America Drops Out of the Top 10 Economically Freest Countries

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Are you economically free?

If you live in Hong Kong, Singapore, Australia or Switzerland, the answer is yes. If you live in Zimbabwe, Cuba or North Korea, then no. And if you live in the United States, your economic freedom is slipping away—with dire consequences.

This, at least, is the warning sounded by Terry Miller, director of the Center for International Trade and Economics at the Heritage Foundation, which has teamed up with The Wall Street Journal to produce the “2014 Index of Economic Freedom.” The Index evaluates the commitment to free enterprise using 10 categories, including fiscal soundness, government size and property rights.

“Countries achieving higher levels of economic freedom consistently and measurably outperform others in economic growth, long-term prosperity and social progress,” Miller writes. “Those losing freedom, on the other hand, risk economic stagnation, high unemployment and deteriorating social conditions.”

According to the Index, the United States has dropped out of the Top 10 economically freest countries and now occupies 12th place, below Mauritius, Ireland and Denmark. “The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy,” Miller asserts. “The intervention impedes both personal freedom and national prosperity.”

To many of these results and claims, we believe, Peter Drucker would have cast a skeptical eye.

It’s not that he would have supported current U.S. economic policy; in many areas, he would not. But Drucker often questioned the utility of evaluating the world’s nations primarily through the prism of economic freedom.

When it comes to liberty, Drucker wrote in The Future of Industrial Man, what really matters to people is the freedom to choose and act in what he called “the socially constitutive sphere”—the “sphere in which the values are the social values of a society, the rewards the social rewards, the prestige the social prestige, and the ideals the social ideals.”  This sphere would differ from place to place. Yes, it might be economic. But it might also be religious, or tribal, or (as in Germany of the 19th century) cultural.

“If the socially constitutive sphere in a society is not free,” Drucker wrote, “the whole society is unfree.”

Drucker felt that failing to understand this truth led to misguided attempts to introduce one society’s notion of liberty to another. “The Western world, for example, found it almost impossible to understand that capitalist economic freedom was not freedom for the Balkan peasant,” he wrote. “Their society was tribal and religious. Economic freedom to the Balkan peasants simply meant insecurity, the tyranny of the international market and the compulsion to choose and to act as a responsible individual in a sphere in which they saw neither need for, nor justification of, choice and responsibility.”

30 comments
eagle11772
eagle11772

The Obamaniac is a SOCIALIST and PROUD of it.  He constantly tells us that he worships ONLY at the alter of Karl Marx, Vladimir Lenin and Uncle Joe Stalin.  Why is anyone surprised at this ? !

mlynnbrrtt
mlynnbrrtt

The Heritage Foundation is a far (think extremist) right leaning political organization owned by Charles and David Kotch .The Kotch bother's are a plague upon our country. They are responsible for the money in politics that prevents progress, purchases our democracy for self gain, writes legislation that favors their business through lobbyists, and encourages things like the government shut down. We have issues surely but The Heritage Foundation is not on our side.  Make no mistake about it, pushing for deregulation has nothing to do with the good of the common man. Deregulation would not "trickle down" to benefit you at all. They DO NOT care about you, your income, your economic freedom, or the economy. The Kotch brothers care about money, power, and control.  I would not trust their charts. A second opinion is needed from an unbiased source.

harte.ryan
harte.ryan

I stopped reading when I got to "the Heritage Foundation"

MattHill
MattHill


We are so close to losing our democracy to the mercenary class, it’s as if we are leaning way over the rim of the Grand Canyon and all that’s needed is a swift kick in the pants. Look out below.

The predators in Washington are only this far from monopoly control of our government. They have bought the political system, lock, stock and pork barrel, making change from within impossible. That’s the real joke.

Sometimes I long for the wit of a Jon Stewart or Stephen Colbert. They treat this town as burlesque, and with satire and parody show it the disrespect it deserves. We laugh, and punch each other on the arm, and tweet that the rascals got their just dessert. Still, the last laugh always seems to go to the boldface names that populate this town. To them belong the spoils of a looted city. They get the tax breaks, the loopholes, the contracts, the payoffs.

They fix the system so multimillionaire hedge fund managers and private equity tycoons pay less of a tax rate on their income than school teachers, police and fire fighters, secretaries and janitors. They give subsidies to rich corporate farms and cut food stamps for working people facing hunger. They remove oversight of the wall street casinos, bail out the bankers who torpedo the economy, fight the modest reforms of Dodd-Frank, prolong tax havens for multinationals, and stick it to consumers while rewarding corporations.

