Why did America prosper while most of the world remains poor?
John Stossel | June 10, 2010
America’s current struggles notwithstanding, life here is pretty good. We have a standard of living that’s the envy of most of the world.
Why did that happen? Prosperity isn’t the norm. Throughout history and throughout the world, poverty has been the norm. Most of the world still lives in dire poverty. Of the 6 billion people on earth, perhaps 1 billion have something close to our standard of living. Why did America prosper when most of the people of the world are still poor?
Milton Friedman taught me the answer. More than any other American, Friedman, who won the Nobel Prize in economics in 1976, clearly warned the world about the unintended consequences of big government.
“We’ve become increasingly dependent on government,” said Friedman. “We’ve surrendered power to government; nobody has taken it from us. It’s our doing. The results—monumental government spending, much of it wasted, little of it going to the people whom we would like to see helped.”
That’s from Friedman’s PBS TV series Free to Choose, which aired 30 years ago and became the basis of his No. 1 bestseller by the same name.
The title says a lot. If we are free to make our own choices, we prosper. That was a new idea to many back then. At the time—when inflation and interest rates were in double digits and unemployment approached 10 percent—people thought a wise government could ensure economic growth, guarantee full employment, and eliminate poverty. Friedman explained that the opposite was true, that bigger government had brought us “burdensome taxes, high inflation, a welfare system under which neither those who receive help nor those who pay for it are satisfied. Trying to do good with other people’s money simply has not worked.”
No, it hasn’t. So why, 30 years later, is America doing so much more of it?
Because people still have not learned Friedman’s lesson.
Because of that, I give money to a charity that offers teachers free copies of some of my TV news videos that explain the benefits of free markets. The video most popular in high schools is one in which I ask students, “When so many nations remain poor, why did America become prosperous?” Many answer, “Because we have democracy.” Yet India has democracy, and India has been poor for years. “India is overpopulated,” they say. They don’t know that India has the same population density as New Jersey.
Other students suggest that America prospered because of our natural resources. But Hong Kong has no natural resources. It’s basically a rock. It is also more densely populated than India. Yet, in just 50 years, Hong Kong went from poverty to American levels of wealth.
How? In Free to Choose, Friedman explained that it was the free market. Overlooking the amazing Hong Kong skyline, he said: “This miracle hasn’t been achieved by government action—by someone sitting in one of those tall buildings and telling people what to do. It’s been achieved by allowing the market to work.”
Walking down a crowded street, he added, “They are free to buy from whom they want, to sell to whom they want, to work for whom they want. Sometimes it looks like chaos, and so it is, but underneath it’s highly organized by the impersonal forces of a free marketplace.”
At the time of his series, India was a symbol of enlightened central planning.
“India has tremendous economic and human potential,” Friedman commented. “The human tragedy is that in India that potential has been stifled by the straightjacket imposed by an all-wise and paternalistic government. Central planning has condemned India’s masses to poverty and misery.” What counted most for Friedman was that people should be free to try innovative ideas and succeed … or fail.
“The free market enables people … to trade with whomever they want; to buy in the cheapest market around the world; to sell in the dearest. … (B)ut most important of all: If they fail, they bear the cost.”
“Most important of all.” It’s clear what he would have thought of today’s government bailouts.
John Stossel is host of Stossel on the Fox Business Network. He’s the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at johnstossel.com.
COPYRIGHT 2010 BY JFS
The above appeared in Reason Magazine, a libertarian publication.
i use a combo of shea butter and aloe vera moisturizer. Works great. I use shea butter on my lips, around my eyes and nose (dry areas), My father swears by vasoline.
p.s. I dropped your name on Gina's post, Barb. ;)
Olga, Also cheap labor…SLAVERY…TRACK
True. And, (I hate to say it), illegal immigrants.
There are those who compare dependence on government to serfdom*–a plantation mentality**, if you will. We give up freedoms for ‘security’. Personally, having lived without either at one time or another, I will gladly give up security for freedom.
* (book) The Road to Serfdom
**Star Parker, CA candidate for congress, (among others)
Morning Olga, Illegals come there by choice to break laws, SLAVES GOT HERE AGAINST THEIR WILL, not the same…TRACK
I did not say they were the same. My intent was to provide an additional example of an exploited group of people. Women and children were also exploited. However, that is not the point of the post.
Olga, If this is different you must state that clearly! Now “the illegals” have the right to go back to their country, and should. All descendants of “the Slaves” are here as natural citizens, set free, December of 1865-the 13th amendment. This is not so with illegals, they are exploited by their own wills, they can return to their own country, this is part of the difference, that should be clear…TRACK
SLAVERY
======================================================
You got that right, TRACK, this country was built on the backs of unpaid laborers, a system which was enormously lucrative for the new nation which became the U.S. and which continues to fill its coffers.
Be happy.
Good article and book. More and more I hear people talking about rising up and revolting against the rise in Government control. I noticed that there are several other states besides Arizona that are enacting laws that will take care of a problem the federal government has sugared coated. It’s not that I’m for or against AZ law about illegals. What I’m for is that there is a rising tide of revolution against big government and taking from the “haves” and giving to the “have nots”. And our relinquishing our power to the government is that age old philosophy that “they are bigger, smarter and wiser” and will make decisions that are good for us. Kind of like a child is with a parent. I certainly hope that all who read any articles about the “the destruction of America life” will do just one small action against what is happening. That’s a lot of power.
True, DM. The good news in this country is that we all have the same power, the vote, to change our situation.
The truth is that ‘government’ is made up of fallible, corruptible human beings just like the much maligned ’greedy corporations’ or the demonized ‘fat cats’. What people don’t seem to realize is that there are greedy people and fat cats in government as well (can we say Congress?, the Administration?). IMHO, a corporation can be put out of business much easier than a government (especially the bureaucrats) can be taken out of power.
Go even more basic. Supply and demand. Let there be free market and successes and failures as the natural flow of things. Govt. intervention can not hold up forever what it thinks is the “right” thing. Trying to bail out a boat when there is more water coming in than out is destined to sink.
Please read:
http://www.congress.org/congressorg/bio/userletter/?letter_id=5429285191&content_dir=congressorg
Thanks for sharing that, Elisa. You know, when I first heard this stuff, I wrote it off to conspiracy theory type stuff, but now it makes sense. Since moving closer to my family two years ago, I have had more time to spend with my mother’s cousins, most of whom are in their 70′s and lived through the Castro takeover of Cuba as adults. They are scared for their grandchildren and for this country. They see many of the actions of this administration as very similar to Castro’s ideas. The close ties with unions and the use of union execs as mouthpieces is one big similarity. Fostering class envy and villifying corporations, as well as inserting themselves on the boards of corporations (GM) is another.
Let’s all pray that they are not successful and there is enough strength in our nation to change this by exposing it for what it is and still be able to do something about it. You two ladies and DL do so much on VN. You have all the right words and links so it’s there if people want to believe. It’s the bigger picture. WAKE UP AMERICA!!!!!!!!!!!!!!!!!!!!
Thanks MG. My intent is to share what I learn along the way. We all should ‘trust but verify’. No one is perfect, no matter how charismatic. We are all flawed human beings. No human being should be followed blindly. Don’t believe the rhetoric, look at the actions and their consequences.
BTW, how’s the move going?
Yiack, that’s a word I borrowed from Lynnette. Slow but sure. Thanks for asking.
You know, sheep will follow sheep right off the cliff. It’s not a pretty sight ;^)