I recently watched a John Stossel episode, and he posed this very question: why is America rich? And we are rich, especially when measured by world standards. Even our poor are well off, compared to the poor of Haiti, Zimbabwe, and Afghanistan. Depending on whose data you rely, the United States come in at 6th (IMF data), 5th (World Bank data), and 8th (CIA World Factbook).
But why? Why do we enjoy such a high standard of living compared to the rest of the world? The answer is property rights.
Where you find clearly defined and well-enforced property rights, you will also find the basic ingredients for wealth creation. The ability to borrow against your property, the property you own, is the fuel that feeds our engine of economic growth. The banker need collateral before loaning you the money to start your own business, and often times that collateral is our property. But, there may be other reasons for our prosperity.
What other reasons can you offer to explain why America has fared so well? We’re a relatively young country, and we’ve come a long way quickly. Why? What is our secret to wealth creation?