With regime change perhaps imminent in Egypt and elsewhere in the Middle East, and amid all the calls for democracy and political freedom, it’s a good time to remind ourselves that desirable as political freedom may be, it’s no guarantee of prosperity. For that you need capitalism.
My colleague Alan Stockman and I looked into this question about 10 years ago; I have not updated the data since then but I expect it would still tell pretty much the same story. First, the following graph plots political rights (as defined and measured by Freedom House) against GDP per capita. Low scores indicate more political freedom (defined by criteria that include the existence of free and fair elections, the right to organize, the existence of opposition parties, the absence of domination by the military, religious heirarchies and economic oligarchies, open and transparent government operations, and full political rights for ethnic, religious and cultural minorities, ). There is a small postive relationship between political freedom and prosperity, but many of the freest countries are still poor. And there is very little difference in GDP per person between countries ranked between 2 and 7 on the political freedom scale.
The next graph indicates a somewhat stronger, but still small, positive relationship between civil liberties (again, measured by Freedom House) and per capita GDP. Countries with more civil liberties are richer on average, but the relationship is weak. (The criteria for civil liberties include freedoms of expression, religion and association, the rule of law, the absence of political terror, gender equality, equality of opportunity and the absence of economic exploitation).
On the other hand, when we plot per capita income against economic (as opposed to political) freedom, the relationship with prosperity is quite strong. The measures of economic freedom come from the Fraser Institute’s Economic Freedom of the World project. Criteria include freedom to own foreign currencies and maintain bank accounts abroad, freedom to start businesses and compete, low taxes, low government spending, and equal treatment under the law. The most recent report ranked Hong Kong as the freest country in the world, with an overall rating of 9.05 out of a possible 10; the United States ranked sixth with a score of 7.96. Egypt, at 6.68, ranks 80th out of 141 countries. Here is the graph that Stockman and I constructed from these data ten years ago:
More recently, Horst Feldmann has found a significant negative relationship between various measures of economic freedom on the one hand, and unemployment on the other hand. (His results are contained in Chapter 5 of the most recent Economic Freedom of the World report).
Political freedom and civil liberties are good things. I endorse them. But as far as human happiness goes, capitalism is an even better thing. As we try and nudge the countries of the middle east and elsewhere in better directions, this is important to keep in mind.
“But as far as human happiness goes, capitalism is an even better thing”
Is there any study linking happiness to GDP per capita?
or rather, to income per capita?
Did you do any analysis to justify the claim that the economic freedom is causing prosperity, rather than that there is some common cause of the two, for example?
Bravo.
@Jonathan Campbell: Yes there is such analysis. It goes under the recondite name “economics”.
@Mike H: Yes there is such analysis. It goes under the recondit name “history”.
@KenB: No, the link between happiness and GDP and/or income is *not* as clear-cut as looking at “history”. See here: http://en.wikipedia.org/wiki/Happiness_economics#GDP_and_GNP
@Rowan: Even the link you provide notes a positive correlation, suggesting that it lessens only above a rather high limit. But countries like Egypt — and that is the context here after all — are well below that limit. So thank you for reinforcing my argument.
We just had a huge fracas over immigration on this blog. Why do people immigrate to the US? Mostly for economic reasons.
Jonathan Campbell:
Did you do any analysis to justify the claim that the economic freedom is causing prosperity, rather than that there is some common cause of the two, for example?
No, we did not. Though I might argue that North and South Korea (or East and West Germany) is about as close to a controlled experiment as you could ever hope for.
Rowan: I do not believe we learn anything at all from the kind of research you’re citing; I’ve blogged about this here.
It would be extremely interesting to see this as a multinomial regression. When I think of wealthy, happy societies that do not follow capitalism, I think of France, or in a more extreme less wealthy sense, Sweden. I assumed they would not be listed as particularly Economically free, but that is not the case. Despite Sweden being listed as the 139th smallest government, it is the 37th freest country due to comparatively high ratings in the other categories. France had the 110th smallest government, and was listed 2 spots higher than Sweden, with also stronger ratings in the other four categories.
@Steve: so on what basis do you link wealth and happiness?
Any chance we could also see a graph of the standard deviation of income per capita vs economic freedom? Just thought it could be interesting.
@ Rowan
If your happiness is not affected by your money I will gladly take some of your money off your hands for it will certainly enhance my wellbeing.
Rowan:
so on what basis do you link wealth and happiness?
