According to a NY Times article by Deirdre McCloskey, since 1800 most countries have experienced astonishing rates of income growth, including 1,000-3,000% in countries such as the United States and Botswana. In just the last 40 years, the amount of people living on $1-$2 a day has halved. McCloskey argues that this Great Enrichment was caused by an idea:
Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called ‘the liberal plan of equality, liberty, and justice.’ In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.
As we try to pull more countries out of economic poverty, it would be smart to keep McCloskey’s argument in mind.