Political Freedom Vs. Economic Freedom and Wealth

June 18, 2009

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[First published March 20, 2005] A natural question is about the relationship between democracy (as Freedom House rates freedom) and economic freedom, and this is shown in the chart below.


To create the chart, the ratings for each index were standardized before making the plot.

Obviously, there is a close relationship, as by theory there should be. One cannot dominate a free market with a government dictated economy without destroying freedom in the process. Note that even the so-called “people’s republic of Sweden” is indexed as being economically free in the Heritage Foundation/Wall Street Journal index. So is Denmark, and so-called “socialist” Israel is indexed as mostly economically free.

Then, what about the economic development, or what I prefer to call the wealth of a nation, and welfare of a people. The next chart shows the close relationship between the Freedom House ratings and various measure of wealth and welfare.


In the chart, HDI = the UN human development index (a measure of general welfare); HPI = UN human poverty index; GNP = gross national product; and PPP = purchasing power parity (currencies are normed such that they will buy the same goods from one country to the next).

There you have it. Political and Economic freedom not only go together, but also they are an engine of a people’s wealth and welfare. Add this to the fact the democratically free countries never have had a famine, virtually never murder their own people, have the least internal violence, and never any wars between them, and you have freedom as the closest thing to a general solution to humanity’s ills.

Three cheers for freedom. Okay, you freedomists out there, to work.


Link of Note

”Testing Whether Freedom Predicts Human Security and Violence (2001) By R.J. Rummel, Appendix to Saving Lives, enriching Life: Freedom as a Right and a Moral Good

In this appendix, I did a variety of mathematical and statistical operations to test the hypothesis that freedom predicts to human security and violence. The conclusion:

For all nations 1997 to 1998, the human security of their people, their human and economic development, the violence in their lives, and the political instability of their institutions, is theoretically and empirically dependent on their freedom–their civil rights and political liberties, rule of law, and the accountability of their government. One can well predict a people’s human security by knowing how free they are.

Moreover, just considering the violence, instability, and total deaths a people can suffer, the more freedom they have the less of this they endure. This is to say:

Even if we just improve the human rights of a people, even if we promote some democratization of their political institutions, it will improve their human security, and reduce the violence that inflicts them.


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