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If human freedom can be measured, how do different countries compare? And different times?…
For the last twenty-five years a group of economists under the leadership of Professor James Gwartney have been measuring economic freedom in the world annually, as I have described here in The Conservative. Their findings about the strong relationship between economic freedom and prosperity are remarkable: If countries are divided up in quartiles, average income in the freest quartile is almost ten times higher than in the unfreest one. The contrast is even starker in the case of the poor: the average income of the poorest ten per cent in the economically freest nations was more than twice the average per-capita income in the unfreest nations. Adam Smith stands vindicated, yet again. But it is quite true that there is more to a good life than economic freedom. Man lives not by bread alone. Therefore, in 2008 a group of experts at two think tanks, Cato Institute in Washington DC and Fraser Institute in Vancouver, began to measure freedom in a wider sense, building upon Gwartney’s work, but broading the scope, including in their investigations political and intellectual freedoms.
82 Indicators in 12 Areas
The experts, Ian Vásquez, Fred McMahon, Ryan Murphy, and Guillermina Sutter Schneider, have constructed an Index of Human Freedom, using 82 indicators of personal and economic freedoms in twelve areas: Rule of law; Security and safety; Movement; Religion; Association, assembly, and civil society; Expression and information; Relationships; Size of government; Legal system and property rights; Sound money; Freedom to trade internationally; Regulation.
The last five areas are derived from Gwartney’s Index of Economic Freedom, but the others refer to personal freedom where the data come from international organisations and associations such as the World Justice Project, Institute for Economics and Peace, and Freedom House. What is really being measured in most cases is how far government goes in restricting personal and economic freedoms, although a few indicators are also about social or nonofficial restrictions, stemming for example from widespread violence or conflict. Thus the authors apply what Oxford philosopher Sir Isaiah Berlin called the negative concept of liberty, absence of constraint, not the positive concept, empowerment (while the distinction between the negative and positive concepts of liberty originated with French writer Benjamin Constant in 1819, as I point out in the first volume of my Twenty-Four Conservative-Liberal Thinkers).
Only 15 per cent in Freest Quartile
In December 2021, the group published its findings for the last year in which there are sufficient data available, 2019, surveying 165 jurisdictions. According to the Index of Human Freedom, Switzerland is the freest country in the world, followed by four other small countries, New Zealand, Denmark, Estonia, and Ireland, in that order. The United Kingdom is number 14 on the list, the United States ties with Germany and Japan in 15th place, Brazil is number 78, Russia number 126 and China number 150. Notably, in the two jurisdictions with the freest economies according to the Index of Economic Freedom personal freedom seems to be much less extensive: Hong Kong is number 30 according to the Index of Human Freedom and Singapore number 48. The five unfreest countries are, in descending order, Egypt, Sudan, Yemen, Venezuela, and Syria. The two remaining communist countries in the world, Cuba of the Castro Brothers and North Korea of the Kim dynasty, are not included.
The Index of Human Freedom can be used to make comparisons over time as well as between countries. For a while after the collapse of communism in 1989–1991 the world was getting freer year by year. This development has stopped, unfortunately. While global human freedom remained on average unchanged from 2018, the ratings decreased for 82 jurisdictions in 2019 and increased for 67 jurisdictions. The ten most populous countries in the world, China, India, the United States, Indonesia, Pakistan, Brazil, Nigeria, Bangladesh, Russia, and Mexico, all saw a decrease in overall freedom. Only 15 per cent of the world’s population live in the freest quartile, mostly in Europe, North America, and Oceania.
The Swiss Achievement
The freest country in the world according to this measurement, Switzerland, is indeed remarkable. Perhaps God, after He had created Switzerland and realised how ungenerous He had been, created the diligent, sensible Swiss to make up for the country’s lack of natural resources. There is little doubt however that the main explanation for the success of the Swiss is that they have over the centuries developed an implicit social contract which constrains power by dividing it up between local communities, and the cantons, and the federation. Lord Acton once remarked that the freedom of a country could best be judged by how she treated her minorities. This is well illustrated in Switzerland. She is a country of many different groups, religious as well as linguistic, that manage to live together peacefully because each group refrains from trying to impose its identity and interests on the others. What is crucial however, I think, is that the power to tax is also divided up between these political units. Those who pay the taxes also make decisions, in regular referenda, on how high they should be, not a large, inflexible, all-powerful, non-transparent bureaucracy.
