[Transcribed from Economic Freedom (mp3, 1:09'48").
Robert A. Lawson.
Economic Freedom of the World, 2009 Annual Report.]
So the great debate was, [in] our context: if you have economic freedom, does
it work or does it not work? I mean, I don't know why we need to argue until
three in the morning and drink beer all night - although that's fun - to answer
that debate. Let's go out and collect some data, which I've done, and let's
try to figure it out.
Well, this is the economic freedom index - this is by quartile, so the reds are
the lowest, this is the bottom 25%, second 25, third, and the highest 25% is
blue. And this is income per capita - it's GDP per capita. It's not a perfect
measure, but -- that's a nice picture. That was Milton Friedman's favorite
picture, if I may drop a name. He loved that picture. He says, "look! We're
right!"
That's not an obvious picture, 25 years ago. There were people who would argue
that if you have centralized planning, if you have less economic freedom, you
should have a richer economy. It's going to work better, we'll have more
prosperity if we have centralized planning. They were projecting that it
should step down the other way. And they're wrong. They're flat-out
wrong.
We all know that today, but this was an open question not too long ago. People
who really debated, who really thought economic freedom didn't work, it made us
poorer.
[skip]
Alright, so what do my friends say, when I would corner them, "You know,
economic freedom - markets, capitalism - it works better. People are richer."
And they would say, "yeah, people are richer, but-- but, it screws the poor.
Or the income distribution is too unequal." That's what they say, right?
Guess what? It's a lie. It's not true.
This is the share of income held by the lowest 10%. The share of income held
by the poorest 10%. By quartile. So if you look around the world, I think
that data set has about a hundred countries in it. You have a hundred
countries, you look at the hundred countries in the world, you look at the
share of income held by the bottom 10%, the bottom quartile, the third, the
second, the most -- what do you see? It's really about the same. It's about
2, 2+1/2 percent. Which sucks. It means that 10% of the people have 2+1/2%
percent of the money. The news there is that being poor is no fun. OK, got
it.
But guess what? It really doesn't matter, in terms of the share of income, in terms of the distribution of income, whether you're in a high economic freedom country or a low economic freedom country, you're going to have 2, 2+1/2% percent of income. If anything, it looks like it's a little bit better in the high income, but I'm not going to push that point. OK? It really doesn't matter.
The evidence is overwhelming that market-oriented, liberal market economies,
free-market capitalism economies, do not have, in general, more unequal
distributions of income. They just don't. So it's a great lie. And leftists
get away with this lie. They just get away with it. We've all nodded our
heads, "oh, yeah, that's a problem, we should deal with it." No, it's a lie.
Don't let leftists say that capitalism creates unqual distributions -- it's a
simply, it's a bald lie. And the only reason they get away with it is, no one
ever argues from data. They just argue from rhetoric, and they throw things
out. The data tell us it's not true.
So, burn that one in your brain, and bring it up the next time you-- to tell
them, it's a lie, you can't get away with those kinds of lies. This one really
annoys me.
--
But guess what? If you want to be poor, where do you want to be poor?
[And so on.]