Debunking: “Capitalism Ends Poverty”

Proponents of capitalism regularly claim that “capitalism ends poverty”. However, the truth and reality do not back up their claim.

When the sources of these claims such as the World Bank, the IMF, etc evaluate “poverty” (sometimes otherwise qualified as “the international poverty line”, “global poverty”, “extreme poverty”, etc), they are talking about a fixed monetary rate, such as $1.90. Depending on exactly when the report is released, it may be a different value or a different fixated rate as a “higher level of poverty”. The premise in any situation fundamentally remains the same, functioning as a fixed value threshold. This gets translated into deceitful “articles” by neoliberal pundits, bourgeoisie-funded think-tanks, and generally throughout the capitalist press. It’s important to understand, realize, and remember the fact of the matter when they discuss that “capitalism ends poverty”: they are talking about “poverty” in a relationship to a fixed monetary value, and not in the relationship to material conditions that people live in. In other words, a key is understanding their definition of what qualifies as “poverty”. They are not discussing “poverty” in the sense of whether or not people have access to edible food, to clean drinking water, are living in safe housing conditions, have reliable sanitation access, access to reliable electricity, and so on.

As an example, in 2020, the World Bank stated: “The latest global poverty estimates show that 9.2% of the global population lives below the $1.90 international poverty line in 2017. This translates into 689 million people still living in extreme poverty.”

At the same time, there are billions of people who are forced to cook or heat their homes with biomass waste, or who lack reliable electricity, or who lack access to sanitation, etc. There are hundreds of millions (or even billions of people, depending on who you ask) that go hungry every year. And in fact, millions of people under global capitalism starve to death each year. Many organizations, including the same ones claiming such low rates of poverty, will even report that billions are living in conditions of poverty. The World Economic Forum in 2019 said that “2.2 billion people still don’t have access to clean drinking water”. 2.2 billion people are far more than 9.2% of the world’s population. The carefully constructed and selected definitions play a role in creating statistics of poverty in less accurate lighting, also attempting to portray conditions of poverty as an otherly existence or fringe reality. What is “clean drinking water”, “safe drinking water”, etc? What does it mean for drinking water to be “basic”, “limited”, “unimproved”, etc, and is that “safe” or “unsafe”? For instance, in the United States, it is well-known that the water millions of people get from the faucet is not always clean or safe in the sense that it is not uncommon for it to contain unsafe levels of lead, or arsenic, or even parasites like giardia, etc. It is not only the public water systems of capitalist governments, it is also private capitalist wells that are often contaminated with diseases, parasites, and toxins. According to an EPA report in 1999, giardia was estimated to have infected at least 1 million young people annually and was found in tap, filtered, and unfiltered water. Despite being in 1999, studies have regularly found that the water supply is often the source of disease outbreaks like the 2007 giardia outbreak in New Hampshire caused by unsafe tap water, in New York in 2009, etc. There are also often outbreaks of other intestinal parasites such as cryptosporidiosis — which is estimated to infect approximately 25%-35% of the entire U.S. population at some point in their life. At any rate, the water supply system is wholly overestimated in its safety with cases of contamination being underreported. It’s no secret that the drinking water in the United States is often not clean or safe.

Rather than spending the money to address and fix the water supply, the neoliberal U.S. government led by the bourgeoisie would rather give tax breaks to the bourgeoisie and spend money on profitable activities for their companies and bank accounts making it easier to export capital, such as funneling weapons around the world to fuel conflicts & wars, staging coups, meddling in the domestic affairs of other countries, etc. At the same time, organizations such as the CDC have stated that “the U.S. has one of the safest water supplies globally. Over 90 percent of Americans get their tap water from community water systems, which are subject to safe drinking water standards.” The drinking water is safe, the CDC says, yet for many within the 90% cited the water contains unsafe levels of toxins, or chemicals, or parasites, etc.

Yet “the poverty rate is only 9.2% in 2017” is claimed by these organizations and proponents of capitalism. That is because it all comes down to how they misdefine “poverty”, and after that, how they misdefine “hunger”, “clean drinking water”, etc to further distort reality. There are billions of people on this planet who live in material conditions everybody understands as conditions consistent with living in poverty, but they say there are less than one billion people in poverty.

They are quick to ignore that in the richest country in the world, in the core despite all of the plundering and wealth accumulated from slavery and colonialism, in the United States of America that is, hunger remains a daily issue for millions. However consistent with the American tradition, it is not called “hunger” but “food insecurity”. After all, “hunger doesn’t exist in America”. Millions of people, especially when on average every 5–7 years there is an economic crisis and millions of people more are added to the reserve army of labor, are forced onto limited unemployment benefits or limited social programs, or forced to beg to family or friends, or even strangers. Without the social programs, which are constantly being attacked by the bourgeoisie and the power of capital, unemployment as a death sentence would exist for a greater number of people, and still today, it even is for some despite these programs. Capitalism requires unemployment to exist, it is simply proven by the fact that it never ceases to ever exist under capitalism. Coupled with commodifying human necessities, that is a death sentence. If the United States were to go back to the way before the programs, as the forces of capital and the bourgeoisie would like and will always seek and make progress while the means of production remain in the hands of the capitalist class, the rate of deaths would compound.

