Global Capitalism: The Solution to World Oppression and Poverty (Part 3 of 3)

by | Sep 30, 2005

The freedom of the capitalist countries has created the most upwardly mobile societies of history, with hundreds of millions of human beings currently enjoying middle class comforts — people whose ancestors were poor just one or two centuries ago, or, in some cases, just decades ago. Further, according to the U.S. government, the poverty threshold […]

The freedom of the capitalist countries has created the most upwardly mobile societies of history, with hundreds of millions of human beings currently enjoying middle class comforts — people whose ancestors were poor just one or two centuries ago, or, in some cases, just decades ago. Further, according to the U.S. government, the poverty threshold for a family of four in 1997 was an annual income of roughly $16,400, i.e., at or below a per capita income of $4,100 per year. This certainly constitutes poverty by the standards of capitalist nations. But what are the standards of non-capitalist nations? 12


What are the conditions of the non-capitalist countries? The first issue to be examined is a society’s attitude toward the underlying cause of wealth – the Enlightenment principles of respect for the mind, individual rights and political-economic freedom. The second is the economic results of those attitudes.

In feudal Europe, prior to the capitalist revolution of the late 18th century, serfdom and its legacy dominated. Peasants were often legally tied to the land and possessed few rights. Commoners, more broadly, were subordinated to the king, aristocrats and Church, and free thought was punished. Voltaire, for example, was imprisoned for his revolutionary ideas, as was Diderot. D’Alembert, the great French scientist and writer, was intimidated by the authorities into temporarily severing his association with the Encyclopedie. Galileo was threatened with torture and Giordano Bruno burned at the stake for supporting scientific theories that clashed with the teachings of the Church. Feudalism – the dictatorship of the aristocracy – suppressed the mind, abrogated individual rights and denied political-economic freedom.

With the minds and actions of commoners – the overwhelming preponderance of men – severely circumscribed, the results were predictable. Poverty, famine and disease were endemic during the feudal era. For example, the bubonic plague wiped out almost one-third of Europe’s population in the 14th century, and recurred incessantly into the 18th. Famine, too, was widespread in Europe until the 18th century, killing sizable portions of the population in Scotland, Finland, Ireland – and causing misery and death even in such relatively prosperous countries as England and France. Regarding living standards, one expert, Angus Maddison, states that economic growth during the centuries 500-1500 was non-existent; and that per capita income rose by merely 0.1 percent per year in the years 1500-1700. In 1500, Maddison claims, the European per capita GDP was roughly $215 per year; in 1700, roughly $265. Contrast such economic stagnation with the capitalist epoch, the years 1820 to the present, in which Western Europe and the world’s other freest nations’ total economic output increased sixty times, and per capita income grew to be 13 times what it had been previously. The European population roughly tripled during the 19th century while per capita living standards steadily rose. 13

Cures for disease, economic growth, agricultural and industrial revolutions – the means by which human beings rise above deprivation and misery – are products of the rational mind operating under conditions of political-economic freedom. Capitalism provides those conditions; feudalism did not.

But today, despite the lessons of the past, political dictatorships even worse than those of feudal Europe proliferate across the globe. For example, though Communism today may be in its death throes, it butchered 100 million innocent victims in 80 years and still enslaves and murders innocent men in China, in Cuba and in North Korea. More broadly, statism – the subjugation of the individual by the state – exists everywhere. Brutal theocracies and military dictatorships in the Middle East murder their own citizens, and sponsor terrorist attacks against the world’s freest country, the United States. In Africa, individual rights and liberty are non-existent – the continent bristles with military and/or tribal dictatorships. For too long the situation was no different in Haiti and only slightly better throughout Latin and South America, where sundry tin pot dictators were and remain the rule. Today, more than 225 years after the American Revolution, freedom is virtually unknown around the globe

In North Korea, Communist oppression is unspeakable. As merely one example, political prisoners are enslaved, starved and used for target practice by guards and troops. In Iraq, under Saddam Hussein, the torture and execution of political prisoners was routine. In Afganistan, the Taliban denied the right to an independent life to the entire female gender, oppressing by that policy alone one/half of the country’s population. Further, to be brutally honest, any degree of freedom is virtually unknown on the African continent.14

