Every year, the Heritage Foundation dutifully churns out its annual Index of Economic Freedom, a ratings guide of countries' relative corporate hospitality. If past years are any guide, over the course of 2008, the report will likely be referenced several times in the Wall Street Journal editorial pages and in various other publications--a quite modest global media splash. Not bad, but not earth-shattering.

The Index of Economic Freedom is significantly more important than this news coverage suggests, however.

For the last several years, the report has been subtitled "The Link Between Economic Opportunity and Prosperity," and a central thesis of the report is that removing controls on corporations creates economic wealth. When countries of similar economic development are compared this claim is revealed to be nonsensical, as various studies from the Center for Economic and Policy Research have shown. But more important than the asserted connection between removing corporate restraints and prosperity is the report's definitional maneuver. It claims "economic freedom"--and all of the justifiably positive connotations of freedom--as part of the corporate agenda.

The Index of Economic Freedom is not the only tool to spread this propaganda, but it is among the most influential. The idea has seeped deep into the culture. The Millennium Challenge Corporation (MCC), which was supposedly the major Bush administration anti-global poverty innovation (but has in fact failed to distribute more than a tiny fraction of funds allocated to it), selects recipient countries in large part based on measures of their "economic freedom." The MCC actually relies on Heritage's Index of Economic Freedom for determining a component (countries' trade openness) of the MCC's economic freedom rating.

Members of Congress have introduced dozens of bills and resolutions referencing "economic freedom" over the last decade. One small example: in 2007 Senator Barack Obama, along with Senators Chuck Hagel and Maria Cantwell, introduced the Global Poverty Act of 2007. (A version in the House of Representatives, introduced by Adam Smith, has 84 co-sponsors.) The bill would require the President to develop a strategy to meet the Millennium Development Goal of halving the number of people in the world living in extreme poverty. Although the bill is mainly aspirational--it doesn't require anything but the development of a strategy--it embraces a worthy goal, and the world would be better if it became law.

The Global Poverty Act does not specify what "economic freedom" means, and the bill's sponsors would almost certainly disagree with portions of the detailed definition supplied by Heritage, yet they have, at least in passing, adopted the framework. What exactly does Heritage mean when it says "economic freedom?" The Index of Economic Freedoms contains a preposterously precise formula for measuring so-called economic freedoms, based on the following 10 factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, and labor freedom.

What do these grand phrases mean when Heritage translates them into concrete terms?

--"Trade freedom" measures not just how low tariff rates are, but the extent to which a country maintains "non-tariff trade barriers," such as "safety and industrial standards regulations" and "advertising and media regulations." Heritage considers national restrictions on biotechnology products--which apply equally to domestic and foreign genetically modified foods--as trade restrictions.

--"Fiscal freedom" is simply code for how low tax rates are. This includes corporate tax rates--which the Heritage formula weighs equally to taxes on individuals.

--Countries are awarded more points the smaller the size of the government relative to national economic output. The most points are awarded for a government with zero size!

--"Investment freedom" actually has almost nothing to do with the ability of people in a country to make investments. Heritage defines investment freedom as whether there are restrictions on foreign investment, including whether any industrial sectors are off limits for security reasons, and whether expropriation is permitted--even with compensation paid to investors.

--"Financial freedom" means whether banks and high finance are unregulated. The US is apparently penalized for the various modest Sarbanes-Oxley rules passed after the Enron and related debacles.

--Heritage contorts "labor freedom" to mean the ability of corporations to fire workers without restraint and the absence of any minimum wage rules. (Countries are penalized for higher minimum wages relative to average value added per worker.)

The successful effort by the Heritage Foundation and its allies to capture the term "economic freedom" is not just a propaganda coup, it is a heist.

Heritage and its collaborators explicitly state they are carrying out a project initiated by Milton Friedman (the author of Capitalism and Freedom, among many other works) to define economic freedom in terms of individual economic actors'--typically corporations, though they often prefer to glorify individual entrepreneurs--abilities to escape public control. This ideal steals from and debases the noble vision of Franklin Roosevelt: of a caring, sharing society, where the crucial economic freedom is freedom from want.

In his famous 1941 "Four Freedoms" speech, Roosevelt offered a humane vision of a world defined by four freedoms (freedom of speech, freedom of religion, freedom from want, and freedom from fear).

"The basic things expected by our people of their political and economic systems are simple," Roosevelt declared. "They are: Equality of opportunity for youth and for others. Jobs for those who can work. Security for those who need it. The ending of special privilege for the few. The preservation of civil liberties for all. The enjoyment of the fruits of scientific progress in a wider and constantly rising standard of living."

"These are the simple, the basic things that must never be lost sight of in the turmoil and unbelievable complexity of our modern world. The inner and abiding strength of our economic and political systems is dependent upon the degree to which they fulfill these expectations."