One of the common arguments for the welfare state is that charity cannot solve all the world’s ills, that government must step in to fill the hole. But charity is not the only game in town; it’s not an all-or-nothing proposition. The gigantic elephant in the room, the one with the most power to create wealth, is the free market.
The market’s power to combat social ills (such as poverty and all its associated ills like malnutrition) is gargantuan. Since the fall of the Soviet Union, the world has moved toward more economic freedom. During this same time, we’ve seen global poverty plummet , violence fall, food consumption in the developing world increase, and all manner of other good things. Jason Furman, President Obama’s economic adviser, did a study finding that Wal-Mart alone saves Americans about $895 per person per year.
Charity can supplement the good works done by the market. It can help those who fall through the cracks. Charity is an important aspect of life. Markets can do the hard work, and charity can help finish up the job. Government, too can help by ensuring fair play: protecting the rights of everyone.