“Yes, the Rich Are Getting Richer, but the Poor Are Getting Richer Faster. And what is driving that process? The Market,” says Daniel Hannan, British Author, Journalist and Former Member of the European Parliament
LOS ANGELES — In PragerU’s newest video, As The Rich Get Richer, The Poor Get Richer, British author, journalist and former member of the European Parliament, Daniel Hannan refutes accusations that western corporations are plundering the world’s wealth and that capitalism as we know it is on its last legs. Hannan contends that in actuality, global inequality is falling precisely because of market capitalism.
Referencing basic global measures of inequality from 1960-2014, dramatic gains have been made in the areas of literacy, longevity, infant mortality, daily caloric intake and even height. The truth is that despite the narrative likely heard in the media and at occupy Wall Street protests, more and more people are being lifted out of poverty under the present global capitalistic system.
Hannan recounts the changes in his lifetime alone. It used to take a month’s salary to afford a TV. Now it only takes two days salary on average. A parked car created more pollution than a car in motion today. On and on the examples go.
“What has caused these miracles?” Hannan asks. “Not any UN development program. Not any government aid scheme. What is causing them is the market.”
Rapid declines in poverty are occurring in countries that are joining the global trading system. When compared side-by-side, the difference between protectionist countries and free-trading economies becomes undeniable.
“You remove barriers to trade. Prices fall,” Hannan explains. As the cost of goods becomes more affordable, the amount of time required to afford living, eating, and sheltering oneself decreases too. This results in spare time enough to invent, buy and sell which increases economic activity and further decreases poverty rates.
Some accuse capitalism of perpetuating materialism and greed, but for Hannan, the desire for wealth is simply part of the human condition. Capitalism is unique because it incentivizes providing goods and services to others in order to succeed. “Under every other system, you get on by sucking up to those in power: commissars, kings, or dictators,” says Hannan. “But under the free market system, you get on by offering consumers something they want.”
Idealistic young people often oppose free trade and market liberalization because they think they are standing up for the poorest in the world. Hannan, who grew up in Lima, Peru, attributes this confusion to aesthetics, or what poverty is “assumed” to look like.
Bewildered Westerners did not understand why indigenous Peruvians chose to live in slums rather than their native villages in the pristine Andes mountains. But as Hannan explains, these shantytowns offered access to resources, education, clinics and they were bustling with jobs and economic activity. Although dirty, they functioned as transitional residences for a people who felt they were “on the way up.”
For countries like Peru, the best way to help the poorest of the poor is by empowering local communities to continue their capitalist ventures, and by purchasing their goods.
“Capitalism has achieved things which earlier ages ascribed to gods and magicians,” concludes Hannan. “It is abolishing hunger and disease and want…It has led to an unprecedented enrichment that is the central fact of your life…now let it work its magic in the rest of the world.”
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