Partly on the observation that people strive for wealth, so they must think it will make them happy. Partly on the observation that people emigrate from places where they’re likely to be poor to places where they’re likely to be rich (though I suppose this is not a separate observation, but another instance of the striving-for-wealth observation). Partly because wealth is a strong determinant of life expectancy, and people seem to be made very sad by the prospect of dying, or of having their loved ones die. Partly because when you’re wealthy, you can always choose to live like you’re poor, but when you’re poor, you can’t always choose to live like you’re wealthy — so the wealthy have all the opportunites the poor have, and more besides. Partly because my friends — every one of whom is among the richest people who have ever lived — seem to revel in the opportunities that their wealth creates for them. Partly because I almost never see rich people disposing of their wealth for the sole reason that they think they’d be happier without it (as opposed to disposing of it because they enjoy the opportunity of helping others, which is a form of enjoying one’s wealth). I could go on.
Partly on the observation that people strive for wealth, so they must think it will make them happy. Partly on the observation that people emigrate from places where they’re likely to be poor to places where they’re likely to be rich (though I suppose this is not a separate observation, but another instance of the striving-for-wealth observation).
@Steve: I suggest you read Stumbling on Happiness, then, for the science on how incredibly bad we are at predicting what will make us happy (and therefore striving for the correct things).
Rowan: I’ve read Stumbling on Happiness, and I’ve had late-into-the-night-over-drinks conversations with Dan Gilbert about its contents. I’d kill for his prose style, but his arguments, and his data assessments, leave me largely unmoved.
@Steve: So to sum up, you don’t like any of the data or analysis out there that might point to whether happiness and wealth are linked, but you also don’t have any data or analysis of your own to offer. I think at best, then, there is no evidence either way, and your assertion that they’re linked is unfounded in anything but speculation. You’re not usually big on unfounded speculation. ;-)
Rowan: I agree that we have no useful academic research linking income to happiness. I am, in fact, pretty skeptical that happiness is measurable, even in principle. But I don’t think it’s “unfounded” to speculate that mothers are happier when their children make it to adulthood, or that the people I see reveling at parties are happier than they would be if they couldn’t afford to be there.
Aside from that, I don’t think you have to speculate about happiness measures to believe that it’s a good thing to help people achieve the things they seem to be striving for.
Edited to add: If I see an anvil about to fall on someone’s toe, I am inclined to push that person out of the way, even though I am not aware of any research showing that people with crushed toes are less happy than people with intact feet. Sometimes you’ve got to do the best you can without a mountain of data. And some of those times, you can even feel pretty darned confident you’re doing the right thing.
Aside from that, I don’t think you have to speculate about happiness measures to believe that it’s a good thing to help people achieve the things they seem to be striving for.
I’m confused, then. The whole point of this post seemed to be to suggest that we should be helping people obtain greater wealth, because you see that as a faster or more certain path to “happiness” than political freedom or civil liberties. But if we should be helping people get what they’re striving for, then we should be calling for what the Egyptians themselves (well, some of them) are calling for — political freedom and civil liberties.
If we use a different adjective than happy, perhaps “content,” then the argument Steve makes is even stronger. Rather than debating happiness we’d be debating the merits of economic liberties over political/civil liberties.
At the end of the day, if Egypt had a freer economic system then there would not be rampant poverty (one of the primary concerns of the protestors). Would they be happier? Maybe not. Would they be rioting? Probably not. Wealth may not bring happiness, but it’s at least an opiate.
If I see an anvil about to fall on someone’s toe, I am inclined to push that person out of the way, even though I am not aware of any research showing that people with crushed toes are less happy than people with intact feet.
And maybe that person was deliberately dropping the anvil on their foot to avoid being drafted into a war in which they would almost certainly be more gravely injured, so you’ve just made them terribly unhappy. It’s impossible to judge the general effectiveness of a class of action in achieving a certain goal from a single interaction, which is why we collect large data sets and analyze them.
Also, in this case, given the lack of (acceptable-to-you) data proving or disproving a link between wealth and happiness, I think a more appropriate example would be: if I believed that having sex outside marriage would doom a person to eternal torment in the afterlife, I should do whatever is in my power to prevent anyone from having extramarital sex, even though there is no research supporting my view.
Rowan:
First, touche.
