The 2021 edition of the Index of Economic Freedom was released today (as I’ve repeatedly stated, it’s my favorite annual publication from the Heritage Foundation).
There are five things that merit attention
1. Hong Kong is no longer in first place. Indeed, it’s no longer even part of the rankings because the authors have determined that Hong Kong no longer has real sovereignty.
So that means Singapore is now the world’s most laissez-faire jurisdiction, followed by New Zealand, Australia, and Switzerland.
Here are the top 30 nations.
I assume nobody will be surprised to learn that Cuba, Venezuela, and North Korea are the three most economically repressive regimes.
2. Most Nordic nations rank above the United States. I highlighted Denmark’s better economic policy when writing about last year’s Index, but Iceland and Finland also rank ahead of America. And Sweden is just one spot behind the USA. Only Norway, cushioned by oil wealth, trails by a meaningful margin.
The United States has better fiscal policy than these countries, but that variable gets too much attention. In areas such as trade and red tape, the Nordic nations are generally more market oriented.
3. More economic freedom means more national prosperity. I’ve repeatedly made this point, but some people never seem to learn. Nonetheless, I’ll share this graph in hopes that data eventually triumphs over ideology.
4. I’m impressed by Taiwan and surprised by Spain. It’s obviously easy for a nation to improve when it starts with a low score. But it’s not easy to make a big jump if a country starts with a high score. So Taiwan’s appearance on the below list is an additional reason to be impressed by that nation’s pro-market orientation.
And, given my recent criticism of Spain, I’m surprised to see that nation made a big jump. I dug into the details and the improvements are in areas other than fiscal policy.
It’s good news, but not overly impressive, to see improvements by nations that start with very low scores.
5. Donald Trump did not deliver more economic liberty. When I point out Trump’s mixed performance, some people accuse me of being a curmudgeonly libertarian who unrealistically demands perfection.
Well, I am curmudgeonly and I am a libertarian, but I’m not alone in noticing Trump’s shortcomings. As you can see from the Heritage Foundation’s data for the United States, we have less economic liberty now than when Trump took office.
The bottom line is that Trump was no Ronald Reagan. On economic issues, he wasn’t even a Bill Clinton.
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Image credit: Pixy.org | CC0 Public Domain.
