Examiner Editorial: Decline in economic freedom seen worldwide 

Adam Smith, the Scottish philosopher and author of "The Wealth of Nations," is not so well-known for having said that "people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Were he with us today, Smith might well add a corollary: Whenever politicians and bureaucrats gather for any reason, their conversation also invariably results in a "conspiracy" against taxpayers and consumers for more government regulation and taxes.

This reality is illustrated in the 2010 edition of the Index of Economic Freedom, compiled and published by The Heritage Foundation and The Wall Street Journal. This is the 16th year Heritage and the Journal have jointly produced the Index.

The most distressing news from the latest edition is the fact that the U.S. fell from its perennial rank as one of the world’s freest economies to "Mostly Free." The U.S. trails Canada, Switzerland, Ireland, New Zealand, Australia, Singapore and Hong Kong, which topped the rankings for the 16th consecutive year. Although still among the top 10, the U.S. just barely edged out Denmark (ninth) and Chile (10th).

The U.S. position likely would be even worse except for the fact that the Index ranking is based on data collected for the period between July 2008 and June 2009, thus excluding much of the heavy increases in Washington, D.C.’s bailout spending and regulation in response to the economic meltdown of September 2008 and the recession that -followed.

Second, the U.S. was not alone in its flawed approach to the economic crisis. "Regrettably, attacks on the free market, fueled by the economic slowdown and the political appeal of quick interventionist remedies, gained strong momentum in some countries, with far-reaching effects," the Index editors said. "Exactly half of the major economies curtailed economic freedom to some degree through various
interventionist measures."

As a result, "overall progress toward greater economic freedom has been interrupted. The average economic freedom score for 183 nations ranked by the 2010 Index is 59.4, down 0.1 point from 2009."

If this downward trend continues for any length of time, either in the U.S. or elsewhere, the negative results will be widespread around the globe because, as the Index makes clear, "economic freedom has far-reaching positive impacts on various aspects of human development. Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance and environmental sustainability."

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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