Wealth and Nations

TCS Daily: Wealth and Nations

MONTERREY, Mexico — Is global capitalism making the poor even poorer, or is it in fact rescuing millions of people out of their misery?

I recently had the chance to participate in a series of debates here about this issue organized by Foreign Policy magazine and Letras Libres, a Mexican cultural publication  Nothing I heard at that meeting changed my conviction that the glass is half-full despite the doomsayers who predict horrific calamities.

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The fact that 20 percent of the world's population is extremely poor should not make us forget that millions of lives have improved dramatically in the last three decades. Illiteracy has dropped from 44 percent to 18 percent, and only three countries out of a total of 102 included in the U.N.'s Human Development Index have seen their socioeconomic conditions deteriorate. China's economy used to represent one-26th of the average economy of the countries that comprise the Organization for Economic Cooperation and Development; today it represents one-sixth.

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Poverty was the natural condition of all of humanity until the market economy opened up the possibility of ever-increasing productivity. By 2030, it is estimated that the average wealth of developing countries will be equivalent to that of the Czech Republic today ($22,000 per person). The World Bank's recent "Global Economic Prospects" report goes as far as to say that Mexico, Turkey and China will equal Spain's current state of development, which is high.

At the recent meeting in Monterrey, those who were trying to justify their phobia against globalization pointed to Cuba and Venezuela as paradigms of development, and to Mexico's poor in claiming that increased trade — through the North American Free Trade Agreement — shortchanges the masses.

In 1953, Cuba's wealth was comparable to that of the state of Mississippi; today, the island's exports total one-third of the sales of Bacardi rum products, the economic icon of the Cuban exile community. Venezuela's economic system is a classic case of state capitalism based on oil — exactly what made that nation's per-capita income go from representing the equivalent of two-thirds of that of the United States in the 1950s to representing barely 15 percent today. And Mexico's slums are not a factor of that country's increased trade with its North American neighbors, which has quadrupled in the last 15 years, but of the slow pace of reform.

The world was not rich and suddenly turned poor. The progress of the market economy that began to free the world of its shackles continues at an even faster pace today despite the many restrictions still faced by the people who create wealth and exchange it, and despite the fears that these momentous times understandably inspire in those who have difficulty adapting. What a heartening thought.