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Thursday, September 18, 2008

Canada and the US decline in economic freedom

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Each year the Vancouver-based Fraser Institute, Washington D.C's Cato Institute and over 70 other think-tanks from around the world put out a report called the "Economic Freedom of the World" which uses 42 measures to evaluate the level of economic freedom in five areas: 1) size of government; 2) legal structure and security of property rights; 3) access to sound money; 4) freedom to trade internationally; and 5) regulation of credit, labor and business. The 2008 report, released Tuesday, uses data from 2006 and ranks 141 countries.

Canada and the US retain their top-10 ranking, with Canada coming in 7th and the US tied for 8th, Fred McMahon, Fraser Institute director of trade and globalization studies notes that "both Canada and the United States have suffered large declines in this area in recent years, but the US declines are greater. Since this measure is partially based on survey data, it will be important to see if this is an ongoing trend.” In 2005, Canada and the US were tied for 5th, and in 2000 the US was 3rd behind only Hong Kong and Singapore.

The report includes a chapter which finds a strong correlation between economic freedom and poverty reduction. “Economic freedom is a key building block of prosperous nations. Countries with high levels of economic freedom are those in which people enjoy high standards of living and personal freedoms. Unfortunately, countries at the bottom of the index face the opposite situation; the people are often mired in poverty, governed by totalitarian regimes and have few, if any, individual rights or freedoms,” McMahon adds.

Check below the fold for the top 10 and bottom 10 countries, a comparison of Canada's scores from last year's report in the 5 key areas, and read the entire report here [pdf].

All scores are from 1 to 10 where a higher value indicates a higher level of economic freedom.

Canada’s Scores (Comparison of 2005 and 2006)

1. Size of government: improved to 6.88 from 6.76
2. Legal structures and security of property rights: dropped to 8.39 from 8.55
3. Access to sound money: dropped to 9.60 from 9.69
4.  Freedom to trade internationally: dropped to 7.14 from 7.51
5.  Regulation of credit, labour and business: improved to 8.22 from 8.11

Top 10 Economically Free Countries

1. Hong Kong (8.94)
2. Singapore (8.57)
3. New Zealand (8.28)
4. Switzerland (8.20)
5. United Kingdom (8.07)
6. Chile (8.06)
7. Canada (8.05)
8. Australia (8.04)
8. United States (8.04)
10. Ireland (7.92)

Bottom 10 Economically Free Countries

131. Burundi (5.23)
131. Rwanda (5.23)
133. Chad (5.12)
134. Central African Republic (5.01)
134. Guinea-Bissau (5.01)
136. Venezuela (4.76)
137. Niger (4.67)
138. Republic of Congo (4.64)
139. Myanmar (4.19)
140. Angola (4.10)
141. Zimbabwe (2.67)

Posted by Kalim Kassam on September 18, 2008 in International Affairs | Permalink

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Comments

I look at the color chart ....
Is that what they mean by going green.
We are already at teal.
Vote Harper ... better red than dead.

Posted by: John V | 2008-09-18 11:55:44 PM


John V: Do you mean the Harper that raided senior citizens income trusts? Do you mean the Harper that took the bloated gov't of Chretien and grew it 14%? It's no wonder we're on the decline when people think Harper is a conservative.

Vote Harper and you WILL be red and you may not be dead, but you may end up jobless.

Libertarians are the only path to economic freedom in this country.

Posted by: attitude | 2008-09-19 10:50:37 AM


Attitude

I agree that libertarianism is the desired paradigm for society but libertarian political action resulting in change has unfortunately been glacial.

Was Hong Kong's economic liberty a creation of libertarian action or a coincidence of British territorial governance?

I'm convinced that the growth of leviathan has been an inevitable consequence of progressive taxation. America's top tenth percentile income earners now pay 70% of the entire tax burden. Guess which group will chose to vote for more benefits from big brother, those that pay or those that are net beneficiaries? Of course this situation is unsustainable, but the parasitized animal can hang on quite a while in decline particularly with the temporary deception of deficit financing.

