The Capitalist Manifesto

1. Capitalism has driven unprecedented global poverty reduction

Between 2000 and 2022, extreme poverty decreased in a way we have never seen before – from 29.1 per cent of the world's population to 8.4 per cent.

Dramatic poverty reduction. The era of globalization and free markets has coincided with the most rapid reduction in extreme poverty in human history. Despite population growth of 1.5 billion people between 2000 and 2022, the number of people living in extreme poverty fell by over 1.1 billion. This equates to lifting 138,000 people out of poverty every single day for two decades.

Widespread gains. This poverty reduction was not limited to just one region or country. Even excluding China, global poverty declined by almost two-thirds between 1990 and 2019. East Asia, South Asia, Latin America, and the Middle East now have lower extreme poverty rates than Western Europe did in 1960. Only sub-Saharan Africa lags behind, though poverty is declining there as well.

Economic freedom as the driver. Countries that embraced economic liberalization, international trade, and market reforms saw the fastest poverty reduction. The data shows a strong correlation between economic freedom and reductions in poverty rates. This suggests that capitalism and free markets, rather than being exploitative, have been the most effective system for improving the lives of the global poor.

2. Economic freedom correlates with higher well-being and environmental protection

The EPI concludes that 'environmental performance correlates strongly with a country's wealth', although there are also countries at each level of prosperity that perform both better and worse.

Economic and environmental progress align. Contrary to the belief that economic growth and environmental protection are at odds, data shows that wealthier countries with freer economies tend to have better environmental outcomes. The Environmental Performance Index (EPI) finds a strong correlation between a country's wealth and its ecological sustainability across 32 environmental measures.

Kuznets curve for pollution. Many forms of environmental degradation follow an inverted U-shaped "Kuznets curve" as countries develop:

• Initial industrialization leads to increased pollution
• As incomes rise further, environmental quality begins to improve
• Richer countries have more resources to invest in cleaner technologies
• Citizens in wealthier nations demand and can afford better environmental standards

Economic freedom enables solutions. Free market economies are better equipped to address environmental challenges through:

• Innovation in cleaner technologies
• More efficient resource use driven by price signals
• Wealth creation that allows investment in environmental protection
• Property rights that incentivize long-term resource stewardship

3. Deindustrialization is a sign of economic strength, not weakness

We must abandon the old notion that deindustrialization is a sign of weakness. In fact, it is a sign of strength, provided it occurs at the right stage.

Productivity, not job loss. The decline in manufacturing jobs in developed countries is primarily due to increased productivity, not outsourcing. In the U.S., manufacturing output has more than doubled since 1980, despite employing fewer workers. This shift reflects economic maturation, not decline.

Global pattern of development. All countries follow a similar pattern as they develop:

1. Agriculture dominates the early economy
2. Manufacturing grows as agricultural productivity increases
3. Services become the largest sector as manufacturing productivity rises
4. Even China is now experiencing manufacturing job losses as it develops further

New opportunities emerge. As manufacturing becomes more efficient, it frees up labor and resources for new industries and services. This leads to:

• Growth in higher-value jobs in design, engineering, and services
• Increased overall prosperity as goods become cheaper
• New industries emerging to meet evolving consumer demands

4. Income inequality concerns often overlook overall prosperity gains

If we only care about our personal finances, do you think you should vote for the party that promises to give you a brand-new government benefit of $100 a month or the party that says they do not intend to give you anything but will implement reforms that raise the country's growth per capita from 1 to 2 per cent?

Growth benefits outweigh redistribution. While income inequality has increased in some countries, the overall economic pie has grown substantially. A 1% increase in economic growth rates compounds over time to produce far greater benefits than small redistributive policies. After just a few years, the average person would be better off with higher growth than with a fixed monthly benefit.

Middle class expansion, not erosion. Data shows that in many countries, the apparent "erosion" of the middle class is actually due to more people moving into higher income brackets. In the U.S., for example:

• The share of households earning $35,000-$100,000 (middle class) decreased from 54% to 42% between 1967 and 2018
• But the share earning over $100,000 more than tripled from 10% to 30%
• The share earning under $35,000 also decreased from 36% to 28%

Global inequality reduction. While within-country inequality has increased in some nations, global inequality has decreased significantly as developing countries grow faster than rich ones. This has led to the first reduction in global inequality since the Industrial Revolution.

5. Big Tech's dominance reflects consumer choice, not harmful monopolies

If you're afraid that a company's control over search services will give them control of what you see, think and buy, it's worth recalling that they have another eight billion competitors. The most common way to find out something, get a second opinion or recommendation on what to think, do or buy is actually not to ask Google or Facebook but to send a message to a friend or contact and ask.

Market-driven success. The dominance of companies like Google, Amazon, and Facebook stems from their ability to provide services consumers value, not from unfair monopolistic practices. Their market positions are constantly challenged by new entrants and shifting consumer preferences.

