Economic Empowerment

First Published: 2000-09-17

Politicians use phrases like "economic empowerment" without defining the term or how this ideal will be accomplished. Do they intend using the coercive power of government to take from some and give to others, or do they mean non-interference with the market – the only impartial means to real "economic opportunity"?

 

  • Frederic Bastiat – French Economist, Statesman and Author.

 

In 1850 Bastiat wrote The Law and clearly shows that when socialist policies that have political appeal are used coercively by the state, they lead to undesirable ends.

He states: "Law is justice. And it is under the law of justice – under the reign of right; under the influence of liberty, safety, stability, and responsibility – that every person will attain his real worth and the true dignity of his being. It is only under this law of justice that mankind will achieve – slowly, no doubt, but certainly – God-s design for the orderly and peaceful progress of humanity."

He continues: "It seems to me that this is theoretically right, for whatever the question under discussion – whether religious, philosophical, political, or economic; whether it concerns prosperity, morality, equality, right, justice, progress, responsibility, cooperation, property, labour, trade, capital, wages, taxes, population, finance, or government – at whatever point on the scientific horizon I begin my researches, I invariably reach one conclusion: The solution to the problems of human relationships is to be found in liberty (free markets)."

 

  • The Politics of Reason and The Politics of Passion

 

Rather than offering the "Politics of Reason," politicians continue to serve up the "Politics of Passion" – making grandiose promises and pandering to views that continue to "keep us down."

Passionate promises are evident in every speech. We are promised work for all, healthcare for all, prosperity for all, education reform for the benefit of all. We are promised public safety for all, that the national debt will be brought under control… and on and on. But these are promises left mostly unfulfilled.

 

  • Government cannot give us economic empowerment

 

In the Bahamas we sometimes confuse a piece of the economic pie with income re-distribution. In other words using the power of government to give preferential treatment to one group over another. What difference does it make how rich the other guy is so long as he is not hurting others and we have the same opportunity to succeed if we put in the effort?

"In a 1997 study Economics researcher Niclas Berggren, found that those countries which have a considerable amount of government control and intervention into the economy – that is, those countries which are not economically free – also happen to be countries in which there are wide differences in income distribution. This problem has certainly been a characteristic of many Latin American economies for a long time and it is for this reason that countries which have been liberalising, like Chile and Argentina, have a very much better distribution of income than those countries which have retained most of the powers of government, such as Venezuela and Columbia, for example".

 

  • Economic Growth means Opportunities for Economic Empowerment

 

James Gwartney and Richard Stroup from their book Ten Key Elements of Economics determined that "There are four sources of income growth."

"The goods and services that provide for our standard of living do not just happen. Their production requires work, investment, cooperation, machinery, brain power, and organisation. There are four major sources of production and income growth.

First, improvements in the skills of workers will promote economic growth. Skilful workers are more productive. Education, training, and experience are the primary ways people improve their skills.

Second, capital formation can also enhance the productivity of workers. Workers can produce more if they work with more and better machines.

Third, an improvement in technology – our knowledge about how to transform resources into goods and service – will also permit us to achieve a larger future output. Then use of brain power to discover economical new products and/or less costly methods of production is a powerful source of economic progress.

Fourth, improvements in economic organisation can also promote economic growth. The legal system of a country for example, strongly influences the degree of economic cooperation. Effective economic organisation will facilitate social cooperation and channel resources toward the production of goods (and services) people value. Conversely, economic organisation that protects wasteful practices and fails to reward creation of wealth will retard economic progress."

Finally, continued economic growth provides more opportunities for "Economic Empowerment." It means moving away from the mind-set of dependency on the state, and a commitment to hard work – and self-empowerment.

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