We need to rekindle our belief in the free market

I ASKED my Iranian friends last week while the Twitter revolution burned bright in Tehran whether the fact that Iraq was now a democratic nation &ndash; albeit one with security issues &ndash; was a factor in the people&rsquo;s non-acceptance of the election results. I half expected a &ldquo;Silly American &ndash; no not at all&rdquo; response. They all responded &ldquo;of course, I mean &ndash; you know when you&rsquo;re not free, and you can see when your neighbors are.&rdquo;<br /><br />That combined with an outstanding dinner at the Institute of Economic Affairs (IEA) on Thursday, where John Micklethwait, Economist editor and author of the book God is Back, spoke about &ldquo;where we were going, what happened and why he&rsquo;s paranoid optimistic&rdquo;, have helped me to feel good about the past 25 years &ndash; when everyone wants to beat up the capitalists.<br /><br />I grew up on Reagan&rsquo;s 1982 tax cuts which heralded 25 years of prosperity. Due to the events of the past 18 months, it&rsquo;s been tough to defend the go-go markets of those decades, but Micklethwait helped me to see the global context for the economic growth. Micklethwait referred to the past 25 years of capitalism as the Great Opening.<br /><br />A billion people have been lifted out of poverty through capitalism and freer markets. When people try to tie this period of history to the greed of Bernie Madoff and/or Fred Goodwin, he urged us to remind them strenuously that it is really about those billion people.<br /><br />Who would really turn back the clock and do it another way, and not allow those billion people to experience a more abundant life?<br /><br />When I was a child, my mother would try to get me to clean my plate by saying &ndash; &ldquo;the children of Africa or India (which she would use interchangably) don&rsquo;t have the food we have&rdquo;. Think about how differently we think of Africa and India today. What happened? Well, India which was aligned with the Soviet Union until the fall of the Berlin Wall, embraced free markets and capitalism. Its government also didn&rsquo;t understand the technology sector, which has been an engine for growth, and so couldn&rsquo;t meddle in it.<br /><br />Dambisa Moyo&rsquo;s recent book, Dead Aid, by all accounts is excellent. She argues that aid has kept Africa back. The book offers proposals for developing countries to finance development, instead of relying on foreign aid.<br /><br />Micklethwait believes that Barack Obama by 2017 must do two things: Firstly, bring the emerging world into the world order with participation in the institutions of power, and secondly resell capitalism.<br /><br />Capitalism and free markets have been good for the world, and for Britain. The decision to persist in our belief in free markets and capitalism must be taken to bring the next billion poverty-stricken people into the first world.<br /><br />Julie Meyer is CEO of Ariadne Capital.