I believe that Margaret Thatcher saw this when she attempted the politically impossible - implementing the poll tax. Only when it is seen as in the best interest of the majority of tax payers will they vote to contain or reverse the growth of the state. A poll tax would do that.

This rant doesn't resolve the dilemma of voting for the lessor of the evils or on principles. In the end it probably doesn't matter as the professional politicians, as such the Libertarians are not, will steal libertarian concepts when or if they ever reach serious polling strength.

Posted by: John Chittick | 2008-09-19 12:14:11 PM


The Fed, the Bank of Canada, the Bank of England and all central banks being unnaccountable unelected and unethical in general, are what has led us to where we are. Top that cake with an icing of war we can't afford and artificially created credit and fiat currency, manipulation of the market place....and you have a bomb waiting to go off. And its only just beginning. Beleiving we can bail ourselves out by taxing ourselves even more is simply ridiculous.

But what better way to crash our present worthless paper currency (not actual money) and bring in the new worthless paper currency, the Amero. Its just what the doctor ordered and is all part of the NAU/ NWO.

Ron Paul was predicting this five years ago.
And he was right too.

Posted by: JC | 2008-09-19 4:52:45 PM


The Fed, the Bank of Canada, the Bank of England and all central banks being unnaccountable unelected and unethical in general, are what has led us to where we are.
Posted by: JC | 19-Sep-08 4:52:45 PM

And where would that be? Possibly the most prosperous period of human existence. What do you suggest,that we return to the days of the gold standard where the same central banks that you despise would set the exchange rate? Or maybe we could go back even farther and resurrect the barter system, the only problem with that is the double coincidence of wants. Have you ever bought anything in a store in Canada and they have refused to accept Canadian currency, instead wanting gold coins or your cow?

Posted by: The Stig | 2008-09-19 5:40:04 PM


Canada and the US retain their top-10 ranking, with Canada coming in 7th and the US tied for 8th,
Posted by Kalim Kassam on September 18, 2008

It just goes to show how irrelevant a lot of these surveys are. Hong Kong and Singapore are essentially nothing more than large cities. Hong Kong is not a sovereign state but a Special Administrative Region of China and Singapore is for all intents and purposes a one-party state run by the People's Action Party. Why didn't Monaco make the list? It has everything that Hong Kong and Singapore have plus an F1 race.

Posted by: The Stig | 2008-09-19 5:51:53 PM


Stig, good one. I have images of someone trying to convince a sales agent to take their cow.

Seriously though, we are prosperous in spite of the interference in the market and monetary policy by governments.

Posted by: TM | 2008-09-19 8:51:57 PM


And where would that be? Possibly the most prosperous period of human existence.
Posted by: The Stig | 19-Sep-08 5:40:04 PM

Or possibly the most prosperous period in history could be evn better for each individual instead of a select few...were it not for the system we have that controls the value every inflated dollar. I have done pretty well in this system though, and all it took was non stop work for about 25 years. And all I have to do to keep what I have is work non stop until I'm dead. And everything I have, I have in spite of the system, not because of it. Its a bullshit system, our lives aren't suppoosed to be spent running on a tax / inflation hamster wheel.
We need a system of hard / commodity based currency...not monopoly money.

Posted by: JC | 2008-09-19 10:09:18 PM


We need a system of hard / commodity based currency...not monopoly money.
Posted by: JC | 19-Sep-08 10:09:18 PM

Here's your opportunity to save the financial world. What commodity are you going to use?

Posted by: The Stig | 2008-09-20 2:10:46 AM


Lets see...Petroleum, Coal, Silver, Copper, Gold...
Ya know what? you are very well trained conformist without the imagination to think anything outside the status quo or the (very simple)powers of observation to see that the Fed et al: are completely controlling and evil.
Good luck inside your little box.

Posted by: JC | 2008-09-20 3:56:32 AM


Lets see...Petroleum, Coal, Silver, Copper, Gold...
Posted by: JC | 20-Sep-08 3:56:32 AM

A graduate of Lyndon LaRouche Economics 101.

Posted by: The Stig | 2008-09-20 4:23:04 AM


Never heard of him.

Posted by: JC | 2008-09-20 7:12:14 AM



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