The Heritage Foundation and Wall Street Journal’s tenth annual Index of Economic Freedom pulls the wool over our eyes. The deception is unintentional and arises from a fatal flaw in the index.
The index delivers the comforting conclusion that the US is the 10th most free country, far ahead of 155th ranked North Korea. However, the index ignores the simple truth that people who do not own the product of their labor are not free. People subject to an income tax do not own the product of their labor.
Our Founding Fathers understood this. Indeed, historically the very definition of freedom has been self-ownership. Serfs and slaves are not free, because they do not own their labor.
Any American who thinks he owns his labor can test the proposition by refusing to pay his income tax. He will quickly discover that he is not a free person.
The Heritage index is ahistorical. It is blind to the enormous loss of freedom in the 20th century, especially in the US and the UK. It takes as its starting point the re-enserfment of populations and predicates a "freedom" index on unfree labor.
This extraordinary failing reduces a valuable study to a propaganda device.
Compare an American taxpayer’s situation today with that of a 19th century American slave. Not all slaves worked on cotton plantations. Some with marketable skills were leased to businesses or released to labor markets, where they worked for money wages. Just like the wages of today’s taxpayer, a portion of the slave’s money wages was withheld. In those days the private owner, not the government, received the withheld portion of the slave’s wages.
Slaves in that situation were as free as today’s American taxpayer to choose their housing from the available stock, purchase their food and clothing, and entertain themselves.
In fact, they were freer than today’s American taxpayer. By hard work and thrift, they could save enough to purchase their freedom.
No American today can purchase his freedom from the IRS.
Slaves could also run away. Today, Americans who run away are pursued to the far ends of the earth. Indeed, the IRS can assert its ownership rights for years after an American gives up his citizenship and becomes a citizen of a different country. The IRS need only claim that the former American gave up his citizenship for tax reasons.
I challenge Heritage and the Wall Street Journal to initiate a broader index of freedom, one that not only includes self-ownership, but also the Bill of Rights that defines our civil liberties and the 14th Amendment that insists on equality before the law.
Such an index would reveal that the US is a stunningly unfree country. The lowest federal tax rate in combination with the Social Security and Medicare tax confers serf status upon lower income groups. The top tax rate, federal and state, converts successful Americans into government’s slaves.
The protective principles in law that ensure our civil liberties — no crime without intent, no bills of attainder, no retroactive law, the attorney-client privilege, no self-incrimination — have been eroded beyond recognition. Wars against the Mafia, drug dealers, child abusers, and terrorists — accused whose convictions are thought necessary at all costs — have eviscerated the Bill of Rights. Today not even multi-billionaires can fight off prosecutorial frame-ups.
Americans believe that they are free until they encounter the "justice" system, at which time they learn that they are as helpless as medieval serfs.
The "civil rights revolution" destroyed equality before the law. Today rights are race- and gender-based. We have resurrected the status-based rights of feudalism. The new privileges belong to "preferred minorities" rather than noble families.
Neoconservative delusion that America has a monopoly on virtue and the right to impose American values on the world prevents a realistic look at the deplorable state of freedom in America today. It is a paradox that a country that has abandoned freedom and re-enserfed its population sees itself as role model for the world.
Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy, Senior Research Fellow at the Hoover Institution, Stanford University, and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions.