How not to keep the poor 170

The way to keep the poor poor, is to keep them dependent on government.

The compassioneers of the Left need to keep the poor poor, or they’d lose not only their pretext for empowering the state to control our lives, and all those voters whom they make dependent on big government, but more dreadfully for them the cause in the name of which they claim moral superiority.

The name of their ideology of forced dependence is Socialism. It’s imposition on a nation is the tried and tested way to create poverty and keep the poor poor.

Capitalism, or what Adam Smith called “the natural order of liberty”, is the tried and tested way to create prosperity and bring people out of poverty.

Whenever socialist states and other tyrannies relent to free markets, their per capita income rises. This has been happening steadily over the last thirty years or so, despite the fervid efforts of Environmentalists and world government fanatics to establish a global socialist economy. The Third World has measurably benefitted.

This is from Townhall by Steve Chapman:

[According to] a new World Bank report, “the data indicate a decline in both the poverty rate and the number of poor in all six regions of the developing world.”

In 1981, 70 percent of those in the developing world subsisted on the equivalent of less than $2 a day, and 42 percent had to manage with less than $1 a day. Today, 43 percent are below $2 a day and 14 percent below $1.

Poverty reduction of this magnitude is unparalleled in history: Never before have so many people been lifted out of poverty over such a brief period of time,” write Brookings Institution researchers Laurence Chandy and Geoffrey Gertz.

Just as important as the extent of the improvement is the location: everywhere. In the past there has been improvement in a few countries or a continent. Not this time.

China has continued the rapid upward climb it began three decades ago. India, long a laggard, has shaken off its torpor. Latin America has made sharp inroads against poverty. “For the first time since 1981,” says the World Bank, “we have seen less than half the population of sub-Saharan Africa living below $1.25 a day.”

The start of most global trends is hard to pinpoint. This one, however, had its big bang in the early 1970s, in Chile. After a socialist government brought on economic chaos, the military seized power in a bloody coup and soon embarked on a program of drastic reform – privatizing state enterprises, fighting inflation, opening up foreign trade and investment and unshackling markets.

It was the formula offered by economists associated with the University of Chicago, notably Milton Friedman, and it turned Chile into a rare Latin American success. In time, it also facilitated a return to democracy.

Chile was proof that freeing markets and curbing state control could generate broad-based prosperity, which socialist policies could only promise.

If that experiment weren’t sufficient, it got another try on a much bigger scale when China’s Deng Xiaoping abandoned the disastrous policies of Mao Zedong and veered onto the capitalist road. The result was an economic miracle yielding growth rates that averaged 10 percent per year.

The formula was too effective to be ignored. Over the past two decades, poorer nations have dismantled command-and-control methods and given markets greater latitude. Economic growth, not redistribution, has been the surest cure for poverty, and economic freedom has been the key that unlocked the riddle of economic growth.

Over the past 30 years, notes the libertarian Cato Institute in the latest edition of its “Economic Freedom of the World,” the average country’s economic freedom score has risen from 5.53 (on a 10 scale) to 6.64 — a significant improvement that has paid off in higher growth and earnings. The evidence indicates a reliable pattern: the freer the economy the faster the growth. …

The latest cover story in The Economist magazine is: “Cuba hurtles toward capitalism.” Cuba! Even communists eventually have to make peace with reality.

But as they do, the country that has grown to be the richest ever because of its freedom – the USA – is being turned into a socialist welfare state by a leader raised and trained as a communist.

President Obama calls capitalism, the magic formula for prosperity, “You’re-on-your-own economics”, and insists that it doesn’t work.

This is from Investor’s Business Daily:

“You’re-on-your-own economics” doesn’t work, President Obama asserted Friday, just as the World Bank reported a halving of world poverty due mainly to — you guessed it — you’re-on-your-own economics.

Perhaps he didn’t try free-market economics himself in the past decade, but all six global regions observed by the World Bank did try it — and the stunning result is that global poverty has been slashed in half … It started with the advent of free markets in Chile in 1975, gained speed with the Reagan and Thatcher revolutions, took off with the Asian Tiger states and has been crescendo-ing around the globe ever since. …

Anyone who travels to countries like Peru, Poland, Indonesia, Colombia, Thailand, Hungary, South Africa, Chile, Tanzania and India knows very well that things aren’t what they used to be. Vast middle classes have formed, education is booming, business is up and many of their cities no longer resemble the Third World.

More to the point, people have growing access to jobs, education and a future. Mexico’s rate of illegal immigration has plunged since 2009 as average incomes there approach $7,000 — the threshold that makes staying in Mexico more attractive than living abroad illegally.

Technology has helped; they all have Facebook, cellphones and ATMs to make living more efficient.

