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The best economic policy for the working class

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Your view: Facebook an Orwellian surveillance machine

<p>Hidden beneath the many news stories about poverty and hardship in the developing world is the not as well publicized progress being made in eradicating poverty globally. The fact is that grinding poverty worldwide has declined demonstrably. According to the Wall Street Journal, &#8220;Poverty is plummeting. Half the globe is now considered middle class and illiteracy, disease and deadly violence are receding.&#8221;</p><p>Why is it then what we learn from the internet, newspapers and television suggest the opposite? The reason is that poverty reduction is occurring overtime in a relentless but, in terms of news coverage, a boring way. There are, of course, the occasional human-interest stories about formerly poor entrepreneurs in Africa, Central America, and Asia creating new businesses in these economically depressed areas of the world. But they are often presented as unique circumstances and not as part of a movement toward economic growth. That growth is enabled by government policies that encourage productive work rather than dependency.</p><p>As recently as 1980, nearly half of the world lived in extreme poverty which is defined by the World Bank as individuals consuming less than $1.90 a day. Since then the world population living in poverty has plummeted to only 8.6 percent of the planet&#8217;s population. Accordingly, the general health of the world has also improved. Diseases which mainly afflicted the poor have been eradicated. Smallpox no longer exists and progress toward solving diseases continues at an exponential rate</p><p>The growth in relative prosperity isn&#8217;t just occurring among the poor. The middle class globally is growing rapidly as well. According to the Brookings Institution World Data Lab, 3.8 billion people can now be considered middle class as defined by spending $22 to $110 a day depending on location, cost of living and other variables. As a result, people are consuming more goods formally thought to be extreme luxuries in developing parts of the world. Beijing&#8217;s transformation from a city of bicycles to one of autos is but one very visible example of the changes that are taking place.</p><p>What is making this transition possible? It is not those highly visible philanthropic organizations that raise millions through well-meaning superstar spokespeople. In fact, many of these programs often have a negative impact in a village or a city. Who wants to work and improve themselves when one doesn&#8217;t have to do either? How can local farmers and others compete with free food, shoes and clothes, etc. provided by well-meaning contributors who believe they are helping but are removing the propensity of people to help themselves?</p><p>Instead, in many parts of the world poverty is being eradicated simply by government policies that encourage investment in human and physical capital. Such policies directly stimulate entrepreneurial behavior, promote capitalism and allows individuals to exercise their own inherent desire to succeed. They create investment opportunities though microloans, focused training programs and other strategies that push rewards and responsibilities down to the people.</p><p>And it works. One of the main reasons for the precipitous fall in the rate of poverty in China was the removal of draconian socialistic policies. The result: China&#8217;s per-capita income has grown 25-fold since the fall of the communist government. Of course, China has its own problems and presents many others to the developed world. But one cannot deny the fact that allowing markets to operate in China has brought billions of people out of poverty.</p><p>It works in reverse as well. In countries where entrepreneurial spirit is stifled when market-based economies are subjugated to extreme socialism, poverty ensues. Venezuela is a prime example. Once possessing the highest per capita income in all Latin America, Venezuela&#8217;s march to socialism has created the world&#8217;s latest poverty trap where now 75 percent of its population are living below the poverty line.</p><p>Poverty is curable, but it takes the right leaders, proven policies, hard work and people who want to change.</p><style>
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<div class="neCaption">Misericordia</div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2019/02/web1_MacDowell-Michael.jpg</photo0><caption0>Misericordia</caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>Michael A. MacDowell</p><p>Guest Columnist</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Michael A. MacDowell in Managing Director of the Calvin K. Kazanjian Foundation and President Emeritus of Misericordia University.</p></shirttailMeta></div>

Their view: World poverty on the decline