Canada’s Fraser Institute has just released a book-length explanation of its study (conducted in association with the U.S.’s Cato Institute and Germany’s Liberales Institut) measuring the level of freedom in 123 countries, in two categories: “economic freedom” and “personal freedom.” The No. 1 country was New Zealand, with an overall Freedom Index of 8.73; the U.S. was in seventh place at 8.30.
I found it quite interesting that Slovakia — the small East European country from which both of my parents hailed — ranked higher, at No. 19, than did the Czech Republic, at No. 34; and that the Czech Republic was slightly better on personal freedom (8.7 vs. 8.6), but Slovakia considerably better on economic freedom (7.57 vs. 6.88). This surprised me, because during the marriage of these two nations under the name “Czechoslovakia,” the Slovak territory was much more Stalinized, geared toward heavy industry, and thus more economically backward. (Not to mention that, since the two countries became independent of each other, the Czech Republic was fortunate to have one of the world’s most prominent free-market economists, Vaclav Klaus, as its president for ten years.)
Still, maybe I shouldn’t be that surprised. Steve Forbes — an economic observer I respect immensely — predicted a decade ago that “the Slovak Republic is set to become the world’s next Hong Kong or Ireland, i.e., a small place that’s an economic powerhouse.” In any case, there is perhaps a broader lesson here: It is precisely the poorer countries that stand in greatest need of economic freedom. For an advanced and wealthy country to say it needs to raise taxes in order to build a more generous welfare state is to propose a luxury — one that its citizens may or not decide that they can afford. But for a poorer, backward country to become prosperous, it has to put freedom first — attract investors and entrepreneurs with low tax rates and a less oppressive regulatory environment. You can’t share, or redistribute, or tax, a wealth that hasn’t been created in the first place.
One of the most interesting things I’ve been hearing about the new pope is that he is simultaneously concerned about the poor (and about socioeconomic inequalities in unjust countries) and skeptical about leftist solutions to poverty. I think this comes from having lived under actual leftism: He knows the poor should be helped, but sees that left-socialist regimes, while claiming they take from the rich to give to the poor, actually take from the rich and the poor to give to themselves and their cronies.
The new book from the Fraser Institute is available for free downloading here.