by Daniel J. Mitchell – Sunday, August 05, 2018
Some argue that the big-government welfare state is to thank for the reduction in global extreme poverty levels, but they’re just plain wrong.
Last September, I shared some very encouraging data showing how extreme poverty dramatically has declined in the developing world.
And I noted that this progress happened during a time when the “Washington Consensus” was resulting in “neoliberal” policies (meaning “classical liberal“) in those nations (confirmed by data from Economic Freedom of the World).
In other words, pro-market policies were the recipe for poverty reduction, not foreign aid or big government.
Sadly, the Washington Consensus has been supplanted. Bureaucracies such as the International Monetary Fund, the United Nations, and the Organization for Economic Cooperation and Development are now pushing a statist agenda based on the bizarre theory that higher taxes and more spending somehow produce prosperity.
To add insult to injury, some people now want to rewrite history and argue that free markets don’t deserve credit for the poverty reduction that already has occurred.
Esteban Ortiz-Ospina, writing for Our World in Data, wants readers to conclude that redistribution programs deserve credit.
…the share of people living in extreme poverty around the world has fallen continuously over the last two centuries. …many often say that globalization in the form of “free-market capitalism” is the main force to be thanked for such remarkable historical achievement. …this focus on “free-market capitalism” alone is misguided. …Governments around the world have dramatically increased their potential to collect revenues in order to redistribute resources through social transfers… The reach of governments has grown substantially over the last century: the share of total output that governments control is much larger today than a century ago….. Read More