Munger on the Cause of Poverty

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From the article:

We don't need nations, flags, and armies to make us prosperous.

and 

The first argument I usually hear, especially from people hearing about VPC (Voluntary Private Cooperation) for the first time, is this: “If markets are so great, why is most of the world poor?” The problem is that poverty is not what needs to be explained. Poverty is what happens when groups of people fail to cooperate, or are prevented from finding ways to cooperate. Cooperation is in our genes; the ability to be social is a big part of what makes us human. It takes actions by powerful actors such as states, or cruel accidents such as deep historical or ethnic animosities, to prevent people from cooperating. Everywhere you look, if people are prosperous it’s because they are cooperating, working together. If people are desperately poor, it’s because they are denied some of the means of cooperating, the institutions for reducing the transaction costs of decentralized VPC.

So forget about explaining poverty. We need to work on understanding prosperity.

Source: Michael Munger, "The Case for Voluntary Private Cooperation," The Freeman, April 16, 2014