Understanding Economic Freedom

We often think about the U.S. as the "land of the free." That is good marketing ... but is it true?  In large part, it depends on the contexts and frameworks you choose to evaluate what constitutes freedom. 

For example, Strategic Coach breaks "entrepreneurial freedom" into four categories: time, money, relationships, and purpose.

Meanwhile, if you look at the First Amendment of the U.S. Constitution, you've got freedom of speech, press, assembly, and the right to petition the government ... and we've since instituted a litany of other freedoms and liberties. 

In this post, we will examine the concept of economic freedom.  Economic freedom represents more than just freedom to make money, it pertains to the decisions and liberties one has in that pursuit. 

The Heritage Foundation releases a yearly Economic Freedom Index. 

 

 

According to VisualCapitalist, the ranking uses four broad categories, each with three key indicators to measure economic freedom.

1. Rule of law: property rights, judicial effectiveness, government integrity
2. Size of government: tax burdens, fiscal health, government spending
3. Regulatory efficiency: labor freedom, monetary freedom, business freedom
4. Open markets: financial freedom, trade freedom, investment freedom

The 12 indicators are weighted equally and scored from 0-100.  The overall score is the average score among those indicators. 

Based on these metrics, the U.S. doesn't even enter the top 10. 

Surprisingly, the U.S. ranks 25th overall - and only 3rd in the Americas. 

Now, freedom means a lot of different things, and economic freedom is only one of many modalities ... but it's an important factor. 

If you were in control, what change would you make to increase the United States' economic freedom?  If you're not from the U.S., where does your country rank, and why?