Stefan Bauschard
Globalization and Poverty Release
1
Background.................................................................................................................................. 3
Resolution ................................................................................................................................ 4
Definitions – Economic Globalization ...................................................................................... 5
Economic Globalization vs. Political Globalization .................................................................. 8
Social Globalization ............................................................................................................... 10
Economic, Political, and Cultural Globalization ..................................................................... 11
General Globalization Definition ........................................................................................... 12
KOF Globalization Index ........................................................................................................ 14
Routes Through Which Globalization Impacts Poverty ......................................................... 15
“Extreme” Poverty Defined ................................................................................................... 16
1.22 Billion Live in Poverty Now ............................................................................................ 17
“Poverty” Defined.................................................................................................................. 18
History of Globalization ......................................................................................................... 20
Globalization Reduces Poverty .............................................................................................. 24
Poverty Decreasing ................................................................................................................ 54
Growth Reduces Poverty ....................................................................................................... 58
Long-Term Reduction in Poverty ........................................................................................... 59
Globalization Increases Growth ............................................................................................ 62
Poverty Impact ...................................................................................................................... 64
A2: Children in Sweatshops ................................................................................................... 65
A2: Increased Poverty in the US ............................................................................................ 66
A2: Globalization Causes a Race to the Bottom ................................................................... 67
Globalization Reduces Inequality .......................................................................................... 68
A2: Globalization Increases Inequality .................................................................................. 72
A2: Globalization Reduces Wages ......................................................................................... 74
A2: Globalization Doesn’t Benefit Africa ............................................................................... 75
Protected Globalization Good ............................................................................................... 77
Democratic Globalization Good ............................................................................................ 85
A2: Global Trade Not Sustainable.......................................................................................... 87
A2: Globalization Hurts Environment .................................................................................... 89
A2: World Trade Organization Only Benefits the Powerful .................................................. 97
A2: World Trade Organization Hurts Progressive Interests .................................................. 98
A2: World Trade Organization Bad for Developing Countries ............................................ 100
A2: Globalization Unsustainable ......................................................................................... 102
A2: Globalization Causes Political Crises ............................................................................. 107
A2: Globalization Causes War ............................................................................................. 109
A2: Globalization Reduces Wages ....................................................................................... 111
A2: Globalization Undermines Collective Bargaining .......................................................... 112
A2: Globalization Increases Rich-Poor Gap ......................................................................... 113
China Responsible for the Decline in Poverty ..................................................................... 114
Globalization Bad..................................................................................................................... 116
Poverty ................................................................................................................................ 117
A2: Globalization Reduces Poverty...................................................................................... 133
Poverty Increasing ............................................................................................................... 136
Environmental Destruction Turn ......................................................................................... 137
Globalization Increases Inequality....................................................................................... 139
Inequality Increasing ........................................................................................................... 141
Globalization Leads to Sex Trafficking ................................................................................. 144
Stefan Bauschard
Globalization and Poverty Release
2
Economic Inequality Undermines Poverty Reduction ......................................................... 147
Other Inequality Impacts ..................................................................................................... 148
Short-Term Poverty Increase............................................................................................... 149
Inequality Between Countries ............................................................................................. 150
Inequality Leads to Poverty ................................................................................................. 151
Violence ............................................................................................................................... 152
A2: Inequality Reduction in Asia.......................................................................................... 158
A2: Benefits Workers ........................................................................................................... 159
A2: Capitalism Self Correcting ............................................................................................. 160
A2: Government Policies Protect the Poor ......................................................................... 163
Bad Growth.......................................................................................................................... 165
Economy .............................................................................................................................. 167
Environment Extensions ...................................................................................................... 168
Globalization Causes War .................................................................................................... 172
A2: Gartzke .......................................................................................................................... 175
A2: Tech Solves .................................................................................................................... 178
A2: Status Quo Improving, Collapse Not Inevitable ............................................................ 184
A2: IKC – Inequality Kuznet’s Curve..................................................................................... 188
A2: EKC – Enviroment Kuznet’s Curve ................................................................................. 190
Country-Based Policies Best to Solve Poverty ..................................................................... 192
Nation-State Key—Global Capitalism .................................................................................. 194
Nation-State Key—Global Capitalism .................................................................................. 197
Nation-State Key—A2: Global Solidarity ............................................................................. 199
Nation-State Key—A2: Nationalism .................................................................................... 201
Turns Economy .................................................................................................................... 202
A2: Sustainability ................................................................................................................. 206
A2: Capitalism Solves War ................................................................................................... 207
A2: Democratic Globalization Good .................................................................................... 209
Stefan Bauschard
Globalization and Poverty Release
3
Background
Stefan Bauschard
Globalization and Poverty Release
4
Resolution
Resolved: On balance, economic globalization benefits worldwide
poverty reduction
Stefan Bauschard
Globalization and Poverty Release
5
Definitions – Economic Globalization
General definition
Stanford Encyclopedia of Philosophy, May 6, 2014, Feminist Perspectives on Globalization,
http://plato.stanford.edu/entries/feminism-globalization/ 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.
Political philosophers are concerned with the effects of these policies on human well-being. Proponents of
globalization claim that economic liberalization has enabled many people throughout the world to move out
of conditions of dire poverty. Open markets, they argue, have increased employment and productivity
within developing countries, raising the standard of living and enhancing the well-being of the people
living within them (Diamandis and Kotler 2012, Friedman 2012, Micklethwait and Wooldridge 2000,
O'Neil 2013). Critics point out that neoliberal policies have created the widest gap between the very rich
Stefan Bauschard
Globalization and Poverty Release
6
and very poor in history, with unprecedented wealth for the rich and poverty and destitution for millions of
the global poor (Nikiforuk 2007, Pogge 2002). On the whole, they argue, globalization has benefitted the
world's wealthiest people—both citizens of the global North and the elite in developing countries—without
substantially benefitting the majority of the world's population.
Feminist philosophers insist that economic globalization must also be understood in terms of the effects it
has had on women, who make up a disproportionate percentage of the global poor. Most agree that these
effects have been primarily negative. For instance, Jaggar argues that globalization has promised many
things that are crucial to feminists: peace, prosperity, social justice, environmental protection, the
elimination of racism and ethnocentrism, and, of course, an increase in the status of women. However,
neoliberal policies have brought about the opposite of these aspirations. Rather than peace, they have
created conditions for war and increased militarism; rather than prosperity and social justice, they have
increased the gulf between the rich and the poor; rather than environmental protection, they have led to the
privatization and destruction of publicly-owned natural resources; and rather than eliminating racist,
ethnocentric, and sexist barriers, globalization has been, ultimately, “a system hostile or antagonistic to
women” (Jaggar 2001, 301).
Economic globalization is economic integration of countries
Wikpedia, 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.
Another definition
Wisegeek, no date, Economic Globalization, http://www.wisegeek.org/what-is-economic-globalization.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 is international 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
Stefan Bauschard
Globalization and Poverty Release
7
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.
Stefan Bauschard
Globalization and Poverty Release
8
Economic Globalization vs. Political Globalization
Political globalization is distinct from economic globalization
Stanford Encyclopedia of Philosophy, May 6, 2014, Feminist Perspectives on Globalization,
http://plato.stanford.edu/entries/feminism-globalization/ DOA: 1-1-2015
2 Political Globalization
Although political and economic globalization are interconnected and mutually reinforcing, they differ in
significant ways. Political globalization refers to changes in the exercise of political power that have
resulted from increased transnational engagement. Prior to World War II, the international political system
was understood in terms of the so-called Westphalian model. According to this model, political power is
exercised primarily through governance at the level of the territorial state. The international political system
is comprised of sovereign states, which enjoy a monopoly on political power within their own territories.
International treaties govern relations among states; however, states generally cannot legitimately intervene
in the domestic affairs of other nations. Thus, when problems, such as famines, genocides, and civil wars
arise, they are seen primarily as security issues for individual states, not matters of justice affecting the
global community (Fraser 2013).
In contrast to this state-centric model, political globalization must be understood as polycentric , that is,
as involving non-state institutions that exercise political power from both “above” and “below” the state
(So 2010). The development of supra-national institutions, such as the United Nations, the World Trade
Organization, the World Health Organization, the European Union, NATO, the Association of Southeast
Asian Nations, and others, can be understood as political “globalization from above.” These institutions
create international rules that constrain the sovereignty of states, in some cases, through enforcement
mechanisms that penalize for noncompliance. In addition to holding states accountable for adhering to
mutually agreed upon norms and standards, global institutions often set the agendas that determine which
issues receive international attention. Institutions such at the UN and EU have sought to draw attention to
some of the injustices experienced by women around the world, such as sexual violence, lack of
educational access, and other women's human rights violations, and to develop global frameworks for
addressing them. However, many feminist philosophers argue that supra-national institutions have had
limited success in protecting the world's most vulnerable people. Most global institutions privilege Western
and corporate interests over those of vulnerable and marginalized people, and few have been successful in
challenging the structural inequalities that give rise to gendered harms, such as deprivation, discrimination,
and violence.
For many feminists, the transnational political movements that have emerged “from below” the state offer a
more promising dimension of political globalization. The expansion of global communications has led to
the development of new transnational political networks, comprised of individuals, non-governmental
organizations, and social movements. These transnational networks, sometimes referred to as “global civil
society,” connect millions of people around the world based on shared political commitments.
Consequently, some feminist philosophers believe that political “globalization from below” provides
women and other vulnerable people with an effective means for resisting the inequalities created by
economic globalization. For instance, some feminists argue that globalization has created new transnational
public spheres in which political opinion can be marshaled to hold leaders democratically accountable
(Fraser 2009, Gould 2009). Others see the promise of political globalization in transnational feminist
solidarity movements, such as the women's rights are human rights campaign and groups combating sex
trafficking and global care chains, that enable feminist resistance to dominant political and economic forces
(Copelon 2003, Hochschild 2000, 2002, Kittay, 2008, 2009, Parekh 2009, Robinson 2003, Stamatopoulou
1995, Walby 2002, Weir 2005).
Stefan Bauschard
Globalization and Poverty Release
Given the complexity of globalization, how have feminist political philosophers addressed the social,
political, and economic challenges posed by it? Below, we provide an overview of several feminist
theoretical approaches to this task.
9
Stefan Bauschard
Globalization and Poverty Release
10
Social Globalization
Information flows and personal contacts are social globalization
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
The KOF Index divides social globalization into information flows , personal contacts, and
cultural proximity , which are all likely to affect the functioning of markets, as well as the behavior of
buyers and sellers on the market. In general, the functioning of markets is critically dependent on
information flows. In less developed countries with high transaction costs and potentially large information
asymmetries, there is a large potential gain in market efficiency from increased use of information and
communication technologies (ICT). Both telecommunications and the Internet are powerful tools for
information transfer and improve the functioning of markets in general. A classic example of the benefits of
telecommunications is Hirschman (1967), showing that long-distance telephone networks led to a credit
market for coffee trade in Ethiopia. 7 As noted by Aker and Mbiti (2010), the distribution of these
efficiency gains among consumers, producers, and firms is theoretically ambiguous. Lower search costs
could benefit sellers in the short term if they make better use of spatial arbitrage opportunities, but as
markets become more competitive, benefits will shift toward consumers as markets approach the law of
one price ( Aker & Mbiti, 2010, p. 216). There are also studies showing that rural telephony increases the
prices farmers receive for their crops and the earnings from off-farm activities (e.g., Duncombe and Heeks,
1999 and Elbers and Lanjouw, 2001). Empirical evidence also suggests that telephone services can improve
government services such as health care ( ITU, 1998). Forestier, Grace, and Kenny (2002) summarize a
wide array of research on the effects of information and communication technology (ICT) and show that
ICT in general is positively related to growth, but the effect on inequality is less clear.
In general, information decreases transaction costs and brings markets closer to the competitive
equilibrium. Because transaction costs essentially work as a tax wedge, the effect of lowering such costs
benefits both producers and consumers and increases output.
In addition to information flows, social globalization comprises cross-border personal contacts. Outgoing
telephone traffic likely contributes to the transmission of information and knowledge, similar to many
indicators of information flows. Tourism is, however, a type of personal contact with less obvious
consequences for poverty. Chao, Hazari, and Sgro (2004) note that tourism is good for development
through terms of trade effect and resource flows, but also that negative externalities of mass tourism might
offset these effects.8
Stefan Bauschard
Globalization and Poverty Release
11
Economic, Political, and Cultural Globalization
Economic, political, and cultural globalization 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.
Stefan Bauschard
Globalization and Poverty Release
12
General Globalization Definition
Globalization is defined in different ways
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
Some interpret it to mean the global reach of new technology and capital movements, some refer to
outsourcing by domestic companies in rich countries, others protest against the tentacles of corporate
capitalism or the US (economic, military, or cultural) hegemony.
Globalization defined/described
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
Over some past decade most economies of the world have become connected due to advancement
in transportation, communication, and also trade liberalization that has removed all forms of trade
barriers between countries of the world. Lola (2009), stated that the connection can also be linked
to expansion in portfolio investment such as international loans, foreign aids, purchases of stocks
and increased inflows of foreign direct investment (FDI) especially through multinational
corporations whose basic interest is in the hi-tech industries; like the telecommunications, oil and
gas, capital intensive manufacturing industries, and banking industries in the developing
countries. These linkage whereby the whole world becomes a single market or global village such
that goods and services, resources both capital and labour are traded on the worldwide bases is
regarded by economists as globalization.
Umo (2007) refers to globalization as the ‘growing integration of the world economies. It is the
intermingling of cultures, policies, economies, technologies. He also stressed that the
intermingling can create structural interdependence, that is, the act of making one system or entity
dependent on the other for better or for worse. Based on this, globalization can be seen as a coin
with two sides being that it can impact on lives of the citizenry either negatively or positively
depending on the level or rate at which a nation embraces the global transition.
Globalization being a contemporary issue has attracted a handful of studies, most of them
revealed that globalization can trigger economic development, sustain growth, increase trade as
well as alleviate poverty to a very large extent.
Globalization defined
Daniel Griswold, CATO, 2000, The Blessings and Challenges of Globalization, DOA: 1-2-15,
http://www.cato.org/publications/commentary/blessings-challenges-globalization
Stefan Bauschard
Globalization and Poverty Release
13
A short definition of globalization is “the growing liberalization of international trade
and investment, and the resulting increase in the integration of national economies.”
Economist David Henderson of the Melbourne Business School expands the definition
into five related but distinct parts:
* the increasing tendency for firms to think, plan, operate, and invest for the future with
reference to markets and opportunities across the world as a whole;
* the growing ease and cheapness of international communications, with the Internet the
leading aspect;
* the trend toward closer international economic integration, resulting in the diminished
importance of political boundaries. This trend is fueled partly by the first two trends, but
even more powerfully by official policies aimed at trade and investment liberalization;
* the apparently growing significance of issues and problems extending beyond national
boundaries and the resulting impetus to deal with them through some form of
internationally concerted action; and
* the tendency toward uniformity (or “harmonization”), by which norms, standards,
rules, and practices are defined and enforced with respect to regions, or the world as a
whole, rather than within the bounds of nation-states.1
Globalization can be seen most clearly in the quickening pace and scope of international
commerce. Global exports as a share of global domestic product have increased from 14
percent in 1970 to 24 percent today,2 and the growth of trade has consistently outpaced
growth in global output. In the United States, the ratio of two-way trade and investment
income flows as a share of GDP has roughly tripled since the 1960s. Annual global flows
of foreign direct investment surged to a record $ 400 billion in 1997, with 37 percent
directed to less developed countries (LDCs), up from 7 percent in 1990.3 In the 1970s,
daily foreign exchange transactions averaged $ 10 billion to $ 20 billion; today, the
average daily activity has reached more than $ 1.5 trillion.4
The expansion of international trade and foreign investment has not been the result of
some grand design imposed on the global economy. It has been an ad hoc, decentralized,
bottom-up process resulting from two developments of the 1980s: the collapse of global
communism and the demise of the Third World’s romance with import substitution. The
fall of the Berlin Wall and the final disintegration of the Soviet empire two years later
released 400 million people from the grip of centrally commanded and essentially closed
economic systems. Meanwhile, the debt crisis of 1982 and the resulting “Lost Decade” of
the 1980s imposed a painful hangover on many Third World nations that had tried and
failed to reach prosperity by shunning foreign capital and by protecting and subsidizing
domestic “infant” industries. Beginning with Chile in the mid-1970s and China later that
decade, LDCs from Mexico and Argentina to India more recently have been opening
their markets and welcoming foreign investment. The globalization of the last decade has
not been the result of a blind faith in markets imposed from above but of the utter
exhaustion of any alternative vision.
Stefan Bauschard
Globalization and Poverty Release
14
KOF Globalization Index
KOF Globalization Index
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
Our measure of globalization is the so-called KOF Index developed by Dreher, 2006a and Dreher,
2006b and updated in Dreher, Gaston, and Martens (2008). The index quantifies economic ,
social , and political globalization , using principal components analysis, to construct an
aggregate index that is comparable over time and between countries from 1970 and onward.
The index also allows for a separation between different dimensions of globalization, is updated
every year, and is available on the web. Table 1 and Table 11 and in the Appendix presents the
details of the index. 4
Stefan Bauschard
Globalization and Poverty Release
15
Routes Through Which Globalization Impacts Poverty
Economic routes through which globalization impacts poverty
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home,
“Globalisation,” pp. 292-7
Globalization means greater economic integration manifested through increased openness via
numerous transmission mechanisms such as trade and investment liberalization; movements of
capital, labor migration across borders and within countries; the nature of technological change
and diffusion of knowledge and technology; the worldwide information flows; and institutional
environments. These mechanisms affect poverty through two different paths: first, through
their contributions to the growth channel (in the upper part of the diagram in Figure 1) and,
second, through their impact on income distribution (in the lower part of the diagram) since
globalization is also known to create winners and losers directly and affect vertical and
horizontal inequalities. The specific links shown in Figure 1 are from openness to growth, from
openness to income distribution (inequality), from growth to income distribution and vice versa,
from growth to poverty, and from income distribution to poverty, respectively. In turn, the two
main channels of globalization—the “growth” and “distribution” channels—further interact
dynamically over time to produce a growth–inequality–poverty triangular relationship, which is
captured by the right-hand side triangle of our diagram describing the arithmetic-statistical
relationship among growth, inequality, and poverty investigated and popularized by
Bourguignon (2003).I
Stefan Bauschard
Globalization and Poverty Release
16
“Extreme” Poverty Defined
Extreme poverty is living on less than $1/day
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.
Stefan Bauschard
Globalization and Poverty Release
17
1.22 Billion Live in Poverty Now
1.22 billion people live in extreme poverty now
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, non-profits, 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.
Stefan Bauschard
Globalization and Poverty Release
18
“Poverty” Defined
“Poverty” includes social, political, and environmental deprivations
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
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’.
Poor are 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).
Poverty is to live with a lack of necessities
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
To most people poverty means the inability to sustain livelihoods – inadequate shelter, too little
food to stay alive and active, helplessness to withstand the elements, and the prevalence of illhealth. The pioneering study of poverty by Seebohm Rowntree in York, England, at the turn of
the twentieth century, for example, defined it as occurring in families where ‘total earnings are
insufficient to obtain the minimum necessaries for the maintenance of merely physical
efficiency.’ 1 Yet what do we mean by ‘necessities’? As Adam Smith pointed out in 1776, ‘[ b] y
Stefan Bauschard
Globalization and Poverty Release
19
necessaries I understand not only the commodities which are indispensably necessary for the
support of life, but whatever the custom of the country renders it indecent for creditable
people, even of the lowest order, to be without.’ 2 So, the definition of an absolute standard of
living is not without its problems, notably with respect to the contextual definition of
necessities. This difficulty is compounded when we compare living standards between people or
groups of people. What numeraire (that is, what unit of measurement) should we use? Physical
parameters can provide a means of comparison. But they are not always homogeneous – for
example, a calorie obtained from eating complex carbohydrates provides for longer-lived
streams of energy than that produced by simple carbohydrates; and how would we define an
‘active life’, or one ‘free from ailments’? This heterogeneity of physical measures is dwarfed by
the difficulties which arise when the numeraire is money. Here the problem is that not all
consumers pay the same prices for the same products or services. This is true within a country –
for example, characteristically it is said that ‘poverty is expensive’, that is, the poor tend to pay
more than do the rich even when they purchase the same good. But it is even more the case
when monetary values are used to compare incomes across countries – a dollar in Geneva buys
considerably less than a dollar in New Delhi.
Poverty can be defined as those living at 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.’ 3 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 (201304-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations
753-759). Wiley. Kindle Edition.
Stefan Bauschard
Globalization and Poverty Release
20
History of Globalization
History of globalization
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
Although the dynamism of globalized production and trade speeded up in the 1980s and 1990s,
the seeds to this outward surge in the global economy were planted in 1944 at a meeting in
Bretton Woods in the USA. The Bretton Woods conference involved representatives from the
USA and the UK and anticipated the end of the Second World War a year later. It was explicitly
tasked with establishing a stable and appropriate institutional architecture to back global
economic progress. This resulted, inter alia, in a system of controls over capital flows, the
establishment of stable exchange rates between currencies, and the creation of global financial
institutions such as the IMF, the World Bank and the General Agreement on Tariffs and Trade
(GATT). During the course of the second half of the twentieth century, the GATT and its
successor, the World Trade Organization (WTO), orchestrated a concerted programme of trade
liberalization. This led to the elimination of most of the quantitative controls which had
governed much of global trade. It also reduced many of the tariffs on cross-border trade. Many
formerly protected low-income countries were dragged to this policy table unwillingly and, in
the context of growing external debt, were subject to great pressure from the global financial
institutions and aid-giving governments to liberalize their trade regimes. But, as the twentieth
century wore on, much of this resistance crumbled, and the idea that trade should not be
restricted is now widely accepted in policy circles. Figure 1.2 evidences the extent and
significance of this pervasive trend towards tariff reduction; bear in mind, though, that perhaps
even more important than tariff reduction was the abolition of quantitative controls in most
countries and in many sectors. By the turn of the millennium, although South Asia in particular
and many other regions maintained tariffs over imports, the level of this protection had
declined significantly from the early 1980s. The revival of post-Cancun WTO trade talks is
designed to sustain this momentum of tariff reduction in the twenty-first century and to provide
a framework for the continued globalization of production and trade. The consequence of this
generalized reform of trade policy was a very significant expansion of global trade during the
latter half of the twentieth century. By 2002, while the value of global exports had grown by
125 times when compared to 1950, that of overall economic output (gross domestic product,
GDP) rose by only a factor of seven (figure 1.3). In the first three post-war decades, the primary
impetus to trade growth was the minerals sector, but in the last two decades the driving force
for the expansion of global trade lay in manufacturing. The value of manufactured exports in
2002 was more than four times that of 1980, whereas the value of agricultural exports was only
20 per cent higher and that of mineral exports 40 per cent higher. By contrast, when comparing
1980 to 1950, it was the minerals sector which saw particularly rapid trade expansion – in this
earlier period, the growth in its value was roughly twice that of manufactures and four times
that of agricultural products. The overall result of this rapid growth in trade was a developing
openness of almost all economies, reflected in the ratio of their trade to overall economic
activity. Table 1.1 shows the trade– GDP ratios for a number of high- and low-income
economies. With the singular exception of India, the degree of openness grew significantly over
the period – by a factor of three for the global economy in aggregate, and especially rapidly in
Stefan Bauschard
Globalization and Poverty Release
21
some economies such as Korea, the Netherlands and Germany. As a general rule, it is evident
that low-income (and large) economies appear to be less open than high-income (and small)
economies. Driving this globalization of trade, as we have seen, was the dynamism of trade in
manufactures. A key factor in this was the growing importance of footloose investment,
searching for the site of most profitable production. As figure 1.4 shows, the growth in the value
of foreign direct investment (FDI) was particularly rapid during the 1990s. Roughly one-third of
this went to low-income economies. During the 1990s, this FDI was complemented by flows of
portfolio investment into low-income and emerging-economy stock markets, allowing domestic
firms to draw on external funds to finance their expansion of manufacturing production and
exports. It was not just the dynamism of manufacturing that was so significant, but also its
changing character. This is reflected in the changing character of FDI during the latter part of the
twentieth century. During the early post-war decades, most foreign investment was destined to
increase production for domestic markets in recipient countries. This is often referred to as
‘tariff-jumping FDI’, attracted by the protection offered to domestically located producers and
induced by the awareness that, without local plants, they would not be able to sell into these
markets. As the decades rolled on, however, an increasing proportion of this FDI became
outward oriented. As we will see in chapters 4 and 5, TNCs began to use low-cost overseas
production sites to service global markets. Moreover, increasingly, much of this sourcing was
not of finished products (for example, computers and clothing), but of components (printed
circuit boards and integrated circuits; clothing accessories and clothing assembly). The growth
in this trade in sub-products has been very significant. It can be measured by computing the
ratio between trade and value added: the greater the thinning out of production into these
subcomponents of manufacturing, the larger this ratio. Table 1.2 shows the trends in a series of
industrial economies, in Asia and in Latin America. What is so striking is the extent to which the
Asian economies in general, and the newly industrializing economies in particular, engage in this
form of disarticulated trade. 6 It is also significant how rapidly the ratio has grown in Mexico as a
result of the increasingly prominent role played by its maquiladora export-processing zones in
producing for the US market. Also significant is the rapid growth in the ratio for China, albeit
from a low base. It should not be thought that all of this growth in trade in manufactures was
due to the overseas production sites of TNCs, for there were other factors at work driving the
globalization of sales. A critical role was played, as we will see in chapters 4 and 5, by global
buying-houses. They were less concerned with who produced what they sourced abroad than
with the price, the delivery reliability and the capacity of distant suppliers to deliver the volumes
they required to meet the needs of their global customers. To some extent these traded
products were sourced from the subsidiaries of TNCs, but, particularly in Asia, increasing use
was made of locally owned or regionally coordinated production networks. Much of the
investment utilized for this expanded production capability was provided by capital inflows from
abroad. Following the abolition of fixed exchange rates in 1971, these capital flows were
lubricated by a series of policy interventions by the Bretton Woods financial institutions
designed to liberalize and force open capital markets in low-income economies. For example, in
many economies, controls on foreign exchange were abolished, not just on remittances of
profits and limited personal savings but also to allow for the inflow and repatriation of large
tranches of capital and hot money. 7 To summarize, therefore, the globalization of the latter
half of the twentieth century was focused distinctively on the cross-border flow of products,
increasingly of semi-manufactured components. This was facilitated by the globalization of
capital, in the form of both foreign direct investment and portfolio funds. Underlying this was a
globally coordinated architecture designed to facilitate trade growth (under the aegis of the
WTO) and to promote capital flows (under the aegis of the IMF). Kaplinsky, Raphael (2013-04-
Stefan Bauschard
Globalization and Poverty Release
22
29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations
578-580). Wiley. Kindle Edition.
Globalization creates massive inequality
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
Despite the truly historic development this represents, such an emergence is in no way the
common experience of most countries from the global South: inequality between and within
countries is now running at record levels, so that polarisation between rich and poor remains
the defining characteristic of corporate globalisation in the twenty-first century. While the rise
of the BRICS (Brazil, Russia, India, China, South Africa) has introduced new forces into the global
political economy, it has strengthened the dominance of capitalism as their governments seek
to promote the interests of their own ‘national champions’ around the world. This rise of new
imperialisms in turn raises broader questions as to whether the North-South framing of the
global political economy that has dominated since the publication of the Brandt Report in 1980
is still fit for purpose. With business representatives from the global South now joining forces
with their Northern counterparts in the elite forums of the transnational capitalist class, it may
be necessary to reframe the battle lines of globalisation in contemporary rather than historical
terms. Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown and the
Struggle for What Comes Next (Kindle Locations 283-289). Pluto Press. Kindle Edition.
Stefan Bauschard
Globalization and Poverty Release
23
Stefan Bauschard
Globalization and Poverty Release
24
Globalization Reduces Poverty
Economic globalization has substantially reduced poverty
Yale Global Online, January 5, “With Little Notice, Globalization Reduced Poverty,”
http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty DOA: 1-1-15
A major success in a poverty-reduction goal for the new millennium – halving the proportion of
people whose income is less than $1.25 per day – largely went unnoticed. The World Bank
estimates poverty levels, but the most recent data is from 2005. By combining the recent
country survey data of household consumption with latest figures on private consumption
growth, Brookings Institution researchers Laurence Chandy and Geoffrey Gertz generated
poverty estimates to the present day. They conclude that the world – even stubborn SubSaharan Africa – is in the midst of rapid poverty reduction; they credit economic growth and
widespread development brought by globalization. Poverty reduction was one part of a key UN
Millennium Goal, and global observers may sit up and take notice after two other key parts are
achieved: full and productive employment for all and halving the proportion of people who
suffer from hunger. In the meantime, the authors promise far-reaching consequences from
rapid poverty reduction via growth. – YaleGlobal
70 million people coming out of poverty annually
Laurence Chandy, Geoffrey Gertz, 2011, Yale Global Online, January 5, “With Little Notice, Globalization
Reduced Poverty,” http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty DOA: 11-15 Laurence Chandy is a fellow at the Global Economy and Development Program in the Brookings
Institution. Geoffrey Gertz is a research analyst in the same program.
WASHINGTON: It is customary to bemoan the intractability of global poverty and the lack of progress
against the Millennium Development Goals. But the stunning fact is that, gone unnoticed, the goal to halve
global poverty was probably reached three years ago.
We are in the midst of the fastest period of poverty reduction the world has ever seen. The global poverty
rate, which stood at 25 percent in 2005, is ticking downwards at one to two percentage points a year, lifting
around 70 million people – the population of Turkey or Thailand – out of destitution annually. Advances in
human progress on such a scale are unprecedented, yet remain almost universally unacknowledged.
Official estimates of global poverty are compiled by the World Bank and stretch back 30 years. For most of
that period, the trend has been one of slow, gradual reduction. By 2005, the year of the most recent
official global poverty estimate, the number of people living under the international poverty line of $1.25
a day stood at 1.37 billion – an improvement of half a billion compared to the early 1980s, but a long way
from the dream of a world free of poverty.
Poverty falling everywhere, not just in China
Laurence Chandy, Geoffrey Gertz, 2011, Yale Global Online, January 5, “With Little Notice, Globalization
Reduced Poverty,” http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty DOA: 1-
Stefan Bauschard
Globalization and Poverty Release
25
1-15 Laurence Chandy is a fellow at the Global Economy and Development Program in the Brookings
Institution. Geoffrey Gertz is a research analyst in the same program.
Behind these aggregate figures lies a somber reality. In assessing the fortunes of the developing world
during the late 20th century, countries can be roughly divided into two categories: China and the
rest.China’s stunning economic reversal – 30 years ago, only 16 percent of its population lived above the
poverty line, but by 2005, only 16 percent stood below it – masks others’ failings. Excluding China, the 500
million decrease in global poverty becomes an increase of 100 million. In the world’s poorest region, subSaharan Africa, the poverty rate remained above 50 percent throughout the period, which, given the
region’s rapid population growth, translated into a near doubling in the number of its poor. Similarly in
South Asia, Latin America and Europe–Central Asia there were more poor people in 2005 than there were
a quarter of a century earlier.
T Not only is poverty falling rapidly, it’s falling across all regions and most countries. Unsurprisingly, the
greatest reduction has occurred in Asia. But it’s not just the dynamic economies of East Asia, such as
China, recording great feats in poverty reduction; South Asian giants including India and Bangladesh, and
Central Asian economies such as Uzbekistan also make great strides. Even Sub-Saharan Africa is sharing
in this progress. The region finally broke through the symbolic threshold of a 50 percent poverty rate in
2008 and its number of poor people has begun falling for the first time on record.
This stunning progress is driven by rapid economic growth across the developing world. During the 1980s
and 1990s, per capita growth in developing countries averaged just 1 to 2 percent a year, not nearly fast
enough to make a serious dent in poverty levels. Since around 2003, however, growth in the developing
world has taken off, averaging 5 percent per capita a year.
his depressing track record shapes perspectives on poverty that abound today. Global poverty has come to
be seen as a constant, with the poor cut off from the prosperity enjoyed elsewhere. Only a radical change to
the current global order – an alternative system to globalization or a massive exercise in redistribution –
could possibly alter this destiny.
In a new study of global poverty, we upend this narrative. By combining the most recent country survey
data of household consumption with the latest figures on private consumption growth, we generated global
poverty estimates from 2005 up to the present day. Poverty reduction accelerated in the early 2000s at a
rate that has been sustained throughout the decade, even during the dark recesses of the financial crisis.
Today, we estimate that there are approximately 820 million people living on less than $1.25 a day. This
means that the prime target of the Millennium Development Goals – to halve the rate of global poverty by
2015 from its 1990 level – was probably achieved around three years ago. Whereas it took 25 years to
reduce poverty by half a billion people up to 2005, the same feat was likely achieved in the six years
between then and now. Never before have so many people been lifted out of poverty over such a brief
period of time.
Countries that are reducing poverty the fastest are the most globalized
Laurence Chandy, Geoffrey Gertz, 2011, Yale Global Online, January 5, “With Little Notice, Globalization
Reduced Poverty,” http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty DOA: 11-15 Laurence Chandy is a fellow at the Global Economy and Development Program in the Brookings
Institution. Geoffrey Gertz is a research analyst in the same program.
How and why sustained high economic growth in developing countries took hold are questions likely to be
debated by economic historians for many decades. Already one can point to a number of probable
sources emerging or accelerating around the turn of the century: an investment boom triggered by rising
commodity prices; high growth spillovers originating from large open emerging economies that utilize
cross-border supply chains; diversification into novel export markets from cut flowers to call centers;
Stefan Bauschard
Globalization and Poverty Release
26
spread of new technologies, in particular rapid adoption of cell phones; increased public and private
investment in infrastructure; the cessation of a number of conflicts and improved political stability; and
the abandonment of inferior growth strategies such as import substitution for a focus on macroeconomic
health and improved competitiveness.
These factors are manifestations of a set of broader trends – the rise of globalization, the spread of
capitalism and the improving quality of economic governance – which together have enabled the
developing world to begin converging on advanced economy incomes after centuries of divergence. The
poor countries that display the greatest success today are those that are engaging with the global
economy, allowing market prices to balance supply and demand and to allocate scarce resources, and
pursuing sensible and strategic economic policies to spur investment, trade and job creation. It’s this
potent combination that sets the current period apart from a history of insipid growth and intractable
poverty.
World will become mostly middle class
Laurence Chandy, Geoffrey Gertz, 2011, Yale Global Online, January 5, “With Little Notice, Globalization
Reduced Poverty,” http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty DOA: 11-15 Laurence Chandy is a fellow at the Global Economy and Development Program in the Brookings
Institution. Geoffrey Gertz is a research analyst in the same program.
The fight against poverty has long been a moral and strategic goal of Western governments. But the record
of the last few years is likely a surprise to them. In their eyes, the fate of the world’s poor largely depended
on forging progress on three fronts: debt relief, more aid and freer trade. World leaders convened at
numerous meetings to build support and momentum around these priorities, but despite these efforts
successes were hard to come by: While more than $80 billion of poor countries’ debt has been forgiven,
most countries failed to meet global aid targets, and the Doha Development Round has languished at the
World Trade Organization.
Thankfully for the world’s poor, this logic turned out to be flawed. While progress on each of the three
fronts would have been helpful for developing countries and their ability to tackle poverty, the significance
of each was undoubtedly overhyped and said more about the West’s sense of responsibility and
magnanimity than what was actually needed to deliver development.
Taking a long view of history, the dramatic fall in poverty witnessed over the preceding six years
represents a precursor to a new era. We’re on the cusp of an age of mass development, which will see the
world transformed from being mostly poor to mostly middle class. The implications of such a change will
be far-reaching, touching everything from global business opportunities to environmental and resource
pressures to our institutions of global governance. Yet fundamentally it’s a story about billions of people
around the world finally having the chance to build better lives for themselves and their children. We
should consider ourselves fortunate to be alive at such a remarkable moment.
Three decades of data proves economic globalization reduces absolute poverty
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty? World
Development, pp. 42-61
Using data from 114 countries (1983–2007), we examine the relationship between globalization
and World Bank absolute poverty estimates. We find a significant negative correlation between
globalization and poverty, robust to several econometric specifications, including a fixed-effect
Stefan Bauschard
Globalization and Poverty Release
27
panel—a “long run” first difference—and a pooled OLS-regression. Introducing two instruments
for globalization we also show that results are robust to correction for potential endogeneity.
We motivate and test the instruments in several ways. In particular information flows and more
liberal trade restrictions robustly correlate with lower absolute poverty.
Strong empirical data demonstrates that increasing trade and information flows
reduce poverty
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
This paper contributes in both these areas. Recent improvements in data availability allow a meaningful
analysis of panel data where the dependent variable is head count measures of absolute poverty collected
from the World Bank’s household surveys. Our regressions include more than 100 countries, with poverty
data averaged over four five-year periods, the first one being 1988–92.
We also introduce two instruments for globalization in order to examine whether the estimated
relationships are causal: preceding average economic globalization of neighboring countries, and the
number of years with the presence of McDonalds in a country. We examine both instruments carefully,
showing that they are powerful, directly uncorrelated with poverty, and theoretically meaningful in the
sense of capturing globalization the way it actually happens.
Using the KOF Index of Globalization, (Dreher, 2006a, Dreher, 2006b and Dreher and Gaston, 2008) we
find evidence of a negative relationship between different types of globalization and absolute poverty. The
effect appears in a fixed-effect panel, a long first difference estimation, in a pooled OLS regression and
when instrumenting for globalization. In particular, information flows and more liberal trade restrictions
seem to reduce poverty.
