The End of Poverty

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The total number of people living in extreme poverty, the World Bank estimates, is 1.1 billion, down from 1.5 billion in 1981. While that is progress, much of the one-sixth of humanity in extreme poverty suffers the ravages of AIDS, drought, isolation and civil wars, and is thereby trapped in a vicious cycle of deprivation and death. Moreover, while the economic boom in East Asia has helped reduce the proportion of the extreme poor in that region from 58% in 1981 to 15% in 2001, and in South Asia from 52% to 31%, the situation is deeply entrenched in Africa, where almost half of the continent's population lives in extreme poverty--a proportion that has actually grown worse over the past two decades as the rest of the world has grown more prosperous.

A few centuries ago, vast divides in wealth and poverty around the world did not exist. Just about everybody was poor, with the exception of a very small minority of rulers and large landowners. Life was as difficult in much of Europe as it was in India or China. Your great-great-grandparents were, with very few exceptions, poor and living on a farm. The onset of the Industrial Revolution, supported by a rise in agricultural productivity, unleashed an explosive period of modern economic growth. Both population and per-capita income came unstuck, rising at rates never before imagined. The global population rose more than sixfold in just two centuries, while the world's average per-capita income rose even faster, increasing around ninefold between 1820 and 2000. In today's rich countries, the economic growth was even more astounding. The U.S. per-capita income increased almost 25-fold during this period. In beholding that success, many people embrace faulty social theories of those differences. When a society is economically dominant, it is easy for its members to assume that such dominance reflects a deeper superiority--whether religious, racial, genetic, ethnic, cultural or institutional--rather than an accident of timing or geography.