Free Markets

Canadian Provinces Suck Slightly Less Than U.S. States at Economic Freedom

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Economic Freedom of North America
Fraser Institute

Canada's growing advantage in economic freedom relative to the Unfortunate States of America doesn't just matter in terms of international bragging rights—it's also dragging down the the relative attractiveness of U.S. states as places to live and do business. Nationally, the United States has slipped in both Fraser Institute and Heritage Foundation assessments of economic freedom. And now the Fraser Institute says that states are being weighed down by federal policy that makes it harder for them to compete with their neighbors north of the border. Unfortunately, Canada is winning this race not with great policy, but by being less bad than than its neighbor.

When the U.S.-based Heritage Foundation publishes its latest Index of Economic Freedom, the authors wrote, "The United States, with an economic freedom score of 76, has lost ground again in the 2013 Index. Its score is 0.3 point lower than last year, with declines in monetary freedom, business freedom, labor freedom, and fiscal freedom."

Likewise, Canada's Fraser Institute, in its most recent Economic Freedom of the World (PDF) report, grimly stated:

Throughout most of period from 1980 to 2000, the United States ranked as the world's third-freest economy, behind Hong Kong and Singapore. As Exhibit 1.5 indicates, the chain-linked summary rating of the United States in 2000 was 8.65, second only to Hong Kong. By 2005, the US rating had slipped to 8.21 and its ranking fallen to 8th. The slide has continued. The United States placed 16th in 2010 and 19th in 2011.

Unfortunately, even as American states vie with one another to attract businesses and investment, they're limited in what they can undo in terms of damage done by Washington, D.C. State governments are largely hemmed-in, and hobbled, by federal policy—with unfortunate repercussions. That becomes clear in Fraser's latest, more locally focused, Economic Freedom of North America report. As the authors pithily point out, "the race is heating up for some U.S. states. Unfortunately, it's a race to last place. According to the report, the federal government's influence over the states is increasing, and the average state score has dropped 0.9 points since 2000. That's particularly bad news when you consider that a one-point increase in economic freedom translated into a 1.4-point increase in the employment growth rate between 2000 and 2005. That's 1.5 million jobs created over five years!"

For readers of Reason, Fraser's definition of economic freedom is unlikely to be controversial. Fundamentally, the report says, "Individuals have economic freedom when (a) property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and (b) they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others."

The report includes two rankings of economic freedom—one just comparing state and provincial policies, and the other incorporating the effects of national legal systems and property rights protections. Since people are subject to all aspects of the environment in which they operate, and not just locally decided rules and regulations, it's that "world-adjusted all-government" score that matters most, and it has a big effect—especially since "gaps have widened between the scores of Canada and the United States in these areas." The result is is that:

[I]n the world-adjusted index the top two jurisdictions are Canadian, with Alberta in first place and Saskatchewan in second. In fact, four of the top seven jurisdictions are Canadian, with the province of Newfoundland & Labrador in sixth and British Columbia in seventh. Delaware, in third spot, is the highest ranked US state, followed by Texas and Nevada. Nonetheless, Canadian jurisdictions, Prince Edward Island and Nova Scotia, still land in the bottom two spots, just behind New Mexico at 58th and West Virginia at 57th.

Before you assume that the nice folks at Fraser are gloating, or that you should pack your bags for a northern relocation, the authors caution that things aren't necessarily getting better north of the border. Instead, "their economic freedom is declining more slowly than in the US states."

So, they have that going for them. For what it's worth.

Congratulations to my Canadian friends for out-scoring the U.S. on economic freedom. I look forward, someday, to racing them to the top rather than the bottom.

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  1. I was the last one left after the nuclear holocaust, eh. The whole world had been destroyed, like U.S. blew up Russia and Russia blew up U.S. and Canada. Fortunately, I had been offworld at the time. There wasn’t much to do. All the bowling alleys and donut shops had been wrecked. So’s I spent most of my time looking for beer.

    1. Take off, you hoser!

      1. Fleshy-headed mutant! Are you friendly?

        1. No way, eh! Radiation has made me an enemy of civilization.

  2. I see red Maine next to blue New Hampshire.

    There was an article a while back comparing the cost of opening a gas station in ME vs NH, and the difference was nearly a hundred thousand dollars in fees and licenses.

    1. Maine is a victim of their own stupidity. Even with the hipsters in Portland, I never understood why it wasn’t a conservative state.

      1. The lobsters probably contain too much mercury.

        1. You may be right. The real Mainers I knew were Democrats. They thought they could vote themselves some free shit while living so far in the backwoods that no cop, tax collector, or regulator would ever find them.

