The American Magazine Online | 3.18.13
By Alan W. Dowd

Existing attempts to measure economic freedom have long been imperfect — blurring various definitions of freedom, using subjective rather than objective measures, and either failing to account for economic freedom or focusing exclusively on it. That helps explain the rationale behind the Fraser Institute’s new book, Towards a Worldwide Index of Human Freedom.

The book represents a major step toward developing an overarching Human Freedom Index (HFI). Produced in partnership with the Liberales Institut in Germany and the Cato Institute in the United States, the book is edited by the Fraser Institute’s Fred McMahon, who explains that the goal of the HFI “is to measure the degree to which people are free to enjoy classic civil liberties — freedom of speech, religion, individual economic choice, and association and assembly — in each country surveyed.” As suggested by the title, this is a work in progress; we are moving towards a human freedom index. McMahon notes that later this year, he and his team will present another version of the index that incorporates helpful comments about, and tweaks to, the first draft.

The book’s contributors have combined economic freedom measures from the Fraser Institute’s Economic Freedom of the World (EFW) index with measures of civil and personal freedoms — including security and safety, freedom of movement, freedom of expression, and relationship freedoms — to create the prototype of a complete HFI.

After all the number crunching, New Zealand takes the top spot, followed by the Netherlands, Hong Kong, Australia, Canada, Ireland, the United States, Denmark, Japan, and Estonia.

Estonia’s placement is impressive given that just 22 years ago it was shackled to one of the greatest enemies of human freedom in all of history. Indeed, the examples of Estonia and Japan disprove two common misconceptions. First, Estonia’s rapid rise from totalitarian oppression discredits the notion that freedom is something that blossoms only after centuries of nurturing. Second, Japan’s top-10 placement — owing to a record of high and enduring levels of individual freedom — refutes the view that freedom is something only a small circle of Western nations can handle. Indeed, Japan has become part of the West.

Equally interesting is the other side of the 123-nation HFI — countries that have disappointing rankings or are headed in the wrong direction.

Turkey (83rd on the HFI) wants to join the European Union and continue its economic liberalization. Yet the nearest EU member on the HFI (Romania) is 17 spots above Turkey. Not surprisingly, Turkey also flounders in the bottom half of the economic freedom ranking (75th out of 144) and smack-dab in the middle of the property rightsindex (65th out of 130) produced by the Property Rights Alliance.

Russia (89thon the HFI) has devolved from an aspiring liberal economy into a kleptocracy. Russia is 95th on the economic freedom ranking, 97th on the property rights index, and abysmal on measures of civil liberties.

India (92ndon the HFI) is an aspiring global leader but will not gain many followers with the same level of economic freedom as Pakistan (both are 111th on the survey). Pakistan is 121st on the HFI and 113th on the property rights index.

China (100thon the HFI) is building the world’s largest economy, but a world shaped by free governments and free markets will not follow a country that does not respect the full range of personal and economic freedoms. China ranks 107th for economic freedom and predictably low in a global ranking of religious freedom.

Not only is Iran (116th on the HFI) an international pariah thanks to its drive for nuclear weapons, the Iranian regime rates poorly on the economic freedom index (111th), languishes in the cellar on the property rights index (107th), and is consigned to the lowest tier in the religious freedom ranking.

The Assad dynasty’s policies have sentenced Syria (119th on the HFI) to 119th on the economic freedom ranking and 81st on the property rights measure.

Permanent Plunge?

Turning back to the high-ranked on the HFI, if there is a surprise in the top 10, it may be that the United States barely made it. However, those who follow these sorts of surveys most likely are not surprised. For example, the most recent EFW report reveals that the United States has plunged to 18th place, its lowest-ever ranking in this annual study.

This tumble from the top was inevitable given Washington’s numerous government interventions in recent years, expansion of government spending, and consequent shrinking of the space for free economic exchange. The examples — and warning signs — abound:

·        Total federal outlays have exploded. Between 2001 and 2013, federal outlays jumped from $1.86 trillion per year to $3.80 trillion per year — an increase of 104 percent, or about 8 percent per year. In the previous 13-year span, federal outlays grew from $1.06 trillion to $1.78 trillion, an increase of a comparatively modest 5 percent per year.

·         Overspending clearly predates the Obama administration. However, it’s worth noting that in each year of the Obama administration, the federal government has consumed between 22.8 and 24.1 percent of GDP — far above the historic average of 21 percent of GDP.This shift does not appear to be a post-recession blip, but rather a permanent change in federal spending levels.

·         As government grows, so too does dependency on government. Consider the findings of the Heritage Foundation’s Index of Dependence on Government. Today, 21.8 percent of the country receives assistance through government programs. Before the Johnson administration’s Great Society, 11.7 percent of the U.S. population received such assistance.

President Ronald Reagan worried about the growth of government in all its forms. “There is a threat posed to human freedom by the enormous power of the modern state,” he said in 1982. “History teaches the dangers of government that overreaches: political control taking precedence over free economic growth, secret police, mindless bureaucracy, all combining to stifle individual excellence and personal freedom.”

Towards a Worldwide Index of Human Freedom reminds us there is much work to do to restrain the leviathan and expand freedom in the twenty-first century — at home and abroad.