They are quick to grant credit to “capitalism” for their claim, which has been demonstrated to be fraudulent. For what poverty conditions they admit exist, they are quick to blame it on everything else and anything else. Even though it is the capitalist profit-motive fueling wars in various regions around the world and resulting in widespread conditions of poverty, they don’t acknowledge capitalism’s fault. Even though it is the capitalist profit motive fueling the existence of sex slavery and human trafficking, fueling drug trafficking and epidemics, etc they don’t accept the reality of its relationship to capitalism. Hunger had steadily fallen since Hugo Chávez in Venezuela — this is ignored by the capitalists. But as the U.S. & co. attempted to strangle Venezuela with the oil price war and sanctions, hunger had risen, and suddenly “that’s socialism’s fault”. For centuries in the pre-Soviet region, famines were a regular occurrence due to the backward feudal system, natural droughts, etc. This cycle ended during the Soviet era in the 1940s and the caloric intake for the average person skyrocketed during the Soviet era becoming on par with the United States — that is outright ignored by the proponents of capitalism. It is clear to see the changes in the conditions of the water systems, diets and food consumed, etc between the Soviet-era & the contemporary capitalist region. In the years since the 1990s yet they claim “communism failed” as an illegal coup dissolved the USSR and as capitalism has brought a sharp rise in homelessness, deteriorating water supply systems, etc. And how do they explain hunger in capitalist countries outside of the imperial core, such as for capitalist African countries? Since they can’t admit that it’s capitalism’s fault, the fault of imperialist extractors, etc they instead blame it on some racist conception of something like “lazy Africans”, blame it on the weather or whatever ignoring the cash crops, etc.

CIA document dated January 8th of 1983 (released on April 15th of 2008) noted that by that time Soviets and Americans ate about the same amount of food but “the Soviet diet may be more nutritious”.

Capitalism does not “end poverty”. That has never been the goal of capitalism and it will never be achieved by capitalism. Capitalism is an economic system wherein the profit-motive drives the capitalist class who possesses the privately owned means of production. It does not produce or allocate according to the needs and wants of humanity, but instead profit and profitability. The goal is to profit, expand, make greater profits, expand more, profit even more, etc. At this point in capitalist development, we have reached a point where there is enough food produced in order to feed the entire world and have leftovers. However, as noted before, hundreds of millions of people starve and millions die every year. It is because it is more profitable for the capitalist to destroy edible food than it is to end hunger. There is a lot of money that goes into boxing up food properly, transporting it safely, maintaining it, distributing it, etc to people who cannot replace that cost that it would take, and the capitalist will lose more money doing that than he will if he just throws it away. Therefore he destroys food and allows people to starve, in order to maximize profits. It is not that it’s impossible by means such as logistics, it’s about the profit incentive. The capitalist gets richer and secures greater profits because he condemns people to starve, to go without medicine (such as insulin), to go without safe housing, etc — in effect, the capitalism condemns billions to poverty because it is profitable.

This writing is not to say the transition of feudalism to capitalism was simply a continuation or reiteration of feudalism. It was not. In the first sentence of “The Communist Manifesto” by Marx & Engels, they state “The history of all hitherto existing society is the history of class struggles.” That is to say that the whole of human history has been a march of class struggle, with class antagonisms, evolving and developing — that the transition from feudalism to capitalism was the latest development of that “history of class struggle”. Marx & Engels did not argue that capitalism was incapable of building up productive forces of society and producing items. They said the opposite in “The Communist Manifesto” stating that “Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells”.

“The Falling Rate of Profit Explained: Why Capitalism Will Fail”

In part 3 of volume 3 of “Capital” by Marx, he outlines several aspects or “counteracting” methods that can increase the rate of profit and prevent it from falling, temporarily. But in the end, Marx says, it is only so long and there is only so much that these methods can counteract the law of the rate of profit to fall. That the rate of profit can only be propped up with imperialism, repressing wages below the value of labor power, etc for so long until the limit is reached and the rate of profit falls. Capitalism will never end poverty and that’s why it never has after several centuries; capitalism will seek greater profits and continuously produce according to profitability until it collapses.

The belief that “capitalism ends poverty” hinges on misdefining “poverty” and the ensuing characteristics in a fraudulent and misleading way. In the imperial origins of capitalism, despite all of the plundering and accumulation of wealth, poverty exists as a structural production of capitalism. The United States, the United Kingdom, Germany, etc are often pointed to as “successes” of capitalism yet poverty exists structurally. And even as these locations are pointed to as “successes”, the colonial theft and imperial extraction continue and continue to prop up capitalism in these countries while viscerally condemning billions in the imperialized countries to conditions of poverty as wealth is extracted from these nations and brought into the imperial centers.

Michael Parenti explains how imperialism benefits the imperial countries economically, propping up their economies by exporting capital to imperialized countries with relatively cheap access to labor markets, with plentiful resources, etc, and extracting wealth from these oppressed countries

Capitalism has never ended poverty or the characteristics of poverty in any of the capitalist experiments around the world for the last 500 or so years at no point. Not in early capitalist development, not in late capitalist development, not in the social democracies like Sweden, not in the neoliberal countries, not in the richest capitalist country. In every capitalist country, no matter the “form” or how “friendly” the face is, the characteristics of poverty will always exist because it is inherent and structural to capitalism’s existence.

Capitalism requires that unemployment exist and is structurally unable to end hunger, homelessness, and other characteristics of poverty. “Capitalism ends poverty” is one of the greatest hoaxes, one of the greatest disinformation campaigns of all time. If we want to truly end poverty, we must move beyond the capitalist system of profiteering, overproduction, and allocation of resources according to profitability as opposed to producing and allocating according to the needs and wants of human beings.

In short, the way to end poverty is, to quote Marx in the “Critique of the Gotha Programme”, to pursue a policy of “from each according to his ability, to each according to his needs”.

If you enjoy this writing, please consider following me on twitter at my new account, here.

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