As we get ready to celebrate all that we have to be thankful for this year (and yes I have a lot to be thankful for) lets not forget those less fortunate. And lets not forget why most of them are so unfortunate...most of the world's billion hungry people live in countries where they have little incentive to prosper. For centuries economists have tried to figure out why certain countries prosper and others don't, you've probably heard some of these explanations. People in hot places don't work as hard. Wealthy countries have that old Protestant work ethic. Former British colonies are the richest countries. Nations with the largest populations of European descent do better. Geography, weather, tropical diseases, and nutrient starved soil doom certain areas to poverty . The lack of education and technology lead to poverty. While all of these theories may have instances of relevance they just don't hold up to real world analysis. Take communist North Korea, with the same weather, geography and culture of its capitalist neighbor to the south, yet ten times poorer. Or the stark contrast twenty years ago between East and West Berlin. Or the stark contrast between those on one side of the Mexican boarder living in Arizona and those on the other side in Mexico. Or look at the difference between Cuba and Miami. Or look at China, where decades of stagnation and famine were reversed after they began introducing private-property rights.
Poverty happens where people have no incentive to prosper. Poverty happens where people believe that no matter how hard they work someone else will prosper before their children do. Poverty is all about incentives, or more appropriately the lack thereof.
People need incentives to prosper, they have to know that if they work hard and make money they can actually keep some of that money to improve their families future. The key to ensuring that those incentives are in place are strong rules of law and a government that believes in it. The government has to offer its citizens opportunities to achieve and innovate, and to keep most of the fruits of their labors.
Fix incentives and you will fix poverty.
So this Thanksgiving lets not forget how fortunate we are to live in a country that was built on the rights of the individual, and let us continue to work to defend those rights here in the U.S. and help spread them throughout the world so we can truly put an end to poverty.
Happy Thanksgiving,
Chris Wiles
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