By Peter Trankner
Around 200 years ago, most of humanity lived in a world that is difficult for us to imagine today: hunger was normal, child mortality was shockingly high, medical care was practically nonexistent, education was a privilege of the few and social mobility was almost impossible. Poverty was the natural condition of mankind.
Then came the Industrial Revolution.
With steam engines, and later electricity, modern agriculture, science, medicine and global trade, the world changed fundamentally. Production costs fell, food became more available, transportation accelerated, knowledge spread and labor became more productive. What had once been reserved only for the elite gradually became accessible to broader segments of society.
The numbers are remarkable: around 1820, an estimated 80–90 percent of the world’s population lived in extreme poverty. Today, despite modern crises, that figure is below 10 percent. Global life expectancy, once often below 30 to 40 years, is now above 70 years worldwide.
This transformation did not happen through the redistribution of wealth, but through the creation of wealth. Capital, investment, innovation and competition made productivity leaps possible that were previously unimaginable. Capitalism was not merely an economic system for the rich — historically, it became the engine of mass prosperity.
There is an often overlooked point: prosperity is created not only by systems, but by personal initiative. People who take responsibility for their own problems — who take risks, work hard, save, invest and act instead of waiting for handouts or miracles — are those who create progress. Those who permanently depend on government support, redistribution, or simply the hope that someone else will solve their problems usually remain dependent.
Personal responsibility is one of the foundations of every free society. Progress often begins not in parliament, but in the mind of the individual. The opposite model is socialism in its real-world form: the promise of equality. In practice, however, this promise frequently ends in a low-level equilibrium: under socialism, everyone is equal—equally poor.
In other words: “Socialism is the equal sharing of misery” (Winston Churchill). Only a small political elite, the nomenklatura, lives in comfort and privilege. The clearest example is North Korea.
Further examples can be seen in Venezuela, Cuba and Argentina:
Venezuela, once one of the wealthiest countries in Latin America, suffered a dramatic economic collapse under decades of socialist state control, price regulations, mismanagement and corruption. Millions of people left the country because even basic supplies became difficult to obtain.
Cuba also demonstrates the structural weaknesses of a heavily state-controlled system: low wages, chronic shortages of daily necessities, immense poverty and the emigration of skilled workers. Privileged access to wealth is reserved only for those connected to power and hard currency.
Argentina, through Peronist policies and a bloated public-sector bureaucracy, has seen a long-term decline that has contributed significantly to its poverty.
This is the uncomfortable truth for ideological leftists: Only open-market capitalism creates mass prosperity. Poverty is not created by capitalism; it is created by corruption, bad governance, failed institutions and political systems that destroy initiative instead of rewarding it.
A powerful and positive example is China. Although politically a socialist one-party state, it embraced large parts of a market-driven economy with strong capitalist elements. Over the last 30 years, this economic transformation helped lift around 800 million people out of extreme poverty. It reflected the spirit of Deng Xiaoping’s famous principle: “To get rich is glorious.” Instead of resorting to the usual China-bashing, wouldn’t it be more useful to ask what made China — and now also Vietnam — so economically successful?
