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Dallas Morning News: Economic Freedom is Waning in the United States

Dallas Morning News editorial writer Jim Mitchell has written about the research of SMU economist Robert Lawson, co-author on the new report Economic Freedom of the World: 2011 Annual Report.

Lawson is the Jerome M. Fullinwider Chair in Economic Freedom in the O’Neil Center for Global Markets and Freedom at the SMU Cox School of Business.

Lawson has co-authored the widely-cited Economic Freedom of the World annual report for 20 years. The report provides an economic freedom index for over 140 countries. He helped found and still blogs periodically for www.divisionoflabour.com.

He and his co-researchers penned a commentary for The Huffington Post, “Economic Freedom of the World: Lessons for the U.S..”

DMN subscribers can see the editorial.

EXCERPT:

By Jim Mitchell
Dallas Morning News

So what nation has the greatest economic freedom? Surely it must be the United States, the land of capitalism and rugged individualism?

Well it isn’t, according to a study by SMU researcher Robert Lawson and co-authors of Economic Freedom of the World Index. Key measurements of economic freedom include Size of Government: Expenditures, Taxes, and Enterprises; Legal Structure and Security of Property Rights; Access to Sound Money; Freedom to Trade Internationally; and Regulation of Credit, Labor, and Business.

By this framework, Hong Kong tops the list, for the highest rating for economic freedom, followed in order by Singapore; New Zealand; Switzerland; Australia; Canada; Chile; United Kingdom; Mauritius; and the United States. In fact in the last 10 years, the report notes, the world’s largest economy, the United States, has suffered one of the largest declines in economic freedom due mostly to higher government spending and borrowing and lower scores for the legal structure and property rights components.

And why is this important? According to the report:

  • nations in the top quartile of economic freedom had an average per-capita GDP of $31,501 in 2009, compared to $4,545 for those nations in the bottom quartile, in constant 2005 international dollars.
  • nations in the top quartile of economic freedom had an average growth in per-capita GDP between 1990 and 2009 of 3.07%, compared to 1.18% for those nations in the bottom quartile, in constant 2005 international dollars.
  • In the top quartile, the average income of the poorest 10% of the population was $8,735, compared to $1,061 for those in the bottom quartile, and the average income of the poorest 10 percent in the top quartile is almost double the overall income per capita in the bottom quartile ($4,5459) and the poorest people in the most economically free countries are nearly twice as rich as the average people in the least free countries.

DMN subscribers can see the editorial.

SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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Report: U.S. Economic Freedom Continues Fall; Global Average Declines

Levels of economic freedom have decreased around the globe, according to a new report released today by the Fraser Institute, Canada’s leading public policy think-tank.

Economic Freedom of the World: 2011 Annual Report shows that the average economic freedom score fell to 6.64 in 2009, the lowest in nearly three decades, from 6.67 in 2008.

The United States in particular dropped from No. 6 to No. 10 in the ranking.

“The big news this year is that economic freedom in the United States continues to fall,” said SMU economist Robert A. Lawson, an author on the research who has helped compile the annual report since 1997. “For the last decade the United States’ rating has been falling. On our 0-to-10 scale, the U.S. rating has fallen by about a point. This is a big change. In fact for the first time ever Canada ranks higher than the United States.”

The global average also is falling, Lawson said. For the past two years it’s fallen after rising for the last 20 to 30 years, he said.

“This is really important because all of the research that we have done and that others have done tells us one thing: Economic freedom really matters,” Lawson said.

To do well on the index, a country’s taxes must be low, regulations moderate, property rights secure and money sound, with free trade domestically and abroad.

“In response to the American and European debt crises, governments around the world are embracing perverse regulations and this has huge, negative implications for economic freedom and financial recovery,” said Fred McMahon, Fraser Institute vice-president of international policy research.

Hong Kong again ranked number one for economic freedom, followed by Singapore and New Zealand, Switzerland, and Australia.

The United States experienced one of the largest drops in economic freedom, falling to 10th place overall from sixth in 2010. Much of this decline is a result of higher spending and borrowing on the part of the U.S. government, and lower scores for legal structure and property rights, the authors said.

Zimbabwe once again received the worst score among the 141 jurisdictions included in the study, followed by Myanmar, Venezuela and Angola.

“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life,” McMahon said.

“The political uprisings sweeping across the Arab World are the result of people wanting the outcomes of economic freedom — prosperity, job growth, political freedoms and poverty reduction,” he said.

The annual peer-reviewed Economic Freedom of the World report is produced by the Fraser Institute, Canada’s leading public policy think-tank, in cooperation with independent institutes in 85 nations and territories.

In addition to Lawson, other authors are James Gwartney, Gus A. Stavros Eminent Scholar Chair at Florida State University; and Joshua Hall, Beloit College.

The report uses 42 different measures to create an index ranking of 141 countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete and security of private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labor and business.

Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms and longer life spans.

International Rankings
Hong Kong offers the highest level of economic freedom worldwide, with a score of 9.01 out of 10. The other top scorers are Singapore (8.68), New Zealand (8.20), Switzerland (8.03), Australia (7.98), Canada (7.81), Chile (7.77), the United Kingdom (7.71), Mauritius (7.67) and the United States (7.60).

The rankings and scores of other large economies include: Germany, 21st (7.45); Japan, 22nd (7.44); France, 42nd (7.16); Italy, 70th (6.81); Mexico, 75th (6.74); Russia, 81st (6.55); China, 92nd (6.43); India, 94th (6.40); and Brazil, 102nd (6.19).

Zimbabwe maintains the lowest level of economic freedom among the 141 jurisdictions measured. Myanmar, Venezuela, Angola and Democratic Republic of Congo round out the bottom five nations.

Several countries have substantially increased their economic freedom scores since 1990. Uganda saw the biggest improvement, climbing to 7.10 this year from 3.00 in 1990, followed by Zambia, which rose to 7.35 from 3.52; Nicaragua, which jumped to 6.76 from 2.96; Albania, which climbed to 7.54 from 4.24; and Peru, which increased to 7.29 from 4.13.

Over the same period, economic freedom has steadily regressed in Venezuela, whose score fell to 4.23 from 5.45; Zimbabwe, which dropped to 4.06 from 5.05; the United States, which slipped to 7.58 from 8.43; and Malaysia, which fell to 6.68 from 7.49.
The report notes that among the highest-ranked countries, the average income of the poorest 10 per cent of people was $8,735 (in constant 2005 international dollars), compared to a meagre $1,061 for those living in the least economically free countries.

On average, the poorest 10 per cent of people in the most economically free countries are nearly twice as rich as the average population of the least economically free nations.

About the Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom.

This year’s publication ranks 141 nations representing 95 percent of the world’s population for 2009, the most recent year for which data is available. The report also updates data in earlier reports in instances where data have been revised.

For more information on the Economic Freedom Network, data sets, and previous Economic Freedom of the World reports, visit www.freetheworld.com

SMU’s Lawson is in the Cox School of Business as the Jerome M. Fullinwider Chair in Economic Freedom, O’Neil Center for Global Markets and Freedom. — Fraser Institute and Southern Methodist University.

SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information see www.smu.edu.

SMU has an uplink facility located on campus for live TV, radio, or online interviews. To speak with an SMU expert or book an SMU guest in the studio, call SMU News & Communications at 214-768-7650.

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Christian Science Monitor: Usain Bolt and limits of human speed

The Christian Science Monitor asked human locomotion expert Peter Weyand to weigh in on the subject of how fast human beings might ultimately be able to run. Weyand’s analysis was published as an opinion essay in the newspaper’s Sept. 4 online version.

Earlier Weyand was interviewed by the online magazine Matador Sports for the piece “Calculating the Human Speed Limit,” which published Aug. 21, 2009; and by Britain’s Daily Express, which published “How Fast Can a Bolt of Lightning Travel?” in its July 26, 2009 edition. Weyand was also quoted by the blog SBS.com.au in a story July 22, 2009.

Weyand, a physiologist and biomechanist, is an SMU associate professor of applied physiology and biomechanics in the Annette Caldwell Simmons School of Education & Human Development. He recently lead a team of experts in biomechanics and physiology that conducted experiments on Oscar Pistorius. The South African bilateral amputee track athlete, Pistorius has made world headlines trying to qualify for races against runners with intact limbs, including the Olympics.

Excerpt:

By Peter Weyand
For The Christian Science Monitor
DALLAS — How fast might human beings ultimately run?

Usain Bolt’s recent assault on the track and field record book — running 9.58 in the 100m and reaching a top speed of nearly 28 mph — has raised this question at a crucial crossroads for organized athletics. While specific predictions by modern science are not precise, the general influence of scientific advancement is poised to overwhelm human performance and organized athletics as we have known them.

Although we can readily quantify the forces acting on the body and predict the motion they produce using classical Newtonian mechanics, we still have an incomplete understanding of the process of force production within the body, and how the body’s internal forces eventually translate into motion.

Conceivably, the secret to blazing running speeds might be explained by either of two abilities: repositioning the limbs quickly through the air, or hitting the ground forcefully with each step. Contrary to intuition, fast runners achieve their greater speeds, not by repositioning their legs any more rapidly, but rather by hitting the ground with greater force and quickness than slower runners do.

How hard and how quickly do elite sprinters hit the ground? Once up to speed, an athlete like Usain Bolt will hit the ground with a force equivalent to roughly 1,000 pounds, and do so within five 100ths of a second of the first instant of foot-ground contact.

Read the full essay.

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Peter Weyand
Annette Caldwell Simmons School of Education & Human Development