Helping the Poor

May 22, 2008

From The Economist:

SINCE 1950 13 countries have grown at an average rate of 7% a year, or more, for 25 years or longer … the causes of breakneck growth varied significantly between countries, but [a report on these countries] identifies five points of broad resemblance: full exploitation of the world economy (importing bright ideas and technology; producing exports that others want); macroeconomic stability; high rates of saving and investment; letting the market allocate resources; and committed, credible, capable governments.

This is the same thing I’m always talking about, but if you care about people in developing countries, pay attention. The role of government is to create an environment in which the free market can thrive. Investors and businessmen just want to know that the government is going to leave them alone. Globalization and free markets generate growth and help the poor.

These are the empirical facts about what causes economies to grow. Assimilate them into your worldview.

Addendum: I must include this clip from Peep Show. Mark can be counted on to crack me up at least once per episode.

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2 Responses to “Helping the Poor”

  1. Thomas Says:

    There is very little connection between the growth of the GDP in a country and “helping the poor” in that country.

    What has been happening since trade relations between China and the US were normalized? China’s GDP has skyrocketed. In both countries this has contributed to the transfer of wealth to privileged sectors and away from general populations.

    Let me quote Chomsky (as usual):

    “What is called “globalization” is a specific form of international integration, designed and instituted for particular purposes. There are many possible alternatives. This particular form happens to be geared to the interests of private power, manufacturing corporations and financial institutions, closely linked to powerful states. Effects on others are incidental. Sometimes they happen to be beneficial, often not.”

    That pretty much sums it up!

  2. Thomas Says:

    But I do love Peep show


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