America is less economically free than it was just a few years ago. This is especially true relative to the rest of the world. The United States stands at number ten on the 2004 Index of Economic Freedom. A decade ago, the U.S. occupied the fourth position on the annual study conducted by the Wall Street Journal and the Heritage Foundation.

Why are we less free? "First, the U.S. government's continued expansion of expensive entitlement programs has increased the fiscal burden," the Heritage Foundation's Ana Isabel Eiras points out. "Second, other important areas of economic openness--capital flows and foreign investment, trade policy, wages and prices, and regulations--have simply failed to maintain pace with the changing world."

At the federal level since 1998, farm subsidies have increased 76 percent, education spending has increased 78 percent, and unemployment compensation has increased 128 percent. In other words, under Republican control of the purse strings of Congress the state has grown larger. This necessarily means the people have become less free vis a vis the government.

Albert Jay Nock demonstrates this in his classic book, Our Enemy, the State. He wrote: "just as the State has no money of its own, so it has no power of its own. All the power it has is what society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn. Therefore every assumption of State power, whether by gift or seizure, leaves society with so much less power; there is never, nor can be, any strengthening of State power without a corresponding and roughly equivalent depletion of social power."

Your stuff is brilliant as usual. Just a note to say that Nock is wrong on this point.

Think of a football team whose players owned the team. They hire a coach. It is not true that the more power the coach has the less the team has. As a member of the team, I might not want a curfew for myself but I might want others to have a curfew so the team might win more. It might be said that the more power the coach has the less the individuals have, but you can't say the team has less power. They have hired a coach exactly because better coordination will give them more power. (Nock assumes power is a zero sum game, but if I buy a muscle car you can, too. We can both have more power, except when our goals conflict.) Only when the coach oversteps his bounds and tries to regulate non-football things or has policies which divide the team rather than coordinate it, has the team lost power.

Unfortunately, most all governments, with the notable exception of the government chartered by the Constitution of 1787, tend to make these mistakes--so Nock is often right in practice. But the theory is still wrong.

Albert Jay Nock vs. Dr. McG?

All other thing being equal, every increase in the State's power over its citizens leaves the citizens with less power over themselves. This is a mere matter of definition. (It is like saying that everytime I spend money I am less wealthy. This is true by definition, whether or not I in the future make money from the investment.) So ceteris parabus Nock is correct.

When we remove the ceteris parabus condition, DocMcG's point is valid: we can say that sometimes an increase in the State's power over its citizens rewards its citizens with more power of another kind. E.g., when the State restricts murder, it removes power from its citizens to kill each other, but the citizens also gain a different type of power over themselves by being freed from the threat of murderers. It is a trade-off -- decrease of power of one kind is traded for increase of power of another kind. But Nock is still in theory correct.

So we could look at government this way -- everytime we sacrifice or invest some of society's power to the State, we are making the bet that the State will pay us back with something better. This is usually a bad bet.

Nock is correct -- the ante that government always demands is the person's power over himself. As with all investment, when dealing with government we are always guaranteed to lose something. Only occasionally does the bet pay off well enough to offset the ante -- the loss of power over ourselves.

Nock does not say the individual loses power, he says the society does. That's why I used the example of the team, the player, and the coach. There is some sense in which the individuals lose power when the team hires a coach, but it is not true that the team necessarily loses power.

If Nock is using the word "society" to mean any collection of individuals, then his logic might be right (though his theory would be missing an important term without which no correspondence to reality could be approached). But if he is using "society" in a more common way (e.g. "an association of individuals for common ends") He is wrong. An association will almost certainly have more power when it is well coordinated than when it is not. Well-functioning government increases society's power. Whether that is a good thing for the individuals in it depends on the nature of the society.

Gadfly, you read the NYTimes, hence your statement: "the income of all Americans fell 9.2 percent from 2000 to 2002." This statement is more than a little misleading. As the Times article made clear, by far the sector hurt the worst (percentage-wise) were the richest people. All that the statistic means is this: the gross income of the whole country divided by the number of people fell by 9%. But considering that much of the burden of this 9% is carried by the rich, the meaning of this statistic is much different from your simple and slightly alarmist statement that "the income of all Americans fell." I've never before heard a Leftist complain that the rich are getting poorer, so you're the first.

