This article by Linda Whetstone, chairman of Atlas Network, was originally given as a speech during the first regional conference of Conservatives International, a flagship initiative of ACRE, in Miami, Fla. on May 26-27, 2017
Many thanks to the organizers of this event for the opportunity to discuss the world’s forgotten 70 percent and how to appeal to them.
Although I have to start by saying I don’t think this is the right question and would suggest we should be asking “how to increase opportunity and prosperity” for those in the world who currently have little if any of these things.
I agree that exchange and trade have been the crucial drivers of a mass escape from poverty, but I don’t believe that poor people need us or anyone else to explain to them the benefits of markets.
All over the world you can see those at the bottom of the heap making the best use of the market opportunities that are available to them to support themselves and their families, however pitifully small those opportunities maybe. They instinctively know that production and exchange are crucial to their existence, but are mightily constrained by the many barriers in their way.
By treaty, by barter, and by purchase
The conference website talks about ‘poverty alleviation’ which I would change to ‘an escape from poverty’ because poverty alleviation implies that someone else has done something to or for poor people, such as foreign aid. Surely what they deserve and want is the dignity and human flourishing that comes, not from handouts, but from the opportunities for enterprise that exchange and trade provide.
As Adam Smith so rightly said in An Inquiry into the Nature and Causes of the Wealth of Nations:
“As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour.”
“This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature, which has in view no such extensive utility; the propensity to truck, barter, and exchange things with one another.”
Although not a perfect analogy, I don’t believe it is helpful to ‘give a man a fish’ (except in disaster situations), or that the “forgotten 70 percent” mostly need to be taught how to fish by us. What they need is for someone to identify and remove the barriers to enterprise so that they can not only produce enough fish to feed themselves and their families, but through increased specialization and exchange, will be able to produce enough to feed the whole community and sell some beyond it as well.
The only sustainable solution to poverty
I am very proud and excited to be here as Chairman of Atlas Network, which for the last 35+ years has been supporting partner think tanks who believe that freedom is the only sustainable solution to poverty. Currently over 460 Atlas Network independent partner think tanks in nearly 100 countries are working to increase individual freedom and the opportunity and enterprise it brings by identifying and breaking down the barriers to exchange and trade in their countries.
At Atlas Network we believe that we have the possibility right now to free many millions more people to lift themselves out of poverty, not over the next century, but over the next five or so years. Extensive academic research on economic reform and Atlas Network’s on-the-ground experience shows that it can be done. We are currently waiting for the results of some research on the correlation between economic freedom and poverty/prosperity levels which we anticipate will provide the clearest case yet as to the obstacles to enterprise and if they can be eliminated we can confidently expect increased private investment, increased growth rates, and many more people lifting themselves from poverty.
What economic freedom is, and that it is responsible for these good things, should not be controversial anymore; what is needed is not the knowledge as to which policies work, but the means to overcome state-created obstacles to enterprise by formulating and promoting the benefits of specialization and trade to political decision-makers, the media, and broad segments of the affected publics. And our partners are getting better and better at this, with help from Atlas Network’s online educational programs, think tank trainings around the world, funding of our partners’ projects to the tune of approximately $5 million a year, and competitive awards and prizes to identify their most effective programs so these can be copied by other partners in the network.
Property rights, minimum capital requirements, school choice
To give credibility to my case I want to end with a few examples of barriers to enterprise being removed by Atlas Network partners.
Imagine the beneficial effect on thousands of poor people struggling to start a legitimate business in India when last year India’s minimum capital requirement of 111.2 percent of average per capita income to start a business was rescinded along with the need to also get a government certificate before doing so. And all thanks to the policy reform efforts of long term Atlas Network partner the Centre for Civil Society (CCS) in Delhi as part of Atlas Network’s current Leveraging Indices for Free Enterprise Policy Reform program.
Imagine the effect on the education and future lives of thousands of Indian children as the major reforms of the New Education Policy of 2016 start to work as a result of a CCS drive to promote school choice. Mechanisms for teacher accountability, setting learning goals, and moving to a new per-child funding model among others.
Imagine the joy of acquiring ownership of your home or business after a lifetime of uncertainty. Atlas Network partner, The South Africa-based Free Market Foundation (FMF) has demonstrated that for every $100,000 (USD) in funding it secures for direct expenses for their property rights project, it is able to generate approximately $6.7 million (USD) in capital for low-income South Africans.
Imagine what it must be like when you eventually acquire title to the property on which you rely to house and feed your family after years of insecurity, intolerable poverty, and abuse by officials. The India-based Liberty Institute and ARCH made it possible for thousands of local tribes people to transform their land from a burden into an asset and opportunity for future prosperity. Possibly 40,000 will eventually be covered. See the happiness and expectation and imagine the relief and hope of these 300 farmers who recently got title to their properties in a village in Gujarat and came from miles to a meeting to learn about possible future investments in them which would have been unthinkable before.
We know there are going to be many more wins of this sort; each one increasing the opportunities available to the ‘forgotten 70 percent” and that cumulatively these efforts can eventually eliminate absolute poverty.