Governments are the problem, not markets

John Stossel writes:

[Bill] Gates spoke at Harvard recently, urging graduating students to take on the “world’s deepest inequities [including] world hunger … the scarcity of clean water … children who die from diseases we can cure”. All of us want those problems solved, and through their charitable foundation, Gates and his wife, Melinda, have certainly put their money where their mouths are. But Gates seems unaware that these problems can’t be eliminated in the simplistic way he advocates.

He told the grads, “The market did not reward saving the lives of these children [in poor countries], and governments did not subsidize it. So the children died because their mothers and their fathers had no power in the market and no voice in the system.”

What is Gates talking about?

Can he name one poor country that permits the free market to operate? The problem is not that the market doesn’t make it profitable to save lives—it most certainly does. The problem is that Third World countries have overbearing, corrupt governments that are obstacles to private property and freedom. That’s why the children’s parents have no voice or power.

Read the full piece—I think the last three paras are a superb summation of the problem. India, alas, is an excellent illustration of how government smothers free enterprise.

PS: And while on spontaneous order, one of my favourite posts on the subject, one that I’d linked to here and Rahul reminded me of recently, is “A Simple Rule For a Complex World” by Don Boudreaux. An excerpt:

While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith—a simple and baseless faith that people invested with power will not abuse it; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.

So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.

Solutions to complex social problems require as many creative minds as possible—and this is precisely what the market delivers.