[bus whirring]
- This is a former communist country,
the Soviet satellite - Georgia.
Today it's a growing nation,
ranked even higher than America,
in economic freedom.
[people talking]
How did Georgia fairly quickly get to this
after decades of poverty and misery?
[upbeat music]
My Executive Producer Maxim Lott spent months there
to try to find out.
- What can Americans learn from here?
- Georgia was once extremely poor
because 100 years ago...
- The Red Army had occupied the whole country
and established the Soviet regime.
- Communists took ownership
of all private property.
Farms, houses, businesses - everything was taken
and put under government control.
- It was a crazy time, crazy country.
- When Zurab Japaridze was younger,
he joined these protests.
[crowd shouting in Georgian]
- These, combined with protests
all over the Soviet Union,
eventually took down the communist regime.
But with no recent history of democracy...
[guns shooting]
Georgia quickly devolved into rivals fighting for control.
[guns shooting]
The fighting happened right in the middle
of city streets.
[guns shooting]
That left the country even poorer
and it was already poor from communism.
Soviet leaders had thought they were smart enough
to run the entire economy.
They'd ordered Georgians to do things like produce tea.
- 95% of tea was to Soviet Union
was provided from Georgia.
- But Georgia was not a great place
to grow tea.
- After the collapse,
people started to taste the Indian tea
and then realized that that tea's actually better.
So, nobody wanted Georgian tea.
- That industry, and many others, collapsed
when Soviet support ended.
- 3/4 of Georgian economy just disappeared right away.
- Central planners are never smart enough
to run something as complex as an economy.
- Thank you. - Bye-bye.
- Fortunately...
[upbeat music] [crowd cheering]
this eccentric libertarian multi-millionaire
became economy minister
and had nearly free rein to make...
- Everything private, as much as possible...
- As Georgia's former president puts it:
- We scrapped 90% of licensing and permits.
- That reduced corruption.
- Every license means interaction with the officials
and every interaction with the official
can be an open door for a corrupt request.
- Fady Asly ran a food import business.
- Corruption was so rampant.
A high-ranking official came to me one day
and he told me: "I have a friend of mine
who's very honest and very competent,
and we would like him to be the chair
of this Anti-Corruption Commission.
But he has to pay someone $10,000 to get his job".
So the future chair of the Anti-Corruption Commission
had to bribe someone to get his job.
[upbeat music]
- Georgia has come a long way since then.
Transparency International says it's now less corrupt
than all of its neighbors.
- We fired the entire police force,
the entire customs office,
the entire tax service.
We diminished the number of agencies by half.
[upbeat music]
- There was a huge boom.
Georgia then turned from a failed state
to a very successful state.
- Even some Americans noticed.
- Obviously, Georgia's made strides.
- Georgia's economy started
growing 10% a year.
- Huge economic growth.
- Iva Nachkebia saw the changes growing up.
- You kind of notice when people are getting rich, right?
You notice it on their clothing,
the way they look, on their cars,
I mean, the streets and stuff.
- Buildings that had once been burned
were restored, some prosperity finally came to Georgia.
- You'll be shocked by the difference.
Now you can see McDonald's, KFC,
the stuff which was unimaginable
and we could only have seen in the movies at the time.
This was this kind of like, let's say,
a libertarian utopia for four years.
- And then the government said: "Okay,
we are very well organized.
We are already a success story.
We're gonna take the economy in our own hands".
- Politicians reverted to big government ways.
They decided:
"We're gonna get into business ourself".
And they chose 10, 15, 20 businessmen
who were close to the government
and they started protecting them
at the expense of their competitors.
[door sliding]
- Competitors like his company.
Government protected his rivals
by making them tax-exempt.
- So, after losing like a couple of million dollars,
then I decided to stop the business.
- Economic growth slowed.
Georgia is still very poor.
Why did Georgia turn back towards big government?
Because...
- People did not actually understand
why all this happened.
- Years of Soviet propaganda kept people
from learning about free markets.
- When explaining some stuff to my parents,
they lived all their life through Soviet times,
and what I realized that you're touching something
that is really sacred for them.
With my parents, I just gave up.
- Did they vote for you anyway?
- Yeah, of course, yeah, of course, yeah.
- Japaridze is now in the Georgian parliament,
the leader of this libertarian party.
- Which stands for the values
of individual liberty, property rights,
free market, freedom of speech and expression.
- It's about how you see the world,
whether you want to take responsibility
about your life or you are fine
with being a slave
and having some kind of a master
who will provide you with all your basic needs.
This is kind of mentality,
this is what is hindering the rapid development
of this country.
- The overall lesson to learn from Georgia?
- Government should not interfere with business.
Government should be out.
Government should be very small.
It should just regulate the minimum.
[logo whooshing]
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[lively music]