Why has extreme poverty decreased so dramatically?
Yesterday, we looked at the staggering drop in worldwide extreme poverty: from 90% in 1800 at the beginning of the Industrial Revolution to less than 10% today.
What accounts for this incredible drop?
Five reasons, says Radelet, author of The Great Surge: The Ascent of the Developing World, as quoted in Steven Pinker‘s Enlightenment Now.
Reason #1: The decline of communism. “Market economies can generate wealth prodigiously while totalitarian planned economies impose scarcity, stagnation, and often famine,” writes Steven Pinker. “A shift from collectivization, centralized control, government monopolies, and suffocating permit bureaucracies to open economies took place on a number of fronts beginning in the 1980s.
“They included Deng Xiaoping’s embrace of capitalism in China, the collapse of the Soviet Union and its domination of Eastern Europe, and the liberalization of the economies of India, Brazil, Vietnam, and other countries.
“Though intellectuals are apt to do a spit take when they read a defense of capitalism, its economic benefits are so obvious that they don’t need to be shown with numbers,” Steven writes.
The difference can be seen from space.
“A satellite photograph of Korea showing the capitalist South aglow in light and the Communist North a pit of darkness vividly illustrates the contrast in the wealth-generating capability between the two economic systems, holding geography, history, and culture constant,” Stephen notes.
The sharp contrast can also be seen between West and East Germany when they were divided by the Iron Curtain; Botswana versus Zimbabwe under Robert Mugabe; Chile versus Venezuela under Hugo Chávez. Once upon a time, Venezuela was a wealthy, oil-rich country. Now it suffers from widespread hunger and a critical shortage of medical care.
Reason #2: Leadership. “Mao imposed more than communism on China,” Steven Pinker writes. “He was a mercurial megalomaniac who foisted crackbrained schemes on the country, such as the Great Leap Forward (with its gargantuan communes, useless backyard smelters, and screwball agronomic practices) and the Cultural Revolution (which turned the younger generation into gangs of thugs who terrorized teachers, managers, and descendants of “rich peasants”).
“During the decades of stagnation from the 1970s to the early 1990s, many other developing countries were commandeered by psychopathic strongmen with ideological, religious, tribal, paranoid, or self-aggrandizing agendas rather than a mandate to enhance the well-being of their citizens,” Steven notes.
With the spread of democracy in the 1990s and 2000s, new humanistic leaders emerged, including Nelson Mandela, Corazon Aquino, and Ellen Johnson Sirleaf as well as local religious and civil-society leaders who acted to improve the lives of their country men and women.
Reason #3: The end of the Cold War. “It not only pulled the rug out from under a number of tin-pot dictators but snuffed out many of the civil wars that had racked developing countries since they attained independence in the 1960s,” Steven Pinker writes.
Civil war is both a humanitarian and economic disaster.
“Facilities are destroyed, resources are diverted, children are kept out of school, and managers and workers are pulled away from work or killed,” Steven observes. He quotes economist Paul Collier, who calls war “development in reverse,” and estimates the typical civil war costs a country $50 billion.
So far we’ve covered three of the five primary reasons for the dramatic drop in extreme poverty.
Reflection: Am I surprised by the data above? Why or why not?
Action: Share this information with a friend or colleague who is convinced we live in the “worst of times.”