This is wonderful news and it is driven by a general tendency to liberalize markets. Resources now flow from one place to the next more easily than they ever have. As such entrepreneurs are more able to create wealth even in some of the most challenged parts of the globe. Freedom works. Liberty works. Economic decentralization works. Where allowed to flourish without undue burden the market makes life generally better. Where the market is largely restricted poverty continues to prevail. This we see from US inner cities to the suburbs of Paris to sub-Saharan Africa.
But let us focus on this good news.
As we have said before, many times, we are against crony capitalism and for capitalism not because “we just want to keep what’s ours.” Not because we feel some slavish devotion to an ethos of greed. (As some might call self interest.) But because the voluntary exchange of goods and services, capitalism, is the economic vehicle which raises more out of poverty and provides the most opportunity for everyday people. Where one can do business without the government or the local lord or mafia boss taking all the profits people can build wealth. They can then in turn invest this wealth. Which then in turn creates new jobs and new wealth creation and so on.
Where people can’t do business in an honest way wealth aggregates with cronies and eventually the broader economic system stagnates. Contracts aren’t respected. Investment wains. Jobs aren’t created or disappear. The everyday person is worse off. This is the reality of big government, and it creates poverty.
To deny this seemingly obvious reality (at least to us) is to condemn many people to lives of economic despair and social marginalization. We know the Pope doesn’t want that.
Wouldn’t that be great? Porsches for everyone! Well, not really. Perhaps some groceries in most cases.
An interesting little experiment. We’re guessing that the interns at Bloomberg needed something to do one afternoon.
The way out of poverty is through capitalism, free enterprise, free markets, and free prices. But so many people who I believe honestly want to do good do not understand this. They believe that central planning and aid from “rich countries” will solve the world’s problems even though they have only worsened things in aggregate around the world for decades.
Where poor people can build wealth and enjoy property rights and honest pricing the tendency is toward prosperity. Where there is government intervention, where the government or connected cronies can just seize the limited wealth of the poor (often in the name of “justice”), where prices are obfuscated, there is poverty and misery.
We do not believe in free prices and free markets because we want to keep “what’s ours.” We believe in them because we know, and have seen, how much better capitalism is for everyday people than state intervention and its associated cronyism.
In order for a society to truly proper people need both personal liberty and economic liberty, which are actually one and the same. Capitalism allows for both and offers a path out of poverty. (Not that it is always easy.) But many people just refuse to see this. It fundamentally conflicts with everything they’ve been told, to date.
The scourge of Argentinian Peronism, a type of fascism, goes worldwide.
This is what happens when government layers regulations on top of regulations. When it makes it very difficult to start businesses. When it encourages government dependence for electoral reasons. (It does. I hate that it does, but it does.) When government rewards companies which partner with politicians with taxpayer money and favors.This is what happens when the people running the show in Washington abandon the spirit of free enterprise, the spirit of freedom, and instead embrace the languid mediocrity of the welfare state.
No child should be hungry. But the welfare state is not the way to keep bellies full. Non-profits need to be empowered, and government and the dependence it creates must be reduced in a real way. (This must be done over time but with tangible and verifiable milestones. Corporate dependence needs to be cut tomorrow however.)
(From The USA Today)
A higher percentage of children live in poverty now than did during the Great Recession*, according to a new report from the Annie E. Casey Foundation released Tuesday.
About 22% of children in the U.S. lived below the poverty line in 2013, compared with 18% in 2008, the foundation’s 2015 Kids Count Data Book reported. In 2013, the U.S. Department of Human and Health Service’s official poverty line was $23,624 for a family with two adults and two children.
*It should be noted that we are still in a depression, and it is deepening in other parts of the world. We are just not in reverse gear. Currently.
Click here for the article.
I am also compelled as I look at the picture above to post this video by the band (a notoriously leftist band – who made a TON of money thanks to capitalism) Rage Against the Machine. The song in the video is called FREEDOM and though it is full of earnest calls for the release of Leonard Peltier (someone on which who we can not comment from an informed perspective) it is a very good history lesson.
If you like the government running things just look to what it has done to the American Indian.
Cronyism happens on all scales. Sometimes it’s massive bank bailouts, sometimes it’s the quiet siphoning of state and federal money to connected groups and individuals in a little town.
But it’s the same thing fundamentally, theft.
I did not grow up with money. But I did work in finance for years and I have known a number of people with significant wealth. I also live in an old money town, Charlottesville, Virginia.
There is an adage about significant wealth which I think holds generally true and that is that “old money” is smaller than “new money.”
Often with older money there is some patriarch a few generations ago who made a pile of cash in some endeavor, rubber, banking, textiles, whatever. And sure, properly taken care of this wealth should grow from generation to generation. And this sometimes happens.
But never underestimate the destructive ability of an idiot son or grandson or grandsons given too much responsibility and too much money. Over time fortunes very often erode. Not always, but often. And they are always split up through the generations.
Of course this assumes a capitalist, or close to capitalist system, not a crony capitalist one like we have now.
This op-ed from Walter Williams comes the same week that the World Bank has proclaimed publicly that it “will end extreme poverty by 2030.” If the institution wants to end such human desperation it would be wise to encourage the rule of law and free markets (and free prices).
They arrest people for feeding homeless people in some cities. And God forbid you are a doctor in Mississippi with an excellent reputation who wants to treat people for free. Can’t have that.
Many of Dr. Landrum’s patients can’t afford to drive to a doctor’s office. So he comes and sees them. I thought that was called a “house call.”
Why do the busybodies have to regulate EVERYTHING?
India has long been mired in socialism. Bureaucracy ran and continues to run through the country’s massive system of governance. As I understand it, to get anything done in India for many years the paperwork had to be done in triplicate and processed a half dozen times. And then one got a new pile of paperwork.
But times are changing. India has opened up quite a bit over the last 2 decades, and it looks like even more light will be shining into the economy soon.
Hernando de Soto is one of my favorite economists. (Though as with almost anyone I disagree with him on some important points.) A champion of capitalism and everyday people he is my kind of guy.
His argument basically goes like this:
Poor people are shut out of economies. Cronyism and red tape make building businesses almost impossible. In many countries the poor remain permanently on the margins of society. The poor typically have no property rights (even if they’ve been on a piece of land for generations for instance) and enforceable contracts do not often exist. As a result this situation limits access to capital – no one will provide a loan on a piece of property for which there is no deed – which then keeps the poor poor.
Why is it that these sort of programs never seem to help the people for which they are intended? Ever notice that?
This is the title of a Yahoo News story.
And his wife makes $400,000 per year.