It is all fine and noble to care for the poor, and believe that the government ought to do something, but it is important to realize that the greatest mechanism in lifting people out of poverty does not come from the minds or labor of government bureaucrats, but instead from economic freedom. Truth be told, capitalism is the greatest force in human history at alleviating poverty and raising the standard of living of masses of people.
94 percent of the global population was living in poverty in 1820, 84 percent living in what was considered extreme poverty. 172 years later, the poverty had been slashed to 51 percent, the extreme poverty rate cut to 24 percent. From 1981 to 2011, the poverty rate dropped from 51 percent to 17 percent. In a 20 year period from 1990 to 2010, poverty rates were cut in half from 43 percent to 21 percent in developing nations, representing poverty alleviation of some 1 billion people. 680 million people alone lifted out of poverty in China following increases in economic freedom from 1981 to 2010. Since 1978, China has increased its per-capita income by 13-fold following reforms leaning in favor of market economics. In 1980, 700 million of those living on the equivalent of $1 U.S. a day were located in China, 19 years later that number dropped to 33 million. Increases in economic freedom resulted in the rate of extreme poverty being slashed from 84 percent in 1980 to 10 percent today. By 2003, the GDP of China was 8 times as large as it was 25 years prior, the share of global trade for 2003 was 6 times as large as it was in 1978. And yet, I am told to fear capitalism.
In the last 20 years, the number of people in developed countries living on less than $1.25 a day has been cut in half. Half of those living in the poorer nations of the world three decades ago were living in extreme poverty. By 2012, that number was slashed to 21 percent. Hunger in India was slashed by 90 percent following replacement of 4 decades worth of disastrous socialist policies with capitalist reforms, substituting tremendous resource misallocation with economic freedom. Income in India rose 3-fold following the liberalization of its markets. Amidst the 19th and 20th century, real incomes increased by 15-fold in the West. Between 1999 and 2010, real per capita incomes in Africa rose 97 percent. In the most economically free nations, the income of the bottom 10 percent of the population is more than twice the average income in the least economically free countries. In Ireland, mean wealth doubled from 1994 too 2006 and tripled from 1986 to 2006 following the replacement of trade barriers with capitalist reforms. And yet, I am told to fear capitalism.
Some of the greatest trends of the last 100 years were real per capita GDP rising from $4,800 to $31,500, real hourly wages rising from $3.45 to $12.50, life expectancy increasing by three decades, air quality improving by nearly 30 percent dating back to 1977 in major cities, major life-threatening disease cases declining to less than 50 per 100,000 people. Infant mortality rates falling 10-fold, TV ownership increasing from 0 percent to 98 percent, household assets rising from $6 trillion to $41 trillion, U.S. household poverty rate declining from 40 percent to 13 percent, patents granted jumping from 25,000 to 150,000, computer ownership from 1 percent in 1980 to 44 percent 18 years later, percent of women awarded Bachelor’s degrees increasing from 34 percent to 55 percent, computer speed skyrocketing from 0.02 million instructions per second in 1976 to 700 million just 22 years later, workweek length declining from 50 hours to 35 hours, homeownership in the U.S. jumping from 46 percent to 66 percent. And yet, I am told to fear capitalism.
It could not be more clear that capitalism is the greatest force in history at alleviating poverty, unleashing the creativity of man, driving innovation, and generating wealth at rates never seen under any other alternative economic system. Protection of the environment through strictly enforced property rights, unleashing of the creativity of man through reduction of government barriers and promotion of economic freedom, increases in living standards and human development through competition, the evidence clearly portrays markets, not government action, as the way to increase economic prosperity across the world. Meanwhile, people on the Left complain of greed, surplus exploitation, and caring for the poor as if these were legitimate arguments against the greatest economic force in human history. Capitalism delivers the goods, it cares for the poor by providing economic mobility, not economic stagnation and resource misallocation, it harnesses greed by allowing people to amass wealth only by helping their fellow man. And yet, I am told to fear capitalism.
Those on the Left constantly paint themselves as heroes of the poor, committed to raising the standard of living of Americans, freeing them from oppression and exploitation, yet refuse to acknowledge occurrences of people climbing out of poverty not through government action, but through economic freedom. Had this country had pure capitalism dating back to 1946, the average household income would be $330,000, not $53,000, and the U.S. GDP would be nearly $60 trillion. Three-quarters of your wealth lost in the opposition to the greatest force man has ever known. And yet, I am told to fear capitalism.