The solution to poverty
The world has prospered.
Today, the world is much more prosperous. World national income has increased. The health of the citizens of the world in general has improved by leaps and bounds. The threat of debilitating diseases has been reduced to the minimum. People can expect to live longer as a result of advances in medicine and health care. People eat better quality food. Agricultural output has also increased. Industrial output has gone up. When all these are taken into consideration, the world has indeed turned out for the better.
How has humankind achieved this state of affairs? We will say at the outset that all this has been possible because of our acceptance of the system of market economy. Some thinkers refer to the system as the ‘extended order of human cooperation’. In simpler terms, we call it capitalism.
Many people are appalled by this system. They oppose it- sometimes vehemently so. They accuse the system as being avaricious. They accuse it of tyranny. Many people are impoverished because of capitalism. One writer stated that the market economy has marginalised and impoverished thousands of people. He has written a book with an accusing title- what the market does to poor people.
Unfortunately, these critics are silent on the following facts. It is this. All countries that have adopted the capitalist system have prospered. Those that operate the socialist system or centrally planned economic system have all failed. On a smaller scale, the individual who has adopted market economy principles have prospered.
To us, the choice is very clear. If we desire to reduce poverty, if we want to enrich people, we must build and improved our market economy. This now, is our proposition. Why must we crack our heads debating the merits of this or that system? The realities of life are much more important to us than academic debates. Yes, debates indeed can show the quality of our powers of analysis and so on. But as we have said, debates and speeches do not solve poverty.
How do we improve the management of our assets? How can we reduce the subsidy mentality? How can we avoid issuing out xenophobic statements as to the causes of poverty? For example: Some say our country is poor because the people speak Bahasa Melayu. Our country is poor because the Bumiputeras are poor. Our country is poor because all the Chinese has exploited our sources of wealth. If that is so- then it becomes excusable to say that our country is poor because we are Malays?.
Sometimes we are thinking how much more stupid and banal we become to listen to mentally challenging statements coming forth from some second rate intellectuals and pugilistic politicians and so forth. We must realise that economic advancement depends of a whole range of skills- managerial, organisational, trading, industrial prowess and so forth. We need quality human capital. We can never become rich through speeches.
The capitalist system is good because of the following reasons. It is a system that is based on the freedom of the individual to pursue what interests him. It is therefore a system that accommodates human instincts. The system is based on two important principles. Firstly, everyone is free to pursue economic activities which interests him without any form of artificial and arbitrary restraints and constraints.
Secondly, it is a system that is based on the rules of the law. The most tyrannical form of constraints on human freedom come in the form of central planning or from any of its variations such as state owned business enterprise, the giving of monopolies to special interest groups and so on.
We will understand that any other system regarded as being able of being ‘thinkable’ by the human brain can never be better than capitalism. In his book, The Fatal Conceit, Friederich Hayek stated clearly and convincingly that the socialists and those pandering for more central planning are misleading us when they say that our lot will be improved via central planning.
The facts from which we cannot run from are that the system that teaches us the paramouncy of the profit motive has revealed itself to be the best for humankind. It has been responsible for the great advances in technology, science and wealth creation.
Prosperity is linked to liberal democracy.
The system which honours the human initiative and his freedom spills into the political arena. People are exposed to the ideas of freedom from arbitrary rule cry for participation in the political system, to determine their future. Today, as the extension to the economic prosperity given birth by capitalism, people desire constitutional liberal democracy as the system by which to manage society. All over the world, we are indeed witnessing the end of history.