          1. Some of them weren’t wrong. But that means you have to live way out in the backwoods. I’ve been to the backwoods of Maine. There isn’t shit out there.

            1. Depends on what kind of shit you like. If trees and moose and not being able to buy stuff easily is your thing then it’s great. Also seems to be a popular place to grow weed, which I approve of.

    2. And it’s not as if it is super easy in NH.

  3. I have a hard time believing California is only in the 2nd quintile.

    1. Yeah I have a hard time buying that too. I mean, living here is fairly easy if you have a good job. But I wouldn’t want to try to buy a home here, much less start a business.

  4. The fuck? Is that Illinois I see in the “most free” category?

    1. Beat me to it. That’s nuts. Much worse than WI, which is yellow.

      1. Same here. That is ridiculous, Illinois is terrible.

        It’s also a libertarian tragedy, because Illinois is an industrious state that is being held hostage by Shitcago. The rest of the state is farms and factories and railroads, but the Democrats have sunk their teeth into Illinois.

        Sadly, the same is increasingly true of another old Democrat machine that never gets any attention: Cleveland. The sprawling Cleveland-metro Democrat complex has been instrumental in making Ohio the ultimate shitty “purple” state.

        As always, the fight for economic freedom is the fight against the statist propaganda matrix.

  5. My tiger friend has got the sled,
    And I have packed a snack.
    We’re all set for the trip ahead.
    We’re never coming back!

    We’re abandoning this life we’ve led!
    So long, Mom and Pop!
    We’re sick of doing what you’ve said,
    And now it’s going to stop!

    We’re going where it snows all year,
    Where life can have real meaning.
    A place where we won’t have to hear,
    “Your room could stand some cleaning.”

    The Yukon is the place for us!
    That’s where we want to live.
    Up there we’ll get to yell and cuss,
    And act real primitive.

    We’ll never have to go to school,
    Forced into submission,
    By monstrous crabby teachers who’ll
    Make us learn addition.

    We’ll never have to clean a plate
    Of veggie glops and goos.
    Messily we’ll masticate
    Using any fork we choose!

    The timber wolves will be our friends.
    We’ll stay up late and howl,
    At the moon, till nighttime ends,
    Before going on the prowl.

    Oh, what a life! We cannot wait,
    To be in that arctic land,
    Where we’ll be masters of our fate,
    And lead a life that’s grand!

    No more of parental rules!
    We’re heading for some snow!
    Good riddance to those grown-up ghouls!
    We’re leaving! Yukon Ho!

    1. Economic freedom? I’m having Nunavut.

      1. *narrows gaze*

        You just…I mean…but…

        *slowly shuffles away*

      2. Indeed!

        Do you know the way to Nunavut?
        I’ve been away so long,
        I may go wrong and lose my butt.
        Do you know the way to Nunavut?
        I’m going back to find some peace of mind in Nunavut.

        BC is a great big freeway,
        Put a hundred down and buy a sled.
        In a week, maybe two, they’ll make you a shed.

        Weeks turn into years, how quick they pass,
        And all the sleds that never were
        Are barking curs all slumping past.

        You can really breathe in Nunavut,
        They’ve got a lot of space.
        There’ll be a place where I can stay.
        I was born and raised in Nunavut,
        I’m going back to find some peace of mind in Nunavut.

        Gold and fortune is a magnet,
        It can pull you far away from home.
        With a dream in your heart you’re never alone.

        Dreams turn into snow and blow away,
        And there you are without a friend,
        You pack your sled and ride away.

        I’ve got lots of friends in Nunavut.
        Do you know the way to Nunavut?

        BC is a great big freeway,
        Put a hundred down and buy a sled.
        In a week, maybe two, they’ll make you a shed.

        Weeks turn into years, how quick they pass,
        And all the sleds that never were
        Are barking curs all slumping past.

        I’ve got lots of friends in Nunavut.
        Do you know the way to Nunavut?
        Can’t wait to get back to Nunavut.

  6. Jesus. Louisiana is a pain in the ass but I see it ranked in the bestest catagory. I cant imagine why anyone would put up with worse. If you are in a red state why not pack up and move your business to a blue one? Is the market that good in the red states? Or are the people too naive to know better?

    1. Always the red state blue state labels with you. Can’t you admit we’re all purple states? (Purple being not at all economically free no matter what any map says.)

    2. Yeah, I never thought of Louisiana as a bastion of freedom or anything while growing up there. Maybe they’re counting the lax liquor laws or something, and those only apply to certain parts of the state.

      1. ” I never thought of Louisiana as a bastion of freedom or anything.”

