The Heritage Foundation's 2013 Index of Economic Freedom

Jan 09, 2013

The results are in, and economic freedom is not on the march. In the Wall Street Journal (sub. req'd), Terry Miller expounds upon an unfortunate reality:

The foundations of economic freedom are weakening around the world, according to the 2013 Index of Economic Freedom, published today by the Heritage Foundation and The Wall Street Journal.

Even more deplorable, he adds:

The United States, ranked only 10th most free in the world this year, joins Ireland as the only advanced economies to have lost economic freedom five years in a row.

Indeed, developed nations have not gone unscathed by this negative trend:

Corrupt political and legal environments cause underdevelopment in poorer countries, and this year's index devotes a special section to the importance of the rule of law in fostering freedom and economic growth. Unfortunately, economic favoritism and cronyism exist in advanced democracies, too. In the index, Matt Mitchell of the Mercatus Center at George Mason University catalogs a dozen ways in which government privileges for special interests hurt productivity and reduce efficiency. The damage isn't just economic. The pathology of privilege, which tends to favor the rich and powerful, erodes the integrity of political systems, too.

We deserve better than a society in which "redistributionist economics on behalf of electoral majorities" take hold and damage our economy. It is truly lamentable that we live in a society in which we operate on "transfers of income and wealth" that "tend to compromise property rights and reduce incentives to work."

Rather, we should strive to maintain policies that make countries great and prosperous:

Policies that promote the rule of law and protect individuals from arbitrary government regulation [that] ensure fairness-and, as documented in years of empirical data, promote higher incomes and faster growth.

Interestingly, many European nations "that know firsthand the ravages of socialism," such as Poland, Georgia, and Estonia are making strides in the right direction toward "market-oriented policies promoting economic freedom."

Miller suggests the cause of the general worldwide decrease in economic freedom is "the lack of U.S. leadership." His conclusion resounds with truth:

All around the world, the true cost of lost economic freedom isn't just slower economic growth but poorer performance on social indicators such as health, education, poverty reduction and environmental protection. Freer economies are better able to achieve such progressive social goals than are economies that rely more on government regulation and centralized control.

Related Links:

2013 Index of Economic Freedom