One example is Sudan. Its dictator, Omar Hassan Ahmed al-Bashir, continued the policies of one of his predecessors, Jaafar Nimeri, persecuting the non-Muslim and black population of the country’s south. Human Rights Watch Africa labeled Sudan’s record on rights “abysmal,” and reported that all forms of political opposition were banned, both legally and by means of systematic terror. The war against blacks and Christians in the south continued, including the bombing of villages. As part of the ongoing war, the ancient practice of slavery was revived there, as well. “Slavery in the Sudan is in part a result of a 15-year war by the Muslim north against the black Christian and animist south. Arab militias, armed by the Khartoum government, raid villages, mostly of the Dinka tribe. They shoot the men and enslave the women and children. Women and children are kept as personal property or they’re taken north and auctioned off…In Sudanese slave markets, a woman or a child can be purchased for $90.” Such U.S. organizations as the American Anti-Slavery Group have a stopgap mission of buying, at a cost of $85 each, black women and children whom the Sudanese Muslims capture, enslave and torture. The purchase made by these groups emancipate the slaves. 15

In Rwanda in 1994, Hutu tribesmen slaughtered hundreds of thousands of innocent victims, mostly members of the Tutsi tribe, hacking them to pieces with machetes, then stacking the corpses in piles like so much cordwood. The Hutus butchered 800,000 men, women and children in 100 days, averaging 8,000 murders per day in “the fastest, most efficient killing spree of the twentieth century.” 16

The non-capitalist nations of the Communist and 3rd Worlds are brutal dictatorships, often wracked by bloody, internecine tribal warfare, in which the principles of individual rights and liberty are utterly unknown. Crucially, the rational mind is repudiated in these societies in favor of tribalism, faith and unremitting brute force. It should, therefore, come as no surprise that millions of individuals subsist in the most abysmal poverty in these countries – a destitution undreamed of in the capitalist world for almost 2 centuries.

In Sudan, for example, per capita GDP is $296.00 per year; in Rwanda, it is $227.00; in Communist North Korea, where nighttime satellite photographs reveal utter darkness because the country lacks electricity, conditions are just as grim. Despite massive aid from the capitalist West, tens of thousands of human beings, by conservative estimate, starved to death there in recent years. By contrast, the freer, semi-capitalist South Korea enjoys living standards more than 30 times those of the North and is perpetually free of famine. Similarly, the per capita standard of living for Cuban-Americans in Miami is roughly 20 times what it is for those trapped in the prison of Castro’s Cuba. In Communist Vietnam, per capita GDP is $331 and the economy is stagnating, while its freer, semi-capitalist neighbor, Thailand, enjoys a per capita GDP 8 times that and growing. Just as there is a stunning correlation in the world between freedom and prosperity, so there is an equally stunning correlation between statism and destitution. By the standards of capitalist America, poverty is reached when one descends to the threshold of $4,000.00 per year – an income 10 or 12 or 15 times the average figure in non-capitalist countries of both the past and the present. 17

The non-capitalist nations of the world today are more brutally repressed even than those of feudal Europe, which explains why, despite the global diffusion of American technology, their living standards are virtually identical to that earlier era. When the mind is suppressed, technological, industrial and agricultural development – the achievements of the mind – are stifled.

Capitalism protects the inalienable rights of the individual and is, therefore, the only moral system. Because it respects the minds and rights of all individuals, it thereby creates vast wealth, and is the only practical system. By contrast, statism systematically violates the rights of individuals and is, therefore, immoral. Because it suppresses the mind and violates men’s rights, it thereby causes abysmal poverty and is utterly impractical.

Men’s choice today is stark: freedom and prosperity – or statism and misery. Capitalism, and the Enlightenment principles upon which it rests, if and when chosen, will bring freedom and prosperity to the oppressed masses of the 3rd World in the exact manner it did to the oppressed masses of feudal Europe.

Examples of this can be seen in the Communist dictatorships of Asia. During the blood-drenched rule of Mao tse Tung, the regime’s atrocities were unspeakable; at least 65 million innocent individuals were butchered by the Communists during that 30 year reign of terror. Nobody knows how many of that total died when Mao forcibly attempted to collectivize the peasants “during the ill-named Great Leap Forward – estimates range from 20 million to 43 million dead for the years 1959-1961…Mao and the system that he created were directly responsible for what was…the most murderous famine of all time, anywhere in the world.” 18

To speak exactly, there were no “living standards” under Mao; there were only “dying standards.” Conditions only began to improve under the slightly less brutal regime of Deng Xioping. Beginning in the late 1970s, Deng permitted some elements of private ownership and profit seeking. Farmers could consume or sell for profit whatever they produced above state quotas. The result was that agricultural production increased by more than 50 percent in just 16 years.

