Bitcoin and the concept of “economic freedom”

The 2020 Index of Economic Freedom, published by the Wall Street Journal and Heritage Foundation “measures the degree to which a country’s laws protect private property rights and the degree to which its government enforces those laws.” Countries like Singapore that score highly on the Property Rights Index have greater GDP per capita on average, and vice versa.

In practice, would you be motivated to work hard if your savings could be unjustly confiscated at any moment? In many developed countries like the United States, democratic rule of law protects against such scenarios. Yet for billions of people worldwide, this is a distressing possibility.

For billions, there is a similar force that is equally disheartening: What if your savings devalue by >3.5% each year due to a force known as inflation? Oxford defines inflation as a general increase in prices and fall in the purchasing value of money.

Countries that score highly on the larger Index of Economic Freedom tend to have low and stable rates of inflation (~2%) and vice versa. Beyond property rights, the Index of Economic Freedom also measures factors such as government integrity, judicial effectiveness, government spending, tax burden, fiscal health, business, labor, investment, trade, and financial freedom.