That’s the disturbing finding of the 2013 Economic Freedom of the World Annual Report, a highly-regarded study of economic freedom around the world.
The annual study is prepared by the Economic Freedom Network, a group of independent research and educational institutes in nearly 90 nations and territories worldwide. The group describes the report as “the world’s premier measurement of economic freedom.”
From 1980 to 2000, the United States was generally rated the third freest economy in the world, ranking behind only Hong Kong and Singapore.
But policies of the Bush and Obama administrations have decimated that ranking. Today, the U.S. languishes in 17th spot.
Hong Kong again topped the rankings of 152 countries and territories, scoring 8.97 points out of a possible 10. Hong Kong was followed by followed by Singapore (8.73), New Zealand (8.49), and Switzerland (8.30).
Also ahead of the United States: United Arab Emirates (8.07), Mauritius (8.01), Finland (7.98), Bahrain and Canada (each 7.93), and Australia (7.88)… and six more.
Scores are for 2011, the most recent year for which the data is available.
More disturbing than the rankings is the U.S.’s score, which shows a sharp drop in the amount of economic freedom. After generally rising from 1980 to reach a score of 8.55 in 2000, the U.S. has now fallen to a considerably lower 7.73.
“Unfortunately for the United States, we’ve seen overspending, weakening rule of law, and regulatory overkill on the part of the U.S. government, causing its economic freedom score to plummet in recent years,” said Fred McMahon of the Fraser Institute, co-author of the report.
“This is a stark contrast from 2000, when the U.S. was considered one of the most economically free nations and ranked second globally.”
The worst countries? Venezuela has the lowest level of economic freedom worldwide, with Myanmar, Republic of Congo, Zimbabwe, and Chad rounding out the bottom five. (North Korea and Cuba could not be ranked because of a lack of data.)
The worldwide average economic freedom score rose slightly to 6.87 out of 10, compared to 6.74 last year. However it remains below its peak level of 6.92 in 2007.
These scores are extraordinarily important, because, as the report shows, economic liberty is literally a matter of life and death. Extensive research shows that people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer life spans.
“The link between economic freedom and prosperity is undeniable: the nations with the most economic freedom also offer people the best quality of life. Compare the bottom-ranked countries, where oppressive regimes deny their citizens opportunities for economic growth and personal freedom,” McMahon said.
On average, the poorest 10 per cent of people in the freest nations are more than twice as prosperous as the average population of the countries with the least economic freedom.
Among the highest-ranked countries, the average income of the poorest 10 per cent of people was $10,556 (U.S. dollars) in 2011, compared to only $932 (U.S.) for those living in the least free economies.
The report defines the cornerstones of economic freedom as personal choice, voluntary exchange, freedom to compete, and security of private property.
The report measures economic freedom in five different 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 full report goes into all of these issues in far greater detail. It is available free at www.freetheworld.com.