FIGHTING POVERTY

Fraser Institute - September 2002
The west is already fighting global poverty
By Fred McMahon

Let’s get something straight - the United States and the “rich” west have been doing everything they can to help poor nations adopt the one, and only, economic system that has been able to create wealth and relieve poverty wherever it has been tried.

Some sadly ill-informed commentators have tried to blame an “arrogant and greedy” west for the 9-11 terrorist attacks. Even on the surface, this is silly. The attackers were sons of privilege mostly from rich Saudi Arabia. Al-Qaeda propaganda does not talk about global poverty. It is hate literature, filled with venom aimed at Jews and Christians.

This is not a jab at Muslims. All major religions - Christian, Jewish, Sikh, and Hindu, among others - have been plagued by extremist groups which propagate hate and violence. (The relatively new Bahá'í faith may be an exception, but give it time.) Nor, is this a jab at religion. Ideologies like Marxist socialism have also spawned violence and a goodly number of terror groups. So has nationalism.

This aside, the charge that global poverty sparked terrorism would have legitimacy only if the rich west selfishly denied wealth to others. But, far from being “greedy,” western nations have been desperately trying to promote the economic system that has lifted the bulk of the population out of poverty where ever it has been implemented.

That system is the market system, enriched by economic freedom. People make better choices for themselves, and unleash more drive and creativity than government planning has ever achieved. Until market economies developed in Europe, 19 of every 20 people on the planet lived in dismal poverty, with average life spans of less than 30 years. What is now called poverty in market economies would have been incredible luxury through most of human history.

Those once poor third world nations that adopted market economies have achieved massive poverty reduction. The poor no longer worry about starvation and have once undreamed of access to education and health services. Examples are Taiwan, South Korea, and even Chile.

Economic freedom promotes other freedoms. No non-market economic has maintained a stable democracy. All nations with market economies move on to the creation of democracy and other freedoms.

Take a look at Taiwan, South Korea and Chile. All were ruled by brutal dictatorships prior to adopting free markets. Economic freedom eroded the power of these dictatorships. Now democratic systems, as fully developed as those in the west, have evolved in Taiwan, South Korea and Chile. Neighboring nations in Asia and Latin America, which have not fully adopted market economics, continue to suffer under dictatorships or a corrupt form of democracy that hardly deserves the name.

Ironically, socialist and nationalist groups, like the Council of Canadians, which claim to be concerned about poverty and democracy, battle the economic reforms that could bring hope to millions. They also want to shut down the world trading system that has helped lift so many out of poverty. The words “arrogant” and “self-righteous” are appropriate here.

The economics promoted by these self-righteous anti-globalist groups have succeeded nowhere. Yet, they arrogantly ignore the evidence and promote their ideology with complete disregard for the suffering it causes real people.

Despite this unfortunate activity, the diffusion of western technology and economics has improved the lives of people around the world. Per capita calorie intake in the developing world has increased by 39% since 1960. The difference between life expectancy in developed and developed nations has declined from 24.5 years in 1960 to 8.6 years, except in sub-Sahara Africa. But, even there, life expectancy has increased by 15% since 1960.

In an effort to relieve global poverty, rich nations have spent trillions of dollars - that’s trillions, not mere billions - on foreign aid. Unfortunately much foreign aid to the developing world focused on state-planned economic growth, a model that failed dismally.

That failure was predictable from the start. Foreign aid, instead of encouraging the development of free markets, all too often kept corrupt regimes in power and enabled them to put off reform.

This failure, not greed, is the cause of “donor fatigue” in foreign aid. Now, many international organizations are trying to share with less developed nations the lessons of the past and encourage them to accept the one proven recipe for poverty relief, free markets  to repeat, the only system of economic organization that has succeeded in lifting the mass of the population out of poverty.

It’s time we stopped the silliness that western wealth is responsible for terrorists attacks and the even more damaging silliness that western power prevents other nations from succeeding.

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Fred McMahon, fredm@fraserinstitute.ca, is the director of the Centre for Globalization Studies at the Fraser Institute, a Vancouver-based policy research organization.