Poverty and Capitalism

From an excellent treatise in The Claremont Review of Books, Up From Poverty, some clarity about growth and the eradication of poverty comes forth:

In the touchstone year of 1820, 84% of the world's population lived in what would today be judged "extreme poverty." Today, only 16% do. That is such an astounding achievement that it is difficult even to comprehend. According to the World Bank, in the last 30 years alone-a time of rapid globalization-the number of people living in extreme poverty fell by 25%, or 500 million people. The outbreak of entrepreneurial capitalism within the Communist political system of the People's Republic of China accounts for most of this achievement, but almost every region of the world has seen a decline in the share of its population living in extreme poverty. Bright spots such as Israel and Mauritius, moreover, have proven that growth can occur in regions previously thought allergic to it.

All this appears to have happened in the absence of, or even in spite of, those infusions of foreign aid once presumed to have been poor countries' only hope. In fact, the one factor we can say with certainty is a force behind global growth is capitalism-a reality stubbornly resisted by those who seem blinded either by the now fashionable resistance to growth, often dressed as anti-globalism, or by their unbreakable embrace of planning as the predicate for economic success, or both.

And the marvelous conclusion, at least to my way of thinking, comes this:

The principles of liberal democracy have made sustainable economic development a possibility for the whole world going forward. The application of creative talent by the individual in the context of commerce-once found only in liberal democracies-is now seen as necessary even inside socialist regimes. The rediscovered insight that entrepreneurs bring forth expanding welfare for all is so powerful that growth has regained its rightful place as a legitimate goal of economic theory....an enduring truth often forgotten (or ignored) by proponents of state-led development: economic growth owes more to the forbearance of the state than to its intervention. Governments do not, indeed cannot, make wealth-only their citizens can. And when government protects their freedom, the world's growing population of entrepreneurs, in the bargain, expands human dignity and establishes the foundation of ongoing growth on which civil society ultimately depends.

Please read it all so you can help eradicate the so wrong notions about the evils of globalisation and the tragedy of capitalism.