Who Is the Freest of All?
Byline: Richard W. Rahn, THE WASHINGTON TIMES
ALPBACH, Austria. - They claim here that great mountains lead to great thoughts, and they even have a path named "The Thinkers Walk." And indeed some of the greatest economic thinkers of all time did walk and enjoy the Austrian Alps. The Austrian School of thought produced two of the most influential economists of the 20th century, Ludwig von Mises and F.A. Hayek. Through logical rigor and empirical observation, they proved limited government and economic freedom lead to individual and national economic prosperity and to a more civil society.
At the end of August each year, many leading European scholars, businesspeople, policymakers and even some graduate students come to this small village, arguably one of the most scenic on the planet, to discuss the state and future of the world economy and what should be done. As a participant, I have been struck with the number of European opinion leaders who still ignore the obvious: Economic freedom is the key. Though Hayek held conferences in this town before his death 14 years ago, his work has had much more influence in the U.S. and the United Kingdom than in Continental Europe, including Austria.
The 2006 annual Economic Report of the World has just been released, ranking the world's economic entities by their degree of economic freedom. Read on to see the top 10. This report, authored for the last decade by James Gwartney and Robert Lawson, is published by the Frasier Institute in Canada and the Cato Institute in the U.S., and several dozen other economic institutes around the world. The publication has become very influential by providing more empirical evidence to support the arguments of von Mises and Hayek that freedom works. (The Heritage Foundation and the Wall Street Journal also produce an influential annual Index of Economic Freedom. Though it uses somewhat different methodology, its findings tend to be very close to those of Mr. Gwartney and Mr. Lawson.)
The top 10 economic freedom ratings this year go to: Hong Kong, Singapore, New Zealand, Switzerland, the United States, Ireland, the United Kingdom, Canada, Iceland, and Luxembourg. At the other end of the scale, the bottom five go to: Venezuela, the Democratic Republic of the Congo, the neighboring Republic of the Congo, Myanmar (the former Burma), and at the bottom, Zimbabwe. (Note the Economic Report of the World does not include all countries because of the problem of comparable data so totally nonfree states, such as Cuba and North Korea, are not in the rankings.)
When one examines the rankings, it becomes obvious economic freedom is highly correlated with economic prosperity and individual liberty. …