The 2009 Index of Economic Freedom

Posted January 13th, 2009 at 3.26pm in American Leadership, Enterprise and Free Markets.

For 15 years, The Wall Street Journal and The Heritage Foundation have been measuring countries’ commitment to free-market capitalism in the “Index of Economic Freedom.” The 2009 Index, published this week, provides strong evidence that the countries that maintain the freest economies do the best job of promoting prosperity for all citizens.

The positive correlation between economic freedom and national income is confirmed yet again by this year’s data. The freest countries enjoy per capita incomes over 10 times higher than those in countries ranked as “repressed.” This year, for the first time, the Index also correlates economic freedom with important societal values like poverty reduction, human development, political freedom and environmental protection. The linkages are robust, with economically freer countries performing significantly better on every indicator of well-being.

Those tempted to abandon the free market and capitalism in the current crisis need to look carefully at the record of countries moving down that path. In 2009, it is Zimbabwe that has lost the most economic freedom, dropping 6.7 points on the Index’s 0-100 scale and falling to next-to-last place. Deficit spending, the expropriation of land and resources, and government support of favored enterprises have destroyed the economy; hyperinflation and corruption have devastated the nation.
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Hong Kong and Singapore are once again the freest economies in the world, followed in the rankings by Australia, Ireland and New Zealand. The U.S. slipped one spot to sixth place this year because of increases in both tax revenue and government spending as a percentage of GDP.
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In a special chapter in this year’s Index, the Journal’s Stephen Moore chronicles the critical role that tax cuts, particularly cuts in corporate taxes, have played in economic growth in Eastern European countries and others like Ireland. The citizens of those countries lived for decades with state-directed economic planning and regulation, which many now advocate for the U.S. and other advanced economies. They remember the clumsiness of socialism and the government missteps that fostered economic disaster. To switch dance partners now that they have adapted to the quick step of capitalism and are enjoying its many benefits would be a tragic mistake.

Author: Terry Miller
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16 Comments

January 13, 2009 Ireland writes:

I think you better have a good look at Ireland again and revise.
Because of its addiction to enlarged government and welfarism the country is on the edge of bankruptcy.

January 14, 2009 SnarkyBytes » 2009 Index of Economic Freedom writes:

[...] the Heritage Foundation, the 2009 Index of Economic Freedom. Hong Kong and Singapore are once again the freest economies in the world, followed in the rankings [...]

January 14, 2009 Chris, Australia writes:

NO WAY does Australia deserve the 3rd spot, I suggest around 25 - 30th.

January 14, 2009 djr writes:

Adding “green” and other nonessencials to an econ-index destroys the value of this index. Well done.

January 14, 2009 Matthew Yglesias » Economic Freedom, Universal Health Care, and Labor Unions writes:

[...] touting the fifteenth annual edition of its joint project with The Wall Street Journal called the “Index of Economic Freedom”. This is the right-wing’s gold standard of international comparisons that they say [...]

January 14, 2009 Ranald writes:

“The positive correlation between economic freedom and national income is confirmed yet again by this year’s data.”

Is it? Obviously the countries are very bottom of the list are poor, but once you get away from the bottom I can’t see any such correlation. Of the richest countries in the world (by GDP per capita) Luxembourg is 15th on this list, Norway 28th and Qatar 48th. Conversely, of the top 5 countries on the list Hong Kong, Singapore, Australia and New Zealand are not especially wealthy for 1st world countries, though Ireland is.

January 14, 2009 Anton, Charlottesville writes:

Iceland at 14th? Freedom’s just another word for nothing left to eat.

January 14, 2009 Heritage Foundation says property rights not important to growth « Amused Cynicism writes:

[...] on 2009-Jan-14 The Heritage Foundation, a right-wing US think tank, has published its annual Index of Economic Freedom (via Matthew Yglesias). The index rates each country on ten different measures of economic freedom, [...]

January 14, 2009 Mike, Hickory, NC writes:

Judas H. Priest, the Socialists are comming out of the woodwork here!

And the worst part is the inmates of the International Leftist/Socialist insane asylum, along with their willfully blind fellow inmates, are set to take over everything they can get their greedy, megalomaniacal, Leftist/Socialist government elitist, demagoguing, pandering, “bail-out/government take-over” mits on, when the lesson of history is Leftist/Socialist government elitism kills both freedom and economies, and thus fails miserably, every time it’s tried!

All proving, of course, and, unfortunately, evidently bound to prove yet again, that a definition of insanity is: “Continuing to try the same things, expecting different results”!

What was that about “Those who forget (or deny) history are doomed to repeat it”?…Which explains why history so very evidently is about to repeat itself yet again here!

January 16, 2009 Rachel, Illinois writes:

How does this work at only 2 weeks into 2009? Info gathered in 2008, or is it “projected” onto this year?

January 17, 2009 Libertas, France writes:

Please join the Facebook group of Libertarian bloggers : http://www.facebook.com/group.php?gid=40644723076

January 18, 2009 Edwin Buck, New Mexico writes:

Economic freedom means having the government out of our pockets, out of the pockets of our financial institutions, Industries, and every thing else that we do, as long as what we do is legal. Unfortunately, our government has decided that they must stick their noses into everything we do, legally. And if there are no laws, that what they do is legal, they will make one up to make it legal, what they do, I mean.

January 23, 2009 Wonk Room » McConnell: Employee Free Choice Will ‘Fundamentally Harm’ And ‘Europeanize America’ writes:

[...] “fundamentally harm and Europeanize America,” it is worth pointing out that — even using data from the conservative Heritage Foundation — countries with the highest degree of [...]

March 12, 2009 Capitalists on the defensive | Renegade Futurist writes:

[...] it individual freedom has also been discredited by the persistent human rights abuses in Singapore (one of the most “economically free” places in the world) compared to the more economically regulated nation of Norway. You can’t make a convincing [...]

March 19, 2009 italy writes:

With all due respect I would not follow your advice because those who ignored you and put their investment in Zimbabwe are now better off than some of us who followed your biased advice and put money in madagascar or the west african guineas which have now descended into chaos and dj rule.

September 8, 2009 Paul, Ireland writes:

Yeah all this mattered once upon a time when we humans had standards. And look what they’re doing to the states. They’re butchering that place. California and Michican are on the edge if not bankrupt already. The federal government are getting their tentacles into those states in particular as they swoop into to take ownership of the defaulters. They may lose their economic freedom and California - the region I credit with doing the most for the world with it’s high level of freedom - may now become un-free. I’m typing this now on a PC. The world may have never got personal computers were it not for their economic freedom in California (from Apple). It was all ‘technology is for big business only. You can all go and jump’
before Xerox and Apple etc. How is that fair? The police state is coming if we don’t act. No to lisbon ii

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