The fine folks at Mercatus have released an index of freedom in the fifty U.S. states that’s attracted quite a bit of attention, mostly uncomplimentary. (See the libertarian-leaning Timothy Lee, as well as Matt Yglesias, for example.) I have some substantive quarrels with both inclusions (right-to-work laws, for example; see my old post on unions, and remember that right-to-work laws are an active regulation prohibiting firms from entering into certain kinds of contracts with recognized collective bargaining agents; see too Matt Zwolinski’s post on RTW) and exclusions (abortion, which has been widely and correctly noted as a serious omission). Some of the weightings seem pretty strange to me (see this discussion from friend-of-BHL political scientist Jason Sorens; I trust factor analysis more than he does, and think that the method described seems designed to overweight the tax burden relative to everything else), but there does have to be a weighting in an index, and as long as it’s transparent and the data on the individual categories are available (true in this case) it’s legitimate, and it does seem that Mercatus has avoided some of the double-counting problems that afflict many such indices. I don’t distrust indices as such– Freedom House’s index is a very important tool in political science– but one has to be awfully careful with them.

There are also certain kinds of biases pre-cooked into something like this that I’d rather see acknowledged. For one thing: it’s well-known that red states, which tend to be poor and/or agricultural, tend to be large net recipients of federal funding, whereas blue states– coastal, urban, rich– tend to be net contributors. What I don’t often see discussed is that this allows for deceptively low state tax rates in the former. “We can keep the state income tax rate low because so many people are getting direct federal benefits through farm subsidies or indirect federal benefits through means-tested block grants and so we don’t need to tax our own population to provide government expenditures” seems to me pretty inadequate as a measure of economic freedom from a libertarian perspective. Yes, it measures something real as far as the subjective perception that Jason describes– but we don’t really want to slap a normative seal of approval on it, do we?

But mostly I just want an excuse to post a link to the classic Nick Gillespie Reason article responding to a similar ranking, one that shows the range of libertarian views on questions like these more effectively than an argument about factor analysis ever could: ‘Live Free and Die of Boredom: Is “economic freedom” just another word for nothing left to do?’