From the Bench: February 2012
Senator Francis O’Reilly (I-Puerto Rico) filed a bill yesterday to remove the phrase “land of the free” from the National Anthem. During brief remarks from the senate floor, the legislator from the recently admitted 51st state decried the embarrassing fall of the United States’ ranking to 10th in the Heritage Foundation’s 2012 Index of Economic Freedom.
The previous paragraph was a lampoon, of course, with the exception of the hard to believe, but true, diminished status of our beloved country among countries deemed just “mostly free” lagging behind the five of which were deemed “free.” We trail other sovereign nations, such as Australia, New Zealand, Canada, Chile and Mauritius. Yes, Mauritius.
The Heritage Index empirically establishes economic freedom as the life blood of prosperity, an aggregate term used to capture intertwined economic measures including per capita income, productivity and the elimination of poverty. This monumental research effort found that “the positive relationship between economic freedom and prosperity has been confirmed yet again in the 2012 Index.”
Poverty intensity, as measured by the United Nations’ new Multidimensional Poverty Index is “much lower on average in countries with greater economic freedom.” The ten-year growth rate of countries having experienced the greatest improvements in economic freedom over the same period realized per-capita income 1.6% higher than those in the lowest grouping (3.7% and 2.1%, respectively). If that sounds insignificant, consider this: A family living in the top grouping of economically free countries will realize gains in their income twice that of a family in the lowest grouping in just 10 years. The Heritage Index of Economic Freedom grades nations on 10 measures that evaluate the rule of law, regulatory efficiency, open markets and intrusiveness of government.
Efforts to reduce regulations and other initiatives within the free-enterprise agenda have in recent years been countered with accusations that this approach, known commonly as laissez faire capitalism, is to blame for the Great Recession. This argument collapses almost immediately in the face of evidence catalogued by George Reisman which makes clear that what we have in the United States is hardly laissez faire capitalism. Reisman points to 15 federal cabinet departments, “nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce.” Add to that more than 100 federal agencies and commissions contributing to the Federal Register’s 69,000 pages of detailed government regulations.
The ebb and flow of economic freedom at the national level clearly impacts prosperity in the Sunshine State. Recent good news includes the signing of free trade agreements with Colombia, Korea and Panama long championed by the Florida Chamber of Commerce, as well as the fix to visa restrictions that hindered travel to Florida. Let’s pause only momentarily to celebrate before turning our eyes to the work remaining, not only at the national level, but also within our beloved state. With clear evidence that constraints on business translate into restrained income growth for our residents, the rationale for championing economic freedom at a state level provides more than just a philosophical rationale for pursuing greater economic freedom.
