Okay, the title’s an exaggeration, but this chart is rather revealing. It shows how per-capita GDP has changed between 1980 and 2008 in Chile, Argentina, and Venezuela.
As you can see, Chile used to be the poorest of the three countries and now it is comparatively rich. Argentina has enjoyed a bit of growth. Venezuela, by contrast, used to be the richest of the three nations but has stagnated and now is in last place.
So what accounts for these remarkable changes in relative prosperity? The answer, at least in part, is the difference between free markets and statism. Simply stated, Chile has reduced the burden of government a lot in the past three decades, Argentina has reduced the burden of government a little, and Venezuela has gone in the wrong direction and increased the burden of government.
The following numbers come from the Economic Freedom of the World, which looks at all facets of economic policy, including regulation, trade policy, monetary policy, fiscal policy, rule of law, and property rights.
* Chile’s score jumped from 5.6 in 1980 to 8.0 in 2008, and the country now ranks as the world’s 4th-freest economy (ahead of the United States!).
* Argentina’s ranking has improved a bit, rising from 4.4 to 6.0 between 1980 and 2008, but that still only puts them in 94th-place in the world rankings.
* Venezuela, by contrast, is embarrassingly bad. The nation’s score has dropped from 6.3 to 4.4, and its ranking has plunged from 22nd-place in 1980 to 121st-place in 2006.
The simple lesson is that nations have the ability to create prosperity, but they have to follow a simple recipe. Adam Smith is reported to have written several hundred years ago that, “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice.”
Since Adam Smith probably never imagined a world filled with things such as OSHA, the Department of Energy, the IRS, agriculture subsidies, and fiat money, his recipe might be a bit dated, but the general idea still holds.
[...] Over three hundred years ago Adam Smith wrote (H/T Daniel J Mitchell): [...]
[...] decline, several people have emailed to ask how Chile compares. Ask and ye shall receive. This post from last month shows shows Chile, Argentina, and Venezuela. Very powerful, which is why I gave the post such a grandiose [...]
[...] its economy; Argentina has stayed roughly the same; and Venezuela, of course, has turned hard left. The result, in terms of per capita [...]
[...] the title of this post is a huge overstatement. I’ve already noted here that Argentina is not a good role model and warned here how that Obama is repeating many of the mistakes that undermined Argentinian [...]
[...] moral of the story, needless to say, is that free markets and small government are the right policies. That’s the best approach to improve living standards for all [...]
[...] and lower living standards (compared to what they would be in the absence of bad policy). The chart in this blog post is a good example of the cost of bad policy and the benefits of good [...]
[...] But the point of this post isn’t to decide whether Singapore is richer than the United States. Instead, the moral of the story is that small government and free markets are a recipe for strong growth and rising levels of prosperity. [...]
[...] post showing how Singapore has caught up with the United States. And here’s another comparing what’s happened in the past 30 years in Chile, Argentina, and Venezuela. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] (Via Dan Mitchell, International Liberty). [...]
[...] post showing how Singapore has caught up with the United States. And here’s another comparing what’s happened in the past 30 years in Chile, Argentina, and Venezuela. 0 comments, 0 called-out + Comment now + Comment now [...]
[...] And if you like these types of comparisons, here’s a post showing how Singapore has caught up with the United States. And here’s another comparing what’s happened in the past 30 years in Chile, Argentina, and Venezuela. [...]
[...] The bottom line is simple. When people get rich by providing goods and services in a competitive market, that’s capitalism. When they get rich because of subsidies, bailouts, preferences, and handouts provided by the ruling class, that’s Argentina. [...]
[...] The bottom line is simple. When people get rich by providing goods and services in a competitive market, that’s capitalism. When they get rich because of subsidies, bailouts, preferences, and handouts provided by the ruling class, that’s Argentina. [...]
[...] a chart that I’ve used before, using international data to compare living standards in Venezuela, Argentina, and Chile since [...]
[...] I think the most important piece of evidence (building on the powerful comparison in this chart) is in the second table we included with the [...]
[...] I think the most important piece of evidence (building on the powerful comparison in this chart) is in the second table we included with the [...]
[...] I don’t have a single answer to that question. Sometimes I use the utilitarian approach and show how capitalist nations outperform statist nations, as you can see in this comparison of North Korea and South Korea, and this post comparing Argentina, Chile, and Venezuela. [...]
[...] I don’t have a single answer to that question. Sometimes I use the utilitarian approach and show how capitalist nations outperform statist nations, as you can see in this comparison of North Korea and South Korea, and this post comparing Argentina, Chile, and Venezuela. [...]
[...] the thug who is presiding over an economic nightmare is presuming to give advice about domestic policy to the White [...]
[...] oui, le voyou qui a présidé au cauchemar économique de son pays a le culot de donner des leçons à la Maison Blanche sur la façon de conduire sa [...]
[...] point in this PBS interview, but I suspect these charts comparing North Korea and South Korea and comparing Chile, Argentina, and Venezuela are much more [...]
[...] point in this PBS interview, but I suspect these charts comparing North Korea and South Korea and comparing Chile, Argentina, and Venezuela are much more [...]
[...] whether we’re looking at North Korea vs South Korea, Chile vs. Venezuela, or the U.S. vs. Europe, the world is a laboratory and the evidence gets stronger with each passing [...]