Warning: Exploding Myth Alert

The Opinion Journal announces the release of the 2007 Heritage Foundation/The Wall Street Journal 2007 Index of Economic Freedom. Contrary to the anti-globalization forces and the dedicated socialists, the poor are getting richer in countries with economic freedom. Those with tighter governments controls fare much worse for their citizens.

Here's bad news for those who oppose global free trade: Not only did the world-wide trend toward greater economic liberty hold steady over the past year, but the incomes of poor individuals across the globe are rising as result. The world isn't only growing richer. The gap between the per-capita income of have-not populations and that of the developed world is narrowing.

This good news for human progress is documented in the 2007 Heritage Foundation/The Wall Street Journal 2007 Index of Economic Freedom, released today. Neither another year of Islamic terrorism, nor record high oil prices, nor fear mongering on Capitol Hill about the China peril have been able to reverse a gradual global shift that reflects the basic human longing for individual liberty. While not all of mankind is participating in this advance, in those places where freedom has increased, people are becoming decidedly better off.

The average freedom score this year for the 157 countries ranked is the second highest since we began measuring economic freedom 13 years ago. It is down a fraction from last year, but each region of the globe enjoys greater economic freedom than it did a decade ago. Hong Kong, Singapore and Australia are the three freest economies in the world this year, in that order. The U.S. ranks No. 4. Among the 20 freest economies in the world, Europe holds 12 places. (The rankings are here.)………

…….This year the Index again includes important essays on world economic trends. In a piece titled "Global Inequality Fades as the Global Economy Grows," Columbia University professor of economics Xavier Sala-i-Martin destroys the myth that the income gap is widening. While it is true that some countries are being left behind, when population weights are factored into the equation, the evidence shows that "individual income inequality declined substantially during the past two decades. The main reason is that incomes of some of the world's poorest and most populated countries (most notably China and India, but also many other countries in Asia) converged rapidly with the incomes of OECD citizens." Of course both China (ranked 119) and India (104) have a long way to go toward economic freedom but both have made big gains in recent years. Mr. Sala-i-Martin finds that the inequality gap would be even narrower if not for the "dismal performance" of African countries.

By all means go check the whole thing out. The opponents of free trade have some explaining to do to justify their reasoning. Because the fact of the matter is that protectionism and government control is the worst thing we can do for the developing world contrary to the myths that are being promoted. One thing that should disturb you is that the United States only ranks 4th in economic freedom. That really isn't a thing to brag about.

Other Links to this Post

1. Blue Crab Boulevard » The Moral Plank — Tuesday, 16 January , 2007 @ 9:31 pm

2. Doug Ross @ Journal — Wednesday, 17 January , 2007 @ 5:20 am