"My country, 'tis of thee, sweet land of liberty, of thee I sing. Land
where my fathers died, land of the pilgrim's pride, from every
mountainside, let freedom ring." And if America is to be a great nation,
this must become true. So let freedom ring from the prodigious hilltops
of New Hampshire. Let freedom ring from the mighty mountains of
New York. Let freedom ring from the heightening Alleghenies of
Pennsylvania! Let freedom ring from the snowcapped Rockies of
Colorado! Let freedom ring from the curvaceous peaks of California!
But not only that; let freedom ring from Stone Mountain of Georgia! Let
freedom ring from Lookout Mountain of Tennessee! Let freedom ring
from every hill and every molehill of Mississippi. From every
mountainside, let freedom ring.1
Freedom. Liberty. "Free at last!" Just words, or the essence of humanity? We hold this truth to be
self-evident; freedom is a fundamental piece of being. We strive for it, we nurture it, we yearn
for it, we die in quest of it, and we ache to our bones when it is denied. No chronology or
treatise could ever hope to discuss all aspects of
liberty. The force of freedom, whatever exactly it is,
is too powerful for simple recitation. Here we do
not hope to expand the domain of thoughts about
freedom. Our goal here is more direct: to measure
economic freedom and study how people react to it.
About five years ago several scholars at Clemson
University decided to investigate the link, if any,
between economic freedom and economic activity
in the United States.2 There was a tried-and-true technique of creating indexes of freedom across
countries and across time, but the effort then was the first attempt to examine the impact of
economic freedom on life inside the United States.3
Our purpose here is to update and refine the original 1999 Clemson University study on
economic freedom.
We undertake the analysis with up-to-date data, and we add several new
measures of economic freedom across the states. As in the earlier study, our method attemptsto remove a level of subjectivity common in most discussions of freedom, namely, what exactly
is freedom?
There are basically two ways to assess or assign levels of freedom across time or space. One
is a subjective determination of the factors that wisdom suggests constitute liberty. For
example, the Bill of Rights is a proud and prominent declaration of certain freedoms. One
could start from these and then build a framework or matrix of freedom based on sound
principles and accumulated wisdom. This is a fine way to measure freedom, and it makes for
powerful analysis. There is only one problem: this technique is the result of one person's
thinking or a group's conclusion.
Individuals do not have to agree on every aspect of freedom. Consider the simple problem of
marriage. A man and a woman enter into a contract "to have and to hold from this day forward,
to love and to cherish.. " Are they more or less free?
Do land covenants make people less free? Yes and
no. Therein lies the issue. Freedom is best viewed
through the eyes of the beholder. People might
agree to a point, but there is no single universally
accepted definition. There is, however, an
alternative approach.
The one taken here appears agnostic on the surface, but is actually a market-based definition.
This technique creates measures of freedom, indexes, and then searches across them, finding the
one that best maps into actual human behavior that is arguably driven by freedom.
Our index offers the clear advantage that it is evaluated
in the marketplace, by the actual decisions people make about where to live. Our technique works and measures
what we want it to: economic freedom as seen through the eyes of ordinary people.
If we see people climbing the Berlin Wall,
swimming the Florida Straights, or applying for visas to live in the United States, we can, to some
extent, claim that these people are "in search of freedom."4 Therefore, we adopt a migration
metric for economic freedom. If people are moving from one state to another, other things equal,
we assert and believe that this is a market-based response to differences in freedom.
As Pres ident Reagan said, and we believe it is the essence of the correct way to measure
freedom using market tests, "Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this
wall!" What else could Reagan have meant except freedom is the right to live where one
wishes. People define freedom by voting with their feet.
In summary, our method uses the classical approach of using our judgment to compile a list
of relevant indicator variables for economic freedom. These indicators are then converted into a
number of indexes using various techniques. We then compare each index to the others in
terms of its ability to explain human migration, other things the same. The best index is then
used to rank the U.S. states in terms of economic freedom.
Our index is our best estimate of the state rankings. We have employed our judgment, and
we do not claim it is perfect. We have at every junction made what we think is the right
decision about what is free and what is not. Our index offers the clear advantage that it is
evaluated in the marketplace, by the actual decisions people make about where to live. Our
technique works and measures what we want it to: economic freedom as seen through the eyes
of ordinary people. |
Economic freedom is the right of
individuals to pursue their interests through voluntary exchange of private property
under a rule
of law, and this
freedom forms the
foundation of all market economies.
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We can note that this approach is Rawlsian in nature.5 If a system is just and fair, and people
value these things, as we believe they do, then migration is a proper measure of one social
implication of differences in economic freedom.
   
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