20 March 2019

What has capitalism ever done for us?

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It’s allowed us to live longer

At the beginning of the nineteenth century, no country on Earth had an average life expectancy of over 40 years. Thanks to improvements in healthcare and living standards brought about by capitalism, almost every country has an average life expectancy of over 70.

Not only are we living much longer, far fewer children are dying. Child mortality rates have plummeted since the 1800s and continue to decrease. A grim exception to this is Venezuela, where the economic collapse brought about by socialism has seen a drastic increase in child mortality rates.

It’s made us richer

For most of human history, economic growth was slow and living standards remained stagnant. However, thanks to the industrial revolution, the economies of Europe and the New World experienced massive growth. People were lifted out of a life of subsistence and grinding poverty and enjoyed a massive increase in their standard of living.

This trend has continued in the West and has spread to countries around the world. The proportion of people living in poverty has more than halved since 1990.

Economic growth continues to increase the standard of living for people living in rich countries, meaning that they can buy more of the things they want and need. What is even more exciting is that it is the world’s poorest people who are getting richer faster than anyone else.

It’s made us more equal

Inequality was described as ‘the defining issue of our time’ by President Obama in 2013. What is more, people are often rightly concerned with the gap between the richest and poorest people on the planet.

Billions of pounds are spent each year by charities, governments, and NGOs in an attempt to deal with inequality and the problems which people believe that it causes. Happily, it looks as though capitalism is solving this issue as well. As people in poor countries become richer than those in wealthier country, they have started to catch up. Global inequality has decreased as a result.

It’s stopping war

It might not seems as though this is the case from watching the news, but international trade has contributed to a decline in the number of wars being fought. Although there are still regional skirmishes, sometimes lasting for many years, the world is becoming progressively more peaceful.

Countries who trade with each other do not tend to wage war on each other. Simply put, the economic benefits of winning wars are not as high as the benefits gained through countries freely trading with each other. As early as the 18th century, Adam Smith believed argued this was the case, and the evidence shows that it is true: if you want the world to live in peace, then you need more capitalism and freer markets.

It’s good new for women

One of the biggest killers of women throughout history has been childbirth. Thanks to capitalism, maternal mortality rates in the Western world have dropped dramatically since the 1800s. What is more, death rates in Asia and Africa have also dropped significantly in countries which have embraced a market economy.

Once again, socialist Venezuela has deviated from the norm. Maternal mortality rates have shot up over the past few years. For the mothers who survive childbirth, many now experience the heartbreak of watching their child die as infant mortality rates have also increased.

It’s given us exciting new technologies

Capitalism has led to a massive increase in new technologies over the past decades and centuries. This technology improves productivity and has led to safer, more interesting, and better paid jobs.

What is more, inventions such as smartphones allow us to keep in touch with friends, get around, learn what’s going on in the world, and find our next date. This broadens our horizons and gives us greater freedom and choice than any other generation.

It’s allowed children to stay in school longer

In the centuries before the industrial revolution, children in Western countries who survived infancy had no choice but to work in order to help to provide for their families. The work was often hard, unpleasant, and dangerous. There was virtually no education, except for the children of wealthy parents. Although this continued through the industrial revolution, the increase in productivity and wealth meant that children no longer had to work.

Child labour is more common in less economically developed countries. However, in countries which have opened and liberalised their markets, child labour rates have fallen over the past three decades and they continue to do so.

It means we can fund essential public services

In much of the world, people receive free or subsidised healthcare, education, and social care. This is only possible as governments place taxes on the productive activities of their people. As Karl Marx himself acknowledged, capitalism is the most efficient way to create wealth. It follows that promoting a vibrant market economy is the best way to provide the funding for public services.

Without capitalism, there can be no way for governments to provide high quality public services.

It’s given us an abundance of food

Over half a century ago, Professor Paul R. Ehrlich predicted that hundreds of millions of people would have starved to death by the 1970s and that humanity might become extinct.

Ehrlich was, obviously, wrong. Far from starving to death due to a depletion of resources, the market has allowed us to allocate scarce resources and find new ones.

What is more, thanks to restaurants and suppliers competing for our business, we get to enjoy food from all over the world. And with the advent  of food delivery apps, there is no need to even leave the house.

It’s allowed us to see more of the world

For most of human history, most people would never leave the village or town in which they were born. Thanks to the wonders of competition and economies of scale, more and more of us can now travel to other parts of the country and to other countries in a way which is relatively affordable.

Not only does this mean that we can experience and learn completely different cultures, it also means that we can have different jobs and form friendships and relationships with people from all around the world.

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Ben Ramanauskas is a Policy Analyst at the Taxpayers' Alliance.