Monitor | Claims for economic freedom index simply don't stand up
Hong Kong again tops the list of freest markets in world, but if freedom leads to greater prosperity, then why isn’t the city also the richest?
Once again, Hong Kong has been pronounced the world's freest economy.
Yesterday, US free market lobby group Heritage Foundation published its 20th annual index of economic freedom. And for the 20th year in a row, there was Hong Kong sitting at the top of the ranking.
Naturally, the Hong Kong government was overjoyed, with Financial Secretary John Tsang Chun-wah declaring that he is determined to uphold economic freedom.
The Heritage Foundation was pretty pleased with itself too. Its 20th anniversary report on the index included a chapter entitled "The moral case for economic liberty", extolling the merits of free markets and lambasting 19th century British philosopher John Stuart Mill, author of the seminal work , for daring to suggest that because trade is a social rather than personal act, it should be subject to social control and regulation.
The foundation's researchers have no doubts. Greater economic freedom leads to greater prosperity, which they define as a higher gross domestic product per capita.
Last year … Hong Kong had slipped to a lamentable 25th place in terms of its GDP per capita
"In plain language, the more economically free a country is, the wealthier its people are," the report declares. "The linkage is unmistakable, and the data each year confirm it."
