Capitalism is truly a wonderful thing. This economic system is empowers the individual and limits government control over economies, which draws criticism and derision from the Left. They like to claim that capitalism is greed and they use that populist sentiment to push more state control and regulations.
But what the Left won’t admit is that capitalism is saving lives and reducing poverty in countries where free trade and market liberalization are being enacted. An editorial in the most recent issue of The Economist outlines the successes of capitalism:
The world’s achievement in the field of poverty reduction is, by almost any measure, impressive. Although many of the original Millennium Development Goals (MDGs) —such as cutting maternal mortality by three-quarters and child mortality by two-thirds—will not be met, the aim of halving global poverty between 1990 and 2015 was achieved five years early.
The MDGs may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution.
The world now knows how to reduce poverty. A lot of targeted policies—basic social safety nets and cash-transfer schemes help. So does binning policies like fuel subsidies to Indonesia’s middle class and China’s hukou household-registration system that boost inequality. But the biggest poverty-reduction measure of all is liberalizing markets to let poor people get richer. That means freeing trade between countries (Africa is still cruelly punished by tariffs) and within them (China’s real great leap forward occurred because it allowed private business to grow). Both India and Africa are crowded with monopolies and restrictive practices.
Many Westerners have reacted to recession by seeking to constrain markets and roll globalization back in their own countries, and they want to export these ideas to the developing world, too. It does not need such advice. It is doing quite nicely, largely thanks to the same economic principles that helped the developed world grow rich and could pull the poorest of the poor out of destitution.
While an imperfect system, capitalism has done more to free people from the chains of poverty than socialism or communism, which is why China is expanding market reforms. Another point to add is that, as people in these countries see that market liberalization works and is bringing them out of poverty, they’re going to desire more freedoms.
And while it may take time to see this come to pass, governments will have a tough time ignoring the cries for more freedom.
H/T: Mark Perry