It might be the greatest achievement in human history, and yet so few have ever heard it. Global extreme poverty (defined by the United Nations as living on less than $1.90 a day), has been nearly eradicated. As recently as 1990, 32 percent of the world’s population subsisted on less than $1.90 a day. In 2005, the number was 20 percent. Now, the World Bank reports that as of 2015 this number had been reduced to 10 percent. A remarkable 50 percent cut in half in a decade. The pace of progress has been astounding, and it is only accelerating. It is not only possible but also highly probable that we will see the eradication of extreme poverty within the next 20 years.


What is truly astounding about this achievement is that it is entirely the product of human ingenuity and cooperation. Crushing poverty, rampant disease, constant warfare, sky-high infant and maternal mortality, and Malthusian food constraints were not consigned to the dustbin of history by mere happenstance. Something happened. Human beings developed the rule of law, open markets, and social norms conducive to the free exchange of goods and ideas, and, in so doing, we unleashed our unlimited potential to cooperate and innovate beyond anything dreamed imaginable. In short, in a mere two and a half centuries liberal democratic capitalism has nearly eradicated or vastly reduced almost every material problem from the old world that would then have been considered a scourge of civilization.

For over 5,000 years, the norm was to live a life that was, to quote Thomas Hobbes, “Solitary, poor, nasty, brutish, and short.”  If anything, this was an understatement. For nearly all human history, the average person was born into the world with a one in three chance of dying before the age of five.  If he did survive to adulthood (and this would have been defined as somewhere in his midteens, or even younger, for most peoples throughout much of recorded history), he would have lived a life of meager subsistence, engaging in backbreaking labor all day, nearly every day, just to produce enough to survive.  If he did survive, our average man would have an extremely high chance of contracting any one of dozens of diseases modern medicine has either wiped from the face of the earth or drastically reduced in virulence.  If he managed to make it through his early adult life without dying of Typhus, Malaria, Measles, Tuberculosis, Yellow Fever, Smallpox, or Plague, and somehow produced enough to feed himself and his family, he was still likely to die before he turned 40.

This was the lot in life of the vast bulk of humanity before the mid-1700s, and it was not getting any better: before the industrial revolution of the late 18th and early 19th centuries, literally, everyone lived on under $3 a day.  Economist Agnus Maddison estimates that between the years 1 A.D. and 1820 A.D., world GDP grew at a pace of 0.06 percent per year, or, 6 percent per century.  That is essentially no growth at all for 1800 years.

Then, around the year 1700, something astounding happened. Suddenly, we were becoming wealthier.  First in Holland and England, then in the “new world” and beyond, human beings started to blast their way out of the grinding poverty and torturous living conditions that had since then prevailed.  Economic progress exploded.  And by the late 19th century, growth rates could hover around 6 percent for decades at a time.  Incomes and living standards rose.  Once people could feed themselves and their families, they invested what was left.  The rule of law established and their property rights secure, investors took those savings and dedicated them to funding innovations, which in turn generated a greater surplus, and on and on in a virtuous cycle up to the present day.