Reflecting on Poverty

by Kerby Anderson, Point of View: Why is there so much poverty in the world? A recent study by economists at the Frasier Institute and the Cato Institute suggest a link between poverty and the lack of freedom. They looked at 141 countries around the world and found a significant difference in poverty based upon the country’s economic freedom.

Countries with economies that rely on free markets, free trade, and private property grow faster than those that do not enjoy the same economic freedom. And these higher growth rates usually translate into higher incomes. Nations that are listed in the top fifth of the economic freedom index have an average income that is nearly seven times as great as those in the bottom fifth.

What about the plight of poor citizens in those countries? The economists also found that the average income of the poorest tenth of the population in the freest countries was eight times higher then the poorest tenth in the least free countries. John Goodman argues in a recent column: “If you are poor, it pays to live where capitalism is less hobbled.”

That is certainly true in this country. Robert Rector (Heritage Foundation) explains what poverty in America looks like. In his study “Understanding Poverty in the United States, he found that 80 percent of poor households have air conditioning, nearly three-fourths have a car or a truck, and more than half have one of more computers. The average poor American has more living space than the typical non-poor person in Sweden, France, or the U.K.

Walter Williams turns the question about poverty around. He reminds us: “Poverty has been mankind’s standard fare and remains so for most of mankind. What is unusual and challenging to explain is affluence—namely, how a tiny percentage of people mostly in the West, for only a tiny fraction of mankind’s existence, managed to escape the fate that befell their fellow men.”

This latest study demonstrates that one factor in removing or reducing poverty is economic freedom. I’m Kerby Anderson, and that’s my point of view.
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Kirby Anderson is an author, lecturer, visiting professor and radio host and contributor on nationally syndicated Point of View" and the "Probe" radio programs.

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