As 2009 comes to an end, it’s worth looking back at the year, as well as the emerging trends that could carry forward into 2010. After months of economic chaos, government bailouts, and frantic finger pointing, one thing seems clear: At this moment in history, free market capitalism isn’t poised to win any global popularity contests.
According to a recent BBC poll, capitalism’s plummeting popular cache makes Tiger Woods look like a rising Hollywood starlet. The poll’s results, from 29,000 people in 27 countries, are stark. Almost a quarter of respondents said that free market capitalism is fatally flawed. In certain countries (Mexico, Brazil, and France) that number ranges from 35-40%. And only two countries had more than one in five people say that capitalism works well: the United States and Pakistan.
For many, then, any talk about the free market helping the poor sounds just plain crazy. But, as the Illinois Policy Institute showed last Wednesday at its “Gifts of the Free Market” holiday event, that talk also happens to be true—and the growing realization that free market capitalism is a tool for social good may be the trend to bet on for 2010 and beyond.
According to the Fraser Institute, infant mortality rates in the world’s most economically free countries are less than one-tenth those in the least free countries. Life expectancy in the economically freest countries is about 35 percent longer than that in the world’s least free countries. “The world’s most economically free nations are not just wealthier overall,” Michigan’s Mackinac Institute adds. “The poorest 10 percent of their populations make an average income about eight times that of the poorest 10 percent of the populations of the world’s least economically free countries.”
The facts alone are compelling, but the stories are even clearer in their illustration of the power of free markets. James Tooley, a professor at the University of Newcastle, is a pioneer in showing how free market private schools provide affordable, quality education for Africa’s poor—schools that local government officials tell him don’t exist. He recently wrote an article for the Friedman Foundation that recounted his experiences in Kenya:
One father I spoke to lived in Kibera, the largest slum in Africa, where half a million people are crammed into corrugated iron and cardboard huts in an area the size of Manhattan's central park. He had moved his daughter to the public school on the periphery of the slum when it had been made free, only to become disillusioned by huge class sizes and teachers who no longer bothered. He had an understanding of economics that would have warmed the heart of Milton Friedman: he told me 'if you go to the market and are offered free fruit and vegetables, they'll be rotten. If you want fresh produce, you have to pay for it.
Whether it is through microfinance (Opportunity International, a guest at the Institute’s event, offers small business loans to the poor around the world), agricultural innovation (the One Acre Fund, also featured at the Institute’s event, offers agricultural training to subsistence farmers in Africa on a loan-based system) or education reforms here in America and abroad, free market capitalism has tremendous power to change lives for the better—and those who have seen this firsthand are working hard to spread the word.
Yesterday in Chicago, the American Enterprise Institute held a morning symposium on the subject of capitalism and the case for free enterprise. Led by AEI president Arthur Brooks, the event featured a series of roundtables and panels dedicated to making the case for free enterprise—particularly based on its ability to help the poor and disadvantaged.
“I do not view capitalism as a credo,” Peruvian economist Hernando de Soto once said. “Much more important to me are freedom, compassion for the poor, respect for the social contract, and equal opportunity. But for the moment, to achieve those goals, capitalism is the only game in town. It is the only system we know that provides us with the tools required to create massive surplus value.”
It’s certainly true that free market capitalism has had a rough year in the polls. But the good news about popularity, or the lack thereof, is that things can change. In the court of public opinion, no verdict is final. With more people spreading the word about the gifts of the free market—as well as its potential to be a life-changing force for good around the world—perhaps free market capitalism has a fighting chance. It’s a trend to hope for in 2010 and beyond.