Section 2 provides an analytical framework discussing the possible links from globalization to absolute
poverty. Section 3 describes our data and empirical strategy, and presents baseline panel regression results,
with a number of robustness tests. Section 4 introduces our instrumental variable strategy and presents
results when instrumenting for globalization. The article closes with some concluding remarks on the
implications of the findings.
Globalization reduces poverty
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
Our dataset covers the 1983–2007 period, with poverty data available from 1988, averaged over four fiveyear periods: 1988–92, 1993–97, 1998–2002, and 2003–07. Five-year averages are used both because we
lack yearly data and to minimize the impact of measurement errors. The panel is unbalanced but includes
information for 114 countries, and the efficient sample consists of more than 300 observations meeting
baseline specifications. An absolute majority of these observations refers to conditions in countries
classified as low- or lower middle-income countries with a 2008 GNI per capita of USD 3,855 or less.
Table 12 in the Appendix presents descriptive statistics and sources for all variables used in the analysis,
and Table 13 in the Appendix presents details about the country sample.
Stefan Bauschard
Globalization and Poverty Release
28
The main dependent variable is the percentage of the population in a country living on less than one dollar
per day (PPP adjusted 1993). This absolute measure comes from the Povcal database (World Bank, 2010)
and is derived from household surveys. Our globalization measure is the KOF Index (Dreher et al. , 2008),
as described in Section 2. We use the index both as a composite measure (KOF), in which the three
dimensions of globalization are equally weighted together, and in a disaggregated format (KOF1 and
KOF2). Moreover, we use the sub-components for the economic and the social globalization index (flows
and restrictions, and information flows, personal contact, and cultural proximity, respectively). The index
takes values between 0 and 100 with higher values indicating more globalization. As can be seen in Figure
2, the cross-country correlation between the aggregate globalization index and poverty is clearly negative.
Our baseline is a panel data setting that should capture potential short-run effects on poverty. We specify an
equation that relates globalization to poverty and to a set of control variables as follows (countries being indicated by
i and time by t ):
In Eqn. (1), the brackets indicate that the quadratic term of globalization may be excluded. Glob is a vector
for different types of globalization, X includes control variables, δi corresponds to a country-fixed effect
that captures stable differences in poverty between countries, and ρt is a period-fixed effect capturing the
influence of shocks that affect poverty in multiple countries at the same time. Finally, ɛit is an error term
assumed to be normally distributed.
In the baseline regression, globalization is lagged one period. For example, average globalization in 1983–
87 is used to explain average poverty in 1988–92. With this specification, if the J-curve hypothesis is
correct, a linear globalization term should have no or possibly a negative sign, whereas a quadratic
specification is likely to fit the data better.11
We begin by estimating a relatively parsimonious baseline, controlling only for country log real GDP per
capita (PPP adjusted) collected from the World Bank (2010). To maximize comparability across
specifications including the same indicator of globalization, we let the sample contain the same countries.
The number of observations might, however, vary across index-specific estimations.12 The null hypothesis
of no country effects is rejected in all estimations and using a Hausman test, the random-effect model is
rejected against the fixed-effect model. Moreover, time dummies are jointly significant in a majority of
baseline specifications, suggesting they should be included in the model. All specifications consequently
include country-fixed and time-fixed effects. Table 2 presents baseline results using panel regressions.
As expected, the linear specifications in columns 1, 4, and 7 fit worse than the remaining quadratic
specifications: As shown in columns 2 and 3, aggregated globalization negatively associates with absolute
poverty with decreasing marginal effect, consistent with the inverted J-curve hypothesis. Note that the
aggregate index includes political globalization that we do not analyze separately. 13 Results for the different
types of globalization (columns 5, 6, 8, and 9) suggest that the poverty-decreasing effect holds for both
economic and social globalization. Interestingly, the size of the association decreases only marginally when
controlling for income (columns 3, 6, and 9). This result suggests that globalization tends to decrease
poverty, but not mainly via the income channel—at least not in the short run captured by the panel.
Table 3 examines what components of economic and social globalization that explain the negative
association with absolute poverty in Table 2. Including trade flows and trade restrictions separately and
together (columns 1–6) suggests that the significant coefficient on economic globalization comes from
restrictions rather than from flows.14 A similar exercise for social globalization (columns 7–14) points to
the importance of information flows for reducing poverty, while cultural proximity actually seems to have a
small poverty-increasing effect when all components of social globalization are included simultaneously.
To further check the robustness of our baseline findings using panel regressions, Table 14 in the Appendix
presents the results from the following sensitivity tests: changing the specification to a random effects
model, using globalization in period t rather than t -1, excluding observations with extreme values of
Stefan Bauschard
Globalization and Poverty Release
29
globalization and poverty, using alternative measures of poverty, and excluding various geographical
regions. 15 Overall baseline results are robust to these changes, suggesting that globalization is good for
the poor. In particular, more liberal trade restrictions and larger information flows correlate with less
absolute poverty.
Poverty still declines when many other variables are controlled for
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
To gain knowledge about potential mediators in the globalization-poverty relationship we add a number of
control variables to the baseline regression: The average level of education in the population over 15 years
old, the share of the population residing in urban areas, and the government final consumption expenditure
as a share of GDP and inflation.
While an expected negative effect of education on poverty is uncontroversial, there are different views on
the poverty consequences of urbanization, as noted by Leon (2008) who describes the more recent view on
urbanization as more optimistic for the poor than the older view. With regard to government consumption,
there are several reasons to expect that states with larger welfare systems have lower poverty rates, but
higher government expenditure does not necessarily imply a larger welfare state. For example, many
developing countries allocate relatively large shares of public expenditures to defense activities, and as
shown by Mosley and Suleiman (2007) such expenditures seem to hurt, not support, the poor. Inflation is
generally assumed to be harmful to the poor, whose assets are typically less protected against inflation.
Table 4 summarizes the results from regressions including control variables, starting with the baseline
estimates to facilitate comparison. Next, we control for government consumption as a share of GDP. This
variable is not significant and does not change other coefficients by much at all, suggesting that
government size is not an important mechanism for poverty reduction. Urbanization, on the other hand,
turns out to be negatively related to poverty, supporting the newer rather than the older view as described
above, but the variable inclusion does not change the globalization coefficients. Surprisingly, education
seems to be unrelated to poverty, and inflation associates with less poverty. Finally, including all the above
control variables in the same specification changes little except for small reductions in the size of the
globalization coefficients suggesting that there is something else in the globalization process benefiting the
poor.
One concern is that baseline results are driven by unobserved institutional changes, not captured by the
country- and time-fixed effects, which are systematically related to globalization and poverty reduction. As
a test of robustness we include information of a county’s legal structure and security of property rights,
measuring the quality of the legal system, in terms of judicial independence, impartial courts, military
interference, and integrity, and of the extent to which economic actors perceive the legal system to protect
their property and contracts. The variable refers to the second area of the Economic Freedom Index
(Gwartney, Lawson, & Hall, 2011). Baseline results are also robust to the inclusion of this institutional
measure (see Table 4). In fact, institutional quality and improvements thereof do not seem to be related to
absolute poverty in the short run (which is less surprising in a model with country-fixed effects).
We also examine if the relationship between globalization and poverty depends on the level of democracy
using the Polity IV index by Marshall and Jaggers (2009), ranging from 10 to 10 with higher values
indicating more democratic regimes.16 Only including observations with a Polity IV score of at least 7 in
the estimations (there are 115 such observations from 50 countries, with an average Polity IV score of
8.26), results in a slightly larger coefficient on the aggregated globalization index, and also makes social
globalization insignificant. The insignificance of social globalization masks, however, a negative
association with information flows and a positive association with cultural proximity, similarly to the
Stefan Bauschard
Globalization and Poverty Release
30
results when analyzing the full sample. For economic globalization, the effect result once again seems to be
driven by restrictions.
Running a separate regression on the remaining 186 observations (coming from 82 countries with an
average Polity IV score of 2.76) reveals that the negative coefficient on economic globalization in less
democratic countries is driven by trade flows rather than restrictions.
Countries can only growth with trade and there is NO evidence that trade
increases poverty
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has Globalization
Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-has-globalizationbenefited-poor DOA: 1-1-15
Economic growth is the main channel through which globalization can affect poverty. What researchers
have found is that, in general, when countries open up to trade, they tend to grow faster and living
standards tend to increase. The usual argument goes that the benefits of this higher growth trickle down
to the poor. It has been a bit trickier, especially with aggregate data, to pinpoint how exactly the poor
have been benefited. One challenge is that when trade or globalization happens, many other factors are
changing, such as technology and macroeconomic conditions. Another challenge is that high-quality data
on the well-being of the poor is often not available. It is thus really hard to tease out the effects of
globalization on poverty in a broad sense But, that said, it is virtually impossible to find cases of poor
countries that were able to grow over long periods of time without opening up to trade. And we have no
evidence that trade leads to increases in poverty and declines in growth.
Globalization solves structural violence. Infant morbidity is at an all time low
and life expectancy is increasing.
Krieckhaus et al. 11 – Missouri political science professor [Jonathan, “Globalization and
human well-being”, International Political Science Review, SAGE]
Globalization is increasingly prevalent in the modern world, and scholars have therefore rightly
explored both its causes and consequences. Human well-being is also a heavily studied topic,
given that citizens around the globe desire healthy children and longer lifespans. Surprisingly,
however, there has been scant research on the myriad ways through which globalization
might influence human well-being. We have argued that there are advantages and
disadvantages to globalization, but that in spite of the shortcomings, on balance globalization
has a positive effect on human welfare, due to its ability to bring increased development,
technology, knowledge, and foreign support. We tested three aspects of this argument, namely
the effects of economic globalization, social globalization, and political globalization. We found
that all three of these forms of globalization have enhanced human welfare, and that these
positive effects are relatively robust to a wide range of statistical specifications. These
findings have significance for both social science and public policy. Concerning social science, we
contribute to the longstanding debate as to whether the forces of globalization are a positive or
negative force in the world. Although our results speak only to the issue of human physical wellbeing, we suggest that this is an important criterion for evaluating globalization. Given that we
find that three different dimensions of globalization all have consistently positive effects on
well-being, we provide new evidence in support of globalization. Concerning public policy, our
findings have clear implications for child welfare advocates. While organizations like the UNDP
and UNICEF can, and should, continue to advocate for the interests of developing countries,
Stefan Bauschard
Globalization and Poverty Release
31
they should also keep in mind that encouraging developing countries to incorporate
themselves into the global system (economically, socially, and politically) will also encourage
child welfare. For these same reasons, our results should be of considerable interest to
policymakers in the developing world, who often face difficult choices concerning the political
costs and benefits of economic liberalization and decreased cultural autonomy. While we
cannot provide here a full cost/benefit analysis of globalization, we do note that a new and
important dimension must enter such calculations, namely globalization’s positive effects on
the well-being of children.
Neoliberal globalization reduces poverty
Bandow 2001 – Senior Fellow at Cato [Doug. “Globalization Serves the World's Poor,” April
25th, http://www.cato.org/pub_display.php?pub_id=4310]
Despite the worst efforts of violent protestors in Quebec, leaders of countries
throughout the Western hemisphere concluded their Summit of the Americas
by proposing a broad free-trade agreement. Bringing more of the world's
poor into the global economy is the best hope for raising them out of
poverty. Curiously, globalization has become the latest cause celebre of left-
wing activists. These First-World demonstrators self-righteously pose as
defenders of Third-World peoples, even as they advocate leaving the latter
destitute. The process of development, of moving traditional, agricultural
societies into the Industrial and Information age, is extraordinarily painful. It
was difficult enough for Western societies, which took hundreds of years to
develop. It is even harder for today's developing states, which are attempting
to telescope the process into a few decades. But that pain must be endured to
achieve a better life. Economist Joseph Schumpeter termed capitalism
"creative destruction." Every innovation creates losers: automobiles ruined the
buggy industry, computers destroyed the typewriter industry. It is fair to
encourage the development of social institutions to ease the transition. It is not
fair to shut off development. Some trendy Western activists wax eloquent on
the wonders of rural living. Presumably they have never visited a poor country,
let alone a poor countryside. For instance, when I traveled the hills of eastern
Burma with the relief group Christian Freedom International, I found ethnic
Karen villagers living in wooden huts open to rain and insects. There was
neither electricity nor running water. People lacked latrines and let their
livestock run loose; filth was everywhere. In such circumstances, life is hard,
disease is rampant, and hope is nonexistent. No wonder people flee to the city.
Not one Quebec protestor would likely choose such a "dignified" way of life.
Indeed, the problems of globalization must always be "compared to
what?" Yes, factories pay low wages in Third World countries. But
workers in them have neither the education nor the skills to be paid at First
World levels. Their alternative is not a Western university education or
Silicon Valley computer job, but an even lower-paying job with a local firm or
unemployment. The choice is clear: according to Edward Graham of the
Institute of International Economics, in poor countries, American
multinationals pay foreign citizens an average of 8.5 times the per capita GDP.
Overall, the process of globalization has been good for the poor. During
Stefan Bauschard
Globalization and Poverty Release
32
the 1980s, advanced industrialized countries grew faster than developing
states. In the 1990s, as globalization accelerated, poor nations grew at 3.6
percent annually, twice that of their richer neighbors. Despite the illusion of
left-wing activists that money falls from the sky, poverty has been the normal
condition of humankind throughout most of history. As even Marx
acknowledged, capitalism is what eliminated the overwhelming poverty of
the pre-industrial world. That remains the case today. Resource
endowment, population level and density, foreign aid transfers, past colonial
status none of these correlate with economic wealth. Only economic openness
does. The latest volume of the Economic Freedom in the World Report,
published by the Cato Institute and think tanks in 50 other countries, finds
that economic liberty strongly correlates with economic achievement.
Policies that open economies strongly correlate with economic growth. By
pulling countries into the international marketplace, globalization encourages
market reforms. With them comes increased wealth. Concern over the
distribution of income understandably remains, but if nothing is
produced, there is nothing to distribute. And, in fact, globalization has
shared its benefits widely. In a recent World Bank report, economists David
Dollar and Aart Kraay conclude that the "income of the poor rises one-forone with overall growth." Globalization also has important political
ramifications. Freedom is indivisible; economic liberty tends to undercut
political controls. Countries such as South Korea and Taiwan threw off
authoritarian dictatorships once their burgeoning middle classes demanded
political rights to match economic opportunities. International investment
and trade also help dampen nationalism and militarism. Globalization is
not enough: rising levels of foreign commerce did not prevent World War I, for
instance. Yet investment and trade create important economic incentives
for peace. They also put a human face on people who might otherwise seem to
be the enemy. The result is a better environment in which to promote
international harmony. Like most human phenomena, globalization has ill,
as well as good, effects. But the latter predominate. In most ways for most
people, globalization is a positive.
Neoliberal globalization solves poverty and global inequality
Martell, 10, (Luke, 2010, Professor of Political Sociology, Sussex Centre for Migration Research,
“Sociology of Globalization,)
Globalisation for the poor countries of the world often means their integration into world ¶ trade and the
exchange of commodities and services in the global economy. It is argued ¶ that this will allow them to trade their way
out of poverty. In a situation of open ¶ competition rather than protectionism they can sell
goods and services to bring in income ¶ and overcome poverty. The liberalisation of trade
restricts other countries from protecting ¶ their own industries with tariffs or quotas on imports, or
subsidies which give them an ¶ advantage over others. If such forms of protection are
removed then the poor can trade ¶ freely without being blocked or disadvantaged and this can
help them out of poverty. ¶ They also have to bring down tariffs, quotas and subsidies themselves as part of the deal. ¶ ¶
One way in which poorer countries have become integrated into world trade has been on ¶
the basis of what is sometimes called the Washington Consensus pursued through ¶ organisations such as
Stefan Bauschard
Globalization and Poverty Release
33
the World Bank and International Monetary Fund. This
refers to an ¶ approach where such organisations or
richer states provide financial support to poorer ¶ countries to deal with crises or stimulate
development, in return for those countries ¶ meeting certain conditions – hence that it is sometimes
called ‘conditionality’. The IMF ¶ have called this ‘structural adjustment’ because countries are required to make structural ¶ changes
to their economy or public sector as a condition for receiving the financial help.
Globalization solves poverty and repression.
Chen 2k – Minnesota law school professor [Jim, “ESSAY: PAX MERCATORIA: GLOBALIZATION
AS A SECOND CHANCE AT "PEACE FOR OUR TIME”, 24 Fordham Int'l L.J. 217,p. 245-6
The antiglobalization movement has made some extraordinary claims. Let us transplant a
precept of natural science into this social realm: extraordinary claims demand extraordinary
proof. From Seattle to Prague, protesters have argued that the organs of international economic
law conspire with multinational corporations to sap national and local governments of
legitimate power, to destabilize global security, and to poison workplaces as well as ecosystems.
That case has not met even the most generous standard of proof. The antiglobalization
movement has failed to refute the following: Dramatic improvements in welfare at every wealth
and incomelevel. Since 1820 global wealth has expanded tenfold, thanks largely to
technological advances and the erosion of barriers to trade. The world economic order, simply
put, is lifting people out of poverty. According to the World Bank, the percentage of the
world's population living in extreme poverty fell from 28.3 to 23.4% between 1987 and 1998.
(The World Bank defines extreme and absolute poverty according to "reference lines set at $ 1
and $ 2 per day" in 1993 terms, adjusted for "the relative purchasing power of currencies across
countries.") A more optimistic study has concluded that "the share of the world's population
earning less than US$ 2 per day shrank by more than half" between 1980 and 1990, "from 34
to 16.6 percent." n184 In concrete terms, "economic growth associated with globalization" over
the course of that decade helped lift 1.4 billion people out of absolute poverty. Whatever its
precise magnitude, this improvement in global welfare has taken place because of, not in
spite of, flourishing world trade. The meaning of American victory in the Cold War. The liberal
democracies of the north Atlantic alliance decisively defeated their primary political rivals in the
Eastern bloc. Capitalism coupled with generous civil liberties crushed central planning coupled
with dictatorship of the proletariat. "America, so the world supposes, won the Cold War." n187
And the world is right. The true nature of the environmental crisis. The most serious
environmental problems involve "the depletion and destruction of the global commons." n188
Climate change, ozone depletion, and the loss of species, habitats, and biodiversity are today's
top environmental priorities. None can be solved without substantial economic development
and intense international cooperation. The systematic degradation of the biosphere respects no
political boundaries. Worse, it is exacerbated by poverty. Of the myriad environmental
problems in this mutually dependent world, "persistent poverty may turn out to be the most
aggravating and destructive." We must remember "above all else" that "human degradation
and deprivation ... constitute the greatest threat not only to national, regional, and world
security, but to essential life-supporting ecological systems." The enhancement of individual
liberty through globalization. By dislodging local tyrants and ideologies, globalization has
minimized the sort of personal abuse that too often seems endemic to one place, one
population. The twenty-first century will witness "people voting with their feet to escape from
some village elder's idea of how to live, or some London School of Economics graduate's idea of
Stefan Bauschard
Globalization and Poverty Release
34
protecting Indian folkways." This changing social reality will undermine the conventional
assumption that capital is mobile but labor is immobile. Generations of scholarship on trade
and international relations hang in the balance. At the very least we will have to recalibrate
existing race-to-the-bottom models and their sensitivity to "giant sucking sounds."Nor has
localism propounded plausible solutions to challenges such as food security, AIDS and other
epidemiological crises, and barriers to full equality for women and children. The localist package
of autarky, retaliatory protectionism, and isolationism would be catastrophic. It really is a
shame that Ralph Nader will probably not be named "the first U.S. ambassador to North Korea,"
where he could "get a real taste of what a country that actually follows [his] insane economic
philosophy - high protectionism, economic autarky, anti-markets, antiglobalization, antimultinationals - is like for the people who live there." The policies preferred by the protesters at
Seattle and Prague guarantee penury for most, security for some, and power for an unjustly
privileged few. That way runs anew the road to serfdom.
Capitalism prevents war and has historically caused the largest reductions in
poverty and inequality – any other argument ignores empirics and robust
economic models
Weede 08 (Erich, professor at the Institute for Political Science and Sociology,
“Globalization and Inequality” Comparative Sociology 7, p. 415-433)
Globalization refers to an increasing international division of labor and more trade between economies, to
cross-border investment and rapid transfers of technology between nations, to global capital flows and,
to a lesser degree, to increasing labor mobility. There is as yet no global labor market. Globalization also implies
better opportunities to learn from foreigners or strangers. The more similar you are to others, the less likely
it is that you can learn from them.1 Unfortunately, many people prefer to rely on established routines and resent the challenge of
having to learn from others. Globalization is another word for a worldwide expansion of capitalism. It
results in international tax competition (Edwards and de Rugy 2002; Mitchell 2005). Globalization is based on some technological
and political prerequisites. These include ever cheaper and faster means of communication and transportation as well as an
adequate political environment. The
global expansion of capitalism requires political fragmentation:
markets should be larger than political units.2 This provides an exit option from oppressive
government for capital and, to a lesser degree, for qualified labor. Such an exit option protects economic
freedom from ever-increasing state interference and tax burdens. If one state should be much more powerful than all others, as the
US currently is, then globalization requires a deeper commitment to capitalism and economic freedom by the hegemon than by
other states. Th ese political requirements of globalization are fulfilled. Globalization
maximizes the size of the
market. Since Adam Smith (1776/1976) we know that the size of the market determines the degree of
division of labor which promotes productivity. Thus, globalization is beneficial because it
increases productivity. This is not only a theoretical claim, but also an empirical statement. For instance, based on data
from the US Bureau of Labor Statistics, yearly economic gains from globalization have been estimated to be somewhere between
$1,650 and $3,300 per capita for Americans (Scheve and Slaughter 2007:36–37). Real compensation per hour (including benefits and
wages) has also gone up in the past decade, by 22 percent (Griswold 2007:1).3 Since Deng Xiaoping opened China in the late 1970s
by introducing reforms which imply creeping capitalism, Chinese agricultural production grew rapidly. Later, China attracted a lot of
foreign direct investment. Today China is a major base for manufacturing. By 2005 it was already the third largest exporter, still
behind Germany and the US but already ahead of Japan (Th e Economist 2005). By 2008 China is likely to become the biggest
exporter in the world. In the early 1980s (but no longer thereafter) even the disparity between urban and rural incomes in China
decreased (Lin, Cai, and Li 2003:145). Hundreds of millions of Chinese were taken out of abject poverty. In the first two decades of
reform, per capita incomes grew fourfold (Bhalla 2002:218). Later, less radical reforms in India led to nearly doubling per capita
incomes in a similar period of time and pulled about two hundred million Indians out of abject poverty (Das 2002:360). Since
China and India together account for nearly forty percent of mankind and about half of the
population living in less developed countries, economic growth in China and India and other
Asian countries contributes to the equalization of the global distributions of income between
Stefan Bauschard
Globalization and Poverty Release
35
individuals and households. If we are interested in individuals rather than states, then the empirical indicators are clear.
Globalization or the global expansion of capitalism has contributed to, or at least been compatible with, an
equalization of the size distribution of income between human beings. Since cross-national differences
between average incomes are still a more important component of inequality between human beings than intra-national differences
in income, it is possible – and currently true – to have the following two trajectories at the same time: growing inequality within
many or even most countries amidst some movement towards equality among individuals worldwide (Bhalla 2002; Firebaugh 1999;
Goesling 2001; Sala-i-Martin 2007; World Bank 2005). Admittedly, many economies, including the US and China, suffered some
deterioration in their domestic income distributions. This is why the legitimacy of capitalism and globalization comes under attack,
even in the American citadel of capitalism. This is also why calls for protectionism become louder and louder (Scheve and Slaughter
2007). But critics
of globalization tend to forget a basic truth about free trade (Griswold 2007:3): “If
can shift within the domestic economy, jobs eliminated by import competition
will quickly be replaced by jobs created elsewhere.”4 One should not blame the consequences of institutional
workers, capital, and resources
sclerosis, or of an unwillingness to adjust, on globalization. Globalization has led to a significant reduction in mass poverty. Although
the Chinese distribution of income has become much less equal since the reform process began in the late 1970s, the
strong
growth performance of China has pulled hundreds of millions out of abject poverty. In India
growth has been less spectacular than in China such that the distribution of income has changed less, and yet again hundreds of
millions have been pulled out of abject poverty. Although Latin America and Africa have benefitted much less from globalization
than Asia has, these continents also cannot match the demographic weight of Asia. Therefore, their comparative lack of success
cannot neutralize Asian progress in global perspective. Moreover, one has to keep in mind that winning in the process of
globalization presupposes participating in it, not abstaining from it. One may illustrate global change with data provided by Indian
economist Surjit Bhalla (2002:187). He defines people with a daily income between $10–$40 USD as members of the global middle
class. In 1960 this class consisted largely of whites; only six percent were Asians. By 2000, however, 52 percent was Asian. Th e era of
globalization is one in which Asia is now recovering, after falling for about two centuries further behind the West. Except for Africa
abject poverty worldwide is likely to become significantly reduced within one or two decades. Th e African share of abject poverty in
the world is expected to rise until 2015 from 36 percent to about 90 percent (Bhalla 2002:S. 172).5 Why did so many people in Asia
benefit from globalization, whereas Africans did not? A plausible explanation has been offered by Collier (2007:79).6 He points out
that about three quarters of the bottom billion7 live in countries which have suffered from civil war or long periods of bad
governance and poor economic policies. According to Collier (2007:27), “civil war is development in reverse. It damages both the
country itself and its neighbors.” Bad governance and poor economic policies distort incentives and misallocate the meager
resources of poor countries. Africa has suffered from these development traps to a greater degree than other continents. Moreover,
one may argue that a focus on income and income distributions is biased towards understating the benefits of globalization. As
Goklany (2007:chaps. 2–3) has pointed out, the same income per capita today (in terms of purchasing power) implies higher life
expectancies, lower infant mortalities, less malnutrition, healthier lives, and less child labor than it did decades or centuries earlier.
Less developed, still poor countries do benefit from the technological progress achieved by developed and rich countries. Thus, even
if one disputes the widely held and well-supported view regarding some equalization of individual or house-hold incomes worldwide
in recent decades, one should still accept Goklany’s contention (2007:72): “In
the aspects of human well-being that
are truly critical – life expectancy, infant mortality, hunger, literacy, and child labor – the
world is far more equal today than it was a century ago, in large part because of
globalization.”8 Another advantage of globalization is that it contributes to preventing war (Russett and
Oneal 2001; Weede 2005). Quantitative research demonstrates that the risk of war between nations is
reduced if they trade a lot with each other. There is something like a commercial peace or
peace by trade. Moreover, economic freedom reduces involvement in military conflict and
financial market openness also reduces the risk of war (Gartzke 2005, 2007). In particular, I want to underline
that economic cooperation pacifies the geopolitical relationship between rising China and the West.9 Moreover, there is also
something like a democratic peace. The
risk of war between democracies is extremely small. In my view,
one should conceptualize this as a component of a capitalist peace because democracies
prosper best in wealthy countries10 and because capitalism or economic freedom and thereby globalization contribute
to prosperity (Weede 2005, 2006). Since rising powers tend to challenge the political status quo, it is fortunate that the two
demographic giants of this world seem to prosper under global capitalism/
Globalization lifted Vietnamese farmers out of poverty
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has
Globalization Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-hasglobalization-benefited-poor DOA: 1-1-15
Stefan Bauschard
Globalization and Poverty Release
36
Q: Could you describe who the poorest people are in these countries?
Many studies focus on the consequences of globalization for less educated workers in
manufacturing. But there are other parts of the population in developing countries who are
even poorer: individuals who live on less than a dollar a day — often small-scale rural farmers.
These households spend a large share of their budget on food and other essential items. They
are less likely to send their children to school. They are more prone to health risks.
Q: How do they end up being reached by globalization?
For the rural areas, it really depends on how much globalization involves agriculture and that
varies country to country. One example where the poor who were in agriculture benefited
substantially was Vietnam. In the mid-1990s, Vietnam liberalized its trade. Prior to that, Vietnam
limited the amount of rice that farmers were able to export abroad. When the government
eliminated that quota, demand for Vietnamese rice increased and prices of rice in Vietnam
increased. This led to higher standards of living for Vietnamese rice farmers. Globalization
helped lift many of them out of poverty. Conversely, if you are a country that imports a majority
of the food stock, farmers might be made worse off by trade liberalization because prices of
agricultural products will fall. You can see how the result depends on the underlying structure of
the economy prior to trade liberalization.
McDonald’s identifier proves globalization reduces poverty
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
Being a symbol of globalization, a lot of sociological research suggests that McDonald’s presence can work
as an instrument for globalization (Ritzer, 1995 and Ritzer, 1996). According to its website, McDonald’s
use local or regional providers wherever possible, suggesting that the immediate effect of McDonald’s on
trade flows might be small. Several findings suggest however that the presence of McDonald’s in a country
over time will increase both social and economic globalization (apart from the fact that the number of
McDonald’s restaurants per capita is a part of the KOF-index measure of cultural proximity).
First, the chain is typically among the first to enter new markets and its presence is likely to increase the
likelihood of similar chains. For McDonald’s and Burger King this has recently been shown by Yang
(2012).
Second, human’s intrinsic fear of new food items (so called food neophobia ) and tourists’ tendency to
seeking the ‘ontological comfort of home’ ( Quan & Wang, 2004, p. 301) suggest that the presence of
McDonald’s is likely to increase tourist flows. For example Mak, Lumbers, and Eves (2012) note that the
desire to seek novel food and dining experiences can be a major motivations to visit foreign destinations,
but also that many tourists need a certain degree of familiarity, especially in the case of Western tourists
visiting destinations in developing countries ( Cohen & Avieli, 2004). As a result, the presence of
McDonald’s may not only increase tourism, but also lead to increased interaction between tourists and local
food producers. 18
Third, McDonald’s tendency to adapt to the local culture is also likely to increase globalization. An
example is provided by Ram (2004) who describes the opening of McDonald’s in Israel 1993. Ram
describes how McDonald’s started a process that contributed to a renaissance for the local delicacy
Stefan Bauschard
Globalization and Poverty Release
37
‘falafel’, where a ‘McDonaldized’ version was standardized, branded, and marketed globally through new
international franchise chains.
All the above mechanisms are likely to be stronger over time but not necessarily in a linear fashion. For this
reason we use the number of years since entry as an instrument and allow this to affect globalization using
a quadratic first-stage specification.
According to Lafontaine (2004) the country level entry of McDonalds is explained by GDP per capita
(which is confirmed in our sample; the correlation between duration and per capita GDP is 0.6), trade
openness, population size, and distance to the US. McDonald’s is often entering many additional markets at
any given time in the data, and the firm does not saturate markets before entering new ones. The presence
of competitors does not significantly affect the likelihood of entry. Finally, physical distance from the US
has a clear and statistically negative effect on entry probabilities.
The importance of distance from the US suggests that conditional on GDP per capita, there is some
exogenous variation in McDonald’s presence that can be used for identification purposes.
As shown in Table 6, our sample contains countries that were both relatively poor and not very globalized
when McDonald’s entered, but it is still true that the company has not entered the poorest and least
globalized part of our sample. The reasons for not doing so may be related to poverty. While we will verify
that the instrument is not correlated with poverty when included in the baseline regression, the obtained
results will be the local average treatment effect (LATE) that differs from the average effect of interest,
unless responses to globalization are homogenous—which is unlikely.
Figure 3 further shows that there is quite some variation in McDonald’s presence across countries. The
average years of the presence of McDonald’s in our full sample is six years with a standard deviation of
8.5. In 2005 McDonald’s was present in half of the countries in our sample (Figure 3 does not include
countries where they were not yet present in 2005) and in many countries the company launched their
first restaurant during the time period we study.
As a complement to the McDonald’s instrument, we also use a second instrument: preceding average
level of economic globalization in neighboring countries . As shown by Gassebner, Gaston, and
Lamla (2011), there are geographical spill-overs (or peer effects) in market-liberalizing reforms, such that a
country is likely to be more open if its neighbors are more open. It is unlikely that absolute poverty in a
neighboring country directly affects globalization of the neighbors—especially as this globalization
measure temporally precedes the poverty indicator. A similar IV-strategy has previously been applied by
for example Eichengreen and Leblang (2008) and de Soysa and Vadlamannati (2011) who both instrument
variables of openness with lagged values of openness of neighboring countries.
Economic globalization in neighboring countries is collected from Dreher et al. (2008). We define two
countries as neighbors if they share a land or maritime boundary, the latter as recognized by the United
Nations Convention on the Law of the Sea. However, territories are not classified as neighboring
countries.19
We follow our baseline setting by using both neighbors’ average globalization and globalization squared,
and the years of McDonald’s presence and its square in the IV-estimations. Moreover instruments are
lagged one period with respect to globalization.
(b). Testing the instruments
Having discussed several theoretical aspects of our instruments, we proceed to test their validity on our
data. Following the approach in Dutt, Mitra, and Priya (2009) who instrument trade policy by the number
Stefan Bauschard
Globalization and Poverty Release
38
of years a country has been a GATT/WTO member since the GATT was founded, we use a pooled
sample.20
As shown in Table 7, estimations using OLS on a pooled sample (including country dummies) generate
results very similar to baseline results using panel data, although the magnitudes of the estimated
coefficients are slightly smaller.
To assure that our instruments are unrelated to poverty, we include them in our baseline
specification. The results in Table 8 show that both instruments are unrelated to poverty, that
they add no explanatory value, and do not change the baseline coefficients on globalization very
much.
Next, we verify that the instruments are powerful in predicting globalization. Table 9 shows the
results from the first-stage regression estimating the relationship between the two instruments
and the various measures of globalization, controlling for GDP per capita and including country
dummies. Based on the F-tests and the size of the coefficients, the instruments seem to do a
good job of predicting all globalization indicators except personal contacts.
Finally, Table 10 presents the second-stage regression results, where predicted globalization levels from the
first stage are used to estimate the effect on absolute poverty. The baseline finding that globalization
reduces poverty is confirmed. Note however that the Sargan-statistics indicate problems for trade flows,
personal contacts, and cultural proximity, suggesting that instruments are not valid for these dimensions of
globalization. Importantly, the instruments work well for trade restrictions and information flows, and
confirm the baseline findings that these dimensions of globalization negatively relate to absolute poverty. 21
Poverty reduction can be achieved through globalization
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
5. Conclusions
We set out to test the links from globalization to poverty reduction, and our results are coherent enough to
identify some interesting patterns. Globalization correlates negatively with absolute poverty both across
countries, in a panel with fixed effects, and in a longer first difference regression. While we cannot be
certain that our results are causal, two different instrumental variable approaches support our baseline
findings.
The size of the effect in our baseline panel estimate is not remarkable. For example, consider the case of
Bangladesh. During 1980–2000, the country increased its KOF value from 17 to 38. According to the longrun estimates in Table 5, this translates to a reduction of absolute poverty by about 11 percentage points,
which roughly means that it takes a two standard deviation increase in globalization to decrease poverty by
half a standard deviation. Overall, the absolute value of the instrumented coefficients in Table 10 are
slightly bigger than the OLS coefficients in Table 7, suggesting that ordinary least square estimates can be
considered a lower bound for the magnitude of the poverty effect of globalization.
Looking closer at the factors included in the KOF index, less trade restrictions and larger information flows
are robustly associated with lower poverty levels. A likely explanation for the importance of trade
restrictions is that these matter for import prices.
Stefan Bauschard
Globalization and Poverty Release
39
Analyzing trade flows only, the standard approach in the globalization-poverty nexus (assuming that trade
increases growth and that growth reduces poverty), holds up well. In both the short-run and long-run
analysis, we find that higher trade flows are on average followed by lower poverty, but the effect is no
longer significant once we control for income or growth. The fact that trade restrictions turn out to be more
robust than trade flows should however probably be carefully interpreted: Deaton (1995) notes that trade
data may be biased upward due to over-invoicing of imports, a method often used to transfer funds abroad
from low-income countries, causing a systematic bias in trade data and in national accounts.
For both trade restrictions and information flows, a relatively large poverty-decreasing effect remains after
controlling for GDP per capita, suggesting that the standard approach actually underestimates the povertyreducing impact of globalization. A possible explanation to this is that there are income distribution effects
such that the incomes of the poor increase more than the average income. Another possibility is that the
result follows from measurement errors in the GDP data. As discussed by e.g., Heston (1994), productivity
increases in the subsistence sector and the informal sector are often insufficiently captured in GDP data. 22
Our results leave room for cautious optimism. Although the fact that many low-income countries embarked
on programs of external economic liberalization in recent decades has been intensely debated, our analysis
suggests that the underlying premises of current and previous poverty reduction strategies are correct:
poverty reduction can be achieved by means of closer economic integration and higher levels of
globalization.
Globalization benefitted the poor in Argentina
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home,
“Globalisation,” pp. 292-7
De la Fuente examines the globalization effects on the poor through one of the manifestations of migration,
namely, through the channel of international remittances. The paper focuses on Mexico where the flow of
remittances from largely US based migrants has become the dominant source of foreign exchange
revenues. The author tests a popular claim that international remittances could become a massive resource
transfer mechanism to reduce poverty levels by increasing incomes of poorer households. To verify this
claim, the paper examines whether people who are most vulnerable to shocks and falling into poverty
would be likely to receive remittance transfer or not. For this purpose, a “vulnerability to poverty” index
(the VTP index) is formulated and computed. This index is a forward looking measure of the magnitude of
the threat of future poverty that a household might experience—computed from a household panel data set
extending from October 1998 to November 2000. The VTP index is then used as an explanatory variable,
along with other characteristics (household sociodemographic characteristics as well as both idiosyncratic
and covariant risks that households face), in a series of Probit and Tobit models of remittance transfers.
