Thich Nhat Hanh notes in Peace Is Every Step that “It is difficult to explain to children in the ‘overdeveloped’ nations that not all children in the world have such beautiful and nourishing food.... [How can we] ... assist those who need our help so much?”

The material wealth of America’s average citizen astounds those with historical and cross-cultural perspectives. Most of the time, we who grow up with plenty assume it to be the norm.

According to the Population Reference Bureau, more than one half (53 percent) of the world’s population lives on $2 a day or less: a maximum of $730 a year. This percentage will likely increase, as the vast majority of projected population growth over the next generation will be in the world’s poorest countries.

By comparison, some of America’s most impoverished pockets are Indian reservations. Average incomes on the Crow Creek and Pine Ridge reservations of South Dakota are under $7,000 per year; at Montana’s Rocky Boy reservation, that number is just over $7,000.

One drawback of our wealth is the difficulty of understanding poverty. It is almost impossible to imagine the daily tradeoffs faced when essentials are scarce. Consider the wrenching choice between keeping your eight-year-old in school or sending her to work, or measuring the cost of your five-year-old’s medicine by the number of meals your family will have to skip to acquire it.

What conditions enable the poor to build the wealth required for dignity and well-being? This we know from 50 years’ experience: conventional foreign aid may temporarily preclude starvation but it doesn’t end poverty. Noted development economist Peter Bauer argued that the poor are often in the best position to know their own most pressing needs. Those who experience poverty must fix it.

Here are some universal conditions to facilitate this process. Countries governed by a rule of law, with secure property rights, and something like a free market, will prosper. When the market is employed as a coordinating tool, rather than a mechanism to benefit cronies, people can create wealth. If the country’s people are blessed with a good work ethic and respect commerce, progress is rapid. Across time and culture, these ingredients attract investments.

Under the above conditions, entrepreneurs -- indigenous or exotic -- emerge, and a few flourish. Successful entrepreneurs find creative ways to move resources, especially human resources, to higher value. In the most constructive sense, potential workers who are now poor represent a great resource; developing their human capital generates mutual benefit.

Some are outraged by the low wages paid to workers in developing countries. From an American perspective, these numbers are inconceivably low. Many critics fail to understand a critical point: the value of a wage can best be measured by comparing it to the highest available alternative wage.

When people increase their human capital, greater and better choices will follow; higher wages accompany expanded opportunities. Simple assembly work leads to manufacturing, and then to skilled labor. Consider the story of Caterpillar. “I have visited China regularly over the last 20 years and have witnessed the nation's extraordinary economic growth and development during that time,” said Caterpillar Chairman Jim Owens, a Ph.D. economist.

Cat sold its first products there in 1975 and began manufacturing in China during the 1980s. It started at the bottom, rebuilding worn out machinery, and moved up. In 2002, Cat built its 10,000th excavator in China. It now operates 13 plants in China and is developing a major Innovations Center.

A further step of this labor evolution is high-tech R&D. According to a recent New York Times article, more than a third of the 200 top American and European multinationals are investing R&D in rapidly developing nations.

On a recent flight out of Bozeman, I was seated next to Michael Oudshoorn, head of Montana State University’s Department of Computer Science. He was traveling to India to recruit undergrads and grad students to MSU. Remarkably, he wasn’t offering scholarships; he did not need them.

MSU has 99 full tuition Indian graduate applicants for this fall. The fact that prominent American universities now draw from a global talent pool is testimony to this evolution of human capital.