Economic vs. Political Freedom

Resurrecting an earlier thread that got lost in the shuffle:

The Heritage Foundation has confidently asserted that a comparison of nations on Freedom House's Index of Political Freedom and the World Bank's Index of Economic Freedom demonstrates a near perfect correlation between economic and political freedom. This is the conventional wisdom among conservatives. Well, let's take a look:

There are 179 ranked nations in the 2009 Index of Economic Freedom. The United States ranks #6 on the list. In addition to the United States, Singapore, Australia, Ireland, New Zealand, Canada, Denmark, Switzerland and the UK rank in the top 10. Hong Kong (which is part of the Peoples Republic of China) ranks #1 but it has a geographically and historically unique situation.

So let's look at the other 9 on the list. Except for the U.S. they all have universal health care systems (in many cases including dental and optical coverage). Along with the U.S. they all have heavily subsidized public university systems. They all have heavy subsidies for public housing (Singapore has a huge public housing program). They all have public transportation systems, social security programs, unemployment insurance and progressive taxes. Yet, they are all considered quite economically free.

While I could not quantify it, I suspect that if one were to rank these 9 countries -- including the U.S. -- by social safety net, the U.S. would fall to the bottom of the list. Countries with apparently stronger safety nets -- Australia, Ireland, New Zealand and Singapore -- rank ahead of the US in economic freedom.

Now let's compare the economic list with the Index of Political Freedom published by Freedom House. There are 193 nations listed here. They are ranked on two scales of 1 to 7 for political freedom and civil rights. So a country receiving a 1 for political freedom and a 1 for civil liberties has the highest rating. Hong Kong -- which enjoys the top slot on the Index of Economic Freedom is not ranked here. Singapore -- which ranks the 2nd most economically free nation -- is really quite politically repressed with a ranking of 5 for political freedom and 4 for civil liberties. All of the Scandinavian countries -- known for their democratic socialism and vast safety nets -- receive the highest rankings of 1 and 1. Canada -- with it's comparably liberal reputation also receives the highest ranking. France, which ranks a lowly 64 on the Index of Economic Freedom, also gets perfect scores for political freedom and civil liberties. And Poland, which comes in at 84 in economic freedom, gets perfect scores for political freedom and civil liberties.

In sum, the Heritage Foundation's correlation between economic and political freedom is misleading -- particularly if you view economic freedom as a limited or non-existent social safety net and flat taxes.

I agree that economic freedom -- that is the right to trade freely, own property and run a private business -- is a good thing. And economic freedom is often conducive to political freedom. But that does not mean that a country that provides a decent life for its citizens -- with universal health care, open access to education, affordable housing, old age security, public transportation and progressive taxes -- is destined for tyranny. History has proven otherwise. And it does not mean the economically "free" nations cannot fall into forms of authoritarian tyranny -- such as Singapore which is highly repressive and brutal but which ranks well above the U.S. in economic freedom.

There is a natural tension between democracy and private property which is well recognized by legal scholars who analyze property -- like Harvard Law professor Frank Michaelman. A pure majoritarian democracy could theoretically abolish private property. A pure form of capitalism could theoretically replace democracy with a system of private contractual governance. Pure capitalism is close to the economic libertarian ideal. Because virtually every act of government effects property interests at some level, economic libertarianism allows for little majoritarian control over anything. As Michaelman eloquently stated, if every existing “legally sanctioned advantage is property” we are gradually “forced to recognize in every act of government a redefinition and adjustment of a property boundary [for which compensation must be paid]. The war between popular self government and strongly constitutionalized property now comes to seem not containable but total.”

Being a pragmatist, I don't worry about ideological purity. I think democracy is a good thing -- up to the point where it invades traditional realms of private liberty. I think individual liberty, including economic liberty, is a good thing -- up to the point where private power becomes so concentrated that a nation is effectively divided into oligarchs and serfs. Real human freedom lies at the center of this economic balance -- not at the abstract ideological extremes of communism or economic darwinism. Real freedom seems to reach its apex in social democracies -- like Canada, Scandinavia and most European nations --- and the United States of America. Various social support systems in these countries emphasize opportunity and social mobility (mainly through subsidized education and progressive taxation) and a baseline of human dignity (through various health care, housing, social security and unemployment benefits). This middle ground is where my political philosophy lies. This places me just to the left of center in the United States, among progressives inside and outside the Democratic party.