The idea in a nutshell

  • How do you think we’re doing as a species?
  • What are your views on Capitalism and how it has contributed to the benefit of society?
  • Everything else appears to going quite well if you look at the statistics.
  • That’s not what the media reports, however.
  • It’s also not what most of the people I know believe.
  • This article looks at some relevant statistics in an attempt to outline the reality.
  • Global warming is a problem. In my view, we need more capitalism to fix it; not less.

Ignore The Headlines – Capitalism Is a Success

As a species, we’re richer, healthier, and smarter than we’ve ever been. However, most people I know think the world is f**ked and we’re going to hell in a handbasket – whatever that means.

In this article, I’ve looked at some of the major metrics that track the real quality of societies’ lives. Remember, though, our planet has been around for 4.3 billion years. A lot of the stats I show below, however, only regard the last 46 years.

Some Charts To Explore The Point

I read in the paper the other day that, in 1982, 42% of the world’s population lived in extreme poverty. Now, that figure is around 10% – one billion people have been lifted out.*

I’m 46 years old. In my lifetime, the number of people living in absolute poverty (currently an income below $1.90 per day) has fallen by more than 100,000 people per day. For 46 years. The GDP of the world has risen by roughly 3,000% over the same period.

UK GDP Per Capita Has Increased Approximately 30 times since 1770

GDP – Gross Domestic Product – is the total amount produced by an economy. For most of human history, there was no economic growth. In the last 250 years, led by the UK, GDP growth has provided an increase in the standards of living, which were unimaginable for almost all of human history.

And Capitalism has produced much less carbon emissions in that time. US GDP has doubled since 1970, but energy consumption has hardly risen. (As opposed to communist alternatives.)* 

GDP Per Capita has increased dramatically under Capitalism.
Many of the benefits of Capitalism are enabled with the financial resources available to governments through tax from GDP. Source As above.

The Proportion Of People Living In Extreme Poverty

The proportion of people living in extreme poverty has decreased – even as the population has dramatically increased. Nearly 1.1 billion people less live in extreme poverty since I went to University in the early 1990s. The UN defines extreme poverty as those earning < $1.90 per day. Most people (although by no means everyone) believe that $1.90 is the lowest amount that will ensure people their reliable ongoing nutritional needs.

The proportion of people living in extreme poverty has fallen by approximately 130,000 people per day, every day, for the last 50 years or so.
I believe this is the Capitalism’s major achievement.

Life Expectancy Has More than Doubled In The Last 150 Years

When it comes to health, there has been a huge amount of progress. There’s no smallpox, malaria isn’t fatal, there’s less polio, and HIV/AIDS can now, thankfully, be treated (although not cured). Similarly, life expectancy has risen and continues to rise.

Improvements in medical technology have not yet plateaued. At least 10 key areas are likely to yield material benefits in the next decade, including gene editing, new cancer treatments, and treatments to fight Alzheimer’s.

Life Expectancy is a side effect of the wealth created by Capitalism.
Life expectancy increases by about 3 hours for every day you’re alive.

Proportion Of People Living In Freedom

Freedom is not a singular thing – it’s more of a spectrum. For example, men have some rights in Saudi Arabia; women less. Generally, however, the proportion of the world population living in some version of freedom has improved a great deal. Some economists even believe that Capitalism is the most direct force stimulating the growth in individual freedoms.

The proportion of people living in democracy is another factor which has grown quickly in my lifetime.
The proportion of people living in a democracy has risen from 35% to 50% in my lifetime.

Time Spent Waring

Thankfully, I am now 46, and hopefully beyond the age where they’d conscript me. A cursory glance at this chart below, shows that the number of conflicts taking place on the planet is pretty much lower than it has ever been. I’ve seen a similar, related chart – deaths from war – which, of course, follows a similar path.

I’ve also seen a number of reports linking economic progress and the trade-related agreements between governments as strong contributing factors to the reduction in wars.

Deaths from wars and number of wars taking place have both decreased, notably, in the time I’ve been alive.
Deaths from war and total number of wars taking place have both fallen since 1500 – and notably in the time I’ve been alive. 

Global Literacy Rates

Literacy rates have risen in my lifetime. Now, just slightly over 10% of people on the planet are illiterate. (People over 15 years old.)
Since 1800, this chart has all but inverted. At the start of measurement, illiteracy stood at 85%. Now, only 15% of people 15 years old or older are illiterate – an approximation of global educational standards.

Global Child Mortality Has Fallen To Virtually Nothing

Child mortality is obviously a component of life expectancy, which has already been covered. I think it’s a significant variable. I just imagine the amount of human misery which has been avoided by parents not needing to watch their kids die, and I think this is worth tracking.

Over the course of the last 200 years, Global Child Mortality has fallen precipitously.
A contributor to increases in life expectancy, child mortality, surely one of the worst social harms, has fallen from around 15% to around 5% just in my life time alone.

Global Income Distribution

In the last generation, capitalism has produced the greatest reduction in global income inequality in history.*

Income distribution is an interesting problem. Some (non Behavioral) economists might suggest that it’s not a rational problem of any sort. If you’re cardinally better off this year by 10%, why does it matter that someone else is 20% better off? The reality, however, is that Income Inequality is associated with almost every negative social outcome you can think of – including potentially reversing some of the good work that has been done here.

There is still a lot to do on income inequality. However, comparing current performance to previous years, you can easily see on the chart that we have a fairer distribution now than we’ve ever had before.

Conclusion – why is this a surprise?

The surprising thing about all of this good news is that it’s surprising. Once you become aware of these facts, you might notice, as I have, that versions of this story are Tweeted or released every 6 months. I’ve linked to some of the sources I’ve used in the text above.

This is the news that relates to the real state of the world. I’ve heard it called ‘slow news’. Fast news, (news that fits the 24-hour news cycle) is far more sensational and seductive, but probably not as important. I think there is room for both, of course, but I believe that if this news was reported by the mainstream outlets people watch the most, then people might feel very differently about the state of the world and our part in it.

I’m not saying there are no problems with the world. There clearly are. My point is that as a species, we solve the problems we set out to.

*s reference the Financial Times 19th December 2019)