Second, there is still this difference: When I see, say, an emigrant travel from Mexcio to the U.S. in search of a higher income, I can be pretty sure that he’s really looking for a higher income — and that he’s given some serious thought to the matter. When I see a protestor in the streets of Cairo, it’s harder to tell whether he’s motivated by a well-considered passion for civil liberties or whether he’s swept up in the excitement. Almost no individual Egyptian will have any significant influence on what sort of government comes out of all this, and therefore almost no individual Egyptian has much incentive to have thought hard about what kind of government is likely to be good for them.
Third, that being said, I absolutely agree that we should support Egyptians and others around the world in their struggles for political freedom and civil liberties. But I think we should be aware that there are other things that might do them even more good, even if they don’t realize it.
And again, the difference between the individual striver and the mass protestor is that the individual striver has a lot more control over his own destiny, and is therefore a lot more likely to have thought hard about what he wants that destiny to be.
@Rowan,
The “Mo’ Money, Mo’ Problems” argument falls flat *very* quickly. If you were offered a raise for doing the exact same work, would you take it? I suspect most people would say yes (let’s not get into annoying things like tax brackets, etc). The old saying is that money can’t buy happiness, but it sure can rid you of quite a bit of unhappiness.For most intents and purposes, that’s the same thing.
Secondly, the post is about giving them what they want. They mention political freedoms, etc., but they would probably also like more prosperity as well. Is your argument that income doesn’t make people happy? Or just that the Egyptians shouldn’t get capitalism because they didn’t ask for it?
@Rowan: you are confusing academic research and knowledge. I won’t belabour this point as it is obvious to the rest of us. But Steve has gone to the trouble of writing out some of the ways we know wealth matters, and is a good thing; this seems such an uncontroversial assertion I suggest the onus is on you to disprove it. That done, we can debate if good health or freedom from pain contribute to happiness and what peer reviewed double blind studies (uncontaminated by drug compnay funding of course) show this.
@MIke: Yes. Money cannot buy happiness but the rich can suffer in comfort.
Frankly there is something a bit ugly about rich westerners dismissing as unimportant the comforts and benefits wealth can bring to the poor in poorer countries.
Steve, about the economic “experiments”, Brad DeLong had a really good post* about this a while back that made some comparisons:
http://delong.typepad.com/sdj/2010/10/how-much-does-the-market-organization-of-economic-life-matter.html#tp
*[Hard to believe, I know, but it does happen once in a while. Of course there was mutiny among his commenters, who were quite taken aback that he would have anything nice to say about economic freedom.]
A few comments:
It seems to me that the observations about how people with money enjoy their money are equally consistent with two theories:
1) money makes people happy
2) people adapt to be happy with what they have
People with money delight in having money, people with talents delight in having talents, etc. I would guess that your friends who enjoy the things they can do with money also very much enjoy the things they do with their social freedoms.
Second, “the wealthy have all the opportunities the poor have and more” is true, but the question raised in the original post is only even significant if we assume there’s an opportunity cost to a society when it chooses which types of freedom to pursue first. It’s not true that the politically-unfree rich have all the opportunities that the politically-free poor have.
I had a third point that I’ve now forgotten, but it probably involved phrases like “a given set of subjective motivations S” and would not have actually made anyone happier to read.
Frankly there is something a bit ugly about rich westerners dismissing as unimportant the comforts and benefits wealth can bring to the poor in poorer countries.
As ugly as it is, I also find it ugly when rich westerners decide they know more about what is better for the poor in poorer countries than those poor themselves do.
you are confusing academic research and knowledge
Oh, I see! I thought because the main tenets on Steve’s post were based on academic research, his ultimate conclusion would also be supported by same. My mistake!
@Rowan: to guess that they want more prosperity must be a pretty good guess…
When there was the islamist revolution in Iran, I have seen pictures of pretty Iranian women in jeans and tight t-shirts, burning the Shahs pictures and US flags… not sure what they (thought they) wanted, but I would guess that it was not what they have eventually got..
I think that the Egyptians want more freedom, less corruption and nepotism, more prosperity and opportunities … and I am not sure what they will eventually get.
People are not all that different, East or West.
@Rowan: “I also find it ugly when rich westerners decide they know more about what is better for the poor in poorer countries than those poor themselves do.” Who (aside perhaps from you) is doing that? As SuperFly notes we want the Egyptians to get what they want, and we observe that if what they want includes prosperity then they will be better off if they get capitalism too. SuperFly’s question is a good one: do they Egyptians have to explicitly ask for, like some sort of Simon Says game, before we can wish for them to get it?
Rowan:
Oh, I see! I thought because the main tenets on Steve’s post were based on academic research, his ultimate conclusion would also be supported by same. My mistake!
