Delivered June 27, 2008
The Heritage Foundation founded the Index of Economic
Freedom in 1995 as a way for countries to measure progress and
compare themselves in what we believe is an essential ingredient of
prosperity- namely, economic freedom. The Index is now in
its 14th edition, and it is co-published with the Wall Street
Over the years, it has been interesting to see how competitive
some countries have become regarding their own scores in the
Index. In fact, sometimes governments actually try to
persuade us to give them a better score. We steadfastly refuse to
be lobbied or unduly influenced, of course; yet some countries
persist nonetheless. And in spite of this occasional
overzealousness, having countries compete to be the freest
economies in the world is in itself a very good thing!
Today, I wish to frame my remarks about the Index in
light of the topic we are addressing here: human rights. But first,
I'd like to say a few words about what you will find in this year's
Index, for those who may not be as familiar with it.
Each year, Heritage strives to make the Index a more
precise measure of economic freedom. We examine 10 factors, such as
property rights, freedom to trade, and freedom from government
regulation. Each factor is scored on scale of 1 to 100; the scores
are weighted equally; and then they are averaged to determine a
country's overall economic freedom score.
Those who have followed the Index over the years know
that we continually fine-tune the methodology and vet any changes
we want to make with an advisory board of economists and
members of the academy before they are incorporated. Then we
go back and rescore the countries' past scores so comparisons
can be consistently made over time.
This year, we graded 157 countries for which we had good data.
And what did we find? Well, sadly I must report that economic
freedom is still a relatively rare commodity in the world.
- Only seven countries have economies that rank as "free" (score
of 80 or higher); 23 are "mostly free" (70-79.9); 103 are either
"moderately free" (60-60.9) or "mostly unfree" (50- 50.9); and
24 are "repressed," with total scores below 50 percent.
- The average score worldwide this year is 60.3. The variance is
startling. Hong Kong, which again ranked as the world's freest
economy, scored a healthy 90.3. Singapore finished 2nd with a score
of 87.4. But North Korea finished last with a very dismal score of
Overall, the level of economic freedom in the world has neither
advanced nor declined. But this year, for the first time, every
region in the world had at least one country in the top 20:
- Half of the best performers are in Europe, with Ireland leading
the way (3rd).
- The Asia-Pacific region made another great showing, with Hong
Kong (1st), Singapore (2nd), Australia (4th), New Zealand (6th),
and Japan (17th). Three of the world's top five economies (all
of them former British colonies) are in this region.
- The Americas has three in the top 20: the U.S. (5th), Canada
(7th), and Chile (8th).
- The Middle East/North Africa region is back in the top 20, but
only barely, represented solely by Bahrain (19th).
- And, for first time ever, one of the top 20 freest economies is
in Africa (Mauritius, 18th).
Indeed, half of all the countries graded actually improved their
economic freedom scores this year. This is a good thing, of course,
but we can't say it represents a trend. That's because there is the
other half that are not improving their scores, and in some cases
are getting worse. We worry too that some developed countries are
moving in reverse-becoming more protectionist in trade,
increasing the size of government, and over-regulating the
Each region offers case studies of the benefits of expanding
economic freedom. Europe's shining star is the "Celtic Tiger,"
Ireland. It ranks 3rd with a score of 82.4. By comparison, France
is 48th with score of 65.4, and Portugal is 53rd with a score of
Since there is some disparity in Europe's economic freedom
scores, it comes in with a relatively lower than expected average
of 66.8 percent free. Notwithstanding some real stars, there are
still in Europe some countries with relatively high levels of
government intervention and expenditures, as well as subsidies.
The Index's findings also point to a potential downside
of fuller European integration. If countries with high levels
of economic freedom must downgrade their policies to be more
consistent with EU norms, they could find themselves suffering from
the same growth problems that bedevil some long-time EU
Now, the main message of the Index is that it shows how
nations can best develop and grow economically. It doesn't
necessarily tell you how to calibrate growth rates, or even
which factor alone is most important (although some studies have
suggested possible answers to that question). But it does show
clearly that economic freedom is a precondition for the
development of prosperity in the long run.
