1 00:00:02,140 --> 00:00:05,800 “The rich are getting richer and the poor are getting poorer.” 2 00:00:05,800 --> 00:00:09,600 “The top one per cent of people on the planet have half the wealth.” 3 00:00:09,600 --> 00:00:13,040 “Western corporations are plundering developing countries.” 4 00:00:13,040 --> 00:00:16,760 “Capitalism is on its last legs.” 5 00:00:16,760 --> 00:00:18,440 Really? 6 00:00:18,440 --> 00:00:22,380 The truth is that global inequality is tumbling. 7 00:00:22,380 --> 00:00:26,800 Yes, the rich are getting richer—but the poor are getting richer faster. 8 00:00:26,800 --> 00:00:29,100 And what’s driving that process? 9 00:00:29,100 --> 00:00:30,800 The market. 10 00:00:30,800 --> 00:00:33,260 Look at the most basic measures: Literacy. 11 00:00:33,260 --> 00:00:34,220 Longevity. 12 00:00:34,220 --> 00:00:35,520 Infant mortality. 13 00:00:35,520 --> 00:00:36,500 Calorie intake. 14 00:00:36,500 --> 00:00:37,560 Height. 15 00:00:37,620 --> 00:00:42,240 More and more people are being lifted out of poverty. 16 00:00:42,240 --> 00:00:45,540 I think of the changes just in my lifetime. 17 00:00:45,540 --> 00:00:51,100 When I was born, in 1971, an American worker had to earn a month’s salary to be able 18 00:00:51,100 --> 00:00:53,220 to afford a TV set. 19 00:00:53,220 --> 00:00:55,380 Now, it’s two days. 20 00:00:55,380 --> 00:01:01,060 In 1971, fewer than half of girls worldwide completed at least primary education. 21 00:01:01,060 --> 00:01:03,640 Now, it’s more than 90 percent. 22 00:01:03,640 --> 00:01:11,660 In 1971, a stationary car emitted more pollution than a car moving at full speed today. 23 00:01:11,660 --> 00:01:13,320 Go a little further back. 24 00:01:13,320 --> 00:01:18,660 In the seventeenth century, the most powerful man in the world was Louis XIV of France. 25 00:01:18,660 --> 00:01:22,760 Every night, he’d have 40 dishes prepared for his dinner, and he’d pick the one 26 00:01:22,760 --> 00:01:24,820 that he felt like. 27 00:01:24,820 --> 00:01:29,820 Think about it: A receptionist today can stop off at a store on her way home and have not 28 00:01:29,820 --> 00:01:33,800 only a wider choice than that king, but a fresher one and a healthier one. 29 00:01:33,800 --> 00:01:38,620 We all live better than Louis XIV. 30 00:01:38,620 --> 00:01:41,360 What has caused that miracle? 31 00:01:41,360 --> 00:01:43,679 Not any UN development program. 32 00:01:43,680 --> 00:01:45,860 Not any government aid scheme. 33 00:01:45,860 --> 00:01:49,060 What caused it was the market. 34 00:01:49,060 --> 00:01:53,120 The most rapid falls in poverty are happening in countries that are joining 35 00:01:53,120 --> 00:01:55,420 the global trading system. 36 00:01:55,420 --> 00:02:00,880 Compare growth rates in free-trading Colombia and protectionist Venezuela; or in free-trading 37 00:02:00,880 --> 00:02:07,560 Vietnam and protectionist Laos; or in free-trading Bangladesh and protectionist Pakistan. 38 00:02:07,560 --> 00:02:10,440 It’s the same story every time. 39 00:02:10,440 --> 00:02:14,880 China after 1979, India after 1991. 40 00:02:14,880 --> 00:02:16,700 You remove barriers to trade. 41 00:02:16,700 --> 00:02:17,900 Prices fall. 42 00:02:17,909 --> 00:02:22,239 Your people no longer have to work every hour just to afford food and basic commodities. 43 00:02:22,239 --> 00:02:25,900 They have time to invent and make and buy and sell other things. 44 00:02:25,900 --> 00:02:28,400 The whole economy is stimulated. 45 00:02:28,400 --> 00:02:30,920 Poverty falls. 46 00:02:30,920 --> 00:02:36,540 OK, you might say, so maybe capitalism works; maybe people are better off. 47 00:02:36,540 --> 00:02:38,280 But isn’t there a cost? 48 00:02:38,280 --> 00:02:40,520 Doesn’t it make us more materialistic? 