It’s always better to have careful research than not to have it. Regarding the determinants of prosperity, I don’t think we can say much at all without careful research (and incidentally, the graphs I posted barely count, because they don’t begin to address the causality question — they are, I think, usefully suggestive, but only that). On the other hand, I do think there are things we are entitled to believe without a research basis. I stand by my earlier example: I am quite confident that if you prevent someone’s toes from being crushed, then you’ve probably done him a favor, even though I’m not aware of any academic research on toe-crushing.
So—the claim that economic freedom is a more important determinant of prosperity than political freedom is based on academic research, but it’s (very) far from definitive research. The claim that people are happier when they’re wealthier is based on something other than academic research, but I don’t think that’s sufficient reason to dismiss it.
Who (aside perhaps from you) is doing that?
@KenB: to answer that question, I’m going to quote from one of Steve’s comments above (emphasis mine, assuming the bold tag works):
Third, that being said, I absolutely agree that we should support Egyptians and others around the world in their struggles for political freedom and civil liberties. But I think we should be aware that there are other things that might do them even more good, even if they don’t realize it.
@Rowan,
Saying that ‘rich westerners’ are presumptuous to give advice to Egyptians is not only an intellectual distraction, it’s very patronizing to Egyptians. Just because the protesters don’t know economics doesn’t mean they can’t understand it or they wouldn’t benefit from it. It just means that’s not what was on their mind when they went to the streets. Given the imminent regime change… we might as well give them some other good things to, like economic freedom.
Economics doesn’t care about where you’re from. Given that the Egyptians want more prosperity, economics can tell them good ways about how to get it.
Throughout the post, you state that “GDP per capita” is a measure of or proxy for “prosperity.” What reasons do you have for thinking this is a good equivalence? Perhaps this is something you’ve discussed and defended elsewhere but I’m currently of the opinion that it doesn’t actually measure wealth very well and, consequently, it doesn’t measure individual “prosperity” very well either. What the GDP does do fairly well is measure spending, including spending on broken windows. What you need for your analysis, it would seem, is not a measure of money spent, but of value received (or not destroyed, as GDP doesn’t consider the depletion of real wealth in the form of natural resources and the environment). Otherwise, it would seem that all you’ve shown is that as market-based economic freedom increases, market-based economic activity increases…a rather trivial conclusion (and fallacious to the degree that we’re all digging and filling holes, fixing windows and making mud pies).
All of that is not to say that I wouldn’t expect a link between economic freedom and happiness once a better statistic is found. I do. But I would not say that for prosperity “you need capitalism.” I would say that for prosperity you need at least a free market in the broadest sense (and that is not a merely semantic distinction).
Okay, this has gotten enough off-topic that it’s time for me to walk away and spend more time on my day job. ;-) My initial point was to challenge Steve’s conclusion that wealth equals happiness, which doesn’t have anything to do with a) whether the Egyptians would like more prosperity, or b) whether we in the West should be helping them get it.
Rowan: Re your quote, and your boldfacing:
I think it would be presumptuous and wrong for rich westerners to think they know more than poor easterners about what the poor easterners want. But I don’t think it’s presumptuous and wrong for rich westerners to think they might know something about how to achieve something that the poor Easterners don’t know.
I see Egyptians in the streets hungering for — I’m not sure what. Political freedom as an end in itself? Or political freedom as a path to prosperity? I suspect that a lot of it is the latter, and I feel fairly confident that (having spent a good part of my life thinking about such things) I know more than most people about the most effective paths to prosperity.
If you could convince me that the Egyptians—or anyone else—preferred being poor, I’d agree that we should respect that preference. But I don’t see any evidence that that’s the case, and absent evidence, I think it’s fair to observe that a lot of our other experience renders a preference for poverty implausible.
Can I be permitted a small laugh here? Several people seem to be arguing that econometric numbers are solid knowledge. More solid indeed than our knowledge that people like money.
Ken B: Let me add that these numbers fall far short of anything econometric. They’re just raw data.
Can we please distinguish between these four types of “knowing what’s good for someone”?
(a) knowing better than Mr. Jones what actions will lead to Mr. Jones’ desired outcomes
(b) knowing better than Mr. Jones what outcomes will promote Mr. Jones’ goals
(c) knowing better than Mr. Jones how well Mr. Jones’ goals have already been reached
(d) knowing better than Mr. Jones what goals are best for Mr. Jones, as measured by some standard that exists independent of Mr. Jones
The post seems uncontroversial regarding (a): which actions maximize prosperity? Everyone seems to agree (or be happy to stipulate) that certain ways of getting prosperity work better than others.
