My reading, as of late, has been heavy with economics books – from Hayek to Friedman to Adam Smith. The casual observer might note that list is comprised entirely of free market economists, and they’d be right. I believe personal liberty and economic liberty are one and the same, and it is the best way to promote the general welfare of all people. And according to a newly-published report by the World Bank, global poverty levels have plummeted Guy Sorman elaborates:
Thirty years ago, half of the planet lived in utter misery, and many commentators argued that poverty was destiny. At best, most pundits conceded that pockets of poverty could be alleviated through international aid. Only a handful of economists begged to differ: Theodor Schultz, Milton Friedman, and Peter Bauer were the mavericks advocating free-market policies for every nation as the way out of poverty. They have been proven right. China’s economy has been growing since the mid-1980s—when Deng Xiaoping, its de facto leader, abandoned central planning, opened the borders for foreign investment, and promoted entrepreneurship at home.
In 1991, after the Soviet economic model proved bankrupt, India left behind its socialist ideology, opened its borders to foreign competition, and deregulated its economy. The economies of the two most populous countries on earth have grown without interruption ever since. Remember, too, that South Korea and Taiwan understood the virtues of free markets long before China or India discovered them. Many smaller countries, across a huge range of cultures, soon followed suit. African governments, too, converted to free-market economics with significant results— Kenya, Uganda, Senegal, and Sierra Leone, among others. The International Monetary Fund, though useless as a lender, has proven beneficial in Africa by persuading local leaders to create independent central banks, which now manage reliable and stable currencies. The central banks, among other free-market institutions, have ignited economic growth in Africa, formerly ravaged by hyperinflation. The reconversion to monetary stability has also played a decisive role in rekindling Brazil’s economy, which had been stalled in the 1970s by monetary follies.
Global growth, thus, is not a miracle, but the outcome of sound economic policies. This confirms what free-market economists have been writing since 1776, when Adam Smith published his Wealth of Nations: economic policies based on entrepreneurship, open borders, and competition, prove successful. Socialism, promoted throughout the twentieth century as a way to bridge the gap between poor and rich countries, has failed everywhere. The debate is over, or should be. Humanitarian aid has helped alleviate misery in specific conditions, but it is no substitute for sound economic policy.
I highly recommend reading the whole thing.