Take property rights: think about how the legal protection of them makes a free economy possible. If there’s a high degree of corruption in your country and the courts are unwilling or unable to enforce legally binding contracts, how safe is your money, or anyone’s money, for that matter? Not very. Economic freedom depends on many factors, including an open court system that works to ensure everyone plays by the rules. If you aren’t reasonably confident that your property is safe, that it can’t be taken from you without due process of law, you can hardly conduct ordinary day-to-day business, can you?
As Ed Feulner, president of The Heritage Foundation, writes in his preface to the 2006 2006 Index:
“Economic freedom is necessary for people to prosper. By reducing obstacles, it creates a framework within which people can choose how to use their time, skills and resources: a framework in which innovation is welcomed and economic growth is enhanced. Simply put, around the world, countries with a higher degree of strong commitment to economic freedom enjoy a higher standard of living.”
With that in mind, it’s good to see that economic freedom is on the march. Of the 157 countries graded in this year’s Index, 99 saw their scores improve -- some, such as Pakistan and Romania, by wide margins. The editors note that the trend over the last decade has been toward economic freedom.
Still, much work remains, especially in the Middle East, Africa and Latin America, where many economies (read: people) languish under the grip of governments who miss the connection between freedom and prosperity. The Index has shown over the years that relatively simple changes can yield positive results. Yet too many governments look the other way, often completely unwilling to make things better for their citizens.
“Yes, government should do all that is necessary,” President Ronald Reagan once said, “but only that which is necessary.” Restrictions on economic freedom are not only unnecessary; they’re counterproductive to individuals, families, and nations. Let’s hope the trend toward freedom continues.