Steve smuggled an assumption about (b) into the post with the word “happiness”: that prosperity promotes happiness more effectively than the outcomes of political freedom do. Rowan pointed to a book about how individual people are really quite bad at questions of type (b) when the goal in question is happiness. The responses I see to that are “well, *I* must be good at that, because I’m so sure of myself” (not convincing!), and “happiness is too hard to reckon with; let’s take ‘success in one’s aims’ as the goal, and then we can almost totally skip type (b) questions and plus it feels like granting people more autonomy” (not my choice, but a perfectly good approach).
And then there’s something about dropping anvils on people’s toes in Hell which seems to conflate questions (c) and (d) but I can’t really tell.
(P.S. Sorry, I shouldn’t have said “smuggled”; if it was forbidden for blog posts to assume answers to questions that they don’t address, nobody would have a blog. But it brought in an issue that I don’t think the post indeed otherwise addressed.)
@Steve: I agree, from what I’ve seen all these things are thinner than gossamer. But I’m amused at the idea that even the BEST economteric numbers — like the death penalty deterrence numbers you blogged — are the solidest source of knowledge we can aspire to, as if economics or any social science was quantum mechanics, and no other source can compare. For that is precisely the argument being made here.
@Aaron: I don’t object to the word smuggled but if Steve smuggled he did it in plain view. He was quite explicit.
Aaron: I do not object to “smuggled”.
Does anyone have a good argument for why economic freedom should NOT be the most important of the three freedoms mentioned in the post?
(Important in the sense that it will bring the most prosperity to its people. You can substitute ‘happiness’ for ‘prosperity’ if you’d like, but I don’t know how to quantify or measure ‘happiness’, so I prefer ‘prosperity’.)
Steve,
I know you’ve written on the topic before, but I would love to see another post on “The rules of evidence,” where you address the following questions.
In the absence of rigorous proof, how should we reason? What counts as evidence? How should we compare evidence? Is there a hierarchy?
I understand that even if you do this, one could always question where your answer came from, and play this game ad nauseum, but I’m still interested in your answer. The fact that you seem not only sure of what your opinions are, but also sure that they’re “right”, or “good”, makes me think that perhaps you have an answer to this.
Why do you think your opinions are defensible?
(If you say that you are a Bayesian, or that that is the right metaphor, which is my own take, I am going to want to know something about where priors should come from).
I don’t know if you take requests, but you would have at least one interested reader.
I enjoyed today’s post, and the linked post about the analysis of self-reported happiness, which I agree is utterly and obviously stupid.
“Instead, the findings published in the journal Proceedings of the National Academy of Sciences suggest that factors including partner’s temperament, faith, social participation, healthy habits and long-term goals weigh much more heavily into personal satisfaction.
On the other hand, the pursuit of wealth and material goods, as well as a neurotic partner, are key elements of unhappiness, the study showed.”
Quoted in http://www.aolhealth.com/2010/10/05/25-year-study-unlocks-secrets-to-happiness/
Original article at http://www.pnas.org/content/107/42/17922.full.pdf+html?sid=b5badf1f-beb3-4a77-a5d2-d98c938a90af
Note that it doesn’t say “wealth makes you unhappy”. It says “The pursuit of wealth makes you unhappy”
FWIW, I substituted the World Bank’s wealth per capita metric from “Where is the Wealth of Nations?” for GDP and got the following correlation coefficients:
Political – 0.57
Civil – 0.64
Economic – 0.56
‘Political freedom is no guarantee of prosperity. For that you need capitalism.’
I was under the impression that the Egyptian regime was moving to ‘proper’ as opposed to ‘Nationalist’ capitalism on the grounds that this would restrain extremism- which sounded quite promising.
It appears, however, that the lesson being drawn from the current turmoil is that it is precisely ‘proper’ capitalism which is dangerous. An equality of misery appears to be the only thing that keeps people happy. Oh yes, and arming oneself for an unwinnable war.
My first reaction is that these are “graphs” of arbitrary scales, they are not plots of one quantity against another. The first two show a strong correlation, but the difference is mostly between class 1 and the rest for graph 1, and class 1 and 2 and the rest for the second. One could come up with another scale that stretched out class 1, and that would show very strong correlation. We cannnot easily say “this country is twice as free as that one”
The capitalism graph seems to show two distinct populations rather than a “linear” correlation. If you separate out that top clump, there does not look to be a very strong correlation at all, either within the clump or amongst the rest. It is quite possible that that top wealthy capitalist clump is there due to history rather than a causual relationship between GDP and capitalism.
