Today is the start of the 2015 Global Entrepreneurship Summit (GES). The co-host this year is Kenya where the conference is being held. According to one U.S. government source, “GES is an annual summit bringing together entrepreneurs –- including social entrepreneurs — business people, venture capitalists and foundations for an intense two-day conference to network, learn from each other, and identify ways to improve the entrepreneurial ecosystem. GES is a White House initiative that partners with a different host country each year to showcase the dynamism of the local environment and hopefully strengthen entrepreneurial infrastructure.” Naturally President Obama will be there, but maybe this year he should take along some help.
In 2010, on the day that Obama was to give his State of the Union address, our site posted, “For a 100 years, the United States has stood out as the torch bearer of free enterprise. Tonight the world will be waiting to hear his words and the direction he plans to take America over the rest of his term.” In that post I used the 2010 Index of Economic Freedom of The Heritage Foundation to compare the freedom of the U.S. and Canadian economies. It’s five years later and Obama’s time is almost up thanks to the two-term restriction in U.S. politics. In Canada, Harper’s time may be up, too, as a result of this fall’s federal election and a jaded electorate that may have ‘had enough’ of our current Prime Minister. It’s time to revisit the Heritage Foundation and see how the freedom of each country’s economies have fared these past five years. After all, our economic freedom is bestowed and sanctioned by our political leaders and these are the two men who have been in charge of their respective countries. It’s economic freedom that lets entrepreneurship survive and thrive.
In 2010, Canada and its economy scored an overall 80.4, placing 7th freest in the world. Scores are out of 100 and represent an average calculated from ten components, such as Business Freedom, Trade Freedom, etc., which are also each scored out of 100. Surprisingly the United States stood in 8th place with an overall score of 78. An overall score of 80, which Canada attained, is required to be designated a ‘free economy’. At 78, the U.S. is categorized as ‘partially free’.
Here are the ten components and the scores for 2015 for Canada and the United States. The country with the highest and best score for 2015 in each component (if you believe in a free economy) is in bold italics. An asterisk* after this year’s score indicates a plus or minus spread of five points or more from a country’s 2010 score. The old 2010 scores are in (brackets):
- Business Freedom — Canada 89.0* (96.5), United States 88.8 (91.3)
- Trade Freedom — Canada 88.4 (88.1), United States 87.0 (86.9)
- Fiscal Freedom — Canada 79.9 (76.7), United States 66.2 (67.5)
- Government Spending — Canada 48.3* (54.1), United States 51.8* (58.0)
- Monetary Freedom — Canada 77.9 (75.4), United States 76.6 (78.1)
- Investment Freedom — Canada 80.0* (75.0), United States 70.0* (75.0)
- Financial Freedom — Canada 80.0 (80.0), United States 70.0 (70.0)
- Property Rights — Canada 90.0 (90.0), United States 80.0* (85.0)
- Freedom from Corruption — Canada 81.0* (87.0), United States 73.0 (73.0)
- Labour Freedom — Canada 76.1* (81.5), United States 98.5 (94.8)
These 2015 scores drop the overall score for Canada from 80.4 in 2014 to 79.1 now. In other words, our score changes our status from a free economy (80 and above) to a partially free economy. However, our standing among 177 other countries improves from 7th place to 6th place. The overall score for the United States fell from 78 in 2010 to 76.2 in 2015 which tumbled its standing from 8th to 12th place. Conclusion? Since both Obama and Harper have been at the helm of their ships since 2010, the nod for a better economic environment has to go to Harper. However, these results should come as no surprise. After all, Canada’s leader is an economist. So, he would make an excellent companion and adviser to Obama at the GES.
True, there are five countries that have higher overall scores than Canada in 2015. In descending order they are: Hong Kong, Singapore, New Zealand, Australia and Switzerland. But these countries don’t have the close ties to the U.S. that Canada has. Historically, when our two countries haven’t been fighting a common enemy, we’ve been fighting each other. A good fight lets one really get to know and appreciate your neighbour and Canada’s been invaded about seven times by Americans. All of them close affairs. So Harper should be the one to accompany Obama to the GES. Obama’s going to need all the help he can get in Kenya. The 2015 overall score for Kenya is 55.6. That’s 122nd place out of 178 countries. That also earns the classification of ‘mostly unfree’.