Tuesday, May 02, 2006

Where Has “Austrian” Economics Eliminated Poverty?

ALBATROZ (an internet identity): "And I would like to repeat my challenge to all of you:

"Would anyone be so kind as to tell me in which countries poverty was eliminated by means of your (Austrian) enlightened theories?..."

MY REPLY: Taking "Austrian" economics in its political application to mean private ownership of the means of production and respect for individual rights, including property rights, the answer is (and this should be understood as only a partial list):

Great Britain, the United States, Canada, Australia, New Zealand, France, Belgium, Holland, Germany, Switzerland, Denmark, Norway, Sweden, and more recently, Japan, South Korea, and Taiwan.

In these countries, thanks to the substantial application of the free-market principles of Austrian economics (and before that, Classical economics), saving and capital accumulation were tremendously encouraged along with scientific and technological progress. On this foundation the productivity of labor rapidly increased, resulting in more abundant supplies of food, clothing, and housing per capita, and improved sanitation and hygiene. As a result infant mortality radically declined, life expectancy greatly increased, the average person became able to afford to work fewer hours, child labor was progressively eliminated, and for the first time in human history, it became possible for the average person to have access to books, music, art, and education.

Please let me know if you have any further questions.

George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics. His web site is http://www.capitalism.net.