Monday, May 5, 2014

What is the relationship between emancipative values and economic freedom?

Followers of this blog will know that I have recently written several posts on topics related to this question. However, I will do my best to ensure you can understand what this post is about without having to read earlier posts in the series. I will try to pull the threads together in a subsequent post.

Emancipative values, as defined by Christian Welzel in his book Freedom Rising, are about such things as individual autonomy, choice in relationships, gender equality, freedom of speech and democracy. Economic freedom is about such things as the right to use your own resources for whatever purposes you choose including mutually beneficial activities with others.

There is no, in principle, reason why emancipative values should conflict with economic freedom. The niggling issue at the back of my mind is that emancipative values are being expressed increasingly in affirmative action to create ‘entitlements’ that restrict economic freedom.

An obvious place to start in considering the relationship between emancipative values and economic freedom is with an international comparison of the type presented for 58 countries in Chart 1. The chart is based on data on emancipative values from WVS surveys conducted mainly in the first decade of this century and Fraser Institute economic freedom data for 2011.

The most striking observation from the chart is that while emancipative values are weak in some countries with high economic freedom, no countries with low economic freedom have strong emancipative values. That is consistent with the view presented in earlier posts that economic freedom improves the odds in favour of economic development and economic development tends to lead toward the strengthening of emancipative values.

According to that view, we might expect a strengthening of emancipative values in Singapore in the years ahead. The chart also suggests that there is something odd about the combination of economic freedom and emancipative values in Venezuela – hopefully adjustment will occur by restoring economic freedom rather than through a weakening of emancipative values.

It is also evident from the chart that the US is no longer exceptional in terms of either emancipative values or economic freedom. Not only does the US have emancipative values that are weaker than in Sweden and Norway, it now also has levels of economic freedom lower than in Switzerland and New Zealand. Australia is not much better than the US in either respect.

Chart 2 shows how economic freedom has changed with changes in emancipative values over the last few decades in 36 countries for which data is available.

Click on the chart for a better view.

If a trend line was drawn it would appear to show a negative relationship between changes in emancipative values and economic freedom. That apparent relationship disappears if we just focus on countries with relatively high incomes (above $25,000 in US 2005 dollars) shown in red. There is no obvious relationship between change in emancipative values and change in economic freedom in the high income countries. While the US and Japan experienced a modest strengthening in emancipative values accompanied by a decline in economic freedom, Sweden and Norway experienced both a strengthening in emancipative values and an improvement in economic freedom.

The experience of Sweden and Norway goes some way toward persuading me that if the expression of emancipative values conflicts with economic freedom in high income countries, then the economic consequences will unleash social forces to rectify the problem. However, it would be nice to have a better understanding of how the attitudes and ideologies that lead to change in economic freedom are related to emancipative values.

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