Introduction: Resolved: On balance,
economic globalization benefits worldwide
poverty reduction
Introduction
The February Public Forum resolution centers debates on the question of whether or
not economic globalization results in a net reduction in poverty.
In this essay I discuss some of the key terms in the resolution and identify some of
the major arguments on both sides. In the Pro and Con essays (forthcoming) I
discuss some additional arguments on both sides of the resolution.
Defining Terms
Economic globalization. Generally, economic globalization refers to the process of
global economic integration. This integration includes trade, financial services
integration, and
Wikipedia, no date, http://en.wikipedia.org/wiki/Economic_globalization, DOA: 1-1-15
Economic globalization is the increasing economic integration and
interdependence of national, regional and local economies across the
world through an intensification of cross-border movement of goods,
services, technologies and capital.[1] Whereas globalization is a broad set
of processes concerning multiple networks of economic, political and
cultural interchange, contemporary economic globalization is propelled by
the rapid growing significance of information in all types of productive
activities and marketization, and by developments in science and
technology.[2]
Economic globalisation primarily comprises the globalization of production and
finance, markets and technology, organizational regimes and institutions,
corporations and labour.[3]
While economic globalization has been expanding since the emergence
of trans-national trade, it has grown at an increased rate over the last 20–
30 years under the framework of General Agreement on Tariffs and
Trade and World Trade Organization, which made countries gradually cut
down trade barriers and open up their current accounts and capital
accounts.[2] This recent boom has been largely accounted by developed
economies integrating with less developed economies, by means
of foreign direct investment, the reduction of trade barriers, and in many
cases cross border immigration.
Such globalization usually includes efforts by countries to privatize property and
deregulate assets. These actions are necessary because without them global
commercialization would not be possible.
Stanford Encyclopedia of Philosophy, May 6, 2014, Feminist Perspectives
on Globalization,http://plato.stanford.edu/entries/feminismglobalization/ DOA: 1-1-2015
1. What is Globalization?
1.1 Economic Globalization
Economic globalization refers to the processes of global economic
integration that emerged in the late 20th century, fueled by neoliberal
ideals. Rooted in classical liberal economic thought, neoliberalism
claims that a largely unregulated capitalist economy embodies the
ideal of free individual choice and maximizes economic efficiency
and growth, technological progress, and distributive justice.
Economic globalization is associated with particular global political
and economic institutions, such as the World Trade Organization, the
International Monetary Fund, and the World Bank, and specific
neoliberal economic policies, such as the following:
 Trade liberalization. Free trade policies, such as the North
American Free Trade Agreement (NAFTA), seek to integrate
regional or global markets by reducing trade barriers among nations.
Signatory countries typically agree to eliminate tariffs, such as duties
and surcharges, as well as nontariff obstacles to trade, such as
licensing regulations, quotas on imports, and subsidies to domestic
producers.
 Deregulation. Trade liberalization is associated with the easing of
restrictions on capital flow and investment, along with the elimination



of government regulations that can be seen as unfair barriers to
trade, including legal protections for workers, consumers, and the
environment.
Privatization of public assets. Economic globalization is marked
by the sale of state-owned enterprises, goods, and services to
private investors in the name of expanding markets and increasing
efficiency. Such assets include banks, key industries, highways and
railroads, power and electricity, education, and healthcare.
Privatization often also involves the sale of publicly owned,
economically exploitable natural resources, such as water, minerals,
forests, and land, to private investors.
Elimination of social welfare programs. Neoliberalism favors
sharp reductions in public expenditures for social services, such as
housing, health care, education, and disability and unemployment
insurance, as a crucial means of reducing the role of government
and making private businesses more efficient. Structural Adjustment
Policies (SAPs) have been instrumental in requiring countries in the
global South to eliminate social welfare spending. Since the early
1980s, the World Bank and International Monetary Fund have
required debtor nations to adopt SAPs as a condition of borrowing
money or improving conditions of existing loans. SAPs require
debtor nations to restructure their economies along neoliberal lines,
by, for example, removing government regulation, eliminating social
welfare programs, and promoting market competition.
