The expansion of capitalism has led to a deterioration in human well-being

Newswise — Far from reducing extreme poverty, the expansion of capitalism from the 16e century has been associated with a dramatic deterioration in human well-being, according to a scientific study carried out by the Institute of Environmental Science and Technology of the Universitat Autònoma de Barcelona (ICTA-UAB) in collaboration with Macquarie University, Australia, which shows that this New Economic System saw a decline in wages below subsistence level, a deterioration in human stature, and a marked increase in premature mortality.

It is often assumed that prior to the 19th century the vast majority of the human population lived in extreme poverty, unable to access essentials such as food, and that the rise of capitalism led to a steady and dramatic improvement in the human well-being.

A new paper supervised by ICTA-UAB researcher Jason Hickel challenges these claims. The study, recently published in the scientific journal Global development, shows that the data used to make these claims relies on historical GDP data and purchasing power parity (PPP) exchange rates that do not sufficiently account for changes in access to essential goods. These data do not offer a good approximation of human well-being and may give the impression of progress even as health standards deteriorate.

Researchers use an alternative approach to reconstruct the history of human well-being. They analyze three empirical indicators – real wages (relative to a subsistence basket), human size and mortality – in five regions of the world (Europe, Latin America, sub-Saharan Africa, South Asia and China) from the rise of the capitalist world. -economy in the 16th century.

Their analysis leads to three conclusions. First, they find it unlikely that extreme poverty was a normal or universal condition before the 19th century. Real wage data indicates that historically, unskilled urban workers tended to have sufficient incomes to meet their basic needs for food, clothing and shelter. Extreme poverty tended to occur during times of dramatic social upheaval, such as wars, famines, and dispossession, especially under colonialism. “If one assumes that extreme poverty was nearly universal in the past, then it might sound like good news that only a fraction of the world’s population lives in that condition today,” says Dylan Sullivan, lead author of the study and researcher at Macquarie University, Australia. “But if extreme poverty is a sign of severe distress, relatively rare under normal conditions, it should be of deep concern to us that hundreds of millions of people continue to suffer in this way today,” he says.

The second conclusion is that, far from bringing progress in social outcomes, the rise and expansion of capitalism has led to a dramatic deterioration in human well-being. In all regions studied, the process of incorporation into the capitalist world-system has been associated with a decline in wages below subsistence level, a deterioration in human stature, and a marked increase in premature mortality. “That’s because capitalism is an undemocratic system where production is organized around the accumulation of elites rather than human need,” Sullivan explains. “To maximize profitability, capital often seeks to devalue labor through processes of confinement, dispossession and exploitation,” he says.

Finally, the authors find that recovery from this long period of impoverishment has only recently occurred: advances in human well-being began in the late 19th century in northwestern Europe and in the middle of the 20th century in the global south. Sullivan and Hickel note that this coincides with the rise of the labor movement, socialist political parties, and decolonization. “These movements redistributed income, established public supply systems and attempted to organize production around meeting human needs,” says Jason Hickel. “Progress seems to come from progressive social movements.”

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