Whatever Happened To Penny Candy Ch 15

Natural Law and Economic Prosperity

• Two Types of Law: Natural Law (represented by common law) and civil/Roman law exist. Natural Law posits a Higher Law above government dictates, while civil law prioritizes the government's law.

• Natural Law Principles: Natural Law derives from fundamental religious principles: fulfilling agreements (contract law) and respecting others' property (tort and some criminal law). Valid law must align with these principles.

• Natural Law and Prosperity: Widespread adherence to Natural Law principles leads to liberty, free markets, and economic growth, with abundant investment and job opportunities.

• Civil Law and its Implications: Civil law allows governments wide latitude, leading to potential periods of liberty, followed by tyranny. Governments can enact policies like free speech, or quickly enact repressive measures without constraint.

• Historical Trends: Civil law predominated historically, but a period of Natural Law influence existed from the Magna Carta to the 20th century. This period correlated with significant economic prosperity in aligned countries.

• America's Role: Post-1776, America championed Natural Law doctrines, significantly contributing to global economic prosperity among its allies.

• Modern Economic Philosophy: Socialism gained prevalence in the mid-19th and early 20th centuries, effectively diminishing the influence of Natural Law.

• Socialism's Economic Failure: Socialist economic models demonstrated failure by the 1990s, such as in the USSR. This shift led to experiments with free markets, but not necessarily with Natural Law based legal systems

• The Persistence of Civil Law: Despite the rejection of socialist economics, civil law systems (often the product of Roman and other historical legal systems) remain dominant, prioritizing government expediency rather than ethical principles.

• Risk in Investment: Countries with less Natural Law influence in their legal systems are at higher risk of suddenly reversing economic policies, impacting investment returns. Conversely, those strongly adhering to Natural Law present lower-risk investments.

• Legal System's Impact on Economics: A country's legal system is the crucial factor affecting its economic prosperity.

• The Importance of Due Diligence: Investors should carefully review the legal systems of foreign countries before investing to understand risk levels. Financial institutions often neglect this element; the legal system profoundly impacts a country's economic future.

Country Legal System Examples

• Based on English Common Law (Natural Law principles): Many countries follow this historical system, but few perfectly uphold pure Natural Law today. Examples include New Zealand, the US, Britain, Australia, Canada, and (until the change) Hong Kong.

• Civil Law (Roman Law Principles): Numerous countries base their law on this system inherited from Rome. These nations sometimes display significant Natural Law influence; however, this tends to be less common. Examples are Italy, France, and others.

• Colonial and Islamic Laws: Many countries have a mixture of legal systems based on their colonial history or Islamic law. These countries can show elements of Natural Law or civil law features.

Economic Freedom Index

• Importance: The Index of Economic Freedom provides an assessment of economic freedom in various countries. A 1.0 rating implies substantial economic freedom, while higher scores indicate less economic freedom and potentially more risk for investing.

• Top-Performing Countries: Examples are Hong Kong, Singapore, New Zealand, Bahrein, and Luxembourg, along with USA, Australia, Britain, Switzerland, and Canada.

• Worst-Performing Countries: Examples are North Korea, Cuba, and many countries impacted by civil wars.

• Index Access: The index is accessible on the Heritage Foundation website.

• Economic Considerations: Investors should consider the level of economic freedom, legal system, and potential for sudden policy shifts when evaluating investment options.