ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, January 2, 1997 TAG: 9701020032
SECTION: EDITORIAL PAGE: A10 EDITION: METRO
"AS OUR century began late with an assassination in 1914," writes Robert L. Bartley in the foreword of the recently published 1997 Index of Economic Freedom, "it ended early, with the fall of the Berlin Wall in 1989."
In pegging the start of the 20th century at the assassination in Sarajevo of Austro-Hungarian Archduke Francis Ferdinand, an event that touched off World War I, Bartley is in accord with historical convention. In pegging the century's end to the date when communism's most visible symbol turned to rubble, like communism itself, the editor of The Wall Street Journal's opinion pages will probably prove in accord with the judgment of future historians as well. We certainly wouldn't bet against it.
In Bartley's view, 1914 marked the end of a remarkable era of economic freedom and economic growth, and ushered in a century of warfare and dictatorial ideologies that ignored the how-to-grow lessons of the 1800s. Now, however, there is a return to the old understanding, as evidenced by the widespread rejection of communism as an attractive economic system and engine of development.
Let's hope the revived confidence in free economic systems proves durable. The central thesis of the Index - co-published by The Journal and a Washington think tank, The Heritage Foundation - is that economic freedom and economic prosperity go hand in hand. The case is demonstrated, amply, with a nation-by-nation assessment of the status of economic freedom in 150 of the world's 191 countries. The 72 rated "free" (including the United States) or "mostly free" are far better off and growing far faster economically than the 78 rated "mostly unfree" or "repressed."
Not that the Index's numbers show a perfect relationship. History and geography play roles, too. On the African continent, for instance, oil-rich Libya is "repressed" but has five times the per-capita purchasing power of "mostly free" Uganda and Zambia. "Mostly free" Australians have slightly more per-capita purchasing power than "free" New Zealanders and considerably more purchasing power than "free" Taiwanese.
Other anomalies seem to arise from the limitations of conventional economic measurements in describing the good life - especially with inadequate notice of income gaps between rich and poor, and in service of an apparent anti-tax bias. By the purely economic yardsticks of the Index, for example, politically authoritarian Singapore is rated one of the world's few "free" countries, ahead even of Western Europe's democracies. The Index gigs the latter, most of which are rated "mostly free" rather than "free," for higher tax rates - even though the taxes often pay for economically valuable services like universal health care.
The case of the new Russia illustrates another theoretical difficulty. It is "mostly unfree" in part because of a flourishing black market - the control of which is part of governmental regulation that the Index otherwise counts as an economic-freedom demerit.
But these are quibbles. The "economic freedom" distinction between an Australia and a New Zealand is, after all, marginal. Singapore notwithstanding, most countries that rate well by economic-freedom criteria would also rate well on political freedom. The collapse of the 20th century's command-and-control ideologies, communism most prominently, offers great hope for a more widely dispersed global prosperity in the century to come.
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