Georgia’s Libertarian Hero

I wrote yesterday about an absurd example of media bias. A reporter for the New York Times authored a story about how people in the nation of Georgia supposedly miss communist enslavement.

It was especially galling that the reporter repeatedly cited a radical Marxist, yet failed to divulge her background to readers. Instead, she was merely identified as a “workers’ rights activist.” That would be like a reporter quoting me extensively in an article about fiscal policy without disclosing my libertarian bona fides.

For today’s column, let’s look at economic policy in Georgia. And, to be more specific, let’s look at how one person made a huge difference.

We’ll start with something I wrote in 2018, which is that Georgia enjoyed a dramatic increase in economic freedom earlier this century.

But that column had an oversight. It did not highlight the role of Kakha Bendukidze, who was largely in charge of economic policy in Georgia from 2004-2009.

To atone for that mistake, I want to share some excerpts from a 2014 article in the New Yorker. Authored by Natalia Antelava, it’s a list of Kakha’s remarkable achievements.

Bendukidze…undertook a libertarian overhaul of the Georgian economy… A big man with outsized wit and a personality to match, he was a model for many struggling liberal reformers in the region. …Bendukidze became an influential voice in favor of opening the Russian economy. But, by 2003, he later said, he saw signs of Putin’s increasingly controlling approach to economic policy. A year later, he sold all his holdings in Russia and returned to his native Georgia, where, following the country’s Rose Revolution, a new, liberal government asked him to come on as the minister of the economy. …The country became a laboratory for Bendukidze’s radical libertarianism. Governments across the former U.S.S.R. watched in disbelief as he not only rapidly privatized state industries but also abolished most of the country’s regulatory agencies. Bendukidze cut income and payroll taxes and abolished other taxes, customs tariffs, and nearly eight hundred government licenses and permits. “Each government permit was a corruption tool that allowed the state to take bribes,” Fady Asly, the chairman of Georgia’s International Chamber of Commerce, said. …When Bendukidze began his reforms, the country was heavily dependent on the support of USAID and other development agencies and organizations. They felt that they deserved a say in Georgia’s economic policies; Bendukidze thought that they did not.  On one occasion, his deputy at the time, Vato Lezhava, recalled, Bendukidze told a USAID representative to “fuck off.” …He had to break the mentality shaped by years of Communism.” The result, his allies point out, was astonishing. By 2005, Georgia’s budget had tripled—largely because taxes, though lower, were being collected—and its G.D.P. was growing by ten per cent each year. By 2009, the country had climbed from a hundred and forty-seventh to eleventh place in the World Bank’s “ease of doing business” index.

Wow, an amazing track record. And one that (of course) produced great results. Bendukidze was the Javier Milei of his country.

Heck, Kakha is one of the people Gary Johnson should have named back in 2016 when he was asked to identify an admirable foreign leader.

We need someone like that in America.

P.S. Sadly, Georgia has drifted in the wrong direction in recent years. It now ranks #25 for economic freedom. I’m especially disappointed that the country’s tax and spending limits have been abolished.