Wednesday, April 24, 2013

An Actual Hockey Stick Graph

Rule of law is the key to prosperity. This helps more people than all the good-intentioned compassion in the world to lift people from poverty.

This is instructive:

I know this doesn't provide opportunities to demonstrate that you care, but this is the way to improve more people's lives:

Governments seeking to unlock long-term growth should eschew command-and-control policies. Instead, they should craft economic institutions that reward all types of investment in physical and human capital, and that help markets function securely and inexpensively. For instance, an impartial judicial system that defines and enforces clear property rights gives firms and individuals the right incentives for work and investment; they know the courts will adjudicate property claims and contract disputes fairly, and uphold the rule of law.

Other key institutions include a stable, relatively corruption-free government, one that is able to provide for national defense and other public goods; a market system for the production and distribution of most goods and services, to provide monetary incentives for efficient allocation of resources and creation of jobs and incomes without need of government control or subsidy; and a financial system, modestly regulated for safety and economic growth paired with a sound currency, to encourage savings and to channel those savings into loans for large and small firms.

This is one reason why I keep droning on about the importance of rule of law in Iraq (and even in Afghanistan, which is so bad that even a little bit of improvement in this area would be helpful), as well as in the Arab world.

It matters here, too, for that matter. It's frightening to even have to mention that. But there are plenty of deniers out there who can't see the evidence and think global socialism is the answer to current problems rather than continuing a process that got us to our prosperity.

UPDATE: Thanks to Pseudo-Polymath for the link.