The development of free market economies has been accompanied by a large decrease in poverty around the globe. Extreme poverty is virtually nonexistent in the most industrialized countries.
Many people believe that after the fall of the Soviet Union more than 20 years ago, the world went through a wave of globalized development. Capitalism spread and free markets were adopted in numerous countries. Industries became a focus of countries everywhere.
Thirty years ago, 50 percent of people in poor nations were living in extreme poverty. Since the development of global markets, however, 21 percent of people in poor nations around the world are considered to be living in extreme poverty.
Capitalism has some clear effects on a country’s economic system, and therefore on its citizens. Free markets open up trade opportunities, increase competition for jobs and extend life expectancy.
When countries use free markets, they immediately become a global partner in trade. They are more able to import and export their products to a larger market, thus increasing their economic wealth greatly. Countries with higher economic success generally see less poverty in their citizens.
In a capitalistic system, jobs are given to those who work for them, and the workers only get paid when they complete their requirements. When there are more people than positions available, people will increase their efforts to rise above the rest and claim that position. Creating a competitive environment can increase the effort people put forward. Efforts to alleviate poverty must come from a system that rewards productivity and industriousness.
With the increase of economic prosperity in countries with many people living in poverty, they can move from the lowest global income bracket to the middle-income bracket. Data shows that by moving up in economic status, life expectancy increases. When people are in the lowest bracket, life expectancy is around 40; however, in the middle bracket, it increases to 60.
As seen in past experience, developing the free market system may be the best solution for the countries that are facing large amounts of poverty.
Ismael Hernandez, a writer for News-Press.com, said, “Wherever culture and institutions focus on creative and productive activity, you put in motion processes where great civilizations emerge and the lives of people are enhanced.”
— Hannah Cleveland