Free markets help eliminate poverty

 

For some reason, capitalism always takes a drubbing during the holidays (when the real villain most folks mean is consumerism). It's unwarranted, because free trade is directly responsible for much of the progress mankind has seen in recent centuries.

This year, even Pope Francis has been critical of capitalism. That's a shame, because capitalism has done so much to feed the masses.

"He's anxious to understand the world's poor, and preaches that alleviating their suffering is a vital role of the church," wrote Robert Fulford for Canada's National Post. "But in his eagerness to spread justice in an unjust world, he's been won over by a dark and dangerous view of trade, a view that's lately become popular. He's apparently decided that the free market in food works against the poor."

Fulford said that's an easy mistake to make.

"After all, it results in some people growing prosperous while others do not," he wrote. "From a certain point of view that's unfair; certainly it doesn't go out of its way to create an atmosphere of equality. Moreover, markets encourage greed, the sin that most people deplore even though it's part of almost everyone's make-up."

But that's a superficial view of capitalism and free market economics. There is, in fact, a moral case to be made for capitalism. First and foremost, it does more good than any other system in history.

"The pro-market argument has to ground itself not in the motives of those involved but in the effect they have on individuals and on the rest of humanity," Fulford wrote. "That makes the ethics clearer. Free markets are essential for a humane social order because they promise (and usually deliver) the outcomes on which a society is based."

Fulford is right. Intentions are important, but they're not enough. It's nice to desire fairness; it's vital to deliver food from those who grow it to those who need it efficiently and reliably. It's laudable to talk about humanity's commonality. It's far more important, however, to establish the Rule of Law and respect for property rights — the factors history shows matter most in lifting people out of poverty.

The question that Pope Francis doesn't answer is what system is superior? But there are those who answer for him and advocate socialism as a superior model.

But where's the evidence of that?

Famine is a human tragedy, but in the late 20th and early 21st centuries, it's always and everywhere a political phenomenon. We grow enough food to feed all of us. Though droughts are common to all, it's the socialist nations that suffer the famines. Capitalism saves lives.

"Giovanni Federico of the University of Pisa, who studies food production in great detail, sees it that way," Fulford wrote. "He calls his comprehensive history of agriculture Feeding the World (Princeton University Press) and argues that in modern times agriculture has been, for all its failures, a remarkable success. Through technical progress and market flexibility it has nourished a growing population with an increasing variety of products, at falling prices."

And that's good news.

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