How commerce became our most powerful tool against global poverty

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Back in 2022, sunglasses-wearing U2 frontman and rock star philanthropist Bono gave one of those long interviews to the New York Times Magazine. In between talking about his band’s new albums and the challenge of staying relevant after nearly 50 years in the music business, Bono mused on what he’s learned in his decades as an activist for the global poor:

I thought that if we just redistributed resources, then we could solve every problem. I now know that’s not true. There’s a funny moment when you realize that as an activist: The off-ramp out of extreme poverty is, ugh, commerce, it’s entrepreneurial capitalism.

The statement “ugh, commerce,” coming from a rock star with an estimated net worth of $700 million is a little, what’s the word, rich. But whatever you think about Bono — and personally I’m still ride or die for Achtung, Baby — he’s right that trade and capitalism have been perhaps the most important factor behind the sharp historical decline in global poverty.

With the world now on the brink of an unprecedented trade war thanks to President Donald Trump’s tariffs, it’s more important than ever before to appreciate the progress we’ve made — and just what drove it.

If the remarkable decline of child mortality is the most important number in the world, as I wrote a couple of weeks ago, then the sharp decline in extreme poverty might be the second-most important.

There are a few lessons in this chart. One, extreme, grinding poverty — here defined as living on the equivalent of $1.90 a day or less — was not just more common in the not too distant past. It was the lot of most human beings.

As recently as 1950, more than half the world’s population lived in a state of extreme poverty. Go back further, to the early 19th century, and it was closer to four out of every five people. Until the last few decades, in those regions outside the developed world (like most of Africa, South Asia, and East Asia), it was nearly everyone.

Today, the picture looks entirely different. As this chart below shows, the number of people living in extreme poverty in the present day, when the global population is 8.2 billion, is lower than it was than in 1820, back when the entire population of the world was barely more than 1 billion people.

Zoom in on this chart, and you see another part of the story. Even as the industrial revolution and everything that followed brought more and more people in the developed world out of extreme poverty, the overall number of people in extreme poverty did keep growing, albeit more slowly.

Then, beginning around 1990, the world experienced an unprecedented and drastic decline in extreme poverty, which fell from 38 percent of the global population to approximately 8.5 percent in 2024 (based on current figures that go beyond these charts).

How did it happen? There were many factors: increased spending on social and anti-poverty programs, improved health and education, urbanization, better political stability, and governance.

But the biggest one, to borrow Bono’s words: “ugh, commerce.”

Between 2001 and 2006 I lived and worked as a journalist in Hong Kong. The city itself is an emblem of the way trade and enterprise can erase poverty: Between 1960 and the present day, per-capita GDP increased by more than 11,000 percent, to more than $50,000. But even more impressive was what was happening just across the border in mainland China, in the city of Shenzhen.

In 1980, Shenzhen was a sleepy fishing village of maybe 30,000 people. That was the year then-Chinese Premier Deng Xiaoping designated the town as China’s first special economic zone — a place to experiment with market-oriented, capitalistic policies that weren’t allowed in the rest of China. By the time I got to Hong Kong in 2001, that fishing village had grown to a city of more than 7 million people, and had made itself into the workshop of the world, manufacturing products that were exported around the globe.

Today, Shenzhen has a population of 17 million people — nearly three times that of neighboring Hong Kong — and its skyline looks like this:

What happened in Shenzhen is an extreme version of what happened in the rest of China, and in other parts of the world that had long been mired in dire poverty. Between 1990 and now, China’s growth lifted 800 million people out of extreme poverty, far more than any other country. And it was able to do that largely because it opened itself up to an increasingly globalized economy and harnessed a resource that, until then, had been more of a hindrance than a boon: its sheer number of workers.

In doing so, China followed in the footsteps of other Asian countries like Japan and South Korea that had gone through penury to wealth in the postwar period through economic development and trade. To a lesser extent, other countries like India, Indonesia, Vietnam, Bangladesh, and Ethiopia managed to do the same.

It’s no accident that the most rapid progress against extreme poverty came during a time when the global economy became increasingly, truly global. Between 1990 and 2008, international trade as a percentage of global GDP increased from 38 percent to 61 percent.

This was the era when supply chains for companies like Walmart and Amazon went global, when international air travel took off, when the price of goods for American consumers like electronics and appliances plummeted (something that, as my colleague Kelsey Piper wrote recently, is much more of a good thing than we often recognize). It was also — not coincidentally — a period with unusually low levels of international conflict.

Of course, all that growth and travel and stuff has its downsides, like the rapid rises in greenhouse gas emissions and other markers of environmental destruction. For the countries undergoing that vertiginous growth, it was a period of extreme social change and growing inequality.

For the US, of course, the deindustrialization that occurred as manufacturing jobs were lost to other countries created social and political disruption that we are still grappling with (though as my colleague Dylan Matthews wrote recently, much more of that disruption was due to factors like increased automation and a shift in demand in the US from products to services than it was to globalization).

But don’t lose sight of the upside: Hundreds of millions of people were rescued from the most grinding poverty and put on a path to a better life, one with more opportunities and more choice.

As the world, and especially Trump, appears set on reversing all that progress by starting trade wars of the sort we haven’t experienced for decades, it’s all the more important to recognize this as one of the greatest accomplishments that the world has ever seen, one made all the more remarkable by the fact that no one really set out to make it happen. It was just — ugh, commerce.

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The vaccine drove a rapid and dramatic decline in polio cases in the US. Salk chose not to patent the vaccine — “Could you patent the sun?” as he told Edward Murrow — to facilitate its widespread and affordable distribution. Cases have fallen 99 percent since 1988 globally, and the world is on the brink of eradicating the disease.

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While the study doesn’t promise immortality, it suggests that consistent meditation could be the ultimate anti-aging cream for your brain and stress levels.