The World Bank cites generally stronger political institutions — the kind that enforce one set of laws for all, respect property rights and don’t reward crony capitalists or stacked courts — something Obama might learn from. …

The big Goliath of this revolution is the embrace of free markets. Against the president’s claims that free markets don’t work, note that all six regions of the world are making big progress by embracing markets. …

President Obama’s ambition to keep the poor poor is not limited to turning America into an economically depressed, heavily indebted socialist state; he takes whatever active steps he can to establish a globally centralized control-and-command economy.

He has appointment a new head of the World Bank,  Jim Yong Kim, who will no doubt try to prevent such a report as Steve Chapman sums up ever coming out again: a man in whose dogma such truths need to be suppressed.

This is by Jacob Laksin at Front Page:

Imagine if President Obama appointed radical Noam Chomsky, who has denounced capitalism as a “murderously destructive catastrophe,” to head up a committee on economic growth. That’s less of a stretch than it may seem, considering Obama’s nominee to head the World Bank, current Dartmouth College President Jim Yong Kim.

Kim’s expertise is in health policy, so little is known about his views on economic development, the World Bank’s primary purpose. What is on the public record, however, is deeply troubling. A case in point is a collection of studies that Kim co-edited in 2000, Dying for Growth: Global Inequality and the Health of the Poor. The grim title accurately reflects the book’s radical central premise, namely that capitalism and economic growth is bad for the poor across the world. The introduction, which Kim co-authored with several other academics, states the point bluntly: “The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”

A barefaced lie, as the statistics in the World Bank’s report demonstrate.

In this vein, the authors go on to dismiss “neoliberalism” – the preferred left-wing academic pejorative for free trade and free markets – as a failure, particularly for the world’s poor. “Even where neoliberal policy measures have succeeded in stimulating economic growth, growth’s benefits have not gone to those living in ‘dire poverty,’ one-fourth of the world’s population,” the authors assert.

If economic growth hurts the poor, especially in the Third World, what helps their cause? The book answers that question with a chapter touting what it considers a true success: communist Cuba’s health-care system. As the chapter’s author tells it, Cuba’s health care is supposedly on par with that of the United States, an achievement made “possible because of a govern­mental commitment not only to health in the narrow sense but to social equality and social justice.” Relying on bogus statistics from the Cuban government and distorting the extreme inequities of Cuban health care, where few of Cuba’s poor can either afford or obtain either medicine or doctors’ treatment, the study is revealing mostly of the ideological extremism of its author. Indeed, it might well have been written by Chomsky, which in fact it was: the author is Aviva Chomsky, Noam Chomsky’s eldest daughter. Noam Chomsky himself is quoted in the book’s conclusion, which cites his dismissal of economic growth as “efforts to make people feel helpless.” The book’s authors, including Jim Yong Kim, seem to agree.

They could hardly be more wrong.

(For confirmation of how they could hardly be more wrong, see our post Any old pills?, October 29, 2010.)

In fact, there is overwhelming evidence that economic growth raises income levels, which in turn reduces poverty and improves the lot of the global poor. Much of that evidence has been documented by the World Bank, the very institution that Kim has been tapped to lead. Earlier this month, for instance, the World Bank released a report documenting a decline in the poverty rate of the poor in all the regions of the developing world. The finding is especially striking because it comes amidst a global downturn. Economic growth accounts for much of this astounding progress.

He too quotes statistics:

And that progress is truly impressive. In 1990, 52 percent of the population in the developing world lived below the poverty rate of $1.25 a day. That number was halved by 2008, when 22 percent lived below the poverty rate. Progress has been most dramatic in East Asia, particularly China, which has seen the greatest surge in economic growth. In the 1980s, according to the World Bank report, East Asia had the world’s highest poverty rate, with 77 percent of the population living below the poverty rate as recently as 1981. By 2008, that number had plunged to 14 percent. The report points out that in China alone, 662 million people are no longer living poverty. Not only is no one “dying” due to economic growth, but literally millions of lives have been bettered thanks to economic gains.

China may be the most spectacular example of economic growth’s unmatched capacity to improve the lives of the poor, but it is not an exception. Africa, so long associated with extreme poverty, is also making strides on poverty reduction thanks to economic growth. … As a result of sustained economic growth over the past 15 years …

Africa’s success is especially noteworthy because it has not been limited to countries with natural resources, such as South Africa’s diamonds or Nigerian oil. On the contrary, the authors note that poverty has fallen “for both landlocked and coastal countries, for mineral-rich and mineral-poor countries, for countries with favorable and unfavorable agriculture, for countries with different colonizers, and for countries with varying degrees of exposure to the African slave trade. The benefits of growth were so widely distributed that African inequality actually fell substantially.”

Poverty reduction through economic growth is thus one of the great success stories of recent decades. And that work is not done. …  Achieving sustained reduction in poverty will remain the great cause of the 21st century.

Yet it’s hard to see how the World Bank will help that cause if led by an open critic of economic growth like Jim Yong Kim. … It’s hard to see how its reputation will be redeemed by a World Bank president who seems to believe that the greatest danger to the global poor comes from the only proven strategy to improve the quality of their lives.