Some Optimistic News from the Dismal Science

Via Gavin Kennedy at Adam Smith’s Lost Legacy, Jacob Lundberg writes on the “The Triumph of Global Capitalism” here.

Kennedy’s comments are interesting throughout, including this:

Adam Smith took a radical stance towards the condition of the rural and urban poor and he articulated the view that the continuing division, and sub-division, of labour with the ever extending complexity of markets, would raise living standards to at least unprecedented subsistence levels in the first instance and, then through economic growth, make available to labouring people and their families, access to the ‘conveniences’ of life. This process would continue argued Smith provided that erroneous political economy could be curbed and replaced with markets where possible and state investment where necessary. This required a resolute policy in favour of market competition and an end to Elizabethan mercantile privileges favoured by a merchant order of men whose interests conflicted with the interests of consumers.

 

And here are a few excerpts from Lundberg’s article:

…poverty is decreasing and the world is gradually becoming a better place to live in: health is improving, school enrolment is increasing and democracy is on the rise. Many people seem to be unaware of this fact. An important reason for the progress that is taking place is the fact that during the last decades of the 20th century, there was a movement towards liberalization and globalization almost everywhere.

 

Economic growth is by far the best way to fight poverty. The countries with the highest income growth are also the countries were the incomes of the poor grow the most. (Dollar & Kraay, 2002, Adams, 2004) Strong growth over the last three decades has lifted almost a billion people out of extreme poverty – when consumption falls short of a dollar per day, inflation adjusted. As a share of world population that represents a decline from 42 to 21 percent between 1981 and 2005. The World Bank predicts that poverty will continue to fall to 11 percent in 2020.

Author: Brandon Dupont

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