Friday, January 25, 2008

Is capitalism or taxes a better cure for poverty?

In June 2007, I wrote an article (Hold on to your wallets) about Microsoft Chairman, Bill Gates', Harvard commencement address in which he appealed to the graduates to strive for "creative capitalism." In it he suggested capitalism creates inequities between nations with free-market economies and those that don't.

I thought that was the point of capitalism, to provide the opportunities for individuals to capitalize on their ideas, build multi-billion dollar companies that employ hundreds of thousands of people world-wide, and create complimentary businesses (consultants, engineers, etc.) that employ millions more, that government can't do itself and without taxpayer expense.

Lawrence Kudrow caught up with Mr. Gates at the World Economic Forum in Switzerland where Gates has changed the title of his mantra to "kinder capitalism."

Lawrence Kudrow writes (Capitalism doesn't work, Mr. Gates?):
Gates says he has witnessed steep income and cultural inequities in his travels around the world, in particular to Africa. But for this he should blame the absence of capitalist principles, not capitalism itself. Even the most compassionate corporate executives are not going to bring prosperity to impoverished countries with statist economies. Until Africa's nations undertake the market-oriented reforms that have boosted China and the other Asian Tigers -- like South Korea and Taiwan -- they will continue to rank at the bottom of the world prosperity scale.
Give the whole article a read. I think Mr. Kudrow (and the late Milton Friedman) have a better idea to lift Africa's, Cuba's, and other countries' economies, standard of living, and fight more poverty than increased federal income taxes ever could.

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