Tuesday, February 25, 2014

It's An Economic Fact: Free Markets Cure Poverty

I found this to be interesting information on the correlation between capitalism and the fight against poverty. It is from the transcript of the Freakonomics podcast of 12/19/2013, "Pontiff-icating on the Free Market System." The podcast guests include economist Jeffrey Sachs and Joe Kaboski, economics professor at the University of Notre Dame.

This quote is from Joe Kaboski:

"[W]e’ve never seen an example of any country that has escaped extreme poverty because of foreign aid or NGOs. And more people have escaped extreme poverty in the past 25 years in part through the growth of China and India than in any period of human history. And all of these miracle countries, miracle in the economic sense, China, South Korea, Taiwan, Hong Kong, Singapore, you know, Chile down in Latin America, they’ve all grown through high levels of trade, market economies. And that’s important. The importance of a market economy you can see no better than South Korea and North Korea. I mean, North Korea people are starving to death and dire poverty. And South Korea is basically a high income country at this point, and it’s because of 40 years of intense growth versus opposed to 40 years of stagnation or even going down."

More wealth is created when people are free to think, to choose, to act, i.e., to be free to exercise their minds, than when freedom is constrained by arbitrary restrictions against cooperation and economic liberty. Political coercion always creates economic chaos and is less optimal that economic freedom. This is a basic moral, political and economic principle. 

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