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24 January 2010
By Jacob G. Hornberger As President Obama and his cohorts struggle over
what to do now with their socialist health-care plan
in response to the Democratic defeat in Massachusetts,
now would be a good time to point out one of the
biggest reasons for the enormous death toll in Haiti —
socialism. Yes, I am referring to the economic
philosophy of American liberals — the people who
purport to love the poor but whose economic policies
condemn the poor to destitution and even death. As George Mason University economics professor
Walter Williams points out in his excellent column “Haiti’s
Avoidable Death Toll,” Haiti is an extremely poor
country in terms of wealth. Thus, when the earthquake
hit, the country’s dilapidated buildings quickly
crumbled, and people lacked the necessary equipment,
machinery, and medical services that could have saved
many more lives. Compare Haiti’s plight to the United States. By and
large, buildings here are much more able to withstand
earthquakes. Moreover, highly trained personnel with
heavy equipment are able to quickly move into the
affected area and save more people. Why? Why is Haiti so poor while the United States
is so rich? That’s a critically important question,
one that liberals answer incorrectly. They say that
people are poor because other people are wealthy.
Thus, the key to ending poverty, they claim, is for
the government to use its monopoly of force to take
from the rich and give the money to the poor. There is one big problem, however, with this
socialist concept: It doesn’t work. Government
intervention in economic affairs actually makes
society poorer. In fact, it is the root cause of
poverty, not the solution to poverty. It is this
notion that has ensured that the masses of humanity
have remained mired in poverty throughout most of
history. Consider my hometown of Laredo, Texas, compared to
its sister city on the Mexican side of the Rio Grande,
Nuevo Laredo. In actuality, Laredo and Nuevo Laredo
constitute one big city that has a river running
through it, much like San Antonio or Austin, which
have rivers running through them. Yet, the standards of living of Laredo and Nuevo
Laredo are dramatically different. As poor as Laredo
is, the people living there have a remarkably higher
standard of living than the people living in Nuevo
Laredo. How can this be, given that it’s one big
metropolitan area? The reason is that there has always been
significantly more government involvement in economic
affairs in Mexico than there has been in the United
States. In other words, despite the massive taxation,
welfare-statism, and regulation that have afflicted
the United States during the past several decades, it
is nothing compared to the Mexican government’s
socialist, interventionist, and mercantilist economic
policies that have afflicted Mexico during its entire
existence. And that’s the problem with Haiti. Like so many
other Latin American countries, the government taxes,
loots, plunders, and confiscates wealth and regulates
and controls economic activity. In doing so, it
prevents wealth from accumulating. It keeps people
poor. What is the key to the creation of a wealthy
society? Capital. Capital enables people to be more
productive. More productivity means higher profits and
higher wages. How does capital come into existence?
Through savings? When people save a portion of their
incomes, they put the money into banks, when are then
able to lend it out to businesses that are financing
the purchase of equipment, which makes workers more
productive. It is a process by which everyone’s
interests coincide — those of the employer, the
employee, and the consumer. (See “The Keys to Economic Development: A Speech to
the People of Brazil” [http://www.fff.org/comment/com0404f.asp]
by Jacob G. Hornberger. Thus, the key to a wealthier society is precisely
the opposite from that advocated by liberals.
Socialism is not the solution to poverty, as liberals
claim. Socialism destroys wealth and ensures that
people will remain mired in poverty. The creation of wealth depends on economic
enterprise being freed from the dead hand of the
state. People need to separate the economy and the
state just as our American ancestors separated church
and state. That’s what a genuine “free market” is all
about. That’s the key to a wealthier — and safer —
society. Jacob Hornberger is founder and president of The
Future of Freedom Foundation. |