Does the corona crisis expose the failings of capitalism? A comparison of two recent rankings confirms that the opposite is true.
Socialists around the world have been very busy of late in their efforts to brand the corona crisis a failure of capitalism. The Index of Economic Freedom, which has been compiled annually since 1995 by the The Heritage Foundation, measures the economic freedom of 180 countries. According to the German sociologist Erich Weede, the index can also be regarded as a global “scale of capitalism”.
The Deep Knowledge Group, a respected consortium of commercial and non-profit organisations, has just published an interim review of measures to combat the pandemic, including a Safety Countries Ranking of the 40 states that are doing the best job of protecting their citizens against coronavirus.
Of course, it is still far too early to make an overall assessment. Nevertheless, Deep Knowledge’s interim balance sheet reveals that the places doing the best so far are all among the most capitalist countries in the world. According to the Heritage Foundation’s index, only six (3.3%) of 180 countries in the world earned very high economic freedom scores, putting them in the ranks of the “economically free”. With the exception of Ireland, all (!) of these economically free, highly capitalist countries also rank among the Top 11 on the Safety Countries Ranking.
Here are the top six most economically free countries in the world according to the Heritage Foundation index. The scores in brackets represent the same country’s ranking in the Top 40 COVID-19 Safety Countries Ranking:
- Singapore (8)
- Hong Kong (10)
- New Zealand (6)
- Australia (4)
- Switzerland (11)
- Ireland (34)
The same comparison in reverse is equally revealing: the top ten nations in the COVID-19 Safety Countries ranking (with the exception of China) are all among the top 30 most economically free countries in Heritage Foundation’s ranking. So, 90% of the countries that are best protecting their citizens from coronavirus also belong to the small group of 17% of countries with the strongest capitalist freedoms.
Here are the top ten nations in the COVID-19 Safety Countries ranking. This time the scores in brackets represent the same country’s ranking in the Heritage Foundation’s ranking of the world’s most economically free countries:
- Israel (26)
- Germany (27)
- South Korea (25)
- Australia (4)
- China (103)
- New Zealand (3)
- Taiwan (11)
- Singapore (1)
- Japan (30)
- Hong Kong (2)
Of course, there is no 100% correlation between economic freedom and protection against coronavirus. The United Kingdom, for example, ranks 7th in the Heritage Foundation’s index of the most economically free countries, but is not among the 40 countries providing the best protection against Covid-19. In the UK, as in the United States, the Government spent too long compared to other countries underestimating the problem, with corresponding, and tragic, results.
Though the Safety Countries Ranking is just an interim assessment – and there is certainly scope to argue about the correct ranking of one country or the other – one thing is clear: the rankings do nothing to support the notion that “the free market” or “capitalism” are to blame for the corona crisis, a thesis advanced by a number of left-wing intellectuals recently.
And what about the countries at the bottom of the Index of Economic Freedom? As I wrote in my 2019 book The Power of Capitalism, one need only compare the outcomes of highly controlled economies and more liberal ones to see which is more likely to deliver greater human welfare – and so it has proven with this crisis too.
Countries such as Venezuela and North Korea, which bring up the rear of the Heritage Foundation’s ranking, are nowhere near the Safety Countries Ranking.
Venezuela ranks second from bottom (179) in the Index of Economic Freedom. “Our health system is worse than Haiti’s,” warns José Félix Oletta, the former Venezuelan health minister. The government has designated 46 hospitals for the treatment of Covid-19 patients, four of which are in the capital Caracas. “But there are only 206 intensive care beds in these 46 hospitals and only 102 ventilators. That is less than 10% of the equipment needed to cope with projected demand according to the average forecasts,” a concerned Oletta explained recently to the German news magazine Der Spiegel.
In addition, electricity, water, medicines and protective equipment are in short supply, adds the physician and founder of the Alianza Venezolana por la Salud (Venezuelan Alliance for Health), a health and epidemic monitoring centre.
As for North Korea, it’s rock bottom of the Heritage Foundation index and does not have a single official case of coronavirus, just as it has no crime and no unemployment, no hunger and no poverty.
And yet, despite all available evidence, people continue to propagate the absurd notion that capitalism is to blame for the corona
crisis. “Capitalism Caused the COVID-19 Crisis” is, for example, one of the claims made on the website of Andrej Markovčič, an organiser with the Democratic Socialists of America.
Watch this video from TRT London and you will see a debate I recently had with Markovčič. Despite the interviewer’s best efforts to get Markovčič to repeat that contention, he would not do so.
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