De la Fuente’s analysis of the panel data derived from household surveys shows that national and
transnational support available to the rural poor through remittances is surprisingly low and transfers are
not going to the poorest members in rural communities in Mexico. His econometric estimation results
further reveal that an increase in the threat of future poverty that rural families could experience (a higher
VTP) actually reduces their likelihood of receiving transfers, including foreign remittances. On the basis of
these results, the author concludes that though remittances are perceived increasingly as one of the main
positive effects of globalization on the rural poor, facilitating foreign remittances for rural recipients should
not be considered a safety valve against poverty nor a substitute for the introduction of publicly funded
schemes of social protection coupled with improvements in economic opportunities for the rural poor.
Aguayo-Tellez, Muendler, and Poole examine how factors relating to globalization affect an individual
decision to migrate internally within Brazil, where only 66% of its labor force held a formal sector job in
1997, and considerable economic disparities across regions continue to prevail. The level of per capita GDP
in the southern regions is more than triple that in the northern regions. The authors argue that while
interstate migration has a long history in Brazil typically with massive flows of internal migration from the
Stefan Bauschard
Globalization and Poverty Release
40
northern regions to the urban centers in the Southeast and Brasilia, an accelerated rise in FDI and export
activities in the process of increasing integration into the global economy, following the dramatic marketoriented policy reforms, has contributed to a spurt in internal migration of formal sector workers to lower
income regions. This migration spurt occurred within the Southern states already endowed with a high
concentration of well-established firms, as well as from the South and Southeastern states to the
Northeastern state, where many foreign-owned and exporting firms started to locate their operation.
Aguayo-Tellez et al. examine this new pattern of surged interstate migration among former sector workers,
using a uniquely matched employer–employee data set across all states of Brazil for 1997–01. Their
analysis shows that prospective employment at a foreign-owned establishment exerts a positive and
significant pull effect on formal sector internal migration flows. They found that rather than responding to
the spot wage differentials, a worker’s decision to migrate is likely to be made on the expectation of a
steeper wage path, human capital accumulation, or other forms of nonpecuniary compensation at a
destination establishment, the majority of which is foreign owned. Thus, they conclude that globalization
acts on internal migration through the growth of foreign-owned firms and employment opportunities as a
pull factor. This process was facilitated by the expansion of infrastructure investments and export
promotion programs in the North, Northeast, and Center-West regions following trade liberalization in the
1990s, leading to a reduction in regional disparity and income inequality.
Macours and Vakis explore the impact of seasonal migration on early childhood development within the
context of a poor shock-prone border region in rural Nicaragua. The authors show that seasonal migration
can play an important role in protecting early cognitive development of pre-school children in poor areas
suffering from severe malnutrition problems. Paradoxically and somewhat counter-intuitively, they find
strong evidence that mothers’ migration has a positive effect on early childhood development while fathers’
migration does not. At least two factors account for this unexpected result: seasonal migrant mothers tend
to bring more migration income home, possibly allowing them to allocate more income on children’s
welfare through a direct income and indirect empowerment effect (women as decision-makers in contrast to
men tend to allocate a larger share of their budget to nutrition and child care). The income and
empowerment gains of migrating mothers appear to more than offset the potential negative effects on early
child development that could result from temporary lack of parenting (most children of migrant mothers
were left in the care of their grandmothers). The evidence in this paper illustrates how one aspect of
globalization, that is, increased opportunities in seasonal migration, because of higher South–South
mobility, might positively influence early childhood development, and as such long-term poverty reduction.
An indirect implication of the findings is that a conditional transfer program targeted to mothers in times of
shocks might be particularly effective in fostering the growth of children. In a more general sense, freeing
the movement of people across regional borders can also help create more flexible regional labor markets
that allow increasing production of goods for which the region has a comparative advantage.
Exposed to powerful globalization forces, many developing countries tend to go through sharp business
cycles of boom and burst. Argentina’s experience in the recent past typifies such a condition. Fields and
Sánchez Puerta examine earning mobility in urban Argentina during the period of 1996–03—a most
tumultuous period. In particular, they analyze, using a series of one year long panels, who gained the most
in pesos when the economy grew and who lost the most in pesos when the economy contracted.
Specifically, the authors test two hypotheses: (a) whether mobility was divergent, that is, whether the
largest earnings gains went to those who were initially better-off and (b) whether those individuals who
gained the most in times of economic growth are the same as those who gained the most in times of
stagnation or recession.
Their empirical analysis shows that the pattern of earnings changes is mostly convergent, occasionally
neutral, and never divergent, that is, the earnings dynamics observed for this period in Argentina show that
the initially low earners do at least well, often very much better than the high earners. While their results
challenge typical findings of rising inequality from cross-sectional analysis, they argue that the rising
inequality and the convergent mobility are reconcilable, since the widespread and sometimes large earnings
changes for individuals are concealed from cross-sectional data analysis of inequality. Hence, they
Stefan Bauschard
Globalization and Poverty Release
41
conclude that the picture of economic growth in Argentina is much more pro-poor in that period than what
one gets from cross-sectional inequality comparisons.
Globalization reducing poverty in China
Stephanie Rugolo, May 30, 2014, CATO, “Globalization Eradicates Poverty,”
http://www.cato.org/blog/globalization-eradicates-poverty DOA: 1-1-15
The Malaysia Chronicle and The Economist recently reported on how globalization is improving the lives
of Chinese villagers. Consider this example:
Taobao is an online retailer like Amazon. There are few qualifications to open an online store with Taobao.
Chinese villagers, having little more than their cheap labor to offer, sell handicrafts on the website. The
villagers get paid for their work and amass greater opportunities in return, while money and prosperity flow
into their previously sleepy villages.
Globalization is making Chinese villagers richer, contrary to critics who claim that globalization generates
poverty.
Interconnected, free markets generate wealth and pull people out of poverty. This occurs as the
connective technologies of globalization (like the Internet) increase competition. That benefits
consumers who can buy more, increasingly inexpensive products to better their quality of life.
That also creates innovation and employment, as is the case for Chinese villagers.
Globalization reduces poverty
Jan Cienski, 2011, Globalization Cures Poverty: Study,
https://www.globalpolicy.org/component/content/article/162/27754.html DOA 1-2-15
Globalization is responsible for dramatically reducing the number of abjectly poor people around the world,
according to a new study that contradicts the claims of skeptics who say it has worsened global poverty.
"On average economic growth is good for the poor, and trade is good for growth," said the study by the
London-based Centre for Economic Policy Research.
The study, prepared for the European Commission by a group of respected economists who surveyed
existing literature and studies on globalization, was unambiguous in saying that almost every criticism
levelled by free trade's skeptics is wrong.
Many globalization critics are "poorly informed about the historical record, and appear not to be aware of
the contribution played by globalization in the struggle against poverty," the study's authors say.
They say closer economic ties between countries, reduced tariffs and greater flows of investments have
made the most startling impact on global poverty.
While acknowledging the number of poor people in the world remains "disturbingly high," the study says
that in 1950 about 55% of the world's population lived on less than US$1 a day (in constant, inflationadjusted dollars). By 1992, only 24% of the world's population had to make do with that tiny amount.
During that time the number of poor remained static at about 1.3 billion people, while the global population
grew rapidly.
Stefan Bauschard
Globalization and Poverty Release
42
"The proportion of the world's population living in absolute poverty is lower now than it has ever been," the
report says.
The study echoes a recent World Bank report which found the degree of an economy's openness is closely
linked to its standard of living.
The support for the often-controversial position of continuing to lower tariffs and expand free trade was a
little much for the European Commission, which represents governments of various stripes and stressed
that the study was not its official position.
"In many respects, the findings will prove controversial, at least to those outside the circle of professional
economists, contradicting as they do certain deeply held beliefs about the negative consequences of
globalization," wrote Romano Prodi, the European Commission President.
The study notes that, while there are fewer people in abject poverty, the gap between average incomes in
rich and poor countries is wider.
Improved communications has had the perverse effect of undermining the case for globalization because
"the poor that remain, though a shrinking proportion of the whole population, are more than ever aware of
their relative deprivation."
Technology also makes it easier to draw attention to the startling discrepancies in world incomes.
The study takes issue with the slogans of protesters at anti-globalization rallies, like the one in Calgary
during last month's G8 summit at Kananaskis, Alta.
Critics charge globalization with increasing inequality, polluting the environment, exploiting workers,
undermining the ability of governments to raise taxes to provide health care and welfare and with causing
economic instability.
Untrue, according to the study.
"Many of the charges against globalization are misguided," says the study, which says that while
globalization does carry some costs, they are more than outweighed by the benefits.
The drumbeat of protest about manufacturers such as Nike and the Gap using Third World sweatshops to
make their products actually harms the workers in those factories.
While a salary of $5 a day may seem "shockingly poor" to protesters in rich countries, that is often five
times more than the workers would have gotten by staying in traditional industries such as agriculture, the
study says.
Although there is some proof that countries exporting energy and natural resources such as timber
underprice those products, causing environmental harm, there is no evidence of a "race to the bottom" in
wages or environmental standards.
Many critics contend that corporations will relentlessly hunt for the cheapest place to do business, forcing
richer countries to gut their social safety nets and environmental rules to match those of the lowest-cost
country.
"If low wages alone were enough of an attraction, more [investment] would have flowed to the poorest
countries in Africa, rather than predominantly to a small number of middle-income countries in Asia and
Latin America," it says.
Stefan Bauschard
Globalization and Poverty Release
43
In fact, it is in Africa that the study finds the weakest international performers, and failed economies that
drag down the statistics for the rest of the world.
Recognizing that skeptics often make a better case than the proponents of deeper globalization, the study
recommends that rich countries do a better job of explaining the benefits of globalization or else risk a
backlash similar to the one that ended the last burst of freer trade that lasted from 1870 to 1913.
The study also recommended the wealthiest nations commit to lowering tariffs and subsidies for agriculture
and textiles, which would boost incomes of the poorest workers and farmers, and also increase their foreign
aid to 0.7% of GDP.
Currently, only Scandinavians, Luxembourg and the Netherlands give that much. Canada gives only 0.24%
of GDP in aid, while the United States gives only 0.1% of GDP.
The study's optimistic conclusions were discounted by globalization skeptics, who saw it as one of a host of
biased reports aimed at confirming the reigning orthodoxy.
"For the last 25 years, globalization has been heavily tilted in favour of banks and investors and against the
interests of working people," said Robert Scott, an economist at the Economic Policy Institute, a leftleaning Washington-based think-tank.
He charged that the numbers showing poverty reduction were skewed by the exceptional cases of China
and India. Removing those two huge nations creates a much more ambiguous case for globalization and
shows dramatic increases in global inequality, Dr. Scott said.
"The evidence shows that unregulated capital and trade flows contribute to rising inequality and impede
progress in poverty reduction," a new Economic Policy Institute study said."
Globalization hurts the poor
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
It is actually not very difficult to think of a number of channels through which the process of globalization
may hurt the poor. Even some of the most ardent “pro globalization” advocates would admit that, for
instance, trade reform in developing countries may lead in the short run to higher unemployment and
greater poverty. This could be as a result of pervasive labor market distortions -- such as a low degree of
wage flexibility and imperfect labor mobility across sectors (Agenor, 2004). In this section I want to
emphasize, without trying to be exhaustive, the possibility that globalization may affect poverty adversely
in the long run as well.
Globalization benefits exporters and lowers prices
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
LDCs have the most to gain from engaging in the global economy. First, they gain access
to much larger markets, both for imports and exports. On the import side, consumers
Stefan Bauschard
Globalization and Poverty Release
44
gain access to a dramatically larger range of goods and services, raising their real
standard of living. Domestic producers gain access to a wider range and better quality of
intermediate inputs at lower prices. On the export side, domestic industries can enjoy a
quantum leap in economies of scale by serving global markets rather than only a
confined and underdeveloped domestic market.
Globalization improves living standards
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Any casual survey of the world today will confirm that nations relatively open to trade
tend to be more prosperous than nations that are relatively closed. The wealthiest
nations and regions of the world- -western Europe, the United States, Canada, Japan,
Hong Kong, Taiwan, South Korea, Singapore—are all trade-orientated. Their producers,
with a few notable exceptions, must compete against other multinational producers in
the global marketplace. In contrast, the poorest regions of the world—the Indian
subcontinent and sub-Saharan Africa—remain (despite recent, halting reforms) the least
friendly to foreign trade. And those countries that have moved decisively toward
openness—Chile, China, and Poland, among others—have reaped real (and, in the case of
China, spectacular) gains in living standards.
Systematic studies confirm a strong link between openness and economic growth.8 A
study of 117 countries by Jeffrey Sachs and Andrew Warner found that open economies
grew much faster than closed economies. Specifically, the authors found that the
developing countries that maintained open economies throughout the 1970s and ’80s
grew at an average annual rate of 4.5 percent, compared with an average growth rate of
0.7 percent for closed economies. As a result, the open developing economies tended to
converge toward the slower-growing rich economies, while relatively closed economies
did not converge.9
A more recent study, by Jeffrey Frankel and David Romer, produced similar results. The
authors found that trade exerts “a qualitatively large and robust E positive effect on
income.” In their study of 150 countries, they concluded that increasing the ratio of trade
to gross domestic product by 1 percentage point raises income per person by between 0.5
and 2 percent.10 The Organization for Economic Cooperation and Development (OECD)
concluded that nations relatively open to trade grew on average twice as fast as those
relatively closed to trade.11
Globalization reduces poverty
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Globalization offers hope to the world’s poorest. Just as more open trade tends to
promote economic growth, growth in turn leads to poverty reduction. A World Bank
Stefan Bauschard
Globalization and Poverty Release
45
study found that periods of sustained economic growth are almost always accompanied
by reductions in poverty. Specifically, the study found that poverty fell in 77 of the 88
decade- long periods of growth covered by the survey.12
The greatest reductions in poverty in the last twenty years have occurred in nations that
have moved decisively toward openness and domestic liberalization. The most
spectacular gains have been realized in East Asia. Between 1993 and ‘96, the number of
people living in absolute poverty—what the World Bank defines as less than $ 1 per day—
declined in the region from 432 million to 267 million. In China alone, the number of
poor people so defined fell by 150 million between 1990 and ‘97.13 The 1997—98
financial crisis that began in East Asia brought a temporary halt to this progress, but
poverty rates in the hardest-hit countries—Korea, Thailand, and Indonesia—have begun
to decline back toward their precrisis levels. Globally, the number of people living in
absolute poverty has declined in the 1990s to an estimated 1.2 billion in 1998.14
Globalization facilitates the spread of modern medicine, which has helped to extend life
expectancy and reduce infant mortality in rich and poor countries alike. On average, life
expectancy in developing countries rose from 55 years in 1970 to 65 years in 1997. This
good news is tempered by the fact that life expectancy has actually fallen in thirty-three
LDCs since 1990, in large part because of AIDS epidemics, and remains far behind the
OECD average of 78 years. Infant mortality rates in Asia and sub-Saharan Africa have
fallen by about 10 percent since 1990.15
Opponents of globalization try to blame poverty in the world on the spread of trade and
investment liberalization. But those regions where poverty and inequality have been the
most visible and intransigent for decades—Latin America, sub-Saharan Africa, and the
Indian subcontinent—for most of that time self-consciously followed policies of
economic centralization and isolation.
Globalization benefits poor countries
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Evidence of a similar trend exists among countries that have chosen to join the global
economy. A 1998 study sponsored by the WTO found that global trade and investment
flows have actually become less concentrated in the last two decades when adjusted for
the growth in world trade. Moreover, the authors found that the concentration of trade
and financial flows has fallen among countries that have more rapidly liberalized,
whereas it has increased among those that have integrated more slowly. “We argue this
shows that marginalization of individual countries from world markets can be mostly
explained by inward-looking domestic policies,” they concluded, “and therefore that
marginalization is not inherent to the globalization process.”26
Of course, the advanced economies have not always been helpful. Despite progress in the
post-war era, advanced-economy trade barriers remain stubbornly high against clothing,
textiles, and agricultural goods, the very products in which LDCs have a natural
comparative advantage. A recent study by Thomas Hertel of Purdue University and Will
Martin of the World Bank found that the average tariff that rich countries impose on
Stefan Bauschard
Globalization and Poverty Release
46
manufacturing goods from poor countries is four times higher than the average tariff rich
countries impose on each other’s goods.27 One of the many disappointments left in the
wake of the failed WTO talks in Seattle has been the indefinite postponement of
negotiations to lower barriers to poor-country exports. It would be wrong, however, to
blame advanced-country trade barriers for the lack of economic progress in so many
LDCs. After all, the Four Tigers of East Asia managed to hop on the income-convergence
conveyor belt in the face of advanced-country trade barriers that were even higher than
they are today.
For poorer nations, the global economy has become like one of those giant conveyor belts
that speed passengers through airport terminals. Globalization can accelerate a country’s
development, but only if its policymakers allow its citizens to hop onboard by opening
the economy to international trade and investment. This conveyor belt of growth
provides new technology, investment capital, domestic competition, expanding export
markets, and powerful incentives for further domestic policy reform. The result is faster
growth and dramatic improvements in living standards within a generation or two—as
we have seen most strikingly in the Far East. The fact that some nations insist on walking
their own, uphill, isolated, and often dead-end path is not the fault of globalization but of
their own policymakers.
The story of income inequality within nations is more complicated. The trend within the
United States and other developed nations has been toward a wider earnings gap
between the lowest- and the highest-paid workers. The gap has been driven primarily by
a difference in worker skills rather than by international trade. An information-based
economy will naturally produce jobs that require more specialized and technical skills
than a less developed economy, which is more weighted toward agriculture and industry.
As a result, in the United States in the last twenty-five years, the gap in income has been
increasing between workers with college degrees and those with only high school
diplomas.
International trade has probably contributed something to this trend in the United
States, because trade should in theory accelerate the transition toward industries that
rely more intensively on high-skilled labor. But the primary engine of change in the U.S.
economy during that time has been technological innovation.
The relatively larger importance of technological change compared with trade can be
seen in recent trends of job displacement. U.S. Labor Department surveys show that
three-quarters of Americans displaced from their jobs in 1995—97 were working in
sectors of the economy that are relatively insulated from trade.28 Even in the more
trade-intensive manufacturing sector, technological change rivals trade as the principal
engine of labor-market change. International trade is often blamed for job displacement
in manufacturing when in fact the cause is rising productivity. This explains why the
number of workers employed in manufacturing in the United States has remained stable
in the 1990s at slightly more than eighteen million, at a time when manufacturing output
has been rising an average of 3.8 percent a year in the decade (and 5.5 percent a year
since 1994).
As with employment, technology is also the chief explanatory variable of changes in
income inequality. William Cline, in a study on the impact of trade on wages, concluded
that international trade and immigration “are unlikely to have been the dominant forces
Stefan Bauschard
Globalization and Poverty Release
47
in rising wage inequality.”29 After surveying the literature and employing his own Trade
and Income Distribution Equilibrium model, Cline concludes that skills-based
technological change is by far the largest identifiable contributor to the growth in income
inequality. International trade and immigration together “contribute only about onetenth of the gross (total) unequalizing forces at work over this period.”30
If curbing inequality is the aim, trade policy is a poorly suited instrument for achieving
it. The right response to this growing demand for higher skills is not to stifle change
through trade barriers but to raise the general skill level of the workforce. Instead of a
futile effort to “save” the jobs of yesterday, the focus should be on preparing workers to
meet the rising demands of the labor market for specialized skills.
Globalization reduced poverty in Nigeria
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
This study investigated the relationship between globalization and Poverty rate in Nigeria. The
study employed the two basic channels theory to explain the relationship that exists between
globalization and poverty rate within the Nigeria context. The study adopted a co-integration and
error correction modeling techniques on an annual time series data within the periods of 1981 –
2009.A unique co-integration between poverty rate and the explanatory variables in the study is
found. In order to determine the short-run dynamics around the equilibrium relationship, we
estimated an error correction model (ECM). The empirical findings in this study shows that an
increase in openness by (1) one unit will bring about a decline in poverty rate by 0.46209 percent
in the current period showing a negative relationship. However, openness has a positive and
significant impact on poverty in Nigeria during the period under study. Domestic investment
(INV) was statistically significant and has a positive impact on poverty reduction, the current
value of FDI responded negatively in terms of relationship and insignificantly to poverty in
Nigeria, whereas, the first lagged FDI was statistically significant and also negatively related to
poverty. This however shows delayed response. The results of the study suggest the need for
Government to encourage globalization, by embarking on trade liberalization policies in order to
accelerate and sustain industrial growth and in turn reduce poverty also bearing in mind the
growth and development of home industries which is also paramount to development,
government should make sure that the globalization process is implemented in a gradual pace. As
rapid globalization could be disadvantageous to industrial growth and this can in effect or breed
more poverty.
Reducing foreign investment in Nigeria increases poverty
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
Nnadi (2010) concludes that globalization has significantly affected Nigeria’s Economic growth
through the decline in Foreign Direct Investment (FDI). This according to him can result to high
rate of unemployment, poverty and inequality and that for such aforementioned problems to be
Stefan Bauschard
Globalization and Poverty Release
48
alleviated there will be need for a change in the dominant economic policies of the country. So by
implication the work reveals a positive relationship between globalization and poverty in Nigeria
because a decline in the inflow of foreign investors can trigger or even breed poverty.
More globalization in Nigeria means more poverty reduction
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
This study investigated mainly the relationship between trade openness (globalization) and
poverty rate in Nigeria. In the empirical investigation of aggregate function of poverty in Nigeria,
co-integration and error correction estimation were done. In order to determine the short-run
dynamics around the equilibrium relationship, we estimated an error correction model (ECM).
The empirical findings in this study have it that there is an inverse and significant relationship
between trade openness and poverty rate in Nigeria, poverty responds positively, but
insignificantly to external debt in Nigeria, poverty reacts positively and significantly to domestic
investment in Nigeria. Even though the result of the study shows that globalization brought about
a reduction in poverty rate in the period under study while poverty is still visible in the country,
the policy implications that the result suggest are: The need for Government to encourage
globalization, by embarking on trade liberalization policies in order to accelerate and sustain
industrial growth and in turn a reduce poverty. They should also monitor the movement of factor
inputs as well as imported and exported goods both in and out the country by way of creating a
well secured boarders across the country and a strong and efficient Custom Officials. Government
also bearing in mind the growth and development of home industries which is also paramount,
should make such that the globalization process is implemented in a gradual pace. As rapid
liberalization could be disadvantageous to industrial growth and this can in effect breed more
poverty.
To the financial institutions, they should put measures in place to encourage more financial
openness. Although study has revealed that financial globalization plays vital role in the reduction
of poverty. (Ogbuaku et al 2006). But the positive impact of financial openness is not strong
enough to bring about a massive reduction of Poverty in the country. Meaning that the impact of
trade openness on poverty appears to be more compare to financial openness.
Resource extraction destroys the future economic prospects of developing
countries
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
No economic sector offers such a stark reminder of the devastation that capital causes in its
relentless pursuit of profit than the extractive sector. Encompassing oil, gas and mining in their
various forms, the extractive industries are unrivalled in the intensity of social and
environmental devastation they cause to local communities and regions. The ‘resource curse’
that has blighted so many economies which become over-reliant on their natural wealth
endowment is a constant threat, and only the most incautious commentator would suggest that
foreign investment from extractive transnationals offers host countries unalloyed benefit. Yet at
the same time, few sectors are heralded as being so important for the long-term prospects of
Stefan Bauschard
Globalization and Poverty Release
49
their host economies, if only the involvement of private capital (and especially foreign capital)
can be properly managed. For the countries of Africa, a continent which still relies on fuels and
mining products for two thirds of its total merchandise exports, the successful exploitation of
strategic natural resources is still seen as critical to future economic prospects. 1 The unique
threat posed by the extractive industries to host populations was affirmed by Professor John
Ruggie in the early days of his mandate as UN Special Representative on human rights and
transnational corporations (TNCs). In his first interim report of February 2006, in which he
presented an overview of the 65 cases of corporate human rights abuse he had examined from
27 countries around the world, Ruggie noted: The extractive sector – oil, gas and mining –
utterly dominates this sample of reported abuses with two thirds of the total … The extractive
industries also account for most allegations of the worst abuses, up to and including complicity
in crimes against humanity. These are typically for acts committed by public and private security
forces protecting company assets and property; large-scale corruption; violations of labour
rights; and a broad array of abuses in relation to local communities, especially indigenous
people … The extractive sector is unique because no other sector has as enormous and as
intrusive a social and environmental footprint. Hilary, John (2013-10-09). The Poverty of
Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle Locations 15901594). Pluto Press. Kindle Edition.
Globalisation drives down wages and labour standards
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
If the extractive sector is the site of the most intense confrontations between transnational
corporations (TNCs) and local communities, the garments sector is the most familiar example in
the public eye for capital's continuing exploitation of labour – and especially women's labour. As
a result of ongoing struggles by trade unions in garment factories of the global South and
parallel campaigns in countries of the North, it is now commonly recognised that the relocation
of clothes production outside the core capitalist economies has allowed brand names and
retailers to maintain high profits at the expense of workers’ rights. As a result, the garments
sector has become the defining example of how the process of globalisation has enabled capital
to drive down wage costs and labour standards while evading all prospects of binding
regulation.
Globalisation has created poverty in the garment industry
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
Yet the promise of the globalised garments industry has not materialised, as a direct result of its
imprisonment within the framework of global supply chains dominated by capitalist relations of
production, or ‘networked capitalism’. 1 The garments sector is a stark example of a buyerdriven value chain controlled by brands and retailers that are able to dictate terms to suppliers
as a result of their overwhelming market power, ensuring that they also capture the greater part
of all gains arising from globalised production. 2 Consequently, as this chapter will show, the
emancipatory potential of employment in the garments sector has been largely negated as a
result of TNCs’ drive to keep labour costs low and their requirement that supplier factories meet
Stefan Bauschard
Globalization and Poverty Release
50
increasingly unrealistic production deadlines. These demands have led to women employed in
the garments sector being condemned to insecure, low paid and dangerous jobs, their working
lives characterised by exploitation rather than empowerment. Only the struggles of the workers
themselves, backed up by worldwide campaigns against the brands and retailers ultimately
responsible for their abuse, have managed to challenge the power relations that underpin the
system. Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown and the
Struggle for What Comes Next (Kindle Locations 1957-1966). Pluto Press. Kindle Edition.
Globalisation undermines worker unions so they can’t fight against the worst
part of wage reductions
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
Yet the central contradiction of all outsourced production networks is that while workers and
their trade unions may confront the immediate failure of factory owners and national
governments to guarantee decent working conditions and a living wage, ultimate responsibility
rests not at the national level but with the buyers and retailers that control the global supply
chain and dictate the terms of its operation. Those who hold power over the value chain are
removed from the locus of production itself, and thus insulated from any direct challenge on the
part of labour – this being the essential advantage of all outsourced production, reinforced in
the final analysis by the ease with which buyers can end a relationship with any particular
supplier and take their business elsewhere. Faced with this most extreme form of capital
mobility, individual associations of workers are constrained in what they can achieve at the
factory or national level, and can only hope to mitigate the worst excesses of the system. As
Jeroen Merk describes it, ‘even if workers succeed in organising themselves and want to enter
into collective bargaining, they discover that they are bargaining with the wrong people, namely
local capital itself subordinated to the dynamics of global capitalism’. 42 Hilary, John (2013-1009). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next
(Kindle Locations 2222-2224). Pluto Press. Kindle Edition.
Globalization of agriculture creates food poverty
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
The global food regime exemplifies in its starkest form the challenge posed to the peoples of the
world by the endless process of capitalist accumulation. As with the garments sector, the
production, distribution and consumption of food are already dominated by a small number of
giant transnational corporations who seek to determine what is grown and what is eaten in all
corners of the globe. As with the extractive sector, capital has become increasingly aggressive in
its attempts to appropriate the natural resources necessary for its further expansion: land,
seeds, water and the genetic building blocks of life itself. These ‘new frontiers’ of primitive
accumulation have in turn generated a modern day gold rush of hedge funds, pension funds,
sovereign wealth funds and private equity funds desperate to buy into the latest asset classes
following the bursting of their dotcom and housing bubbles. The renewed ‘scramble for Africa’ is
just the most visible example of a phenomenon that is tearing across the planet as a whole.
The direct challenge posed by such speculative activity has galvanised a worldwide movement of
Stefan Bauschard
Globalization and Poverty Release
51
peasant farmers, fisherfolk, landless workers and indigenous peoples determined to defend
their lands and their livelihoods from the depredations of foreign investors. More than just a
force of resistance, however, the movement has developed its own positive framework of food
sovereignty to set against the dominant capitalist model of dispossession and exploitation. The
principles of food sovereignty, described more fully below, provide the framework under which
communities retain the right to develop their own models of farming on agroecological lines,
and to explore constructive alternatives to a global system that has delivered great gains to
agribusiness but failed in all social and ecological respects. 1 The full extent of that failure was
brought to international attention in 2009 when the UN's Food and Agriculture Organisation
(FAO) reported that, for the first time in human history, over a billion people were officially
classified as living in hunger. The FAO stressed that this scandal was not a result of limited food
supplies, in that the previous two years had seen record levels of cereal production, but a direct
consequence of poverty and economic disempowerment of those who could no longer afford
the food available. 2 The backlash that met the publication of the one billion figure led the FAO
to suspend further statistical pronouncements on global hunger until 2012, when its annual
State of Food Insecurity report recorded instead that 868 million people should be considered
‘chronically undernourished’. Yet the FAO itself acknowledged that this headline figure ‘should
be deemed a very conservative indicator of hunger’ as it relates only to those who fail to secure
the minimum intake of calories required to support a ‘sedentary’ lifestyle. When set against the
minimum level of calories needed to sustain a lifestyle of ‘normal activity’, the FAO estimated
that 1.52 billion people are without enough food, while for the level needed to sustain ‘intense
activity’ the FAO estimated that as many as 2.56 billion people have an inadequate food intake –
substantially more than the corresponding figure for the same category in 1990.3 The
conclusion that more working people around the world are now suffering from insufficient food
than 20 years ago corresponds to the indicators of growing inequality and reduced share of
national income returning to labour that were noted in Chapter 2. Yet the ultimate scandal is
that the majority of those suffering from extreme poverty are to be found among the world's
rural populations – precisely those who, as food producers, should be benefiting from rising
prices – just as three quarters of all those living with chronic hunger are from smallholder
farming communities, landless rural families or communities dependent on herding, fishing or
forest resources. In a global food regime that has increasingly favoured the spread of industrial
agriculture over sustainable local farming, those who live off the land have been rendered most
vulnerable. As food commodities fetch record prices on global markets, those growing the food
are denied even the basic minimum to eat. 4 Hilary, John (2013-10-09). The Poverty of
Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle Locations 22962297). Pluto Press. Kindle Edition.
Globalization leads to a massive land grab that threatens the poor
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
Nowhere is the drive for capitalist expansion seen more clearly than in the rush to dispossess
farming communities of their land for use in the corporate production of food, agrofuels and
agro-industrial crops, or simply for speculation. As many commentators have emphasised, the
expropriation of land from the peasantry is a recurrent historical phenomenon, with the term
‘land grabbing’ already found in Marx's account of the displacement of rural labour through
which large-scale agriculture was first introduced into England. 29 In the present context,
Stefan Bauschard
Globalization and Poverty Release
52
capital's accelerated appetite for land acquisition reflects the relative scarcity of other asset
classes in which it can be so profitably invested, together with the recognition that commodity
prices are likely to remain high into the long-term future, as the rising demand for food is
exacerbated by the challenges of climate change, water scarcity and the steady loss of millions
of hectares of cultivated land to soil degradation and urbanisation each year. While estimates
vary as to the total number of deals done, at least 83 million hectares of land in the global South
have been acquired in transnational agricultural investments (not including mining, forestry or
tourism) since the year 2000.30 Very often it is the most fertile land that is appropriated by
investors, who are typically granted long leases or concessions lasting for anything up to 99
years. Foreign investors have targeted agricultural land in as many as 84 countries across the
world, with a significant bias towards African states such as Sudan, Mozambique, Tanzania,
Ethiopia, Madagascar, Zambia and the Democratic Republic of Congo (listed in order of total
land area covered in reported deals). In Asia, investors have particularly focused their attention
on the Philippines, Indonesia, Lao PDR and Cambodia, which alone has seen concessions
covering two million hectares (over 10 per cent of the country's total land mass) granted to
agro-industrial businesses, including several from China and Vietnam. 31 Brazil and Argentina
are the two countries that have been most closely targeted in Latin America, while European
capital has also pursued large-scale land acquisition in Russia, Ukraine and Kazakhstan. Even if
the phenomenon of land grabbing is familiar from history, there is no doubting the scale of its
current ambition. The precise interest in land acquisition differs between investors. The rush to
agrofuels has been responsible for around a third of all large-scale land grabs recorded during
the first ten years of the twenty-first century, with private companies registered in the UK and
Netherlands particularly active in land acquisition for the production of jatropha, the agrofuel
crop behind three quarters of all non-food land grabs. Apocalyptic projections suggest that
plantations of jatropha and other agrofuel crops could expand to encompass 20 per cent of all
arable land by 2050 – a development whose destructive impact would be ‘unprecedented in
contemporary capitalism’. 32 Other deals have involved foreign agribusiness firms taking over
farmland to produce staples such as rice, maize and wheat; non-food cash crops such as cotton
(especially prevalent among land acquisitions in Ethiopia, for example); or so-called ‘flex crops’
such as soya bean, sugar cane and oil palm, which can be used for a range of food and non-food
purposes. Others have seen investors establish agro-industrial plantations to produce high-value
crops such as rubber, while others again have acquired land for tree plantations, or to log
existing forests. Private equity funds, pension funds and sovereign wealth funds have invested
substantial sums in agricultural land with a view to long-term financial returns, while hedge
funds have engaged with an eye to more aggressive speculation. 33 Yet the common thread
binding together all these forms of capital investment is the neocolonial drive to accumulate by
means of the dispossession of those currently living off the land. Hilary, John (2013-10-09). The
Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle
Locations 2458-2459). Pluto Press. Kindle Edition.
Land appropriation is violent and causes forced eviction
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
The violence with which land is expropriated for capital without the free, prior and informed
consent of the people living on it can often involve the forced eviction and displacement of
whole communities. In Cambodia, dozens of rural and indigenous communities have been
Stefan Bauschard
Globalization and Poverty Release
53
forcibly evicted to make way for new agribusiness projects, with over 400,000 people affected in
the past decade. 36 In Colombia, farmers of the Afro-Colombian, indigenous and mestizo
communities have been forced from their lands in terror attacks by right-wing paramilitary
groups linked to agribusiness, in order to establish oil palm, banana and agrofuels plantations on
their territories. 37 Similar mass evictions to make way for agricultural land grabs have been
reported in recent years from Uganda, Honduras, Guatemala and many other countries, in
addition to the vast number of instances where farmland has been expropriated for the
extractive industries or other investments. 38 Around a third of the total land surface covered in
reported deals is in forested areas, raising further concern as to the ecological damage that
could arise if those forests are logged or otherwise destroyed to expand plantation agriculture.
Olivier De Schutter, UN Special Rapporteur on the Right to Food, has argued that states have a
duty to protect communities already living on the land, and to prioritise ‘development models
that do not lead to evictions, disruptive shifts in land rights and increased land concentration’.
According to De Schutter, agricultural deals that imply a significant shift in land rights ‘should
represent the last and least desirable option, acceptable only if no other investment model can
achieve a similar contribution to local development and improve the livelihoods within the local
communities concerned.’ 39 Hilary, John (2013-10-09). The Poverty of Capitalism: Economic
Meltdown and the Struggle for What Comes Next (Kindle Locations 2482-2483). Pluto Press.
Kindle Edition
Stefan Bauschard
Globalization and Poverty Release
54
Poverty Decreasing
World poverty has declined 75%
Center for Economics and Business Research, September 18, 2013, Globalisation Can reduce
Poverty, http://www.cebr.com/reports/globalisation-can-reduce-poverty/ DOA 1-1-15
Anti-globalisation campaigners like the Occupy movement need to accept they have misunderstood
globalisation and apologise to those they have misled. Anti globalisation campaigners have in the past
claimed that globalisation only helps rich people and nations and that the current world trading system will
not reduce poverty by anything like the 50% targeted by the Millennium Development Goals by the target
date of 2015. But new and credible data from the respected Brookings Institute suggests that far from
poverty not being reduced by as much as 50%, it is likely over this period to be reduced by over 75%
Gresham Professor of Commerce Douglas McWilliams this evening in his first Gresham lecture of the new
academic year 2013/14 asks the anti-globalisation campaigners ‘to be brave enough to admit they were
wrong’ and to ‘apologise to those who have been misled.’ In the lecture ‘Globalisation and Inequality’
Professor McWilliams shows how globalisation has been associated with rising inequality within countries
as low skilled jobs have migrated from richer economies to poorer economies but that this has been offset
by falling inequality between rich and poor countries.
He uses the example of Premier league footballers’ salaries to illustrate how income disparities have risen.
‘Sir Bobby Charlton in the early 1970s was paid about twice the average pay in the top league and about
ten times what a player in the lower leagues would be paid. Today Wayne Rooney is paid about ten times
the average pay for a premiership footballer and about five hundred times what a lower league footballer
would earn. Professor McWilliams argues that this widening of the income gap in top football probably has
further to go. ‘It all depends on what incomes the clubs achieve – if they get more from pay per view and
from opening up the international market for soccer it remains feasible that we could see a footballer
earning £100 million a year within the next 10-15 years.
Professor McWilliams warns against intervening directly to stop high pay or to tax it. ‘Excessive pay is the
symptom, not the underlying problem. Where pay is too high, the need is to deal with the excessive profits
and exploitation of the consumer that allows pay to be too high in the first place. This should be done
through enforcing competition policy so that consumers benefit from lower prices and better service.
Simply trying to cap pay may make people feel good but will not make any consumer any better off.’
