United States

Ranking Economic Freedom with The Heritage Foundation's James Roberts


"Economic Freedom peaked about seven or eight years ago in the U.S. and has been dropping since then," claims James Roberts, Heritage Foundation Research Fellow and co-author of the 2012 Index of Economic Freedom.

For over a decade the Heritage Foundation has been ranking countries based on a number of indices, including open markets, regulatory efficiency, and the size and scope of government. Due primarily to costly regulations and rapid government expansion, the tenth-place United States' declined in the rankings for the fourth straight year, behind Hong Kong (#1), Australia (#3), Switzerland (#5), Canada (#6) and Ireland (#9).  Even Maruritius, a small island off the coast of Africa, was seen as a more economically free.

Roberts sat down with Reason's Matt Welch to discuss the Index, the state of free enterprise in the world, and the decline of economic freedom in Europe and North America.

About 6:30 minutes. Shot by Meredith Bragg and Joshua Swain and edited by Bragg.

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  1. onetime a puppy followed me and we played and jumped and I got real tired and when I woke up it was a raccoon instead.

    1. ….and it ate my brain.

      1. This is a fascinating way to open up the discussion.

  2. I’m shocked the U.s is in the top 10. Sad how unfree most of the world is.

    1. If you want to feel even worse, keep in mind this is just economic freedom. If you take into account other measures of freedom like freedom of speech and gun rights, the US would probably move to the top.

      1. Give Me time, and I’ll put us in the BOTTOM ten.

  3. New Zealand is the only country on the list I would consider moving to and that’s only because I recently read that the women there were the most promiscuous in the world. Plus the scenery in LOTR. Don’t know much else about it.

    1. New Zealand boasts Kimbra. Homina.

      1. I don’t know what that is

          1. That’s very little to boast about.

            1. Yeah, I don’t like Bing either.

    2. New Zealand has Czech Republic syndrome — shitty and intrusive personal and economic laws and regulations that aren’t as bad as they seem in practice because too many entities of government don’t care and don’t actually fuck with people to the extent the law mandates/allows.

      1. In Hedrick Smith’s The Russians, he quoted someone as saying ‘the only thing that saves us is the lax application of our laws. If we were Germans, it would be unlivable.’

    3. Remember with New Zealand you have a country bigger than Japan but with a population of four million people. And one and a half million of them live in one city at the fathest North tip of the North island. The rest are spread out over a great deal of land. New Zealand likes to think of itself as a very liberal nanny state but… it’s just not. There is simply not enough enforcers to really enforce an authoritarian rule over such a sparce population. Add to it that most Kiwi’s are a very self-reliant people (due to both nessessity and nature), they just don’t need to be nannied that much. But the thought of being liberal makes them feel like they’re doing good. Sound fammiliar?

      Oh, and as far as having the most promicuous women goes, remember this; four million people, fourty million sheep. You figure it out.

      1. Japan’s 145,000 square miles, and New Zealand’s 103,000. 😛

        1. Hokaido doesn’t count. It’s too damn cold and the food sucks.

          1. Guess you don’t like seafood, dairy, pastries, ..shit, what DO you like?

  4. North Korea: 179 with a bullet!

  5. Shouldn’t Somalia be #1 on this list?

  6. I am a world travel. I lived in New Zealand for a spell. It felt like I was living in prison. Freedom of thought is not tolerated. If you speak out in favor of something that offends European Socialist style sensibilities people were quick to ostracize. Despite its clever marketing campaign eager to portray to outsiders the contrary, New Zealand is an insular country that does not value personal freedom. Much of New Zealand industry exists due to heavy government subsidization (i.e. dairy and wool subsidies). Contrary to the wild untamed lands seen in so many commercials, New Zealand is basically a giant government subsidized sheep farm with small pockets of tourism. This study is pure bullshit. It would be more useful if each of the individual US states were ranked in terms of economic and personal liberty. Federalism is the only path to true freedom. Centralized government by its nature is an enemy of private enterprise and personal freedom and you won’t find a more centralized bureaucracy than that of Wellington.

    1. Let me give a specific example of what you’re talking about. In New Zealand it is impossible for anyone to own mineral rights. All mineral rights belong to the “Crown” – i.e. the bloated, centralized government. Similarly, property rights are subject to profound government meddling. If you want to cut down a tree in your own backyard in New Zealand you must first get formal approval from a visiting government inspector. If you want to drive a car in New Zealand you must first pass a nationally administered smog program that is stricter than anything found in any US. Nowhere in New Zealand can you drive without a seatbelt without subjecting yourself to a huge nationally administered fine. Most of New Zealand’s most beautiful hikes require government permits, payment of government fees, camping in government administered camp grounds, etc.

      1. And that is such a shame. It is storybook beautiful and so are the women. What a waste.

        1. A visit to “people’s museum” in Wellington will disabuse you of this notion. A giant satellite image of the country is found there. It seens like 99% of the land is either city or developed farmland. Those iconic scenic images you see in the commercials are actually small isolated enclaves left undeveloped but visited by hordes of tourists and surrounded by sheep and dairy farms. If you want a place to chase freedom and a wild frontier, I recommend Vietnam.

