My previous column focused on why the United States is no longer among the top 10 nations listed in the annual “Index of Economic Freedom.” It’s important to put this in a larger context and explain why it matters.

The freest societies in history have always been the most prosperous. The more freedom that people have to engage in entrepreneurial and other economic activities, the more products, processes, innovation, jobs, wealth and opportunity will be created, and that greater prosperity means a better living standard for all the people.

History has shown that only in times of economic turmoil have the forces opposed to individual liberty been able to fully seize power. No revolution has overthrown a government in times of widely shared prosperity.

In the United States, the 10 states noted for the greatest amount of freedom, opportunity and encouragement of business activity are also the fastest-growing and most prosperous. On the other hand, the states with the greatest burden of taxes, regulations and restriction on businesses are the 10 slowest-growing states.

The link between freedom and prosperity also holds true on the world stage. For 20 years now, the Heritage Foundation has produced the Index in cooperation with the editors of The Wall Street Journal. Each year, the Index ranks more than 175 nations in terms of their level of economic freedom, characterizing them as “free,” “mostly free,” “moderately free,” “mostly unfree” and “repressed.”

During this entire period, Hong Kong has always been ranked No. 1 in the Index, thanks to its small government, low taxes and light regulations. As former Attorney General Edwin Meese, now the Ronald Reagan Distinguished Fellow at the Heritage Foundation, put it in a 1999 Heritage lecture, “Economic freedom and economic prosperity rise and fall together.”

He cited the remarkable history of Hong Kong is a brilliant illustration of the value of political and economic freedom:

“A century and a half ago Britain’s Lord Palmerston dismissed Hong Kong as ‘a barren rock with hardly a house upon it.’ One can only wonder what Lord Palmerston might think if he could visit Hong Kong today.

"He would walk among skyscrapers that hold the offices of 9,000 multinational companies. His eyes would behold the fifth-largest banking center on earth, and the eighth-largest stock market. He would stroll among citizens who earn the sixth-highest per-capita income in the world.

"He would see a conduit through which flows 70 percent of all foreign investment in China. And he would no doubt be dumbstruck to see all this dynamic economic energy being generated on an island with a population smaller than that of Chicago.”

By contrast, nations such as the United Kingdom and United States, once admired throughout the world for their commitment to economic freedom, have seen a sharp decline in the Index ratings.

“The record of increasing economic freedom elsewhere makes it inexcusable that a country like the U.S. continues to pursue policies antithetical to its own growth, while wielding its influence to encourage other countries to chart the same disastrous course,” writes Index editor Terry Miller in a recent op-ed essay for The Wall Street Journal. (The entire list can be found at heritage.org/index.)

The need for U.S. lawmakers to get serious about cutting government down to size, overhauling our tax system and transforming costly entitlement programs should be obvious. Yet for many of them, passing a pork-packed omnibus spending bill is the order of the day.

What’s needed instead is greater economic freedom. That means greater economic prosperity, and greater economic prosperity means a better life for all the people.

The Index findings reinforce the eloquent words with which Mr. Meese concluded his Heritage lecture: “To attain freedom is mankind’s highest aspiration. To use freedom wisely is mankind’s urgent responsibility. To preserve freedom is mankind’s continuing challenge. May we all be equal to that task.”