“Freedom” means different things to different people. For some, it may refer to the ability to rid oneself of overbearing rules set by some sort of authority – be it your employer’s rules against using certain substances, or the government’s attempt to roll back personal rights. Or, viewed from another angle, some people may see the government’s attempted expansion of services as being freed from the tyranny of private sector power and monopolies. The battle over health care, pitting a freer market versus a potential single-payer system, comes to mind.
Freedom can have any number of meanings, but in terms of the economy, we typically mean freedom to be associated with choice. That can include the choice to open a business, the choice to buy a good or service, or the choice to accept a job offer, at a wage rate and duration chosen only by the parties involved. With as little outside interference as possible.
Obviously, some level of regulation is needed. The government has a role, which is to maintain the framework and infrastructure to keep the economy – and thereby the country – running at optimal levels. Its when government intrudes into other areas that things get squirrely. Minimum wage laws, environmental protections, etc. – all of these do impact the economy.
So, if you want to live the “freest” life possible, economically speaking, where can you go? In the United States, we have some insight, thanks to the latest Economic Freedom of North America report, from the Fraser Institute.
“Economic Freedom of North America is an attempt to gauge the extent of the restrictions on economic freedom imposed by governments in North America,” the report says. “The freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions such as what is to be produced, how it is to be produced, how much is produced, and for whom production is intended. As government imposes restrictions on these choices, there is less economic freedom.”
Based on those guidelines, the report ranks the economic freedom of every province and state in North America, including Canada and Mexico. We’ve listed the top 10 states below, but if you want more insight, check out the entire report.
But if there’s one thing the Fraser Institute’s scholars want you to know, it’s that freedom is on the decline. “It seems states are increasingly following D.C.’s lead by over-spending, over-taxing, over-subsidizing, over-regulating and undercutting individual liberty. As a result, many U.S. states are falling behind their Canadian neighbors in economic freedom, just as the U.S. is falling behind its global neighbors,” writes Alan Dowd, a senior fellow at the Fraser Institute.
Here are the top 10 “freest” states in the U.S., per the report.
10. Kansas, Colorado, North Dakota, Maryland, and Arizona (tie)
Surprise, you’re actually getting more than 10 states among the top 10, and that’s due to the traffic jam at the first spot. Five states – Colorado, North Dakota, Kansas, Arizona, and Maryland – all ended up in the same position, making for a jumble. It’s interesting to look at the differences between these states as well. For example, we’ve seen Kansas’ policies certainly open things up, but do large damage to the state’s economy as well. Colorado has freed up the cannabis industry, which has led to a spike in economic activity.
There are mixed results from similar, yet different degrees of freedom, and the policy mix between these several states put that clearly on display.
7. Nebraska (tie)
Nebraska is a conservative-leaning state in the Midwest, which is largely rural – there are only a couple of big population centers in Lincoln and Omaha. That mix has made it friendly to certain policies, allowing for people to live “freer” lives than they would in other states and the economy seems to have benefited. Nebraska scored a 7.6 economic freedom score, according to the report.
7. Missouri (tie)
Missouri, unlike Nebraska, has a couple of very big population centers, which tend to lean blue – and may be friendlier to more liberal policies. Still, the rest of the state is largely rural, maintaining a solid political balance (it’s a “purple state,” historically) and allowing it to harbor laws that preserve more economic freedom.
One of the original colonies, and still one of the freest, Virginia is one of the nation’s most important swing states. Being located next to one of the most bureaucratically heavy areas in the country (Washington, D.C.), you may think that Virginia’s legislating would be influenced – and yet, the state remains fairly wide open, in terms of economic policy.
Tennessee was the birthplace of American hero Davey Crockett – a man who was freedom incarnate, for all intents and purposes. That spirit has lived on, as Tennessee is among the freest states in America to this day. Its economy has prospered of late as well, likely thanks to pro-business and growth policies.
3. Florida (tie)
If America were a large, extended family, Florida would be the crazy uncle who lives in the basement. Florida is in a very unique situation, being under constant threat from natural disasters, large influxes of immigrants and refugees, and at the center of the drug trade. Yet, throughout it all, the state has remained fairly free and open, economically speaking.
3. Texas (tie)
You can’t have a list of the freest states without Texas. Texas is a huge state – in many aspects. It’s home to several major cities, has a gigantic economy, and its citizens like to think it’s a whole other country. In some respects, it behaves like one as well. That idea has permeated into its lawmakers’ policies, which has kept Texas near the top of the freedom rankings.
2. South Dakota
Nothing says “freedom” like Mt. Rushmore, and Mt. Rushmore’s home state of South Dakota is one of the freest. Located in the Midwest, South Dakota is a very rural state with a hard conservative lean. For that reason, policy has preserved most freedoms, and allowed businesses to operate with less restriction than in other areas.
1. New Hampshire
New Hampshire is America’s freest state, which it clearly takes pride in by showcasing the phrase “live free or die” on its license plates. New Hampshire plays an important role in our election process as well, and its people tend to have a hard libertarian lean. That’s one likely reason it’s remained near the top of the list.
Check out the Fraser Institute’s entire report for more detail – and for those of you who are curious, Alberta was ranked as the freest state or province in North America, followed by British Columbia.