Take a close look at this.

Jonathan Height, the noted New York University psychologist, calls it the most important graph in the world.

Why does he say that?

Because he knows this graph reveals a simple, inescapable fact.

There is no substitute for free market capitalism as a promoter of human prosperity.

Let it be noted that Height is no one's idea of a conservative.

But when hard evidence stares him in the face, he's not going to look away.

The graph is based on the research conducted by the late British economist Angus Madison.

The numbers along the X-axis are years, 2000 of them.

The number on the Y-axis are dollars.

All of them, divided by the number of people on the planet.

It's what's called GDP per capita, which is the world's economic output divided by its population.

GDP is considered the best measurement of a country standard of living, and in this case the world's standard of living.

Often when I show this graph to students, I get this comment, that's not capitalism.

It's just the impact of the industrial revolution.

So I show them another chart by the Madison project.

This one breaks the GDP hockey stick into regions.

As you can see, there are a number of hockey sticks.

But note that they don't rise at the same time.

The United States surged first.

Why?

Well, in a very fortuitous coincidence, the year 1776 witnessed both the signing of our Declaration of Independence and the publication of a book called The Wealth of Nations by the Scottish economist and philosopher Adam Smith.

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