Study: America falls to 18th in economic freedom
posted at 3:21 pm on September 25, 2012 by Mary Katharine Ham
Not as free as she used to be. That’s the verdict from the Economic Freedom of the World Annual Report on the U.S., which fell to 18th in the rankings this year. America was consistently in the top five from 1975-2002, but has since quickly lost ground, going from 12th to 18th since 2009. This year’s ranking is the lowest showing for the U.S. since the study started.
Taking the Top 10 spots were: Hong Kong, Singapore, New Zealand, Switzerland, Australia and Canada (tied), Bahrain, Mauritius, Finland, Chile. The bottom ranked countries: Venezuela was lowest, followed by Myanmar, Zimbabwe, Republic of Congo, and Angola.
The Fraser Institute, a free-market think tank in Canada, and the Washington-based Cato Institute use 41 measures of economic freedom to rank 144 countries. On the bright side, average freedom all over the world is slightly up over 2011. Their definition of economic freedom:
Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. An index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions.
The study evaluates countries in five areas: “size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor, and business.”
Much of America’s decline is due to the growth of the government’s footprint in our lives since 2000. The assault on American property rights has not helped matters, either. The war on terror put American travelers under the thumb of the TSA—an entity that combines the charm of the DMV, the might of a paramilitary force, and the impropriety of a fraternity hazing. The Supreme Court’s Kelo decision ushered in a rise in eminent domain abuses. And let’s not forget the bailouts of those corporations that were “too big to fail.”
Taxpayers, on the other hand, were just the right size to fail, and that is what happened to them when the government took their money to pay off big, failing businesses.
Those who love freedom recognize it as a value in and of itself, and one that, happily, produces healthy, prosperous societies and people. It isn’t just freedom that’s good. Its outcomes are.
My friend Sean Malone created the infographic below to answer the question, “Why should you care about economic freedom.” Turns out it’s great for fixing things liberals love to use overbearing government to fix, like income inequality, gender discrimination, and the environment:
Child labor rates in the 20 most economically free countries are half what they are in the 20 least economically free countries. And this isn’t because the rich-and-free countries import cheap goods from countries that exploit children. Among the most impoverished countries, those that are more free have significantly lower child labor rates than those that are less free.
Even the environment does better with economic freedom. The 50 countries with the least economic freedom suffer significant deforestation. The 50 countries with the most economic freedom enjoy significant reforestation. The least free countries experience nearly three times the air pollution of the most free countries, and the least free countries experience five times the amount of CO2 emissions per GDP than the most free.
Almost every political hobby horse would be better achieved if governments would simply adopt economic freedom as their primary goal.
The study finds the same thing is true in the freest states in the U.S. vs. the least free.
From 1985 through 2009, unemployment in the 25 most economically free states averaged 5.2 percent, versus 5.8 percent in the 25 least free states. That 0.6 percent difference is equivalent to 460,000 additional jobs that might exist if the least free states were more free. Over the same period, median household income was 7.8 percent greater in the most free states. The rate of homeownership is higher in the most free states. The poverty rate in the most free states averaged 1.6 percentage points less than in the least free states.
Download and read the whole study, here.
Pass this along to your friends who love freedom and all its benefits, or those who may have never considered either before: