Is globalization the enemy?

This week we are exploring the reasons behind the incredible drop in worldwide extreme poverty: from 90% in 1800 at the beginning of the Industrial Revolution to less than 10% today.  

And falling.

The United Nations has set a target of “ending extreme poverty for all people everywhere” by 2030.  

What accounts for this incredible drop?

Yesterday, we looked at three reasons outlined by Steven Radelet, author of The Great Surge: The Ascent of the Developing Worldas quoted in Steven Pinker‘s Enlightenment Now.

Today, we turn to reasons four and five.

Reason #4 for the dramatic decline in worldwide extreme poverty: Globalization.  “In particular the explosion in trade made possible by container ships and jet airplanes and by the liberalization of tariffs and other barriers to investment and trade,” writes Steven Pinker.  “As countries specialize in different goods and services, they can produce them more efficiently, and it doesn’t cost them much more to offer their wares to billions of people than to thousands.  At the same time buyers, shopping for the best price in a global bazaar, can get more of what they want.

“Notwithstanding the horror that the word elicits in many parts of the political spectrum, globalization, development analysts agree, has been a bonanza for the poor,” notes Steven.  He quotes Nobel-winning economist Angus Deaton, who said: “Some argue that globalization is a neoliberal conspiracy designed to enrich a very few at the expense of many.  If so, that conspiracy was a disastrous failure—or at least, it helped more than a billion people as an unintended consequence…” 

“While working on the factory floor is often referred to as sweatshop labor,” observes economist Steven Radelet, “it is often better than the granddaddy of all sweatshops: working in the fields as an agricultural day laborer.” 

He shares his own experience visiting Indonesia in the early 1990’s to conduct research:  “I arrived with a somewhat romanticized view of the beauty of people working in rice paddies, together with reservations about the rapidly growing factory jobs.  The longer I was there, the more I recognized how incredibly difficult it is to work in the rice fields.  

“It’s a backbreaking grind, with people eking out the barest of livings by bending over for hours in the hot sun to terrace the fields, plant the seeds, pull the weeds, transplant the seedlings, chase the pests, and harvest the grain.  Standing in the pools of water brings leeches and the constant risk of malaria, encephalitis, and other diseases.  So, it was not too much of a surprise that when factory jobs opened offering wages of $2 a day, hundreds of people lined up to get a shot at applying.”

Kavita Ramdas, the head of the Global Fund for Women, said in 2001 that in an Indian village “all there is for a woman is to obey her husband and relatives, pound millet, and sing. If she moves to town, she can get a job, start a business, and get education for her children.”

Steven Pinker shares data from a Bangladesh study which confirms women who worked in the garment industry (as Steven’s grandparents did in 1930s Canada) “enjoyed rising wages, later marriage, and fewer and better-educated children.  Over the course of a generation, slums, barrios, and favelas can morph into suburbs, and then working class can become middle class.”

Industrialization of the developing world has produced poor working conditions that are “harsh by the standards of modern rich countries and have elicited bitter condemnation,” notes Steven.

Consumer protests and pressure from trade negotiators has resulted in “measurably improved working conditions in many places, and it is a natural progression as countries get richer and more integrated into the global community,” notes Steven.

Progress does not mean “accepting every change as part of an indivisible package—as if we had to make a yes-or-no decision on whether the Industrial Revolution, or globalization, is a good thing or bad thing, exactly as each has unfolded in every detail,” Steven observes.  

“Progress consists of unbundling the features of a social progress as much as we can to maximize the human benefits while minimizing the harms,” writes Steven.

Reason #5:  Science and technology.  “Life is getting cheaper, in a good way.  Thanks to advances in know-how, an hour of labor can buy more food, health, education, clothing, building materials,” Steven writes.  

“As for good advice on health, farming, and business: it’s better than cheap; it’s free.” 

More than half of the adults worldwide own a smartphone.

“In parts of the world without roads, landlines, postal service, newspapers, or banks, mobile phones are more than a way to share gossip and cat photos; they are a major generator of wealth,” Steven writes.  “They allow people to transfer money, order supplies, track the weather and markets, find day labor, get advice on health and farming practices, and even obtain a primary education.”  

Access to information about medicine, electronics, crop varieties, and best practices in agriculture, business, and public health has made a huge impact. 

“According to one estimate, every cell phone adds $3,000 to the annual GDP of a developing country,” Steven writes.

But what about growing income inequality?

More tomorrow.

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Reflection:  Am I surprised by the data above?  Why or why not?  

Action: Share this information with a friend or colleague who is convinced we live in the “worst of times.”

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