“Scandinavian economies are some of the most market-oriented on the planet” says economist Scott Sumner, who adds “Denmark is the most market-oriented country on earth.”
This peculiar claim is even more curious considering that it is based on the Heritage Foundation’s 2012 Index of Economic Freedom. On the Heritage Index, which ranks countries based on ten components of economic freedom, the United States comes in at #10, lumped in with the “mostly free” countries. All of the Scandinavian countries are lower on the list: Denmark (#11), the Netherlands (#15), Finland (#17), Sweden (#21), Iceland (#27), and Norway (#40).
Each of these countries are considered “less free” on Heritage’s Index than such nations as the U.S., Canada, and Chile, mostly because they have high levels of wealth redistribution. But Sumners thinks that the “size of government and degree of market freedom” are “two completely separate issues.”
The inimitable Bryan Caplan explains why Sumners is wrong and why size of government and economic freedom are inextricably connected:
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