The Force of Competition:
Creating Wealth and Alleviating Poverty
The natural state of man is poverty and conflict.
Historically the natural state of man is poverty and conflict, not prosperity and peace. Prosperity and peace are things that we have to work very hard for. They are the exception and not the rule.
If we create wealth, we can lift the poor out of poverty.
Wealth can be created or destroyed, but it is very hard to create. This is why prosperity and peace are not the ordinary states that that mankind has found itself in.
Wealth creation is the realization of ideas by entrepreneurs applying their work and ideas to his or her property.
The force of competition is one of the most powerful forces that we know for wealth creation, to create innovation and to do the things that are necessary to lift people out of poverty. This also goes hand-in hand with property rights protection. This is why prosperity and peace are not the ordinary states in which mankind finds itself.
One’s success or failure should be based on the quality of their ideas and their capacity for hard work, not on their relationship with the government, nor on their ability to change legal or regulatory environments to satisfy particular goals.
We need to optimise the billions of individual interactions between people, with people coming together in voluntary exchange to meet each other’s need without distortions- whether government distortions or other private sector distortions.
We need to create an aspiration-based society conditioned upon forces of competition, not by relying on government intervention and regulation.
The Three Pillars of Economic Growth – open trade, competition and property rights protection – represent this pathway to ending poverty.
The GATT system, the reduction of trade barriers and the movement towards trade liberalisation has been a tremendous opportunity for mankind. That has lifted billions of people out of poverty all over the world and is a huge achievement.
Free trade is the greatest antidote to poverty that mankind has ever devised.
The GATT system, the reduction of trade barriers and the movement towards trade liberalisation has been a tremendous opportunity for mankind. That has lifted billions of people out of poverty all over the world and is a huge achievement.
Creating optimism combines spiritual and economic development and vice versa, thereby promoting social prosperity.
You will create a person who wakes up in the morning thinking “I can succeed”, based on my capacity for hard work and my ideas, and nothing’s going to get in the way of that.
That’s going to create an optimistic, hopeful person, as opposed to somebody who believes that if ‘I’m born poor I will die poor and there is nothing I can do about that’.
In the past 25 years, the overemphasis on government’s role has undermined the benefits of globalization and liberalization.
There was a failure in building of truly competition-based or competitive markets inside the border.
There was a failure of the building of truly competition-based or competitive markets inside the border.
As wealth creation has declined and competition faltered, crony-capitalism has replaced free markets, leading to increased regulatory barriers and protectionism.
Influence peddling by individuals whereby they targeted changing government regulatory systems, was intended to keep their opponents out and attain monopoly profits. These profits were then plowed back into the regulatory system and further damaged the economic environment.
While market distortions have impeded growth in the shorter term, over the longer term of 400 years, market forces, innovation and competition have largely succeeded in improving the human condition. The many areas that are left behind must be our concern.
Mankind has achieved Incredible advances over the longer term. The number of people living in poverty is a fraction of what it was. We have succeeded in the eradication of many diseases.
Humanity in Extreme Poverty (red) Versus Not in Poverty (green)
Although we were eliminating the number of people who live in absolute poverty, which is subsisting on less than $1 a day, the recent lack of growth, coupled with COVID lockdowns in developing countries has meant that that number is increasing.
Communication of what has succeeded and what has caused failure is crucial for creating a hopeful future.
Background Information
The Busch School of Business of Catholic University sponsored the “Good Profit” conference in 2018, where Shanker Singham was a featured speaker. Mr. Singham covers in his presentation his unique approach to improving the condition of humanity through the liberalization of trade and competition.