Rapid market changes. The tech landscape changes quickly:

• Most of today's dominant tech companies didn't exist or were small startups 20 years ago
• Previous "unassailable" tech leaders like Nokia, Yahoo, and MySpace have fallen
• New challengers like TikTok can rapidly gain massive user bases

Value creation, not extraction. Big Tech companies often provide free or low-cost services that create enormous consumer surplus:

• Users would be willing to pay thousands of dollars annually for search engines, email, and digital maps if they had to
• The primary cost to consumers is viewing targeted ads, which many find preferable to paying directly

6. Government industrial policy frequently leads to inefficient outcomes

If you care about more people than yourself right now, right here, we should strive for economic growth.

Failed track record. Historical attempts at government-directed industrial policy have largely been unsuccessful. Studies show that the vast majority of such programs fail to produce positive economic outcomes and often waste resources on politically-favored industries rather than those with true growth potential.

Knowledge problem. Governments lack the localized knowledge and incentives to efficiently allocate resources across an economy:

• Markets aggregate information from millions of producers and consumers
• Price signals direct resources to their most productive uses
• Government planners cannot replicate this decentralized process

Opportunity costs. Resources directed to government-favored industries come at the expense of other potentially more productive sectors. This can lead to:

• Reduced overall economic growth
• Misallocation of capital and labor
• Entrenched inefficient industries that lobby for continued protection

7. China's economic success stemmed from market reforms, not central planning

Everything that took China out of poverty happened outside the five-year plans.

Bottom-up reforms. China's economic miracle was driven by grassroots capitalism and market reforms, not top-down planning:

• Farmers secretly privatized land in the late 1970s, boosting agricultural productivity
• Small private businesses emerged in cities as employment regulations relaxed
• Special economic zones allowed experimentation with market principles

Unintended liberalization. Many reforms were reluctantly implemented by the government in response to popular pressure or to solve unintended consequences of previous policies. The Communist Party often had to catch up to changes already happening on the ground.

Recent reversal. China's shift back towards greater state control and industrial policy under Xi Jinping threatens future growth:

• Productivity growth has slowed significantly since 2010
• Attacks on the tech sector have chilled innovation and investment
• State-owned enterprises receive preferential treatment despite lower efficiency

8. Climate change solutions require economic growth and innovation

We cannot save the climate by becoming poorer, we can only do so by becoming richer, in a smarter way.

Wealth enables solutions. Addressing climate change requires massive investments in new technologies and infrastructure. Wealthier societies are better equipped to make these investments and bear transition costs. Poverty reduction should not be seen as conflicting with climate goals.

Innovation is key. Market-driven innovation is crucial for developing cost-effective clean energy solutions:

• Solar power costs fell 89% between 2009 and 2019 due to technological advances
• Electric vehicles, energy storage, and other green technologies are rapidly improving
• Carbon capture and other frontier technologies may play important future roles

Policy recommendations:

• Put a price on carbon emissions to internalize environmental costs
• Remove fossil fuel subsidies to level the playing field for clean energy
• Maintain open trade to spread green technologies globally
• Avoid heavy-handed regulations that stifle innovation and economic growth

9. Capitalism fosters social cooperation and generosity

The habit of thinking in terms of mutual gain apparently develops a feeling for others and their needs.

Markets encourage cooperation. Contrary to claims that capitalism makes people selfish, research shows that market economies foster greater cooperation and trust:

• Experimental games find people in market-based societies make more generous offers and are more willing to punish unfairness
• The more integrated into markets people are, the more they cooperate with strangers
• Individualistic, market-oriented countries have higher rates of charitable giving and volunteering

Expanded moral circles. Market interactions encourage people to consider the needs and perspectives of those outside their immediate community:

• Trade requires understanding and accommodating the desires of customers and partners
• Impersonal market exchange reduces in-group favoritism and tribal thinking
• Global supply chains connect people across cultural and national boundaries

Positive-sum mindset. Capitalism cultivates a worldview based on creating mutual benefit rather than zero-sum competition:

• Entrepreneurs succeed by creating value for others, not by taking from them
• Market interactions reward those who can understand and meet others' needs
• This cooperative mindset extends beyond purely economic spheres

10. Free markets have improved quality of life across numerous measures

The three decades after 1990 – when capitalism, according to Naomi Klein, enveloped the planet in its 'most savage form' – have seen greater improvements in human living conditions than the three millennia before that combined.

Broad-based progress. The era of globalization and expanding free markets has coincided with dramatic improvements in human well-being:

• Life expectancy increased from 64 to 73 years between 1990 and 2019
• Child mortality rates have fallen by over 50%
• Literacy rates have risen from 74% to 86%
• Access to electricity, clean water, and sanitation has greatly expanded

Technological diffusion. Market economies have accelerated the spread of life-improving technologies:

• Developing countries can adopt innovations more quickly than in the past
• Mobile phones, vaccines, and other technologies reach global markets faster
• This allows poor countries to make rapid gains in health and productivity

Subjective well-being. Survey data shows that people in market-oriented countries report higher levels of life satisfaction:

• There is a strong correlation between economic freedom and happiness
• Contrary to critics' claims, loneliness and mental health issues have not increased as markets expanded
• The ability to choose one's path in life contributes to greater fulfillment

Last updated: May 10, 2025