Capitalism and extreme poverty
Dylan Sullivan and Jason Hickel
We recommend reading the recent published study by Dylan Sullivan and Jason Hickel  that challenges the commonly held belief that capitalism is necessary for improving human well-being. The title is “Capitalism and extreme poverty: a global analysis of real wages, human height, and mortality since the long 16th century. [Ed]
- The common notion that extreme poverty is the “natural” condition of humanity and only declined with the rise of capitalism rests on income data that do not adequately capture access to essential goods.
- Data on real wages suggests that, historically, extreme poverty was uncommon and arose primarily during periods of severe social and economic dislocation, particularly under colonialism.
- The rise of capitalism from the long 16th century onward is associated with a decline in wages to below subsistence, a deterioration in human stature, and an upturn in premature mortality.
- In parts of South Asia, sub-Saharan Africa and Latin America, wages and/ or height have still not recovered.
- Where progress has occurred, significant improvements in human welfare began only around the 20th century. These gains coincide with the rise of anti-colonial and socialist political movements.
This paper assesses claims that, prior to the 19th century, around 90% of the human population lived in extreme poverty (defined as the inability to access essential goods), and that global human welfare only began to improve with the rise of capitalism. These claims rely on national accounts and PPP exchange rates that do not adequately capture changes in people’s access to essential goods. We assess this narrative against extant data on three empirical indicators of human welfare: real wages (with respect to a subsistence basket), human height, and mortality. We ask whether these indicators improved or deteriorated with the rise of capitalism in five world regions Europe, Latin America, sub-Saharan Africa, South Asia and China
– using the chronology put forward by world-systems theorists. The evidence we review here points to three conclusions. (i) It is unlikely that 90% of the human population lived in extreme poverty prior to the 19th century. Historically, unskilled urban labourers in all regions tended to have wages high enough to support a family of four above the poverty line by working 250 days or 12 months a year, except during periods of severe social dislocation, such as famines, wars, and institutionalized dispossession – particularly under colonialism. (ii) The rise of capitalism caused a dramatic deterioration of human welfare. In all regions studied here, incorporation into the capitalist world-system was associated with a decline in wages to below subsistence, a deterioration in human stature, and an upturn in premature mortality. In parts of South Asia, sub-Saharan Africa, and Latin America, key welfare metrics have still not recovered. (iii) Where progress has occurred, significant improvements in human welfare began several centuries after the rise of capitalism. In the core regions of Northwest Europe, progress began in the 1880s, while in the periphery and semi-periphery it began in the mid-20th century, a period characterized by the rise of anti-colonial and socialist political movements that re-distributed incomes and established public provisioning systems.
This article has the following creative commons attribution: International CC BYNC 4.0