Development successes

Within the development industry, there is an almost mystical air to the question of how development can happen. The time of simple answers is well past us at this point, and the gibberish reports produced by the international organizations of today offer nothing concrete in their meaning-free but grammatically and politically correct platitudes. While these organizations cannot in any meaningful way claim to have succeeded in their original missions, nonetheless, the world has witnessed significant improvements in standards of living, and the steady elimination of poverty, absolute poverty, illiteracy, and many diseases.

But the idea that these organizations are in any way to thank for this progress is a fiction that not even their own economists do not entertain seriously. An examination of the history of economic development over the past seven decades shows very clearly how there is no mystery to it, and that it conforms to the fundamental tenets of economics. All over the world, and not just in developing countries, societies that have secure property rights, free markets, relatively open international trade are the ones that have prospered and eliminated poverty the most. As nineteenth century industrial technology has spread around the world in the twentieth century, in spite of government restrictions and controls, it has brought the living standard improvements that it always brings. As modern telecommunication technology has also spread worldwide, it has helped people integrate into markets, learn skills, and improve their productivity massively.

The most important stories of growth and trans formation have come in the countries that have escaped socialist regimes to more market-friendly political institutions. China is the most important example, of course. In the 1970's, China had little private property and almost complete central planning of its economy. After the death of Mao and the gradual movement toward a market economy, things improved drastically in China, and poverty has almost been entirely eliminated in four decades. India's move away from heavily-socialist rule of British boarding school-educated Fabians started in the 1980's, and with it has come a huge change in the living standards of many of the world's poorest. Neither of these countries had significant presence of World Bank or IMF lending and projects driving its development, nowhere as much as African and Latin American countries languishing in poverty.

Within Africa and Latin America, the only two examples of countries to successfully maintain economic growth for any appreciable period are Botswana and Chile, both of whom are the freest market economies in their continents. Across all continents, and without exception, every single ex ample of a political regime that tried government control of capital has ended with economic disaster and hyperinflation.

There is no mystery to achieving economic development. The mystery is purely in how to centrally plan economic development while taking on large amounts of loans from the international financial institutions. This is why development economists are ultimately mystified; their job is not to end poverty or bring about development; it is to try to do these things while securing jobs for themselves and furthering the institutional arrangement that makes their job possible.

Among development economists, who subsist on"jobs" from the misery industry, the success of India and China is viewed as a testament to the wise policies followed by their governments, and proof that active government management of the economy is necessary and good. But anyone without a pay check from the misery industry can clearly see that the real driver of growth is the massive reduction in the role of government in the economy, and that further limiting of the state and the misery industry will result in even faster growth and development. It is not the criminally bad policies of Chinese and Indian bureaucrats and politicians that are driving their economies forward, it is simply the fact that these bureaucrats and politicians have far, far less influence over the lives of their citizens since the death of Mao and the increasing marginalization of the Indian Fabian socialists who destroyed their economies for decades