Poverty: We’ll always have the poor among us, the old biblical saying goes. But at the rate absolute poverty is shrinking around the world, that might not be true for much longer.
Politicians of all stripes in virtually every country have long expressed deep concern about global poverty, especially what the World Bank calls extreme poverty — those living on $1 a day or less.
But in fact, the decline in poverty is an unheralded success story, thanks mainly to freer markets around the world. As recently as 2003, nearly 35% of all the world’s inhabitants were considered poor. By 2012, even after two epic stock market meltdowns, a global financial crisis and a Great Recession, only about 12% or so of the world’s population was poor.
It’s one of the great economic shifts in the history of humankind, all taking place in the space of about 20 years. And yet, it largely remains unremarked upon.
How did such a thing happen? In a word, capitalism — that is, economic freedom and all it entails.
Indeed, the process of poverty reduction could be said really to go back 200 years or so, to the beginnings of the Industrial Revolution.
The creation of factories, the steam engine and other mechanical productivity multipliers, the explosion in new goods and services, and the expansion of trade helped create a new middle class in the developed world, pulling millions out of poverty. Despite wars, revolutions, civil wars, coups, and the advent of communist regimes, capitalism’s powerful expansion continued pulling ever-greater numbers of people out of poverty.Read the rest of this IBD editorial HERE.
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