This is a good thing in itself, of course. But I would say that
economic freedom is more than a path to prosperity. It also is a
condition that opens up opportunities to enjoy freedom in the
largest sense of the word-both politically and socially.
Economic Freedom as a Human Right
It is in that vein, then, that I wish to speak about economic
freedom as a right-as a right that, in the end, should be seen as
indivisible from the broader idea of liberty and the rights
associated with liberty.
I should think that it would not be very difficult to make the
case that the right to property is not essentially different from
the right to labor. The accumulation of property is, after all, the
fruit of one's labor, and the idea that it attaches to an
individual rather than a group is, in my estimation, not only
a fundamental tenet of liberty in general, but a bedrock principle
for the rule of law, as properly understood.
Ultimately, freedom is indivisible. If rights to life, liberty,
and property are inalienable (i.e., not contracted), then
economic freedom and its variously derived rights certainly belong
in the hallowed hall of natural rights.
Let me clarify and emphasize some points. First, by a right, I
mean a natural right-one not given or manufactured by governments,
courts, or international institutions such as the United Nations.
Nor is it a right even given by constitutions. You can argue
that the right in question was given to us by God or nature, but
when I am speaking of economic freedom as a right, it is something
that governments should respect and protect, not provide.
Secondly, as someone who was once responsible for U.S. policy at
the United Nations, I want to assure you that I am sympathetic not
only to the view that rights should not be inflated or created out
of whole cloth, but also that they-particularly, but not only, the
natural ones-should not be primarily the concern of
international courts and organizations. Sovereign national
governments should have the primary responsibility for protecting
rights-and, in this case, economic freedom- because to do otherwise
empowers international bureaucrats with unaccountable power that
inevitably will deprive us of our liberties.
Frankly, although I think that economic freedom is a
natural right, its value really does not depend on whether we say
it is or is not a right. Not only can we make a philosophical case
for economic freedom, but a very practical political one as
I believe that economic freedom-the liberty to profit from our
ideas and our labor-is absolutely vital to the human condition and
to the human soul. Its loss relegates people to servitude to other
persons, and it inevitably exposes people to exploitation
either by the state or by people who can exercise arbitrary power
Friedrich Hayek said it best in The Road to Serfdom when
he observed that, "To be controlled in our economic pursuits means
to be controlled in everything."
Now, I am not exactly certain of all the details of the
relationship between economic and political freedom, but I do
believe that if there is a relationship, it is a positive
In our 1999 Index we explored this point. We examined the
connection between economic freedom and political freedoms,
and we found the relationship statistically
significant-meaning, in laymen's terms, it was "no accident,
comrade." We did a regression analysis comparing our economic
freedom scores with the Freedom House scores for political and
civil liberties. We found that:
- Countries that are more economically free also tend to be more
politically free; and
- There is an even stronger link between economic freedom
and civil rights such as freedom of assembly, an independent media,
and equality of opportunity. That relationship was
statistically significant at 99 percent.
Year after year, the Index of Economic Freedom shows that
countries with more economic freedom are wealthier, while Freedom
House's comparative survey shows that countries with the highest
levels of political rights and civil liberties are wealthier. No
one can objectively deny the strong relationships among
economic, political, and civil freedoms and wealth.
Another thing that cannot be denied is that economic
freedom is a great social emancipator. Take women's rights, for
example. My colleague, Ambassador Terry Miller, recently
authored a report that showed how societies with increasing levels
of economic freedom also enjoy higher levels of income for
Perhaps we all know this to be intuitively true for advanced
economies. But it is interesting to watch it occur in places like
Africa, where women are increasingly becoming more active both as
entrepreneurs and as political leaders. Their economic
emancipation is leading to their political empowerment, and
they are using that newfound power not only to protect their rights
as women, but to advance real democracy and the rule of law.
Even a cursory glance at the countries in the Index of
Economic Freedom would show that the most oppressive political
regimes are also the most repressive economically. Again, this is
no accident, because the same power of the state that denies
people political rights also denies them their economic rights
as well. In fact, state control of the economy is just another
instrument of political power.
