Globalization and the World's Poor
Do we have a realistic view of world poverty?
by Janet Minshall
All of these conclusions are false.
The clear implication of these messages is that we consumers in the US should feel guilty about buying anything made in other countries by "foreigners," and that we should demand that no one else in the world be permitted to do the work of US, European and multinational corporations but the highly paid middle-class workers who have done that work in the past. Those of you who actually research the issue of globalization will find that such misrepresentations are egregiously self-serving on behalf of the US and Western European labor unions and grossly unfair to workers and the poor in the rest of the world.
The reality is that the overall effects of globalization are primarily positive. Globalization is actually achieving a major economic goal in the world which Quakers have long sought, i.e. rapidly bringing the poor out of poverty in those countries which are in process of globalizing.
Nevertheless, there have been abuses of globalization. The situation is quite similar to the first burst of industrialization, when people flocked from the countryside to the new factories and mines of 17th century Britain. These new industrial workers felt that they had improved their lives farm life was difficult and prone to disaster but the fact remains that they were then exploited by the owners of the new factories. Beautiful townships were devastated by factory construction, and by air and water pollution. Entire livelihoods vanished almost overnight. Urban slums expanded rapidly, without public health or indeed any civic services or regulation. Only gradually, over a period of a century or more, were the excesses of rapid industrialization ameliorated. We can expect similar developments with globalization, though the evidence so far suggests to me that the negative consequences will be (a) mild compared to what happened during the early centuries of the industrial revolution, and (b) insignificant in comparison to the worldwide decrease in poverty.
The Hard Evidence
Economic analyses indicate that the globalization which took place in the early part of the twentieth century was actually more rapid than what is occurring at present. Because the process is now old enough to examine thoroughly, there are many good articles and books available on the actual effects of globalization on the peoples of the world. While some are slanted to support particular political agendas, many are written objectively by people from a wide variety of cultures and countries.
For example, there is Martin Wolf's book, Why Globalization Works, published by Yale University Press, 2004. Martin Wolf is associate editor and chief economics commentator at the Financial Times of London. Another good book from a slightly different perspective is In Defense of Globalization by Jagdish Bhagwati, also published in 2004. Bhagwati is University Professor at Columbia University and Andre Meyer Senior Fellow in International Economics at the Council on Foreign Relations. He is also a former Special Advisor to the United Nations on Globalization.
Contrary to what you may read in anti-globalization leaflets and press releases, between 1980 and 2000, 75% of the world's population achieved an enormous increase in both average incomes and living standards due to the effects of globalization. Summarized from Wolf's book in the chapter "Why The Critics Are Wrong" (p. 143), "never before have so many people, or so large a proportion of the world's population, enjoyed such large rises in their standard of living India produced an approximately 100% increase in real GDP per head and China nearly a 400% increase in real GDP per head." This is an enormous improvement, experienced by some two billion people.
Meanwhile, GDP per head in high-income countries (with only 15% of the world's population) rose by 2.1% between 1975 and 2000, and by only 1.7% per year between 1990 and 2001.
A much shorter piece appeared in the Nov/Dec 2004 issue of Foreign Affairs which helps, along with the data cited above, to explain some of the intense reactions against globalization by the middle class around the world (including many Quakers). The article is "Globalization's Missing Middle" by Geoffrey Garrett. He, too, describes the net positive effect of globalization on the poor of the world and admits that the rich also benefit, but his primary focus is the fact that "middle income countries have not done nearly as well under globalized markets as either richer or poorer countries..."
He explains as I too explained in a 2001 article in Friendly Women which was reprinted as TQE #23 that the middle-class workers in many countries like the US don't have the technical and scientific education necessary to compete for the higher-wage jobs which have developed over the past twenty years or so. The relatively poorly trained and educated workers in the US and Europe are vainly trying to force employers to keep those higher-wage jobs at home, rather than outsource them to better educated and less expensive workers in China, India and elsewhere.
The Role of Labor
To his credit, John Sweeney, president of the AFL-CIO, recognized the problem years ago. He funded programs to upgrade the education and skills of laid-off workers. However, many of those who might today benefit from such an upgrade think they are somehow entitled to their previous jobs for the rest of their working lives without any further training.
Friends frequently express concern for truth, simplicity, equality and peace, all venerable Quaker testimonies. In keeping with those testimonies, Friends are required to search continuously for ways of understanding the realities of the world which put them on the side of the poor and the oppressed. Some middle-class labor movement representatives have succeeded in convincing Friends that the workers in the US and European labor movements are the poor and oppressed, and that we Friends should take sides with them against those who are truly poor in other countries.