Professor McWilliams draws attention to the spread of anti-globalisation sentiment including an example
on the BBC GCSE Bite Size page for geography :
‘Globalisation operates mostly in the interests of the richest countries, which continue to dominate world
trade at the expense of developing countries. The role of LEDCs in the world market is mostly to provide
the North and West with cheap labour and raw materials.’ The BBC quotes in support of this
‘environmentalists, anti-poverty campaigners and trade unionists’.
Professor McWilliams argues that the BBC should not be spreading anti-globalisation propaganda that is
contradicted by all reputable studies, particularly on a website aimed at children. He has written to Lord
Hall, Director General of the BBC, asking for the misleading site to be corrected. A copy of the letter is
below.
Status Quo Improving
Stefan Bauschard
Globalization and Poverty Release
55
Goklany 09 – Assistant Director for Science and Technology Policy, PhD electrical engineering
from MSU [Indur. “Have Increases In Population, Affluence And Technology Worsened Human
And Environmental Well-Being?” http://173-45-244-96.slicehost.net/public/journal_article/11]
Although global population is no longer growing exponentially, it has quadrupled since 1900.
Concurrently, affluence (or GDP per capita) has sextupled, global economic product (a measure
of aggregate consumption) has increased 23-fold and carbon dioxide has increased over 15-fold
(Maddison 2003; GGDC 2008; World Bank 2008a; Marland et al. 2007).4 But contrary to NeoMalthusian fears, average human well-being, measured by any objective indicator, has never
been higher. Food supplies, Malthus’ original concern, are up worldwide. Global food supplies
per capita increased from 2,254 Cals/day in 1961 to 2,810 in 2003 (FAOSTAT 2008). This helped
reduce hunger and malnutrition worldwide. The proportion of the population in the developing
world, suffering from chronic hunger declined from 37 percent to 17 percent between 1969-71
and 2001-2003 despite an 87 percent population increase (Goklany 2007a; FAO 2006). The
reduction in hunger and malnutrition, along with improvements in basic hygiene, improved
access to safer water and sanitation, broad adoption of vaccinations, antibiotics,
pasteurization and other public health measures, helped reduce mortality and increase life
expectancies. These improvements first became evident in today’s developed countries in the
mid- to late-1800s and started to spread in earnest to developing countries from the 1950s. The
infant mortality rate in developing countries was 180 per 1,000 live births in the early 1950s;
today it is 57. Consequently, global life expectancy, perhaps the single most important measure
of human well-being, increased from 31 years in 1900 to 47 years in the early 1950s to 67 years
today (Goklany 2007a). Globally, average annual per capita incomes tripled since 1950. The
proportion of the world’s population outside of high-income OECD countries living in absolute
poverty (average consumption of less than $1 per day in 1985 International dollars adjusted for
purchasing power parity), fell from 84 percent in 1820 to 40 percent in 1981 to 20 percent in
2007 (Goklany 2007a; WRI 2008; World Bank 2007). Equally important, the world is more
literate and better educated. Child labor in low income countries declined from 30 to 18
percent between 1960 and 2003. In most countries, people are freer politically, economically
and socially to pursue their goals as they see fit. More people choose their own rulers, and
have freedom of expression. They are more likely to live under rule of law, and less likely to be
arbitrarily deprived of life, limb and property. Social and professional mobility has never been
greater. It is easier to transcend the bonds of caste, place, gender, and other accidents of birth
in the lottery of life. People work fewer hours, and have more money and better health to enjoy
their leisure time (Goklany 2007a). Figure 3 summarizes the U.S. experience over the 20th
century with respect to growth of population, affluence, material, fossil fuel energy and
chemical consumption, and life expectancy. It indicates that population has multiplied 3.7-fold;
income, 6.9-fold; carbon dioxide emissions, 8.5-fold; material use, 26.5-fold; and organic
chemical use, 101-fold. Yet its life expectancy increased from 47 years to 77 years and infant
mortality (not shown) declined from over 100 per 1,000 live births to 7 per 1,000. It is also
important to note that not only are people living longer, they are healthier. The disability rate
for seniors declined 28 percent between 1982 and 2004/2005 and, despite better diagnostic
tools, major diseases (e.g., cancer, and heart and respiratory diseases) occur 8–11 years later
now than a century ago (Fogel 2003; Manton et al. 2006). If similar figures could be constructed
for other countries, most would indicate qualitatively similar trends, especially after 1950,
except Sub-Saharan Africa and the erstwhile members of the Soviet Union. In the latter two
cases, life expectancy, which had increased following World War II, declined after the late 1980s
to the early 2000s, possibly due poor economic performance compounded, especially in Sub-
Stefan Bauschard
Globalization and Poverty Release
56
Saharan Africa, by AIDS, resurgence of malaria, and tuberculosis due mainly to poor governance
(breakdown of public health services) and other manmade causes (Goklany 2007a, pp.66-69,
pp.178-181, and references therein). However, there are signs of a turnaround, perhaps related
to increased economic growth since the early 2000s, although this could, of course, be a
temporary blip (Goklany 2007a; World Bank 2008a). Notably, in most areas of the world, the
health-adjusted life expectancy (HALE), that is, life expectancy adjusted downward for the
severity and length of time spent by the average individual in a less-than-healthy condition, is
greater now than the unadjusted life expectancy was 30 years ago. HALE for the China and
India in 2002, for instance, were 64.1 and 53.5 years, which exceeded their unadjusted life
expectancy of 63.2 and 50.7 years in 1970-1975 (WRI 2008). Figure 4, based on cross country
data, indicates that contrary to Neo-Malthusian fears, both life expectancy and infant
mortality improve with the level of affluence (economic development) and time, a surrogate
for technological change (Goklany 2007a). Other indicators of human well-being that improve
over time and as affluence rises are: access to safe water and sanitation (see below), literacy,
level of education, food supplies per capita, and the prevalence of malnutrition (Goklany 2007a,
2007b).
World better off
Dash 13 – Co-Founder and Managing Director at Activate, a new kind of strategy consultancy
that advises companies about the opportunities at the intersection of technology and media cofounder and CEO of ThinkUp, which shows you how to be better at using your social networks,
publisher, editor and owner of Dashes.com, my personal blog where I've been publishing
continuously since 1999, entrepreneur, writer and geek living in New York City [Anil. “THE
WORLD IS GETTING BETTER. QUICKLY.” 2/4/13. http://dashes.com/anil/2013/02/the-world-isgetting-better-quickly.html]
The world is getting better , faster, than we could ever have imagined. For those of us who are
fortunate enough to live in wealthy communities or countries, we have a common set of
reference points we use to describe the world's most intractable, upsetting, unimaginable
injustices. Often, we only mention these horrible realities in minimizing our own woes: "Well,
that's annoying, but it's hardly as bad as children starving in Africa." Or "Yeah, this is important,
but it's not like it's the cure for AIDS." Or the omnipresent description of any issue as a "First
World Problem". But let's, for once, look at the actual data around developing world problems.
Not our condescending, world-away displays of emotion, or our slacktivist tendencies to see a
retweet as meaningful action, but the actual numbers and metrics about how progress is
happening for the world's poorest people. Though metrics and measurements are always
fraught and flawed, Gates' single biggest emphasis was the idea that measurable progress and
metrics are necessary for any meaningful improvements to happen in the lives of the world's
poor. So how are we doing? THE WORLD HAS CHANGED The results are astounding. Even if we
caveat that every measurement is imprecise, that billionaire philanthropists are going to favor
data that strengthens their points, and that some of the most significant problems are difficult
to attach metrics to, it's inarguable that the past two decades have seen the greatest leap
forward in the lives of the global poor in the history of humanity. Some highlights: Children are
1/3 less likely to die before age five than they were in 1990. The global childhood mortality
rate for kids under 5 has dropped from 88 in 1000 in 1990 to 57 in 1000 in 2010. The global
infant mortality rate for kids dying before age one has plunged from 61 in 1000 to 40 in 1000.
Stefan Bauschard
Globalization and Poverty Release
57
Now, any child dying is of course one child too many, but this is astounding progress to have
made in just twenty years. In the past 30 years, the percentage of children who receive key
immunizations such as the DTP vaccine has quadrupled. The percentage of people in the world
living on less than $1.25 per day has been cut in half since 1990, ahead of the schedule of the
Millennium Development Goals which hoped to reach this target by 2015. The number of
deaths to tuberculosis has been cut 40% in the past twenty years. The consumption of ozonedepleting substances has been cut 85% globally in the last thirty years. The percentage of
urban dwellers living in slums globally has been cut from 46.2% to 32.7% in the last twenty
years. And there's more progress in hunger and contraception, in sustainability and education,
against AIDS and illiteracy. After reading the Gates annual letter and following up by reviewing
the UN's ugly-but-data-rich Millennium Development Goals statistics site, I was surprised by
how much progress has been made in the years since I've been an adult, and just how little I've
heard about the big picture despite the fact that I'd like to keep informed about such things. I'm
not a pollyanna — there's a lot of work to be done. But I can personally attest to the profound
effect that basic improvements like clean drinking water can have in people's lives. Today, we
often use the world's biggest problems as metaphors for impossibility. But the evidence
shows that, actually, we're really good at solving even the most intimidating challenges in the
world. What we're lacking is the ability to communicate effectively about how we make
progress, so that we can galvanize even more investment of resources, time and effort to
tackling the problems we have left.
East Asian incomes rose dramatically over the last 20 years
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
World Bank researchers found that the average person in the middle of the income spectrum in
China, for example, enjoyed a near-tripling of income between 1988 and 2008. Middle-income
Thais and Indonesians nearly doubled their incomes, while India’s middle class saw income
growth of about 50 percent in the same time period.
600 million have been lifted out of poverty in Asia
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US
Middle Class,” http://www.washingtontimes.com/news/2014/oct/6/economicglobalization-boosts-asia-bogs-down-us-mi/?page=all DOA: 1-2-14
The shifting of income gains to Asian economies has gone so far, according to Mr. Lakner, that it
has nearly enabled Asia to reclaim the prominent place in the world economy it enjoyed before
the Industrial Revolution of the 1800s vaulted the West to predominance. Leading the resurgence
of Asia has been China, whose rapid industrialization has lifted more than 600 million people out
of abject poverty in the last two decades — an unprecedented feat in world history.
Stefan Bauschard
Globalization and Poverty Release
58
Growth Reduces Poverty
Strong empirical evidence that growth has reduced 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
Globalization has played an important catalytic role in reducing poverty in developing countries through
its impact on growth. More open economies, and those who have been more successful in accelerating
their pace of integration, have recorded the best growth performance, whereas developing countries with
inward oriented policies have suffered from poor growth rates. Frankel and Romer (1999) have estimated
that an increase in the ratio of trade to GDP by one percent raises the level of income by one-half to two
percent. By stimulating higher growth, integration can have a strong positive impact on poverty
reduction. There is now robust cross-country empirical evidence that growth is on average associated
one-for-one with higher incomes of the poor. There are, however, significant variations in this relation
between countries. In the aggregate, no more than 50% of the variation in the poverty measure is
explained by differences in growth. Another way to state this is to say that poverty is affected by many
factors other than growth.
There is widespread acceptance that in the long run open economies fare better in aggregate than do
closed ones, and that relatively open policies contribute to long-run development (Winters, 2000).
Many commentators fear, however, that in the shorter run trade liberalisation puts great stress on certain
actors in the economy and that even in the longer run successful open regimes may leave some behind in
poverty.
As global income rises, poverty will be eliminated
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
One has to acknowledge that poverty is fundamentally a relative measure which would probably gain an
entirely different meaning as the world economy becomes more integrated. For example, if global growth
continues at a rapid pace during the next century, it is possible that emerging market economies,
including China and India, could attain income levels exceeding those of Americans today by the end of
the century. This implies that Malthusian notions of poverty are likely to become a distant memory in
most parts of the world as global income inexorably expands over the next century, and issues of
inequality, rather than subsistence, will increasingly take center stage in the poverty debate.
Stefan Bauschard
Globalization and Poverty Release
59
Long-Term Reduction in Poverty
Globalization could increase poverty in the short-term and decrease it in the
long-term
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
Agénor (2004) describes several reasons for expecting economic globalization to foster growth and
decrease poverty in the long run. Many mechanisms are straightforward applications of mainstream
economic theory: specialization, scale economies, competition, incentives for macro-economic stability,
and innovation are all likely to be important mechanisms. Higher integration in the global economy may
also increase the returns to higher education in poor countries, as described by Stark (2004), negatively
affecting poverty in the long run. Agénor (2004) notes also that there are several reasons why the short-run
effect of globalization may well be an increase in absolute poverty, suggesting that globalization has an
inverted J-curve effect on absolute poverty. Such reasons include:
•
Transition costs: As an economy opens, more and cheaper capital becomes available. When firms
replace labor with capital in production, poverty may increase before laid-off workers find new
employment. Increasing competition following economic openness may also affect unemployment
by forcing some domestic firms out of business.
•
Shortage of human capital: If openness leads to the introduction of more advanced technologies,
or more capital intense production, the full benefits may require more skilled labor than is initially
available.
•
As discussed by Bhagwati and Srinivasan (2002), higher economic openness likely comes with a
greater commitment to low inflation, which should foster growth in the long run and particularly
assist the poor if they are vulnerable to inflation. The transition from high to low inflation may,
however, be associated with higher unemployment in the short run.
•
Globalization may affect government size and, for example, social spending, in turn affecting
poverty. As suggested by the race to the bottom hypothesis ( Sinn, 1997) open economies may
have to compete by lowering taxes in turn followed by less social spending. An opposite
mechanism—termed the compensation hypothesis—has however also been proposed in the
literature ( Rodrik, 1998 and Lindbeck, 1975) where open economies rather develop larger welfare
states as an insurance institution. 6
Stefan Bauschard
Globalization and Poverty Release
60
Reasons globalization reduces poverty in the long-term
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
Some plausible mechanisms suggest that globalization decreases poverty also in the long run.
For example, Kawachi and Wamala (2007) propose that openness can lead to a faster and
geographically broader spread of infectious diseases (such as HIV and the H5N1 avian influenza
virus), which may increase poverty through lower productivity and labor supply. This adverse
effect may well hit the poor relatively more than the rich, and thus illustrates the possibility that
openness can promote growth without decreasing poverty. Globalization may also affect social
norms and lifestyle patterns, such as eating and smoking habits (Medez and Popkin,
2004 and Yach et al., 2007), which may have negative health and productivity effects.
Globalization reduces poverty over the long run
Andres Bergh, Therese Nelson, October 2014, Lund University, Sweden, Research Institute of
Industrial Economics (IFN), Stockholm, Sweden, Is Globalization Reducing Absolute Poverty?
World Development, pp. 42-61
To capture the long-run effects of globalization, we estimate the relationship by considering the differences
over a longer time period, by running the following regression:
equation(2)
ΔPovertyi=α+β1(ΔGlobi)+β2(Xi)+εiΔPovertyi=α+β1(ΔGlobi)+β2(Xi)+εi
Turn MathJax on
In equation (2), ΔPovertyi and ΔGlobi refer to the change in poverty and globalization in country i over a
longer time period. Following Ravallion (2006), we maximize the length of this time period for each
country, and the dependent variable might consequently correspond to changes in poverty over different
periods for different countries. In our setting we focus on changes that take place over 10 or 15 years, but
exclude countries for which we only have information on poverty in two adjacent time periods. To
minimize potential reverse causality, globalization is lagged by one time period. The spell length for
poverty and globalization is the same, and a dummy variable is included to control for the spell length and
to control for time effects.
For example, in our sample there is information on poverty outcomes in Zambia for all four time periods of
the panel. We therefore calculate the change in poverty by taking the poverty level in 2005 minus the
poverty level in 1990. Likewise, we calculate the Zambian change in globalization using a 15-year time
spell. In the Zambian example, this variable is thus derived by using data on globalization in 1985 and
1970.
As a robustness test, we run the same regression on a sample of 15-year periods only, which means
regressing the change in poverty during 1990–2005 on the change in globalization during 1970–85 for all
countries included in the exercise.
This first difference analysis bundles all time-invariant country characteristics into an error component, and
estimates the relationship between globalization and poverty robustly to latent heterogeneity due to timeinvariant effects. Specifications, however, include information on economic growth and initial poverty,
referring to the poverty level in the earliest year in each country’s poverty spell. 17
Stefan Bauschard
Globalization and Poverty Release
61
Table 5 presents the results. The long-run first difference analysis confirms baseline panel findings. The
results that trade restrictions and information flows matter for poverty are confirmed, while the positive
poverty effect of cultural proximity appearing in some of the panel estimations disappears when applying a
long-run perspective. Similarly, despite substantially reducing the country sample analyzed, results are also
more or less the same when using only 15-year spells (columns 11–13).
Stefan Bauschard
Globalization and Poverty Release
62
Globalization Increases Growth
Many economic benefits to globalization
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
There are, undoubtedly, significant potential benefits to globalization. Openness to foreign direct
investment, for instance, can contribute to growth by stimulating domestic capital formation and
improving efficiency and productivity, as a result of greater access to new technologies. At the same time,
openness to capital flows may also increase opportunities for portfolio risk diversification and
consumption smoothing through borrowing and lending; and producers who are able to diversify risks on
world capital markets may invest in riskier (and higher-yield) projects, thereby raising the country’s rate
of economic growth (Obstfeld, 1994). Increased access to the domestic financial system by foreign banks
may raise the efficiency of the intermediation process between savers and borrowers, thereby lowering
markup rates in banking, as well as the cost of investment, and again raising growth rates (Baldwin and
Forslid, 2000). And to the extent that financial openness helps to mitigate asymmetric information
problems and to reduce the fixed costs associated with small-scale lending, it can improve the
opportunities for the poor to access the formal financial system.
Similarly, openness to trade may generate significant gains, both static and dynamic (Agenor, 2004).
Static economic gains, as emphasized by conventional trade theory, refer to the fact that under greater
openness to trade, productive resources tend to be reallocated toward activities where they are used
with comparatively greater efficiency and away from less efficient activities (such as import-substitution
industries or rent-seeking activities). In addition, the literature on endogenous growth has emphasized
the existence of various mechanisms through which trade may generate dynamic gains and thereby affect
the economy’s rate of growth in the long run. In particular, it has been argued that trade openness may
facilitate the acquisition of new inputs, less expensive or higher-quality intermediate goods, and improved
technologies, which enhance the overall productivity of the economy. Romer (1994), for instance, has
argued that in an economy subject to trade restrictions, only a narrow range of specialized intermediate
goods or capital goods can be profitably produced and therefore the full range of technological
possibilities, which rely on a potentially broader range of inputs, cannot be exploited effectively
Globalization increases technology access
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Second, LDCs that open themselves up to international trade and investment gain access
to a much higher level of technology. This confers on LDCs a “latecomer’s advantage”:
rather than bearing the cost of expensive, up-front research and development, poor
countries can import the technology off the shelf. They can incorporate new technology
by importing capital equipment that embodies the latest advances and computers with
the latest software. Subsidiaries of multinational companies also bring with them new
production techniques and employee training that bolster the host nation’s stock of
human capital.
Stefan Bauschard
Globalization and Poverty Release
63
Globalization provides lesser developed countries with capital to grow
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Third, engagement in the global economy provides capital to fuel future growth. Most
LDCs are people-rich and capital-poor. In a few countries in Asia, the level of domestic
savings has been high enough to finance domestic investment, but typically the domestic
pool of savings in an LDC is inadequate. Global capital markets can fill the gap, allowing
poor nations to accelerate their pace of growth. In 1998, $ 166 billion in foreign direct
investment flowed from the advanced economies to the less developed. A poor country
that closes its door or fails to maintain sound domestic policies will forfeit the immense
benefits this capital can bring.
Globalization provides infrastructure needed for growth
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Fourth, openness to the global economy can provide the infrastructure a developing
economy needs for growth. Foreign capital can finance more traditional types of
infrastructure, such as port facilities, power generation, and an internal transportation
network, just as British capital helped to finance America’s network of canals and
railroads in the nineteenth century. But just as importantly, multinational companies
can provide an infrastructure of what could be called “enabling services,” such as
telecommunications, insurance, accounting, and banking. As China and India have
realized, a protected and inefficient service sector weighs down an entire economy,
retarding the development of manufacturing and other industries. LDCs need to shed the
mistaken idea that opening their economies up to international service competition is a
“concession” to be made to gain access to farm and manufacturing markets in the
advanced economies. In reality, liberalizing their service sectors by opening them to
foreign competition is a favor LDCs can do for themselves.
Stefan Bauschard
Globalization and Poverty Release
64
Poverty Impact
Poverty results in exploitation
Jeffrey Sachs, August 22, 2005, Scientific American, “Can Extreme Poverty Be Eliminated?:
Globalization, Poverty, and Foreign Aid,” http://www.scientificamerican.com/article/canextreme-poverty-be-el/ DOA: 1-1-15
Affluent nations have repeatedly plundered and exploited poor countries through slavery,
colonial rule and unfair trade practices. Yet it is perhaps more accurate to say that exploitation is
the result of poverty (which leaves impoverished countries vulnerable to abuse) rather than the
cause of it.
Stefan Bauschard
Globalization and Poverty Release
65
A2: Children in Sweatshops
Reducing poverty reduces children in sweatshops
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has
Globalization Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-hasglobalization-benefited-poor DOA: 1-1-15
Q: Another issue associated with globalization is child labor. Does buying a sweatshirt in the
United States encourage child labor in the country where that was manufactured?
The usual concern that we have about globalization leading to child labor focuses on the fact
that globalization might generate employment opportunities in poor countries. In particular,
consumers in developed coun-tries tend to import a lot of products, such as t-shirts, sweatshirts,
and toys, that are made with low-skilled labor. By increasing the demand for these products, we
are increasing employment opportunities for children in poor countries and this discourages
them from going to school.
But to understand the link between child labor and international trade, we really need to think
about why children work. And one reason why children might work is the story I just told. But
another reason children work is because their families can’t survive without the help of child
work. Studies suggest that the main reason why children are working is the poverty of their
household and the main channels through which trade is affecting whether children work is the
effect of trade on household poverty. In circumstances where trade increases living standards of
poor households, as was the case in Vietnam, households pulled their children away from work
and children started going to school. The liberalization in Vietnam also created greater earning
opportunities for children, but because of improved economic conditions these families no
longer had to rely on children to work.
If children weren’t working in sweatshops, they’d be working in even more
unfortunate conditions
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has
Globalization Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-hasglobalization-benefited-poor DOA: 1-1-15
Q: This suggests that the knee-jerk response of banning children from working in any factory
may not be the most effective way to improve their welfare.
When you look at the images of children working in not-very-safe factories, that is the knee-jerk
reaction. What we need to be asking is, if we banned child labor, if we shut down these
factories, what would these children be doing? We would like to see them attend school, but
that might not be the alternative for these children. They might take a job that is even more
hazardous, like prostitution or stone quarrying, or work in parts of the economy that are even
more informal than sweatshops.
Stefan Bauschard
Globalization and Poverty Release
66
A2: Increased Poverty in the US
Technology, not trade, responsible for increased poverty in the US
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
There is, however, the issue of how much of the rising inequality in the United States can be attributed to
trade, and how much to other factors, specifically to technology. The overview by Pavcnik (2011) captures
the recent consensus:
A large body of research on this topic finds little support that international trade in final goods driven by
relative factor endowment differences can account for much of the observed increase in skill premiums in
developed and developing countries… . First, the Stolper–Samuelson mechanism suggests that increased
relative demand for skilled labour in countries abundant in skilled labour occurs as a result of shifts in the
relative demand for skilled labour across industries… . However, the employment shifts across industries
have not been sufficiently large to account for the large increase in wage inequality. Most of the observed
increase in demand for educated labour in countries such as the United States is driven by increased relative
demand for skilled labour within industries. (p. 242)
There is significant debate on the relative role of trade. Although Krugman (2008) argues against
his own earlier view that trade was a relatively small factor in explaining the rise of inequality
compared to technology, there are also criticisms of the “small role of trade” view by Irwin
(2008), Katz (2008), and Autor (2010). It would be fair to say that skill-biased technical change is
considered to be a major driving force, if not necessarily the dominant force, behind rising
inequality.7 This empirical and policy debate has in turn fed into an emerging literature that goes
beyond simple H–O/Stolper–Samuelson formulations to consider within-industry wage
differentials between heterogeneous firms and how these could be affected by trade.
Poverty can still decline even if inequality increases
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home,
“Globalisation,” pp. 292-7
Potentially the most important transmission channel is growth. High rates of economic growth
such as those experienced in China and India today translate into significant declines in the
incidence of poverty even when the growth pattern is dampened by increased income
inequality.
Stefan Bauschard
Globalization and Poverty Release
67
A2: Globalization Causes a Race to the Bottom
Trade liberalization encourages higher standards and a race to the top
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Critics of globalization warn of a destructive “race to the bottom,” as advanced nations
are forced to weaken labor and environmental standards to compete with less-regulated
producers in developing nations. This theory rests on the assumption that lower
standards give LDCs a significant advantage in attracting global capital and gaining
export markets at the expense of more developed countries. The OECD has found that, in
practice, a lack of core labor standards plays no significant role in attracting foreign
investment or in enhancing export performance. The OECD did find strong evidence
“that there is a positive association over time between sustained trade reforms and
improvements in core standards.”19
In other words, trade liberalization encourages higher standards, not lower standards. If
anything, the real race may be toward the top. For reasons of internal efficiency as well
as public perceptions, multinational companies tend to impose higher standards on their
overseas production plants than those prevailing in local markets, thus raising average
standards in the host country. Free trade and domestic liberalization—and the faster
growth they create—are the best ways to encourage higher standards. As per capita
incomes rise in less developed countries, so does the domestic political demand for
higher standards, and the ability of the productive sector to pay for them. Punishing
LDCs with trade sanctions would only cripple their long-term ability to raise domestic
labor and environmental standards.
Stefan Bauschard
Globalization and Poverty Release
68
Globalization Reduces Inequality
Inequality is going down and these slight improvements enable adaptation.
Goklany 07 – Assistant Director for Science and Technology Policy [Indur, “IS A RICHER-BUTWARMER WORLD BETTER THAN POORER-BUT-COOLER WORLDS?”,
http://www.ce.cmu.edu/~gdrg/readings/2006/02/14/Goklany_160.pdf]
It has been sometimes argued that the extent to which economic growth increases society’s (or
another entity’s) capacity to reduce climate change damages via adaptation or mitigation, this
capacity would depend considerably on the distribution of the determinants of human well
being (such as economic growth) between and within countries. For example, if economic
growth is concentrated on countries that are already wealthy, as sometimes has been claimed
to be the case in recent decades, then today’s poorer countries’ ability to reduce future climate
impacts (due to higher adaptive capacity because of economic growth) could be seriously
overestimated. While there is some merit to this argument, it should be noted that in the recent
past, economic growth in some of the most populous developing countries (e.g., China and
India) has outstripped that in developed countries. As a result, income inequalities have, for
the world population as a whole, shrunk around the world (Sala-i-Martin, 2007; Bhalla, 2002),
as have inequalities between developing and developed countries since the 1950s in terms of
determinants of human well-being. 6 More importantly, according to the IPCC scenarios,
between 1990 and 2100 income growth in developing countries relative to developed countries
will be greater by a factor of 3.6 to 9.4 (IPCC, 2000: 301). Secondly, an examination of Figures 1
and 2 indicates that the dependence of virtually all determinants of human well-being on
income is highly non-linear (generally logarithmic) with their improvements occurring much
more rapidly at the lowest levels of income (Goklany, 2007a). Thus even a small improvement
in income for poor societies (or the poor within a country) could enhance their adaptive
capacity more than a larger increase for richer societies (or the rich). Thirdly, over the long
haul (say, 50 to 100 years), secular improvements in technology could dominate over
increases in income with respect to enhancing adaptive capacity, particularly at low income
levels (see Figure 3). The long term impact of technological change is one reason for the
remarkable declines—99 percent or greater—during the 20th century in mortality and
morbidity rates in the United States for various waterrelated diseases, e.g., typhoid,
paratyphoid, dysentery, malaria and various gastrointestinal diseases) (Goklany, 2007b: 153;
USBC, 1975: 77).
Every indicator of inequality is trending down.
Segerstrom 10 – Stocholm School of Economics professor [Paul, “Naomi Klein and the AntiGlobalization Movement”, 6-23, http://www2.hhs.se/personal/segerstrom/naomiklein.pdf]
Much of what Naomi Klein writes about the marketing behavior of large corporations is true.
But I want to focus on her reason for being concerned. According to Naomi Klein (NL, p.122),
“over the last decade [the 1990s], there has been a massive redistribution of the world’s
resources, with everyone except those in the very highest tier of the corporate elite…getting
less.” There appears to be a general consensus among anti-globalization activists that the world
we live in is characterized by disturbing increases in poverty and income inequality. But is this
Stefan Bauschard
Globalization and Poverty Release
69
really the case? Economists have devoted a lot of energy to measuring poverty and income
inequality in the world. I want to discuss at length the influential paper “The World Distribution
of Income: Falling Poverty and…Convergence, Period” by Xavier Sala-i-Martin (2006), an
economist at Columbia University. Sala-i-Martin (2006) uses aggregate Gross Domestic Product
data and within-country income shares for the period 1970-2000 to assign a level of income to
each person in the world. All income data used are purchasing-power-parity-adjusted since
people tend to buy goods where they live and one wants to compare incomes across people
who live in different countries. Also all income levels are converted to 1996 constant US dollars
and are thus corrected for inflation. Sala-i-Martin estimates a densit function for the world
distribution of income. The implications for poverty and income inequality are surprising. Sala-iMartin finds that the percentage of people in the world with incomes below $1 per day (one
commonly used measure of poverty) has fallen from 15.4% in 1970 to 5.7% in 2000 and the
percentage of people in the world with incomes below $2 per day (another commonly used
measure of poverty) has fallen from 29.6% in 1970 to 10.6% in 2000. The recent period of
globalization has been associated with a substantial decrease in the fraction of the world
population living in poverty (using either measure). Indeed, the entire distribution of income in
the world has shifted significantly to the right (see Sala-i-Martin’s Figure 4). 5 Turning to income
inequality, Sala-i-Martin uses eight different popular indexes to measure income inequality .
All indexes show a reduction in global income inequality between 1980 and 200 0. Withincountry income inequality has increased slightly during the sample period but not enough to
offset the substantial reduction in across country disparities. 6 The reduction in global income
inequality is driven by China, where 1.2 billion people (20% of the world population) have
benefited from high economic growth rates since 1978. If one removes China from the data,
then global income inequality would be roughly constant over time.
Reject nightmarish depictions of free markets; the opposite is the true.
Neoliberalism enables huge gains in prosperity across-the-board.
Butters 7 – Ph.D., President – Nebraska Council on Economic Education, Assistant Professor of
Economics – University of Nebraska at Lincoln [Roger B. “Teaching the Benefits of Capitalism”.
http://www.hillsdale.edu/images/userImages/afolsom/Page_6281/Butters.pdf]
There is a reason J.K. Rowling wrote Harry Potter: Capitalism. Rowling lived in a society that
defines and enforces property rights, promulgates the rule of law, relies on competitive markets
and fosters entrepreneurial activity. All these together created the incentive for an out of work,
single mother to sit down in a café and record her thoughts knowing full well that if she created
something of value that value would accrue to her and enable her to provide for herself and her
loved ones. Those incentives made a poor woman into the richest woman in the world and a
celebrated author that enriched and created wealth for millions of readers throughout the
world. It is fitting contrast to the traditional Bogeymen of capitalism; wealthy elites
unconcerned with the plight of the poor. Texts and manuals are replete with political cartoons
from the 1920s illustrating fat cats smoking rolled money, giant octopi stretching over the land
to lay claim to everything or, more offensively, the huddled masses begging for the drippings
and scraps from the table of the rich. The reality , again, is exactly the opposite . In a market‐
based society, where property is secure it is impossible to amass wealth without creating
wealth for everyone else .
Stefan Bauschard
Globalization and Poverty Release
70
Higher incomes among the rich decrease poverty because it leads to more gains
for the poor.
Norton 2 – Aldeen Professor of Business – Wheaton College [Seth W. Fall,
http://www.cato.org/pubs/journal/cj22n2/cj22n2-5.pdf]
The pattern that emerges in Table 3 is that the components of the HPI [Human Poverty
Index] are mostly negatively related to the incomes of the poor and the incomes of the rich,
as well as to the geographic variables. Consequently, higher income to either group tends to
reduce poverty rates. The most salient feature in Table 3 is the fact that the coefficients for
the rich incomes have a stronger effect on poverty reduction than the coefficients for the
poor incomes. That observation is true for all cases. Restricted coefficient estimates (Wald’s)
tests reveal that the coefficients for the rich income category are (absolutely) greater than
the coefficients for the poor income category for survival, illiteracy, and undernourished
children. The significance tests for access to safe water and access to health services indicate
that while those measures are more sensitive to the incomes of the rich than to those of the
poor, the differences are not statistically significant. More generally and more importantly,
there is no evidence that the income gains to the rich do not benefit the poor, at least as
evidenced by broad and well-established measures of poverty. The results for
undernourished children merit special attention. The coefficient for the rich incomes is
negative and significant, indicating that an increase of rich people’s incomes reduces this
measure of children’s malnutrition. The coefficient for poor peoples’ incomes is slightly
positive but not significant. Presumably, the estimate reflects multicollinearity. Regressing
the undernourishment variable on just the incomes of the poor does lead to a reduction in
the proportion of undernourished children. However, the comparable simple regression
estimate for the incomes of the rich is still substantially greater.2 Thus, the easiest
interpretation is that the relationship between the incomes of the rich and undernourished
children is negative and robust, but the relationship between the incomes of the poor and
reduced children’s malnutrition is weaker and perhaps nonexistent. [Spelling-out of Human
Poverty Index not in original.]
Historical data and developments prove neoliberalism isn't the root cause of
economic inequality or crises.
Norfield 12 – PhD Candidate in Economics at SOAS - University of London [Tony. "‘The most
detailed account available’ – more praise for ‘The Failure of Capitalist Production’,"
http://plutopress.wordpress.com/2012/03/22/the-most-detailed-account-available-morepraise-for-the-failure-of-capitalist-production/]
Writing on the Economics of Imperialism blog, Tony Norfield praises Andrew Kliman’s The
Failure of Capitalist Production as “probably the most detailed, and effective, assessment of the
economic statistics behind what happened [during the economic crisis] that is available”.
Norfield writes: The Failure of Capitalist Production has two main theses. Firstly, it argues that
the major post-war crisis of the 1970s did not result in enough destruction of capital values to
provide the basis for sustained accumulation thereafter. This meant that profitability showed
little, if any, sign of recovery and economic growth remained weak. This, in turn, set the stage
for credit-driven, speculative bubbles, not least the biggest and most recent one that has burst
with such intractable consequences. Secondly, and following from this analysis, it argues that
the common radical arguments about the nature of the crisis are myths. ‘ Neoliberal’
Stefan Bauschard
Globalization and Poverty Release
71
economic policies did not cut real wages and did not divert resources into finance and away
from production. A close look at the data for the US finds no evidence for these assertions.
Instead, the slow growth of incomes and investment is shown to be a consequence of
problems with capital accumulation, problems that resulted from inadequate profitability… His
case is well made, and is convincing. These are critical points for an attack on the notion that
mistaken government policies – or a ‘neoliberal coup’, as some writers suggest – are the root
cause of the crisis. Kliman shows that the deterioration in profitability, investment, growth,
etc, began in the late 1960s or in the 1970s, prior to the beginnings of the ‘neoliberal’ era that
is usually dated from 1979-81 with the Reagan (US) and Thatcher (UK) political regimes.
Global free trade volume empirically best measure for economic equity
Perry 12/31/13 http://www.aei-ideas.org/2013/12/chart-of-the-greatest-and-mostremarkable-achievement-in-human-history-and-one-you-probably-never-heardabout/comment-page-1/ Dr. Mark J. Perry is a full professor of economics at the Flint campus of
The University of Michigan, where he has taught undergraduate and graduate courses in
economics and finance since 1996. Starting in the fall of 2009, Perry has also held a joint
appointment as a scholar at The American Enterprise Institute.
It turns out that between 1970 and 2010 the worst poverty in the world – people who live on
one dollar a day or less – that has decreased by 80 percent (see chart above). You never hear
about that. It’s the greatest achievement in human history, and you never hear about it. 80
percent of the world’s worst poverty has been eradicated in less than 40 years. That has never,
ever happened before. So what did that? What accounts for that? United Nations? US foreign
aid? The International Monetary Fund? Central planning? No. It was globalization, free trade,
the boom in international entrepreneurship. In short, it was the free enterprise system,
American style , which is our gift to the world. I will state, assert and defend the statement that
if you love the poor, if you are a good Samaritan, you must stand for the free enterprise
system, and you must defend it, not just for ourselves but for people around the world. It is
the best anti-poverty measure ever invented.
Stefan Bauschard
Globalization and Poverty Release
72
A2: Globalization Increases Inequality
An increasing inequality does not mean an increase in poverty
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has
Globalization Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-hasglobalization-benefited-poor DOA: 1-1-15
It’s very country-specific, and it depends on where countries started off and on the nature of
trade reform. Oftentimes, when we try to look at what globalization has done for the poor, we
focus on workers in developing countries: what types of factories they work in, and what wages
they earn. We often find that wages are lower than similar workers would be making in a
country like the United States and working conditions are worse. But another way of looking at
the consequences of globalization for poor countries is to actually look at how workers in these
countries were doing prior to globalization and compare that to how they are doing now.
Recent research has focused on how trade can affect inequality and poverty by affecting relative
prices of goods and wages of individuals. And what that literature has found in India and in
many Latin American countries is that inequality between the more educated and less educated
has increased. The extent of the increase varies somewhat from country to country, but the
evidence suggests that the more educated are benefiting more from the trade reforms than the
less educated.
