We used to take it for granted that the United States had the freest economy in the world.
Well, no longer, according to the Index of Economic Freedom for 2016.
If you're not familiar with it, The Index of Economic Freedom is the ranking of nations according to their levels of economic freedom. It was developed by the Heritage Foundation in partnership with the Wall Street Journal. The Index describes economic freedom this way:
Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.So how do countries stack up:
Hong Kong. If I had made a guess as to which country ranked the freest as per the index, I would have said United States, Canada, and United Kingdom. At least one of them should make it to the top since they are some of the strongest countries when it comes to the economy and currency.
Nevertheless, Wikipedia.com reported that Hong Kong scored 88.6 on the index, the highest score actually among the other nations in all over the world. This is not surprising. In terms of economy, Hong Kong is stable, being the leading global financial center. The country’s low level of taxation and free trade are strong nationally as internationally.
Four other countries are in this enviable category: Singapore, New Zealand, Switzerland, and Australia.
Canada ranks the highest in the category of essentially free and is fifty on the over all list. Canada has a substantial national and international market presence. However, the present status of its weak labor market is possibly the primary reason why it only scored 78 out of the 100 points on the index.
The United States falls in the Mostly Free category–we rank number eleven in the overall list.
Why the low rank?
Americans continue to lose economic freedom. Following declines in seven of the past eight years, the United States this year has equaled its worst score ever in the Index of Economic Freedom. Ratings for labor freedom, business freedom, and fiscal freedom have flagged notably, and the regulatory burden is increasingly costly. . . .
President Barack Obama’s second-term efforts to expand government spending, the scope of the administrative state, and regulation have been stymied to some degree by political opposition in Congress.
Yet the U.S. economy continues to underperform despite a private sector–led energy boom that has made the U.S. the world’s largest producer of oil and natural gas. Uncertain responses to foreign policy challenges, particularly concerning the Middle East, have contributed to a loss of support for the President and strong gains for Republicans in Congress and state legislatures. Political tensions related to racial, religious, and social issues have increased over the past year.
The Philippines scored 62.2 on the index, making it somewhat free. The problem in the country is the rate of unemployment, the lack of efforts for human development, and the rampant corruption. The free trade of the nation is relatively stable and with the current growth of BPO and outsourcing, the economy of the country is surviving.
China, although one of the most successful economies in the world with open trades in almost all nations, only scored 52.7on the index. Hence, it fell on the "mostly unfree" category. It is very ironic that a strong economy such as China falls into this category. The main reason for this is that being the factory of the world, the country has such severe environmental problems that people have to buy bottled air. Poverty is likewise rampant, especially in the rural China. Children are being forced into labor, and when they work, they are not getting paid the standard wage or the nationally acceptable salary.
It is no surprise that North Korea ranked the most repressed nation in the world with a score of 1.3 on the 2016 index. It is a dictatorship that is cut off from contact with the rest of the world.
It cannot be denied that the rankings of these nations are attributable not just to the economy but also to overall performance in terms of democracy, education, environment, politics, and human development among the many other factors.
Sad day when the United States is outranked by ten other nations.
Guest blogger Lucy Adams writes for BuzzEssay.