The foundational stone of American Exceptionalism has always been our economic freedom. The ability of individuals, regardless of background or circumstances, to freely engage in the marketplace to lift their own fortunes has been our nation’s greatest strength. With economic freedom, none of the “isms” that keep the left up at night matter. We are all truly, regardless of race, gender, class or anything else, “captains of our fate and masters of our souls.” A decade ago, we were the second most economically free country in the world. Today, under Obama, we are 18th.
Every year, The Fraser Institute, a free-market think tank in Canada, compiles a highly respected index of economic freedom in countries around the world. Broadly speaking, it looks at five critical components to freedom: size of government, rule of law, sound money, free trade and regulation. Historically, the US has been near the top of the table in economic freedom, surpassed only by the city-states of Hong Kong and Singapore. This year, we are 18th in the world, while our northern neighbor, Canada, has become the 5th most economically free nation in the world.
Let us pause here and list the countries that are more economically free than ours.
Hong Kong, Singapore, New Zealand, Australia, Canada, Bahrain, Mauritius, Finland, Chile, United Arab Emirates, Ireland, United Kingdom, United Arab Emirates, Estonia, Taiwan, Denmark and Qatar.
We are just barely ahead of Kuwait and Cyprus.
Worse, this index was compiled from data through just 2010. Since then, our government has grown considerably larger and the weight of regulations have grown heavier. And, the recently announced QE3 from the Fed will further debase our currency. Without a change in course, our comparative advantage in the world will slip even further.
Fortunately, there is hope in North America. Canada has learned a lesson from our past and is moving to free its markets. Government there is not only restrained, but shrinking. They recognize the abundant natural resources they have and are aggressively utilizing them, while we spin fantasies of wind and solar power.
So, there is still a “shining city on the hill” on our continent. Its just now a lot further north than we expected.