Torch, Spring/Summer 2009

12 TORCH | Spring–Summer 2009 unemployment. To put that into context, the world’s second-largest economy is slowing down roughly three times faster than the U.S. The fall is mostly due to falling demand for Japan’s exports.” While Japan’s economy has been in turmoil for years, its reliance on exports is the immediate cause of its current crisis. The country depends on other nations, notably the United States, for its economic well-being. But Japan is hardly alone. Growth in China’s economy has also drastically slowed because of the decline in exports to the West. India, too, has been affected as its exports continue to tumble and domestic demand dwindles. Even the United Kingdom has faced economic pressures. According to a February 16 article in The Wall Street Journal , “The U.K. economy will contract at its fastest pace in six decades this year, causing unemployment to peak at over 3 million and interest rates to remain mired around historic lows, [said] the Confederation of British Industry. … The British business lobby said rapidly deteriorating global demand will exacerbate the U.K. recession and delay an economic recovery.” Needless to say, a recession largely precipitated in the U.S. has had devastating effects on many economies around the world. That’s the risk of a global economy. And yet it is the global free market that is the best way to reduce poverty. For instance, businesses in the U.S. — and the rest of the world, for that matter — want to sell their goods and services in other countries. This expansion provides opportunities to earn higher profits and, of course, serve a larger number of people, leading to added employment in developing nations and a variety of possibilities that would not exist otherwise. Serving Others What we call the global free market is nothing more than businesses in different countries forming a one-world market of buying, selling, and investing. This is what will help people who are poor generate wealth, which is the only real way to lessen poverty. Unfortunately, Americans are more interested in redistributing wealth that already exists than in creating new wealth. We see someone with a high income, label it unjust, and look for ways to share that money. This may be politically correct and represent the mood of the nation, but it won’t help reduce global poverty. It is clear to many economists that creating wealth is the only way to reduce poverty on a global scale. And a global free-market economy does just that. SLAVOLJUB PANTELIC / ISTOCKPHOTO