The World’s “Freest” Economy Is Also the Most Plutocratic

How It Works
March 19 2014 5:21 PM

The World’s “Freest” Economy Is Also the Most Plutocratic

A woman walks in front of the IFC tower in the financial district of Hong Kong on Sept. 6, 2013.

Photo by Philippe Lopez/AFP/Getty Images

The Economist has just released a clever “crony capitalism” index, measuring the places where government-connected businessmen are most likely to prosper. The index works by measuring the wealth of a country’s billionaires who are involved a number of “industries that are vulnerable to monopoly, or that involve licensing or heavy state involvement,” including utilities, ports, and airports, energy, infrastructure, investment banking, and defense.  

Joshua Keating Joshua Keating

Joshua Keating is a staff writer at Slate focusing on international affairs and writes the World blog. 

The place—not actually a country—that tops the list is Hong Kong. This is not particularly given that catering to international business interests is Hong Kong’s raison d’etre. This is a place where business groups literally select members of the legislature and where you can go to an HSBC ATM and take out money with an HSBC logo on it. It is home to 45 billionaires, just two fewer than Britain, which has nine times as many people.   


But it’s interesting to note that Hong Kong has also, for 20 consecutive years, topped the Heritage Foundation’s “economic freedom” index, which measures countries based on rule of law, limited government, regulatory efficiency, and open markets. Singapore, which is in second place on the Heritage Foundation’s list, comes in fifth on the Economist’s cronyism list. 

In Hong Kong’s case, Heritage notes that the territory enjoys “low rates of corruption, although business interests exercise a strong influence in the unicameral legislature and executive branch.” (“Strong influence” over the government is also exercised by the decidedly not-free People’s Republic of China, though that’s another issue.)

The Economist is quick to note that Hong Kong and Singapore are well-run places by any standards, but also says that they are “packed with billionaires in crony industries. This reflects scarce land, which boosts property values, and their role as entrepots for shiftier neighbours. Hong Kong has also long been lax on antitrust: it only passed an economy-wide competition law two years ago.”

You wouldn’t be able draw a linear relationship between the two indexes. The disconcertingly newsy trio of Russia, Malaysia, and Ukraine, which round out the top five most cronyistic countries on the Economist’s list, are all scored pretty dismally by Heritage. The least cronyistic place measured, Germany, is a respectable 18th on Heritage’s list. 

But in looking at indexes like the one Heritage puts out, it’s worth keeping in mind that the some of the places being celebrated for governments that give free rein to private industry are places where the two simply have a symbiotic relationship.

Joshua Keating is a staff writer at Slate focusing on international affairs and writes the World blog. 



More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

iOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.

Why Greenland’s “Dark Snow” Should Worry You

Three Talented Actresses in Three Terrible New Shows

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.


Happy Constitution Day!

Too bad it’s almost certainly unconstitutional.

The Ungodly Horror of Having a Bug Crawl Into Your Ear and Scratch Away at Your Eardrum

My Father Was James Brown. I Watched Him Beat My Mother. Then I Married Someone Like Him.

  News & Politics
Sept. 17 2014 12:02 PM Here It Is: The Flimsiest Campaign Attack Ad of 2014, Which Won’t Stop Running
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
Sept. 17 2014 1:59 PM Ask a Homo: Secret Ally Codes 
  Double X
The XX Factor
Sept. 17 2014 1:26 PM Hey CBS, Rihanna Is Exactly Who I Want to See on My TV Before NFL Games
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
Brow Beat
Sept. 17 2014 1:01 PM A Rare, Very Unusual Interview With Michael Jackson, Animated
Future Tense
Sept. 17 2014 12:35 PM IOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.
  Health & Science
Bad Astronomy
Sept. 17 2014 11:18 AM A Bridge Across the Sky
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.