Democratic Socialists of America members and progressives who share their worldview are having a good political run. New York Mayor Zohran Mamdani won office with a high-profile campaign promising city-run stores and severe new regulations on landlords. Rep. Alexandria Ocasio-Cortez (D-NY) is a top contender for the Democratic presidential nomination in 2028. In Michigan, progressive Democrat Abdul el Sayed has a slim lead in his U.S. Senate race with former Republican Rep. Mike Rogers.
Socialists and progressives seek better healthcare, education, housing, and environmental protection. We share these goals. But the evidence suggests the best way to achieve these aims is to use markets, not mandates; cooperation, not coercion.
The Fraser Institute of Canada has for decades published the Economic Freedom of the World, an index that ranks nations by economic freedom. It is built around 46 categories and subcategories that are grouped into five broad areas: size of government, legal systems and property rights, sound money, freedom to trade internationally, and regulation. Together, these data tell us the degree to which people in 165 jurisdictions around the world are allowed to make their own economic choices.
According to the latest edition of the index, to be released Oct. 6, the United States was ranked fifth in the world in 2024. Due to increases in the size of government, weaker protection of property rights and the rule of law, and significant restrictions on trade freedom during the first year of the second Trump administration, the authors expect the U.S. to drop to seventh place when the 2025 data come out.
The top four jurisdictions in economic freedom are Hong Kong, Switzerland, Singapore, and New Zealand. The median income in these countries is over $85,000. At 165, the least economically free country in the index is Venezuela. There, the average wage is less than $3,000 a year.
In 1970, Venezuela was the 13th freest economy in the world, and its citizens were the wealthiest in Latin America. But as the rest of the world liberalized in the 1980s and 1990s, Venezuela moved to restrict the economic freedom of its citizens. After Hugo Chavez’s election in 1999, the country doubled down, embarking on a disastrous experiment in populist “democratic socialism.” Venezuela became even more authoritarian under Chavez’s replacement, Nicolas Maduro. Incomes collapsed. Poverty exploded. Inflation soared. Price controls created widespread shortages. And, ultimately, a quarter of the country fled.
Economic freedom is highly correlated with prosperity. For example, those who live in the freest quartile produce nearly seven times as much as those in the bottom quartile, as measured by GDP per person. Life expectancy in the top quartile is much higher, too. Residents of economically freer economies live 14 years longer than those in the least free. And on average, poverty levels in the least-free quartile in the rankings are about 20 times higher than those in the freest quartile.
The index is highly regarded for the quality of its data, which are publicly available to scholars around the world. More than 1,000 scholarly studies have used data from the Economic Freedom index to help isolate cause and effect accurately. The overwhelming number of these studies find positive links between economic freedom and wellbeing. These include, but are not limited to, health, education, economic growth, entrepreneurship, life satisfaction, environmental protection, and improvements in the status of women.
Do the DSA and other progressive statists have a thousand studies linking the limitation of economic freedom with better outcomes? We’re still waiting for the index that demonstrates Venezuela’s approach to economic policy achieves greater prosperity.
The debate between socialism and economic freedom is not a debate about goals. Most people want greater prosperity, better healthcare, stronger educational opportunities, cleaner environments, and more secure lives. The debate is instead about which institutions are most likely to permit these outcomes.
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The evidence accumulated over decades points in a consistent direction. Countries, states, and provinces that allow individuals greater freedom to invest, innovate, trade, work, and build tend to outperform those that rely more heavily on government control and direction. Some people value economic freedom as an end in itself, believing that all people deserve the freedom to write their own economic lives. But even those who disagree should recognize that economic freedom is a powerful means of empowering people to improve their own lives and communities.
As socialists and progressive policymakers gain influence in American politics, they should be judged by the same standard applied to every other political movement: What does it achieve? The historical record, the international comparisons, and the scholarly literature all suggest that societies prosper when governments protect economic freedom rather than limit it. If the goal is widespread opportunity, rising living standards, and human flourishing, the lesson from both the data and lived experience is difficult to ignore: freedom works.
Matthew Mitchell is a senior fellow with the Fraser Institute of Canada and co-author of the Economic Freedom of the World and Economic Freedom of North America indices. Michael LaFaive is senior director of fiscal policy at the Mackinac Center for Public Policy.