49 00:02:40,520 --> 00:02:43,240 Doesn’t it make us greedier? 50 00:02:43,240 --> 00:02:49,100 If by “greed” you mean a desire for material wealth, that’s part of the human condition. 51 00:02:49,100 --> 00:02:54,180 It’s in our DNA or, if you prefer, it’s in our fallen nature. 52 00:02:54,180 --> 00:03:00,160 Under any system—socialism, communism, fascism, absolute monarchy, theocracy— 53 00:03:00,160 --> 00:03:03,040 people want more stuff. 54 00:03:03,040 --> 00:03:09,040 The unique quality of capitalism is that it structures the incentives so that the way 55 00:03:09,040 --> 00:03:13,900 to succeed—the way to be “greedy,” if you insist on using that vocabulary—is to 56 00:03:13,900 --> 00:03:17,440 offer a service to the people around you. 57 00:03:17,440 --> 00:03:23,740 Under every other system, you get on by sucking up to those in power: commissars, 58 00:03:23,740 --> 00:03:25,840 or kings, or dictators. 59 00:03:25,840 --> 00:03:32,100 But under a free market system, you get on by offering consumers something they want. 60 00:03:32,100 --> 00:03:37,220 As the economist Joseph Schumpeter put it, the achievement of capitalism is not to provide 61 00:03:37,220 --> 00:03:44,180 more silk stockings for princesses, but to bring them within the reach of the shop girl. 62 00:03:44,180 --> 00:03:46,680 So, why can’t we see it? 63 00:03:46,680 --> 00:03:52,160 Why do well-intentioned, idealistic young people oppose free trade and market liberalization, 64 00:03:52,160 --> 00:03:55,400 thinking that they’re standing up for the poorest people on the planet, when in fact 65 00:03:55,400 --> 00:03:58,420 they’re doing the opposite? 66 00:03:58,420 --> 00:04:00,840 A big part of the answer is aesthetic. 67 00:04:00,840 --> 00:04:07,840 As the Victorian novelist, Anthony Trollope, wrote, "Poverty, to be scenic, should be rural." 68 00:04:07,840 --> 00:04:12,360 I grew up in Lima, Peru which, in those days, was surrounded by shantytowns 69 00:04:12,360 --> 00:04:14,840 known as las barriadas. 70 00:04:14,840 --> 00:04:18,760 Western visitors would come, and they’d visit Machu Picchu, and then they’d ask 71 00:04:18,760 --> 00:04:24,260 in bewilderment why people would migrate from the Andes to the slums. 72 00:04:24,260 --> 00:04:30,940 Why did they swap the clean air and the mountain scenery for open sewers and traffic fumes? 73 00:04:30,940 --> 00:04:33,200 It’s a very first world question. 74 00:04:33,200 --> 00:04:38,260 No Peruvian ever needed to ask why you’d leave a place with no electricity, no school, 75 00:04:38,260 --> 00:04:41,600 no clinic, and no jobs. 76 00:04:41,600 --> 00:04:47,280 Those shantytowns, those barriadas, for most of their residents, are transitional. 77 00:04:47,280 --> 00:04:51,640 They’re busy places, humming with enterprise, and the people in them sense that they’re 78 00:04:51,650 --> 00:04:53,750 on their way up. 79 00:04:53,750 --> 00:05:01,220 If we want to help those people, the best thing we can do is let them sell us their stuff. 80 00:05:01,220 --> 00:05:07,880 Capitalism has achieved things which earlier ages ascribed to gods and magicians. 81 00:05:07,880 --> 00:05:11,820 It’s abolishing hunger and disease and want. 82 00:05:11,820 --> 00:05:17,620 It’s led to an unprecedented enrichment that is the central fact of your life. 83 00:05:17,620 --> 00:05:21,780 The fact that you’re watching this video is enough to tell me that. 84 00:05:21,780 --> 00:05:26,560 Now let it work its magic in the rest of the world. 85 00:05:26,560 --> 00:05:29,520 I’m Daniel Hannan for Prager University.