ABSTRACT The ‘standard narrative’ about capitalism and extreme poverty holds that the transition to the former was associated with a staggering reduction of the latter. Recently, this has been strongly called into question by a critical narrative grounded in a battery of non-GDP-based measures of extreme poverty and living standards, such as subsistence welfare ratios, skeletal height data, and famine reports. This critical narrative holds that extreme-poverty conditions were + rare in normal circumstances before the transition to capitalism, and that a significant deterioration amounting to extreme poverty happened in Europe and globally only afterwards. The present paper re-examines the issue, drawing on these and additional non-GDP-based historical sources of living standards, including formerly overlooked cases, such as pre-conquest Aztec Empire and Tokugawa-era Japan. It finds that the standard narrative’s portrayal of the prevalence of extreme poverty before capitalism is indeed mistaken. However, it also takes issue with parts of the critical narrative, mainly the idea that capitalism caused severe deterioration in living standards. On a widely shared definition of capitalism, and a quantitatively demonstrated periodization of the transition, the notion that living standards were generally poor before a society’s transition to capitalism and only started systematically improving afterwards has better support.
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