Walter Williams recently posted an article at Creators.com about the causes of prosperity in a nation.  Mr. Williams is a professor of economics at George Mason University.

Mr. Williams points out that when people from countries where a majority of the population is living in poverty come to the United States, many of these people are very successful in America.  What makes the difference?

Why do Egyptians do well in America, but not well in Egypt?  Why is this also true for citizens of many other countries with the exception of Taiwan and Hong Kong? 

Mr. Williams points out:

Much of Egypt’s economic problems are directly related to government interference and control that have resulted in weak institutions vital to prosperity. Hernando De Soto, president of Peru’s Institute for Liberty and Democracy (www.ild.org.pe), laid out much of Egypt’s problem in his Wall Street Journal article (Feb. 3, 2011), “Egypt’s Economic Apartheid.” More than 90 percent of Egyptians hold their property without legal title.

De Soto says, “Without clear legal title to their assets and real estate, in short, these entrepreneurs own what I have called ‘dead capital’ — property that cannot be leveraged as collateral for loans, to obtain investment capital, or as security for long-term contractual deals. And so the majority of these Egyptian enterprises remain small and relatively poor.”

There are some things we can learn from these observations.  When people have more economic freedom and less government regulations, they are free to create wealth.  Mr. Williams concludes the article by stating that liberty is a necessary ingredient for prosperity.  This is something we need to keep in mind as government regulations spiral out of control.  Unless the government is reined in quickly and its current direction reversed, America will join the ranks of third world countries with impoverished populations.