The wide differences in economic freedom that we observe at the country level can exist at the subnational level as too (e.g., residents in Texas and Florida have greater economic freedom than those in California and New York). But until recently, there were no local indices comparable to the national and global rankings. In a recently published study for the Journal of Regional Analysis & Policy, Dean Stansel, professor of economics at Florida Gulf Coast University, shows that greater economic freedom in metropolitan areas corresponds to higher incomes and lower unemployment in these localities.
Here are the most and least free metro areas in America:
In this abridged version of the video series Economics for Everybody, R.C Sproul Jr. explains why it’s important for Christians to understand economics. Economics Has Consequences pulls together some of the key aspects of the original series into one film, including introductions to such basic principles of economics as stewardship, civil government, work, wealth, and entrepreneurism. The second section explores the impact of government intervention on education, the money supply, welfare, depressions, markets, and more.
The video shows why economic freedom is directly related to religious freedom, and that the loss of one inevitably leads to the loss of the other.
Sojourners’ Jim Wallis has been at the Davos gathering in Switzerland and is urging us to be guided by a new Davos “covenant.” If you’ve never heard of Davos, Michael Miller’s RealClear Politics piece “Davos Capitalism” describes the gathering and its unassailable hubris this way:
Davos capitalism, a managerial capitalism run by an enlightened elite–politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities–all gathered together trying to make the economic world smarter or more humane…. And we looked up to Davos Man. Who wouldn’t be impressed by the gatherings at the annual meeting of the World Economic Forum at Davos, a Swiss ski resort? Sharply dressed, eloquent, rich, famous, Republican, Democrat, Tory, Labour, Conservative, Socialist, highly connected, powerful and ever so bright.
Then, when the whole managerial economy collapsed, the managers and technocrats lost faith in markets. But they did not lose faith in themselves, and now they want us to entrust even more of the economy to them.
As if on cue, Jim Wallis writes in a recent public letter:
This week at the World Economic Forum in Davos, Switzerland, we are looking to the future and asking “what now?” At a Saturday session — “The Moral Economy: From Social Contract to Social Covenant” — a document will kick off a year-long global conversation about a new “social covenant” between citizens, governments, and businesses.
Why dispense with the yeomen-like “contract” language in favor of a new “social covenant”? Wallis explains that “in the past 20 years, the world has witnessed the death of social contracts. We have seen a massive breakdown in trust between citizens, their economies, and their governments…. Former assumptions and shared notions about fairness, agreements, reciprocity, mutual benefits, social values, and expected futures have all but disappeared. The collapse of financial systems and the resulting economic crisis not only have caused instability, insecurity, and human pain; they have also generated a growing disbelief and fundamental distrust in the way things operate and how decisions are made.” (more…)
There are more people living in the city of Los Angeles than live in New Zealand. Yet the small country in Oceania beats out the the U.S. in several key areas, such as on the production of movies about hobbits, ratio of sheep to humans (9 to 1), and . . . economic freedom.
And the Kiwis aren’t the only ones. Australia, Canada, Switzerland, and six other countries have more freedom to control their own labor and property than we do. According to the Index of Economic Freedom, an annual report released by The Wall Street Journal and The Heritage Foundation, the United States has continued it’s half-decade of decline:
Registering a loss of economic freedom for the fifth consecutive year, the U.S. has recorded its lowest Index score since 2000. Dynamic entrepreneurial growth is stifled by ever-more-bloated government and a trend toward cronyism that erodes the rule of law. More than three years after the end of recession in June 2009, the U.S. continues to suffer from policy choices that have led to the slowest recovery in 70 years. Businesses remain in a holding pattern, and unemployment is close to 8 percent. Prospects for greater fiscal freedom are uncertain due to the scheduled expiration of previous cuts in income and payroll taxes and the imposition of new taxes associated with the 2010 health care law.
Restoring the U.S. to a place among the world’s “free” economies will require significant policy reforms, particularly in reducing the size of government, overhauling the tax system, transforming costly entitlement programs, and streamlining regulations.
Still, there are 134 countries that are even less free. So while we’re not free as folks in Denmark or Chile, we’re not as bad off as Cubans or North Koreans either. I guess that’s something to be thankful for.
What is a Right to Work law?
Right to Work laws are state laws that guarantee a person cannot be compelled to join or pay dues to a labor union as a condition of employment.
Economic freedom exists when people have the liberty to produce, trade, and consume legitimate goods and services that are acquired without the use of force, fraud, or theft. Mandatory unionism violates a person’s economic freedom since it forces them to pay a portion of their income, as a condition of employment, to a third-party representative—even if they disagree with the aims, goals, or principles of the representative group.
What’s wrong with being forced to pay for union representation?
On Nov. 28, the Canada-based Fraser Institute released the eighth edition of its annual report, Economic Freedom of North America 2012, in which the respective economic situation and government regulatory factors present in the states and provinces of North America were gauged.
Global studies of economic freedom, such as the Heritage Foundation’s 2012 Index of Economic Freedom and the Fraser Institute’s Economic Freedom of the World 2012, rank the United States and Canada as two of the most economically free countries in the world. But, as data from the North America report shows, not all sections of the countries are experiencing an equal level of economic freedom and it is important to look at areas in which this falters.
States and provinces were evaluated and ranked within three categories: 1) Size of Government; 2) Takings and Discriminatory Taxation; and 3) Labor Market Freedom. The Canadian province, Alberta, claimed the top spot as most economically free, followed closely by Delaware. New Mexico placed 59th, making it the least economically free state, followed by Prince Edward Island of Canada, notching the rank of least economically free area in North America (between the United States and Canada).
The Economic Freedom of North America 2012 report draws a clear link between prosperity and economic freedom, through a comparison of states and provinces. “In the United States, the relatively free Georgia does much better than the relatively unfree West Virginia. In Canada, British Columbia, where economic freedom has been increasing in recent years, has been experiencing considerably greater growth on a per-capita basis than Ontario, where economic freedom has been decreasing in recent years.” (more…)
At some point in tonight’s foreign policy debate between the two presidential candidates, Governor Mitt Romney should send his very capable inner wonk on a long coffee break and press a big-picture truth that otherwise will go begging: America’s strength on the international stage requires economic strength, and our economic strength cannot long endure under the weight of a government so swollen in size that it stifles human enterprise.
The connection between economic freedom and economic growth is well-established. The connection between the relative strength of a nation’s economy and its strength on the international stage is also well established.
There are a lot of reasons for this, but it’s maybe easiest to grasp by thinking about technology. Our strength rests partly on our position as a technology leader, which allows our military to do more with less. But we’re unlikely to maintain that position of leadership if our government habitually suffocates our high-tech entrepreneurs under high taxes and hyper-regulation.
“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.”
At least Obamacare comes at us head on. The greater legislative threat may be the one that most Americans have never heard of. Economist Scott Powell and Acton friend Jay Richards explain in a new piece in Barron’s:
While Obamacare received more attention, the Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank after its Senate and House sponsors, … unleashed a new regulatory body, the Consumer Financial Protection Bureau, to operate with unprecedented power.
Dodd-Frank became law in 2010 and is supposed to avert the next financial crisis. Yet banks are still too big to fail and Fannie Mae and Freddie Mac remain wards of the state, while the CFPB has been given sweeping authority over consumer credit and other financial products and services that played no significant role in the crisis of 2008.
Powell and Richards then offer some specifics: