The New York Times’ sensible columnist, John Tierney, recently wrote about the “Baltic Tiger.” That is, Estonia, which is prospering under the resolute free market policies of Mart Laar. Since the NYT column is “premium content” and available only to those who have paid, I’m pasting in a summary of his piece from NCPA:

Economists call Estonia the Baltic Tiger, the sequel to the Celtic
Tiger as Europe’s success story, and its policies are more radical than

Ireland’s, says columnist John Tierney. On this year’s State of
World Liberty Index, a ranking of countries by their economic and
political freedom, Estonia is in first place, just ahead of Ireland and

seven places ahead of the United States (North Korea comes in last at

159th).

Estonia transformed itself from an isolated, impoverished part of the

Soviet Union thanks to a former prime minister, Mart Laar, a history
teacher who took office not long after Estonia was liberated. He
was 32 years old and had read just one book on economics, “Free to
Choose,” by Milton Friedman, which he liked especially because he
knew Friedman was despised by the Soviets. Laar was politically
na?ve enough to put the theories into practice:

o Instead of worrying about winning trade wars, he unilaterally
disarmed by abolishing almost all tariffs.

o He welcomed foreign investors and privatized most government
functions (with the help of a privatization czar who had
formerly been the manager of the Swedish pop group Abba).

o He drastically cut taxes on businesses and individuals,
instituting a simple flat income tax of 26 percent.

The results:

o Wages have soared thanks to jobs created by foreign companies
like Elcoteq of Finland, which bought a failing electronics
factory and now employs more than 3,000 people making phones
for Nokia and Ericsson.

o Foreign investors worked with local software engineers to
create Skype, the Internet telephone service, and the country
has become so Web-savvy that it’s known as E-stonia.

o The growth over the past decade has produced so much
unanticipated revenue that the tax rate is being gradually
reduced to 20 percent.

Source: John Tierney, “New Europe’s Boomtown,” New York
Times, September 5, 2006.

One particularly nice touch — when the economy booms and revenues flood into the treasury, the government cuts taxes! That’s the big point leftists never understand, that resources are better used in the private sector than if sucked into the state to be allocated according to the whims of politicians who won’t bear the costs of their mistakes.