Marx’s Predictions Failed: There are Fewer and Fewer Poor People

By: Vanesa Vallejo - Dec 25, 2016, 10:28 pm
Los países que, como Venezuela, han llevado al extremo la idea de un Estado planificador que controla la mayor cantidad de aspectos posibles en una economía, se han un hundido en un pozo sin fondo del cual sólo el liberalismo podrá sacarlos. (Orígenes)
Countries such as Venezuela have sunk into a bottomless pit from which only classical liberalism can pull them out. (Orígenes)

Karl Marx’s ideas have been put into action dozens of times in different parts of the world. These have always had the same consequences: death and misery. A country’s failure level is proportional to the intensity with which they apply the recommendations of the father of modern communism.

Countries that have pushed to the extreme the idea of a planning state that controls as many aspects as possible in an economy, such as Venezuela, have sunk into a bottomless pit from which only classical liberalism can pull them out. Others, such as Switzerland, have understood that the more prominence given to individuals, the greater the welfare. And between Switzerland and Venezuela, there are a lot of countries whose failure depends on the level of State intervention.

Now, although it seems clear that a country’s failure is directly proportional to the degree to which they apply Marx’s advice, it is surprising to see how, in spite of the nefarious results of communism, the fears that drove millions of people into the ranks of Marxism continue captivating supporters.

The leader par excellence of modern communism frightened hundreds of young people, making them believe that capitalism would have inevitable consequences: misery, concentration of wealth, and slavery. Today, in spite of the clear evidence of Marx’s tremendous mistake, progressives still believe that capitalism will lead us to a debacle with no way out.

Well, although the nefarious result of Marx’s ideas is obvious, I will now present the evident to you, dear reader, with graphs and data: the father of modern communism was mistaken in all of his predictions. Capitalism has only brought well-being, and the number of poor people has declined worldwide.

  1. Contrary to end up immersed in misery, the whole world is enjoying greater economic well-being

Marx asserted that capitalism would lead people to poverty, and that more and more workers would die of hunger because of the evil capitalists. The data shows the opposite: there is no better remedy than capitalism to get out of misery.

The World Bank’s graph below shows how the population living in extreme poverty throughout the world has decreased from more than 80 percent in 1820, to around 20 percent today.

Source: World Bank
Source: World Bank

Marx was incredibly mistaken. Year after year, thanks to capitalism, there are fewer and fewer poor people in the world. And despite results as obvious as those in this chart, people still have the vague idea that we are getting worse.

That is not true. We are increasingly getting better. And this happens all over the world, as we can see in the following image: the number of poor people has decreased in every region.

Fuente: Banco Mundial
Source: World Bank
  1. The workers and the poorest, contrary to what Marx said, have better economic conditions and greater well-being

Marxists use as one of their strongest weapons the idea that the entrepreneurs exploit and enslave workers. Therefore, they claim, the latter will be increasingly poor. That is how they convince thousands of unwary workers with no basic notions of economics to join in their ranks.

However, figures are clear. Currently, regular workers live with levels of economic well-being that not even the kings of the past could get. Electricity, hot water, television, and the normal things that anyone enjoys these days, were not available for the nobility.

Marx was wrong: the poorest people from countries with market economies live much better than the kings of the sixteenth century.

The following graph shows how the freer countries, which avoid Marx’s advice, offer a better standard of living to its poorer inhabitants than those in countries where communism has gained greater acceptance, and the State plays a more important role.

Income from the poorest 10 percent vs. economic freedom

Fuente: Índice de Libertad Económica en el Mundo: Informe Anual 2015. Fraser Institute
Source: Index of Economic Freedom in the World: Annual Report 2015. Fraser Institute

That is to say, above all, capitalism benefits the poorest.

In 1950, for example, as shown in the graph below, workers spent on average more than 2,200 hours a year at work. By 2010, the annual average of hours had been reduced to 1800.

Fuente: OMT
Source: ILO

It seems clear now that Marx’s predictions about the misery that capitalism would bring to the world, and how inconvenient it is for the poor, make no sense. The history of humanity is a history of poverty until the industrial revolution, when the world got to know capitalism and market economy.

The human being has always lived on the edge of subsistence, until he began to do just the opposite of what Marx proposes. The capitalist economy has simply had an unqualified success.

Great Marxist thinkers, especially affiliated with the Frankfurt school, such as Antonio Gramsci, the father of modern progressivism, know all this. Hence they have changed their strategy.

Marx was evidently wrong, and capitalism has achieved the complete opposite of what the communists claim. That is why the only option they have left is to appeal to emotions, since logic and reason make it clear that there is no point in continuing to fight for a criminal ideology.

Vanesa Vallejo Vanesa Vallejo

Vanesa Vallejo is a Colombian economist, columnist, and classical liberal activist. She is a member of Colombia's Libertarian Movement. Follow her: @VanesaVallejo3.