Via RCP, a superb essay by Carl Schramm Up From Poverty. How economic growth occurs remains a mystery to economists - or at least a subject of endless debate.
An enduring truth often forgotten (or ignored) by proponents of state-led development: economic growth owes more to the forbearance of the state than to its intervention. Governments do not, indeed cannot, make wealth-only their citizens can. And when government protects their freedom, the world's growing population of entrepreneurs, in the bargain, expands human dignity and establishes the foundation of ongoing growth on which civil society ultimately depends.
One quote from the essay:
In the touchstone year of 1820, 84% of the world's population lived in what would today be judged "extreme poverty." Today, only 16% do. That is such an astounding achievement that it is difficult even to comprehend. According to the World Bank, in the last 30 years alone-a time of rapid globalization-the number of people living in extreme poverty fell by 25%, or 500 million people. The outbreak of entrepreneurial capitalism within the Communist political system of the People's Republic of China accounts for most of this achievement, but almost every region of the world has seen a decline in the share of its population living in extreme poverty. Bright spots such as Israel and Mauritius, moreover, have proven that growth can occur in regions previously thought allergic to it.
