Gene Epstein explores for the latest issue of Barron’s the consequences of declining economic freedom in the United States.
The U.S. has the dubious distinction of suffering one of the biggest declines since 2000, along with countries that include Argentina, Iceland, and Venezuela. An approximately similar level of economic freedom that in 1970 put the U.S. third in world ranking, behind only Hong Kong and Singapore, leaves it 19th in the world as of 2010. That’s down from second in 1995 and eighth in 2000. … Countries the U.S. now trails in economic freedom include Australia, Canada, Chile, Denmark, Finland, New Zealand, Switzerland, and the United Kingdom. …
… It’s not surprising that the countries in the European Union whose economic freedom has lost ground over the past 10 years include the troubled economies of Portugal, Ireland, Italy, Greece, and Spain. But of the five, Ireland now ranks somewhat higher than the U.S., mainly because it does better in terms of security of property rights and freedom to trade internationally. …
… What about trends in the U.S.? From 1970 through 2000, all five components of the freedom index rose; since 2000, all five have declined, with special weakness in the effectiveness of the legal system and property rights. One example Fraser analysts cite is the violations of the property rights of bondholders in the bailout of General Motors.