We pay. We pay at the grocery store. We pay at the gas pump. We pay the taxes they write off. Our low-wage workers pay with sweat and deprivation because this town (Washington DC) – aloof, self-obsessed, bought off and doing very well, thank you – feels no pain.

-Bill Moyers

eagle11772
eagle11772

The Obamaniac is a Stalinist.  He doesn't keep this a secret.

PhilLanager
PhilLanager

Another dumbed-down report from Heritage Foundation. Why does Time even bother offering this propaganda to it's readers?

DeweySayenoff
DeweySayenoff

Yeah, I read right up to the point it said "Heritage Foundation" and stopped.  They have never produced a credible balanced statement or study in their existence.  Their chief tactic is cherry-picking the data to skew their results and then calling it unbiased.

I've never heard anything entirely truthful or accurate from them. 

smjhunt
smjhunt

You know this is a biased, unscientific opinion when you see words like "shackled" in place of specific details that could be verified. Typical right wing pseudo-science most likely from an economist paid by some right wing "think tank"

SmoothEdward1
SmoothEdward1

 Typical Heritage Foundation spin. There are plenty of countries with more regulation than the U.S. that have greater social mobility and better distribution of income. As usual, this right-wing think tank conveniently leaves them out.

cjh2nd
cjh2nd

good job libtards, you guys really know how to pick a disaster-in-chief

BradFoley
BradFoley

Um. Wow. I could spend the time discussing (say) the socialised health care in Switzerland, Australia or Hong Kong, or the higher level of taxes in those countries plus the commitment to public schooling. I might also discuss the ways in which the US has some of the lowest social mobility because of its poor commitment to preschool, (again) health care, and public transportation. Honestly, HOW anyone could argue Australia and Switzerland are less regulated than the US? They've clearly never needed to deal with Australian bureaucracy.


As I say, I could spend my time talking about all this. But, then, it's a report from the Heritage Foundation. Enough said.

M.ThomasFrederiksen
M.ThomasFrederiksen

@mlynnbrrtt This is just an  ad-hominem attack.  And as DavidIhde has pointed out, you clearly have no idea what the Kotch bother's stand for.

DavidIhde
DavidIhde

You have no idea what you are taking about. We are not a democracy and their money in politics is only competition for the lefts money like George Soros and others who are Crony Capitalists and have been buying politicians for years. Regulations hurt small business while protecting big business from competition. The Koch brothers are not doing that, the left wing cronyists are! They (the left) are also the ones who brought you the NSA and the Patriot Act. Both of which the Koch's abhor!

DavidIhde
DavidIhde

@Bill Moyers. You have no idea what you are talking about either. Cut food stamps? The same people who subsidize corporate farming at the expense of the family farm have also tripled food stamp payouts! I wonder who benefits from that? We are not a democracy either but that is exactly how we got to this point because ignoramuses like you think we are and are supposed to be. And the same left wingers who wrote this progressive tax code are the same ones who rig it for their rich friends on wall street and throw crumbs like food stamps at the masses to pacify them while they pull a fast one and run off with the loot. You make it sound like this is left vs right. Oh no it's not! It's left vs left. Dodd-Frank is part and parcel to the Crony Capitalists that torpedoed the economy and they are the ones who bailed them out too by the same government!. Remember it was Dodd, Barney Frank and Obama as a Senator that blasted anyone who dare say that there was something wrong with Fannie Mae and Freddy Mack! And now they are the ones crafting legislation to supposedly protect us from that ever happening again? Dovetail that with the Federal Reserve monetizing all that debt and that is the real reason we the little guy take it it the ass at the gas pump and grocery store.The wolves are still guarding the Henhouse!

WaxilDavidson
WaxilDavidson

@MattHill This is an easy fix in theory just invoke 3 things. 1) term limits on all offices 2) supreme court justices must be voted in and also have term limits 3) no private campaign financing. This will eliminate the career politicians who legislate with their egos while pandering for future votes propping up private interests in order to do so. It would spark the return of the true statesmen (think Bernie Sanders or Alan Grayson) by removing the incentive for the scum who run things now. Reasonable men will step in with no interest in power, just serving their country. Right now this is a laughable notion. "All for one and one for one" is the subtextual credo of nearly every single politician scumbag. Embarrassing. This is not freedom. This is not what the founders wanted. We lost it Ben, we lost it. 