Finally, you say: "To me, it is no measure of a change in my economic freedom, however, if the gov't can shuffle around its economic priorities and --with no tax increase, direct or indirect-- spend an additional 75% on farm subsidies." But the Bushies and Congress haven't merely shuffled around money. They have increased federal spending markedly. And if this isn't done as an honest tax now, it will only be done as a underhanded tax (in the form of inflation) later.

I didn't read the Times today, thanks. I have better sources.

First: I can't speak to the 2000-2002 numbers off the top of my head, but if you think the incomes of the wealthiest in relation to the incomes of the poorest are on the decline, then I would venture to guess that you would be quite wrong.

Moreover, the refutation you offered in your first paragraph fails.

If I tell you that the number of "creatures in the sea" declined 10% last year, and you say "well, the annoying smelt are the most numerous, and they bore the brunt of the decline, while the rare giant squid hardly lost anything," this changes nothing. If I made 30,000 in 2000 (just pretend), and therefore lost only slightly less than 3,000 by 2002, whereas someone who made 300,000 lost nearly 30,000, the fact remains that I lost, and --I think you must admit-- my loss of 3,000 per year hurts me more than the wealthy man's loss of 30,000.

Even if, as a percentage of my income I lost less than the wealthy individual, I am still harmed by this, and my "economic freedom" (such as it is) is affected.

Lastly, my general point still stands: the gov't.'s increase in spending --and we know it's been both Dems and Republicans at the trough these past two years-- effects little or not at all my own economic freedom, so long as this increase in spending does not come from a tax increase, and does not affect me directly (as in the case of farm subsidies).

Even if, as you argue, the increase in expenditures may come back to haunt me either as inflation or a later tax increase, it certainly fails to follow that all increases in gov't spending are flawed or reduce my power.

As DocMcG pointed out, the government may spend in such a way (say on welfare-to-work programs) that the net freedom of the members of the society which it governs is increased (by taking those who were dependents of the gov't and making them --at least in part-- more independent.

But the real point to be made here, against the Heritage Foundation's reports on economic freedom, is this (and I think I'm in line with 100 years of Catholic social thought when I say): measures of economic freedom which aren't in some way tied to quality of life are rather meaningless. It is this same viewpoint which would regard the Dow's steady climb as an unmitigated good, even if it meant that many companies were achieving better numbers on the page by cutting thousands of jobs -- or as the papers like to say, using a dietary metaphor: "downsizing."

I think you are right Gadfly on Catholic social thought but by the time I read through this thread I forgot what I wanted to say.

Gadfly, you aren't paying attention. You say: "As DocMcG pointed out, the government may spend in such a way (say on welfare-to-work programs) that the net freedom of the members of the society which it governs is increased (by taking those who were dependents of the gov't and making them --at least in part-- more independent." Since you say 'net freedom' here, this is perfectly consistent with what I have said above. But, nevertheless, _every_ government action (because funded by taxes and encroaching on spheres of action otherwise the domain of non-governmental actors) takes away that ante, that is -- it takes away the initial investment of freedom and money. Whether the program's result out-weighs its investment (and so increases net freedom) is entirely contingent on the prudence of the policy. I thought I made this abundantly clear above.

First, Le Gadfly's instincts are wrong as evidenced when he wrote "I can't speak to the 2000-2002 numbers off the top of my head, but if you think the incomes of the wealthiest in relation to the incomes of the poorest are on the decline, then I would venture to guess that you would be quite wrong." According to the census bureau the household income of the richest 5% fell 3.6% from 2001 to 2002 while the income of the poorest 20% fell only 1.4%. See the data at

http://www.census.gov/hhes/income/histinc/h0301.html

In 2002 the policies of the Bush administration were not yet fully implemented and the Clinton fiscal and security policies proved to be disastrous. (Property is less valuable when it is insecure so the events of 9/11 were devastating to the economy, and would have been more so if the President's tax plans had not been implemented.)

On the more important issue, income is a terrible measure of freedom. Otherwise we could say the poorest fifth of the population is freer today than the upper middle class (the fourth fifth) was in 1967 (see the table referenced above).

The issue is simpler than that. When you are forced to work for others you are a slave. When you choose to work for others you are free. When you choose to work for some and, as the price of letting you do so, the government compels you to work for others of their choosing there is a real sense in which you are only partly free. How free you are depends on the extent of the compulsion. So you can have an index of economic freedom.

Finally we agree on something, DocMcG!

Down with Le Gadfly!