Government-to-government foreign aid promotes statism, centralized planning, socialism, dependence, pauperization, inefficiency, and waste. It prolongs the poverty it is designed to cure. Voluntary private investment in private enterprise, on the other hand, promotes capitalism, production, independence, and self-reliance.
Interpretation
The quote contrasts government aid with private investment and suggests that the former is harmful while the latter promotes prosperity.
Henry Hazlitt argues that government foreign aid leads to negative consequences such as increased dependency and inefficiency, ultimately perpetuating poverty. In contrast, he advocates for voluntary private investment, which fosters capitalism and self-reliance, leading to genuine economic growth and independence.
In practice
In a speech about economic policy, one could use this quote to illustrate the importance of private investment over government aid.
A man with a scant vocabulary will almost certainly be a weak thinker. The richer and more copious one's vocabulary and the greater one's awareness of fine distinctions and subtle nuances of meaning, the more fertile and precise is likely to be one's thinking. Knowledge of things and knowledge of the words for them grow together. If you do not know the words, you can hardly know the thing.
Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
The only way we could remember would be by constant re-reading, for knowledge unused tends to drop out of mind. Knowledge used does not need to be remembered; practice forms habits and habits make memory unnecessary. The rule is nothing; the application is everything.
The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Instead of presiding over an economic system that panders to big business and a wealthy elite, a more human economy must be established which meets the needs of African women and young people.
If we want corporations to act differently, we have to force them to do so through laws that are fully enforced and through penalties higher than the economic benefits of thwarting the laws.
We want a free market, but we know that the paradox of a 'free' market is that sometimes you have to intervene. You have to make sure it's not the law of the jungle but the laws of democracy that works.
The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe.
Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest.
Microfinance recognizes that poor people are remarkable reservoirs of energy and knowledge, posing an untapped opportunity to create markets, bring people in from the margins and give them the tools with which to help themselves.
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