U.S. Falls to 20th in Freedom Index

The United States has fallen to 20th place in the respected Human Freedom Index, produced annually by the Cato Institute and Canada’s Fraser Institute. The index measures nations on personal, civil and economic freedom. The United States has fallen three spots since Barack Obama became President.

According to the Index, the freest nations in the world are, in order: Hong Kong, Switzerland, Finland, Denmark, New Zealand, Canada, Australia, Ireland, United Kingdom and Sweden. The United States is the only English-speaking country to rank outside the top 10.

Because of the drop in freedom in the United States, Northern Europe is now the most free region of the world, edging out North America.

“The U.S. performance is worrisome and shows that the United States can no longer claim to be the leading bastion of liberty in the world,” Ian Vasquez, one of the study’s authors wrote. “In addition to the expansion of the regulatory state and drop in economic freedom, the war on terror, the war on drugs, and the erosion of property rights due to greater use of eminent domain all likely have contributed to the U.S. decline.”

The drop in economic freedom in the U.S. is perhaps the most troubling development. Countries including Singapore, Jordan and the United Arab Emirates all have freer economies than the United States.

The amount of freedom in a nation has a strong correlation with economic prosperity and human well-being. “Countries in the top quartile of freedom enjoy a significantly higher per capita income ($30,006) than those in other quartiles; the per capita income in the least-free quartile is $2,615,” the study finds.

In an interconnected and mobile world, labor and capital will migrate to where each can earn its best return. Entrepreneurs will gravitate to those countries that can best protect the fruits of their labors. A general decline in personal and economic freedom will have long-term ramifications for any country. The United States is not immune to these forces.

A Gallup survey recently found that the U.S. was 12th in the world for business creation. Most of the nations that had more robust business creation also rank above the U.S. in the Freedom Index.

The Freedom study reports that freedom in general expanded rapidly around the globe in the 1980s. In recent decades, however, that expansion has stagnated. It some countries, like the United States, unfortunately, it has regressed.