Companies that outsource generally pay significantly better wages, provide better benefits, and combat sexual, class and cultural / tribal / caste discrimination more effectively than local employers in the countries where they send their work. These are effects that Friends want to support.
Shall We Dumb Down or Tech Up?
As many of us have learned, it is the disaffected middle class which has the time and the resources to organize politically. Rather than organizing against the poor of the world, middle-class people and those in middle income countries need to put their energy into innovation and change.
Rather than "dumbing down" and trying to retain repetitive manufacturing and service jobs, they need to "tech up" their educational and training programs to acquire and keep the newer jobs being developed. Summarizing from Geoffrey Garrett's article in Foreign Affairs (cited above), organizing in middle income countries should focus on deep reforms in infrastructure and institutions such as "government, banking and law to transform economies that stifle innovation into ones that foster it with strong property-rights regimes, effective financial systems and good governance."
A Call for the Middle Class to Put its Own House in Order
First and most importantly, we need to better educate and train our workers. To accomplish necessary institutional change in the US, after exposing the hypocrisy of Bush's "No Child Left Behind" policy, we need to replace the Republicans' misdirected and ineffective efforts with significant and substantial upgrades to our educational system. Our workers need to be prepared for the jobs on the cutting edge of innovation and change, rather than being dragged along behind the economy kicking and screaming.
The efforts of crusaders like New York's attorney general, Elliott Spitzer, who is calling major corporations and industries to account by cleaning up both their boards and their books, needs wider support and encouragement.
Examining the process for casting and counting ballots in this country is equally important and deserves our involvement.
Finally, the McCain-Feingold initiative to reform campaign financing doesn't go far enough. We need to build a fire wall between our elected representatives and the corporate and other special interests who have apparently become their primary constituency. All of these efforts are more important for the survival and well-being of workers and their jobs in the US than uselessly shaking our fists at the process of globalization and outsourcing.
We Cannot Have it Both Ways
We, as Friends, cannot have it both ways. We have constantly demanded a higher income and a better standard of living for the poor for many, many years. Well, now we have both in developing countries that have globalized. To help our own, we have to get tougher both on government and labor and insist that our educational system, especially our resources for college preparation, our community colleges and technical schools, be dramatically upgraded so that the middle- and working-class young people in the US can compete on "a level playing field" with the middle and working class workers in countries such as China and India. We need to upgrade our preparatory programs and then see to it that those prepared for the new job market can actually get into the graduate programs that they may then wish to enter.
The question has been asked, "To increase the incomes of the poor in the rest of the world, are we willing to have less and buy less?"
Well? Are we?
Sincerely your Friend,
Note: Please send comments on this or any TQE, at any time. Selected comments will be appended to the appropriate letter as they are received. Please indicate in the subject line the number of the Letter to which you refer!
This is an excellent summary of the benefits of globalization and the need for Quakers to focus efforts elsewhere rather than on defeating globalization.
Virginia Flagg, San Diego (CA) Friends Meeting.
One is tempted, after reading Janet's succinct analysis, to ask, "How do so many Quakers get it wrong?" As one formerly involved in international joint ventures, and one who still travels widely for pleasure and education, however, I compliment the author for making a much-needed contribution to understanding what is really happening re globalization.
Norval Reece, Newtown (PA) Friends Meeting.
I once had a discussion with a Nicaraguan friend of my son. He decried the garment and other factories that had sprung up in the free trade zone near Managua as evidence of exploitation of the people. this in a very poor country with extemely high unemployment. I guess in his mind rural poverty and semi-starvation are preferable to a factory job in the city. It is true that wages in these factories are low and that some have abused their employees. However thousands of Nicaraguans consider them an opportunity to raise income and better their lives, and they have flocked to these jobs. Ironically, now those jobs (mainly in the garment industry) are threatened by lower-cost producers in Asia. The social problems and slums caused by rural people flocking to the city to look for those jobs are real, as they were in England and America during the early years of industrialization.
I think the real victims of globalization are poor farmers in poor countries, who produce basic products for the world market that have to compete with more efficient (and subsidized) farmers in the rich world. CAFTA has the potential to be very damaging to the farm economies of Central American countries.
On the other hand, consumers in the rich countries benefit from cheaper manufactured goods, and consumers in the poor countries potentially will have more plentiful, cheaper, and higher quality food.
One point that is never made in these discussions is that local employees of multinational corporations in poor countries are generally far better off, in terms of income, working conditions, and benefits, than those of local businesses.
Walt Guterbock, Ravenna, MI.
