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The Daily Missive

Measuring Freedom

By February 23, 2022February 8th, 2023No Comments

“Our faith in freedom does not rest on the foreseeable results in particular circumstances but on the belief that it will, on balance, release more forces for the good than for the bad.”

― Friedrich A. Hayek

Addison WigginDear Reader,

Dmitri Aplerovitch is convinced Vladimir Putin made the decision to invade Ukraine back in December.

Let’s back up a skosh. Last week, I found the rhetoric coming from the Biden White House — and from the media who repeat their soundbytes ad infinitum — indecipherable.

Yes, we get it — Putin wants to invade Ukraine. But why? It seems like a simple enough question. But there isn’t a lot of rational explanation from mainstream sources…

So I wrote to my friend Dimitri Kofinas, whom you may remember from Wiggin Session #68. Dimitri was a former producer for Russia Today and now hosts his own podcast called Hidden Forces.

Kofinas turned me on to one of his own podcasts with Dmitri Aplerovitch, a Russian-born American computer security executive and co-founder of CrowdStrike, the world’s largest cybersecurity company. You may remember Crowdstrike was embroiled in the investigation into President Trump’s alleged collusion with the Russians during the 2016 election.

Mr. Aplerovitch, having listened to Putin’s speeches in Russian, says he’s ratcheted up the rhetoric so high to his own people, only an invasion will show his resolve. (You can listen to the original podcast with Aplerovitch on Kofinas’ Hidden Forces podcast, here.)

At the very least, Putin wants to annex the Eastern part of Ukraine, similar to the Russian takeover of the Crimean Peninsula in 2014. Russian-speaking citizens reside there… and there’s some question over the pipelines that run from Russia through the Ukraine to fuel Germany. Yada, Yada. This is the kind of story about which parables are written.

We bring this “pressing news item” up today for several reasons. First and foremost, because Putin’s approach to expanding his influence in Eastern Europe is so diametrically opposed to the ideas of our guest this week, Perth Tolle, that it’s remarkable.

We also bring it up because Consilience is hosting a live briefing at 7 p.m. ET this evening with Jim Rickards on the crisis brewing on the Ukrainian border. Gas prices have already begun to spike in the West. Further disruption in the supply chain is more than likely as with the commencement of any other armed conflict… let alone one in the heart of central Eastern Europe. The impact of a Russian invasion will be addressed by Mr. Rickards this evening.

You can register to see the free briefing here.

Back to our guest. Let’s get out our imaginary balance.

Click here to learn more

Or a $200 one from

On one side we have armed conflict, i.e. Russia invading Ukraine, the ultimate form of political coercion. Ghengis Khan perfected the technique in A.D. 1223 when he overran both Russia and the Ukraine.

On the other side of the scale, you have a free market and voluntary association of ideas, companies and new products. We mostly associate free markets with Adam Smith and the publishing of the Wealth of Nations in 1776… or, even better, his Theory of Moral Sentiments published in 1759.

Let’s look at the scale again. Armed domination, death and destruction? Or a free market in trade, ideas and capital? Which one would you prefer? Which one suits your life better?

Perth Tolle is a Chinese-born American who founded Life + Liberty Indexes and is the creator of the Freedom 100 EM Index (ticker symbol: FRDM). We know which side of the scale she puts her thumb on.

The founding idea of her index strategy is that the most free nations in emerging markets will produce the best returns for individual investors over the long run. Rather than use the military to annex neighboring countries, the emerging markets who encourage a high degree of economic freedom outperform those in autocratic states.

But if you’re Perth Tolle, how do you measure something like freedom? It seems like trying to quantify love… imagination… or the damage wrought by our favorite punching bag, modern monetary theory (MMT).

As we mentioned briefly yesterday, Ms. Tolle uses the Human Freedom Index co-sponsored by the Cato Institute and the Fraser Institute. The goal, as Cato explains on its website, is to show “freedom is inherently valuable and plays a role in human progress, it is worth measuring carefully.”

The Human Freedom Index scores 165 jurisdictions using 82 different indicators, ranking everything from the rights of citizens to speak out to how well the country’s legal system follows the rule of law.

Then it boils all that down to a 1 – 10 scale, with a higher score indicative of people living freer lives.

Of course, this isn’t just an academic exercise. If you’re an investor looking to invest overseas, you want to make sure your money will be well-treated. So, in theory, your investments should be safer in a country with a high freedom score.

Perth agrees. Investors avoid emerging markets over fears of “non-transparency, lack of independent verification of data, and opacity of ownership structures and accounting standards and things like that.”

She adds, “a lot of these risks are heightened when you’re investing in autocracies.”

Take China, which — despite its size — is considered an emerging market. It’s also one of the least-free major countries on Earth, where the government isn’t afraid to flex its muscles on a whim.

Last year, for instance, it suddenly declared that all online education and tutoring companies had to be run as non-profit entities. Almost instantly, “very lucrative, very profitable companies” could no longer have any profits.

“These are companies that Americans were invested in,” Ms. Tolle says. “Some of them were listed on American exchanges, but a lot of them had exposure in emerging markets funds.”

“Those funds had the most exposure to these Chinese companies that were carpet-bombed last year,” she tells me, “and this regulatory risk isn’t going away.”

Perth recognized that there were “a lot of emerging markets that are very free, like Taiwan, South Korea, Chile, Poland.” But there were few ways for everyday investors to collectively put money into their growth without having it lumped in with investments in autocratic countries.

So she built a solution from the ground up, using the Human Freedom Index as its base. “We take that composite score and our algorithm turns it into country weights and inclusion,” she explains.

In other words, the more free an emerging market is, the more it will be represented in Ms. Tolle’s fund.

We’ll take a closer look at her selection criteria and performance to date tomorrow.

Follow your bliss,

Addison Wiggin

Addison Wiggin
Founder, The Financial Reserve

Addison Wiggin

Addison Wiggin Addison Wiggin is an American writer, publisher, and filmmaker. He was the founder of Agora Financial and publisher for 18 years. An acclaimed New York Times best-selling author, his books include: Financial Reckoning DayEmpire of DebtThe Demise of the Dollar, and The Little Book of the Shrinking Dollar. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by The Essential Investor, in March 2020. He films from a homegrown studio in his basement.