        As a resident of Louisiana, I can attest to that.

    3. I dont buy that map as accurate at all.

      KY sucks in many ways, but not CA ways.

      1. It may also be a tallest midget contest of sorts. No states do very well at all with the second criterion and none do much better on the first:
        “Individuals have economic freedom when (a) property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and (b) they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.”

  7. Wait, this is all screwed up. Illinois is freer than Florida? My ass it is–I’ve lived in both. And states like California and Louisiana rank high? Is this for our universe or some alternative one?

    And why are the Yukon, the Northwest Territories, and Nunavut excluded?

    1. Polar bears ate all the researchers.

    2. Im trying to read thru the methodology and Im not sure, but I think they count the amount the Fed spends in a state against the state.

      Which is weird.

      1. Huh. So if there are a lot of military bases but not a lot of welfare, you’re still screwed?

        1. According to progtards, military bases are identical to welfare spending.

          1. Well, sometimes it’s close to true. A lot of congress things lobby pretty hard to keep bases open in their states for the jobs.

            1. Eh, the US military does defend the borders of the nation. It is massively overstaffed and overfunded, but like an overengineered bridge, it is inefficent, not useless.

              Meanwhile, the denizens of housing projects and trailer parks throughout the land spawning new little parasites in between rounds of daytime TV and trips to the corner store for cigarettes serve no useful purpose whatsoever.

      2. Yes, and they count federal tax burden by amount collected from each state. Because taxes are allocated by the feds on a state level.

        The subnational rankings are more in line with what you’d expect of the states.

        1. I’d copy the rankings but it’s got a POS viewer for the full report.

          Subnational rankings for states:

          47. California
          48. Maine
          49. Vermont
          50. New York (last among states)

          1. Page 9 of the report.

        2. The subnational rankings are more in line with what you’d expect of the states.

          Yep, CA is a 5.6, KY is a 6.2.

          IL is a 6.4, TX a 7.7.

          Okay, much better.

  8. I’m having a hard time believing that CA is in the 2nd quartile of economic freedom.

  9. And nothing else will happen…

    No major politician will talk about the U.S. slide towards Third World unfreedom – just some crackpots like Cruz and Paul. Nobody besides us will care, nobody will lose an election because of it, and nothing will change our pace of businesses and citizens being carpet-bombed with new regulations.

  10. Active shooter Arapahoe HS next to me in Littleton CO
    2 injured so far

    1. If we could only ban schools, the scourge of school shootings would end.

  11. Woohoo!!! Red!

  12. Okay, how the fuck is CA green?

  13. I live in Minnesota, and we currently have to go to Wisconsin to buy fireworks and booze after 10 pm, the two pillars of civilization, so don’t tell me we’re more free.

  14. CA scores a 7.1 on “size of government”. WTF? Arent they notorious for a large state government?

    1. I think much of their bloat is spread through municipal governments as well. Also, you can’t blame them for all the teachers and prison guards, its just coincidence.

    2. Are they using the Richter scale?

      1. Good one.

  15. Surprised Kentucky is so bad. I thought it was roughly on par with VA.

    1. See above, no one is believing those numbers.

      But KY taxes suck in many ways.

  16. This reminds me of the old college arguments about Rolling Stone’s list of 100 Greatest Guitarists. I was mystified that David Gilmour was rated 73 (as I recall), it was quite the ordeal lol

    But to an adult subject like economic freedom, wtf are California and Illinois doing so high? Illinois = Texas and Wyoming? You’ve got to be fucking kidding me!

    Have any of you been through Texas lately? Texas is a fucking powerhouse, the whole state is a giant, flourishing economy, it is magnificent. The same is true of Wyoming, though to a lesser extent (since nobody lives there). Lots of mining and railroading in Wyoming, and their oil production has expanded rapidly. North Dakota is also going gangbusters.

    1. The Jack White and Kurt Cobain rankings were abominations. Although in all, too blues heavy.

      I’m moving to Texas in a month for that reason. I trust actual private development data more than these rankings.

      1. Rolling Stone is drowning in neo-leftism, which includes white guilt, and that’s my theory for why they’ve pushed both shitty contemporary music and old, boring blues that no one listens to anymore. Hence the undo credit given to every old bluesman who was never heard of during his time, like T-Bone this and Floyd Council that, etc. It almost seems like an excuse to leap into a polemical history lesson about the po’ black people.

        But going to Texas is a good move, I want to do the same. I’ve worked in Texas a good deal over the past couple years, and their economy is just booming.

        Also, Texas is filled with really hot chicks, I was blown away.

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