In the year 2000, the United Nations put in place an initiative known as “Millennium Development Goals.” These were, and still are, a set of aspirations the world is tasked with making real by the year 2015. A quick look at the calendar tells us that we have roughly one month until the deadline. So how did we do?
Well, while many goals were not met (as is the case in an imperfect world), as of a few years ago, extreme poverty around the globe had been cut in half relative to where it was in 1990 (extreme poverty is defined as living off of less than $1.25 a day). Truly, that is a remarkable achievement for just a quarter century.
This incredible increase in standard of living is largely due to the economic development of two large, populous nations: China and India. Both nations have the potential to be a larger superpower than the the United States in the future, if they ever achieve a per capita GDP that is a large enough fraction of what ours is. And, both will likely reach this milestone in the lifetimes of any college kids reading this post.
So why have the economies of these two nations been taking off, and as a result slashing their poverty rates so drastically? Since 1978, China has begun de-collectivizing, encouraging entrepreneurship, welcoming foreign investment, and in virtually every way becoming far more of a capitalist country than it had been under socialist economics. Since 1991, India has pursued a similar market-oriented strategy for liberalizing its economy.
Put in other, more relatable terms, the governments of these nations are playing less of a role in their economies than before. Don’t be mistaken, these governments can still be economically powerful in many regards, it’s only that they are weaker relative to what they were before. In essence, they have been trending towards less regulation over, and less collectivization of, their national resources.
To anyone who is intellectually honest, there really shouldn’t be any doubt that free markets and economic liberty are the best, or least flawed way of allocating a nation’s scarce resources. Nations that (for the most part at least) have free markets are virtually always more materially wealthy than their counterparts with corrupt, unstable, or socialistic governments.
As a final point, here is a picture of one segment of Asia at night:
That dark, miserable place in the Northern half of the Korean Peninsula is the world’s largest concentration camp. It is the only nation in the picture that has not, to one extent or another, embraced free markets. China, South Korea, Japan, and a small part of Russia are lit up like Christmas trees. But that nation with over 20 million people, and so much potential, is producing so little output. It’s still in the dark, starving, and alone. Those of us who live in democracies with the power to affect public policy must keep the power of economic liberty in mind. We have control over our own destiny, so let’s not put that to waste.