But greater inequality doesn’t necessarily mean greater poverty. The effect that trade has on
less educated laborers in these developing countries depends in part on where they are
employed and how mobile they are across sectors. Workers, both educated and less educated,
in export-oriented sectors tend to benefit. However, workers who were employed in sectors
that were initially shielded by higher tariffs experienced a drop in relative wages as tariffs were
eliminated. Many countries, such as Mexico and Colombia, had shielded industries that
employed a high share of less educated workers. When the tariffs were eliminated, these
unskilled workers were disproportionately affected by declines in industry wages. These are
short-term costs of globalization, and over time you would hope that these workers would be
able to move toward the exporting sectors and share in the benefits of globalization. But that is
not occurring as fast as we would like because worker mobility in many of these countries is
quite constrained.
East Asian growth resulted in inequality reduction AND poverty reduction
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
The East Asia experience was crucial to the policy debates of the 1970s and 1980s and to the
turn in policies that one began to see in the rest of the developing word from the 1980s and
1990s onward. The 1960s and 1970s saw what has been dubbed the “East Asia miracle” of
growth with equity. Not only did this group of countries have historically high growth rates, and
higher growth rates than their contemporaries, they also managed growth with falling levels of
Stefan Bauschard
Globalization and Poverty Release
73
inequality. The combination of high growth and falling inequality meant a sterling record in
poverty reduction as well.
Relative inequality is a distinct issue from 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
In this paper, I shall limit myself to interpreting globalization simply as openness to foreign trade and
capital flows such as Foreign Direct Investment (FDI). I shall ignore here the important issues arising from
the devastation caused to fragile economies by billions of dollars of volatile short-term capital stampeding
around the globe in herd-like movements, or the substantial poverty-reducing potential of international
(unskilled) labor flows from poor to rich countries (even if allowed in temporary and regulated doses). By
poverty, I shall refer to absolute poverty in low-income countries. A large part of the discussion around
globalization is around its effect on relative inequality, which will largely be skipped in this paper.
Agreement that globalization increases inequality but reduces poverty
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 p. 88
Despite the increasing interests in the influence of globalization on economic growth and inequality,
there are not many empirical studies examining the links between them. The limited empirical
evidence is a result of a lack of theoretical development, limited data and unsatisfactory measures of
globalization. In recent years, several researchers have been developing methods of measurement of
globalization to test the relationships mentioned. The limited evidence also suggests contradictory
views on the issue. For instance, some argue that globalization provides benefits by enhancing
economic development and the reducing inequality of people with high economic opportunity, while
others are against globalization due to its restricted beneficiaries. In general there is an agreement
that globalization increases inequality but it reduces poverty while its regional concentration
increases.
Stefan Bauschard
Globalization and Poverty Release
74
A2: Globalization Reduces Wages
By reducing prices, globalization creates real value to wage gains
Daniel Griswold, CATO, 2000, The Blessings and Challenges of Globalization, DOA: 1-2-15,
http://www.cato.org/publications/commentary/blessings-challenges-globalization
The greatest beneficiaries of globalization are the long-suffering consumers in those
nations that had been “protected” from global competition. Globalization expands the
range of choice, improves product quality, and exerts downward pressure on prices. It
delivers an immediate gain to workers by raising the real value of their wages. It
transfers wealth from formerly protected producers to newly liberated consumers, with
the gains to consumers exceeding the loss to producers because the deadweight losses to
the economy are recaptured through efficiency gains. The greatest beneficiaries of
globalization are the long-suffering consumers in those nations that had been
“protected” from global competition. Globalization expands the range of choice,
improves product quality, and exerts downward pressure on prices. It delivers an
immediate gain to workers by raising the real value of their wages. It transfers wealth
from formerly protected producers to newly liberated consumers, with the gains to
consumers exceeding the loss to producers because the deadweight losses to the
economy are recaptured through efficiency gains
Most studies support the claim that globalization boosts development and
reduces poverty
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
Globalization being a contemporary issue has attracted a handful of studies, most of them
revealed that globalization can trigger economic development, sustain growth, increase trade as
well as alleviate poverty to a very large extent. This is in line with the initial intention that
openness which is a proxy for globalization should encourage improvement in international trade,
labour mobility, FDI, technology improvement, policy transfer and also capital inflow. All these
would in turn foster economic development as well as a reduction in poverty level of the people.
Globalization being a coin with two sides as mentioned earlier, can either benefit or cost a nation.
In line with this statement, Lola (2009) stated that globalization carries benefits and opportunities
as well as risks and costs. She further noted that developed countries like United State of America
(USA), Japan and United Kingdom (UK) are benefiting greatly thereby leaving the less
developed countries particularly African countries with the costs and risks of globalization.
Stefan Bauschard
Globalization and Poverty Release
75
A2: Globalization Doesn’t Benefit Africa
Instability causes poverty in Africa, not globalization
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
Those who are more dubious of global processes point out that in the same decades, poverty has
remained stubbornly high in sub-Saharan Africa, as Chen and Ravalllion (2004) have estimated. During
1981-2001 the percentage of people living below the poverty line of $1.08 per day (at 1993 purchasing
parity) increased in sub-Saharan Africa from about 42% to about 46%.Abs But this may have little to do
with globalization, and more to do with unstable or failed political regimes, wars, and civil conflicts which
afflicted several countries in Africa; if anything, such instability only reduced their extent of globalization,,
as it scared off many foreign investors and traders.
Globalization hasn’t benefitted Africa because of mismanagement, not because
of anything inherent about it
Derrick Owusu-Kodu, April 7, 2014, Poverty and the Impacts of Globalization on the African
Economy,
http://www.africandynamo.com/2014/04/poverty-and-impacts-of-globalizationon.html#mM4cowGoocBOQhUe.99 DOA: 1-2-15
In many ways, Globalization could have helped accelerate development throughout the
Continent, but conflicts, wars, corruption, greed, an unstable political system, lack of competent
human capital and innovations, and cultural practices which hinder development continue to
stifle economic and social progress. These are the manifestations of the overall trend of poor
governance and mismanagement on the African continent. The end results of this trend are an
avalanche impeding the Continent’s capacity to progress in it's handling of the modern
economic landscape, and manipulate the impacts of globalization to the benefit of its citizenry.
Africa lags because its markets are closed
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Poor nations that have fallen further behind the rich nations are almost uniformly those
that have clung to state-directed and inward- oriented economic policies. Sub-Saharan
Africa has lagged behind the rest of the world in economic growth in significant part
because its markets remain among the most closed in the world. Its governments have
neglected domestic infrastructure such as roads and have distorted their domestic
economies with subsidies, high taxes, and regulations. Granted, many African nations
must also bear the burden of civil and tribal strife, poor soil, and inaccessible geography.
Stefan Bauschard
Globalization and Poverty Release
76
But domestic economic policy must be considered a key variable in explaining the
region’s failure to develop. Those African nations that have implemented more open,
stable, and market-friendly policies in the last decade—such as Uganda, Botswana, and
Mauritius—have achieved growth rates exceeding those of the advanced nations.
This is because there are many other barriers to poverty reduction in Africa
Nina Pavcnik, Associate Professor of Economics, Dartmouth College, 2009, How Has
Globalization Benefitted the Poor?, Yale Insights, http://insights.som.yale.edu/insights/how-hasglobalization-benefited-poor DOA: 1-1-15
Q: Why have some regions, such as parts of Africa, not benefited as much from globalization?
In some countries in Africa, there are so many factors that work against trade. One of the
reasons why many companies don’t go into some of those countries is lack of political and
economic stability. The risks of doing business are much higher. That precludes them from
benefiting from globalization. Trade, alone, won’t lift those countries. Many other changes need
to occur.
Stefan Bauschard
Globalization and Poverty Release
77
Protected Globalization Good
Globalization does not causes poverty, but failure to engage with it properly
causes poverty
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
This book focuses on the mechanisms whereby globalization contributes to global poverty and
inequality through the extension of global production and trading networks. As we shall see,
there is widespread recognition that globalization may induce greater inequality. But the idea
that it might cause greater poverty runs against much of current conventional wisdom. This, as
we shall see, argues that inequality and poverty are caused not so much by the workings of the
global economy as by the failure to engage positively with globalization. Kaplinsky, Raphael
(2013-04-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle
Locations 662-666). Wiley. Kindle Edition.
Globalization reduces poverty IF supporting policies are in place
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
The first part of the paper summarizes the channels and transmission mechanisms, such as greater openness
to trade and foreign investment, through which the process of globalization could affect poverty in the
developing world. Using a panel data of 35 developing countries from 1990 to 2004 an empirical
examination is carried out of the impact of real and financial integration on the head count ratio and
poverty gap. Results suggest that, on an aggregate level, capital flows via FDI have had an adverse effect
and real trade-induced income growth had a favorable effect on the incidence of poverty. On the other
hand, a policy of excessive openness to external trade without complementary support mechanisms was
found to be negatively related to the depth of poverty in developing countries.
China grew because it protected its industries from globalization
Dani Rodrik, Spring 2012, This article is adapted from the author’s book The Globalization
Paradox: Democracy and the World Economy, Norton, 2011,America’s Quarterly, “Global
Poverty Amid Plenty: Getting Globalization Right,” http://americasquarterly.org/rodrik DOA: 1-1-15
Dani Rodrik is Rafiq Hariri Professor of International Political Economy at the John F. Kennedy
School of Government at Harvard University.
China’s experience offers compelling evidence that globalization can be a great boon for poor nations. Yet
it also presents the strongest argument against the reigning orthodoxy in globalization, which emphasizes
financial globalization and deep integration through the World Trade Organization (WTO). China’s ability
to shield itself from the global economy proved critical to its efforts to build a modern industrial base,
which would in turn be leveraged through world markets.
Stefan Bauschard
Globalization and Poverty Release
78
Since 1978, income per capita in China has grown at an average rate of 8.3 percent per annum—a rate that
implies a doubling of incomes every nine years. Thanks to this rapid economic growth, between 1981 and
2008 the poverty rate in China (the percent of the population below the $1.25-a-day poverty line) fell from
84 percent to 13 percent, much of it from reducing rural poverty. 5 This meant a whopping 662 million
fewer Chinese in extreme poverty, a number that accounts for virtually the entire drop in global poverty
over the same period.
During the same period, China transformed itself from near autarky to the most feared competitor on world
markets. That this happened in a country with a complete lack of private property rights (until recently) and
run by the Communist Party only deepens the mystery.
China’s big break came when Deng Xiaoping and other post-Mao leaders decided to trust markets instead
of central planning. But their real genius lay in their recognition that the market-supporting institutions they
built, most of which were sorely lacking at the time, would have to possess distinctly Chinese
characteristics.
China’s economy was predominantly rural in 1978. A Western-trained economist would have
recommended abolishing central planning and removing all price controls. Yet without a central plan urban
workers would have been deprived of their cheap rations and the government of an important source of
revenue, resulting in masses of disgruntled workers in the cities and the risk of hyperinflation.
The Chinese solution to this conundrum was to graft a market system on top of the plan.
Communes were abolished and family farming restored, but land remained state property. Obligatory grain
deliveries at controlled prices were kept in place, but once farmers had fulfilled their state quota they were
now free to sell their surplus at market-determined prices. This dual-track regime gave farmers marketbased incentives and yet did not deprive the state of revenue nor deprive urban workers of cheap food. 6
Agricultural productivity rose sharply, setting off the first phase of China’s post-1978 growth.
Another challenge was how to provide a semblance of property rights when the state remained the ultimate
owner of all property. Privatization would have been the conventional route, but it was ruled out by the
Chinese Communist Party’s ideology.
Once again, an innovation came to the rescue. Township and village enterprises (TVEs) proved remarkably
adept at stimulating domestic private investment. They were owned not by private entities or the central
government, but by local governments (townships or villages). TVEs produced virtually the full gamut of
products, everything from consumer goods to capital goods, and spearheaded Chinese economic growth
from the mid-1980s until the mid-1990s. The key to the success of TVEs was the self-interest of local
governments, which would reap substantial income from their equity stake in the enterprises.
China’s strategy to open its economy to the world also diverged from received theory. The Chinese
leadership resisted the conventional advice to remove trade barriers. Such an action would have forced
many state enterprises to close without doing much to stimulate new investments in industrial activities.
Employment and economic growth would have suffered, threatening social stability.
The Chinese decided to experiment with alternative mechanisms that would not create too much pressure
on existing industrial structures. While state trading monopolies were dismantled relatively early (starting
in the late 1970s), what took their place was a complex and highly restrictive set of tariffs, nontariff barriers
and licenses restricting imports. These were not substantially relaxed until the early 1990s.
In particular, China relied on Special Economic Zones (SEZs) to generate exports and attract foreign
investment. Enterprises in these zones operated under different rules than those that applied in the rest of
the country; they had access to better infrastructure and could import inputs duty free. The SEZs generated
incentives for export-oriented investments without pulling the rug out from under state enterprises.
Stefan Bauschard
Globalization and Poverty Release
79
What fueled China’s growth, along with these institutional innovations, was a dramatic productive
transformation.
The Chinese economy latched on to advanced, high-productivity products that no one would expect a poor,
labor-abundant country to produce, let alone export. By the end of the 1990s, China’s export portfolio
resembled that of a country with an income-per-capita level at least three times higher than China’s.7
Foreign investors played a key role in the evolution of China’s industries. They created the most productive
firms, introduced new technology to the economy, and became the drivers of the export boom. The SEZs,
where foreign producers could operate with good infrastructure and with a minimum of hassles, deserve
considerable credit.
But if China welcomed foreign companies, it always did so with the objective of fostering domestic
capabilities. It used a number of policies to ensure that technology transfer would take place and that strong
domestic players would emerge. Early on, they relied predominantly on state-owned national champions.
Later, the government used a variety of incentives and disincentives to foster joint ventures with domestic
firms (as in mobile phones and computers) and expand local content (as in autos). Cities and provinces
were given substantial freedoms to fashion their own policies of stimulation and support, which led to the
creation of industrial clusters in Shanghai, Shenzhen, Hangzhou, and elsewhere. 8
Many of these early policies would have run afoul of WTO rules that ban export subsidies and prohibit
discrimination in favor of domestic firms—if China had been a member of the organization. Chinese policy
makers were not constrained by any external rules in their conduct of trade and industrial policies and could
act freely to promote industrialization.
By the time China did join the WTO, in 2001, it had had created a strong industrial base, much of which
did not need protection or nurturing. China substantially reduced its tariffs in preparation for WTO
membership, bringing them down from the high levels of the early 1990s (averaging around 40 percent) to
single digits in 2001. Many other industrial policies were also phased out.
However, China was not yet ready to let the push and pull of global markets determine the fate of its
industries. It began to rely increasingly on a competitive exchange rate to effectively subsidize these
industries. By intervening in currency markets and keeping short-term capital flows out, the government
prevented its currency (renminbi) from appreciating, which would have been the natural consequence of
China’s rapid economic growth.
Explicit industrial policies gave way to an implicit industrial policy conducted by way of currency policy.
Asia’s economic experience violates stereotypes and yet offers something for everyone. In effect, it acts as
a reflecting pool for the biases of the observer. If you think unleashing markets is the best way to foster
economic development, you will find plenty of evidence for that. If you think markets need the firm,
commanding hand of the government, well, there is much evidence for that too.
Regulated globalization can work
Dani Rodrik, Spring 2012, This article is adapted from the author’s book The Globalization
Paradox: Democracy and the World Economy, Norton, 2011,America’s Quarterly, “Global
Poverty Amid Plenty: Getting Globalization Right,” http://americasquarterly.org/rodrik DOA: 1-1-15
Dani Rodrik is Rafiq Hariri Professor of International Political Economy at the John F. Kennedy
School of Government at Harvard University.
Stefan Bauschard
Globalization and Poverty Release
80
Globalization as an engine for growth? East Asian countries are a case in point. Globalization
needs to be tamed? Ditto. However, if you leave aside these stale arguments and listen to the
real message that emanates from the success of the region, you find that what works is a
combination of states and markets. Globalization is a tremendously positive force, but only if
you are able to domesticate it to work for you rather than against you.
Globalization reduces inequality where the right policies are in place
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
These structural factors have to be seen in conjunction with the perspective of Lewis (1976) that
initial differences in advantage can be magnified by the appearance of economic opportunity.
Thus, perhaps the best interpretation of the East Asia experience is being supportive of both a
structuralist view and a neoclassical perspective based on the H–O model. The land reforms and
the wide spread of education simultaneously reduced surplus labor while at the same time
making the distribution of assets (land and human capital) much more equal. The stage was thus
set for an opening up and integration into the global economy to deliver growth with equity.
However, the outcome was dependent on the initial conditions at the time of the opening up,
conditions that need not necessarily hold in other countries, or at other time periods.
Redistribution solves inequality
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
20.3 and 20.4 of this chapter discussed the skill bias that characterizes technical progress today.
Demand for skilled labor is rising globally, and openness in trade and investment is transmitting
this global demand to the country level. In the absence of policy intervention, these market
processes will lead to rising inequality within countries. As discussed earlier, closing off
economies in order to block this channel of inequality increase is neither feasible nor desirable.
However, Asian economies have tended not to counteract these pressures, either by addressing
structural inequalities in skill levels, or by redistributing market income sufficiently to mitigate
inequality. However, Latin American economies have purposively redistributed income through
cash transfers and have done it in such a way as to help the buildup of human capital through
conditioning these transfers on keeping children in school.
Progressive taxation solves inequality
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
The additional expenditure on conditional cash transfers requires revenues, and the
progressivity of the tax system is another major determinant of how globalization related
increases in inequality can be mitigated. Progressivity is also important in addressing the rise in
very high incomes the world over, especially in Asia. Asian tax systems do not generally score
Stefan Bauschard
Globalization and Poverty Release
81
highly on progressivity. In fact, it is argued that raising progressivity of taxation would have a
greater impact on inequality in Asia than elsewhere in the world.38
Leveraging globalization on top of structural changes solves poverty
OECD Insights, May 4, 2012, Getting Globalization Right: China Marches to Its Own Beat,
http://oecdinsights.org/2012/05/04/getting-globalization-right-china-marches-to-its-own-beat/
DOA: 1-1-15
China’s experience offers compelling evidence that globalization can be a great boon for poor nations. Yet
it also presents the strongest argument against the reigning orthodoxy in globalization, which emphasizes
financial globalization and deep integration through the World Trade Organization (WTO). China’s ability
to shield itself from the global economy proved critical to its efforts to build a modern industrial base,
which would in turn be leveraged through world markets.
Since 1978, income per capita in China has grown at an average rate of 8.3 percent per annum—a rate that
implies a doubling of incomes every nine years. Thanks to this rapid economic growth, between 1981 and
2008 the poverty rate in China (the percent of the population below the $1.25-a-day poverty line) fell from
84 percent to 13 percent, much of it from reducing rural poverty. This meant a whopping 662 million fewer
Chinese in extreme poverty, a number that accounts for virtually the entire drop in global poverty over the
same period.
During the same period, China transformed itself from near autarky to the most feared competitor on world
markets. That this happened in a country with a complete lack of private property rights (until recently) and
run by the Communist Party only deepens the mystery.
China’s big break came when Deng Xiaoping and other post-Mao leaders decided to trust markets instead
of central planning. But their real genius lay in their recognition that the market-supporting institutions they
built, most of which were sorely lacking at the time, would have to possess distinctly Chinese
characteristics.
China’s economy was predominantly rural in 1978. A Western-trained economist would have
recommended abolishing central planning and removing all price controls. Yet without a central plan urban
workers would have been deprived of their cheap rations and the government of an important source of
revenue, resulting in masses of disgruntled workers in the cities and the risk of hyperinflation.
The Chinese solution to this conundrum was to graft a market system on top of the plan.
Communes were abolished and family farming restored, but land remained state property. Obligatory grain
deliveries at controlled prices were kept in place, but once farmers had fulfilled their state quota they were
now free to sell their surplus at market-determined prices. This dual-track regime gave farmers marketbased incentives and yet did not deprive the state of revenue nor deprive urban workers of cheap
food. Agricultural productivity rose sharply, setting off the first phase of China’s post-1978 growth.
Another challenge was how to provide a semblance of property rights when the state remained the ultimate
owner of all property. Privatization would have been the conventional route, but it was ruled out by the
Chinese Communist Party’s ideology.
Once again, an innovation came to the rescue. Township and village enterprises (TVEs) proved remarkably
adept at stimulating domestic private investment. They were owned not by private entities or the central
government, but by local governments (townships or villages). TVEs produced virtually the full gamut of
products, everything from consumer goods to capital goods, and spearheaded Chinese economic growth
Stefan Bauschard
Globalization and Poverty Release
82
from the mid-1980s until the mid-1990s. The key to the success of TVEs was the self-interest of local
governments, which would reap substantial income from their equity stake in the enterprises.
China’s strategy to open its economy to the world also diverged from received theory. The Chinese
leadership resisted the conventional advice to remove trade barriers. Such an action would have forced
many state enterprises to close without doing much to stimulate new investments in industrial activities.
Employment and economic growth would have suffered, threatening social stability.
The Chinese decided to experiment with alternative mechanisms that would not create too much pressure
on existing industrial structures. While state trading monopolies were dismantled relatively early (starting
in the late 1970s), what took their place was a complex and highly restrictive set of tariffs, nontariff barriers
and licenses restricting imports. These were not substantially relaxed until the early 1990s.
In particular, China relied on Special Economic Zones (SEZs) to generate exports and attract foreign
investment. Enterprises in these zones operated under different rules than those that applied in the rest of
the country; they had access to better infrastructure and could import inputs duty free. The SEZs generated
incentives for export-oriented investments without pulling the rug out from under state enterprises.
What fueled China’s growth, along with these institutional innovations, was a dramatic productive
transformation.
The Chinese economy latched on to advanced, high-productivity products that no one would expect a poor,
labor-abundant country to produce, let alone export. By the end of the 1990s, China’s export portfolio
resembled that of a country with an income-per-capita level at least three times higher than China’s.
Foreign investors played a key role in the evolution of China’s industries. They created the most productive
firms, introduced new technology to the economy, and became the drivers of the export boom. The SEZs,
where foreign producers could operate with good infrastructure and with a minimum of hassles, deserve
considerable credit.
But if China welcomed foreign companies, it always did so with the objective of fostering domestic
capabilities. It used a number of policies to ensure that technology transfer would take place and that strong
domestic players would emerge. Early on, they relied predominantly on state-owned national champions.
Later, the government used a variety of incentives and disincentives to foster joint ventures with domestic
firms (as in mobile phones and computers) and expand local content (as in autos). Cities and provinces
were given substantial freedoms to fashion their own policies of stimulation and support, which led to the
creation of industrial clusters in Shanghai, Shenzhen, Hangzhou, and elsewhere.
Many of these early policies would have run afoul of WTO rules that ban export subsidies and prohibit
discrimination in favor of domestic firms—if China had been a member of the organization. Chinese policy
makers were not constrained by any external rules in their conduct of trade and industrial policies and could
act freely to promote industrialization.
By the time China did join the WTO, in 2001, it had created a strong industrial base, much of which did not
need protection or nurturing. China substantially reduced its tariffs in preparation for WTO membership,
bringing them down from the high levels of the early 1990s (averaging around 40 percent) to single digits
in 2001. Many other industrial policies were also phased out.
However, China was not yet ready to let the push and pull of global markets determine the fate of its
industries. It began to rely increasingly on a competitive exchange rate to effectively subsidize these
industries. By intervening in currency markets and keeping short-term capital flows out, the government
prevented its currency (renminbi) from appreciating, which would have been the natural consequence of
China’s rapid economic growth.
Stefan Bauschard
Globalization and Poverty Release
83
Explicit industrial policies gave way to an implicit industrial policy conducted by way of currency policy.
Asia’s economic experience violates stereotypes and yet offers something for everyone. In effect, it acts as
a reflecting pool for the biases of the observer. If you think unleashing markets is the best way to foster
economic development, you will find plenty of evidence for that. If you think markets need the firm,
commanding hand of the government, well, there is much evidence for that too.
Globalization as an engine for growth? East Asian countries are a case in point. Globalization needs to be
tamed? Ditto. However, if you leave aside these stale arguments and listen to the real message that
emanates from the success of the region, you find that what works is a combination of states and markets.
Globalization is a tremendously positive force, but only if you are able to domesticate it to work for you
rather than against you.
You become what you produce. That is the inevitable fate of nations. Specialize in commodities and raw
materials, and you will get stuck in the periphery of the world economy. You will remain hostage to
fluctuations in world prices and suffer under the rule of a small group of domestic elites.
If you can push your way into manufactured and other modern tradable products, you may pave a path
toward convergence with the world’s rich countries. You will have greater ability to withstand swings in
world markets, and you will acquire the broad based, representative institutions that a growing middle class
demands, instead of the repressive ones that elites need to hide behind.
Globalization accentuates the dilemma because it makes it easier for countries to fall into the commodities
trap.
The international division of labor makes it possible for you to produce little else besides commodities, if
that is what you choose to do. At the same time, globalization greatly increases the rewards of the
alternative strategy, as the experiences of Japan, South Korea, Taiwan, and China amply show.
Sustained poverty reduction requires economic growth. A government committed to economic
diversification and capable of energizing its private sector can spur growth rates that would have been
unthinkable in a world untouched by globalization. The trick is to leverage globalization through a
domestic process of productive transformation and capacity-building.
Poor benefit from globalization when there are reforms that support them
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
The poor are more likely to share in the gains from globalization when there are complementary policies
in place (Harrison, 2006). The studies on India and Colombia suggest that globalization is more likely to
benefit the poor if trade reforms are implemented in conjunction with reducing impediments to labor
mobility. In Zambia, poor farmers are only expected to benefit from greater access to export markets if
they also have access to credit, technical know-how, and other complementary inputs. The studies also
point to the importance of social safety nets. In Ethiopia, if food aid had not been well targeted,
globalization would have had little impact on the poor.
Progressive taxation and public services can reduce inequality
Stefan Bauschard
Globalization and Poverty Release
84
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
This dangerous trend can be reversed. The good news is that there are clear examples of
success, both historical and current. The US and Europe in the three decades after World War II
reduced inequality while growing prosperous. Latin America has significantly reduced inequality
in the last decade – through more progressive taxation, public services, social protection and
decent work.
Stefan Bauschard
Globalization and Poverty Release
85
Democratic Globalization Good
Democratic globalization is key to check warfare, poverty, and environmental
destruction
Serrano, Philippine Rural Reconstruction Movement, 1994 [Isagani R., “Humanity
in Trouble but Hopeful,” Citizens: Strengthening Global Civil Society, eds. Oliveira
& Tandon, p. 363-365]
Citizen Participation
In light of the failure of both the state and the market, citizens-as individuals and, even better, organized-exerting efforts to democratize both state and market and doing
things by themselves must occupy an ever expanding public space to influence the processes and outcomes of development at all levels.
As the Human Development Report 1993 puts it, people's participation is becoming the central issue of our time. Ironically, it was also the rallying theme of social
During the past three decades, authoritarian regimes
have fallen one after the other. In all these regime changes and democratic transitions,
movements of citizens cutting across social classes have played a major part. Indeed, we now
see the worldwide emergence of people's organizations demanding on behalf of every citizen
more and more say in shaping our own lives.
Many people are now fed up with the performance of both state and market and are
impatient to see big changes happening without further delay. Aware of the weaknesses of state and market and
refusing the continued domination by both, quite a few courageous citizens want to take control, with or without
any clear alternative agenda of their own. There is so much human energy being generated;
if it is not harnessed in a positive direction, it can result in a kind of polarizing civic energy
and a scenario of anarchy equal to the worst achieved in wars among nations and market
forces.
Participation goes beyond involvement in this or that project. Nor is it limited to people
being able to pressure government for changes. In its full sense, participation means that people are able to control events and
movements in the 1960s. Many things have happened since then.
processes that shape their lives. By this definition, the extent and quality of participation by citizens in the economic, social, cultural, and political processes that affect
their everyday existence is still far from the desired level. To reach this, much more will be required, and efforts in that direction will need the dynamic interplay of all
parties-states, markets, and citizens.
When the Human Development Report 1993 was released, UNDP noted in its press advisory that "90 percent of the world's people lack control over their own lives in spite
of recent changes around the world favoring market economies, multiparty democracies and grassroots activites." This may sound exaggerated, but close examination of
the nature of control that people have over their lives, using the essential meaning of participation, will probably bear UNDP's estimate out.
In today's world of 5.7 billion inhabitants, there are 157 billionaires, some 2 million
millionaires, and more than 1.1 billion people with an income of less than $1 a day. The
richest 20 percent corners 82.7 percent of the world's income; the second, 11.7 percent; the third, 2.3 percent; the
fourth, 1.9 percent; and the poorest fifth, 1.4 percent. Let us for the moment discard the absurd
Humanity in Trouble But Hopeful
Assumption that the millions or billions of excluded are living their own lives anyway and that
an individual can be controlled only to the extent that he or she allows it. And let us assume
that all the world's people are bound by a common set of processes with costs and benefits,
from plain existence to enjoying nearly boundless freedom of movement. Then we can safely say that very
few indeed are in full control over resources, means, and decisions that drive their lives. And this lack of control is expressed in various other forms.
In a sense, no one-not even the richest and most powerful-may be in complete control at all. The Cold War brought with it weapons of mass destruction whose
annihilation potential or means of disposal is beyond the capacity of anyone to handle. The more than 100 wars during the past four decades, which took about 20 million
lives, and before them the "hot" wars the two world wars during which even more lives and properties were lost also attest to how far events could be controlled by the
players who waged them or the ordinary mortals who were affected by them.
Global poverty, the real major threat in the coming decades now that the Cold War is no more, is well on its worldwide tour, without
passport as it were, and in ways that disturb the peace and quiet of the rich and powerful if not the
whole of humanity. A threat to stability everywhere, poverty gives rise to various disturbing
manifestations that strike deep into the moral fiber of humankind: massive involuntary
migration, diseases, drugs, terrorism, wars, civil conflicts, revolution.
Additionally, environmental disasters of transboundary and global proportion have caught up on even those who have the means and resources to move to safer places.
Hardly anyone may be spared from the "hot emergencies" of global warming and ozone depletion. Even those who are in the best position to fend off the all-inclusive
effects of such disasters are merely buying time.
Stefan Bauschard
Globalization and Poverty Release
86
Stefan Bauschard
Globalization and Poverty Release
87
A2: Global Trade Not Sustainable
Global trading system sustainable – only POLICY can derail it
Irwin 10/16/13 http://www.economist.com/debate/days/view/1026/print/all Professor of
economics, Dartmouth College DOA: 1-5-14
Globalisation is alive and doing reasonably well. Despite bumps and blips in the world
economy, the march of increased integration of markets around the world continues. While
the pace of that integration may have slowed, the degree of integration is unlikely to reverse.
As a check on where globalisation has been and where it might be going, look at the figure here
from World Trade Organisation’s newly issued "World Trade Report 2013". In the 1990s and
early 2000s there was an explosion in world trade. An increase in openness to trade in new
emerging markets, led especially by trade reforms in India and China, helped push the ratio of
world trade in goods and services to world GDP from about 20% to about 30%. Let us not forget
that during this period there was a massive reduction in world poverty . Hundreds of millions
of people in China and India could finally escape from a life of impoverishment and move
into the ranks of the lower middle class. The world economy was then struck by the worst
global financial crisis since the Great Depression. World trade contracted sharply in 2009,
plunging 9% in a single year. Capital flows were also massively disrupted. We are still dealing
with the awful consequences of this huge crisis. Yet fortunately, unlike in the 1930s, the world
did not turn in a sharply protectionist direction. While Global Trade Alert has reminded us that
the crisis saw the introduction of some protectionist measures, such as anti-dumping duties,
producer subsidies and buy-local provisions, these policies have been largely piecemeal and ad
hoc. They have not resulted in a significant closing of markets. Consequently, world trade
quickly rebounded in 2010 and has been growing steadily ever since. In what sense could this
globalisation be "in trouble"? Only if there was a serious prospect that this integration of
markets could unravel and reverse itself. In contemplating this prospect, we should
distinguish between globalisation driven by markets and globalisation driven by policy. The
globalisation driven by market forces may be subsiding. It could be that the easy, initial gains
from market opening in China, India and elsewhere have been exhausted. Outsourcing and
offshoring are no longer in vogue, as they were a decade ago (to the fear of many), because
costs have risen in the developing world. Instead, one hears about the return of manufacturing
to America because of higher costs abroad and America’s low energy costs. But the rebalancing
of economic activity around the world does not mean that globalisation is in trouble. There is no
problem with the world trade to GDP ratio remaining stuck at 30% for the foreseeable future,
or even declining if driven by market forces. A reversal of globalisation by government policies
turning inward would be a different story. Yet we did not see this during the crisis; the
backsliding was relatively modest. Public opinion did not demand protectionist policies. No one
is protesting against the World Trade Organisation (remember the Battle of Seattle in 1999?)
and the anti-globalisation crowd has moved on. The opening up of China, India and other
developing countries is largely irreversible: the people of these countries have seen how trade
has utterly transformed their economies for the better and they do not wish to see these gains
Stefan Bauschard
Globalization and Poverty Release
88
reversed. Of course, the world is not moving in the direction of greater liberalisation. Policy is at
a standstill. No one is protesting against the WTO because the WTO isn’t doing anything. The
Doha Round is effectively dead. Regional trade negotiations are doing not much better. The
Trans-Pacific Partnership negotiations face many hurdles and could stretch out for many years
to come. The era of "hyper-globalisation", the rapid integration of the world’s economies in the
1990s and early 2000s driven by both markets and policy, may have hit diminishing returns .
The globalisation process may take a breather. But does this mean that globalisation is in
trouble? Hardly. As long as governments do not attempt to reduce the existing level of
integration or interfere with existing trade flows, a high level of globalisation is here to stay.
Stefan Bauschard
Globalization and Poverty Release
89
A2: Globalization Hurts Environment
Economic evaluation is key to preservation of the environment.
Thompson 03 – Stanford natural resources professor [Barton, “What Good is Economics”, 27
Environs Envtl. L. & Pol'y J. 175, p. 187-90
Even the environmental moralist who eschews any normative use of economics may find
economics valuable for other purposes. Indeed, economics is indispensable in diagnosing why
society currently does not achieve the level of environmental protection desired by the
moralist. Those who turn their backs on economics and rely instead on
ethical [*187] intuition to diagnose environmental problems are likely to find themselves
doomed to failure . Economic theory suggests that flaws in economic markets and
institutions are often the cause of environmental problems. Three concepts of market failure
have proven particularly robust in analyzing environmental problems. The first is the "tragedy
of the commons." n28 If a resource is open and free for multiple parties to use, the parties will
tend to over-utilize the resource, even to the point of its destruction. Economists and others
have used the tragedy of the commons to explain such environmental problems as over-fishing,
the over-drafting of groundwater aquifers, the early and inept exhaustion of oil fields, and high
levels of population growth. The second, more general concept (of which the tragedy of the
commons actually is a specialized instance) is the "negative externality." n30 When parties do
not bear the full cost to society of environmental harms that they cause, they tend to underinvest in the elimination or correction of the harm. Externalities help explain why factories
pollute, why landowners destroy ecologically valuable wetlands or other forms of habitat, and
why current generations consume high levels of exhaustible resources. The final concept is the
problem of "collective action." If political or market actions will benefit a large group of
individuals and it is impossible to exclude anyone from enjoying the benefits, each individual will
have an incentive to "free ride" on the actions of others rather than acting themselves, reducing
the possibility that anything will get done. This explains why the private market does not
provide us with more wildlife refuges or aesthetic open space. Although these economic
explanations for environmental problems are not universal truths, accurate in all settings,
they do enjoy a robust applicability. Experimenters, for example, have found that subjects in a
wide array of countries succumb to the tragedy of the commons. Smaller groups sometimes
have been able to overcome the tragedy of the commons and govern a resource in collective
wisdom. Yet this exception appears to be the result of institutional characteristics peculiar to
the group and resource that make it easier to devise a local and informal regulatory system
rather than the result of cultural differences that undermine the economic precepts of the
tragedy of the commons. These economic explanations point to a vastly different approach to
solving environmental problems than a focus on environmental ethics alone would suggest. To
environmental moralists, the difficulty is that the population does not understand the ethical
importance of protecting the environment. Although governmental regulation might be
necessary in the short run to force people to do what they do not yet appreciate is proper, the
long run answers are education and moral change. A principal means of enlightening the
citizenry is engaging them in a discussion of environmental goals. Economic analysis, by
contrast, suggests that the problem lies in our economic institutions. The solution under
economic analysis is to give those who might harm the environment the incentive to avoid the
Stefan Bauschard
Globalization and Poverty Release
90
harm through the imposition of taxes or regulatory fines or the awarding of environmentally
beneficial subsidies. The few studies that have tried to test the relative importance of
environmental precepts and of economics in predicting environmentally relevant behavior
suggest that economics trumps ethics. In one 1992 experiment designed to test whether
subjects would yield to the tragedy of the commons in a simulated fisheries common, the
researchers looked to see whether the environmental attitudes of individual subjects made any
difference in the subjects' behavior. The researchers measured subjects' environmental beliefs
through various means. They administered questionnaires designed to elicit environmental
beliefs; they asked the subjects how they would behave in various hypothetical scenarios (e.g., if
someone asked them to volunteer to pick up litter on the weekend); they even tried to see how
the subjects would react to real requests for environmental help (e.g., by asking them to
participate in a Saturday recycling campaign). No matter how the researchers tried to measure
the environmental attitudes of the subjects, attitude failed to provide a statistically significant
explanation for participants' behavior in the fishing commons. Those who appeared to have
strong environmental beliefs behaved just as tragically as those who did not when fighting for
the limited stock of fish. In another study, researchers examined domestic consumers of high
amounts of electricity in Perth, Australia. After administering a survey to determine whether the
consumers believed they had a personal and ethical duty to conserve energy, the researchers
tried various methods for changing the behavior of those who reported that people have a
conservation obligation. Informing these individuals of their high electricity usage and even
supplying them with conservation tips did not make a statistically significant difference in their
energy use. The only thing that led these individuals to reduce their electricity consumption was
a letter reminding them of the earlier survey in which they had espoused a conservation duty
and emphasizing the inconsistency of that view with their high electricity usage. In response to
this letter, the subjects reduced their energy use. Apparently shame can be a valuable catalyst in
converting ethical beliefs into action. But the effect may be short lived. Within two weeks, the
Perth subjects' energy use had risen back to its earlier levels. Ethical beliefs, in short, frequently
fall victim to personal convenience or cost considerations. Ethical views sometimes can make a
difference in how people behave. Examples include the role that ethics has played in
encouraging people to recycle or to eat dolphin-free tuna. But the personal cost, if any, of
recycling or of eating dolphin-free tuna is exceptionally small. For most of the environmental
dilemmas that face the nation and the world today, the economic cost of changing behavior is
far more significant. And where costs are high, economics appears to trump most peoples'
environmental views. Even if ethics played a more powerful role, we do not know for certain
how to create or strengthen environmental norms. n38 In contrast, we do know how to change
economic incentives. Although environmental moralists should continue trying to promote
environmental ethics, economic analysis currently provides the strongest tool for diagnosing
and thus helping to resolve environmental problems. The environmental moralist who ignores
this tool in trying to improve the environment is doomed to frustration.