WaxilDavidson
WaxilDavidson

@eagle11772 Please do share this magical evidence. You're a genius, you know that right. We're all wrong, and you're right, a true visionary. 

DeathByCactus
DeathByCactus

@cjh2ndDo you just read anything and everything and fall in step without having a single thought of your own? Or can you do something else besides parrot insults? Have you ever been to any of the other listed countries? I highly doubt you have... If you did you would have reservations about the article in question.


You should also be prepared to note the restrictions both parties have placed and the freedoms both parties have stolen. Liberal or conservative... you are both guilty.

bryanfred1
bryanfred1

@BradFoley You could also discuss the lack of a minimum wage in Switzerland and how that results in unemployment that ranges between two and three percent, providing young people with easier access to jobs where they make money while building work habits and a resume.  You could discuss the U.S. having the highest corporate income tax in the developed world.  We could do this all day.

AllenGingrich
AllenGingrich

@DavidIhde I'm a small business owner and I am vehemently anti-Republican. They protect large business and constantly spit on small. Screw politics, I'm in this to protect myself and my family's well-being, and that means fighting the Republicans.

M.ThomasFrederiksen
M.ThomasFrederiksen

@DavidIhde  "We are not a democracy either but that is exactly how we got to this point because ignoramuses like you think we are and are supposed to be."  Voting just encourages them.  Democracy is only a good system for a small group of people, say up to about 200 or so.  

BradFoley
BradFoley


@bryanfred1 @BradFoley http://www.heritage.org/index/about

They are pretty vague about how they actually define this index. It still seems strange to me that Denmark, New Zealand, Singapore, Australia, Canada and Switzerland are all in the top 10, and yet people want to use this index to claim Obamacare is lowering American freedom. I've lived in Australia and Canada (as well as the States) and can tell you personal taxes are not low in either country, there is some form of universal single payer health care, and the social safety net is strong. And all my Danish and Kiwi friends suggest the same is true in NZ and Denmark.

Without better details about the mechanics of the index, I can't really speculate what is really going on. I do feel like maybe all the loopholes and half-measures that all the partisan fighting in the US has engendered has made spending less efficient here than it should be? There's a weird patchwork of departments here, and a pretty awful and inconsistent school funding system. And, the efficiencies that could be gained from a single payer health system aren't being fully realised, with the strange Medicare/Medicaid/Obamacare Cerberus, along with all the duplication and waste that occurs with competing private healthcare companies, and insurance taking its cut.

And as @MattHill  notes, the effective business tax rate here is actually very low. 

MattHill
MattHill

@bryanfred1@BradFoley  

Reality Check: Effective U.S. Corporate Tax Rate Much Lower Than Most Other Developed Nations

Republicans have been kvetching today about the fact that, as of Sunday, the U.S. will have the highest statutory corporate tax rate in the world following a scheduled cut in Japan’s corporate tax. “The United States is a world leader in countless ways. ‘World’s Highest Taxes’ is a title we should give up as soon as possible,” wrote Sen. John Barrasso (R-WY) in a Fox News op-ed.

This is constant refrain from Republicans, who then blame the supposedly high U.S. corporate tax rate for discouraging job creation. But as we’ve noted time and time again, while the U.S. has a high statutory corporate tax rate (meaning the rate on paper), U.S. corporations actually pay incredibly low taxes due to the ever-proliferating loopholes, credits, and deductions in the tax code and the use of overseas tax havens. U.S. corporate taxes that were actually paid (the effective rate) fell to a 40 year low of 12.1 percent, despite corporate profits rebounding to their pre-Great Recession heights. The U.S. both taxes its corporations less and raises less in revenue from corporate taxes than its foreign competitors.

M.ThomasFrederiksen
M.ThomasFrederiksen

@BradFoley There is a different, and much better index at www.freetheworld.com, which spells out their methodology in detail.  It's not just about the tax rate, or one issue like healthcare--which is not free nor has been free-market in the US either.  

M.ThomasFrederiksen
M.ThomasFrederiksen

@MattHill  The issue goes beyond how much the take was.  The Byzantine nightmare of a tax code is a big problem in and of itself.  Simpler, lower, flatter taxes generally take in more money, while doing less harm to the economy.