How Mao Zedong Helped to Reduce Poverty
Mao Zedong's death, and the subsequent reforms of Deng Xiaoping, were major catalysts to ushering in an era of global prosperity.
My hometown newspapers, the Miami Herald and El Nuevo Herald, have recently headlined stories on the tragic increase of hunger in Venezuela.
Yes, it is important to call attention to how the socialist regime of Chavez-Maduro has impoverished that resource-rich nation. It is also important to focus the spotlight on the economic disasters brought about by “command economies” in Cuba, North Korea, and everywhere where the allure of central planning has prevailed.
Yet, there is a broader story of how extreme poverty is being eradicated worldwide, and how the world is becoming middle class, as argued by Harvard’s psychology professor Steven Pinker. Dr. Pinker is listed by Time, Foreign Policy, and other magazines as one of the world’s most influential thinkers.
He protests, together with economist Max Roser, whose work focuses on how living conditions around the world are changing, that headlines should proclaim:
“NUMBER OF PEOPLE IN EXTREME POVERTY FELL BY 137,000 SINCE YESTERDAY”
They assert that this same headline could have been repeated by the media every day for the last twenty-five years. That is how much daily progress we are making in reducing worldwide extreme poverty. From 1820 to 2015, the percentage of the world population living in extreme poverty has declined from 90% to 10%. Almost half of that decline has occurred in the last thirty-five years.
This brings up the obvious question as to why has extreme poverty declined so dramatically as of late. To this question, International Development economist Steven Radelet offers a witty explanation: “In 1976, Mao single-handedly and dramatically changed the direction of global poverty with one simple act: he died.”
What these social scientists are pointing out is that, the death of Mao Zedong unleashed major causes for the worldwide decline of extreme poverty. In China, Mao’s death allowed the introduction of substantial free-market reforms by his successor Deng Xiaoping.
The poverty reduction success of free-market reforms in China has been dramatic. Since Mao’s death, the daily caloric consumption per person in China has increased from approximately 1,500 calories to 3,100 calories. This higher level is what U.S. guidelines recommend as needed for a highly active young man.
It is not a stretch to affirm that Mao’s death, and the demonstration effect of the success of free-market capitalism in China, had an ideological impact on the rest of the Communist and socialist world. Within fifteen years, the Soviet Bloc had imploded, most of the socialist world was in disarray, and the intellectual advocates of communism were in dismay.
Beginning in the 1980s world economies began emulating China in a shift from collectivization and central planning to more open economies; not only in Russia and Eastern Europe, but in countries such as India, Brazil, and Vietnam, as well as some African countries.
Today, calories consumed per person per day in Africa have risen to 2,600, and for India’s population of one billion, caloric consumption is at 2,400. As a pervasive problem, catastrophic famines seem to have been eradicated from most continents although unfortunately, they still occur in some regions.
And there is more good news. Increases in wealth, as measured by GDP per capita, are naturally correlated with better nutrition and health, and correspondingly, with longer lives. But a much less obvious correlation is also at play. Increases in a country’s wealth also correlate positively with higher ethical values, with human rights, with tolerance, with freedom, and with peace, according to Steven Pinker.
Demonstrably, extreme poverty is declining worldwide. Scholars can attribute the worldwide poverty reduction to myriad factors: the end of the Cold War, technological advances in industry and agriculture, globalization, the increased trade facilitated by large container ships and cargo aircraft, lower tariffs, lower barriers to international investments, and much more.
But, as Dr. Pinker notes, when a lot of good things are happening at once, and they reinforce each other; it is analytically difficult to identify the first domino in the falling dominos series.
Personally, I harken back to the words of Radelet: “Mao single-handedly and dramatically changed the direction of global poverty with one simple act: he died.”
That was the first falling domino.
Dr. Azel’s latest book is “Reflections on Freedom.”