Market forces are key to sustaining the environment.
Wager 11 – EDF economist [Gernot, But Will the Planet Notice? How Smart Economics Can
Save the World, pg 11-2]
The fundamental forces guiding the behavior of billions are much larger than any one of us.
It's about changing our system, creating a new business as usual. And to do that we need to
think about what makes our system run. In the end , it comes down to markets , and the rules
of the game that govern what we chase and how we chase it. Scientists can tell us how bad it
Stefan Bauschard
Globalization and Poverty Release
91
will get. Activists can make us pay attention to the ensuing instabilities and make politicians take
note. When the task comes to formulating policy, only economists can help guide us out of
this morass and save the planet. In an earlier time with simpler problems, environmentalists
took direct action against the market's brutal forces by erecting roadblocks or chaining
themselves to trees. That works if the opposing force is a lumberjack with a chain saw. It might
even work for an entire industry when the task is to ban a particular chemical or scrub a
pollutant out of smokestacks. But that model breaks down when the opposing force is
ourselves: each and every one of us demanding that the globalized market provide us with
cheaper and better food, clothes, and vacations. There is no blocking the full, collective desires
of the billions who are now part of the market economy and the billions more who want to—
and ought to—be part of it. The only solution is to guide all-powerful market forces in the
right direction and create incentives for each of us to make choices that work for all of us. The
guideposts we have today for market forces evolved helter- skelter from a historical process
that gave almost no weight to the survival of the planet, largely because the survival of the
planet was not at stake. Now it is. Since we can't live without market forces, we need to guide
them to help us keep the human adventure going in workable ways, rather than continue on
the present path right off the edge of a cliff.
Globalization doesn’t hurt the environment
Bernauer et al. 10 – Thomas: is a professor of political science at ETH Zurich; Ms. Anna
Kalbhenn: PhD candidate at the Center for Comparative and International Studies (CIS), Zurich;
Vally Koubi: a senior fellow at the Center for Comparative and International Studies (CIS) at the
Swiss Federal Institute of Technology Zurich; Gabriele Ruoff: postdoctoral researcher in the
“International Political Economy” group of Thomas Bernauer at the Center for Comparative and
International Studies [“Climate Change, Economic Growth, and Conflict”
climsec.prio.no/papers/Climate_Conflict_BKKR_Trondheim_2010.pdf]
Other scholars, commonly referred to as cornucopians or resource optimists,
do not share this pessimistic view. They acknowledge that environmental
degradation may negatively affect human wellbeing. But they argue that
humans can adapt to resource scarcity by using market mechanisms (pricing),
technological innovation, and other means (Lomborg 2001; Simon 1998).
Simon (1998) for instance notes that, although population growth can lead
to shortages or increased economic burdens in the short run, the ability of
society to respond to such circumstances by improvements in technology
and efficiency usually outstrips the constraints imposed by an increasing population .
The neo-Malthusian argument has also been criticized for being overly
complex and deterministic, and for ignoring important economic and
socio-political factors (e.g. Gleditsch 1998; de Soysa 2002a,b; Barnett and
Adger 2007; Salehyan 2008). Critics have argued that scarcity of renewable
resources is just one of the factors in the overall relationship between
climate change and conflict. Buhaug et al. (2008:20) note that “climate
change may increase the risk of armed conflict only under certain conditions
and in interaction with several socio-political factors”. They reject the idea that
climate change has a direct effect on the likelihood of conflict and propose
Stefan Bauschard
Globalization and Poverty Release
92
several causal pathways through which economic and political instability,
social fragmentation, and migration could increase the probability of climate
change leading to armed conflict. Qualitative case studies (e.g. Baechler et al.
1996) provide some, albeit anecdotal evidence that climate change induced
environmental degradation (such as water scarcity, soil degradation, or
deforestation) has contributed to conflict in some parts of the world (e.g. the
Sahel region). But it remains unclear to what extent these case specific
findings can be generalized. Large-N studies have, so far, not been able to
provide conclusive evidence. One part of this variance in empirical evidence is
certainly due to the use of different measures of climate change and
environmental degradation, data problems, and different sample sizes and
time periods. Another part, we submit, is due to the fact that past research has
focused on identification of a direct link between climatic conditions and
conflict. Conditional effects that stem from key factors such as economic
development and the political system characteristics may thus have been
overlooked.
All environmental factors getting better.
Lomberg 10 – Ph.D in pol science [“Bjorn Earth Day: Smile, don't shudder; Ignore doomsday
environmentalists. Things aren't so bad. And if rich countries would worry about the right things,
all the better”. USA Today.]
Given all the talk of impending catastrophe, this may come as a surprise, but as we approach the
40th anniversary of the first Earth Day, people who care about the environment actually have a
lot to celebrate. Of course, that's not how the organizers of Earth Day 2010 see it. In their view
(to quote a recent online call to arms), "The world is in greater peril than ever." But consider
this: In virtually every developed country, the air is more breathable and the water is more
drinkable than it was in 1970. In most of the First World, deforestation has turned to
reforestation. Moreover, the percentage of malnutrition has been reduced, and ever-more
people have access to clean water and sanitation. Apocalyptic predictions from concerned
environmental activists are nothing new. Until about 10 years ago, I took it for granted that
these predictions were sound. Like many of us, I believed that the world was in a terrible state
that was only getting worse with each passing day. My thinking changed only when, as a
university lecturer, I set out with my students to disprove what I regarded at the time as the
far-fetched notion that global environmental conditions were actually improving. To our
surprise, the data showed us that many key environmental measures were indeed getting
better.
Neoliberalism won’t cause environmental collapse.
Schweickart 09 – Loyola philosophy professor [David, “Is Sustainable Capitalism an
Oxymoron?”, Perspectives on Global Development and Technology, 8.2-3]
Anti-capitalist ecologists always say this. In Kovel’s (2007) words, “capital must expand without
end in order to exist (p. 38).” But is this true? It would seem not to be. Individual small
businesses sometimes survive for long periods of time. Marx ’s prediction that the “petty
bourgeois” sector would disappear has turned out not to be true. (The tendency toward
monopoly/oligopoly, which he correctly identifi ed, has been off set by the continual rise of
Stefan Bauschard
Globalization and Poverty Release
93
new entrepreneurial businesses.) Capitalism itself has survived prolonged depressions—the
Great One of 1929 lasted a decade. Periods of stagnation have been even more common—
witness Japan throughout the 1990s. To be sure, capitalism incentivizes growth, but it is not at
all clear that thwarted growth leads to death. We can point to lots of counterexamples. It is
not true either that the various ecological crises we are facing will bring about “the end of the
world.”4 Consider the recently-released Stern Review , commissioned by the British
government, which has been applauded by environmentalists for its strong recommendation
that urgent action be taken. If nothing is done, we risk “major disruption to economic and social
activity, later in this century and the next, on a scale similar to those associated with the great
wars and economic depression of the fi rst half of the 20th century.”5 Th is is serious. Some sixty
million people died in World War Two. Th e Stern Review estimates as many as two hundred
million people could be permanently displaced by rising sea level and drought. But this is not
“the end of the world.” Even if the effects are far worse, resulting in billions of deaths, there
would still be lots of us left. If three-quarters of the present population perished, that would
still leave us with 1.6 billion people—the population of the planet in 1900. I say this not to
minimize the potentially horrifi c impact of relentless environmental destruction, but to caution
against exaggeration. We are not talking about thermonuclear war—which could have
extinguished us as a species. (It still might.) And we shouldn’t lose sight of the fact that millions
of people on the planet right now, caught up in savage civil wars or living beneath those US
bombers currently devastating Iraq , are faced with conditions more terrible than anyone
reading this article is likely to face in his or her lifetime due to environmental degradation.6 Nor
will readers suff er more than most of the three billion people alive now who survive on less
than $2/day.
Globalization compatible with environmental sustainability
Jeffrey Sachs, August 22, 2005, Scientific American, “Can Extreme Poverty Be Eliminated?:
Globalization, Poverty, and Foreign Aid,” http://www.scientificamerican.com/article/canextreme-poverty-be-el/ DOA: 1-1-15
By and large, economic development is a positive-sum process, meaning that all can partake in it
without causing some to suffer. In the past 200 years, the world as a whole has achieved a
massive increase in economic output rather than a shift in economic output to one region at the
expense of another. To be sure, global environmental constraints are already starting to impose
themselves. As today's poor countries develop, the climate, fisheries and forests are coming
under increased strain. Overall global economic growth is compatible with sustainable
management of the ecosystems on which all humans depend--indeed, wealth can be good for
the environment--but only if public policy and technologies encourage sound practices and the
necessary investments are made in environmental sustainability.
Free trade does not threaten the environment
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
Stefan Bauschard
Globalization and Poverty Release
94
Some environmental activists complain that the global trading system, as embodied in
the WTO, favors free trade at the expense of environmental protection. But WTO rules
place no restraints on the ability of a member government to impose any environmental
regulations determined to be necessary to protect its own environment from
domestically produced or imported products. Article XX of the General Agreement on
Tariffs and Trade 1994, the basic charter of the WTO, plainly states that members may
impose trade restrictions “necessary to protect human, animal, or plant health.” The
Sanitary and Phytosanitary Agreement of the Uruguay Round does require that such
restrictions be based on sound scientific evidence—a commonsense requirement
necessary to discourage the use of health and safety issues as a cover for protectionism.
If WTO members are found to be in violation of their commitments, they remain free as
sovereign nations to simply ignore any adverse WTO rulings against domestic
regulations that impact trade. A prominent example is the European Union’s ban on the
sale of beef from cattle treated with growth hormones. The EU has repeatedly lost in the
WTO, but it has no plans to lift its ban, even though it has produced no scientifically
sound evidence that the banned beef poses any hazard to public health. The United
States retaliated against the EU in May 1999 by imposing sanctions on $ 117 million
worth of imports from Europe, but retaliation as a weapon of trade disputes existed long
before the WTO.
Antitrade environmental activists complain that several decisions by the WTO have
undercut U.S. environmental regulations. In the so-called Shrimp-Turtle case, the WTO
ruled against a U.S. ban on shrimp from countries the United States judged were not
adequately protecting sea turtles from being caught and killed in shrimp nets. In an
earlier, similar case, the WTO had ruled against a U.S. ban on tuna from Mexico that the
United States claims was caught through a process that endangers dolphins.
Environmental critics of the WTO point to these two cases as proof of their claim.
In both these cases, however, the United States remains free to simply ignore the WTO
ruling and continue enforcing the law as is. The affected nations could in theory retaliate
with trade restrictions of their own if the United States refuses to comply, but that option
would always exist even if the WTO did not. And in the case of the Shrimp- Turtle
decision, it was not the law itself that ran afoul of WTO rules but the discriminatory way
the United States went about implementing it, for example giving Latin American
suppliers more time than Asian suppliers to comply with the law.
Expanding trade is not merely compatible with high standards of environmental quality
but can lead directly to their improvement. As a country sees its standard of living rise
through economic liberalization and trade expansion, its industry can more readily
afford to control emissions and its citizens have more to spend on the “luxury good” of
improved environmental quality, above what they need for subsistence. And as economic
growth creates a growing, better- educated middle class, the political demand for
pollution abatement rises. Today the most restrictive environmental laws are maintained
in developed countries that are relatively open to trade.
This helps explain the so-called Environmental Kuznets Curve, where environmental
quality in a developing nation initially deteriorates as the economy begins to
Stefan Bauschard
Globalization and Poverty Release
95
industrialize but then improves after its citizens reach a certain standard of living.
Research by Alan Krueger and Gene Grossman indicates that the turning point occurs at
about $ 5,000 per capita: “We find no evidence that environmental quality deteriorates
steadily with economic growth. Rather, for most indicators, economic growth brings an
initial phase of deterioration followed by a subsequent phase of improvement.” By $
8,000 per-capita income, the authors found, almost all the pollutant categories had
begun to improve.20
The United States itself is a classic example of the benign effect of trade and growth on
the environment. It has simultaneously one of the most open economies and one of the
cleanest environments in the world. In the past decade, the United States has continued
to open its economy further, signing the North American Free Trade Agreement and
shepherding the creation of the World Trade Organization. Meanwhile, two-way trade
and foreign investment continue to climb as a percentage of GDP. This liberalization of
international trade and investment has been accompanied by ever-rising environmental
standards. According to the President’s Council on Environmental Quality, mean
ambient concentrations of both sulfur dioxide and carbon monoxide in the atmosphere
of the United States have dropped by nearly 40 percent since 1988. During that same
period, the annual number of “bad air days” in major U.S. cities has dropped by twothirds. The direct discharge of toxic water pollutants is down dramatically as well. Since
the early 1970s, during a time of growing globalization of the U.S. economy, real
spending by government and business on the environment and natural resource
protection has doubled.21
Despite the rhetoric heard on the streets in Seattle, expanding global trade has not
spurred a race to the bottom on environmental regulation or quality. In fact, the evidence
points in the opposite direction.
Economic globalization isn’t the root cause of environmental destruction.
Bakker 9 – Proffesor of Geography at University of British Columbia [Karen. "Commentary".
Environment and Planning, http://www.envplan.com/epa/editorials/a4277.pdf]
With this sort of example as inspiration, one hopes that scholars of neoliberal nature would take
on Castree's task. Yet one can anticipate refusals (and this pertains directly to Castree's two final
questions, about the effects of nature's neoliberalization and their evaluation). Some will argue
that `neoliberalism' is constituted of a range of diverse, locally rooted practices, thereby
justifying a sector-specific, case-study approach for which attempts at terminological
systematization are of little utility. This is, as Castree notes, an evasion rather than a convincing
response. A more compelling argument is that the biophysical characteristics of resources and
associated resource economies differ so greatly that expedience (and analytical rigour) demands
a high degree of specialization. But the most fundamental objection (and one that Castree
overlooks) is that the chain of causality in the study of environmental impacts arising from
projects of neoliberalization is so attenuated , and the confounding variables so numerous
(particularly given the multiple scales of regulation and resource production involved), that it
is almost impossible to prove that the environmental `impacts' we might identify do indeed
arise from a particular strategy identified as neoliberal.
Stefan Bauschard
Globalization and Poverty Release
96
Resource scarcity is self-correcting.
Haynes 08 – BYU economics professor [Beth, “Finite Resources vs. Infinite Resourcefulness”,
8-19, http://wealthisnottheproblem.blogspot.com/2008/08/finite-resources-vs-infinite.html]
It’s common sense. Save today in order to have some available tomorrow. It’s how our bank
accounts work, so it seems logical to apply the same reasoning to resource use. But there is a
catch. All of economic history, up to and including today, demonstrates that the more we
exploit our natural resources, the more available they become. (3-7) How can this possibly be?
If we use our “limited, non-renewable resources” we have to end up with less, right? Actually,
no. And here is why. We don’t simply “use up” existing resources; we constantly create them.
We continually invent new processes, discover new sources, improve the efficiency of both
use and extraction, while at the same time we discover cheaper, better alternatives. The fact
that a particular physical substance is finite is irrelevant. What is relevant is the process of
finding ways to meet human needs and desires. The solutions, and thus what we consider
resources, are constantly changing. Oil was a nuisance, not a resource, until humans discovered
a use for it. In order to survive and flourish, human beings must succeed at fulfilling certain
needs and desires. This can be accomplished in a multitude of ways using a multitude of
materials. The requirements of life set the goals. How these goals are met does not depend on
the existence or the availability of any particular material. Limits are placed not by the finiteness
of a physical substance, but by the extent of our knowledge, of our wealth, and of our freedom.
Knowledge. Wealth. Freedom. These are the factors which are essential to solving the problems
we face. “The Stone Age didn’t end because we ran out of stones.” (8) Think for a minute about
how we have solved the problem of meeting basic needs throughout history: Transportation:
from walking to landing on the moon Communication: from face-to-face conversations to the
World Wide Web. Food: from hunting and gathering to intravenous feeding and hydroponics.
Shelter: from finding a cave to building skyscrapers Health care: from shamans to MRIs and
neurosurgery. How does progress happen? A synopsis of the process is provided by the main
theme of Julian Simon’s book, The Ultimate Resource 2: More people, and increased income,
cause resources to become more scarce in the short run. Heightened scarcity causes prices to
rise. The higher prices present opportunity and prompt inventors and entrepreneurs to search
for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are
eventually found. And in the long run, the new developments leave us better off than if the
problems had not arisen, that is, prices eventually become lower than before the scarcity
occurred. (9) This idea is not just theory. Economists and statisticians have long been analyzing
the massive amounts of data collected on resource availability. The conclusion: our ability to
solve the problems of human existence is ever-expanding. Resources have become less scarce
and the world is a better place to live for more and more people. (3-7) Overall, we create
more than we destroy as evidenced by the steady progress in human well being and there is
no evidence for concluding that this trend can't and won't continue. Doomsday predictions
have been with us since ancient times and they have consistently been proven wrong.
Stefan Bauschard
Globalization and Poverty Release
97
A2: World Trade Organization Only Benefits the Powerful
Relative power does not determine outcomes in the WTO—collective
opposition can set the agenda in favor of the less powerful
Page, Overseas Development Institute, 2002 [Sheila, “Developing Countries In
Gatt/Wto Negotiations,” February,
http://www.odi.org.uk/iedg/participation_in_negotiations/gatt_
wtonegotiationsfeb2002.pdf, 1]
The growing role of developing countries in the WTO negotiations since the Tokyo Round suggests
that the most power-based or pessimistic views of the international regime, that it is entirely
determined by the interests of the most powerful, and that the outcome of international
negotiations cannot be influenced by choices made by weaker countries is not correct. While
the role of the largest countries remains central, they cannot impose outcomes against the
will of all other counties, and differences among them offer further opportunities to affect
the outcome.
The question of when and how to participate in international negotiations is therefore a real
one for countries to face. If they identify and determine their own priorities, and their
strengths and weaknesses, they can include the costs and benefits of participation in
international negotiations as part of their economic strategy. Within these, they must again define their priorities: all
countries, even the largest, have found that following all the subjects under the WTO negotiations impossible. The countries that have put a large share of limited
resources into WTO negotiations have done so after making such assessments.
Stefan Bauschard
Globalization and Poverty Release
98
A2: World Trade Organization Hurts Progressive Interests
The WTO produces coalition formation that focus on self-identified developing
country interests and lead to colelctive mobilization
Yu, Programme Coordinator, Global Governance for Dev. Programme, South
Centre, 07/2008 [Vicente Paolo B., III, “Unity In Diversity: Governance Adaptation
In Multilateral Trade Institutions Through South-South Coalition-Building,”
Research Papers 17, http://www.
southcentre.org/index2.php?option=com_docman&task=doc_view&gid=940&Ite
mid=68, vii-x]
There has also been a distinct change in the negotiating dynamics among WTO Members.
Developing countries have learned to work together in cohesive groups or coalitions based on
their self-identified interests in a much better and more coordinated way as compared to, for
example, the way in which they interacted prior to the Seattle Ministerial Conference in 1999. The development of more cohesive regional, cross-regional,
common characteristic, and issue-based purely developing country groupings in the run-up to the 2003 Cancun Ministerial Conference was followed up by more consistent
efforts on the part of these coalitions to work together more closely and in a more coordinated fashion both internally and with other groups.
The result has been a marked improvement in the extent of overall developing country participation in the
WTO negotiations, albeit indirectly. And a stronger ability to influence WTO decision-making on the part of
developing countries can be concluded from the fact that developing country issues now form part of
the central negotiating agenda of the WTO. viii
B. DEVELOPING COUNTRY PARTICIPATION IN THE UN CONFERENCE ON TRADE AND DEVELOPMENT
1. Governance Adaptation in UNCTAD: The Role of the G-77 as the Primary Developing Country Coalition Actor
Group-based dynamics have had a long history in terms of UNCTAD’s intergovernmental processes. Negotiations in the various UNCTAD conferences historically (at least
until the late 1990s) were not carried out by individual countries but by groupings of countries acting together with a common platform and a main spokesperson.
Developing countries have historically participated in any negotiations – e.g. on international commodity agreements, the ministerial declaration of the UNCTAD
conferences, etc. – through the vehicle of the Group of 77 and China’s (G-77 and China) Geneva chapter. The members of this chapter include all the current 132 G-77
members, including China. The G-77 as an intergovernmental developing country coalition was formed on 15 June 1964 by seventy-seven developing countries that were
signatories of the “Joint Declaration of the Seventy-Seven Countries” issued at the end of the first session of UNCTAD in Geneva. It originated from the “merger of AfroAsian countries (Group A) and Latin American countries (Group C) for the purpose of UNCTAD negotiations.”
From its origins with the birth of UNCTAD, the G-77 has now become the premier intergovernmental developing country group working together within the UN system,
being very active on most issues being discussed within the UN.
In some ways, the establishment of the G-77 in UNCTAD and their ability to generate and push cohesive and united negotiating positions was both the effect and cause of
developed country actions. Developing countries in the early 1960s (especially from Africa and Asia) were becoming increasingly frustrated at the way in which developed
countries were not responding favorably to their requests for increased levels of international cooperation to restructure global economic relations to promote the
development of developing countries. As a result, they felt that only a united and cohesive front vis-à-vis developed countries could enhance their leverage and effect
changes in terms of their economic relations with developed countries. During and after UNCTAD I, as the G-77 started operating and presenting cohesive and united
group positions, developed countries started responding by also adopting joint negotiating positions that were previously discussed and coordinated through their
organization, the Organisation for Economic Co-operation and Development (OECD).
As may be expected from a coalition the size of the G-77, with a membership of countries that have widely varying economic policies, development conditions, and
economic and political ties to developed countries, a major aspect of the G-77 coordinators’ job is to try to mediate and settle the differences among the G-77’s members
in order to arrive at a common position. These differences were of three main types, as an observer pointed out: “(1) those that are political and ideological in nature, (2)
those between the more and the less advanced countries in the group, and (3) those resulting from the links of certain developing countries with certain developed ones.”
G-77 negotiating unity and cohesion during the 1970s and early 1980s were fostered to a large extent by their common agreement on the right of each state to determine
its own development strategy on the basis of the unique cultural, social and other characteristics of each country. They argued that there is no one single universal model
for development, no one-size-fits-all approach to development. But as more developing countries changed their economic policies to conform to the Washington
Consensus model in order to try to adapt to and deal with the debt crisis of the early 1980s, UNCTAD began to decline in terms of relevance for both developed and
developing countries alike. As a result coming into the 1990s, the G-77’s internal cohesion and unity in UNCTAD started ix to break apart. By the time of the 1992
Cartagena session of UNCTAD (UNCTAD VIII), the G-77 in UNCTAD was virtually moribund as a united and cohesive group.
However, by the end of the 1990s and the early 2000s, coming out of the various financial and developmental crises that adversely affected the development prospects of
developing countries during the 1980s and 1990s, G-77 unity and cohesion in the UNCTAD context started recovering, spurred in part by the success of collective group
action by developing countries in promoting a more development-focused trade agenda in the WTO. There was also an increasing recognition among developing countries
that fundamental development challenges continue to remain which required developing countries to re-exert a collective effort to get their development partners to
cooperate with developing countries to address these challenges effectively. The G-77’s analysis and critique of the impacts of globalization and the role that the existing
system of international institutions and policies play with respect to developing countries’ development prospects also became clearer. This analysis and critique became
the basis for a renewed interest in the recovery of the G-77 in UNCTAD as a major political actor in UNCTAD intergovernmental dynamics.
By the time of UNCTAD XI in Sao Paulo, Brazil, in June 2004, the G-77’s preparatory process had become stronger, with the result that once again, UNCTAD negotiating
dynamics became focused on inter-group dynamics involving the G-77 as the sole negotiating vehicle for developing countries. Since UNCTAD XI, G-77 unity in the UNCTAD
context has further strengthened. The 2006 process for the UNCTAD XI Mid-Term Review of the implementation of the Sao Paulo Consensus saw a G- 77 that was more
pro-active and able to effectively table and articulate group negotiating positions.
IV. CONCLUSION: DEVELOPING COUNTRY GROUP ACTION AS AN ESSENTIAL COMPONENT IN GLOBAL TRADE GOVERNANCE
As can be seen from the discussion above, the ways in which developing countries participate in the governance of the WTO and UNCTAD, the two premier multilateral
trade governance institutions, reflect their adaptation to perceived and real imbalances of economic and political power, both in terms of the bigger international
economic system as well as with respect to the institutional governance mechanisms of these organizations.
Further enhancing developing country participation and influence in global trade policymaking and governance will require the following:
Stefan Bauschard
Globalization and Poverty Release
99
• Clear policy issue and agenda articulation – Strong group action can only take place on the basis of a shared perception by the group members of having shared issues
and a shared agenda that they are committed to and which they are willing to promote. This shared understanding is important, especially in terms of continuously
updating, fine-tuning and articulating a clear policy framework, a set of well-articulated policy objectives, and a clearly defined action agenda, that can be promoted in
both institutional contexts. This represents an essential foundation and reference point for collective developing country group action in both the WTO and UNCTAD. This
is a vital step in trying to overcome the intellectual and conceptual dependence vis-à-vis the North in which the developing countries have been entrapped. Today, the
South faces the challenge of “intellectual liberation”, which has to be undertaken collectively, as a serious, systematic and sustained effort by developing countries.
• Coordination and leadership – Strong groups in both the WTO and UNCTAD show that having institutionalised coordination and group leadership mechanisms are vital to
the longterm survival of the group.
• Working relationships – Given the relatively greater role that human resource constraints play in determining the extent of developing country participation, the working
relationships that individual delegates have with other developing country delegates in the context of group x dynamics become very important factors in ensuring smooth
intra- and inter-group coordination and action.
• Having institutional support -- Full and continuous institutional support of the highest professional quality is essential for any multilateral endeavour, especially in a
multilateral setting such as the WTO and UNCTAD, where developing countries are confronted with a complex, overlapping and interrelated agenda. This continues to be
one of the weakest links in strengthening collective group action by developing countries. Creating, financing, staffing and running such an institution presents a number of
problems that have earlier frustrated proposals of this kind.
The underlying policy rationale which inspired the formation of the G-77 in UNCTAD in 1964 has essentially remained unchanged, and has been reconfirmed by events and
today the need for collective
and group action by developing countries is greater and more urgent than ever, for a number
of reasons, including:
developments during the last 40 years, especially during the last decade or so in both the WTO and UNCTAD. Indeed,
• The greater weight and importance of the world economy, and the related processes, for their national development and in general their economic policy and
environmental space and sovereignty;
• The increasing complexity and scope of the development process, which no longer allows for sectoral and narrow approaches, and the multiplication of issues and
challenges that concern all countries;
The continued efforts by developed countries to dominate multilateral processes, institutions and
•
outcomes, and, via these, the developing countries, their political and economic space, and their natural resources and endowments.
The experience of developing countries, individually and collectively, during the more recent period of globalization has
only confirmed that developing countries need to be consistent and united in promoting their views and
interests, and that to succeed it is also essential for them to join forces and pursue group action in
most domains on the development agenda, including in the trade area. In a world which is becoming
increasingly interconnected and interrelated, and with a number of developing countries having made important progress and strides in development and economic
the collective weight of the South that can be mobilized today is significant and should
be put to good use, both for launching major policy initiatives, as well as to counter the
systemic economic and political imbalances that continue to exist in favor of developed
countries.
growth,
Stefan Bauschard
Globalization and Poverty Release
100
A2: World Trade Organization Bad for Developing Countries
DOHA is uniquely good for developing countries—the framework stress their
interests and promotes effective coalitions
Yu, Programme Coordinator, Global Governance for Dev. Programme, South
Centre, 07/2008 [Vicente Paolo B., III, “Unity In Diversity: Governance Adaptation
In Multilateral Trade Institutions Through South-South Coalition-Building,”
Research Papers 17, http://www.
southcentre.org/index2.php?option=com_docman&task=doc_view&gid=940&Ite
mid=68, 24-25]
i. Ideational Shift – Pursuing Development and Trade Policy Choice
a fundamental ideational shift has indeed taken place in terms of how developing
countries view the WTO, its role in their respective development processes, and their role as participants in its governance system, and underlies the
basic negotiating positions of today’s WTO developing country coalitions. This ideational shift can be clearly seen in the increasingly
development policy-oriented thrust of the negotiating positions of the various developing country coalitions, in which
It can be argued that
the concept of increased levels of development policy choices and flexibilities is sought to be reflected in operational terms as part of the negotiated outcomes.92
Developing country coalition-building in the WTO in the Doha negotiations is helped by the fact that the
negotiating mandate established at Doha and further clarified in the July 2004 framework package provided them
with both the moral and political basis for stressing the need to ensure that the negotiating outcomes
support their articulated development priorities. The Doha negotiation’s mandate on promoting
developing countries’ needs and interests gave developing countries the flexibility to establish for the most part a basic level of
commonality of interests in many of the negotiating areas that later on formed the basis for
their groups’ negotiating positions.
As a result, developing country participation in the Doha negotiations now take place both directly – as individual Members – and indirectly – as members of various
groups or coalitions. In the major negotiating issues of agriculture, NAMA, and trade facilitation, this trend is much more evident (the services negotiations, with its
bilateral request-offer negotiating format, are not as conducive to group-based negotiations as the others).
More than simply viewing the WTO as an international negotiating forum where trade concessions may be negotiated and
exchanged, developing country coalitions now view the WTO as a negotiating forum in which the
development implications of trade concessions will need to be considered as part and parcel
of the philosophical moorings and values underlying the multilateral trading system. The G20, the G-33, the NAMA-11, the Core Group on Trade Facilitation, the African Group, the ACP
Group, the LDCs Group, the Small Vulnerable Economies Group, all have clearly and distinctly
pegged their positions in the WTO to a clear ideational preference for linking negotiated
concessions to their respective longer-term strategic development objectives and ideas.93
This developing country insistence on viewing the WTO as not merely a trade institution but
as a development and trade institution has been clearly evident in all of the ministerial
conferences since Seattle in 1999, and indeed was instrumental in ensuring that the mandate
of the Doha negotiations is contextualized within a broader development discourse.
ii. Developing Country Coalition Building as Rational Governance Adaptation in the WTO
forming coalitions is a rational response by developing countries to both the issue of negotiating
constraints and the issue of being better able to advance their development agenda. Coalitions enable
developing countries to pool together resources, find strength in numbers, be represented (directly or
indirectly) in various negotiating formats, and have a vehicle through which they can inject their
agenda into and influence the negotiating outcome. In essence, working together in coalitions
helps developing countries in the WTO to increase their power and consequently their ability
to influence outcomes despite the complexity of the issues and the political dynamics that occur in
Working together and
Stefan Bauschard
Globalization and Poverty Release
101
a function of coalitions in multilateral negotiations “is to give
power to their members to help them achieve their objectives. A common platform,
incorporating the minimal demands of each separate coalition member, is easier to handle
and negotiate than the sum of individual items.”94
the negotiations. As one author has pointed out,
Stefan Bauschard
Globalization and Poverty Release
102
A2: Globalization Unsustainable
There are no limits to growth. Technological advancements and demographics
solve.
Bisk 12 – American Israeli futurist; director of the Center for Strategic Futurist Thinking and
contributing editor for strategic thinking for The Futurist magazine. He is the author of The
Optimistic Jew: A Positive Vision for the Jewish People in the 21st Century. Norwich University
MA, Political History Thomas Edison State College BA, Social Sciences, 500 published articles
[Tsvi, , “No Limits to Growth,”
https://www.wfs.org/Upload/PDFWFR/WFR_Spring2012_Bisk.pdf]
The Case for No Limits to Growth Notwithstanding all of the above, I want to reassert that by
imagineering an alternative future—based on solid science and technology— we can create a
situation in which there are “no limits to growth.” It begins with a new paradigm for food
production now under development : the urban vertical farm. This is a concept popularized by
Prof. Dickson Despommier of Columbia University.30 A 30-story urban vertical farm located on
five square acres could yield food for fifty thousand people . We are talking about high-tech
installations that would multiply productivity by a factor of 480: four growing seasons, times
twice the density of crops, times two growing levels on each floor, times 30 floors = 480. This
means that five acres of land can produce the equivalent of 2,600 acres of conventionally
planted and tended crops . Just 160 such buildings occupying only 800 acres could feed the
entire city of New York. Given this calculus, an area the size of Denmark could feed the entire
human race . Vertical farms would be self-sustaining. Located contiguous to or inside urban
centers, they could also contribute to urban renewal. They would be urban lungs, improving the
air quality of cities. They would produce a varied food supply year-round. They would use 90%
less water. Since agriculture consumes two-thirds of the water worldwide, mass adoption of
this technology would solve humanity’s water problem. Food would no longer need to be
transported to market; it would be produced at the market and would not require use of
petroleum intensive agricultural equipment. This, along with lessened use of pesticides,
herbicides and fertilizers, would not only be better for the environment but would eliminate
agriculture’s dependence on petroleum and significantly reduce petroleum demand . Despite
increased efficiencies, direct (energy) and indirect (fertilizers, etc.) energy use represented over
13% of farm expenses in 2005-2008 and have been increasing as the price of oil rises.31 Many of
the world’s damaged ecosystems would be repaired by the consequent abandonment of
farmland. A “ rewilding” of our planet would take place. Forests, jungles and savannas would
reconquer nature, increasing habitat and becoming giant CO2 “sinks,” sucking up the excess CO2
that the industrial revolution has pumped into the atmosphere. Countries already investigating
the adoption of such technology include Abu Dhabi, Saudi Arabia, South Korea, and China—
countries that are water starved or highly populated. Material Science, Resources and Energy
The embryonic revolution in material science now taking place is the key to “no limits to
growth.” I refer to “smart” and superlight materials. Smart materials “are materials that have
one or more properties that can be significantly changed in a controlled fashion by external
Stefan Bauschard
Globalization and Poverty Release
103
stimuli.” 32 They can produce energy by exploiting differences in temperature (thermoelectric
materials) or by being stressed (piezoelectric materials). Other smart materials save energy in
the manufacturing process by changing shape or repairing themselves as a consequence of
various external stimuli. These materials have all passed the “ proof of concept ” phase (i.e., are
scientifically sound) and many are in the prototype phase. Some are already commercialized
and penetrating the market . For example, the Israeli company Innowattech has underlain a
one-kilometer stretch of local highway with piezoelectric material to “harvest” the wasted stress
energy of vehicles passing over and convert it to electricity They reckon that Israel has stretches
of road that can efficiently produce 250 megawatts. If this is verified, consider the tremendous
electricity potential of the New Jersey Turnpike or the thruways of Los Angeles and elsewhere.
Consider the potential of railway and subway tracks. We are talking about tens of thousands of
potential megawatts produced without any fossil fuels. Additional energy is derivable from
thermoelectric materials, which can transform wasted heat into electricity. As Christopher
Steiner notes, capturing waste heat from manufacturing alone in the United States would
provide an additional 65,000 megawatts: “enough for 50 million homes.”34 Smart glass is
already commercialized and can save significant energy in heating, airconditioning and lighting—
up to 50% saving in energy has been achieved in retrofitted legacy buildings (such as the former
Sears Tower in Chicago). New buildings, designed to take maximum advantage of this and other
technologies could save even more. Buildings consume 39% of America’s energy and 68% of its
electricity. They emit 38% of the carbon dioxide, 49% of the sulfur dioxide, and 25% of the
nitrogen oxides found in the air.35 Even greater savings in electricity could be realized by
replacing incandescent and fluorescent light bulbs with LEDS which use 1/10th the electricity of
incandescent and half the electricity of fluorescents. These three steps: transforming waste heat
into electricity, retrofitting buildings with smart glass, and LED lighting, could cut America’s
electricity consumption and its CO2 emissions by 50% within 10 years. They would also
generate hundreds of thousands of jobs in construction and home improvements. Coal driven
electricity generation would become a thing of the past. The coal released could be liquefied or
gasified (by new environmentally friendly technologies) into the energy equivalent of 3.5 million
barrels of oil a day. This is equivalent to the amount of oil the United States imports from the
Persian Gulf and Venezuela together.36 Conservation of energy and parasitic energy harvesting,
as well as urban agriculture would cut the planet’s energy consumption and air and water
pollution significantly. Waste-to-energy technologies could begin to replace fossil fuels .