Deng further permitted the establishment of Special Enterprise Zones (SEZs) with some elements of free enterprise. Guangdong, one such zone, showed an economic growth rate of almost 14 percent, significantly above the national average. The province, possessing a fraction of China’s total population and resources, produced 30 percent of the country’s exports. Even these limited capitalist elements produced dramatic results. When Deng came to power in 1978, the country was desperately poor: 60 percent of its population subsisted on less than a dollar a day. The new elements of free enterprise caused the country’s per capita income to double between 1978 and 1987, and then to double again between 1987 and 1996. Today, China ‘s per capita GDP is $727, vastly below neighboring Taiwan’s figure of $12,461, but an enormous leap above the less-than-$200 total it was under undiluted Communism. 19

China remains a brutal dictatorship, and as such it can never equal vastly freer, semi-capitalist Taiwan’s living standards. But the creative abilities of rational men are such that even minimal amounts of freedom enable them to dramatically raise living standards in an otherwise destitute statist regime.

The situation is similar in Communist Vietnam. There, the minimum wage averages out to $134 annually; but Nike, who owns Vietnamese factories – misleadingly dubbed “sweatshops” by anti-capitalist ideologues – pays an average salary of $670, a sum that is double the country’s per capita GDP. “In the poorest developing countries, someone working for an American employer draws no less than eight times the average national wage.” Further, Western companies in the poorest countries pay their workers, on average, twice what the corresponding native firms pay. 20

The difference is the technology made affordable by the greater capital accumulated and invested by American and other Western firms. In general, white collar workers using personal computers, the Internet, fax machines and global conference calling capabilities can be far more productive than ones lacking these advances and working on old-fashioned typewriters. Similarly, blue collar workers using steam shovels, cranes and power tools can be far more productive than ones relying merely on shovels and pick axes. Based on the subsequent vastly increased output of labor, the workers’ effort is worth more to the company, which can then afford to pay higher wages. It is the advanced technology and more modern plants that Nike deploys that enables it to pay destitute 3rd World workers significantly higher wages.

Technological and industrial advances – the achievements of the minds of men operating under conditions of political-economic freedom – are raising living standards in 21st century Asia just as they did in 18th century Europe.

The real problem in 3rd World countries is not that Western companies exploit their workers – they do not; it is that indigenous dictatorial regimes – whether communist, socialist, theocratic, feudal or military – oppress their own citizens. The moral imperative is not to pressure Nike, et. al., into “better treatment” of its employees; it is to overthrow the communist, theocratic or military despots and establish capitalism, the only system that respects the minds and the rights of the individual.

Capitalism is freedom – and freedom leads to prosperity. The moral is the practical. On the other hand, statism is oppression – and oppression leads to destitution. The immoral is the impractical. After two centuries of capitalism, 80 years of socialism and centuries of feudalism, the scores are on the board and the contest is over. The alternatives open to human beings are stark: freedom and prosperity – or statism and misery. Men have only to make their choices.


12. Robert Rector, “The Myth of Widespread American Poverty,”

13. Angus Maddison, Phases of Capitalist Development (New York: Oxford University Press, 1982), pp. 4-7.

14. Stephane Courtois, et. al., The Black Book of Communism (Cambridge, Mass.: Harvard University Press, 1999), pp. 547-564.

15. Ronald Segal, Islam’s Black Slaves: The Other Black Diaspora (New York: Farrar, Straus and Giroux), pp. 199-223. See also the American Anti-Slavery Group’s website:

16. Samantha Power, “Bystanders to Genocide,” The Atlantic Monthly, September 2001.

17. Gerald O’Driscoll, The 2001 Index of Economic Freedom, op. cit., pp. 143-144, 229-232, 317-318, 341-342, 357-358, 387-389. Peter Brimelow, “The High Cost of Castro,” Hoover Digest 1998 No. 3. William Ratliff, “Cuba: Semper Fidel,” Hoover Digest 2001 No. 4. Robert Levine and Moises Asis, Cuban Miami (New Brunswick, NJ: Rutgers University Press, 2000), pp. 3-6, 93-105. Carlos Seiglie, “Cuba’s Road to Serfdom,” The Cato Journal, Vol. 20, No. 3. Miguel Faria, M.D., Cuba in Revolution (Macon, Georgia: Hacienda Publishing, 2002), pp. 177-194 and passim.

18. Stephane Courtois, The Black Book of Communism, op. cit., pp. 487-496.

19. Daniel Yergin and Joseph Stanislaw, The Commanding Heights (New York: Simon and Schuster, 1998), pp. 194-216. Gerald O’Driscoll, 2001 Index of Economic Freedom, op. cit., pp. 127-132.

20. Johan Norberg, In Defense of Global Capitalism (Stockholm: Timbro, 2001), pp. 202-205.


Andrew Bernstein holds a Ph.D. in Philosophy from the City University of New York. He lectures all over the world. He is a senior writer for the Ayn Rand Institute. He has written numerous books, including his novel, A Dearth of Eagles, recently published and available from Amazon.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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