Index of Economic Freedom

The Index of Economic Freedom is a measure of economic freedom that was created by The Heritage Foundation and The Wall Street Journal in the mid-'90s. The index can be used to compare the economic freedom among nations, as well as how each nation (and the world overall) is getting better or worse compared to the past. See: GINI Index.

Spoiler alert: the world is getting more economically free, slowly but surely. The U.S. is in the top 20, but is no match for Hong Kong, which has been number one many times (although maybe not for long, as Hong Kong gets reincorporated into China, which isn’t even in the top 100 countries ranked).

So how does one measure economic freedom, anyway? The Index of Economic Freedom measures private property rights and enforcement, the nation’s judiciary, the nation’s integrity (i.e. level of corruption, Somalia a perpetual winner), government taxes and spending, business regulations, labor rights, inflation and price controls, trade barriers, and bank regulations. So...just about everywhere money...is.

Perhaps unsurprisingly, there’s a general correlation of more income per capita with more economic freedom. Still, the index has its critics, who argue that economic freedom doesn’t correlate with economic growth.