By Leslee Kulba –
In Defense of Global Capitalism, by Johan Norberg, is ten years old, but it speaks of eternal principles. Although written in a very readable, youthful style, Norberg brings home where the greed really exists in society. Unlike typical public policy analyses that try to prove a multivariate idea is superior by cherry-picking factoids and jumping to conclusions in a most technical, pseudoscientific tone, Norberg, in simple terms, lays out a moral thesis of how humans should behave, and what they should obviously expect.
Now that sounds rather preachy, but billions of our fellow earthlings live on less than $2 a day. Some places, the life expectancy is less than 26 years. In those places, disease runs rampant, making longer life an undesirable prospect for many. One reason the song remains the same is it is so much easier for the average guy to stay at home and play politics than face the evil dictators whose “control-freakery,” with isolationism, protectionism, and just plain lust for power and money, supplants opportunity.
Contrary to popular opinion, Ayn Rand did not consign the poor people of the earth to generational poverty; even though her advocacy of free-market principles continues to be misconstrued, by those who never read her works or don’t want others to, to be stone-cold, greedy exploitation. Instead, Rand and free-market capitalists everywhere have a recipe to help. Norberg believes in the rising tide philosophy of free trade. America didn’t get richer by stealing wealth from others. It got richer while others fared as they would have otherwise; but by getting richer, it put itself in a better position to help those less fortunate – if only evil dictators and the useful-idiot propagandists in their employ would allow them.
Norberg points out progressive remedies for insufferable conditions the world over, such as minimum wages, child labor laws, and even pollution controls, don’t work. The sad truth is that the developed countries had to go through similar growing pains. It was necessary to begin manufacturing before smokestack laws could be enforced – not the other way around. Developed countries, by their example, save poor nations the trouble of reinventing the wheel; but they can’t export teleportation devices. In developing countries, working hours, and health and safety conditions are often multifold better at the factories of multinational corporations than at plants owned by local industries. In fact, in some places children not allowed to work in factories to help their families survive have little but prostitution as an alternative.
Norberg begins with a simple premise. If people are allowed to trade as they please, nobody will enter into an exchange without benefitting. Admittedly, a friend’s happiness, or getting away from an obnoxious salesman, is often included in the purchase price. But when all the pros and cons are tallied, rational trade involves transactions that both parties believe will make them better off. That said, trade is a means to a better life for all who transact; and the fewer barriers, the better.
Histories of isolationist nations; especially side-by-side stories with similar cultures, show nations are more prosperous when they are allowed to exchange goods, technology, and ideas with others. Free flow of labor, with exceptions made for threats to domestic peace, also increases opportunities for transfusion of ideas and technology. One problem in the world today, though, is the protectionist, “buy local” philosophies. The ill-conceived good intentions tend to backfire on those who expect the practice to strengthen the local economy. Tariffs retard economies, and Norberg defies a country to be the first to lift its tariffs and see how much better it does than those countries that cling to theirs.
Norberg considers tariffs a new political “curtain.” History shows massive hypocrisy in motivations behind their imposition. “We may allow [foreign nations] to sell us a few things that we are unable to produce ourselves, but heaven help them if they threaten to put us out of business by doing something cheaper and better than we can.” Economist Eli F. Heckscher has said, “Either a branch of enterprise is profitable, in which case it needs no tariff protection; or else it is unprofitable, in which case it deserves no tariff protection.”
An oft-heard argument against capitalism is that too much technological advance will mean an end of jobs. That is absurd. Norberg asks if anybody on the planet has too few aches and pains, too few annoyances, or too many opportunities to pursue their dreams. There is no end to progress. So, Norberg asks which system affords the most opportunity to improve the human condition.
In international markets, strong regulations are often attempts to prolong the life of bad policies. Control economies are ruled by those who believe humans are a means to an end. Norberg, however, says humans are then end. Capitalism encourages people to live up to that privilege by thinking for themselves. “Capitalism does not force people to maximize their profit at every turn;” wrote Norberg, “it enables them to use their property as they see fit, free of political considerations.”
Attempting to heal world poverty with foreign aid is treating the symptom, not the cause. Economist Peter T. Bauer has described foreign aid as taking from poor people in rich countries to give to rich people in foreign countries. Government aid programs continue to support regimes that exercise power in ways that prevent countries from being lifted from poverty. And many know they can get more aid if they continue to mismanage their countries. When all is said and done, poverty is not the absence of money so much as the absence of tools needed to do the kinds of things people would part with their money to enjoy.