The 'new normal' is a bad, bad thing
The Fraser Institute released its 2013 Economic Freedom of the World Annual Report this month. And the United States has done little to recapture its position as the global home of economic liberty.
Until 2002, the United States ranked among the five freest countries in the world. Since then, we have dropped to 17th in a list of 152. We now fall behind Hong Kong, Singapore, the United Arab Emirates, Canada and Chile, among others, as we acclimate to the “new normal.”
It remains to be seen if this new normal is a permanent condition or a temporary reflection of the political choices we've made through 2011. Whatever the answer, it is clear that we have moved away from economic freedom in favor of greater state control.
In considering more than 40 variables — everything from the size of government to the legal system, security of property rights, access to sound money, free trade and market regulation — The Fraser Institute's report makes this clear. The important question is not whether we are less free but whether being less free is, or can be, a good thing. And the answer to that question is a resounding no.
According to World Bank data, countries that rank above the median for economic freedom have three times the per-capita income of those that rank below that line. And this isn't because developed countries tend to be both wealthy and free. Among the poorest nations, those with more economic freedom have average incomes that are almost 30 percent higher than those with less economic freedom.
Wherever one looks, people who live with greater economic freedom have higher incomes. Much higher. Not surprisingly, poverty rates are much lower in these countries as well. Greater economic freedom brings less income disparity. In the very places the rich succeed the most, the difference between rich and poor is least pronounced.
But the benefits of economic freedom stretch far beyond simple measures of income. According to UNICEF data, child labor rates are 74 percent higher in less economically free countries than in more economically free countries. And this isn't because rich countries import their goods from poor countries with no child labor laws.
Among the poorest countries, child labor rates are twice as high in less free countries than in their more free counterparts. According to United Nations data, countries that are freer also experience significantly greater gender equality. At every turn, freedom and exploitation appear to be incompatible.
Further, these results do not come at the expense of the environment. Less economically free countries experience more deforestation than their more free counterparts, and the most economically free countries actually experience reforestation. According to World Health Organization data, atmospheric pollution is lower in more economically free countries.
The Fraser Institute's study does not prove that economic freedom produces a healthier society but it does show that these two things are highly correlated. Why, then, do our politicians seek to make us less economically free at every turn? They should take the Hippocratic approach: First, do no harm. Economic freedom does no harm and there is every reason to think it does much good.
Where the United States places on future lists depends on the choices we make today. If we choose freedom, we choose prosperity instead of poverty, stewardship instead of exploitation, cooperation instead of coercion and trust instead of fear.
If we choose anything else, we have consciously chosen the “new normal.”
Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan is a fellow of the Institute of Political Economy at Utah State University.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Rossi: Penguins’ best bet is on Martin
- Burnett’s stellar start paves way for Pirates’ victory over Diamondbacks
- From injuries to front office, Penguins’ season didn’t lack drama
- Spirit Airlines lifts fortunes of Arnold Palmer Regional Airport
- Penguins president: General manager, coach won’t be fired
- Young defensemen make case for future with Penguins
- High risk, reward with 1st-round quarterbacks in NFL Draft
- Biertempfel: Observations from a day at the ballpark
- Pitt AD Barnes has enjoyed varied career in college sports
- Pirates’ Cole reinforces status as emerging ace
- Elites, media & character