Investor's Business Daily, July 30th, 2007
Free Markets: Amid all the talk about Latin America's leftward tilt, a new survey shows that public attitudes there toward capitalism have taken a sharp swing upward. Maybe that's because free markets work.
Nothing empowers the private sector like capitalism, and it's good news to see our neighbors to the south increasingly believing that people are better off in free market economies, even if there are gaps between rich and poor, as the Pew Research Center's annual Global Attitudes Survey shows.
Of 5,865 people polled in Argentina, Bolivia, Brazil, Chile, Mexico, Peru and Venezuela, 57% expressed growing confidence in the private sector, which is far higher than five years ago. Back then, Argentina's $100 billion debt default shook the region, causing many to confuse IMF austerity with actual free markets.
Why the shift? Free markets work. The survey's result coincides with strong economic growth across the region, much of it due to tax cuts, stronger property rights, fiscal discipline and fewer rules. Not surprisingly, citizens in countries with the best gains show the most satisfaction with their lives, according to the Pew survey.
The examples set by the freest countries are changing minds. Just as Argentina's debt meltdown triggered a leftward tilt, the success of market economies has given capitalism a boost.
Two of the best examples of free market success are Latin America's biggest economies, Mexico and Brazil:
In Brazil, support for free markets rose nine points in the past five years to 65%. For 2007, Brazil's $1.2 trillion economy is expected to expand 4.5%, up from 3.7% in 2006. Although Brazil's leader, President Luiz Inacio Lula da Silva is a socialist, he understands that the private sector creates jobs. He has paid down government debt and run a fiscal surplus, helping to cut real interest rates and giving more businesses and households access to credit.
In Mexico, 55% of citizens say they're better off in free markets, up 10 points over 2002. Mexico's $741 billion economy is expected to grow 3.3% this year, according to Mexico's central bank, vs. 2.9% average growth in Vicente Fox's six years in office. Both Fox and his successor, President Felipe Calderon, have strengthened property rights, reformed banks and pushed for more job creation.
The positive attitude is spreading across the region:
In Chile, 60% of the public support free markets in an economy projected to gain 6% in 2007.
In Peru, 47% support free markets, with 7.3% growth expected.
In Bolivia, 53% support free markets with 4.2% growth seen.
Even in Venezuela, a country whose clueless ruling dictator explicitly seeks to destroy the private sector and rails against capitalism, a stunning 72% of the public support free markets.
Seems even Venezuelans know they're being left out of a boom. Bad news for Hugo Chavez -- but good news for Venezuela.
