Friedman: How Wealth Works

The World is Getting Richer

Developing Economies Fall from 58% to 39% of All Countries in 15 Years

HT Carpe Diem

Does Inequality Matter?

"This study argues that, for those of us who care about the
welfare of the poorest and the most vulnerable, income
inequality is not a useful measure. Measures of income
inequality tell us nothing about the living conditions of the
poor, their health and their access to economic opportunity.
Income inequality can easily increase in societies in
which everyone, including the very poorest individuals, is
becoming better off. Conversely, a reduction in inequality
can be associated with deterioration in the living conditions
of the less well-off members of the society"

from "Does Inequality Matter?" Dalibor Rohác, Adam Smith Institute Briefing Paper



HT NCPA

Economic Freedom and the Quality of Life

30 years of HIV/AIDS

June 5th, 1981 Morbidity and Mortality Weekly Reports had an article on five cases of Pneumocystis carinii pneumonia (PCP) among previously healthy young men in Los Angeles. This was the beginning of our journey into the puzzle that has been HIV/AIDS. I remember sitting in a series of Grand Rounds in medical school, and then residency, as some of the pieces of the puzzle came together: homosexual males, Kaposi's sarcoma, severe immune deficiency and death from "opportunistic organisms."

The AIDS story has been full of tragedy and fear---and though we still have a long way to go, it is also a story of scientific triumph. In the US it is not quite the same death sentence as before. In Africa, the battles to alter cultures and manage the disease amidst poverty have proved the greater challenge.

The Kaiser Family Foundation  has put together an interactive Global HIV/AIDS Timeline in which you can scan the milestones  from 3 decades of effort.

Just another example of how where there is wealth, the possibilities are so much greater and how poverty is the biggest killer of all.

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The poor are getting richer.

Mark Perry of Carpe Diem reports on new research showing that the poor are not getting poorer, but richer.

“By leaving out additional sources of income – like fringe benefits or employer-provided health insurance – past studies have dramatically understated American households’ access to after-tax resources.” said Dr. Burkhauser. “What we found is that the rich did get richer over the last 30 years, but so did the middle class, the working class and the poorest...

This isn’t a zero sum game, where one group wins at the expense of others. The growth in productivity of Americans in the top twenty percent of tax units increased the size of the economic pie sufficiently to register major gains across the entire distribution of after-tax income.”

Read more here and here.

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Poverty is Easy to Explain

by Walter Williams

There is very little either complicated or interesting about poverty. Poverty has been man’s condition throughout his history...The true mystery is why there is any affluence at all.

Read the rest here.

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Free Market: not just the most effective, but also the most moral solution to poverty

Milton Friedman is right as far as he takes it. The free market is the most effective system the world has known for producing wealth and reducing poverty. What he doesn't say in this video clip is that the free market, because it is limited to voluntary exchange, is also the most moral system for reducing poverty. A system which employs the initiation of force will not be as effective--it can only redistribute wealth not create it--but even more importantly, it entails in its methods the destruction of civil society.


(HT Ideas Matter)

The Rich are Getting Richer

but the poor are getting richer too, and faster.



HT Ideas Matter.

Inequality and Wealth

Can you tell what this chart is showing you?

1. The bottom 5% in the US are as wealthy as the top 5% in India.

2. Of the countries shown, the difference between the richest and the poorest is smallest in the USA. (I'd like to see even more curves and compare them to standing in the economic freedom index. For those shown: US -9th, Brazil - 113, India - 124, China - 135)

What you can 't see here but you can learn by reading The Haves and the Have-Nots by World Bank economist Branko Milanovic , the bottom 5% in America is richer than 68 percent of the world’s inhabitants.

(HT Catherine Rampell via Carpe Diem.)

"I am an Entrepreneur" photo contest

Go check out the fabulous photos in SEVEN's photo contest for "I am an entrepreneur"--and vote for the one you think best.

I first came across SEVEN last year when I googled for sites using the term "morality of profit." At the time, the organization had just finished accepting essays for its contest, What is "The Morality of Profit." A winner was chosen in August.

Belief in the evil of profit is rooted in belief in the evil of mankind...Love for others will never come from old ideas about hatred of ourselves...Mankind is not evil. Ergo a man or a woman’s interest in his or herself is not evil.

You can read a longer except of the wining essay here.

I am hoping they will publish a compendium of the top essays, as they did with a previous competition, In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty.

I love the way this organization both celebrates and supports entrepreneurial efforts throughout the world as the best way to end poverty. We need to create MORE wealth, improving the condition of the poorest, not level things out to an equal but poorer world.

