Economic Freedom Index Should Be Wake-up Call for America

Every American who cares about his or her country’s future should take a look at the Heritage Foundation’s 2015 Index of Economic Freedom. The United States is not even among the top ten nations with the most economic freedom.

Americans now have less economic freedom than Danes, Chileans, Canadians, Swiss, New Zealanders, Australians and even Estonians, according to the Index. In fact, the level of economic freedom in the USA is only slightly higher than that in the United Kingdom, which American conservatives love to disparage as a bastion of socialism. The USA is number 12, and Britain is 13 on the list.

For the record, the top nations for economic freedom are as follows:

1. Hong Kong
2. Singapore
3. New Zealand
4. Australia
5. Switzerland
6. Canada
7. Chile
8. Estonia
9. Ireland
10. Mauritius
11. Denmark
12. United States of America
13. United Kingdom
14. Taiwan
15. Lithuania
16. Germany
17. The Netherlands
18. Bahrain
19. Finland
20. Japan

The Heritage Foundation ranked nations on a one to 100 scale that took factors such as labor freedom, property rights, regulatory efficiency, fiscal freedom, business freedom, and freedom from corruption into account. The USA scored 76.2, meaning that it did not even appear among the five nations the Foundation listed as economically free.

The list makes for some sobering reading, and it should hold some important lessons for Americans and everybody else. Those lessons are:

• Economic freedom is not inherent in any culture or civilization. The two most economically free places in the world are Hong Kong and Singapore, which are predominantly Chinese.

 

• American’s British-derived culture with its heritage of democracy, the English language, and common law capitalism should give us the edge. Seven of the nations (Hong Kong, Singapore, New Zealand, Australia, Canada, Ireland. and Mauritius) in the top 10, including four of the top five, are former British colonies that have English as their primary language. Yet we are not doing that well.

 

• The parliamentary system seems more conductive to economic freedom than our system. Sixteen of the nations in the top 20 have a parliamentary system of government rather than a presidential system like the one here in the USA.

 

• A welfare state, which provides a strong safety net and basic services like national health insurance to its citizens, is not a deterrent to economic freedom. Almost all the nations in the top 10 have strong welfare states. Americans who think that such social programs will hinder economic freedom should consider that.

 

• Countries like Australia, New Zealand, Canada, and Switzerland, which provide benefits like national health insurance, are doing better economically than the United States, which does not. Perhaps America should take a look at those countries.

 

The list makes it clear that a nation can provide both economic freedom and basic social services to its citizens. There is no reason to leave the poor in misery in order to provide people with economic opportunity.

One thing is clear: if we want to solve problems like income inequality, we will need more economic freedom in America. We will also have to provide more economic opportunities and services that can help people get out of poverty. We need to abandon our ridiculous notions of American exceptionalism and start reforming our nation before we find ourselves living in a poor nation with no economic freedom.