Why are average citizens in some countries – such as South Korea, Germany, or Chile – relatively wealthy while citizens in other countries – such as Zimbabwe, Haiti, or North Korea – relatively poor?
There is a strong correlation between economic freedom and wealth. By economic freedom I mean freedom from state intervention in the economy and for a quantitative number I use Heritage Foundation’s Economic Freedom Index. In this light, it is not difficult to explain why Zimbabwe, Haiti and North Korea are poor: they have a low economic freedom which means that the countries’ governments do not allow the productive forces of capitalism to be unleashed.
I do, however, not think that wealth is only a matter of politics. A wealthy society requires not only that the government respects your property rights but also that your neighbor does. Capitalism is when the government respects your property rights and stability is when your neighbor does. And stability is even more important for prosperity than is capitalism for without stability no economic planning, neither private nor government, is possible.
When examining stability, it is interesting to observe a society’s behavior after a collapse of government or a big disruption like an earthquake. The difference between the behavior in Japan and Haiti was startling. In Japan there was no looting which shows that the Japanese people in general respect their neighbor’s property even if there are no legal consequences of stealing. This is a part of the explanation why Japan is richer than Haiti.
The connection between morality and capitalism is something that separates libertarians and conservatives. It is my impression that libertarians generally believe that a big government fosters immorality while conservatives believe that the causality is opposite. Both claims may be true since government must take care of the poor if a society lacks solidarity and solidarity can seem redundant in a welfare state thus creating a wicked society.
The conservatives' view is a very bleak one for welfare states since it creates positive feedback on the growth of a welfare state: more government -> more immorality -> more government etc. This effect is described well by Patrick Henry:
No free government, or the blessings of liberty, can be preserved to any people, but by a firm adherence to justice, moderation, temperance, frugality and virtue, and by frequent recurrence to fundamental principles
Therefore, we as conservatives and libertarians should not only argue the benefits of a small government but also show an example of true solidarity through private donations and care for our fellow citizens thus reducing the need for welfare "solidarity".
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