Where's the State of the Free? By Bryan Caplan

In Montreal, I met William Ruger and Jason Sorens, creators of the Freedom in the 50 States index. It’s a neat project, no doubt partly driven by Sorens’ leading role in the Free State Project. Competing indices exist, but the Ruger-Sorens measure has much in its favor:

This study improves on prior attempts to score economic freedom for American states in three primary ways: (1) it includes measures of social and personal freedoms such as peaceable citizens’ rights to educate their own children, own and carry firearms, and be free from unreasonable search and seizure; (2) it includes far more variables, even on economic policies alone, than prior studies, and there are no missing data on any variable; and (3) it uses new, more accurate measurements of key variables, particularly state fiscal policies.

The index separately reports fiscal and regulatory policy, then averages these scores to get an overall measure of economic freedom. It separately measures personal freedom, then averages economic and personal freedom to measure a state’s overall freedom. Thus, the overall freedom measure is by definition 25% fiscal policy, 25% regulatory, and 50% personal.

Economically, the freest states turn out to be South Dakota, New Hampshire, and Colorado; the least free are California, Maine, and last of all, New York. Personally, the freest states are Alaska, Maine, and New Mexico, and the least free are New York, Illinois, and Maryland. My home state of Virginia ranks 13th in economic freedom and 9th in personal freedom.

Finally, according to Ruger-Sorens’ overall scores, the freest states in the union are New Hampshire, Colorado, and South Dakota, and the least free are Rhode Island, New Jersey, and New York.

Overall, it’s an impressive set of results. Given the intranational mobility of labor and capital – and the ability of real estate prices to adjust – I wonder how predictive their measures will be for things like economic growth and migration. I also suspect that states like New York and California mask the social benefits of freer policies. Due to their big non-policy perks – focal location for New York, great weather for California – they feel like they can get away with less economic freedom – and they’re not entirely mistaken.

Still, if I wanted to really put South Dakota on the map, I can’t think of any better strategy than making it even more abnormally free. Imagine a world where would-be immigrants told each other, “One day, I’ll be living in South Dakota – the state of the free in the land of the free.”