Are the world's impoverished masses destined to live lives of permanent misery unless rich countries transfer wealth for spending on education and infrastructure? You might think so if your gurus on development economics earn their bread and butter "lending" at the World Bank. Education and infrastructure "investment" are two of the Bank's favorite development themes. Yet the evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs.
An annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom. The nearby table shows the 2008 rankings but doesn't tell the whole story. The Index also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.
The 2008 Index finds that while global economic liberty did not expand this year, it also did not contract. The average freedom score for the 157 countries ranked is nearly the same as last year, which was the second highest since the Index's inception. This is somewhat of an achievement considering the rising protectionist and anti-immigration sentiment in the U.S., the uncertainty created by spiking global energy prices, Al Gore's highly effective fear mongering about global warming, and the continuing threat of the Islamic jihad.
Former British colonies in Asia took three of the top five places this year. But half of the top 20 freest economies in the world are in Europe. Of the five regions surveyed, Europe is the most free, continuing to advance this year with tax cuts and other business-friendly reforms. The only other region to score above the world average this year is the Americas, which is helped by strong performers like the U.S., Canada, Chile and El Salvador. At the other end of the scale Argentina, Bolivia, Haiti, Venezuela and Cuba dragged down the regional average.
Although overall global economic liberty did not expand, there were a few stars. Egypt was the most improved economy in the world, implementing major changes to its tax policies and business regulation environment and jumping to number 85 from 127th place last year. Mauritius was the second-best performer, moving into the top 20 from No. 34 last year. Trade liberalization and improved fiscal policies, including a flat tax, made Mongolia the third-best performer, and put it in the category of "moderately free" economies....
In "Narrowing the Economic Gap in the 21st Century," Stephen Parente, associate professor of economics at the University of Illinois at Urbana-Champaign, debunks several World Bank myths by showing that it is not the resources -- land, workforce and capital -- of an economy that play the most important role in explaining higher income countries. Instead it is "the efficiency at which a society uses its resources to produce goods and services." Mr. Parente cites the microeconomic research of McKinsey Global Institute, which estimates that modern industry in India could take a huge bite out of its productivity gap with U.S. competitors by simply upgrading production techniques. India doesn't need another multilateral education project. It needs to tap into knowledge already available in successful economies -- the information and technology is out there. The trouble is that it is unavailable in many countries like India, because government barriers and constraints to limit competition make access difficult or impossible.
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The foolishness of economic "stimulus": "A consensus is building that America's economy is sliding -- perhaps plummeting -- into recession. In December the unemployment rate jumped to 5.0 percent, up 3/10ths of 1 percent from its November level. And of course investors are now growlingly bearish. To no one's surprise, politicians are rushing in with various plans for helping the economy. Most of these plans involve 'stimulus.' The calls are loud to put more money into the hands of ordinary Americans in hopes that they will spend -- not save -- it, thereby boosting the overall economy. Such stimulus, however, is futile. Government cannot create genuine spending power; the most it can do is to transfer it from Smith to Jones. If the Treasury sends a stimulus check to Jones, the money comes from taxes, from borrowing, or is newly created."
Vast Left-Wing Conspiracy: "The Democratic epiphany about the political tactics of Bill and Hillary Clinton continues, with scales falling from eyes on a daily basis. "I think it's not Presidential," said former Senate Majority Leader Tom Daschle, about Mr. Clinton's steady barrage against Barack Obama. "It's not in keeping with the image of a former President, and I'm frankly surprised that he is taking this approach."... "This is beneath the dignity of a former President. He is not helping anyone, and certainly not helping the Democratic Party," added Vermont Senator Pat Leahy. On the point of "helping" the party, Mr. Leahy seems to have forgotten that the Clinton Presidency was an era of more or less persistent Democratic losses -- except for the Clintons. Then there's former South Carolina Democratic Party Chairman Dick Harpootlian, who once backed Bill Clinton but this week called his political attacks "reprehensible" and described one of Mrs. Clinton's TV ads about Mr. Obama as "a lie." As Mrs. Clinton likes to say, she's had "16 years" of experience in dealing with this "Republican attack machine."
Democrat-dominated California: "At some point we Californians should ask ourselves, how we inherited a state with near perfect weather, the world's richest agriculture, plentiful timber, minerals, and oil, two great ports at Los Angeles and Oakland, a natural tourist industry from Carmel to Yosemite, industries such as Silicon Valley, Hollywood, and aerospace-and serially managed to turn all of that into the nation's largest penal system, periodic near bankruptcy, and sky-high taxes."
UK: ID cards "in intensive care": "The identity card scheme was said to be in 'intensive care' as leaked Whitehall documents showed it faced a new delay of two years. The cards were set to be issued to Britons from 2010, when they apply to renew their passports, but private Home Office documents show the introduction is set to be put off until 2012. The likely postponement follows a series of fiascos over the security of personal data held by the Government. Gordon Brown is also widely believed not to share the enthusiasm of his predecessor for the scheme."
Red Ken's distaste for democracy has sent him beyond the pale: "Had I not known that it was Cuddly Ken on the radio yesterday, I would have thought I was listening to the dictator of a small Third World country. The Mayor of London brushed aside every charge against him, on the ground that he had been put in power to do as he liked. Had he used public money to campaign against his old enemy, Trevor Phillips, and stop him becoming head of the new Equality and Human Rights Commission? "Not against Trevor, but what he was saying against multiculturalism... which was very damaging." Had Ken Livingstone's officials campaigned for him at the last election while being paid by the taxpayer? "It would be 1984 if they couldn't have any political activity." Is this a personal fiefdom? "That's what Tony Blair...set out to create." This interview exploded the myth that Mr Livingstone is the people's rebel, the honest outsider. He is the consummate insider, and disarmingly frank about it."
For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and TELSTRA/BIGPOND.
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"Why should the German be interested in the liberation of the Jew, if the Jew is not interested in the liberation of the German?... We recognize in Judaism, therefore, a general anti-social element of the present time... In the final analysis, the emancipation of the Jews is the emancipation of mankind from Judaism.... Indeed, in North America, the practical domination of Judaism over the Christian world has achieved as its unambiguous and normal expression that the preaching of the Gospel itself and the Christian ministry have become articles of trade... Money is the jealous god of Israel, in face of which no other god may exist". Who said that? Hitler? No. It was Karl Marx. See also here and here and here.
The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialistisch) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party".
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