Restrictions on immigration. While many countries have
liberalized capital markets and eased barriers to transnational trade
in goods and services under globalization, most have not eliminated
barriers to the flow of labor. Indeed, some affluent countries, such as
the United States, have implemented more restrictive immigration
policies, leading to the detention and deportation of thousands of
undocumented immigrants and the militarization of national borders.
Despite these restrictions, however, migration has increased along
with other processes of globalization.
While the last part of this definition does suggest that immigration restrictions can be
part of globalization, those restrictions are not really part of economic integration. I
think they just appear in this definition because the author is not supportive of
immigration restrictions or globalization. There are many other definitions of
“economic globalization” that speak to global economic integration and none of them
also include restrictions on immigration.
Wisegeek, no date, Economic
Globalization, http://www.wisegeek.org/what-is-economicglobalization.htm DOA: 11-1-15
Economic globalization is a worldwide phenomenon wherein countries’
economic situations can depend significantly on other countries. Many
allied countries would supply resources to each other that the other
countries do not have. These resources can cover imported products,
technology, and even human labor. Many people have observed that this
phenomenon may lead to a “one-world government,” which consists of a
centralized government for all nations One popular activity under
globalization isinternational trade, in which products and services are
exchanged between or among nations. Many countries that have abundant
natural resources rely on this trading system to market their unique local
products and, in turn, improve their economic state. International trade has
been practiced for centuries, as evidenced by the Silk Road that connects
Asia and Europe for trading purposes. One modern example of this type of
trade is the toy industry, wherein many American-sold toys have the
phrase “Made in China” embossed on their surface Economic globalization
may involve the financial and economic aspects of a nation primarily, but
its interdependent nature can inevitably affect a country’s lawmaking
system and cultural identity. Trading policies and tax treaties are created
between countries to regulate trade and protect either country from threats
of terrorism. Multinational companies are changing some cultural aspects
of many countries; fast food restaurants, for example, have changed the
eating habits of Asian countries that consider rice as a staple food.
Fashion trends from European countries are also carried over to the
opposite side of the globe.
It is important to note here that the resolution limits the debate
to economic globalization. There are other forms of globalization, particularly political
and cultural globalization, and those are distinct.
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of
Housing and Home, “Globalisation,” pp. 292-7
Globalisation is an ongoing process of the flow of capital, information,
labour, technology, and goods across national boundaries to form an
interconnected global economy. One important feature of recent economic
globalisation is financialisation, in which financial instruments are used to
facilitate the exchange of goods and services beyond geographic
constraints. There are three aspects of globalisation: economic
globalisation, political globalisation, and cultural globalisation.
Poverty. Poverty is a bit more difficult to define.
The World Bank defines poverty as living on less than $1/day, which means that
more than 1 billion people world-wide live in poverty.
Anish Bharadwaj, 2014, International Max Planck Research School for
Competition and Innovation, Munich Centre for Innovation and
Entrepreneurship Research, Advances in Economics and Business, 2(1):
42, p. 42-57
This fear may not be universal, but it does play a role in the public
perception that cannot be ignored. More than 1 billion people live in
extreme poverty, which is defined by the World Bank as subsisting on less
than 1 dollar a day1.
Estimates place those living in extreme poverty at 1.22 billion.
Kayla McMurry, 2014, “Factors in Poverty Alleviation: the Globalization,
Growth, Inequality, and Growth Nexus” (2014). University of Tennessee
Honors Thesis
Projects.http://trace.tennessee.edu/utk_chanhonoproj/1731 DOA: 1-2-15
Currently, 1.22 billion people are living in extreme poverty. Since the World
Bank’s establishment in 1944, their mission has been to create “a world
free of poverty” (World Bank, 2014). However, countless NGOs, nonprofits, countries, and governments have also made eliminating poverty a
top goal. But this poses a question, how can countries alleviate poverty? A
general understanding of the factors that have gone into poverty alleviation
in the past is good place to start.
