The Fraser Institute’s Economic Freedom of the World 2022 report was released this morning. This report covers 2020, which while most of our recent history is a bit of a blur, was the year when COVID-19 and COVID lockdowns defined our shared experience. The first of those lockdowns began in mid-March, and we spent most of the rest of 2020 figuring out how to negotiate a newly defined world. So whatever we end up seeing in the report, we’ll have to remember that we spent about 80 percent of 2020, for lack of a better word, grounded.
When additional years of data from the COVID era are added, we fully expect that economic freedom around the world will continue to falter. But let’s not get ahead of ourselves. The 2020 data is bad enough. The global average economic freedom rating fell .14 points in 2020, erasing a decade’s worth of improvements.
Some situations require rapid action. But those should be short-lived holding actions explicitly selected to buy time for deeper analysis, determining root causes, connections, trade offs, and unintended consequences. Clumsy, superficial policies are increasingly the end states of crises or periods of duress. The handful of nations currently on their seventh or eighth failure to impose Zero Covid come immediately to mind, as do the woefully diseconomic choices made by the London Metal Exchange to address the nickel short squeeze in March of this year.
The increasingly popular rule that every curve must be flattened and every dip filled is disconcerting, as every domain touched by human experience exhibits volatility at times. An increasing tendency toward knee-jerk responses from politicians and regulators ignores both the underlying generators of those swings and the harvesting of information embedded within them. The pursuit of nostrums whereby a fragile stability is sought regardless of the consequences is a half step removed from uninhibited superstition, and an abdication of empirical reality. Thoughtlessly mandating the crushing of trends, in retail electricity prices, unemployment, infections, and beyond, is killing the proverbial messenger. Short-sighted, mechanistic solutions not only solve nothing, but provide creatures that thrive on power a license to intervene again, and again, and again.