A new report from the Fraser Institute ranks economic freedom in North America. It finds that the Land of the Free has some work to do. According to Economic Freedom of North America 2014:
In the world-adjusted all-government index, the top three jurisdictions (and four of the top five) are Canadian, with Alberta at 8.2 in first place and Saskatchewan at 8.0 in second. The highest ranked US state is Texas, tied for third at 7.7 with two Canadian provinces, Newfoundland & Labrador and British Columbia. …
On the subnational index, the top and bottom provinces were Alberta and Quebec. In the United States, Texas and South Dakota were tied for first and Maine was last.
Given the state of Maine’s welfare system, we shouldn’t be shocked at its cellar-dweller ranking. Thankfully, as my colleague Jillian Kay Melchior explains in her excellent National Review article, Republican Gov. Governor Paul LePage handily won re-election largely on his welfare-reform agenda (in spite of the Obama Administration’s retaliation, including threats about withholding nearly $4 million in annual federal funding–which we all know is paid for by us hard-working taxpayers in the states, so "federal" money is our money).
In terms of average scores, ranked across factors relating to the size of government, takings and discriminatory taxation, and labor market freedom, the study authors report that:
..on average, Canadian provinces now have a higher level of economic freedom on the world-adjusted index than US states, but only by one tenth of a point (7.6 out of 10 compared to 7.5). Unfortunately, this does not mean that Canadian provinces are gaining in economic freedom, but rather that their economic freedom is declining more slowly than that of the US states. (p. 5)
The results of last month’s mid-term elections have been called historic. They suggest that a majority of Americans are not on board with bigger government and the expensive micromanagement that comes with it. As the Fraser study authors conclude:
The results of the experiments of the twentieth century should now be clear: free economies produce the greatest prosperity in human history for their citizens. Even poverty in these economically free nations would have been considered luxury in unfree economies. This lesson was reinforced by the collapse of centrally planned states and, following this, the consistent refusal of their citizens to return to central planning, regardless of the hardships on the road to freedom. Among developing nations, those that adopted the centrally planned model have only produced lives of misery for their citizens. Those that adopted the economics of competitive markets have begun to share with their citizens the prosperity of advanced market economies. (p. 21)
As Dean Stansel, the primary author of the Economic Freedom of North America 2014 report, summed up on the Washington Examiner:
In the three most-free states (Texas, South Dakota, and North Dakota) average personal income is about 20 percent higher than in the three least-free states (Maine, Vermont, and Mississippi) — approximately $48,000 versus $40,000. And, the unemployment rate is more than 7 percent in Rhode Island (45th) versus about 4 percent in nearby New Hampshire (5th).
Furthermore, cities in low-freedom states like California (43rd), Michigan (37th), and Rhode Island have made headlines in recent years for declaring bankruptcy, whereas cities in high-freedom states like Nebraska (5th), Texas, and the Dakotas, have seen incomes and their tax bases expand. …
Big, costly government at the expense of the people doesn’t work. It leads to economic decline. In contrast, expanding economic freedom increases economic opportunity and provides the path to economic prosperity.