Recap:

Among economists, economic freedom is generally understood as the freedom of individuals to work, do business, and enter into voluntary contracts with minimal government interference. Those who favor economic freedom emphasize individual liberty, private property, and competitive markets as drivers of human flourishing and economic prosperity. As the Heritage Foundation puts it: “At its heart, economic freedom is about individual autonomy: the freedom of choice that individuals enjoy in acquiring and using economic goods and resources. The underlying assumption…is that individuals know their own needs and desires best and that a self-directed life, guided by one’s own philosophies and priorities rather than those of a government or technocratic elite, is the foundation of a fulfilling existence—the “good life.”     

Of course, plenty of economists, political scientists, psychologists, and just plain people are less enamored of free markets, economic freedom and small government. I have quibbles myself. For one thing, I’d like to see universal healthcare and stronger environmental protection in this country and I don’t see that happening without serious government intervention.  But I do think the economic freedom lovers have a point: economic freedom is generally a good thing. Across multiple studies, it has been associated with life satisfaction, GDP growth, less government corruption, higher living standards, and rule of law.    

The Heritage Foundation’s 2026 Index of Economic Freedom ranks 276 countries on the basis of overall economic freedom and various aspects of economic freedom, which are grouped into four pillars: rule of law, government size, regulatory efficiency and market openness. My goal in these posts is to explore possible correlates of economic freedom in 11 countries, as measured and ranked in this year’s Index.    

This post will look at the relationship  between GDP per capita and economic freedom in my 11 countries. Here’s the GDP per capita chart:

The overall pattern is clear for these 11 countries: greater economic freedom = higher GDP per capita, with a few bumps along the line from Singapore to China.  The US is the big exception: lower economic freedom rank than Sweden, Finland, and Canada but much higher GDP per capita. I’m not sure why this is the case, but I suspect the American work ethic has something to do with it. Specifically, Americans work more hours a year and are more engaged in their work than workers in the other three countries, on average.  

Per Investopedia, worker engagement “captures an employee’s enthusiasm and dedication to their work.”  It makes sense that businesses with high worker engagement would be more profitable than businesses with low worker engagement, as was found by one Gallup study.  But I’d also think they would be a country-level link between worker engagement levels and overall economic freedom and that does not appear to be the case:

As to why Americans are more engaged in their work than the others, I have no idea why. “Culture” is not an explanation.