Heritage Economic Freedom Report Shows the World Is Less Free

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This year marks the 20th anniversary of the Index of Economic Freedom. The Index covers 10 freedoms – property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. The Index of Economic Freedom considers every component equally important in achieving the positive benefits of economic freedom. Each freedom is weighted equally in determining country scores.

America’s freedom score has declined for seven years in a row and now ranks 12th, just ahead of Bahrain and four spots behind Mauritius. The U.S. is the classic case of having forgotten the hard-earned lessons of the recent past. America pulled itself out of the despond of the 1970s with policies of lower taxes, less regulation, steady monetary policy, and spending restraint. A two-decade boom followed with little interruption. Then a kind of collective amnesia set in during the 2000s that led to major policy errors and a credit mania, followed by a panic and crash that created a new political opening for those who wanted to expand state control of finance, health care, and energy markets. The last two years of the Bush presidency and first two Obama years marked the largest expansion of state power in the U.S. since the 1930s.

The election of President Barack Obama in 2008 ushered in an era of high government spending, regulation, and new taxes. It was not long before these policies began to affect America’s ranking as one of the world’s freest economies. The U.S. dropped out of the top ranks of the freest economies in 2010. Its score dropped another spot in 2011 and ended up in 10th place in both editions preceding this one—and well below the other freest economies. Even Canada, with socialized medicine, scored higher. For over five years, as the Index documents, our nation’s economic freedom has been unambiguously eroded by excessive government spending and growth-stifling regulations, an unreformed tax system, and creeping cronyism that undermines the rule of law.

As President Ronald Reagan once reminded us:

You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down. Up to man’s age-old dream—the maximum of individual freedom consistent with order—or down to the ant heap of totalitarianism.

Of the 178 economies numerically graded in the 2014 Index, six have earned the designation of “free” with scores above 80. The next 28 countries, with scores between 70 and 80, are considered “mostly free.” These 34 economies sustain and provide institutional environments in which individuals and private enterprises enjoy a substantial degree of economic freedom in the pursuit of greater opportunity and prosperity.

The largest portion of the countries graded—117 economies—have freedom scores between 50 and 70. Of those, 56 economies are considered “moderately free” (scores of 60–70), and 61 are “mostly unfree” (scores of 50–60). Twenty-seven countries have “repressed” economies with scores below 50.

This report can be seen as even more bleak than they spin it. One problem with averaging different measurements is it’s akin to having one foot in boiling water and the other foot in a bucket of ice cubes. On average everything is fine, but in reality you are not in a happy place. Another way to define “free” and “mostly free” is that they are not comparable to the “repressed” countries by any measure. Taking this into account, there are only four countries that have earned the designation of “free” with scores above 80 and only five countries that have earned the designation of “mostly free” with scores above 70. When you look at the regional leaders, North America and Middle East/North Africa does not have a free or mostly free country in their region. There are 42 countries that could be considered “moderately free” because they are a “repressed” country by one measure and their score is 60 or higher. Costa Rica is the only “moderately free” country that has scored 50 or higher in every measure. There are 87 countries that have earned the designation as “mostly unfree” by having between two and four measurements with “repressed” scores and a composite score of 50 or more. There are 40 countries that have earned the designation of “repressed” economies with five or more measurements scored less than 50.

Below are visual displays of the United States, Brazil, Russia, India, China, and South Africa. As bleak as it has been in recent years for the United States, there’s no reason to worry that one of these other countries are going to soon overtake us.

United States

South Africa





free and mostly free

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