The Geography of Personal and Economic Freedom

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My friends will tell you that I’m prone to frequent bouts of uncertainty in terms of where I want to live. One minute it’s Portland, OR; the next it’s Portsmouth, NH. Well today, its Chicago, IL. This I blame on a phone conversation with my pal John earlier in the week which rekindled my desire to return to the Windy City.

But I also have a rational side, one that pontificates on the unappealing side of a particular state or city. By way of an example, San Francisco, Santa Barbara and San Luis Obispo are all locales that get me jazzed; that is, until I consider issues such as cost of living, high taxes and onerous regulations that keep one feeling trapped and hamstrung. Then there’s Chicago and the whole State of Illinois which are both mired in a debt crisis of epic proportions. Things are so fiscally serious in the Land of Lincoln that IOUs are now being issued to many of the state’s lottery winners.

Another factor that I take very seriously is the fact that I’m a black male. So the vast majority of cities in the south are out, along with small midwestern towns with a ‘ville’ at the end of their name. And yes, I do look at racial profiling and stop-and-frisk statistics in places like New York that make moving there unconscionable.

The Economic Freedom Factor

At some level, I believe all of us value our freedoms and liberties. That’s certainly been the case for me which is why I’ve engaged in a great deal of due diligence in terms of finding a home. My current locale of Denver has perhaps been the most accepting place in which I have ever lived, and it is appealing in so many other ways. And I appreciate the strong pro-business, free enterprise climate; one where I’m able to establish an LLC for $25 ($850 in California, where I once lived). That being said, I sense that Denver’s good fortunes may begin to shift amid the city’s meteoric population growth.

One trend that we continue to see is that economic freedom is a major contributing factor to overall wealth and happiness. I am of the opinion that people generally favor environments that offer lower taxes, minimal regulatory burdens and other factors that allow their lives to feel more free. In a 2013 report published by the Mercatus Center at George Mason University, entitled ‘Freedom In The 50 States: Ranking States by the Factors That Shape Personal and Economic Freedom’, the most highly-ranked states have lower tax burdens, have a history of honoring property rights, foster less government spending and possess greater labor market freedoms. Here is a list of the top ten states in terms of these and other freedom factors:

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Globally, the ‘2015 Human Freedom Index: A Global Measurement of Personal, Civil, and Economic Freedom’ offers a fascinating snapshot of personal, civil and economic freedoms around the world. Produced through a joint effort by the Fraser Institute, Liberales Institut at the Friedrich Naumann Foundation for Freedom, and the Cato Institute, it proposes that freedom is a key indicator of social progress. This report captures the degree to which people engage in voluntary exchange and enjoy major liberties. It examines 76 distinct metrics of personal and human freedom, generally defined as the absence of coercive constraint, using the following broader areas:

-Rule of Law
-Security and Safety
-Movement
-Religion
-Association, Assembly and Civil Society
-Expression
-Relationships
-Size of Government
-Legal System and Property Rights
-Access to Sound Money
-Freedom to Trade Internationally
-Regulation of Credit, Labor and Business

So what are the world’s freest countries? Here’s a list of the top 20

1. Hong Kong
2. Switzerland
3. Finland
4. Denmark
5. New Zealand
6. Canada
7. Australia
8. Ireland
9. United Kingdom
10. Sweden
11. Norway
12. Austria
13. Germany
14. Iceland
14. Netherland
16. Malta
17. Luxembourg
18. Chile
19. Mauritius
20. United States

My original intent was to list the top 10. But take a look at who registered in at #20—none other than the United States of America. The fact that it plummeted in four years from 17th place to 20th place gives credence to the fact that the U.S. has lost its prominence as a liberty leader in the world. The report notes that expansion of the regulatory state, the war on drugs, the erosion of property rights and myriad other factors are behind this precipitous decline. “

So maybe I’ll consider Hong Kong (okay, not very likely). It’s high ranking is oddly due to a strong rule of law combined with high levels of personal and economic freedom. One downside: China’s intrusive efforts to minimize democracy by squelching the county’s independent legal system and freedom of the press.

A more likely destination for me would be Canada which registered in at a respectable #6 (I know the Canadian national anthem by heart which might give me a leg up with the immigration process… or not!). Interestingly, Canada didn’t lead in a single area, but had high scores in all of the areas of personal and economic freedom that were measured.

And the lowest of all of the countries included in the study was Iran which came in at #152.

The report defines freedom as “A social concept that recognizes the dignity of individuals and is defined by the absence of coercive constraint.”

Sounds consistent with my value structure. How about you?

Michael Scott is a journalist focusing on the intersection between free markets and economic freedom.  Michael is on Twitter @biz_michael

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