We can see this alliance of economic and political
oppression in countries like Cuba and North Korea, but also
throughout Africa. We should not be surprised that Zimbabwe, for
example, which has a particularly nasty dictator in Robert Mugabe,
ranks 155th out of 157 on this year's Index, and is ranked
"not free" on Freedom House's 2007 survey. Additionally:
- Zimbabwe's economy has shrunk some 40 percent since
- The standard of living there is comparable to levels in
- According to the World Health Organization, it has the world's
lowest life expectancy (34 years for women, 37 for men; meanwhile,
life expectancy in the U.S. has just reached 78).
- Over 80 percent of the population is unemployed.
- Inflation is over 60,000 percent.
The tragedy is that Zimbabwe, which was known as Africa's
breadbasket just over a decade ago, is now a net food importer. And
its confiscation and redistribution of private land and homes has
Zimbabwe is not alone. It is one of seven countries the
U.S. Department of State calls "the most systematic human rights
violators" (the others being Belarus, Burma, Cuba, Iran, North
Korea, and Syria). Such countries do not acknowledge the
economic and political freedoms that we consider inalienable.
To conclude, let me restate my basic point: Economic
freedom offers people around the world the best hope for achieving
healthier, safer, wealthier, and more productive lives, as well as
the dignity of self-reliance. It is not a guarantee, of course, but
in the most general terms it is a prerequisite for these things on
a long-term, sustainable basis.
I differ with the notion that merely talking about human rights
(especially natural ones involving economic freedom) is so fraught
with danger, particularly in the international arena, that we
should foreswear it once and for all. I am afraid that train left
the station a long time ago. I witnessed at the United Nations how
the very expression "economic freedom" was forbidden because it was
deemed "too ideological." I was told just that by several
diplomats in a meeting up at the U.N. in New York.
We should never entrust the United Nations or an international
court with the important task of safeguarding our rights and
liberties, much less with creating them. At the same time we should
not completely disarm ourselves in ideological debates in the
international arena by pretending as if we have nothing to defend
or care about. It will not do to leave the battlefield of ideas and
hide behind some purist intellectual debate while the
international equivalent of Rome burns-in this sense, our
sovereignty and our rights. We have to fight for them at the United
Nations forum and elsewhere.
Talking about "human rights" may make me uneasy; however, I
don't want to imply that, because I am uneasy, I am against human
rights-just as I could be against the idea of social justice
because my opponents have occupied and erroneously defined that
term for us. Whether we believe economic freedom is a public
virtue, a value, a right, or just a plain benefit to society, we
need to say so.
Believe me, those who think economic freedom is a quaint idea
which died a long time ago are not shy about pressing their case.
We must not be shy either.
Kim R. Holmes, Ph.D., is Vice
President of Foreign and Defense Policy Studies and Director of the
Kathryn and Shelby Cullom Davis Institute for International Studies
at The Heritage Foundation. These remarks were delivered as a
keynote address at the XVI International Meeting in Political
Studies and International Summer School in Estoril, Portugal, on
"Human Rights Today: 60th Anniversary of the Universal Declaration
of Human Rights," sponsored by the Institute of Political Studies
at the Catholic University of Portugal.
 Kim R. Holmes, Edwin J. Feulner, and Mary
Anastasia O'Grady, 2008 Index of Economic Freedom
(Washington, D.C.: The Heritage Foundation and Dow Jones & Co.,
 F. A. Hayek, The Road to Serfdom:
50th Anniversary Edition (Chicago: University of Chicago
 Bryan T. Johnson, Kim R. Holmes, and
Melanie Kirkpatrick, 1999 Index of Economic Freedom
(Washington, D.C.: The Heritage Foundation and Dow Jones & Co.,
Inc., 1999), pp. 29-34.
 Brett D. Schaefer and Marian Tupy,
"Africa's Zimbabwe Problem," National Review, May 24, 2007.
See also CNN.com, "Zimbabwe Inflation Now 66,000%," February 15,
2008, at www.cnn.com/2008/WORLD/africa/02/15/zimbabwe.inflation.ap/index.html
(July 22, 2008).