According to Business Insider, the richest man of all time was John D. Rockefeller. Adjusted for inflation, he had a net-worth of over $300 billion. If he traveled to some lifeless rock in the Pacific Ocean and declared sovereignty today, he would replace oil rich Venezuela as the 37th richest country in the world, with even some European countries and Middle Eastern oil emirates falling behind this one man. He grew his wealth by buying oil companies left and right until he eventually owned 90% of all the oil in America.
And yet the richest man in the history of the world could not buy a microwave oven. For $60 I can go on my Amazon app and have a microwave delivered to my door, something Rockefeller could not do with his $300 billion.
Unlike Rockefeller, almost every poor family in America today owns a microwave. According to statistics that are a few years old and therefore have likely improved, over half of the Americans officially labeled poor by the US government own a computer, a game system such as Xbox or PlayStation, and have internet access. Over two-thirds of poor Americans have a DVD player, cable or satellite TV, and air conditioning. The beat up old car that three quarters of poor Americans own is better than any car Rockefeller could have purchased. Every single one of these items that the average poor American today owns was completely unavailable just a century ago to the richest man in human history.
How much do you think Rockefeller would have paid for air conditioning in the hot summer days of the early 1900’s? Even more so, how many millions (billions?) of dollars would he have paid for your cell phone, a handheld device that can access all of the world’s information? Most poor Americans own technology so advanced that a century or two ago it would have gotten you burned at the stake for witchcraft.
This raises the question of how we define poverty. According to the UN, extreme poverty is defined as earning less that $1 a day, or $365 a year. In the U.S., a family of four making less than $24,339 a year is considered poor. But $24,339 in Killeen, Texas will go a lot farther than in New York City, so a nationwide dollar level does not make much more sense than the UN’s $1 a day. When the typical person thinks of poverty, they think of deprivation, which is why the earlier list detailing the possessions of Americans officially labeled poor is so insightful.
If we had established a fixed definition of poverty in Rockefeller’s time based on standard of living, almost no one would be classified as poor in modern America. America’s standard of living has progressed so rapidly that today’s poor would have been considered middle class a generation ago.
It is easy to forget that we are an aberration. Throughout most of human history, and much of the world still today, all but a select few were born into subsistence level poverty and died in the same condition.
Most people don’t think about or recognize this, but it is an amazing achievement.
There is only one system that has proven to actually help people. The free market has been the greatest benefit to the human condition we have ever known. It is no coincidence that 99% of humanity spent their short lives in subsistence level poverty until capitalism exploded wealth creation and developed a middle class. Capitalism is the reason we went from rich people dying of polio to poor people owning smart phones in under a century.
This now leaves us with a choice: do we continue on the path that has dramatically, if unevenly, increased the standard of living for billions of people; or do we abandon or limit our progress in favor of a more even but generally reduced lifestyle?
It is important to remember that, despite the very real problems we still struggle with, there is no better time to be alive than right now, and no better place to live than America. It is the free market that has lifted us up out of the single room shacks our ancestors lived in. But what has been done can be undone.
Let us not confuse imperfection for failure.
It is easy to look at the homeless or people struggling to get by on minimum wage and blame the free market for their woes. But one simple fact instead displays the wonder of capitalism: almost every American in 2018 has a higher standard of living than the richest man who ever lived. Isn’t that amazing?