May282019

Media's Best Kept Secret Capitalism

 

by Lou Binninger

Many ignorant ones complain about world poverty today and believe that capitalism and the West are the reasons for it. Actually, not too far back before the industrial revolution poverty was the norm in the earth and just a tiny minority had more than enough to survive. And, the truth is that embracing capitalism or free enterprise and the mastery of natural resources have lifted billions out of poverty.

            From 1970 to 2006, the number of people living in extreme poverty declined fantastically. People living on a dollar a day or less dramatically fell from 26.8 percent of the global population in 1970 to 5.4 percent in 2006 – an 80 percent decline. If you love people it is a wonderful miracle but is usually ignored by the media because it avoids highlighting the successes of capitalism.

"It was globalization, free trade, the boom in international entrepreneurship," American Enterprise Institute (AEI) president Arthur Brooks said in a 2012 speech. "In short, it was the free enterprise system, American style, which is our gift to the world."

In 1820, 94 percent of the world's population lived in poverty. In 2011, it was down to 17 percent. What is even more incredible is that the global poverty rate was 53 percent in 1981. The decline from 53 percent to 17 percent in thirty years was the "the most rapid reduction in poverty in world history."

"Since the onset of industrialization – and as a consequence of this, economic growth — the share of people living in poverty started decreasing and kept on falling ever since," wrote Oxford University's Martin Roeser.

Between 1988-2008, those in the middle and bottom of the world income distribution have all received pay increases of around 40%. Global differences in life expectancy and height are narrowing too – showing the impact of better nutrition and healthcare.

The world is 120 times better off today than in 1800 as a result of capitalism according to Foundation for Economic Education's (FEE) Steven Horwitz. "The competitive market process has also made education, art, and culture available to more and more people," wrote Horwitz. "Even the poorest of Americans, not to mention many of the global poor, have access through the Internet and TV to concerts, books, and works of art that were exclusively the province of the wealthy for centuries."

Horwitz says capitalism has also resulted in people spending "a much smaller percentage of our lives working for pay" due to the increased value of labor and has produced higher life expectancy "by decades."

Mortality rates for children under the age of five declined by 49 percent from 1990 to 2013. This is according to World Health Organization (WHO) data, a decline termed "faster than ever." Capitalism results in lower child mortality rates by producing better access to medicine and standards of living.

The wealth and innovation spurred by capitalism has done more to help the poor than any government program ever could. The adoption of a free enterprise economic model by China, India, Vietnam and others have had an astounding impact in lifting their societies out of harsh poverty.

           

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