Investigation:

The Index of Economic Freedom is an annual report created by The Heritage Foundation and Wall Street Journal that measures the degree of economic freedom in the world’s nations (2). This scale of freeness is judged on the government’s ability to allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself (4). Through this, patterns arise, demonstrating the need for a nation’s free economy. This index shows that a nation’s GDP per capita correlates with its social progress and democratic governance (2). As we strive to have more economic freedom, many challenges get in our way. This year we have had Russia’s ongoing war with Ukraine, the Chinese communists party’s saber rattling, Hamas’s horrific terrorist attack on Israel, and Houthi terrorists attacking ships in the Red Sea (2). Among geopolitical tensions, we are still feeling the dramatic downward pressure on the world economy as a product of bad economic policy choices during the COVID-19 pandemic period (2). According to The Heritage Foundation, governments’ responses to the virus by lockdowns, travel bans, and restrictions of trade all created real and heavy economic and social costs (2). This past year has served as a very powerful reminder that economic freedom isn’t inevitable. “Indeed, it’s always under attack” (2).

As an international baccalaureate high school student with no degree in economics and little understanding of the geopolitical state of the world, my interpretation of the index is not to create new claims but rather to translate data into a comprehensible format. Furthermore, my goal is to assess the limitations of The Heritage Foundation’s claims and uncover the purpose of their content. 

How it works:

The Index of Economic Freedom takes a comprehensive approach to evaluating the scores. Each of the measured aspects of economic freedom plays a vital role in sustaining national prosperity, but are all interconnected and complementary in their impact as progress in one area can easily reinforce progress in another (2). Similarly, repressed economic freedom in one area can make it much more difficult to prosper in other categories (2). The 12 aspects of economic freedom measured are grouped into the four broad pillars below.

• Rule of law (property rights, judicial effectiveness, and government integrity);
• Government size (tax burden, government spending, and fiscal health);
• Regulatory efficiency (business freedom, labor freedom, and monetary freedom)
• Market openness (trade freedom, investment freedom, and financial freedom)

Key Findings:

This 2024 Index considers the economic conditions and policies in 184 sovereign countries and reveals that the world economy as a whole is “mostly unfree” (2). The global average score (on a scale from 0-100) is only 58.6, falling further from the previous years 59.3 (2). The Heritage Foundation recognizes that rising deficits and rising public debt in many countries have undermined and will continue to undercut their productivity growth and will lead to slowing economic growth (2). Despite this notable downturn in global economic freedom, the relationship is clear: no matter a country’s existing level of development, it can boost its economic growth by implementing policies that reduce taxes, rationalize the regulatory environment, open the economy to greater competition, and fight corruption. 

This report also shows that the standard of living (measured by income per capita) is much higher in economically free countries. These deemed free countries generate incomes that are more than double the average levels in other countries and then more than three times higher than economically repressed countries (2). Once again, this index proves the correlation between great economic freedom with overall well-being which is health, education, the environment, innovation, societal progress, and democratic governance. 

The final results of the index are as follows. Only 4 countries ranked a freedom score of 80 or more (economically “free” category), these countries were Singapore, Switzerland, Ireland, and Taiwan (2). 22 counties ranked “mostly free” and 55 countries were “moderately free”. Thus, less than half of the ranked countries were considered at least moderately free (2). Therefore, more than 50 percent of the countries graded in the 2024 index were considered not free. Out of 95, 62 were “mostly unfree” and 33 were economically “repressed”(2).

Especially notable is the continuing decline of the United States rank, whose score plummeted to 70.1, the lowest level they have reached in the last 30 years. Currently, the US is ranked 25th freest economy. The Heritage Foundation blames “excessive government spending” which has caused big deficits and debt burdens (2). 

Limitations of The Heritage Foundation and the report:

After analyzing this report, I dove deeper into the source – finding many limitations to the origin, purpose, and content of Heritage.

