A free society by definition is the society in which, each individual, i.e. the basic unit of the structure of society remains free to pursue his personal prosperity and happiness, where he is free to achieve his most using his talent and hard-work and saved resources. Obviously, such a society depends on rational pursuit of self-interest and provides full freedom for the individuals from the shackles of social responsibility or altruistic motives.
Often socialists claim that such a free laissez-faire capitalist society will turn out to be a system of dog race where no one will look for the poor, the impoverished an the depraved. Furthermore, socialists claim that for a poverty-free society, compulsory altruism is most necessary, where the producers and creators who can produce wealth, must be forced to pay for the living of the poor and depraved. All governments throughout the world follow such Robin Hood’s philosophy and rob the producers, creators, entrepreneurs and investors for the name-sake of welfare state by means of compulsory taxation, price control, Universal Equality Programs and other similar dictatorial techniques. Yet, the world suffer the problem of poverty as always and despite all the huge socialistic efforts by the governments whole round the world, situations never improves.

So what can help to eradicate the poverty?

As per World Bank’s estimates, 60% of Indian population was living in poverty in 1981, during the socialistic regime of Indian government.
Since 1991, India enjoyed the streams of economic liberalization and stepped towards the making of a free society. As a result, the current estimates of World Bank suggests that 42% of the total Indian population now live under the global poverty line of $1.25 per day (PPP). That is quite a big sweep.
Similarly, in China, since the far changing economic reforms and liberalization were made in the late 1970s, the growth fuelled a noteworthy decline in the poverty rate from 64% at the beginning of reform to 10% in 2004.
Obviously, the data suggests that economic reforms and liberalization is the key to the eradication of poverty. Before 1991, the government controlled almost all industries and production sectors of India but after that, step by step liberalization of industries from public sector to private sector took place and the OECD states the result in following words

Annual growth in GDP per capita has accelerated from just 1¼ per cent in the three decades after Independence to 7½ per cent currently, a rate of growth that will double average income in a decade. [...] In service sectors where government regulation has been eased significantly or is less burdensome – such as communications, insurance, asset management and information technology – output has grown rapidly, with exports of information technology enabled services particularly strong. In those infrastructure sectors which have been opened to competition, such as telecoms and civil aviation, the private sector has proven to be extremely effective and growth has been phenomenal. – OECD¹

Similarly, China confronted economic reforms and liberalization in 1978 and now, as of 2005, 70% of China’s GDP is in the private sector. The relatively small public sector is dominated by about 200 large state enterprises concentrating mostly in utilities, heavy industries, and energy resources.²

Free Market Entrepreneurship is the Key to riddle of Poverty

The examples of China and India clearly show that a free market based on Individual freedom is obviously a solution for the poverty in the society itself.
What impels an entrepreneur, investor, producer or creator in a private sector to remove poverty is not his “altruism”, rather it is his selfishness, his motive to produce and earn more, bigger profits. Yet for making profits, he needs to increase the productivity of the workers. As productivity of workers increases, the poverty reduces.
Social governmental constraints, regionalism, nationalism, license raj, price controls, taxes and subsidies etc only reduces the productivity of individuals and hence causes further poverty.
Examples of Entrepreneur trends eradicating poverty
While the politicians and government of Maharashtra is playing cards of protectionism, regionalism and linguistic discrimination by framing such ridiculous rule like permitting a taxi license only for those who can speak and write Marathi,³ the youth from North East is enjoying various job ventures in private sector freely in Indian metros. For their productive efficiencies, girls and boys from North East are in great demand for jobs in private sector as service providers, sales persons, mall, showrooms or boutique managers etc.⁴
This contrasting difference between the private entrepreneurs and government authorities is because of the fact that private entrepreneurs are motivated by the single aim of satisfying their customers in best possible and productive way for doing which, they need to come above any such linguistic, regional or religious discriminations. On the other hand, government and politicians have nothing to do with customer’s satisfaction or individual rights; what they look for is potential vote bank.
The Astaire Research suggests the hurdles in Indian economic reforms and progress in following words–

A Balance of Payments crisis in 1991 pushed the country to near bankruptcy. In return for an IMF bailout, gold was transferred to London as collateral, the Rupee devalued and economic reforms were forced upon India. That low point was the catalyst required to transform the economy through badly needed reforms to unshackle the economy. Controls started to be dismantled, tariffs, duties and taxes progressively lowered, state monopolies broken, the economy was opened to trade and investment, private sector enterprise and competition were encouraged and globalisation was slowly embraced. The reforms process continues today and is accepted by all political parties, but the speed is often held hostage by coalition politics and vested interests. – India Report, Astaire Research⁵

Another example of entrepreneurs helping the cause of eradicating poverty is the success of entrepreneurs like Vikram Akula⁶ or Irfan Alam.
Irfan Alam an MBA from prestigious IIM-Alhmedabad is the founder and chairman of the SAMMAAN Foundation. His enterprise innovated for the help of the millions of Rickshaw pullers across the country. Most of them are illiterate and poor. Over 90% of them are farm workers who migrate to cities for want of employment at home. They hire rickshaws for which they pay owners Rs 30 to Rs 40 per day and end up with a pittance for themselves.
He managed and persuaded banks to finance rickshaw-pullers. His enterprise SAMMAAN designed rickshaws that can put on hold newspapers, mineral water bottles and other such small items for sale if the passenger needs them. These rickshaws also carry advertisements and the pullers get 50% of the ad revenue, the remainder going to SAMMAAN.
Thus apart from the fare, the rickshaw-puller also earns from the ads and the sales. Gradually they become the owners of the rickshaw after re-paying the bank loan in instalments.
Irfan started off with 100 such rickshaws in 2007. Today, over three lakh rickshaw-pullers from across the country are registered with SAMMAAN. While 10,000 and odd are pedalling the special rickshaws, the process is underway to benefit others.⁷
Conclusion: It is the selfish motive of the entrepreneurs to make profits that entails the solution of poverty. As the governments will start to leave the market and society free of their dictatorial regime, the society itself will reduce the poverty to minimum.

1. “Economic survey of India 2007: Policy Brief”, OECD, pdf [↩]
2. China is a Private-Sector Economy, Economist Fan Gang points to a 70% share of GDP now in private hands, but he acknowledges that much improvement is still needed [↩]
3. Want a taxi permit in Mumbai? Read, write Marathi, Mumbai: The Maharashtra government framed new rules for taxi drivers to get permits in Mumbai. [↩]
4. North East Youth ride high on Reatial Boom, The Economic Times [↩]
5. “The India Report”, Astaire Research. [↩]
6. Vikram Akula, CEO and Founder of SKS Microfinance [↩]
7. Obama invites Bihari Entrepreneur to entrepreneur summit, The Economic Times [↩]