It’s economic freedom that makes the poor rich

An interesting little chart:

Yes, read the legend, this is indeed adjusted for prices across geography.

The lesson from this being that it’s economic freedom that makes the poor rich. Places with more of that economic freedom have richer poor people - QED.

Note that there’s really no correlation at all between the Gini Index - how equal a society is within itself - and how rich the poor are. It really is true that richer places - because of that lovely economic freedom allowing the getting richer - have richer poor people.

Which is why we, given that we are the sort of lefties who want to see richer poor people, are capitalist free marketeers. Because that’s how we gain richer poor people, capitalist free marketry.

This is also why in those richer places no one actually measures poverty any more. The very idea has been replaced with a measure of inequality - less than 60% of median household income - as how can those who hate economic freedom continue to argue against it if the measuring rod proves that what is hated is the very thing that makes the poor rich?

At which point a wholly serious suggestion. Anyone who actually wants to sort out any of these rich countries - sort out as in make richer - needs to change that measurement of poverty. That is, return it to an absolute measure of an amount of deprivation, not one of inequality within the society. We’d even be fine with using the UK’s current definition of absolute poverty - below 60% of the median in 2010. As long as that’s never rebased that is. For only when we return to measuring success by how much richer we’ve just made the poor are we going to adopt those policies which make the poor richer - economic freedom.

You get what you measure after all.

Tim Worstall