Why do some nations prosper, while others suffer?
This seemingly simple question was answered comprehensively almost 250 years ago by Adam Smith in The Wealth of Nations, but many still ask the same question today.
People continue to ignore the evidence establishing the direct causal link between freedom and prosperity, instead putting their trust in schemes for wealth distribution or mere concentration of government power for themselves and their friends.
With Rich Nation, Poor Nation: Why Some Nations Prosper While Others Fail, Robert Genetski, one of the nation’s leading economists and financial advisors, adds his voice to the classic song of economic freedom that continues to ring true today.
Reading the Results
Instead of trusting ideology or belief about the world, people should look at the real world to find out why some countries are more prosperous than others, Genetski writes.
“Why are some nations rich and others poor?” Genetski writes. “Why do some rich nations, such as the U.S., at certain times enjoy periods of strong growth and prosperity, while at other times struggle with little or no growth? These are the very questions economists have attempted to answer for at least two and a half centuries. To be useful, any attempts to answer these questions should be policy-oriented. They should provide policymakers and advocates with a clear, practical guide to policies that promote the creation of wealth, as well as those that impede it.”
Using more than 100 years’ worth of economic data from more than 40 countries, Genetski explains what really helps people—and nations—get ahead in the world.
Simple, colorful charts and engaging narratives make the book’s 163 pages an easy-to-understand read, proving with real-world data—not ideology or articles of faith—government power is negatively correlated with economic freedom and prosperity.
Who Knows Best?
Government control of the economy is based on the belief government bureaucrats are smarter than everyone else, Genetski writes, regardless of whether the interference is done in small doses or large amounts.
“The underlying assumption behind increasing government control over economic decisions is the belief that governments make better decisions than individuals operating in a free-market environment,” Genetski writes. “With the collapse of the Soviet Union there has been a greater recognition of the problems associated with the extreme lack of economic freedom under communism. There is less widespread recognition of how less extreme moves to restrict freedom, from either progressive or socialist policies, might also erode wealth and promote poverty.”
Debunking Social Justice
Taking on one liberal economic dogma after another with real-world examples and data, Genetski also argues against the supposed morality and social justice of redistribution and welfare statism.
Compulsory redistribution cannot help enough people to matter, Genetski writes, whereas ensuring a level playing field is an effective and moral solution to the problem.
“Many believe social justice requires the redistribution of income from those who have to those in need,” Genetski writes. “We are called upon by God and our conscience to help those in need. The character of an individual is measured by the extent to which he or she voluntarily provides for the needs of others from their own resources.… Fortunately, there is a solution. Poverty can be significantly reduced by giving the poor the same opportunities as those in successful economies. The only practical solution to enhancing the wealth of nations is for poor countries to replicate the formula for success followed by wealthy nations.”
Yearning for Freedom
A central theme, expertly weaved throughout the book, is people’s innate desire for freedom.
For untold millennia, people’s baser instincts were enshrined in the rule of tribal kingdoms, such as ancient Egypt or medieval European fiefdoms, and prosperity and progress suffered for it.
When the English Parliament began to take power from the King and establish the rule of law, Genetski writes, technological progress and economic growth began to accelerate as freedom increased.
“As freedom emerged in Europe, living standards began to improve,” Genetski writes. “The discovery of America proved pivotal in the quest for freedom. Even before gaining its independence from England, the colonies were settled by individuals seeking to gain more control and independence over their lives than they were able to obtain in Europe.
“America’s independence produced a quantum leap forward in terms of economic freedom,” Genetski writes. “Individual freedom proved to be a powerful magnet. Propelled by a foundation built on individual freedom, the United States began the 20th century as the most powerful economy in the world.”
Unleashing Human Potential
Genetski answers the question of “Why do nations succeed?” in a more succinct manner than I ever saw before. Economic freedom is why nations—and people—succeed, Genetski writes.
“Freedom places individuals in charge of and responsible for their own accomplishments,” Genetski writes. “Given freedom, individuals respond by unleashing their creative potential and maximizing their God-given talents. It is in unleashing this creative potential that we find the true force behind enhancing the wealth of nations.”
Genetski’s concise and engaging explanation of his subject establishes economic freedom as the only reasonable policy for governments to adopt, everywhere and at all levels, an outcome for which we should all strive.