Garbage, sewage, organic trash, and agricultural and food processing waste are essentially
hydrocarbon resources that can be transformed into ethanol, methanol, and biobutanol or
biodiesel. These can be used for transportation, electricity generation or as feedstock for
plastics and other materials. Waste-to-energy is essentially a recycling of CO2 from the
environment instead of introducing new CO2 into the environment. Waste-to-energy also
prevents the production, and release from rotting organic waste, of methane —a greenhouse
gas 25 times more powerful than CO2. Methane accounts for 18% of the manmade greenhouse
effect. Not as much as CO2, which constitutes 72%, but still considerable (landfills emit as much
greenhouse gas effect, in the form of methane, as the CO2 from all the vehicles in the world).
Numerous prototypes of a variety of waste-to-energy technologies are already in place. When
their declining costs meet the rising costs of fossil fuels, they will become commercialized and, if
history is any judge, will replace fossil fuels very quickly —just as coal replaced wood in a
matter of decades and petroleum replaced whale oil in a matter of years. Superlight Materials
Stefan Bauschard
Globalization and Poverty Release
104
But it is superlight materials that have the greatest potential to transform civilization and, in
conjunction with the above, to usher in the “no limits to growth” era. I refer, in particular, to
car-bon nanotubes—alternatively referred to as Buckyballs or Buckypaper (in honor of
Buckminster Fuller). Carbon nanotubes are between 1/10,000th and 1/50,000th the width of a
human hair, more flexible than rubber and 100-500 times stronger than steel per unit of weight.
Imagine the energy savings if planes, cars, trucks, trains, elevators—everything that needs
energy to move—were made of this material and weighed 1/100th what they weigh now.
Imagine the types of alternative energy that would become practical. Imagine the positive
impact on the environment: replacing many industrial processes and mining, and thus lessening
air and groundwater pollution. Present costs and production methods make this impractical but
that infinite resource—the human mind—has confronted and solved many problems like this
before. Let us take the example of aluminum. A hundred fifty years ago, aluminum was more
expensive than gold or platinum.37 When Napoleon III held a banquet, he provided his most
honored guests with aluminum plates. Less-distinguished guests had to make do with gold!
When the Washington Monument was completed in 1884, it was fitted with an aluminum cap—
the most expensive metal in the world at the time—as a sign of respect to George Washington.
It weighed 2.85 kilograms, or 2,850 grams. Aluminum at the time cost $1 a gram (or $1,000 a
kilogram). A typical day laborer working on the monument was paid $1 a day for 10-12 hours a
day. In other words, today’s common soft-drink can, which weighs 14 grams, could have bought
14 ten-hour days of labor in 1884.38 Today’s U.S. minimum wage is $7.50 an hour. Using labor
as the measure of value, a soft drink can would cost $1,125 today (or $80,000 a kilogram), were
it not for a new method of processing aluminum ore. The Hall-Héroult process turned aluminum
into one of the cheapest commodities on earth only two years after the Washington Monument
was capped with aluminum. Today aluminum costs $3 a kilogram, or $3000 a metric ton. The
soft drink can that would have cost $1,125 today without the process now costs $0.04. Today
the average cost of industrial grade carbon nanotubes is about $50-$60 a kilogram. This is
already far cheaper in real cost than aluminum was in 1884. Yet revolutionary methods of
production are now being developed that will drive costs down even more radically. At
Cambridge University they are working on a new electrochemical production method that could
produce 600 kilograms of carbon nanotubes per day at a projected cost of around $10 a
kilogram, or $10,000 a metric ton.39 This will do for carbon nanotubes what the Hall-Héroult
process did for aluminum. Nanotubes will become the universal raw material of choice ,
displacing steel, aluminum, copper and other metals and materials. Steel presently costs about
$750 per metric ton. Nanotubes of equivalent strength to a metric ton of steel would cost $100
if this Cambridge process (or others being pursued in research labs around the world) proves
successful. Ben Wang, director of Florida State’s High Performance Materials Institute claims
that: “If you take just one gram of nanotubes, and you unfold every tube into a graphite sheet,
you can cover about two-thirds of a football field”.40 Since other research has indicated that
carbon nanotubes would be more suitable than silicon for producing p hoto v oltaic energy,
consider the implications. Several grams of this material could be the energy-producing skin for
new generations of superlight dirigibles—making these airships energy autonomous. They could
replace airplanes as the primary means to transport air freight. Modern American history has
shown that anything human beings decide they want done can be done in 20 years if it does not
violate the laws of nature. The atom bomb was developed in four years; putting a man on the
moon took eight years. It is a reasonable conjecture that by 2020 or earlier , an industrial
process for the inexpensive production of carbon nanotubes will be developed , and that this
Stefan Bauschard
Globalization and Poverty Release
105
would be the key to solving our energy, raw materials, and environmental problems all at once.
Mitigating Anthropic Greenhouse Gases Another vital component of a “no limits to growth”
world is to formulate a rational environmental policy that saves money; one that would gain
wide grassroots support because it would benefit taxpayers and businesses, and would not
endanger livelihoods. For example, what do sewage treatment, garbage disposal, and fuel costs
amount to as a percentage of municipal budgets? What are the costs of waste disposal and fuel
costs in stockyards, on poultry farms, throughout the food processing industry, and in
restaurants? How much aggregate energy could be saved from all of the above? Some experts
claim that we could obtain enough liquid fuel from recycling these hydrocarbon resources to
satisfy all the transportation needs of the United States. Turning the above waste into energy by
various means would be a huge cost saver and value generator, in addition to being a blessing to
the environment. The U.S. army has developed a portable field apparatus that turns a combat
unit’s human waste and garbage into bio-diesel to fuel their vehicles and generators.41 It is
called TGER—the Tactical Garbage to Energy Refinery. It eliminates the need to transport fuel to
the field, thus saving lives, time, and equipment expenses. The cost per barrel must still be very
high. However, the history of military technology being civilianized and revolutionizing accepted
norms is long. We might expect that within 5-10 years , economically competitive units using
similar technologies will appear in restaurants, on farms, and perhaps even in individual
households, turning organic waste into usable and economical fuel. We might conjecture that
within several decades, centralized sewage disposal and garbage collection will be things of the
past and that even the Edison Grid (unchanged for over one hundred years) will be
deconstructed . The Promise of Algae Biofuels produced from algae could eventually provide a
substantial portion of our transportation fuel. Algae has a much higher productivity potential
than crop-based biofuels because it grows faster, uses less land and requires only sun and CO2
plus nutrients that can be provided from gray sewage water. It is the primo CO2 sequesterer
because it works for free (by way of photosynthesis), and in doing so produces biodiesel and
ethanol in much higher volumes per acre than corn or other crops. Production costs are the
biggest remaining challenge. One Defense Department estimate pins them at more than $20 a
gallon.42 But once commercialized in industrial scale facilities, production cost could go as low
as $2 a gallon (the equivalent of $88 per barrel of oil) according to Jennifer Holmgren, director
of renewable fuels at an energy subsidiary of Honeywell International.43 Since algae uses waste
water and CO2 as its primary feedstock, its use to produce transportation fuel or feedstock for
product would actually improve the environment. The Promise of the Electric Car There are 250
million cars in the United States. Let’s assume that they were all fully electric vehicles (EVs)
equipped with 25-kWh batteries. Each kWh takes a car two to three miles, and if the average
driver charges the car twice a week, this would come to about 100 charge cycles per year. All
told, Americans would use 600 billion kWh per year, which is only 15% of the current total U.S.
production of 4 trillion kWh per year. If supplied during low demand times, this would not even
require additional power plants. If cars were made primarily out of Buckypaper, one kWh might
take a car 40-50 miles. If the surface of the car was utilized as a photovoltaic, the car of the
future might conceivably become energy autonomous (or at least semi-autonomous). A kWh
produced by a coal-fired power plant creates two pounds of CO2, so our car-related CO2
footprint would be 1.2 trillion pounds if all electricity were produced by coal. However, burning
one gallon of gas produces 20 pounds of CO2.44 In 2008, the U.S. used 3.3 billion barrels of
gasoline, thereby creating about 3 trillion pounds of CO2. Therefore, a switch to electric vehicles
would cut CO2 emissions by 60% (from 3 trillion to 1.2 trillion pounds), even if we burned coal
Stefan Bauschard
Globalization and Poverty Release
106
exclusively to generate that power. Actually, replacing a gas car with an electric car will cause
zero increase in electric draw because refineries use seven kWh of power to refine crude oil into
a gallon of gasoline. A Tesla Roadster can go 25 miles on that 7 KWh of power. So the electric car
can go 25 miles using the same electricity needed to refine the gallon of gas that a combustion
engine car would use to go the same distance. Additional Strategies The goal of mitigating global
warming/climate change without changing our lifestyles is not naïve. Using proven Israeli
expertise, planting forests on just 12% of the world’s semi-arid areas would offset the annual
CO2 output of one thousand 500-megawatt coal plants (a gigaton a year).45 A global program
of foresting 60% of the world’s semi-arid areas would offset five thousand 500-megawatt coal
plants (five gigatons a year). Since mitigation goals for global warming include reducing our
CO2 emissions by eight gigatons by 2050, this project alone would have a tremendous
ameliorating effect. Given that large swaths of semi-arid land areas contain or border on some
of the poorest populations on the planet, we could put millions of the world’s poorest citizens to
work in forestation, thus accomplishing two positives (fighting poverty and environmental
degradation) with one project. Moving agriculture from its current fieldbased paradigm to
vertical urban agriculture would eliminate two gigatons of CO2. The subsequent re-wilding of
vast areas of the earth’s surface could help sequester up to 50 gigatons of CO2 a year ,
completely reversing the trend. The revolution underway in material science will help us to
become “self-sufficient” in energy. It will also enable us to create superlight vehicles and
structures that will produce their own energy. Over time, carbon nanotubes will replace steel,
copper and aluminum in a myriad of functions. Converting waste to energy will eliminate most
of the methane gas humanity releases into the atmosphere. Meanwhile, artificial
photosynthesis will suck CO2 out of the air at 1,000 times the rate of natural photosynthesis.46
This trapped CO2 could then be combined with hydrogen to create much of the petroleum we
will continue to need. As hemp and other fast-growing plants replace wood for making paper,
the logging industry will largely cease to exist. Self-contained fish farms will provide a major
share of our protein needs with far less environmental damage to the oceans. Population
Explosion or Population Implosion One constant refrain of anti-growth advocates is that we are
heading towards 12 billion people by the end of the century, that this is unsustainable, and thus
that we must proactively reduce the human population to 3 billion-4 billion in order to “save the
planet” and human civilization from catastrophe. But recent data indicates that a demographic
winter will engulf humanity by the middle of this century. More than 60 countries (containing
over half the world’s population) already do not have replacement birth rates of 2.1 children per
woman. This includes the entire EU, China, Russia, and half a dozen Muslim countries, including
Turkey, Algeria, and Iran. If present trends continue, India, Mexico and Indonesia will join this
group before 2030. The human population will peak at 9-10 billion by 2060, after which, for the
first time since the Black Death, it will begin to shrink. By the end of the century, the human
population might be as low as 6 billion-7 billion. The real danger is not a population explosion;
but the consequences of the impending population implosion.47 This demographic process is
not being driven by famine or disease as has been the case in all previous history. Instead, it is
being driven by the greatest Cultural Revolution in the history of the human race: the
liberation and empowerment of women . The fact is that even with present technology , we
would still be able to sustain a global population of 12 billion by the end of the century if
needed. The evidence for this is cited above.
Stefan Bauschard
Globalization and Poverty Release
107
A2: Globalization Causes Political Crises
Neoliberalism won’t lead to political crises.
Stelzer 9 – business adviser and director of economic policy studies at the Hudson Institute
[Irwin. “Death of capitalism exaggerated,”
http://www.theaustralian.news.com.au/story/0,25197,26174260-5013479,00.html]
A FUNNY thing happened on the way to the collapse of market capitalism in the
face of the worst economic crisis since the Great Depression. It didn't. Indeed, in Germany voters
relieved Chancellor Angela Merkel of the necessity of cohabiting with a left-wing party, allowing her to form a
coalition with a party favouring lower taxes and free markets. And in Pittsburgh leaders
representing more
than 90 per cent of the world's GDP convened to figure out how to make markets
work better , rather than to hoist the red flag . The workers are to be relieved, not of their
chains but of credit-card terms that are excessively onerous, and helped to retain their private property - their homes.
All of this is contrary to expectations. The
communist spectre that Karl Marx confidently
predicted would be haunting Europe is instead haunting Europe's left-wing
parties, with even Vladimir Putin seeking to attract investment by re-privatising the
firms he snatched. Which raises an interesting question: why haven't the economic
turmoil and rising unemployment led workers to the barricades, instead of to their
bankers to renegotiate their mortgages? It might be because Spain's leftish
government has proved less able to cope with economic collapse than countries with more
centrist governments. Or because Britain, with a leftish government, is now the sick man
of Europe, its financial sector in intensive care, its recovery likely to be the slowest in Europe, its prime credit
rating threatened. Or it might be because left-wing trade unions, greedily demanding their publicsector members be exempted from the pain they want others to share, have lost their credibility and
ability to lead a leftward lurch. All of those factors contribute to the unexpected
strength of the Right
in a world in which a record number of families are being tossed out of their homes, and
jobs have been disappearing by the million. But
even more important in promoting reform over
revolution are three factors: the existence of democratic institutions; the condition
of the unemployed; and the set of policies developed to cope with the recession.
Democratic institutions give the aggrieved an outlet for their discontent, and hope they can change conditions they
deem unsatisfactory. Don't like the way George W. Bush has skewed income distribution? Toss the Republicans out
and elect a man who promises to tax the rich more heavily. Don't like Gordon Brown's tax increases? Toss him out
and hope the Tories mean it when they promise at least to try to lower taxes. Result: angry voters but no rioters,
unless one counts the nutters who break windows at McDonald's or storm banks in the City. Contrast that with
China, where the disaffected have no choice but to take to the streets. Result: an estimated 10,000 riots this year
protesting against job losses, arbitrary taxes and corruption. A
second factor explaining the Left's
inability to profit from economic suffering is capitalism's ability to adapt,
demonstrated in the Great Depression of the 1930s . While a gaggle of bankers and fiscal
conservatives held out for the status quo, Franklin D. Roosevelt and his experimenters began to weave a social safety
net. In Britain, William Beveridge produced a report setting the stage for a similar, indeed stronger, net. Continental
countries recovering from World War II did the same. So unemployment no longer dooms a worker to close-tostarvation. Yes, civic institutions were able to soften the blow for the unemployed before the safety net was put in
place, but they could not cope with pervasive protracted lay-offs. Also,
during this and other
recessions, when prices for many items are coming down, the real living standard
of those in work actually improves. In the US, somewhere between 85 per cent and 90 per cent of
workers have kept their jobs, and now see their living costs declining as rents and other prices come down. So the
impetus to take to the streets is limited. Then
there are the steps taken by capitalist
Stefan Bauschard
Globalization and Poverty Release
108
governments to limit the depth and duration of the downturn. As the economies of most of
the big industrial countries imploded, policy went through two phases. The first was triage - do what is necessary to
prevent the financial system from collapse. Spend. Guarantee deposits to prevent runs on banks and money funds,
bail out big banks, force relatively healthier institutions to take over sicker ones, mix all of this with rhetorical attacks
on greedy bankers - the populist spoonful of sugar that made the bailouts go down with the voters - and stop the rot.
Meanwhile, have the central banks dust off their dog-eared copies of Bagehot and inject lots of liquidity by whatever
means comes to mind. John Maynard Keynes, meet Milton Friedman for a cordial handshake. Then
came more
permanent reform, another round of adapting capitalism to new realities, in this
case the malfunctioning of the financial markets. Even Barack Obama's left-wing
administration decided not to scupper the markets but instead to develop rules to
relate bankers' pay more closely to long-term performance; to reduce the chance of
implosions by increasing the capital banks must hold, cutting their profits and dividends, but
leaving them in private hands; and to channel most stimulus spending through private-sector companies. This
leaves the anti-market crowd little room for manoeuvre as voters seem satisfied with
the changes to make capitalism and markets work better and more equitably. At least so
far. There are exceptions. Australia moved a bit to the left in the last election, but more out of unhappiness with a
tired incumbent's environmental and foreign policy. Americans
chose Obama, but he had
promised to govern from the centre before swinging left. And for all his rhetorical
attacks on greedy bankers and other malefactors of great wealth, he sticks to
reform of markets rather than their replacement, with healthcare a possible exception. Even in
these countries, so far, so good for reformed capitalism. No substitutes accepted.
Stefan Bauschard
Globalization and Poverty Release
109
A2: Globalization Causes War
Economic globalization has reduced war
The last three decades prove neoliberalism decreases conflict.
Tures 01 – LaGrange political science professor [John, “Economic Freedom And Conflict
Reduction: Evidence From The 1970s, 1980s, And 1990s”,
http://www.freetheworld.com/papers/John_Tures.pdf]
The last three decades have witnessed an unprecedented expansion of market-based reforms
and the profusion of economic freedom in the international system. This shift in economic
policy has sparked a debate about whether free markets are superior to state controls.
Numerous studies have compared the neoliberal and statist policies on issues of production
capacity, economic growth, commercial volumes, and egalitarianism. An overlooked research
agenda, however, is the relationship between levels of economic freedom and violence within
countries. Proponents of the statist approach might note that a strong government can bend
the market to its will, directing activity toward policies necessary to achieve greater levels of
gross domestic product and growth. By extracting more resources for the economy, a powerful
state can redistribute benefits to keep the populace happy. Higher taxes can also pay for an
army and police force that intimidate people. Such governments range from command
economies of totalitarian systems to autocratic dictators and military juntas. Other economically
unfree systems include some of the authoritarian “Asian tigers.” A combination of historical
evidence, modern theorists, and statistical findings, however, has indicated that a reduced
role for the state in regulating economic transactions is associated with a decrease in internal
conflicts. Countries where the government dominates the commercial realm experience an
increase in the level of domestic violence. Scholars have traced the history of revolutions to
explain the relationship between statism and internal upheavals. Contemporary authors also
posit a relationship between economic liberty and peace . Statistical tests show a strong
connection between economic freedom and conflict reduction during the past three decades.
Empirical data demonstrates globalization produces peace and progress
Soysa et al. 11 – Norwegian University of Science and Technology professor [Indra de, “Does
Being Bound Together Suffocate, or Liberate? The Effects of Economic, Social, and Political
Globalization on Human Rights, 1981–2005”, KYKLOS, Vol. 64 – February 2011 – No. 1, 20–53,
ebsco]
There is a large volume of research on human rights and their determinants, but theoretical
models and empirical evidence on the effects of globalization on the extent of human rights are
sparse. The empirical evidence on this subject that does exist assess very simple dimensions of
globalization, typically measures such as the level of trade openness or the penetration of FDI
(Hafner-Burton 2005). Instead of these commonly-used proxies of globalization, we use an
index that aggregates several factors that in combination capture how globalized a country is
along three main dimensions—economic, political, and social globalization (Dreher et al. 2008).
As far as we are aware, no study has estimated how differentially these three dimensions of
Stefan Bauschard
Globalization and Poverty Release
110
globalization affect government respect for human rights and the degree of political terror, an
important normative policy concern as well as a crucial aspect of future socio-political
development. We employ panel data for 118 countries for which there is complete data (94
developing and 24 developed countries) over the period 1981–2005 (25 years). Our results are
easily summarized: globalization and the disaggregated components along economic, social,
and political dimensions predict higher human rights, controlling for a host of other factors.
These results are robust to instrumental variables techniques that allow us to assess the
endogenous nature of the relationship between human rights and globalization. The results
support those who argue that increased globalization could build peace and social progress,
net of all the other factors such as democracy and higher levels of income.
Stefan Bauschard
Globalization and Poverty Release
111
A2: Globalization Reduces Wages
Still net massive gain even when wage reductions in the developed world are
considered
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US
Middle Class,” http://www.washingtontimes.com/news/2014/oct/6/economicglobalization-boosts-asia-bogs-down-us-mi/?page=all DOA: 1-2-14
The migration of Latin American and Asian job seekers to the U.S. and Eastern European and
African job seekers to Western Europe also has helped build wealth in the developing world,
even as it has put “modest pressure” on the wages of low-skilled native workers in the West
who compete with the migrants, he said.
The availability of such plentiful, cheap labor clearly has benefited the owners of corporations
and other rich people, even as it has presented competition for poorer Americans, he said. Still,
the era of globalization overall has brought big benefits to the human race, he said.
Moreover, the rise of the middle class in China and other emerging countries adds to the pool of
global consumers and presents businesses and workers in the West with opportunities for
growth.
“Although significant economic problems remain, we have been living in equalizing times for the
world — a change that has been largely for the good,” Mr. Cowan said. “Policies on immigration
and free trade sometimes increase inequality within a nation yet can make the world a better
place and often decrease inequality on the planet as a whole.”
Stefan Bauschard
Globalization and Poverty Release
112
A2: Globalization Undermines Collective Bargaining
Trade coalitions are the international equivalent of collective barganging
South Centre, intergovernmental policy think tank of developing countries, 1999
[“Least Developed Countries and the WTO A Collective Bargaining Strategy,”
Based on an UNCTAD press release (TAD/UNT/2813, 9 June 1999), http://www.
outhcentre.org/index.php?option=
com_content&task=view&id=789&Itemid=169]
LDCs
Of all countries, the least developed countries (
) are the most handicapped in their participation in the WTO. Lack of financial resources and skilled personnel
means that individual least developed countries cannot maintain anywhere near the requisite level of knowledgeable personnel in Geneva to follow discussions and
Conscious of the problems this causes them, they have now agreed to adopt a
strategy of collective bargaining to further their interests in the multilateral trading system.
participate in negotiations.
WTO coalitions are the basic strategy of the third world to counter-balance the
first
Yu, Programme Coordinator, Global Governance for Dev. Programme, South
Centre, 07/2008 [Vicente Paolo B., III, “Unity In Diversity: Governance Adaptation
In Multilateral Trade Institutions Through South-South Coalition-Building,”
Research Papers 17, http://www.
southcentre.org/index2.php?option=com_docman&task=doc_view&gid=940&Ite
mid=68, 28]
There have been studies on the kinds of collective action-focused coalition building that developing countries have undertaken in the WTO.108 These have looked at the
studies all point to the same overall
conclusion – developing country coalitions are, per se and whether in their formal or informal sense, becoming an
integral and important of WTO decision-making. They have become the de facto preferred
response of developing countries to imbalances in power, process, and participation that existed
in the GATT and which persisted into the WTO. They help harness the power of numbers in favour of those
who join the group, and help improve the negotiating ability of their members by allowing
them to put together a more proactive and defensive negotiating position.109 As such, they
are becoming the vehicles through which some of the worst aspects of such imbalances
may be remedied on an operational basis and through which developing countries can
enhance their role in shaping and influencing decision-making.
They also represent a clear recognition on the part of developing countries that negotiating success in the
WTO lies in improved levels and modes of coordination with other developing countries in order to effect more effective and active participation in
the WTO decision-making process. As a result, developing countries have shown dramatic improvements in
their ability to establish and maintain their coalitions in the context of the WTO negotiations,
and they have become more strategic in doing so.
mechanics, internal dynamics, and the role that these coalitions play in WTO decisionmaking. These
Stefan Bauschard
Globalization and Poverty Release
113
A2: Globalization Increases Rich-Poor Gap
Nothing inherent in globalization expands the rich-poor gap between countries
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US Middle
Class,” http://www.washingtontimes.com/news/2014/oct/6/economic-globalization-boostsasia-bogs-down-us-mi/?page=all DOA: 1-2-14
There is nothing inherent in the process of globalization that would cause the gulf
between rich and poor nations to expand. In fact, the access to capital, new technology,
and larger markets that comes with global integration should be expected to accelerate
the convergence of less developed regions of the world and to make global trade and
wealth less concentrated across countries. This dynamic has been at work inside the
United States, which has itself been a continent-sized free- trade area for more than two
centuries. At the turn of the last century, in 1900, per-capita income varied widely across
the four major regions of the United States. While incomes in the Midwest were close to
the national average, at 103 percent, incomes in the Northeast were 139 percent above
the national average and those in the West were 153 percent above. In contrast, income
levels in the South were only 54 percent of the national average. One century later—
thanks in large measure to the free flow of goods, capital, and people within U.S.
borders—regional disparities have shrunk dramatically. Today, income levels in the
Northeast are only 117 percent above the national average, incomes in the Midwest and
West are within 2 percentage points of the national average, and incomes in the South as
a share of the national average have risen to 90 percent.25
Stefan Bauschard
Globalization and Poverty Release
114
China Responsible for the Decline in Poverty
China’s growth is responsible for 100% of the reduction in global poverty
John Ross, Senior Fellow at Chongyang Institute for Financial Studies, Renmin
University of China, November 2013, China Accounts for 100% of the reduction in the
number of the world’s people living in poverty,
http://ablog.typepad.com/keytrendsinglobalisation/2013/11/china-world-poverty.html
DOA: 1-2-15
In 2010 Professor Danny Quah, of the London School of Economics, noted: 'In the last 3
decades, China alone has lifted more people out of extreme poverty than the rest of the
world combined. Indeed, China’s ($1/day) poverty reduction of 627 million from 1981 to
2005 exceeds the total global economy’s decline in its extremely poor from 1.9 billion to
1.4 billion over the same period.' The aim of this article is to analyse the situation taking
data published three years after Quah's analysis; look at the trends not only of extreme
poverty, which the World Bank calculates using expenditure of $1.25 a day or less;
examine a slightly wider poverty definition ($2 a day expenditure), and compare the
trends in other regions of the world economy.
The conclusion is simple. Quah's conclusion still holds. China is responsible for 100% of
the reduction in the number of people living in poverty in the world. This finding is the
necessary backdrop to any serious and informed discussion of the role of China in the
world economy and its contribution to human rights.
* * *
There are many remarkable economic statistics about China.
• China contained 22% of the world’s population when its reforms began in 1978, so
the percentage of the world’s population directly benefitting from China’s rapid
economic growth is seven times that of the 3% of the world’s population in the
US or Japan when they began rapid growth, or the 2% of the world's
population in the UK at the time of the Industrial Revolution.
• China’s 9.9% average increase in GDP per capita during the two last five year plans
is the fastest economic growth per capita ever achieved by a major country in
human history.
• In the same period China’s annual average 8.1% increase in household
consumption, and 8.3% annual increase in total consumption, including state
expenditure on items vital for quality of life such as education and health, was
the fastest of any major economy. Coupled with a life expectancy above that
which would be expected from China’s GDP per capita it is evident China
experienced the most rapid increase in living standards of any country.
Measured in Parity Purchasing Powers (PPPs) – that is the real increase in output in
steel, cars, transport, services etc. - the greatest absolute increase in output ever
recorded in single year by the US was in 1999 when it added $567 billion in output. But
in 2010 China added $1,126 billion – more than twice the increase in output in a single
year ever achieved by any other country in human history.
Stefan Bauschard
Globalization and Poverty Release
115
Poverty rose outside of China
John Ross, Senior Fellow at Chongyang Institute for Financial Studies, Renmin
University of China, November 2013, China Accounts for 100% of the reduction in the
number of the world’s people living in poverty,
http://ablog.typepad.com/keytrendsinglobalisation/2013/11/china-world-poverty.html
DOA: 1-2-15
Nevertheless, impressive as such statistics are, from the point of view of human welfare
it is another number which dwarfs all others: the contribution of China to the reduction of
human poverty not only within its own borders but in its impact on the world. The
astonishing fact remains that China has been responsible for the entire reduction in the
number of people living in absolute poverty in the world!
To show this the table below gives the number of those in China and the world living on
expenditure less than the two standard measures used by the World Bank to measure
poverty. These are the criteria for extreme poverty, expenditure of less than $1.25 a day
($37.5 a month) and those living in poverty – expenditure of $2 day ($60 a month).
Charts showing the trends are at the end of the article.
In 1981, on World Bank data 972 million people in China were living on an expenditure
of less than $37.50 a month. By 2008 this had been reduced to 173 million, by 2009 it
fell to 157 million. Consequently 662 million people were lifted out of extreme poverty in
China in the twenty seven years up to 2008 and 678 million by 2009.
In contrast the number of people living in such extreme poverty outside China increased
by 50 million between 1981 and 2008 – the number of people emerging from poverty
was less than the population increase. This was due to the rise in the numbe of people
living in extreme poverty in sub-Saharan Africa. China was consequently responsible for
100% of the world’s reduction of the number of people living in extreme poverty.
Analysing those living on $2 a day ($60 a month), still a very low figure, the trend was
even more striking. The number of people in China living on an expenditure of this figure
or less fell from 972 million in 1981, to 395 million in 2008, to 362 million in 2009. The
number living on expenditure of $60 a month or less in China fell by 577 million by 2008,
and by 610 million by 2009.
In contrast the number of those living at this level of poverty in the world outside China
rose from 1,548 million in 1981 to 2,057 million in 2008 – an increase of 509 million.
Again, China accounted for the entire reduction in the number of people in the world
living at this level of poverty.
Stefan Bauschard
Globalization and Poverty Release
Globalization Bad
116
Stefan Bauschard
Globalization and Poverty Release
117
Poverty
Global neoliberalism exacerbates poverty and reifies massive inequalities.
Privatization and free trade claim to bolster the economy, but benefits only go
to neoliberal corporations and institutions. The poor always end up at the
bottom.
Makwana 6 – Director of Share the World’s Resources, an NGO campaigning for global
economic and social justice [Rajesh, “Neoliberalism and Economic Globalization”. 11/06/06.
http://www.stwr.org/globalization/neoliberalism-and-economic-globalization.html.]//jwang
Neoliberalism and Economic Globalization
The goal of neoliberal economic globalization is the removal of all barriers to commerce, and
the privatization of all available resources and services. In this scenario, public life will be at
the mercy of market forces, as the extracted profits benefit the few, writes Rajesh Makwana.
The thrust of international policy behind the phenomenon of economic globalization is
neoliberal in nature. Being hugely profitable to corporations and the wealthy elite, neoliberal
polices are propagated through the IMF, World Bank and WTO. Neoliberalism favours the
free-market as the most efficient method of global resource allocation. Consequently it
favours large-scale, corporate commerce and the privatization of resources.
There has been much international attention recently on neoliberalism. Its ideologies have been
rejected by influential countries in Latin America and its moral basis is now widely questioned.
Recent protests against the WTO, IMF and World Bank were essentially protests against the
neoliberal policies that these organizations implement, particularly in low-income countries.
The neoliberal experiment has failed to combat extreme poverty , has exacerbated global
inequality , and is hampering international aid and development efforts . This article presents
an overview of neoliberalism and its effect on low income countries.
Introduction
After the Second World War, corporate enterprises helped to create a wealthy class in society
which enjoyed excessive political influence on their government in the US and Europe.
Neoliberalism surfaced as a reaction by these wealthy elites to counteract post-war policies
that favoured the working class and strengthened the welfare state.
Neoliberal policies advocate market forces and commercial activity as the most efficient
methods for producing and supplying goods and services. At the same time they shun the role of
the state and discourage government intervention into economic, financial and even social
affairs. The process of economic globalization is driven by this ideology; removing borders and
barriers between nations so that market forces can drive the global economy. The policies
were readily taken up by governments and still continue to pervade classical economic
thought , allowing corporations and affluent countries to secure their financial advantage
within the world economy.
The policies were most ardently enforced in the US and Europe in the1980s during the Regan–
Thatcher–Kohl era. These leaders believed that expanding the free-market and private
ownership would create greater economic efficiency and social well-being. The resulting
deregulation, privatization and the removal of border restrictions provided fertile ground for
corporate activity, and over the next 25 years corporations grew rapidly in size and influence.
Corporations are now the most productive economic units in the world, more so than most
Stefan Bauschard
Globalization and Poverty Release
118
countries. With their huge financial, economic and political leverage, they continue to further
their neoliberal objectives .
There is a consensus between the financial elite, neoclassical economists and the political
classes in most countries that neoliberal policies will create global prosperity. So entrenched is
their position that this view determines the policies of the international agencies (IMF, World
Bank and WTO), and through them dictates the functioning of the global economy. Despite
reservations from within many UN agencies, neoliberal policies are accepted by most
development agencies as the most likely means of reducing poverty and inequality in the
poorest regions.
There is a huge discrepancy between the measurable result of economic globalization and its
proposed benefits. Neoliberal policies have unarguably generated massive wealth for some
people, but most crucially, they have been unable to benefit those living in extreme poverty
who are most in need of financial aid. Excluding China, annual economic growth in developing
countries between 1960 and 1980 was 3.2%. This dropped drastically between 1980 and 2000
to a mere 0.7 %. This second period is when neoliberalism was most prevalent in global
economic policy. (Interestingly, China was not following the neoliberal model during these
periods, and its economic growth per capita grew to over 8% between 1980 and 2000.)
Neoliberalism has also been unable to address growing levels of global inequality. Over the
last 25 years, the income inequalities have increased dramatically, both within and between
countries. Between 1980 and 1998, the income of richest 10% as share of poorest 10% became
19% more unequal; and the income of richest 1% as share of poorest 1% became 77% more
unequal (again, not including China).
The shortcomings of neoliberal policy are also apparent in the well documented economic
disasters suffered by countries in Latin America and South Asia in the 1990s. These countries
were left with no choice but to follow the neoliberal model of privatization and deregulation,
due to their financial problems and pressure from the IMF. Countries such as Venezuela, Cuba,
Argentina and Bolivia have since rejected foreign corporate control and the advice of the IMF
and World Bank. Instead they have favoured a redistribution of wealth, the re-nationalization
of industry and have prioritized the provision of healthcare and education. They are also
sharing resources such as oil and medical expertise throughout the region and with other
countries around the world.
The dramatic economic and social improvement seen in these countries has not stopped
them from being demonized by the US. Cuba is a well known example of this propaganda.
Deemed to be a danger to ‘freedom and the American way of life’, Cuba has been subject to
intense US political, economic and military pressure in order to tow the neoliberal line.
Washington and the mainstream media in the US have recently embarked on a similar
propaganda exercise aimed at Venezuela’s president Chavez. This over-reaction by Washington
to ‘economic nationalism’ is consistent with their foreign policy objectives which have not
changed significantly for the past 150 years. Securing resources and economic dominance has
been and continues to be the USA’s main economic objective.
According to Maria Páez Victor:
“Since 1846 the United States has carried out no fewer than 50 military invasions and
destabilizing operations involving 12 different Latin American countries. Yet, none of these
countries has ever had the capacity to threaten US security in any significant way. The US
intervened because of perceived threats to its economic control and expansion. For this reason
Stefan Bauschard
Globalization and Poverty Release
119
it has also supported some of the region’s most vicious dictators such as Batista, Somoza,
Trujillo, and Pinochet.”
As a result of corporate and US influence, the key international bodies that developing
countries are forced to turn to for assistance, such as the World Bank and IMF, are major
exponents of the neoliberal agenda. The WTO openly asserts its intention to improve global
business opportunities; the IMF is heavily influenced by the Wall Street and private financiers,
and the World Bank ensures corporations benefit from development project contracts. They
all gain considerably from the neo-liberal model.
So influential are corporations at this time that many of the worst violators of human rights
have even entered a Global Compact with the United Nations, the world’s foremost
humanitarian body. Due to this international convergence of economic ideology, it is no
coincidence that the assumptions that are key to increasing corporate welfare and growth
are the same assumptions that form the thrust of mainstream global economic policy.
However, there are huge differences between the neoliberal dogma that the US and EU dictate
to the world and the policies that they themselves adopt. Whilst fiercely advocating the removal
of barriers to trade, investment and employment, The US economy remains one of the most
protected in the world. Industrialized nations only reached their state of economic development
by fiercely protecting their industries from foreign markets and investment. For economic
growth to benefit developing countries, the international community must be allowed to
nurture their infant industries. Instead economically dominant countries are ‘kicking away
the ladder’ to achieving development by imposing an ideology that suits their own economic
needs.
The US and EU also provide huge subsidies to many sectors of industry. These devastate small
industries in developing countries, particularly farmers who cannot compete with the price of
subsidized goods in international markets. Despite their neoliberal rhetoric, most ‘capitalist’
countries have increased their levels of state intervention over the past 25 years, and the size of
their government has increased. The requirement is to ‘do as I say, not as I do’.
Given the tiny proportion of individuals that benefit from neoliberal policies, the chasm
between what is good for the economy and what serves the public good is growing fast.
Decisions to follow these policies are out of the hands of the public, and the national
sovereignty of many developing countries continues to be violated, preventing them from
prioritizing urgent national needs. Below we examine the false assumptions of neoliberal
policies and their effect on the global economy.
Economic Growth
Economic growth, as measured in GDP, is the yardstick of economic globalization which is
fiercely pursued by multinationals and countries alike. It is the commercial activity of the tiny
portion of multinational corporations that drives economic growth in industrialized nations. Two
hundred corporations account for a third of global economic growth. Corporate trade currently
accounts for over 50% of global economic growth and as much as 75% of GDP in the EU. The
proportion of trade to GDP continues to grow, highlighting the belief that economic growth is
the only way to prosper a country and reduce poverty.
Logically, however, a model for continual financial growth is unsustainable. Corporations have
to go to extraordinary lengths in order to reflect endless growth in their accounting books. As
a result, finite resources are wasted and the environment is dangerously neglected. The
Stefan Bauschard
Globalization and Poverty Release
120
equivalent of two football fields of natural forest is cleared each second by profit hungry
corporations.
Economic growth is also used by the World Bank and government economists to measure
progress in developing countries. But, whilst economic growth clearly does have benefits, the
evidence strongly suggests that these benefits do not trickle down to the 986 million people
living in extreme poverty, representing 18 percent of the world population (World Bank,
2007). Nor has economic growth addressed inequality and income distribution. In addition,
accurate assessments of both poverty levels and the overall benefits of economic growth have
proved impossible due to the inadequacy of the statistical measures employed.
