15/07/2005 6:28:33 pm
What Foreign Aid Decreased Poverty in 19th Century Europe?

"A standard myth is there?s a "vicious cycle of poverty" that makes economic development virtually impossible for the world?s poor nations. This myth holds that poor countries are poor because income is so low that savings cannot be generated to provide the kind of capital accumulation necessary for economic growth. Thus, it is alleged, the only way out of perpetual poverty is foreign aid. ...

A relatively well-off country, like France, experienced several faminesbetween the 15th and 18th centuries as well as plagues and diseases thatsometimes killed hundreds of thousands. In France, life expectancy was 20 years, in Ireland it was 19 years, and in early 18th-century London, more than 74 percent of the children died before reaching age 5. ...

How in the world did these once poor and backward countries break the "vicious cycle of poverty" and become wealthy, without what today?sdevelopment experts say is absolutely necessary for economic growth --foreign aid handouts, World Bank and International Monetary Fund loans, andbillions of dollars of debt forgiveness?

The answer is simple: Capitalism started taking root in Europe. Capitalism is an economic system where there?s peaceable, voluntary exchange. Government protects private property rights held in goods and services. There?s rule of law and minimal government regulation and control of the economy."

Walther E Williams