Janet Minshall is absolutely right about globalization, and I am pleased to see at least one corner of the Quaker world where the benefits and necessity of a global economy are recognized. Unfortunately, her otherwise excellent article is marred by two gratuitous assumptions:
Thank you, Janet Minshall, for pointing us in a workable direction regarding what can be done in your piece on Globalization and the World's Poor.
One of the things most irritating to me about the globalization issue has been the current liberal Quaker dogma that the national business world is essentially selfish and the global business world is essentially exploitative. The underlying assumption that occurs when Quakers discuss this is that we share this perspective as a given, even as we enjoy the benefits everyday of that business world.
Reliance on dogma tends to make us feel superior but ironically leads us away from actions which would truly help change things. Shamefully there will be no busses to Washington to lobby for any of the four items that make up your "Call for the Middle Class to put itself in order," but there will be cadres of Friends hopping on the next bus to rally against the World Bank.
Much grander to raise the flag against the "evil empire," I suppose.
Rich Ailes, Middletown Meeting, Lima PA.
Janet Minshall writes, "Only gradually, over a period of a century or more, were the excesses of rapid industrialization ameliorated. We can expect similar developments with globalization...", and asks the question, are we willing to have and buy less to increase the incomes of the poor, as if this process of screwing the current industrial middle class to raise the living standard of the global poor were inevitable and good, and the only way to do things.
I point out that an alternative is to impose reasonable government regulations to safely accomplish increased global industrialization without excessive social disruption, while preventing worker exploitation and environmental degradation in the process.
Unfortunately that alternative is undermined by the apologist attitude of her and those like her toward today's new multinational corporate robber barons. Recall that the "amelioration" of the earlier industrial revolution's excesses included, maybe even required, lots of bloody violence, and the potential exists for even worse in today's complex world. Does she want that? Well, does she? How does she justify the enormous and continually increasing transfer of wealth from the middle to the rich, or is that all to the good in her worldview? How would she feel if these "excesses" left her impoverished and threatened her family's well-being?
Minshall exemplifies a currently popular mindless belief in unfettered market forces which is dangerous and unFriendly. Calling for the middle class to "tech up" in a political climate where education funds and college money as well as job training oportunities are being slashed and burned is truly and painfully blaming the victim, and her ignoble ad hominem sourceless anecdote ("many of those ... think they are somehow entitled ...") adds insult to injury.
If this is Quaker economics the only reason to stay subscribed is to stand against it.
Dave Britton, Morningside MM, New York, NY.
GDP per head doesn't seem to me to be a convincing statistic demonstrating that the poor are getting richer. What counts is the way that increased wealth gets distributed.
Editor's Reply: You are absolutely correct in this, and it is an important point. We plan to address this specific point with hard data in a future letter dedicated entirely to income distributions. Loren Cobb.
To paraphrase the comments of little kids coming to the National Museum of Natural History: "Is that real?" It seems that reality is, like truth and beauty, in the eye of the beholder.
Maurice Boyd, Friends Meeting of Washington.
What’s really wrong with 'Globalization' is the diminishment of self-sufficiency, the snowballing of cash-addiction, the empowerment of unfettered, autocratic, amoral mega-corporate bureaucracy, and the loss of cultural diversity.
The unchecked power given to agents whose main goal is satisfaction of greed is alone enough to make globalization a complete horror, but the loss of self-respect via diminished opportunity for display of integrity in adjusting invention (to be appropriate to local conditions and local distinctions) looms and threatens equally ghastly duress.
Globalization equates not only to homogenization, but to cheapening, trivializing really, too much of life through the effects of propaganda, the inundation of advertising. What about quality of spirit?
Joel John Barlow, Brooklyn NY Monthly Meeting (residing in Chiangrai, Thailand).
I am a Quaker business executive who favors globalization. We buy products made in China. We are working with our chinese source to be sure that the workers are well paid by their standards, that they have a good safety program and are working toward the other SA-8000 standards. We have agreed to jointly pay for external audits to assure ourselves that adequate progress is being made.
I was involved in the creation of the SA-8000 standards. These standards require a living wage, a safe environment, no child labor, no indentured labor, freedom of association and no descrimination. There must be an external certification audit.
I am currently trying to convince the American Friends Service Committee to avoid demonstrations and otherwise behaving in a confrontational way against the private sector, and to start working with companies in a common effort to make the world a better place.
Lee B. Thomas, Jr., Louisville (KY) Friends Meeting.
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Publisher: Russ Nelson, St. Lawrence Valley (NY) Friends Meeting
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Copyright © 2005 by Janet Minshall. All rights reserved. Permission is hereby granted for non-commercial reproduction.