The Heritage Foundation is a right-wing conservative think tank based in Washington DC(5). Many criticize their work because of their political agenda. Heritage has had a significant influence on U.S. public policymaking and has historically been ranked among the most influential public policy organizations in the United States(5). Growing out of the new business activist movement inspired by the Powell Memorandum and discontent with Richard Nixon‘s embrace of the liberal consensus, the founders Weyrich and Feulner sought to create a conservative version of the Brookings Institution that advanced conservative policies(5). Heritage was involved in many republican presidents’ policies, aims, and funding. In their mission statement, they say that their goal is to “formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.” (1)

First, Reagan. Heritage drafted much of Ronald Reagan’s agenda to slash federal spending (3). The Heritage Foundation published a report aimed at reducing the size of the federal government, called Mandate for Leadership – this expressed specific policy guidance to the incoming Reagan administration and included over 2,000 policy recommendations to advance conservative policies (5). The report was well received by the White House, and several of its authors went on to take positions in the Reagan administration (5). Of the 2,000 Heritage proposals, approximately 60% were implemented or initiated by the end of Reagan’s first year in office (5). Reagan later called The Heritage Foundation a “vital force” in the successes during his presidency (5).

Secondly, Bush. Heritage remained an influential voice on foreign and domestic policy during George H. W. Bush‘s administration. The foundation was a leading proponent of Operation Desert Storm designed to liberate Kuwait following Saddam Hussein‘s invasion of Kuwait(5). According to The Baltimore Sun, Heritage “laid much of the groundwork for Bush administration thinking” about post-Soviet foreign policy (5). Furthermore, the Bush administration agreed with six of the ten budget reform proposals the Heritage Foundation proposed in its Mandate for Leadership III book (5)

Thirdly, the Trump administration. While initially against Trump’s run for office (publically), The Heritage Foundation began to support him. 66 Heritage employees and alumni were hired into the Trump administration(5). According to Heritage employees involved, several hundred people from the Heritage database ultimately received jobs in government agencies(5). Also,  multiple conservative groups said that Heritage employees were tracking resumes, looking to staff Trump’s administration with conservative appointees(1). One source described the effort as a “shadow transition team” and “an effort to have the right kind of people in there.”(1) This interconnected influence and relationship between the Trump administration and the Heritage Foundation represents the growing power dynamic between governance, funding, and control.

The Reagan, Bush, and Trump administration’s relationships with the Heritage Foundation point to the great influence and impact this think-tank has, on real US policy and real people’s lives.

Conclusion:

Many criticize the influence and opinions of The Heritage Foundation. Charles W. L. Hill, a professor at the Foster School of Business at the University of Washington, criticized the Index of Economic Freedom, writing that, “given that The Heritage Foundation has a political agenda, its work should be viewed with caution”(5). While a valid statement, this begins the perpetual mistrust of all institutions and begs the question – is there any trustworthy knowledge? Even this advice by Hill needs to be taken with a grain of salt – does all political knowledge hold a political agenda? Doesn’t this professor intertwine bias and subjectivity within the content he teaches and spreads? 

Truly, (ironic as ‘truly’ is to say) it’s impossible to divide one from the other. In the case of the Index of Economic Freedom report, it’s crucial to aim to separate the data from the claims. However, deciphering correlation from causation in a 500-page spreadsheet of number-assigned data is not a simple task. This further contributes to my claim, as learners need to be cautious and curious about the knowledge they consume, gaining a broader understanding of limitations within systems and themselves. This era of self-awareness will lead to prosperity of thought and a generation of well-balanced society and voters.

Works Cited:

(1) DeSmog. “Heritage Foundation.” DeSmog, www.desmog.com/heritage-foundation/.

     Accessed 7 Apr. 2024. 

(2) The Heritage Foundation. “The Index of Economic Freedom: Executive Summary.”

     heritage.org, www.heritage.org/index/pages/report. Accessed 7 Apr.

     2024.

(3) Stein, Jeff. “Heritage Foundation, former powerhouse of GOP policy, adjusts in

     the face of new competition from Trump allies.” The Washington Post,

     www.washingtonpost.com/us-policy/2022/02/07/

     heritage-foundation-trump-republicans/. Accessed 7 Apr. 2024.

(4) Wikipedia contributors. “Index of Economic Freedom.” Wikipedia, The Free

     Encyclopedia., en.wikipedia.org/wiki/Index_of_Economic_Freedom.

     Accessed 7 Apr. 2024.

(5) Wikipedia contributors. “The Heritage Foundation.” Wikipedia, The Free

     Encyclopedia., en.wikipedia.org/wiki/The_Heritage_Foundation. Accessed

     7 Apr. 2024.