The Heritage Foundation created the “Economic Freedom Index” to measure the degree of economic freedom in various countries. Here’s their definition of economic freedom:
“Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.” https://www.heritage.org/index/about
Note that economic freedom and government regulations are perfectly compatible, as long as the regulations are “necessary to protect and maintain liberty itself”. Of course, that wording invites a whole slew of questions, such as:
What is liberty?
Why is liberty so important?
What protects liberty?
What constrains liberty?
Are there other important values that compete with liberty and sometimes justify further constraints on liberty?
These are great questions that I’m not going to address here. However, I do consider liberty a worthy ideal and see the value in evaluating countries according to how close they come to that ideal. Before going to the rankings, let’s flesh out the components of Economic Freedom. Per the Heritage Foundation , there are four broad categories of economic freedom:
Rule of Law : property rights, government integrity, judicial effectiveness
Government Size : government spending, tax burden, fiscal health
Regulatory Efficiency: business freedom, labor freedom, monetary freedom
Open Markets: trade freedom, investment freedom, financial freedom
Without further ado, here are the top 20 of the 186-country 2019 Economic Freedom Index, along with some other indicators of functioning I found interesting:.
Basically, any country in the top 20 is doing pretty good at promoting economic freedom. Most are high-income and even those that aren’t high income (Georgia and Chile) are doing well compared to their neighbors*. Note also that most Scandinavian countries are in the top 20 - further documentation that they are not “socialist” countries at all but market-friendly countries with robust safety nets. For more on this year’s Economic Freedom rankings, go to: https://www.heritage.org/index/ranking
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* I recently came back from a trip to Armenia and Georgia and was amazed by all the new roads and construction in Georgia, in contrast to all the abandoned buildings and unpaved roads in Armenia.