The World Is Getting Better and Better

Poverty rate slashed 80 percent since 1970

There often is a tendency for those concerned about the size and scope of government to feel like everything is getting perpetually worse. But a full look at the evidence shows this isn't so.

While critics claim that free trade and globalization are merely a "race to the bottom," the world as a whole has been quietly reducing poverty, disease, famines and war by embracing the free market.

University of Michigan-Flint economist Mark Perry has a chart showing the remarkable decrease in the world poverty rate, which has fallen 80 percent, from 26.8 percent in 1970 to 5.4 percent in 2006.

Poverty Graph

Much of this is the result of formerly Communist and Socialist economies becoming more market based. China, India and most of South America have been embracing capitalism for decades, while Africa also is moving toward freer markets in more recent years, according to the "Economic Freedom of the World" reports.

The most noteworthy country is China. In the early 1980s, the country began moving away from its strict model of economic central planning and began freeing up its markets. From 1981 until 2010, the country pulled over 600 million people out of extreme poverty, at a time when the population increased by 330 million citizens. That's an average of 1.7 million people every month, or, as a comparison, like a population the size of Idaho moving up into the middle-class every month.

By their nature, think tanks are supposed to see beyond the momentary political battles that dominate news headlines every day and focus on the big picture. That's why the Mackinac Center for Public Policy advocated for a right-to-work law for more than 20 years — at a time when the idea was ridiculed across the political spectrum. The dynamism of the world economy is evidence enough of the importance of long-term thinking.

And it is important for those of us wishing for a more limited state to be ever vigilant, because more freedom leads to a better world.

As Arthur Brooks, president of the American Enterprise Institute, recently said: "I will state, assert and defend the statement that if you love the poor, if you are a good Samaritan, you must stand for the free enterprise system, and you must defend it, not just for ourselves but for people around the world. It is the best anti-poverty measure ever invented."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.