The Heritage Foundation released their 2011 Index of Economic Freedom. They briefly define economic freedom as the fundamental right of every human to control his or her own labor and property and in an economically free society they are free to work, produce, consume, and invest in any way they would like, which is protected. This has been tracked for over a decade by the Wall Street Journal and The Heritage Foundation.
Economic freedom is measured from ten components and is assigned a grade from 0 to 100, where 100 is the maximum level of freedom. The ten component scores are averaged to give an overall economic freedom score for that particular country. The ten components to economic freedom are listed below.
The property rights component is the ability of individuals to accumulate private property, secured by laws that are fully enforced. The degree to which a country’s law protect private property rights and the degree to which it is enforced are taken into account for the grade of freedom. The more protection of private property rights, the higher that country will score. Out of the 183 countries assessed, New Zealand scored a 95 on the property rights score with 14 other countries trailing with a 90. The US scored an 85.
The United States’ overall score for the ten components is 77.8 percent, which is well above world and regional averages. This makes the US the 9th freest country in the 2011 Index. It has gone down .2 percent from last year. The recent spending spree of the government and the interventionist responses to the economic slowdown has hurt economic freedom. There has been no change in the property rights component since last year. According to the Index the US scored an 85 because their property rights are guaranteed, contacts are secure, and the judiciary is independent.
Reports such as Heritage’s Index of Economic Freedom laid the groundwork for other indices such as PRA’s own International Property Rights Index (IPRI) to be created. The 2010 IPRI analyzes data for 125 countries around the globe on their protection of physical and intellectual property, representing ninety-six percent of world GDP.