“There is a problem with his recommendation of the Jeffrey Sachs approach to alleviating poverty by sending taxed dollars to poor countries; it doesn’t seem to have worked so far. The experience with state-directed aid is not a very happy one and, if anything, has worked to increase poverty (and inequality), because it is directed by the generally predatory elites of the recipient states…Of greatest importance, the best way to reduce poverty is to increase wealth. As the late Peter Bauer, a pioneer of development economics, used to put it, poverty doesn’t really have causes; it’s the natural state of humanity. Wealth is what is caused. And it’s wealth that needs an explanation. We now have a rather good understanding of what causes wealth: good institutions. The most important institutions for producing more wealth are those associated with security of property and the freedom to exchange. A look at the data (all of which are publicly available for examination at www.freetheworld.com) makes it quite clear that wealth production is so positively correlated with economic freedom that one has to conclude that it is the cause, rather than, say, resources”. –Tom G. Palmer, in a discussion on When Does Inequality Matter at Cato Unbound