How Global Trade saves lives—Taylor

A victory for capitalism.

As much as the fall of the Berlin Wall or the rise of social media, the astonishing decline in world-wide poverty stands as one of humanity’s greatest achievement over the past quarter century.

Unveiled in 2000, the United Nations’ Millennium Development Goals (MDGs) established eight ambitious goals for world progress. The first and most significant was to cut in half the proportion of people living in extreme poverty globally—defined as an income below US$1 per day. The poverty rate in 1990 was to be the baseline. The end date was 2015.

While the poverty line was later raised to US$1.25 to account for inflation, the goal itself has already been met—five years early, in fact. Between 1990 and 2010 the percentage of people living in extreme poverty fell to 21% from 43%. It’s still falling.

Kudos are definitely in order. But who should take the bow—free markets or global bureaucracy? With the search on for a new set of goals for the world to pursue, it’s a question in need of an answer.

The UN certainly deserves credit for picking suitable targets, raising public awareness and delivering the statistical proof documenting the tremendous drop in the prevalence of extreme poverty worldwide. But while the entire MDG process has been basking in the glow of the poverty-reduction results—and talking of eliminating poverty altogether—none of this progress is properly attributable to UN efforts in particular, or the global governance movement in general.

While poverty has fallen around the world over the past 2½ decades, the vast majority of the people who moved past the $1.25-a-day threshold hail from China. In 1990, 60% of the country lived in extreme poverty. Today, it’s around 10%; a turnaround of half a billion people.

This incredible journey was made possible by a massive population shift from rural to urban, which in turn was facilitated by the unprecedented expansion in manufacturing and international trade in China, a country that steadfastly ignored the entire MDG process. It was unbridled capitalism that did it: to get rich is glorious and all that.

Giving the UN credit for the fall in global poverty is a bit like an NHL goal judge claiming he won the Stanley Cup because he turned on the red light when the winning goal was scored.

Consider, for example, the other seven MDG objectives, such as a proposed 75% improvement in maternal health outcomes, to a 66% decline in mortality rates for children under the age of five. Neither of these worthy goals—far more dependant on direct government involvement—are close to completion. (Although to be fair, clean water and primary education targets have largely been reached.)

Finally, the poverty reduction targets were largely met at the expense of environmental targets, such as carbon emissions and forest coverage in China and elsewhere. The greatest success to come out of the MDG process is the product of messy, decentralized and often chaotic economic growth. It’s a point that seems lost on the global governance movement.

With 2015 fast approaching, the UN is now hunting for new targets. The Centre for International Governance Innovation think-tank in Waterloo, Ont., recently suggested a list of 10 new Millennium Development Goals to replace the ones that will soon expire. Instead of recognizing the importance of private-sector instincts, however, these new proposals blindly call for a massive increase in top-down bureaucratic control.

“Future goals must become sustainable one-world goals that apply to poor and rich countries alike,” the CIGI report boasts. Suggested new targets include such things as mandated biodiversity, worldwide employment equity, more female politicians, lower obesity and greater Internet access. In other words, big bossy government gone global. It is an absurd misreading of the scheme’s success to date. And a recipe for future failure.

To the extent the MDG process has been a success, it’s economic growth that delivered the results. Let’s not forget that.

Peter Shawn Taylor is a writer specializing in economic issues