Saturday, May 23, 2009

The Solution to Economic Crises: Ideas (not Bailouts)

I suppose my personal worldview is a rather optimistic one. So within this framework I find it somewhat sad that this talk by Alex Tabarrok from Marginal Revolution was rated by many as being "unconvincing, long-winded and obnoxious". I suppose that's true if you're of the world view of one commenter who said "thankfully I watched Wade Davis on endangered cultures speech [ed note: Davis worries about dying endangered cultures as if we should condemn the people who live in these cultures to poverty denying them the choice of modernity] straight after which is an eloquent rebuttal of the scary one voice one folk one market vision." Decide for yourself (

Sometimes I do wonder whether or not it's my worldview that is so dramatically out of whack or that of others who prefer economic stability/stagnation/bureaucracy over economic growth/dynamism. Sure things may be miserable now, and while it doesn't help in paying the bills, have a look at the long term trend (from the presentation via Businomics):

GDP growth per capita means that we're getting wealthier - living healthier and more fruitful lives than ever before. We've done so by liberalizing our markets and encouraging economic liberty. And in doing so, as Tabarrok says: 'we extend cooperation across world boundaries.' But as the UK ambassador to the US notes (Seattle Times), we have to be guarded - given the false appeal of turning inwards and re-erecting walls:
We all need to be active to battle the signs of creeping protectionism, here and around the world. Business leaders are in the best position to champion the virtues of open markets. We cannot let those who would restrict trade and investment be the loudest voices in this debate. We need to keep reminding leaders of the value of foreign investment and trade to jobs and prosperity — because protectionism doesn't actually protect economies at all.
The irony is that as developed markets have regressed in their economic leadership growth has come instead primarily from developing countries. As Tabarrok notes: "China has been the world's best anti-poverty program over the last three decades."

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