The history of capitalism, as portrayed in academia and among much of the media, is a sad story. It's one of smokestacks, sweatshops, child labor, robber barons, social stratification and general exploitation of workers.
But this amazing chart, put together by Max Roser, a fellow at the Institute for New Economic Thinking at Oxford University's Martin School, tells a much different story — one of industrialization being associated with a rapid decline in poverty.
In 1820, according to data compiled by Roser*, the share of the global population living in poverty was 94 percent while 84 percent lived in "extreme" poverty. By 1992, the poverty rate had dropped to 51 percent, while the "extreme" poverty rate had dropped to 24 percent. Using a different measure of international poverty, the rate has dropped from 53 percent in 1981 to 17 percent in 2011 – representing the most rapid reduction in poverty in world history.
"In the past only a small elite lived a life without poverty," Roser explains. "Since the onset of industriali[z]ation – and as a consequence of this, economic growth — the share of people living in poverty started decreasing and kept on falling ever since."
This chart is one of many fascinating visualizations on Roser's site Our World in Data, which I highly recommend checking out.
*Note from Roser:
"The share of people of living in poverty and extreme poverty is taken from Bourguignon and Morrison (2002) and 'the poverty lines were calibrated so that poverty and extreme poverty headcounts in 1992 coincided roughly with estimates from other sources.' And in footnote they say 'these definitions correspond to poverty lines equal to consumption per capita of $2 and $1 a day, expressed in 1985 PPP.'
To this I added the share of people living below the international poverty line which, since the revision in 2008, is $1.25 at 2005 purchasing-power parity (PPP). This data is from the World Bank and is available here – for the period 1981-2011. The revisions in the definition of the poverty line and the PPP adjustment make the poverty figures not comparable to earlier data – to illustrate this I have plotted both series for the time from 1981 to 1992. The World Bank data was downloaded in January 2015."