Key Takeaways
Free-Market Critiques
Critics of free markets point to growing inequality as evidence that capitalism only benefits the wealthy and the well connected. They contend that the poor are treated better under socialist economies.
Taking a Closer Look
Inequality measurements do not tell the whole story. When we look carefully at economies that have adopted free-market reforms we often do see rising inequality, but, more importantly, we also find billions of people who have been lifted out of abject poverty.
Examples of Free-Market Miracles
In China and India, income inequality has grown steadily since the implementation of free-market policies. But this does not mean the poor have stayed poor. In India, the incomes of the poorest Indians doubled, and hundreds of millions have escaped subsistence-level poverty. In China, incomes among the poorest Chinese have increased fivefold.
Benefits of Economic Freedom
A narrow focus on relative differences in income have obscured the economic progress of the last half century. Whether we look at China, India, Chile, South Korea, or many other nations, increased economic freedom has benefited billions of people, most notably the poor. Focusing too much on inequality misses the more important point: the market reforms of recent decades have lifted billions of people out of poverty. This is nothing short of a miracle.