I think this is creating a false impression of numerical rigour where none exists.
Out of the top earning 30 or so countries, 23 are in class 1 for political rights.
Out of the top 35 or so countries, 29 are in the top 3 classes for civil rights.
Of those countries earning less than $10,000 pa, only 3 are in the top class for civil rights.
If you put it like this, it sounds as though there is a link.
Add this to the factor eluded to above (re happiness) that the strongest correlation is likely to be found between an economic metric(economic freedom) and an economic measure (GDP/capita)
than for political and civil rights and the same economic measures. I am sure that there is a link between GDP/capita and “happiness”, but we should not conflate the two just because happiness is difficult to measure.
I am not trying to deny the link between economic freedom and wealth – but when it comes to human happiness, it is possible that the link to the other factors is also quite significant.
(I don’t know which countries are represented by the high earning, low freedom blobs on the graph, but they could be very small countries, which we could treat as outliers. Without those, the numbers I cite above would look much stronger. Particularly interesting is the one with over $30,000 GDP and 7 on political and 5 on civil liberties scales)
@Neverfox: could you clarify how you got those correlation coefficients?
I think the wealthy not-free states are the oil states like Saudi Arabia and Quatar. Interestingly, I can’t seem to find these countries in the economic freedom data – could these be missed off? (Exhibit 1.2 p7). Please tell me the graphs above have been checked to include only the same countries as each other.
I just used the last column from Appendix 2 in the linked paper. I hand-entered the numbers for the countries that matched across the 4 data sets. The correlation is just vanilla. I’m on board with all of your suggestions for improving the sophistication but did not incorporate any of it here so as to be apples-to-apples with Steve’s analysis.
The GDP per capita should be on a log scale; there’s a huge difference in quality of life between $1000 and $2000 per year, but not much between $40k and $45k.
I’d like to see how the first 2 charts look then.
Thanks for the post and follow up comments, Steve. You have more patience than I.
@Rowan: Your fundamental understanding of economics and political theory is misguided and your points indicate blind criticism which is practically irrelevant to to the suggestive nature of such the post, especially when you consider the author’s claims in the context with which they are given (a blog post, not a scientific research paper).
“Money” does not, in itself, make you happy unless you know what to do with it.
If doing “X” increases your happiness, then it is fairly critical that you be able to afford doing “X”.
@Mike H: Yes there is such analysis. It goes under the recondit name “history”.
I would have taken the original comment more seriously. There’s clearly an agenda here. Obviously, the blog owner has never lived in one of the happy but not so developed/rich countries. Anyway, I expect an arrogant answer, but will suspend my disbelief for a second. Having said that, I think having some basic needs covered obviously helps, and that means certain level of buying power. But that’s not history, it’s human necessity. The other thing is that through history, you see some countries get rich at the expense of others, usually when one kingdom owns other kingdoms. So it’s obvious in this cases that the rich kingdom will be happier than the salve kingdom. Again, the answer is not “history” here, as history can only provide a correlation and if taken blindly, get you into all kind of errors.
Only partially agree with you, Steven, on this, since the idea that capitalism is different from freedom doesn’t make any sense. Capitalism is the system of natural liberty. We can’t separate them: which would amount to saying that a lotus can have the fragrance of a rose.
The error lies in the poor empirical proxies for freedom. Freedom can’t be captured by ‘tick-a-box’ checklists and ‘scores’. The devil is in the detail. For instance, on the surface the political ‘systems’ of India and Australia are similar, but the moment you go into detail, the thing splits into a hundred differences. A small difference can make a huge impact in the level of freedom that obtains.
When you get some time, please consider read just two chapters from my book, Breaking Free of Nehru (http://bfn.sabhlokcity.com/) (chapters 4 and 5) and you’ll get the point I’m making.
A more free country must NECESSARILY be rich (although a less free country can be temporarily rich as well). The fact that it is not rich gives good reasons to suspect it is not yet free! And a country that is not free (that includes politically) can’t continue to be rich. It must necessarily run out of steam, as the day of political reckoning comes.
Note that no country is free enough in this world, so all countries have a huge scope to increase wealth through greater openness. The USA in particular, at one time a leader in freedom, is reaching an abyss, with its Keynesian and social democratic, interventionist policies.
Regards
Sanjeev