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Why Poor People in the Freest Nations Have Incomes 8x Higher Than Poor People in the Least Free

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More economic freedom, more democracy. Evangelos Andreou:

The Democracy Index is an annual report by the Economist Intelligence Unit that ranks 167 countries according to their commitment to democratic values such as electoral process, pluralism, civil liberties, the functioning of government, political participation, and political culture.

Out of those 167 countries, only 19 countries are classified as “full democracies,” most of which are found among the top 30 countries in the Economic Freedom of the World Report (with the exception of Sweden and Iceland, which rank 43th and 59th respectively and are both still market-oriented economies with strong rule of law). This correlation works both ways: Most authoritarian countries (with the exception of Qatar and the United Arab Emirates) are also economically unfree, belonging either in the third or fourth economic freedom quartile. So, sorry friends of the left: greater economic freedom is empirically associated with more political rights and civil liberties, and vice versa.

Why? Milton Friedman offers an explanation in his 1962 bookCapitalism and Freedom: “In order for men to advocate anything, they must in the first place be able to earn a living. This already raises a problem in a socialist society since all jobs are under the direct control of political authorities.”

There cannot be political freedom without economic freedom. This argument is not controversial, even on the left. Leon Trotsky wrote in The Revolution Betrayed that “in a country where the sole employer is the state, opposition means death by slow starvation. The old principle, who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat.”

[Evangelos Andreou, “Why Poor People in the Freest Nations Have Incomes 8x Higher Than Poor People in the Least Free,” Foundation for Economic Education, November 19]

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