      2. I just didn’t see that when I was there. What areas were you in? I spent most of my time there on the South island and while they do love to try and advocate the virtues of liberalism, they just didn’t seem to really care when it comes to enforcement. Granted I wasn’t there long but I do still have family who are now in the Auckland area and they will say that the difference between what they preach and what they practice can be very different. Besides, most of the examples you gave are less intrusive than some places here in the US. Compaired to Chicago, this sounds like the wild frontier!

        1. The grass is always greener. If you want freedom I suggest you forget about a windswept socialist sheep colony and think about getting away from as many people as you can or becoming fabulously wealthy so you can afford an army of lawyers to overcome the tyranny without too much inconvenience.

      3. Sounds like you’re both describing Canada. Also a country ahead of the USA on the list. I own a business here in Canuckville and lemme tell ya, I don’t think it’s all that free.

    2. The Mercatus Center at GMU does rank the states:


      1. Yeah, but that study is a joke: It ranks paternalist Oregon – a state where you can’t even pump your own damn gas- as number one in personal freedoms. The weightings are all screwed up. What is needed is an index that focuses on population, taxes, rules, regulations, economic opportunity, recreational opportunity, drug laws, transportation laws, marriage laws, speech laws, etc. Tax rates and whether or not you have the right to fucking kill yourself just don’t quite get at what freedom is all about.

        1. I didn’t say that it was perfect, but it does at least attempt to quantify things. You should publish the Harpsichordist Ranking of the 50 States and improve on the model.

        2. It’s impossible to know how much to weigh each factor. Taxes are a large portion of government interference in the free market, though.

  7. I have a theory that isolated, relatively low resource countries like Hong Kong, Singapore, NZ and Chile tend to have better economic records in the long run because they can’t afford isolation and subsidies the way a country like the US or China could.

    1. Chile isn’t resource-poor.

  8. Obama’s White House has approved fewer regulations than his predecessor George W. Bush at this same point in their tenures, and the estimated costs of those rules haven’t reached the annual peak set in fiscal 1992 under Bush’s father, according to government data reviewed by Bloomberg News.


    A simple acoustic detector would have saved BP Oil $20 billion in 2010. Some regulations are cost positive.

    1. Of course you can make a regulation look cost positive if you consider each regulation in isolation only after you know what caused the problem, and if you ignore the hidden costs of regulation. Nothing looks quite as compelling as a cost-benefit analysis that omits the majority of the costs.

  9. Regarding the lack of economic freedom:

    The MetLife Lesson
    Why 4,300 people are suddenly out of a job…

    You know something’s wrong when a company like MetLife can’t find a buyer for its mortgage unit, fires 4,300 workers, and its stock rises. But such is the condition of America’s housing markets, where the risk of overregulation and litigation are so high that companies would rather abandon a business than take a risk on growing it.

    MetLife is an illuminating example. Unlike Bank of America, which bought a shaky subprime lender in Countrywide and then had to take billions in losses when that market evaporated, MetLife got into the mortgage business in 2008 at the bottom of the market and snapped up a platform on the cheap. Its mortgage business soon spanned traditional loan origination, mortgage servicing and more.

    Then came Dodd-Frank, the robo-signing pseudo-scandal, the state Attorneys General multibillion-dollar mortgage-servicing settlement talks, and the Obama Administration’s various efforts to halt foreclosures. Housing prices kept falling. In October, the Federal Reserve?which regulates MetLife’s banking subsidiary that backs its mortgage business?told the company it couldn’t return $4.8 billion to shareholders as dividends or stock buybacks until after a round of stress tests. MetLife sold the bank to GE Capital and wanted to sell its mortgage business too, citing an “uncertain marketplace and regulatory environment” despite its rising market share.


    1. The MetLife mortgage lesson is that even companies with the best risk assessments and strongest balance sheets can’t compete with government gone wild. MetLife’s shareholders may benefit from last week’s announcement, but that’s cold comfort for the 4,300 people who are now out of work.

      “We will stand up in this election to bring about the change that won’t just win an election, but will transform America,”

      – Barack Obama

  10. Obama’s White House has approved fewer regulations than his predecessor George W. Bush at this same point in their tenures,

    Only because the agencies are blowing deadlines for issuing rules. Seriously, ObamaCare, Dodd-Frank, etc. should have added hundreds or thousands of pages to the FedReg by now, but haven’t because the bureacracy is so sclerotic.

    I guess you can take that as a plus, if you want.

    and the estimated costs of those rules haven’t reached the annual peak set in fiscal 1992 under Bush’s father,

    See above, plus of course the agencies get to estimate the costs of their rules. I wonder if any have ever estimated too high?

    1. If that is the case, that they get to estimate their own costs, then it might also be true that under administrations who think that regulations are bad due to such costs and want to find them, that they may feel it is ok to report them.

      If you have another administration that says that regulations are not costly and need to avoid making things look bad in the middle of a recession, they may under report their costs.

      Just speculation.

  11. http://hanseconomics.com/2012/…..egulation/

    Here is a good article responding to the claim that a certain measure of regulation is necessary for economic progress. The claim was made in an analysis of Heritage’s Freedom Index.

  12. Heritage Foundation should never be published on a website called “Reason”… http://pac.org/blog/csr-not-humbug

  13. Watch Herman Cain deliver the Tea Party State of the Union at http://www.TeaPartyExpress.org ! The live stream starts on Tuesday, January 24th at 10:30 EST/7:30 PST.

  14. I never thought about this but this is very serious
    i will read more about this

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