Jefferson Review

	Jefferson Review
	"Your Liberty is Our Interest"	September 2, 2002
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If You Want To Succeed, Study Successful People --

Like The Valley Little League Team

by Pat Pending

On Labor Day, there will be a parade in Louisville to honor the Valley little league team, which just won the international little league baseball championship. We are all very proud of these boys and their accomplishments. If we want learn how to be successful, we ought to study how they did it. The path these boys have taken to success is simple and straightforward and has been explained to us many times in the past. However, while it is clear what we ought to do, it is often very difficult to have the self-discipline actually to do it.

The players of the Valley little league team are a class act. They have individual talent, and they pull together as a team. The players and coaches are dedicated and hard-working -- willing to practice several hours a day. The boys are very well-mannered, polite, and cool under pressure. When Jay Leno invited one of the boys to come on his show, he refused, saying that he would not attend without the rest of the team. Now that's a real team player! There can be no doubt that if we all exhibited more of the traits of those little league players, we would all achieve greater success in our lives.

This week, in addition to celebrating little league heroes, we have been receiving reports of an international conference in Johannesburg on "sustainability". Representatives of organizations receiving taxpayer funding from various countries have come together to suggest ways to reduce poverty in the world. Again, as in the case of the little leaguers, if those representatives really want to know how to improve the economic conditions of poor countries, they ought to study the people who have achieved success and try to emulate them. Again, the path is clear, but it is difficult to have the self-discipline to follow it. Unfortunately, instead of following that clear, simple path to prosperity, the people meeting in Johannesburg are ignoring history and pursuing policies that will create even more poverty in the world.

When it comes to alleviating poverty, there are basically two different world views -- one view is right, and the other is wrong. The first view is that the world economy is a zero sum game, so, if one person becomes wealthier, he does so at the expense of someone else, who is thereby made poorer. The people who subscribe to this view appear to be the majority at the Johannesburg conference, and they believe that the way to make poor countries better off is to take money from people in wealthy countries and redistribute it to people in poor countries. This first world view is a redistributionist model, and history has shown us very clearly that this view is wrong.

The second world view is a productivity view. This view does not see the world as a zero sum game. Instead, this view holds that a person becomes wealthier by becoming more productive. Typically, we become more productive by learning new skills or by foregoing consumption and investing in tools that enable us to accomplish more in a given amount of time. For example, if you are farming with a hoe, you can turn over only a small amount of earth in an hour's time, while, if you are using a large tractor, you can accomplish much more work in the same time, thereby making you more productive. This second world view says that, when you respect people's private property rights, they will save and invest to become more productive and prosperous. This view is often called capitalism, because it is the investment of capital that provides the tools that promote greater productivity. History has shown us very clearly that this view is right.

Looking at history, we can see that the first (zero-sum-game or redistributionist) world view has brought misery and poverty to millions of people, while the second (capitalist) world view has brought abundance. Early settlers in North America learned very quickly that the redistributionist world view resulted in starvation. The Pilgrims who arrived in the Mayflower started out with an arrangement in which the land was held in common, everyone worked, and food was distributed "according to need". They promptly began starving to death. In desperation, they found that, by giving each family its own plot of land, and respecting private property, the colony became much more productive.

More recently, we have had many very clear examples of the poverty created by the zero-sum or redistributionist model and the abundance provided by the property rights or capitalist model. For example, compare communist East Germany with more capitalist West Germany, or communist China with capitalist Hong Kong, or communist North Korea with capitalist South Korea. In most cases, the people have the same cultural history and same natural resources, but the level of prosperity is quite different, depending upon which model is adopted by the government. One exception is Hong Kong, which has far fewer natural resources than mainland China, but which, despite its lack of natural resources, has become much more prosperous than the mainland, thanks to its respect for private property.

Despite the number of well-fed, tax-subsidized representatives in Johannesburg who support taking from the rich to give to the poor, the fact is that we cannot make poor countries wealthy by taking from the rich. While it is clear that taking from the wealthy countries will make those countries poorer, it may not be as intuitively obvious that giving money to the poor countries also will make them poorer. But, just as an individual person in the United States who goes on welfare frequently becomes dependent on government handouts and trapped in poverty, a country that "goes on welfare" also becomes dependent and trapped in poverty.

When we give money to poor countries, that money usually ends up in the hands of the ruling power in that country, effectively propping up a corrupt or ineffective power, and preventing the country from making the necessary changes to become more productive and prosperous. If we give food, medicine, or other goods to the poor country (other than in a very short, temporary emergency situation), and if those products actually get into the hands of the people, they may help those people temporarily, but they also compete with local producers of food and medicine, putting those producers out of business, and thereby making the country more dependent and worse off than it was before the aid was given. Thus, giving aid to countries actually causes those countries to remain poor.

If we study the path of the most prosperous countries, we will find that they have respect for private property and a rule of law. Those features give people a great enough sense of security to know that, if they invest their money in tools to make people more productive, their investment will be respected, and they may prosper. On the other hand, when those features are absent, it becomes much riskier to invest in tools, so less investment is made, and people are less productive and therefore poorer.

It is not necessary to spend money on hundreds of gallons of champagne and caviar, as is being done in Johannesburg, in order to determine how to improve the lot of poor people. Just as with the little league baseball players, the recipe for economic success is very simple and straightforward. What is difficult is for a country or a people to take responsibility for its own success. It is much easier to consider yourself to be a victim and to whine and demand handouts than to have enough self-discipline to establish a system in which private property is respected. Self-discipline is difficult but very worthwhile. Just ask the Valley little league baseball team.