There are definitions of poverty that push the meaning beyond a basic economic
indicator ($1/day) and to factors such as additional factors as social, political, cultural
and environmental deprivations’
“Poverty” includes social, political, and environmental deprivations
Okungbowa, Florence. O. Ewere, Eburajolo, Ose Courage, Benson
Idahosa University Department of Economics, Banking and Finance BeninCity, Nigeria, September 2014, International Journal of Humanities and
Social Science, Globalization and Poverty Rate in Nigeria; An Empirical
Analysis,http://www.ijhssnet.com/journals/Vol_4_No_11_September_2014/
13.pdf DOA: 1-2-15
Poverty on the other hand, is also a complex and multidimensional
phenomenon which results from a combination of economic, cultural,
climatic, ecological and environmental factors. According to World Bank
(1990), poverty is “the inability to attain a minimum standard of living”.
Ajakaiye and Olomola (1999), refers to poverty as ‘a living condition in
which living entities are faced with economic, social, political, cultural and
environmental deprivations’.
It is possible to define the poor as those who lack access to safe drinking water,
health care, education, and housing
Okungbowa, Florence. O. Ewere, Eburajolo, Ose Courage, Benson
Idahosa University
Department of Economics, Banking and Finance Benin-City, Nigeria,
September 2014, International Journal of Humanities and Social Science,
Globalization and Poverty Rate in Nigeria; An Empirical
Analysis, http://www.ijhssnet.com/journals/Vol_4_No_11_September_2014
/13.pdf DOA: 1-2-15
In light of the above, Nzekwu (2006) viewed poverty in its relative terms as
the ‘inability to buy a pre- specified consumption basket of food and in its
absolute term as ‘living below one (1) US dollar per day per person’. In
looking at the different types of poverty, Nzekwu further stressed that while
poverty in the developed countries is basically income determined i.e.
relative poverty, that of the developing countries is in addition, the result of
deprivation and lack of access to basic services or needs such as safe
drinking water, health care, education and housing, i.e. (Absolute poverty).
These definitions are important because there is a lot of good evidence, for example,
that economic globalization destroys the environment. And since the resolution only
asks the question of whether or not globalization causes a net increase in poverty
those do not seem to be especially relevant, but if poverty can be defined to include
things such as living in a poor environment, it will be easier for the Con to win that
economic globalization is responsible for a net increase in poverty.
The following card simply defines poverty as those who live on the bottom half of the
wage level.
Raphael Kaplinsky, Professor of International Development, 2005,
Globalization, Poverty, and Inequality: Between a Rock and a Hard Place,
page number at end of card
The comparison of absolute standards of living across countries using PPP
dollars hints at a second meaning to the concept of poverty. In the early
1970s Townsend produced a seminal study of poverty in the UK. He
concluded that, although absolute poverty was of major concern, it was too
limited and needed to be complemented by a focus on relative living
standards: ‘Poverty can be defined objectively and applied consistently
only in terms of the concept of relative deprivation.’ This distributional
perspective on poverty has diffused widely over the past two decades and,
for example, forms the basis for the estimations of poverty in the EU –
defined as those living on less than half the average wage level in each
country. It is notable, however, that distribution does not surface in any of
the Millennium Development Goals, all of which are focused on the
elimination of levels of absolute poverty. Kaplinsky, Raphael (2013-04-29).
Globalization, Poverty and Inequality: Between a Rock and a Hard Place
(Kindle Locations 753-759). Wiley. Kindle Edition.
This definition is important because there is a widespread consensus in the literature
that globalization has increasedinequality, even if it has decreased poverty. So the
Con could use this argument to make the case that the increase in inequality caused
by economic globalization results in an increase in poverty.
On balance. On balance simply means “overall” and “when all factor are
considered.” Google Definitions.
This is important because it only requires that the Pro win that on the whole that
there is a net reduction in poverty as a result of globalization. While this seems
harder to prove, it is actually the opposite – most research demonstrates that there is
a net reduction while admitting that poverty has increased in some particular ways.
These arguments will be discussed in the next essays.