The 2024 IEF: Two Cheers for Western Civilization

September 7, 2024 by Dan Mitchell @ International Liberty

It’s an annual tradition (2023, 2022, 2021…all the way back to 2010) to write about the Heritage Foundation’s Index of Economic Freedom.

Since most people care about relative rankings, I’ll start with a look at the 25 nations that have the most economic liberty. Special applause to the four nations that are categorized as free, led by Singapore and Switzerland.

You won’t be shocked to learn that North Korea is in last place, followed by Cuba and Venezuela.

Though you may be surprised to see that the United States in only #25, especially since America ranks #5 in the Fraser Institute’s Economic Freedom of the World.

A big difference is that the Heritage index has a measure for fiscal health, which is based on deficits and debt. Given the profligacy of the Biden-Harris administration (building on the profligacy of Trump, Obama, Bush, etc), the United States gets the lowest-possible score of 0.0 in this category.

Here’s the methodology, for those interested.

Based on what I’ve previously written, readers will understand that I’m not a big fan of making red ink such a big part of a nation’s score. And if debt is included, a measure of unfunded liabilities would be more informative than snapshot numbers about deficits and debt.

That being said, there’s no question that American politicians are digging a big fiscal hole for the country.

Now let’s shift to some regional numbers about economic freedom (or lack thereof).

Regular readers know that I regularly warn that the United States should not become more like Europe (to cite just a few recent examples, click here, here, here, here, and here).

But if the United States has to be like another region, this table shows that Europe is the best option.

Here’s what I wrote in 2022 about European economic policy.

European nations generally enjoy more economic liberty than countries from other parts of the world (or, if you like looking at the glass as half empty, they suffer from less economic repression). …Europeans nations generally have bad fiscal policy, but they tend to score highly in other areas (i.e., good rule of law, low levels of red tape, etc). To be sure, not all European nations are the same. There’s a big difference between laissez-faire Switzerland and dirigiste Greece, for instance.

I’ll close by noting that policy is not great in either the United States or Europe. The real takeaway is that policy is bad in other parts of the world.

Let’s call this a comparative victory for Western Civilization.

P.S. Regarding Social Security, European nations are beating the United States.