FEATURE
ECONOMIC FREEDOM INDEXES PROMOTE GROWTH – BUT THEY NEED TO CHANGE Dylan Grice
Economic Freedom Indexes promote growth – but they need to change
Figure 1: (Miller, Kim and Roberts 2019)
I
f economic freedom resembles Hong Kong or Chile as they currently appear, then one would be forgiven for finding it unattractive. Yet despite this, according to the Heritage Foundation Economic Freedom Index (EFI), or that of the Fraser Institute, or those of myriad other organisations, it would seem that this is perhaps how it appears in practice. Indeed, the Fraser Institute deems Hong Kong the freest country on earth. Singapore, a de facto dictatorship with a ‘meticulously planned economy’ (Marshall 2016) comes a close second. Chile comes 13th in the midst of its current protests (Gwartney, et al. 2019), and placed even higher in most EFIs when under the leadership of General Pinochet. Pinochet, of course, tortured and brutalised countless citizens, but duly ran a free market economy as per the guidance of the ‘Chicago Boys’ who advised him, educated at the University of Chicago by Milton Friedman (Sigmund 1983). Each of these economies, past and present, suffers from vast inequality, and has shown on multiple occasions a willingness to suppress the political and civil rights of citizens. In 2015, Singapore jailed 16-year-old Amos Lee as an adult for posting a video criticising ex-leader Lee Kuan Yew. In 2019, Hong Kong attempted to curtail the civil rights of its citizens by introducing a bill allowing the extradition of the state’s political enemies to China, and brutally cracked down on public protest afterwards. It was withdrawn in September, but it now seems that China’s new national security law will be passed regardless. Chilean protests against inequality generally, triggered by higher subway fares, have been met by the government declaring a state of emergency, and the shooting and injuring of numerous protestors with rubber bullets. In most academic literature, however, it is widely accepted that the measures promoted and praised by such EFIs, when implemented by those countries aforementioned, among others, do promote domestic economic growth.
There are some exceptions, such as South Korea and, historically, the USA, whom economist Ha-Joon Chang emphasises developed rapidly due to their distinct mercantilist protectionism (Chang 2011). However, Hong Kong and Singapore are revered as success stories of globalisation, and the material wellbeing of their citizens, even their poorest citizens in an absolute sense, has without doubt seen growth as a result of their opening up to free trade and their domestic embrace of policies promoting economic freedom, as defined by EFIs.
In 2019, Hong Kong attempted to curtail the civil rights of its citizens by introducing a bill allowing the extradition of the state’s political enemies to China, and brutally cracked down on public protest afterwards. Let this article therefore, not be construed as antieconomic freedom, for the growth benefits that policies promoting such freedom can bring globally and domestically are clear. It must be recognised though, that a paradox exists, whereby many of those countries that have embraced 23
