Madrid has become the capital of capitalism. After almost 20 years of liberal policies, close to 70 tax cuts and dozens of reforms focused on reducing political interventionism in the day-to-day activities of companies and families, its levels of development show a clear tendency to improve.
In my new book Madrid-style liberalism (Ediciones Deusto, 2021), I have calculated the current degree of economic freedom in the different communities of our country. The result is the ‘Regional Liberalization Ranking’, in which I take into account variables such as taxes, regulation, efficiency in spending, the number of public employees, political stability or the participation of the private sector in the provision of basic services.
The conclusion of this analysis is devastating. Madrid obtains a rating of 80 points out of 100, more than doubling the result achieved by Extremadura, the red lantern of the table. In fact, the degree of economic freedom observed in Madrid is higher than that recorded in Catalonia by 20 points and improves the national average by 36%. The data therefore support the thesis that Madrid has consolidated its own differentiated economic model, in which the State takes a step back from the market and politicians concentrate on doing fewer things – and doing them better.
Madrid has consolidated its own and differentiated economic model, in which the State takes a step back from the Market and politicians concentrate on doing fewer things
Comparing communities with more and less economic freedom, we see that the former grow 20% faster. Besides, his average income is 6,000 euros higherits unemployment rate is 4 times lower, its entrepreneurship rate per capita is twice higher and its CO2 emissions per inhabitant are 65% lower.
The mantras of anti-capitalist populism have very little travel when we carry out a rigorous and accurate analysis of the results that each model throws up. The Spaniards know this, which is why population and company transfers describe a process of internal migration that enriches the territories with more economic freedom and impoverishes the communities that continue to trust development to interventionism and socialism.
As I explain in the book, 4 out of 10 inhabitants of Madrid come from other regions or countries. This facilitates an effective integration model, based on the pillars of an open society: free markets, pluralism and social tolerance, and the absence of exclusive identity projects. as pointed out Daniel Lacalle in the epilogue, “what happened in Madrid is not a miracle, but the power of freedom”.
It is, in fact, a model diametrically opposed to that of Cataloniawhere nationalism has led to a growing division and social fracture, to the point that mutual trust among its inhabitants is already 50% lower than that observed among the people of Madrid.
One of the levers supporting the liberal progress of Madrid is the tax cut. The average taxpayer saves 2,000 euros per year thanks to these improvements, which also fulfill the paradox lafferian and generate more revenue, based on increasing growth, employment and economic activity.
In addition, deregulation policies have also been of great importance, starting with the Business hourshave ended up making Madrid the community of reference in terms of reducing bureaucratic burdens.
Madrid-style liberalism It also explores the commonly used fallacies that the lying government of Pedro Sánchez tries to propagate on a daily basis. No, it makes sense to speak of the “capital effect” when public spending and employment are lower in Madrid than in any other region. No, Education and Health not only do not show worse results, but also exhibit a leading performance, precisely because the public sector provides facilities to private operators that introduce competition, investment, innovation and excellence in both fields.
And no, keeping Madrid open in the midst of a pandemic was not only not a mistake, but it was the greatest success possible, since the adaptation strategy made it possible to save the economy without producing a turn for the worse in health indicators.
After reviewing more than 970 documents and thoroughly studying the Madrid model, I think I can say, without fear of being wrong, that the system developed by Hope Aguirre and continued now by Isabel Diaz Ayuso It has managed to make liberalism go from theory to practice and develop a pragmatic and effective system that generates enthusiasm and acceptance because it improves people’s lives. that’s liberalism to Madrid.
*** Diego Sanchez de la CruzHe is an economic analyst, director of the Intelligent Regulation Forum, associate researcher at the Institute of Economic Studies and professor at various universities. His new book, ‘Liberalismo a la madrileña’, went on sale on November 24, at Ediciones Deusto.