It was the early 1990's and the Soviet Union was crumbling.   Former satellite nations to the USSR were breaking away in their independence.    For most of the newly formed nations, their first task was the creation of a non-Soviet dominated economy.

Mart Laars was the 30 year old prime minister of the newly created Estonia.  While economist offered all type of advice on creating a vibrant economy, Laars was more persuaded by an economist he had never met.  In fact, Laars built the Estonia economy around the ideals of a book, Free to Choose, written by Milton Friedman.  

Friedman was a celebrated advocate for a free-market system with limited government intervention.  Laars adopted many of Friedan's principals for the Estonia economy including a flat tax.  

Nearly 20 years later, the Estonia economy is the envy of it's neighbors.  While it's had some setbacks with the most recent downturn.  It's maintained a balanced budget with a vibrant economy.  The same can not be said for Estonia's neighbors, many of which followed the liberal economic advice. 

Here's a great clip of Friedman on Phil Donahue's show.  The normally verbal Donahue is struck silent by the wisdom of Dr. Friedman:


(thanks to Ann D. for the clip)