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Leftists Have No Monopoly On Rational Thinking - They Have Their Own Scientific Blind Spot


"It has become fashionable among many on the American Left to describe their views as reality-based."

By Joshua Hall and Robert Lawson

It has become fashionable among many on the American Left to describe their views as reality-based.  Anyone who disagrees with the liberal orthodoxy on fracking, Obamacare, or tax cuts, to name just a few issues, must necessarily be living in some kind of right-wing fantasyland. Paul Krugman frequently employs this tactic in his various writings, claiming anyone opposed to ever-increasing government “stimulus” is an unscientific knave offering only an “expression of prejudice, opportunism and class interest.”

But leftists do not have a monopoly on science and rational thinking, and they themselves have their own scientific blind spots. Many continue to argue that economic freedom (i.e., free-market Capitalism) elicits a vast array of bad social outcomes like increasing inequality, environmental degradation, racist and sexist behavior, and unemployment, again even the decline of Detroit! In their worldview, only aggressive government policies can combat these social ills. Alas, these supposedly “reality-based” viewpoints are as unscientific as those they so frequently ascribed to their political opponents.

If you look at the data in the real world, it is abundantly clear that economic freedom delivers a wide assortment of good consequences. The Economic Freedom of the World (EFW) index, of which we are co-authors, measures the extent to which a nation’s policies and institutions are consistent with economic freedom. Our measure focuses on the importance of private property, the rule of law, free trade, sound money, and a limited role for government in economic affairs.

Forty-two components are used to annually score and rank 144 countries on a 0-10 scale, with higher numbers indicating more economic freedom. Countries like Hong Kong and New Zealand score at the top while countries like Venezuela and Zimbabwe score near the bottom. The U.S. has fallen in its ranking from 2nd in the world to 18th over the last decade.

To get a better idea of the importance of economic freedom, we decided to take a closer look at the burgeoning scholarly literature citing the EFW index. In a paper forthcoming at Contemporary Economic Policy, we analyzed 198 articles published in high-quality, peer-reviewed academic journals that used the EFW index or one of its components in order to explain some empirical phenomenon.

While the bulk of papers looked at the effect of economic freedom on various macroeconomic objectives such as economic growth, a large number focused on less obvious (but no less important) topics such as human rights abuses, political freedom, poverty, income inequality, biodiversity, etc.

We identified whether the EFW variables used in the study were correlated in a normatively good or bad way with a researcher’s variable of interest. For example, variables like growth, investment, peace, human rights, and the like are clearly good. Variables like income inequality, war, and human rights violations are clearly bad. When variables from the EFW index correlated positively with good outcomes (or negatively with bad ones), we coded the result as “good” and vice versa. If the dependent variable was not obviously good or bad, or if the results were contradictory or insignificant, we coded the results as “mixed or uncertain.”

Our findings clearly show that economic freedom is positively related to most desirable economic, political, and social variables (and negatively related to most undesirable variables). Just over two-thirds of the articles found EFW or its components to be correlated in a good with these various outcomes, twenty-eight percent were mixed, and just 4 percent found the EFW variables to be correlated with a negative outcome!

The balance of evidence is overwhelming that economic freedom corresponds with a wide variety of positive outcomes with almost no negative tradeoffs. That’s the reality of economic freedom.


Joshua Hall is an Associate Professor of Economics at West Virginia University. Robert Lawson is the Jerome M. Fullinwider Endowed Centennial Chair in Economic Freedom in the O’Neil Center for Global Markets and Freedom at SMU’s Cox School of Business.They are authors of the Economic Freedom of the World Report, published annually in the United States by the Cato Institute.

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