By Howard Rich – In addition to preserving the inalienability of our individual liberties, limited government ideology has always revolved around the belief that the invisible hand of the free market creates more prosperity for more people than command-and-control economic wealth redistribution.
Actually this isn’t so much a belief (or theory) as it is an incontrovertible economic law. Unfortunately, this law has been willfully ignored by Barack Obama and his congressional allies, who have rung up trillion dollar deficits as part of an ongoing socialist crusade to “spread the wealth around” here in the United States.
A rising tide lifts all ships, the old cliché goes — while teaching a person to fish will feed them for a lifetime, not just one day.
These fortune cookie truisms — ignored both at home and abroad — were lent vital new expression earlier this month when the United Nations effectively acknowledged that its global wealth redistribution scheme has failed to eradicate poverty as efficiently as good old-fashioned capitalism.
In the UN’s “Millennium Development Goals Report 2011” — released on July 7 to virtually no American media coverage — the international organization acknowledged that poverty rates were falling fastest in those nations which have embraced free market reforms.
“The fastest growth and sharpest reductions in poverty continue to be found in Eastern Asia, particularly in China, where the poverty rate is expected to fall to under five per cent by 2015,” the report notes. “India has also contributed to the large reduction in global poverty. In that country, poverty rates are projected to fall from 51 per cent in 1990 to about 22 per cent in 2015.”
Meanwhile in Sub-Saharan Africa — which has received the lion’s share of foreign aid over the last half-century — there have been negligible reductions in poverty. Not only that, there is increasing empirical evidence to suggest that the massive aid being dumped into this region has actually suppressed economic growth while perpetuating popular dependence and government corruption.
“Aid has so spectacularly failed to achieve its intended outcomes in Sub-Saharan Africa because high aid intensity is actually associated with an erosion in the quality of governance,” notes a 2009 report in the Stanford Journal of International Relations. “Foreign aid appears simply to increase the volume of funds at the disposal of already corrupt government officials and kleptocratic elites.”
Even studies which argue for the infusion of additional aid into the region acknowledge that the impact of this avalanche of foreign cash is “difficult to pin down” and that its failure to stimulate economic growth is “confounding.”
Of course the UN — which has not-so-cleverly disguised its wealth redistribution scheme under the guise of climate-friendly “green investment” — isn’t the least bit confounded. Even as its own data conclusively proves the efficacy of free market reforms (and the futility of government handouts), the global bureaucracy is once again inexplicably upping the command economic ante.
After paying lip service in its millennium report to the creation of “conditions in which people are able to carve out and sustain a livelihood,” a separate UN paper released earlier this month proposes the largest wealth transfer in human history.
As part of a $72 trillion plan to “overcome poverty, increase food production to eradicate hunger … and avert the climate change catastrophe,” the UN wants to shift $38 trillion from wealthy nations to developing nations over the next four decades. That staggering sum is more than twice America’s annual gross domestic product — to say nothing of its $14.3 trillion debt.
America simply cannot afford to continue pouring tax dollars into failed wealth redistribution schemes — whether at home or abroad. Not only are these plans destined to fail, but they actually prevent the free market from reducing poverty.
The author is chairman of Americans for Limited Government.
