Is globalization benefiting or hurting the poor?

Great Debates
1

Neoliberals champion globalization and trickle down economics, citing the World Bank and other stats showing that it has lifted millions out of poverty. While inequality has increased, they say, and the rich have benefited more than the poor, they claim in absolute terms that everyone has benefited to some extent and thus globalization is good for poor countries.

There are some challenges to this though that I’d like to present.

  1. Correlation doesn’t necessarily equal causation. While most poverty figures do seem to suggest that there is quite a bit less poverty now than there was in the 80s or even the 90s, the two decades when the current wave of globalization really started kicking into gear, it’s questionable and debatable that this is the reason why poverty seems to have declined. One could also point to better democratic process, the progression of technology, and better crops for this (I do generally support GMOs).

  2. The lion’s share of the decline of poverty has taken place in the People’s Republic of China. The 80s, 90s and 00s saw huge increases in income in China. However it should be noted that while China did open up to the world during this time, their economic policy is still vastly different from a free market. Not only that but you also have to consider that in 1980 they were less than 20 years out of a famine. It’s not like they could have done down much worse than where they were at.

Also I don’t think working for $2 a day in a factory in a dismally polluted city is necessarily that much better than subsistence farming and making $1. When we talk about “lifting millions out of poverty” with China we’re not saying one minute they’re starving to death and then the West comes along and suddenly it’s all caviar and flat-screen TVs. There are millions of Chinese people who can afford such things but the vast majority of Chinese people would be considered very poor by American standards.

They have also lost unpriceable forms of social capital such as close family and community ties that existed in their villages in 1980. I’d much rather live in a rural English village in 1750 than as a factory worker in Newcastle upon Tyne in 1850 even though I’d have a bit more spending money working in the factory.

  1. How much money someone makes a year doesn’t factor in how much of their culture they’ve lost, how oppressive their government is, the non-measurable economic exchanges, etc.
2

Seems pretty obvious: you can’t expect subsistence, collectivized peasents to middle-class burghers overnight.

That may make sense back then as crowded industrial conditions probably meant you were more likely to get ill but China’s cities are quite sanitary.

The government wasn’t any less oppressive and in China’s case was far more oppressive in the past.

3

Well, that’s great. Hows about we let them make their own decision?

So, let me ask you how many people are racing to return to stoop labor farming as opposed to those who are racing to be away from it? Is not the best measure of what people want what they actually choose to do, as opposed to what you want them to do?

4

There is no doubt that the world, on the whole, is getting better. Just in the last ten years we’ve seen a dramatic drop in child mortality, decrease in violence, increase in education, increase in wealth, and increase in lifespan. And this is not just in China. The “starving African children” we grew up hearing about are not unlikely to be watching satellite TV right now. Indeed, much of Africa is booming.

But poverty is still there, and some of it is seeming quite intractable. One big change we are seeing is that inequality is no longer a country-by-country thing. Instead, we see countries developing a wider range of wealth and poverty. In China, Shanghai has a standard of living on par with the US. But rural Guizhou has a standard of living equal to Ghana. In the US, our healthcare is generally pretty good. But black women in New York City have maternity outcomes on par with low-middle income countries like Kazakstan. Among African-American men in DC, you’ll find HIV rates equal to those in parts of West Africa.

We may be headed towards a globe that looks a lot like South Africa, where first-world wealth and third-world poverty live literally side by side.

Not to be forgotten is that there is more to life than wealth. Inequality creates it’s own set of problems, and community, culture, and hope are important goals as well.

Tellingly, the country that has navigated this most successfully doesn’t do that. China makes it VERY difficult to move from the countryside to the city, and people doing it without going through the entire process (which is similar to immigrating) essentially live as illegal immigrants, with next to no access to government services and few rights. This is how China has avoided the slums that have cropped up in much of the world.

