“There’s something going on out there. What it is ain’t exactly clear. Hey, what’s that sound, everybody look what’s going down.”

Karl Marx would be apoplectic. Business people – “capitalists” to use his term – exploit the poor by extracting “surplus value” and adding it to their ever-accumulating stash. Don’t blame them, said Marx (the very model of a modern major in sociology) for they are also slaves to the economic substructure that determines our beliefs, goals, and behaviors. How is it, then, that so many wealthy businessfolk, corporations, and pro-market thinkers are putting entrepreneurial thinking behind the alleviation of poverty in developing countries, and doing it effectively? Marx, as a self-proclaimed “scientific socialist” would hate these awkward data points which cannot be fit into his economic model of exploitation. Of course, if he were alive now, Marx would explain away these odd events as illusions, false consciousness, part of a hidden scheme of deeper exploitation. Marx was never one to let facts get in the way of theory. He had little trouble ignoring plentiful data available to him in his beloved library showing that wages of the “working class” were consistently rising as population growth moderated.

What are these odd events? The phenomenon I’ve been observing is the conscious and spreading application of free markets and personal responsibility to the challenges of poverty and development. Sometimes you see this in the unlikeliest places. Okay, Mr. Gates might give a billion or two to vaccinate poor children in the developing countries to burnish him image. But aren’t those tens of billions he’s giving a bit excessive for public relations purposes? And what on Earth is going on the World Bank? As revealed in a recent issue of HBR, the World Bank at first tolerated and eventually supported an internal initiative to use free markets to generate and implement poverty-busting programs. The World Bank encouraging markets rather than centralized government-to-government aid? The planet must have shifted in orbit. Next we’ll be seeing the IRS give free massages with every on-time tax return.

Business theorists seem to have taken a suddenly renewed interest in the relation between commercial activity and the economic development of the poor. The eminent Michael Porter, with Mark Kramer, recently made a smart case for “The Competitive Advantage of Corporate Philanthropy”. Mohan Sawhney, among others, has made a compelling case for companies not to ignore the “fortune at the bottom of the pyramid”. Others have constructed a “Virtue Matrix” to help executives figure out how best to do good while also doing well. And numerous writers over the last year or two have returned to the issue of the purpose of business and the role of clear values.

Big businesspeople may be unpopular today, yet we can see a powerful trend taking shape that recognizes and appreciates a market-based, responsibility-reinforcing, business-oriented approach to alleviating poverty and lifting billions of humans out of poverty. Since 1987, Hernando de Soto has been spreading his compelling message about the critical importance of streamlined titling of property and businesses to allow people in developing countries to leverage their assets to expand economic activity in ways not feasible in the extralegal economy or in the formal economy which might require impose enormous costs to potential entrepreneurs. Far from simply a good theorist, de Soto has helped apply his ideas in several countries with excellent results.

Then you have the Grameen Foundation and similar micro-loan programs. These have the aims of charities but the means of businesses. They don’t give, they lend – packaged with knowledge. The resulting little startups have been transforming villagers into businesspeople, often bringing badly needed prestige and influence to the women who often run these connection-based businesses.

I find it curious and ironic that the corporate world has become such a target of cynicism and distrust (as the many are punished for the sins of a few) at a time when capitalism – free markets undergirded by property rights and personal responsibility – is doing a better job of helping the poor than any socialistic program ever did. Why aren’t any fingers being pointed to all those academics who, for decades, decried the market system, supported centralized, state-directed efforts, and thereby ensured the poverty of billions? The connection between markets being opened and enabled and the solution of massive problems has often gone unappreciated since this is an emergent, distributed process rather than a visible, centralized one. Many of us will remember the constant TV news reports in the early 1970s of famine and mass starvation in India. But few seem to know why we stopped hearing about that. The cause: The government lifted price controls on agriculture. Sometimes difficult is easy.

For any of us who may be slightly uneasy about their passion these days, I say don’t apologize for business. We have plenty to criticize about many of our corporations and executives – as well as much to appreciate. But don’t let the forces of anti-growth, anti-freedom, anti-progress, anti-individual responsibility take advantage. Markets work. Benjamin Stein’s excellent piece in the December 22, 2002 issue of Forbes (reviewed on manyworlds.com) dramatically shows that civilization and prosperity require the right conditions in which to grow, and that many “progressive” people seem intent on poisoning this soil.

Now if we can just get government agencies to intelligently apply market solutions to more environmental problems (they are getting better) and to solving traffic congestion problems, we’ll be doing well. It is indeed the End of History in one sense, as Fukuyama declared. Markets have won. Now let the winner get on with the job.