You could rephrase your question to: what are the least economically socialist countries?
While not completely free-market, Switzerland, Panama, Singapore, are currently much better than the EU and the US.
Out of these three I like Switzerland's political system, as it's much more democratic than the others. Unfortunately they're getting more and more socialistic recently: gun controls, bank bailouts and so on.
Another example: Liechtenstein. BTW This country was just bullied into signing a TIA with the US. A similar agreement with the EU seems next.
http://www.acton.org/commentary/431_liechtensteins_tax_war.php
Liechtensteinâs Tax War
by Samuel Gregg D.Phil.
As the ongoing global financial crisis continues to shake the worldâs economies, itâs no surprise banks are under increased scrutiny. Few would have predicted, however, that the spotlight would turn to tiny Liechtenstein.
A war of words has just erupted between the small Alpine principality and Germany over German citizens placing assets in Liechtensteinâs banks in order to reduce their tax bills.
The skirmishing broke out when Berlin admitted that, as part of an investigation into some Germansâ alleged tax evasion, it had purchased data about a Liechtenstein bankâs clients from a former bank employee who allegedly stole the information and broke banking-confidentiality laws.
In other words, Germany purchased information obtained through what may have been a criminal violation of perfectly just, legitimate and â in Liechtensteinâs case â constitutionally-grounded laws. No wonder Liechtensteinâs Crown Prince Alois described German authorities as using âmethods that defy the rule of law.â
Europeâs governments donât like Liechtensteinâs low taxes or the fact that many European companies avail themselves of the principalityâs low corporate tax-rates. But that hardly gives Berlin the right to allegedly act as what is commonly known as a receiver of stolen goods â a problem compounded by reports that Germany is offering the material to other countries.
Crown Prince Alois upped the ante, however, when he stated that, âGermany will not solve its problems with its taxpayers by attacking Liechtenstein. Germany has the worst tax system in the world.â Burdensome taxation is just one of the current economic problems facing âold Europe,â against which Liechtenstein stands as a living contrast. In many respects, Liechtenstein exemplifies what a successful free, integrated, prosperous, market-orientated and low-tax European society might look like.
Liechtenstein became a sovereign state in 1806 following the Holy Roman Empireâs dissolution. Until 1918, it was closely linked to the Austro-Hungarian Empire, but entered into a customs and monetary union with Switzerland following World War I. After inter-war instability and a successful effort to avoid being swallowed by National Socialist Germany, Liechtenstein began its rise to prosperity in the 1950s. The growth which made it one of the worldâs richest countries had many causes, but central to Liechtensteinâs success were two factors.
The first was the decision to specialize in activities which Liechtenstein did extremely well: financial services and high-tech industries. The second was Liechtensteinâs adherence to Adam Smithâs famous observation, âLittle else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice.â
Thus not only have Liechtensteiners profited from the fact that the state takes relatively little of their wealth, but they are not burdened with the type of opulent welfare bureaucracies that characterize âSocial Europe.â Hence Liechtensteinâs government regularly runs surpluses rather than deficits. Its unemployment rate is presently 2.7 percent.
Liechtenstein has also managed to avoid some of the social problems characterizing much of Western Europe. Thirty-four percent of Liechtensteinâs population is foreign-born. But it has pointedly rejected the multiculturalist ideology presently crippling many European countriesâ ability to escape the shackles of political correctness. Instead Liechtenstein unapologetically focuses on integrating all resident foreigners, including requiring them to learn German, the countryâs official language.
Likewise, though a largely Catholic country, Liechtenstein has a strong tradition of religious liberty. This doesnât involve, however, any nonsense about incorporating shariâa law into Liechtensteinâs civil law.
In short, the rest of Europe could learn much from Liechtenstein. Instead of harassing Germans weary of Germanyâs oppressive taxes, the German government would be better off investing its energies in trying â yet again â to reform Germanyâs â yet again â faltering economy. Liechtenstein would be a good model.
Not that Liechtenstein is likely to be intimidated by Germanyâs recent actions. The country has a proud reputation for defying some formidable bullies. In 1945, a group of Russians fleeing Communist tyranny crossed Liechtensteinâs border seeking refuge from the Red Army. Despite lacking an army and in the face of overwhelming force, little Liechtenstein refused to give up the refugees. In 1993, the Nobel Prize winner Aleksandr Solzhenitsyn called this act an âoutstanding lesson in courage.â
Solzhenitsyn contrasted it with the behavior of the Western powers who handed over thousands of anti-Communist Soviet citizens to Soviet forces, who swiftly dispatched them to the degradation and death of Stalinâs Gulag.
Liechtensteinâs present challenges donât quite fall into the same category of defying criminal regimes like the Soviet Union. But as long as Liechtenstein refuses to bow to Social Europeâs pressures to diminish its freedoms, weâll know that liberty in Western Europe is alive, albeit not well.