Twenty years ago I published a book on how Iceland could adopt the Swiss model, cut taxes and create a business-friendly environment, and how my country might thus become the Switzerland of the North. On 12 December 2002 I was presenting my argument at a literary café in Reykjavik. The room was packed. A well-known left-wing author, Hallgrimur Helgason, was in the audience. He jumped up and asked: ‘Why should we try to emulate Switzerland? They have not produced anything except the cuckoo clock!’ He was of course referring to Orson Welles’ famous quip in The Third Man (1949): ‘In Italy for thirty years under the Borgias, they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace, and what did that produce? The cuckoo clock.’
I replied to Helgason: ‘First, it is a myth that Switzerland produced the cuckoo clock. It was invented in the Black Forest of Bavaria. Secondly, the annals of a happy nation have blank pages. Fortunately, nothing very interesting happens in Switzerland. It is an argument for it, not against it. Thirdly, remember that Swizerland, even if she does not have a totally unblemished record, has over time been an asylum for both people and their property from tyrants and dictators.’
The Nordic Countries are Free
Another interesting fact is that the five Nordic countries score highly on the Index of Human Freedom: Denmark is number 3, Finland ties with Canada in 6th place, Sweden is number 9, Iceland number 12, and Norway number 13. Notably, all of them are freer than the United States. Since Senator Bernie Sanders has been urging his fellow Americans to adopt the Nordic model, this would seem to entail that the Americans should try to increase freedom, not reduce it. But of course it is a myth that the Nordic countries are examples of successful socialism. Their prosperity is despite social democracy, not because of it. The three main reasons why the Nordic countries are both free and prosperous are, I submit, that they firmly uphold the rule of law, including respect for private property and freedom of contract, that they practice free trade (as small economies have to do if they are to benefit from the international division of labour), and that at least until recently the Nordic societies have been relatively homogeneous, with extensive social cohesion, a high level of trust and a strong work ethic. But the success of the Nordic countries should not be exaggerated. They could be compared to those states in the United States and those regions in Canada which are in many ways similar, such as Minnesota, the two Dakotas and Manitoba. These ‘Nordic countries in North America’ would perform just as well or even better on most criteria than the five ‘Nordic countries in Europe’.
I find it mildly surprising, though, that Iceland is in fourth place out of five among the Nordic countries, not in the first or second place which I would have expected. I took a look at the data, and although it seems mostly reliable, there are a few odd assumptions. One example is that the indicator ‘Academic and cultural expression’ was estimated to be 10 in 2008–2016 (which meant no restrictions at all), but then the assigned number suddenly dropped to 7.5 in 2017 where it has remained. What happened in 2017? What new restrictions on academic and cultural expression were then introduced? I have no idea. Another example is the indicator ‘Media self-censorship’. It was estimated to be 8.3 in 2008–2012, but in 2013 the assigned number went down to 6.9, remaining at that level until 2018, when it went up again to 7.2, and then in 2019 it dropped again, to 6.2. Again I am at a loss to explain how the numbers were assigned. The third example is the indicator ‘Media freedom’. It was estimated to be 8.1 in 2008–2012, and 8.6 in 2013–2018, but the assigned number suddenly dropped to 6.9 in 2019. What happened? What new restrictions on media freedom were introduced?
If anything, in the case of the two media indicators it should have been the other way around. In 2008, most of the private media in Iceland was owned by a retail magnate, Jon A. Johannesson, who was the biggest debtor of the Icelandic banks and who used his clout to attack the authorites for subjecting him to a police investigation. (He was eventually given a suspended prison sentence in the Supreme Court for bookkeeping irregularities.) Johannesson—who lost most of his business empire in the 2008 crash—sold his radio and television stations to one company in 2017 and his newspaper and online journals to another company in 2019.
Among the Fortunate Few
The source for these three odd assumptions about Iceland seems to be the annual report Freedom in the World, published by Freedom House. For 2019, Iceland received less than full marks by Freedom House for a few indicators, including the influence on political decision-making by forces external to the political sphere, and media freedom. These two ratings in particular seem to have been because of a case involving the large fishing firm Samherji which has been accused by journalists at the government-owned Icelandic National Broadcasting Service, in conjunction with two left-wing online magazines, of having bribed officials in Namibia in order to obtain fishing licences there. I think this is a highly misleading interpretation of the still unresolved case, but it is a topic for another occasion. Anyway, these ratings do not make much of a difference. It hardly matters if on the Index of Human Freedom Iceland is number 6 in the world like Finland, or 9 like Sweden, or 12, which is her present rating, or 13 like Norway. It would be a quibble about petty details. The fact remains that Iceland, while certainly not perfect, is one of the freest countries in the world. The Icelanders are among the fortunate 15 per cent of the world’s population.