To celebrate the entrepreneurial spirit in the world is to celebrate man's lust for life.

Poverty is the problem. Wealth is the solution.

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Poverty and Capitalism

I love this man's impish benevolence--and his economics aren't bad either.

Two Earthquakes: A World of Difference

Just a few links to articles on why Haiti's earthquake was a horrific national disaster while a more severe earthquake in Chile was a far more limited tragedy.

How Milton Friedman Saved Chile WSJ

A Tale of Two Quakes NCPA or WSJ

Why Haiti's Quake Toll Higher than Chile's CNN

Many articles give credit to building codes--but in a poor country, the choice is frequently: build cheaply or not at all. Only where wealth is sufficient can building codes even be considered.

Wealth is not the problem. Poverty is the problem. Wealth is the solution.

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Climate change policy: A treatment worse than the "disease"

Disease is in quotes, because catastrophic anthropogenic global warming in not a proven fact.



Poverty is the problem.

Wealth (including the cheap, abundant Wealth (including the cheap, abundant energy of fossil fuels) is the solution.

Haiti: Poverty is the Problem

Walter Williams has an excellent op-ed which compares the devastation wreaked by the 7.0 earthquake in Haiti to the much less devastating earthquakes in California (7.1 Loma Prieta 1989, 7.8 San Fransisco in 1906.)

Why such a difference? Wealth.

Why is Haiti so poor? Corruption and lack of economic freedom.

Read the article for details.

Haiti's Avoidable Death Toll by Walter Williams, Jan 20, 2010 Townhall.com




(HT The Atlashpere.)

Haiti's Un-natural Disaster

News on Haiti has focused on the horrible and devastating destruction of the recent earthquake. Deaths, injuries, collapsed buildings and ruined infrastructure have overwhelmed the country. People need help immediately--and help is being sent by both governments and charity organizations. But, and this "but" is key: once the immediate needs have been met, a hard look needs to be taken at why Haiti is so vulnerable, why is it the poorest country in the Western Hemisphere? Attention now necessarily goes to relieving the massive suffering---but unless the underlying forces which keep the bulk of Haitians destitute are understood and reversed, all the current rescue efforts will only be a temporary patch work.

The real tragedy of Haiti is not the earthquake's aftermath. That plight, as horrific as it is, is a short term problem which has the attention of the world, and will be solved. It is the long term disaster of Haiti's economic stagnation and political corruption that must be corrected before Haitians will have a chance to participate in the world's growing prosperity.

I recently read a fascinating book about Dr. Paul Farmer's heroic efforts to improve the healthcare received by Haitians. Farmer's story is inspirational for demonstrating what a single dedicated and passionate individual can accomplish--and for that example, it is a story worth reading (Mountains Beyond Mountains). And yet, although he is clearly an astute diagnostician and clinician of infectious disease, his understanding of economics is mistakenly Marxist.

Richard Ebeling has an article which begins to look at the man-made aspects of the current disaster.

At a time when many countries in the less-underdeveloped areas of the globe have been rising out of poverty over the last several decades, Haiti, however, is one of those countries that has continued to stagnate with a 50 percent rate of unemployment of the work force and with 80 percent of the population estimated to be living below the poverty line before the earthquake. At a time when more and more countries are becoming industrialized and economically more diversified, over 65 percent of the people in Haiti still depend upon low productivity farming for their meager standard of living.

The government, not just for decades but also for more than two centuries, has been notoriously corrupt, brutal and tyrannical. If there is any instance of Frédéric Bastiat's notion of "legalized plunder," under which the powers of government are applied to steal the wealth of some for the benefit of others who are politically well connected, it is Haiti throughout its sad history.

Billions of taxpayers' dollars from the United States and many other countries have all gone down a huge government rat hole that has lined the pockets of the rulers and their political cronies in Haiti.

From slave colony and pirate haven, through the despotism of rebel leaders such as Jean-Jacques Dessalines, the serfdom of Jean Pierre Boyer, international meddling by France, Germany, the US and Great Britain, dictators Trujillo and the Duvaliers, the Tonton Macoutes death-squads, and the controversial presidency of Jean-Bertrand Aristide---the government instability, as evident by 32 coups in 200 years, has allowed almost continual violation of personal liberty and property rights, which even at its best were never truly secure.

So send dollars to charity to help with the immediate needs---but the longer lasting help must consist of eliminating the un-natural disaster of corrupt, unstable and exploitative government. Rule of law, protection of individual rights and and economic freedom must be established in order for the Haitians to generate the wealth they need to raise themselves permanently out of poverty and protect themselves from the devastation of future natural disasters.


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