Looking for the cause of poverty? It isn’t capitalism. Look for some other Cs – corruption, collusion, and cronyism

It’s not capitalism that has crushed millions of people into the dust of poverty across Africa and many other places and times around the world. Capitalism lifts people out of the dust.

What keeps the poor in grinding poverty?

Writing in the Wall Street Journal, Daniel Henninger’s column Capitalism’s Corruptions discusses the real causes of poverty

The plight of the world’s poor can be summed up in three truly ugly C-words: corruption, collusion and cronyism. All three may be kissing cousins but each in any language makes a mockery of both capitalism and justice.

If you are looking for justice, or seeking morality, or otherwise want to lift people out of grinding poverty, bashing capitalism may feel good, but is fruitless.

Instead consider that an

…enormous body of economic literature now exists confirming that corruption keeps the poor down.

Why is that? Consider:

Corruption suppresses growth because citizens in time recognize that honest work produces a lower return than spending one’s energies gaming the system. And, they’ve also found, the vicious circle worsens when real productivity falls along side an inexorably expanding public sector.

You can make more money playing the system or bribing officials. Why try to make an honest dollar with honest goods when your gains can be taken away on the whim of a corrupt official who got paid off by your competitor? Why bother?

Global poverty persists because corruption kills capitalism.

The corrosion caused by corruption expands, like rust on steel:

In time, corruption accelerates political instability, erodes democratic order if it exists, and someone from the outside has to clean up the mess. Think Syria or Mali.

Where is the social justice in bashing capitalism while ignoring the corruption that perpetuates poverty? How is it that corruption, collusion, and cronyism are on a higher moral plane than free market capitalism that lifts people out of poverty?

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