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Jacobin - October 31, 2021

Last month, the Frasier Institute put out its annual Economic Freedom of the World report. As usual, it showed that “economic freedom” is positively correlated with many good things and negatively correlated with many bad ones.

Defenders of capitalism love the Frasier Institute. Libertarian philosopher Jason Brennan, for example, has made heavy use of the rankings in the context of criticizing the arguments of Marxist philosopher G. A. Cohen. Brennan argues that given all the positive things that come with greater economic freedom, the debate about whether capitalism is superior to socialism has a clear victor: the pro-capitalist side. The only remaining question is whether socialism would be better in a hypothetical world where humans were less selfish and lazy.

Economist Peter Leeson has deployed the Frasier Institute’s reports to mount an even more strident defense of capitalism Many commentators, Leeson writes, think that capitalism deserves “two cheers” for yielding many good outcomes while also thinking that “excessive” or “uncontrolled” capitalism can be bad. Leeson says this is wrong because the Frasier Institute’s numbers show that capitalism deserves three cheers.

Although many relationships in the social sciences are unclear, capitalism’s relationship to development isn’t one of them. Unless one is ashamed of unprecedented increases in income, rising life expectancy, greater education, and more political freedom, there’s no reason to be a milquetoast defender of capitalism.

These are bold claims. And if you just look at the Frasier Institute’s many graphs and assume that the x-axis really is about something called “economic freedom” (or, in Leeson’s language, countries becoming “more capitalist” and “less socialist”), the data does seem to prove that people live longer and are more prosperous, more educated, and more politically free in more capitalist countries. How, then, could anyone be a socialist? How could anyone even be a social democrat, aspiring to curb “excessive” or “uncontrolled” capitalism through expansive social programs and a regulatory state? The more capitalist a society is, the better the outcomes.

There’s just one problem with all of this. The premise is nonsense. Even a quick glance at the Frasier Institute’s report reveals that the numbers that emerge from their methodology are flatly irrelevant to anything in dispute between social democrats, socialists, and defenders of laissez-faire capitalism. ...
Read full report at Jacobin