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Hate capitalism? Here's how it keeps lifting millions out of poverty



Free your population to go out and selfishly make a buck, and pretty soon children stop starving to death 


We here at the National Post have decided to close out 2021 by holding a bit of a love-in for our favourite economic system: Capitalism. Although free markets and liberalized world trade have gotten a bit of a bad rap in recent years, they remain the absolute best, tried-and-true methods of ensuring that your population can spend their days arguing about nonsense on the internet rather than watching their children die of cholera. Don’t believe us? Watch the latest Everything Should Be Better video or read the transcript below. 


After that, read the rest of the Post’s series, The Capitalist Manifesto, saluting the unfashionable yet awesome power of the free-market system.




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Oh wait, sorry, all of that is actually good news. You know, if you hate poverty and starvation.


Not to be overly simplistic here, but the main reason why is capitalism: A bunch of people were given relatively free reign to selfishly make a buck. Yadda, yadda, yadda; millions of children are now reaching adulthood instead of dying of cholera.


“Thanks, capitalism!” Photo by Getty Images


But … how?


Let’s take a trip to China, shall we?


In the course of a single human lifetime, China has — hands-down — experienced the most dramatic upswing in prosperity and poverty reduction ever seen in human history.


In the late 1970s, 98 per cent of rural China was below the poverty line. By 2016, it was 4.5 per cent.


And everybody — including the country’s literal Communist rulers — are pretty much in agreement that this all happened because the country adopted the principles of a free market economy.


For the first three decades of the People’s Republic of China, its economy was the opposite of a free market. Wages, prices, the precise number of shoes to be manufactured, even the types of crops to be planted: All of these things were decided by some bureaucrat in Beijing and then dictated down to the masses.


If Mao Zedong had a dumb idea that farmers should all abandon their fields in order to make steel in crappy backyard furnaces, then that’s what happened. In that particular case, Mao’s ideas caused a catastrophic economic collapse resulting in the largest famine in human history, with around 30 million killed.


This all changes starting in 1978. This guy, Deng Xiaoping, ushers in a suite of economic reforms: Private property, foreign investment, no more price fixing.


In this 1979 file photo, Deng Xiaoping tries on a cowboy hat at a rodeo in Texas. Photo by AP Photo


In the early 1970s, Jianguo here works on a collective farm: He’s legally barred from owning anything, and he gets the same food ration regardless of how much work he does.


After 1978, he can work his own plot of land, sell what he produces and if he happens to innovate a better way of doing it, he reaps the benefits .


When you do that to several hundred million people, you unleash an unstoppable wave of enterprise that can quickly make cities like Shenzhen go from this in the 1980s, to this.


But maybe China’s just a fluke, right?


Since the year 2000, Rwanda saw its national poverty rate drop from 77 per cent to 55 per cent . From 1993 to 2014, Vietnam saw poverty rates drop from 60 per cent to just 14 per cent. In just eight years between 2011 and 2019, the number of India’s poor dropped from 340 million to 78 million .


And Singapore, my god. In 1960, 80 per cent of the population technically lived as squatters . Now, it’s one of the richest countries on earth; that’s where they filmed Crazy Rich Asians.


There wasn’t a lot of this going on in 1950s Singapore. Photo by Warner Bros Pictures/Crazy Rich Asians


The through line in all of these economic miracles is market liberalization: Deregulation, removal of tariffs, openness to foreign investment, abolition of price controls, ease of starting a business — all that stuff Michael Moore hates.


South Korea was one of the poorest countries on earth following the end of the Korean War. A liberalized export-oriented economy later, and we’re all using Samsung phones and watching Squid Game while Korea enjoys one of the lowest relative poverty rates in the OECD .


Meanwhile, there’s a giant chunk of Korea that didn’t do any of that market liberalization stuff, and they’re so poor they still get hit by famines .


Capitalism isn’t perfect. It has a bit of a problem with environmental externalities. Although, to capitalism’s credit, once countries get rich, one of the first things they do is pay to stop their rivers from catching on fire.



Child labour is still bad, everyone. Photo by Library of Congress


And if you don’t equip your free market with basic curbs on human exploitation, you will get a Charles Dickens novel.


But, hoo boy, if you want to create a giant pile of money really quickly that your population can then use to stop dying before the age of 40, I cannot recommend capitalism more highly.



Source: Edmonton Sun

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