The Freedom Parlour Game!

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I created this quiz in 2016, and delivered it at Brian Micklethwait's flat for one of his "Last Friday" talks. Sadly, Brian passed away on November 15th 2021.

Here is an updated and interactive version - I hope you enjoy it as much as he did.

According to economists Robert Lawson and J.R. Clark, the "Hayek-Friedman hypothesis" is shown below. Do you agree with this claim? (This question is ungraded.)

Yes

Maybe

Clear selection

The claim is that "democratic socialism" is wishful thinking - any society that lacks economic freedom, will also lack political freedom.

To test this, we want to find some measures. Which of these organisations produces the "Economic Freedom Index"?

2 points

Cato

Heritage Foundation

Fraser Institute

The World Bank

Clear selection

Which of the following is a respectable measure of political freedom?

2 points

Freedom House's "Freedom in the World"

The IMF's "World Economic Outlook"

Legatum Institute's "Global Prosperity Index"

The World Bank's "Doing Business" report

Clear selection

Let's define "Economically Free" as being 0.5 standard deviations higher than average on the Economic Freedom Index. And "Politically Free" is 1 standard deviation higher than average on the Freedom House Index. This produces a matrix with how many quadrants?

2 points

Clear selection

Try to match the country with the quadrant.

6 points

Australia

Iran

Singapore

Clear selection

The Hayek-Friedman hypothesis focuses on quadrant D.

Which of these is an example of a quadrant D country today?

2 points

Latvia

Russia

Argentina

Qatar

Clear selection

The Hayek-Friedman hypothesis could be interpreted in two ways. Either that it's impossible to be in quadrant D, or that quadrant D is not a stable equilibrium. In others words, that countries that find themselves in quadrant D will move away from it.

At various points in history, some countries have indeed occupied quadrant D. In 1980 there were 12: Bahamas, Barbados, Costa Rica, Denmark, France, Greece, Iceland, Italy, Norway, Sweden, United Kingdom, and Venezuela.

If the Hayek-Friedman hypothesis were true, what should have happened by 2005?

2 points

Most of them have moved out of quadrant D

Most have them have stayed in quadrant D

Clear selection

As you can see, only one of those 12 countries remained in quadrant D.

10 countries moved to quadrant A, and 1 country moved to quadrant B.

Hayek also famously warned against "The Road to Serfdom". His concern there was that a lack of economic freedom would lead to lower political freedoms.

Which country demonstrates the "Road to Serfdom" argument?

2 points

Barbados

Greece

Venezuela

None of the above

Clear selection

The following chart shows what's happened to the percentage of cases that have occupied quadrant D (violating the Hayek-Friedman hypothesis) over time.

What has happened?

2 points

Cases rose - the hypothesis seems more relevent

Cases rose - the hypothesis seems less relevent

Cases fell - the hypothesis seems more relevent

Cases fell - the hypothesis seems less relevent

Clear selection

Here's an example of how one particular country has changed over time. This country started with low economic freedom and strong political freedom, and has steadily moved to quadrant A. It shows how economic freedoms can follow political freedoms.

Who do you think it is?

2 points

Israel

Taiwan

Singapore

USA

Clear selection

This country has high economic freedom but low political freedom. It seems to violate Hayek's claim that economic freedom should, over time, lead to political freedom as well. Where is it?

2 points

Israel

Taiwan

Singapore

USA

Clear selection

This country shows a similar starting position, but a different outcome. Here we see economic freedom leading to greater political freedom. Where is it?

2 points

Israel

Taiwan

Singapore

USA

Clear selection

Which country started with high economic and political freedom, reduced it's economic freedom, and then saw political freedom fall?

In other words, who followed the Road to Serfdom?

2 points

Taiwan

Venezuela

Chile

Israel

Clear selection

Which country started with low political and economic freedom, made progress on economic freedom, and then saw political freedom increase?

2 points

Taiwan

Venezuela

Chile

Israel

Clear selection

Hayek's claim in 'The Road to Serfdom' wasn't a warning that any country that reduces economic freedom will necessarily become totalitarian. He was providing a warning that this can happen.

He played a major role in providing the intellectual basis for those countries that avoided the fate of Venezuela, and liberalised their economies. And notice that the strongest example of how liberating the economy can precede political freedom, is Chile.

Just to see the difference between these two countries, the chart below shows GDP per person from 1950 to 2016. Try to guess which is which:

2 points

Yellow

Red

Chile

Venezuela

Clear selection

One could say that it is wrong to consult illiberal regimes. Perhaps it's important to focus on improving political freedom before economic freedom.

However Chile is the best counterexample to this!

Venezuela is the best example of the dangers of allowing a reduction in economic freedom.

And Chile is the prime example of the success of using economic reforms as a prelude to political freedom.

What do you think?

Clear form

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