WHAT NATIONS NEED TO THRIVE

 

What do nations need to succeed? Ultimately, according to Theologian Wayne Grudem and Economist Barry Asmus, economic viability is measured by the GDP, the amount of products and services a nation produces:

◦ History shows that every nation that is prosperous today has doubled and then redoubled its GDP many times over in past years. Although each nation chose a somewhat different path, they all increased GDP through increasing productivity. (The Poverty of Nations: A Sustainable Solution)

The authors warn that one necessary ingredient for economic growth is freedom, the empowerment of its people:

◦ Economic freedom and government-forced economic equality are opposing goals, and when government forces economic equality (for example, through heavy taxes on the rich), it can actually diminish economic incentives and harm the GDP. This can be seen in the history of every nation ruled by communism, whether the former Soviet Union, Cuba, North Korea, or China before it implemented many free-market reforms. Milton Friedman rightly said: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” A nation must produce wealth before it can distribute or enjoy it. The goal must be to increase a nation’s GDP.

However, many other principles and values have a bearing on the economic viability of a nation:

◦ The correct goal for a poor nation, then, is to become a nation that continually produces more goods and services each year. If a nation is going to succeed in overcoming poverty, it must be willing to examine its official policies, laws, economic structures, and cultural values and traditions to see whether they promote or restrain increases in the goods and services that the nation produces.

Any producer must trust many parties in order to produce and to bring their product to market, where it will not be confiscated. This requires a trustworthy political system and people. As obvious as this might be, many economists have instead focused on foreign aid and the forgiveness of national debt. However, this money seldom finds its way to the right parties. It can even contribute to poverty.

The authors also argue that natural resources are not a big factor. They cite the limited resources of Taiwan, China, South Korea, Singapore, Japan, and Hong Kong as examples of thriving nations which lack an abundance in natural resources.

The authors also argue that our beliefs might prevent us from seeing the solution to our problems. One example is multiculturalism, which blocks any comparative assessment between cultures to identify problems and solutions:

◦ They are convinced that it is misleading or even wrong to say that any one culture is “better” than any other, even “better” at producing economic growth. Therefore, there must be some other reason, or perhaps it is an accident, that some countries have become wealthy and others remain poor. We should not try to explain the disparity by saying that one country’s cultural habits and values are better than another’s.

In his Forward to Grudem’s book, Pastor Rick Warren offers his own experiences in support of many of the authors’ claims:

◦ Having traveled the globe for thirty years and trained leaders in 164 countries, I’ve witnessed firsthand that almost every government and NGO (non-profit) poverty program is actually harmful to the poor, hurting them in the long run rather than helping them. The typical poverty program creates dependency, robs people of dignity, stifles initiative, and can foster a “What have you done for me lately?” sense of entitlement. The biblical way to help people rise out of poverty is through wealth creation , not wealth redistribution . For lasting results, we must offer the poor a hand up , not merely a handout. You spell long-term poverty reduction “j-o-b-s.” Training and tools liberate people. Trade, not aid, builds the prosperity of nations.

The work force must be empowered and protected and not indulged and disempowered.