One of the problems with your line of thinking is that, for various reasons, it’s usually the men taking off to move to the cities and endure slum life on the slim hope of getting lucky. Around the world, you’ll find villages that are devoid of men, populated only by women, children, and elders. Unfortunately, men without families (and families without men) create all kinds of social problems. It’s not really a good thing.

5

Neoliberal globalization is hurting the world’s poor, and adding to their numbers as middle classes continue to shrink. In contrast, globalization that sidesteps neoliberal policies, even in small ways, is enormously beneficial.

6

I’m almost afraid to ask, but what is the difference between “globalization” and “neoliberal globalization”?

7

So, why don’t they go back to the villages, then, if most people are worse off? Or, assuming the are worse off, what should be done? Should they not be allowed to leave the villages? Should they not be allowed to leave unless they take their families with them? Will their families be better off if they leave the villages, too?

8

Globalization clearly helps The Poor™ overall. Obviously there are going to be downsides to anything, but it’s hard to see how anyone can look at the world today and not see that people are better off today than they have ever been in history.

Didn’t the OP ask a similar question to this recently? I seem to recall the poster and going through a similar explaination that, IIRC, the OP never got back to the thread with any further thoughts.

9

Globalization refers to increased economic integration around the world. This ought to be a good thing, and often it is. However, when this integration occurs under neoliberal paradigms, i.e. privatization of profits and socialization of costs/externalities (or, to put it another way, free markets for the masses and welfare for the rich), it’s bad news.

10

It is helping the poor worldwide, and hurting the poor and the middle class in the US.

11

Well millions upon millions of Chinese would disagree with you and they have actually been presented with the choice in real life.

12

And hundreds of thousands of them every year die from cancer. It’s come to a huge price to their environment, and it’s making fighting climate change even more of a futile battle.

13

Cite?

14

While it’s true that a major famine hasn’t struck Africa since the 90s, I’d be careful using access to technology as a measure of quality of life. Thanks to Moore’s law technology is incredibly cheap now. It’s much cheaper to own a cell phone than it is to feed your kids or yourself.

I think we are creating wealth by mining the welfare of people in the future.

15

Just to be clear, you have not offered even one cite in support of your thesis. As it is, I would call it an “interesting opinion”, and that is being overly fair. If you want it to rise to more than that, then you need to cite your claims.

16

Well, the guys are fine. Healthy young men free of family obligations can always make some money and find fun stuff to spend it on. But slum life is less safe and sustainable for women, children and the elderly, so they tend to stay behind. These are the people who bear the burden of extreme poverty when the economic heart of their community is out in the city doing day labor (and often immediately drinking the profits.)

Tons can be done. Either the cities can be made more suited for family and community life- affordable decent housing, schools, health care, police, better gender equality so women can work, etc. or the countryside can be made more appealing to young men with better agricultural marketing and improvements to the local valor chain.

17

With such a huge pool of slave labor available around the globe, and transportation so cheap, it’s hard to imagine the money that runs the world would have let the politicians stand in the way of globalization.

18

Peru has massively reduced poverty since it stopped it anti-globalization policies in the early nineties. We went from 25% poverty and 25% extreme poverty to 15% poverty and 5% extreme poverty.

Millions of Peruvians have not only come out of poverty but have also been given the oportunity to better themselves and their families.

19

And Venezuela massively reduced their poverty rates while railing against globalization and embracing socialism. Extreme poverty went from 23% to 8%.

20

I’ve heard this isn’t the case anymore. Finding a country with a dirt poor labor force that is also relatively healthy, has a basic level of education/literacy to increase their productivity, in a country that has political stability (no civil wars, etc), has good infrastructure, has a business friendly government, has an obedient workforce, has few consumer/environmental protections and has a labor surplus is not nearly as easy as it was.

Chinese manufacturing wages keep going up, I think they are about $1-2/hr now. So the companies are moving to southeast asia, Bangladesh, Africa, etc. But I’ve heard other countries have other problems.

I hope this is true, because if so then companies will have no choice but to increase wages to keep their workers.