Wall-Street’s effect on Developing Economies

This is a great article from the Wall Street Journal by Dr. Bill Easterly. Easterly, has written some great books on development that I regrettably haven’t read but are sitting on my shelf. One is “The White Man’s Burden.” Here he explains how the current events in America is effecting the developing world. Here is what he has to say:

“Financial meltdown will not cause the U.S. to abandon democratic capitalism, but the outcome is less clear for countries deciding whether capitalism is the best system. In many of these countries the choice is not between light and heavy financial regulation, but between relying on creative individuals or government planners to escape poverty.

Some countries are already taking the wrong prescriptions from recent events. Honduran President Manuel Zelaya told the U.N. General Assembly last month that the lesson of the crash was “the market’s laws were demonic, satisfying only the few.” Paraguayan President Fernando Lugo said the “market mechanism” and “immoral speculation” were a mistake. Brazilian President Luiz Inácio Lula da Silva Lula added that speculators have “spawned the anguish of entire peoples” and Brazilians needed “indispensable interventions by state authorities.”

The government will never blame themselves for this mess, they will only blame capitalism. They make you believe it is this mysterious thing that they must try to wrangle. They, of course, are only trying to blame something that they know is hard to wrangle. If they could wrangle it then you would be able to see that it works. Not only do the home government that caused the problem, blame this all on capitalism but so do the rest of the world.

As it is not as critical for us to be as free market as we should, it is very critical for these developing economies. Millions of people have died at the hands of dictators and central planning bureaucrats. The developing world is no different.

The rest of this great article is here.



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