The mandate for economic growth is the perfect platform for corporations which, as a result,
have grown rapidly in their economic activity, profitability and political influence. Yet this very
model is also the cause of the growing inequalities seen across the globe. The privatization of
resources and profits by the few at the expense of the many, and the inability of the poorest
people to afford market prices, are both likely causes.
Free Trade
Free trade is the foremost demand of neoliberal globalization. In its current form, it simply
translates as greater access to emerging markets for corporations and their host nations. These
demands are contrary to the original assumptions of free trade as affluent countries adopt and
maintain protectionist measures. Protectionism allows a nation to strengthen its industries by
levying taxes and quotas on imports, thus increasing their own industrial capacity, output and
revenue. Subsidies in the US and EU allow corporations to keep their prices low, effectively
pushing smaller producers in developing countries out of the market and impeding
development .
With this self interest driving globalization, economically powerful nations have created a global
trading regime with which they can determine the terms of trade.
The North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico is an
example of free-market fundamentalism that gives corporations legal rights at the expense of
national sovereignty. Since its implementation it has caused job loss , undermined labour
rights , privatized essential services , increased inequality and caused environmental
destruction.
In Europe only 5% of EU citizens work in agriculture, generating just 1.6% of EU GDP compared
to more than 50% of citizens in developing countries. However, the European Common
Agricultural Policy (CAP) provides subsidies to EU farmers to the tune of £30 billion, 80% of
which goes to only 20% of farmers to guarantee their viability, however inefficient this may be.
The General Agreement on Trade and Services (GATS) was agreed at the World Trade
Organization (WTO) in 1994. Its aim is to remove any restrictions and internal government
regulations that are considered to be "barriers to trade". The agreement effectively abolishes
a government’s sovereign right to regulate subsidies and provide essential national services
on behalf of its citizens. The Trade Related agreement on International Property Rights (TRIPS)
forces developing countries to extend property rights to seeds and plant varieties. Control
over these resources and services are instead granted to corporate interests through the
GATS and TRIPS framework.
These examples represent modern free trade which is clearly biased in its approach. It fosters
corporate globalization at the expense of local economies, the environment, democracy and
human rights. The primary beneficiaries of international trade are large, multinational
Stefan Bauschard
Globalization and Poverty Release
121
corporations who fiercely lobby at all levels of national and global governance to further the
free trade agenda.
Liberalization
The World Bank, IMF and WTO have been the main portals for implementing the neoliberal
agenda on a global scale. Unlike the United Nations, these institutions are over-funded,
continuously lobbied by corporations, and are politically and financially dominated by
Washington, Wall Street, corporations and their agencies. As a result, the key governance
structures of the global economy have been primed to serve the interests of this group , and
market liberalization has been another of their key policies.
According to neoliberal ideology, in order for international trade to be ‘free’ all markets should
be open to competition, and market forces should determine economic relationships. But the
overall result of a completely open and free market is of course market dominance by
corporate heavy-weights. The playing field is not even ; all developing countries are at a great
financial and economic disadvantage and simply cannot compete.
Liberalization, through Structural Adjustment Programs, forces poorer countries to open their
markets to foreign products which largely destroys local industries. It creates dependency
upon commodities which have artificially low prices as they are heavily subsidized by
economically dominant nations. Financial liberalization removes barriers to currency
speculation from abroad. The resulting rapid inflow and outflow of currencies is often
responsible for acute financial and economic crisis in many developing countries. At the same
time, foreign speculators and large financial firms make huge gains. Market liberalization poses
a clear economic risk; hence the EU and US heavily protect their own markets.
A liberalized global market provides corporations with new resources to capitalize and new
markets to exploit. Neoliberal dominance over global governance structures has enforced
access to these markets. Under WTO agreements, a sovereign country cannot interfere with a
corporation’s intentions to trade even if their operations go against domestic environmental
and employment guidelines. Those governments that do stand up for their sovereign rights
are frequently sued by corporations for loss of profit, and even loss of potential profit.
Without this pressure they would have been able to stimulate domestic industry and self
sufficiency, thereby reducing poverty. They would then be in a better position to compete in
international markets.
Global capitalism causes savage inequalities – their examples are historical
anomalies and mathematically false
Graeber ’14 [5/30/14, David Graeber is an American anthropologist, political activist and was
formerly an associate professor of anthropology at Yale University, ~ “Savage capitalism is back
– and it will not tame itself”,
http://www.theguardian.com/commentisfree/2014/may/30/savage-capitalism-back-radicalchallenge] GKoo
He seemed touched by my naivety. At that time, there was a series of assumptions everybody
had to accept in order even to be allowed to enter serious public debate. They were presented
like a series of self-evident equations. "The market" was equivalent to capitalism. Capitalism
meant exorbitant wealth at the top, but it also meant rapid technological progress and
economic growth. Growth meant increased prosperity and the rise of a middle class. The rise
of a prosperous middle class, in turn, would always ultimately equal stable democratic
Stefan Bauschard
Globalization and Poverty Release
122
governance. A generation later, we have learned that not one of these assumptions can any
longer be assumed to be correct . The real importance of Thomas Piketty's blockbuster, Capital
in the 21st Century, is that it demonstrates, in excruciating detail (and this remains true despite
some predictable petty squabbling) that, in the case of at least one core equation, the numbers
simply don't add up. Capitalism does not contain an inherent tendency to civilise itself. Left
to its own devices, it can be expected to create rates of return on investment so much higher
than overall rates of economic growth that the only possible result will be to transfer more
and more wealth into the hands of a hereditary elite of investors, to the comparative
impoverishment of everybody else . In other words, what happened in western Europe and
North America between roughly 1917 and 1975 – when capitalism did indeed create high
growth and lower inequality – was something of a historical anomaly. There is a growing
realisation among economic historians that this was indeed the case. There are many theories
as to why. Adair Turner, former chairman of the Financial Services Authority, suggests it was
the particular nature of mid-century industrial technology that allowed both high growth rates
and a mass trade union movement. Piketty himself points to the destruction of capital during
the world wars, and the high rates of taxation and regulation that war mobilisation allowed.
Others have different explanations. No doubt many factors were involved, but almost everyone
seems to be ignoring the most obvious. The period when capitalism seemed capable of
providing broad and spreading prosperity was also, precisely, the period when capitalists felt
they were not the only game in town: when they faced a global rival in the Soviet bloc,
revolutionary anti-capitalist movements from Uruguay to China, and at least the possibility of
workers' uprisings at home. In other words, rather than high rates of growth allowing greater
wealth for capitalists to spread around, the fact that capitalists felt the need to buy off at least
some portion of the working classes placed more money in ordinary people's hands, creating
increasing consumer demand that was itself largely responsible for the remarkable rates of
economic growth that marked capitalism's "golden age". Since the 1970s, as any significant
political threat has receded, things have gone back to their normal state: that is, to savage
inequalities, with a miserly 1% presiding over a social order marked by increasing social,
economic and even technological stagnation. It was precisely the fact that people such as my
Russian friend believed capitalism would inevitably civilise itself that guaranteed it no longer
had to do so.
Their statistics are biased reject them
NC ’14 [8/2/14, Nation of Change provides a free daily newsletter with articles from
progressive writers and initiates activistic calls to action, ~ “The Seven Deadly Sins of
Capitalism”, http://www.nationofchange.org/seven-deadly-sins-capitalism-1391350401]
5) Poverty. One of the most common arguments for global capitalism is that it helps alleviate
poverty. Problem is, global poverty statistics are generated by the World Bank, an institution
explicitly designed to promote globalization . Critics argue that (1) the numbers are usually
skewed by one or two rapidly developing countries, (2) the definition of deep poverty as a
wage of $1.25/day is set arbitrarily low in order to yield the desired stats , and (3) daily wages
Stefan Bauschard
Globalization and Poverty Release
123
say nothing about access to potable water, adequate nutrition, healthcare, education,
community, and other things that determine quality of life. Moreover, poverty rates mean
little when economic disparity has increased so dramatically in recent decades. Actually, a
compelling argument can be made that global capitalism doesn’t alleviate poverty but causes
poverty . After all, the aim of globalization is to expand markets by infiltrating “undeveloped”
(read: self-sufficient) communities and dragging them into the money economy, thus creating
new laborers and consumers. Could members of a gift-based, indigenous tribe really be called
“poor”? Only by the logic of capitalism , which defines poverty as the inability to purchase
one’s basic necessities (which might include designer clothing) from an outside party using fiat
currency.
Their argument is misleading – even if poverty is being reduced social inequality
is sky-rocketing
Harvey Distinguished Professor at the Graduate Center of the City University of New York
2006 David A Conversation with David Harvey Logos 5.1
http://www.logosjournal.com/issue_5.1/harvey.htm
I’ll respond in two ways, there is a lot of controversy over the kind of data you look at and how you prove that. For
instance if you ask the question of how many people were in poverty in 1980 and how many
people there are in poverty today, you might say, there are fewer people in poverty now than
there was back then. But when you look at the economic performance, of say China and India, and you look at the
aggregate data, it looks like the world is better off. If you start to look at social inequality however, you start to
see in many instances, that neo-liberalization has increased social inequality, even at the same time
that it has lifted some of the people at the bottom out of poverty. If you look at the concentration of
wealth, at the very top bracket of society, you will see immense concentrations of wealth at the very top 0.1% of the population.
At this point the
question is: who is neo-liberalization really benefiting? And if you look at
concentrations of political and economic power, it has largely benefited a very very small
elite. And we have to start looking at that. For instance, the New York Times had this interesting data a couple of months ago. How
rich, on average, are the richest 200 (or 400) families in the United States? I think the data showed that back in 1980, they had
something like $680 million. In constant dollars it is something like $2.8 billion. They have quadrupled their wealth in the last twenty
years and this is a familiar story not just in the U.S but also globally. In Mexico, after neo-liberalization, you see the same thing. You
see the same think happening in China and in India. When Thomas Friedman talks about a flat world, he is saying you do not have to
come to America to be a billionaire; you can be a billionaire in Bangalore now. You do not have to migrate to America, but the social
inequality in India is increasing dramatically.
Global capitalism makes social inequality inevitable
Wise et al. (Director of Doctoral Program in Migration Studies & Prof of Development Studies;
Universidad Autónoma de Zacatecas, Mexico) 10
(Raúl Delgado Wise, Humberto Márquez Covarrubias, Rubén Puentes, Reframing the debate on migration,
development and human rights: fundamental elements, October, 2010, www.migracionydesarrollo.org)
At the end of the first decade of the 21st century, a
general crisis centered in the United
States affected the global capitalist system on several levels (Márquez, 2009 and
2010). The consequences have been varied: Financial. The overflowing of financial
capital leads to speculative bubbles that affect the socioeconomic framework
and result in global economic depressions. Speculative bubbles involve the
bidding up of market prices of such commodities as real estate or electronic
innovations far beyond their real value, leading inevitable to a subsequent slump
(Foster and Magdof, 2009; Bello, 2006). Overproduction. Overproduction crises emerge when
Stefan Bauschard
Globalization and Poverty Release
124
the surplus capital in the global economy is not channeled into production processes due to a fall
in profit margins and a slump in effective demand, the latter mainly a consequence of wage
containment across all sectors of the population (Bello, 2006). Environmental. Environmental
degradation, climate change and a predatory approach to natural resources
contribute to the destruction of the latter, along with a fundamental undermining of the
material bases for production and human reproduction (Fola- dori and Pierri, 2005;
Hinkelammert and Mora, 2008). Social. Growing social inequalities, the dismantling of the
welfare state and dwindling means of subsistence accentuate problems such as poverty,
unemployment, violence, insecurity and labor precariousness, increasing the pressure to
emigrate (Harvey, 2007; Schierup, Hansen and Castles, 2006).
The crisis raises questions about the prevailing model of globalization and, in a
deeper sense, the systemic global order, which currently undermines our main sources
of wealth—labor and nature—and overexploits them to the extent that civilization
itself is at risk. The responses to the crisis by the governments of developed countries and
international agencies promoting globalization have been short-sighted and exclusivist. Instead
of addressing the root causes of the crisis, they have implemented limited
strategies that seek to rescue financial and manufacturing corporations facing
bankruptcy. In addition, government policies of labor flexibilization and fiscal adjustment
have affected the living and working conditions of most of the population. These measures
are desperate attempts to prolong the privileges of ruling elites at the risk of
imminent and increasingly severe crises. In these conditions, migrants have been
made into scapegoats, leading to repressive anti- immigrant legislation and
policies (Massey and Sánchez, 2006). A significant number of jobs have been lost while the
conditions of remaining jobs deteriorate and deportations increase. Migrants’ living standards
have drastically deteriorated but, contrary to expectations, there have been neither massive return
flows nor a collapse in remittances, though there is evidence that migrant worker flows have
indeed diminished.
Globalization correlated with rising poverty in Mexico
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home,
“Globalisation,” pp. 292-7
Most of the existing empirical literature on the effect of trade liberalization on inequality in Mexico focuses
on the wage earners and shows a rise in income inequality on account of an increase in the relative demand
for, and the relative returns to, skilled labor. As the self-employed, accounting for one-third of the labor
force, are one of the vulnerable groups in the economy, operating almost entirely in the informal sector,
Popli examines the trend in income inequality and poverty among the self-employed workers in Mexico for
the two decades (1984–02), during which Mexico opened its economy to the global market through trade
and investment liberalization. Under the impetus of increased competition furthered by the liberalization
process, the informal sector is seen to expand in the need to absorb negative income shocks as workers in
the formal sectors are laid off, giving rise to the fear of “social exclusion” of the self-employed.
Popli finds that inequality and poverty increased among the self-employed during the first decade following
trade liberalization; however, during the second decade, she observes that as the economy stabilized while
experiencing economic growth, inequality started to go down, but poverty kept increasing, recording a
doubling of the headcount ratio from 21% in 1984 to 40% in 2002. Most of the increase took place after the
1995 peso crisis. More generally, the poverty incidence among the self-employed follows closely the
economic cycles. To understand these changes in inequality and poverty in relation to the self-employed
workers, she decomposes the inequality and poverty indices into within and between group effects—
employing well-established decomposition methods.
Stefan Bauschard
Globalization and Poverty Release
125
Trade reduces the demand for skilled labor and worsens wage distribution
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
Trade liberalization may also lead to higher poverty by reducing the demand for unskilled labor (not only
in import-substitution industries but also in other sectors as well) and a worsening of wage income
distribution. In a number of countries in Latin America and Asia, openness to trade during the 1980s and
1990s has coincided with an increase in the demand of, and the return to, skilled labor relative to
unskilled labor, and a worsening of wage inequality (Robbins, 1996 and Harrison & Hanson, 1999).
A possible explanation of this phenomenon is that trade liberalization has been associated with the
introduction of higher-level technology, the use of which requires skilled labor.
The reason is that the cost of (imported) capital depends not only on the relative price of capital goods
but also on tariffs that are incurred in purchasing a unit of capital goods abroad. To the extent that a fall in
tariffs translates into a fall in the cost of capital, a high degree of complementarity between skilled labor
and capital, and a high degree of substitutability between unskilled labor and capital, would indeed entail
an increase in the demand for skilled workers – thereby leading to a widening of the wage gap between
skilled and unskilled labor4.
The reduction in the demand for unskilled labor may translate into higher unemployment for that
category of labor and increased poverty
Trade reduces human capital investment
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
The link between trade openness and the accumulation of human capital is important to understand the
long-run effects of globalization on poverty. Do open trade regimes lead to high investment in human
capital in developing countries? Some theoretical models actually predict that free trade may lead to a
decrease in the accumulation of human capital in countries that are initially skills-scarce. Findlay and
Kierzkowski (1983), for instance, using a model in which capital markets are perfect, showed that the
accumulation of human capital (and thus the supply of skilled labor) in countries that are initially skillsscarce falls when the rewards to education are reduced by the availability of cheaper, skills-intensive
import goods. If human capital formation has spillover effects on growth (as in endogenous growth
models of the Lucas-Romer variety), trade liberalization may thus lead to higher poverty rates.
Financial integration subjects the poor to economic shocks and is driven by
inequality
Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich
Centre for Innovation and Entrepreneurship Research, Advances
2(1): 42, p. 42-57
in Economics and Business
Stefan Bauschard
Globalization and Poverty Release
126
A key problem associated with financial openness, as Agenor (2004) points out, is that access to world
capital markets tends to be asymmetric. Many developing countries (including some of the richer ones)
are able to borrow on world capital markets only in “good” times, whereas in “bad” times they tend to
face credit constraints. Access is thus pro-cyclical. Clearly, in such conditions, one of the alleged benefits
of accessing world capital markets (the ability to borrow to smooth consumption in the face of temporary
adverse shocks), is nothing but a fiction (Agenor, 2003). Pro-cyclacality may, in fact, have a perverse effect
and increase macroeconomic instability (Dadus et al, 2000). This can be understood in the following
manner. Favorable shocks may attract large capital inflows and encourage consumption and spending at
levels that are unsustainable in the longer term, forcing countries to over-adjust to adverse shocks as a
result of abrupt capital reversals. The impact on poverty may thus be magnified
In recent years, financial globalization in many transition and developing economies has taken the form of
greater penetration of the domestic financial system by foreign banks.. Agenor (2003) explains this
lucidly: “Unlike trade liberalization, which has often resulted from unilateral decisions by governments to
lower tarrifs, this form of financial integration has often been less a matter of choice than a decision
imposed by the country’s situation – in several cases, the need to recapitaslize domestic banks in the
aftermath of a banking crisis.” Although there are potentially large benefits associated with greater
foreign penetration (such as enhanced quality of financial services, better techniques for credit analysis,
and reduced risks of domestic financial instability), which may translate into higher growth rates and
lower poverty, there are potentially adverse effects as well.
Globalized credit market hurts the poor
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
Another channel through which financial openness may have an adverse effect on the poor (at least in the
short run) is the credit market. As argued by Agénor and Aizenman (1998, 1999), 6 the increased exposure
to volatile shocks that is associated with financial openness may translate into higher domestic interest
rates (because of the increased risk of default), lower domestic output, and thus possibly higher poverty
rates. The key reason is that increased volatility (of world interest rates, in particular) raises expected
intermediation costs and lead domestic financial institutions (whose ability to enforce loan contracts is
limited) to either increase domestic interest rates or to ration credit to maintain expected profits. Of
course, what this argument implies is not that financial openness per se is undesirable, but rather that
financial integration should be accompanied by adequate reforms of the domestic financial system to
minimize the adverse effects of volatility on output, employment, and poverty
Globalization causes capital flight
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
In addition to level effects associated with greater exposure to volatility, financial openness may also have
adverse effects on growth and, through that channel, on poverty. If financial openness is accompanied by
capital flight, the lower rate of accumulation of domestic capital that may result could be associated with
a persistent, adverse effect on growth in the presence of increasing returns driven by externalities in
knowledge and capital formation (Song, 1993).
Stefan Bauschard
Globalization and Poverty Release
127
Financial crises threaten the poor
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
Another significant result of Harrison (2006) is that financial crises turn out to be very costly to the poor.
Poverty rates in Indonesia increased by at least 50 percent after the currency crisis in 1997. Cross-country
evidence also suggests that financial globalization leads to higher.consumption and output volatility in low
income countries. One implication is that low income countries are more likely to benefit from financial
integration if they also create reliable institutions and pursue macroeconomic stabilization policies
(including the use of flexible exchange rate regimes). Unrestricted foreign capital flows are generally
associated with high poverty rates among less developed countries
Foreign investment undermines local profits
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
A major challenge of foreign direct investment (FDI) for an emerging economy is the retention of some of
the profits earned by the investing firm. If none of the benefits of FDI is reinvested in the local economy,
then the investment is not worthwhile for the emerging economy. FDI may also slowdown growth and
lower the real income of the country, if the FDI worsens the terms of trade of the country.
Shocks make transitory poverty permanent
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
More importantly, severe shocks can turn transitory poverty into a permanent phenomenon. Even a
transitory loss of income can cause the poor to lose opportunities to acquire human capital through
education, health care, and nutrition and thus affect their ability to get out of poverty in the future. Third,
the poor may not be tightly linked to the formal economy and generally subsist in the urban informal
sector or in rural subsistence agriculture. Thus, trade policy reform that seeks to be sensitive to its effect
on the poor will not be able to ignore these sectors.
African exports mean inequality and poverty
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
Stefan Bauschard
Globalization and Poverty Release
128
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
New natural resource discoveries are driving an explosion of economic growth in subSaharan Africa. GDP in oil-rich countries like Equatorial Guinea and Angola has grown
at average annual rates of more than 10 percent since 2000. Exports of oil, natural gas,
metals, and minerals are also behind strong growth in Tanzania, Zambia, the
Democratic Republic of Congo, Mali, and Namibia.43 However, though several African
countries are among the faster growing economies in the world, inequality remains
rampant, hindering the rate of poverty reduction.44 In fact, there is a positive correlation
between the level of resources African countries export and their levels of inequality (as
measured by the Gini coefficient).45
In countries with weak regulatory institutions, some companies undervalue the assets on which
they pay royalties and taxes. As the individuals and companies involved in these extractive
corporations and their political allies become rich, less and less attention is paid to efforts to
reduce poverty and inequality.
Globalization means resource exploitation and waste dumping in Africa
Derrick Owusu-Kodu, April 7, 2014, Poverty and the Impacts of Globalization on the African
Economy,
http://www.africandynamo.com/2014/04/poverty-and-impacts-of-globalizationon.html#mM4cowGoocBOQhUe.99 DOA: 1-2-15
After centuries of colonization, slavery, exploitation, marginalization and excruciating poverty,
African politicians have yet to grasp the nature of manipulable globalization. Years of relative
economic retrogression have taken a horrendous toll on all parts of the African economy. To add
insult to injury, the African continent inadvertently welcomes with open arms a colossal dose of
the negative impacts of globalization. The nature of the African economy itself continues to limit
gains from the enormous opportunities in the liberal globalization. Clearly, globalization by all
odds has enabled the African continent to be used as a tolerating and warm-welcoming place
for natural resource exploitation and industrial waste dumping. Economies lacking innovation
and value creation are largely to blame for these huge miscalculations, and the lopsided
relationships.
Globalization leads to the feminization of poverty and human trafficking
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
Millions of people are trafficked all over the world and enslaved in forced labor in a
broad range of industries. Yet, the global community’s efforts to mitigate trafficking
Stefan Bauschard
Globalization and Poverty Release
129
have fallen short. This Article argues that the lack of success in fighting human
trafficking is to a large extent the result of framing the existing discourse of human
trafficking as a matter of criminal law and human rights of women and children, rather
than addressing the economic and global market conditions within which human
trafficking thrives. Human trafficking is a multi-dimensional issue exacerbated by poverty
and disparities in economic opportunities vis-a-vis unmet labor demands and strict
migration laws in wealthier countries. It thrives on the vulnerability of certain individuals
and populations to exploitation, and particularly those who may desire to migrate in
hope of better economic opportunities. Human trafficking is also very much a
manifestation of the feminization of both poverty and migration. The dominant gendered
narrative, however, continues to marginalize both the impact on and the role of women,
children and migrant workers in the global economy, and ignores the complex structural,
social and economic aspects of women’s labor migration.
The Article specifically highlights vulnerabilities to trafficking and exploitation brought
upon by globalization, the feminization of labor migration, and the links between
irregular migration and human trafficking. Migrant workers, particularly migrant women,
are playing an increasingly critical role in sustaining the global economy. Poor women
(of color) in developing countries comprise most of those emigrating for survival, and
relatedly, the overwhelming majority among those who are exploited in the process and
subject to trafficking. Nonetheless, the international community has been reluctant to
fully investigate and act upon the linkage between trafficking and migrant labor. Even
more importantly, the current discourse on trafficking fails to admit that human
trafficking is the "underside of globalization." There is no commitment to reframe
trafficking as a global migratory response to a global market that seeks out cheap,
unregulated, and exploitable labor and the goods and services that such labor can
produce. Instead, this Article argues, we need to develop an economic analysis of
human trafficking–one which primarily looks at globalization, trade liberalization and
labor migration as the core areas that need to be explored to advance the prevention of
human trafficking.
Globalization threatens women in the global South
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
Globalization has had a particularly harsh impact on women in the “global south,” and it is critical that we recognize the “systemic
link between the growing presence of women from developing countries in a variety of global migration and trafficking circuits on
the rise in unemployment and debt in those same economies on the other.”113
Women in developing countries who may have been able to participate in the formal
economy through small locally owned businesses and farms may no longer have those
opportunities and lose out to cheaper imported goods. They are consequently pushed into
the informal sector or into low-skilled manufacturing and service jobs generated by the
entrance of transnational corporations into developing economies.114 Quite often those
corporations are allowed to get away with adverse working conditions and low wages in
their “global assembly line.” Such employers may even prefer female workers from
disadvantaged background as they take advantage of deeply imbedded gender
one hand and
Stefan Bauschard
Globalization and Poverty Release
130
subordination in traditional societies and assume that these workers are likely to be more
submissive and less likely to resist exploitive work conditions.115
Globalization increased poverty in many developing countries
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
The relationship between globalization and poverty level has been a subject of prolonged and
unresolved debate both in the developed and developing nations. Many scholars are of the
opinion that globalization has actually reduced poverty in the developed countries, but one may
not be categorical in the case of the less developed countries. Oyewale and Amusat (2013)
viewed globalization as a borderless world with greater economic integration that is meant to
enhance the living standards of people across the globe, but most developing countries
in Africa, Asia and Latin America have been victims rather than beneficiaries of the
globalization process especially as poverty and income inequality increased in the last two
decades.
A curious look at the Nigerian economy shows that despite the high rate of openness, poverty is
still highly visible.
Globalization raises unemployment, which drives people into poverty
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 the same vein, Ghimire (2006), in his work on the effect of globalization on poverty stated
vehemently that globalization creates tensions especially within nations and companies between
those who have the skills and resources to compete in the global market and those who do not. He
stressed further that this disparity is capable of creating high unemployment rate which therefore
drives the people further into poverty.
Globalization means many producers lose, increasing poverty
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
In considering these issues, we begin with a brief excursion into the theory of the terms of trade
(section 7.1), since this provides an important backdrop for assessing the overall outcome of
global specialization. This will be followed by a review of some of the major factors which might
lead to a win– win outcome from deepened globalization in the production and exchange of
manufactures (section 7.2). It begins with a discussion of the theoretical explanation for such
mutual gains and considers some of the evidence to back these assumptions. In section 7.3 we
question this win– win outcome by focusing on the realism of these abstract theoretical
assumptions in the context of the real world of the early twenty-first century. We conclude with
Stefan Bauschard
Globalization and Poverty Release
131
a pessimistic view that, while the workings of the global economy may be positive for some
producers, they are unlikely to work to the benefit of many other producers. In these
circumstances, a significant degree of poverty and inequality are relational outcomes of
globalization. They arise as a direct consequence of excess global capacity and constrained
global consumption, and lead to a race to the bottom in real incomes. Kaplinsky, Raphael (201304-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations
3370-3372). Wiley. Kindle Edition.
Increased trade contributes to the growth of slums
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
More importantly for our analysis, they are an outcome of the very success of globalization in
two important respects. First, as we saw in chapter 7, the displacement of labour which results
from reducing impediments to trade has contributed to the growth of slums. And, second, the
extension of global product markets has depended on the development of global brands. These
brands are backed by advertising, not just the explicit ‘in-your-face’ hoardings which increasingly
dominate the cityscape, but also the more subtle subliminal offerings such as ‘product
placements’ of key global brands in films. Much of this branding is culturally specific, with an
emphasis on sexuality which is anathema to many religious groups. Kaplinsky, Raphael (201304-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations
4374-4380). Wiley. Kindle Edition.
Capitalism puts hundreds of millions of people in poverty
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
Of the many consequences of the global economic meltdown that swept the world from 2008
onwards, perhaps the most important for the long term was that it exposed to public attention
the true nature of the capitalist world system in the modern age. The immediate trigger for the
Great Recession may have been a liquidity crisis brought on by mass panic at the bursting of the
US housing bubble, once it was realised that no one could predict to what extent the world's
banking system was contaminated with toxic debt. Yet it soon became clear that there was
something rotten in the state of the global economy far beyond the greed and grasping of a few
creative financiers. Most obviously, the crisis served to reveal the economic, social and
ecological imbalances that had developed over the previous three decades of neoliberal
globalisation, a period during which states had granted unprecedented powers to capital while
steadily undermining the privatisation, liberalisation and deregulation had aimed at nothing
less than a second ‘great transformation’ to rival the free market fundamentalism of the
nineteenth century, directing state intervention away from social redistribution towards an
unambiguous role as enforcer of the enduring freedoms of capital. 1 Any suggestion that these
freedoms would be to the greater benefit of society was finally laid to rest in 2008, as
unimaginable sums of public money were commandeered to rescue the system from itself. Yet
in addition to exploding once again the myth of the self-regulating market, the global economic
meltdown also stimulated recognition of a more profound truth: that independently of the
excesses of neoliberalism, the massive accumulation of capital at the core of the system offers
Stefan Bauschard
Globalization and Poverty Release
132
only crisis and poverty to hundreds of millions of people across the world. Hilary, John (201310-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next
(Kindle Locations 191-198). Pluto Press. Kindle Edition.
Globalization increases poverty in the South in order to increase poverty
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
This book seeks to challenge the notion that transnational capital is a benign force in the service
of humanity, and to set against that orthodoxy the evidence of its actual operations around the
world. The international focus of the book is deliberate and necessary, as the most extreme
injustices of the system are manifest in its relations with the peoples of the majority world,
forced to survive their integration into the global economy in situations of incomparable stress
and insecurity. impoverishment of the peoples of the global South, incorporated into the
bottom of global value chains so as to generate ever greater profits for those at the top, is a
lasting reminder that the programme of corporate globalisation was developed not for public
benefit but to further the interests of the few. Years of low inflation and cheap credit allowed
the champions of neoliberalism to conceal this reality from people in the rich world, and to
sustain the central myth of globalisation as a ‘win-win’ or positive sum equation. This book seeks
to restore the experience of the peoples of the majority world to a debate from which they are
invariably excluded. 9 Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown
and the Struggle for What Comes Next (Kindle Locations 261-266). Pluto Press. Kindle Edition.
Stefan Bauschard
Globalization and Poverty Release
133
A2: Globalization Reduces Poverty
Pro states are false – globalization has not reduced poverty, it has increased it
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
To many people, particularly those living outside the core economies of the capitalist world
system, this was not news. The experience of colonialism had taught the peoples of the global
South that the accumulation of capital in the metropolitan centres of empire required the
violent suppression and immiseration of the colonised, to the extent that it negated the
possibility of their historical development. 2 Nor was this experience confined to some dim and
distant past, as the ‘new imperialism’ exercised through international financial institutions such
as the World Bank and International Monetary Fund (IMF) had continued to condemn the same
peoples to exploitation throughout the decades following their liberation from colonial rule. 3
The result of this systematic dispossession has been mass poverty on a global scale. In August
2008, one month before the collapse of investment bank Lehman Brothers sent financial
markets into freefall, the World Bank acknowledged that it had previously overstated the
numbers lifted out of poverty in the previous three decades of neoliberal globalisation, and that
a staggering 1.4 billion people were still living below the extreme poverty line (the equivalent of
what it means to be poor in the world's very poorest countries, such as Mali, Ethiopia or Chad).
A total of 2.6 billion people – over half the entire population of the global South – were
calculated to be living below the $ 2 a day poverty line, following the extensive structural
adjustment programmes undertaken at the behest of the World Bank and IMF in order to
‘integrate’ their national economies into the capitalist world system. 4 Before the global
economic meltdown, in other words, the majority world was already in crisis. Hilary, John
(2013-10-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes
Next (Kindle Locations 203-211). Pluto Press. Kindle Edition.
Financial integration makes the poor vulnerable
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
While trade integration does not appear to increase vulnerability, and foreign direct investment flows
have been remarkably stable, integration with financial markets can increase the propensity to develop
crises. The increased susceptibility to and costs of crises are due to inadequacies in the domestic policy
and institutional framework and larger and more volatile private capital flows. Although the increased
prevalence of financial crises has not raised GDP volatility (with the exception of East Asia), it can have a
large detrimental impact on the poor both through output declines and the socialization of large
resolution costs (World Bank, 2000). Beyond these aggregate effects, globalization can increase insecurity
of particular groups, especially workers, in a more footloose and fast changing world.
Poor do not have the skills to take advantage of free trade
Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich
Centre for Innovation and Entrepreneurship Research, Advances
2(1): 42, p. 42-57
in Economics and Business
Stefan Bauschard
Globalization and Poverty Release
134
The poor in countries with an abundance of unskilled labor do not always gain from trade reform
(Harrison, 2006). Many economists have used the Heckscher-Ohlin (HO) framework in international trade
to argue that trade liberalization should raise the incomes of the unskilled in labor-abundant countries.
Most researchers who use this framework to argue that globalization is good for the world’s poor make a
number of heroic assumptions. These assumptions -- such as the necessity that all countries produce all
goods are often challenged. In addition, the country studies show that labor is not nearly as mobile as the
HO trade model assumes; for comparative advantage to increase the incomes of the unskilled, they need
to be able to move out of contracting sectors and into expanding ones. Another reason why the poor may
not gain from trade reforms is that developing countries have historically protected sectors that use
unskilled labor, such as textiles and apparel. This pattern of protection, while at odds with simple
interpretations of HO models, makes sense if standard assumptions (such as factor price equalization) are
relaxed. Trade reforms may result in less protection for unskilled workers, who are most likely to be poor.
Finally, penetrating global markets even in sectors that traditionally use unskilled labor requires more
skills than the poor in developing countries typically possess.
Globalization doesn’t benefit Africa because outside firms build everything
Derrick Owusu-Kodu, April 7, 2014, Poverty and the Impacts of Globalization on the African
Economy,
http://www.africandynamo.com/2014/04/poverty-and-impacts-of-globalizationon.html#mM4cowGoocBOQhUe.99 DOA: 1-2-15
Another negative impact of globalization has been the total reliance on foreign
enterprises. African countries habitually resort to employing foreign companies to
carry out almost all of their infrastructure projects. Almost every project requiring
technical know-how in Africa is being constructed by foreign companies. It is not
surprising one bit to see Chinese companies building roads, bridges and other
infrastructure in every corner of Africa. How many African companies are helping
build Chinese infrastructure? A hallmark of all great civilizations has been
exceptional development of enterprise, but attempts by African
state's governments to encourage African firms and organizations to play front-line
roles in economic, social and infrastructure development have always proven
futile.This has led to an increasing dependency on outside aid and a net loss to the
African economy.
Globalization makes poor countries vulnerable to financial crises
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
It is now increasingly recognized that the process of globalization entails significant risks and potentially
large economic and social costs. Openness to global capital markets has brought greater volatility in
domestic financial markets, particularly in countries whose financial systems were weak to begin with and
economic policies lacked credibility. Large reversals in short-term capital flows (often induced by
contagion effects or abrupt changes in market sentiment on world capital markets) have led to severe
financial crises and sharp increases in unemployment and poverty, which have in some cases persisted
Stefan Bauschard
Globalization and Poverty Release
135
beyond the short-term (Agenor, 2004). Similarly, trade liberalization has led in some countries to reduced
demand for unskilled labor and lower real wages in the short run; combined with a low degree of intersectoral labor mobility, job losses and income declines have often translated into higher poverty rates.
Trade openness does not benefit developing countries
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
Although there are some good arguments suggesting that trade liberalization may improve resource
allocation in the short term or raise growth rates permanently (and thus be beneficial to the poor), there
are a number of other arguments suggesting the opposite. Opening a country’s markets to foreign firms,
for instance, tends to reduce the market power of domestic firms and increase competitive pressures on
them, eventually forcing (some of) them out of business. In the longer run, the country may well become
more efficient in using its productive resources, thereby enjoying higher growth rates and lower poverty.
But in the short term, the inability to compete, and the presence of labor market rigidities (segmentation
due to minimum wage legislation or wage-setting behavior by firms or trade unions, as well as imperfect
mobility across sectors), may hamper the reallocation of all categories of labor from the non-tradable
sector to the tradable sector that a reduction in tariffs normally entails (Agenor & Azeman, 2006). As a
result, both unemployment and poverty may increase and persist over tim
Even if total income increases, there is a net increase 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
Trade liberalisation is generally an ally in the fight against poverty: it tends to increase mean incomes,
providing more resources with which to tackle poverty, and, while it will generally affect income
distribution, it does not do so in a systematically adverse way. However, most trade reforms will hurt
someone, and that some reforms may increase overall poverty even while they boost incomes in total.
Stefan Bauschard
Globalization and Poverty Release
136
Poverty Increasing
Absolute global poverty is increasing
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
It is important to distinguish between the incidence of poverty as a percentage of a total population and
the absolute number of the poor. World Bank (2000) states that the share of the population in poverty
has declined for developing countries as a whole (from 28.3% in 1987 to 24% in 1998 based on $1/day
and from 61% in 1987 to 56% in 1998 based on $2/day) and in all developing regions except Sub-Saharan
Africa and Eastern Europe and Central Asia. Declines have been pronounced and sustained over a longer
time period for the most populous developing countries. For example, the incidence of poverty in India
measured by the official poverty line fell from 57% in 1973 to around 35% in 1998, whereas the incidence
of poverty fell from 60% to 20% between 1985 and 1998 for Indonesia. Standards of living have also
improved. Infant mortality rates globally have been cut in half during 1970-1997, from 107 to 56 per
thousand; and life expectancy has risen from 55 years to 67 years. However, in spite of this broad based
progress, more than 40 developing countries with 400 million people have had negative or close to zero
per capita income growth over the past thirty years. And the absolute number of poor has continued to
increase in all regions except East Asia and the Middle East. Overall, despite impressive growth
performance in many large developing countries, absolute poverty worldwide is still increasing.
Latin American and African poverty increasing
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
Poverty trends between 1990 and 2001 vary according to the definition of poverty applied
If the poor are considered to be those living on less than one dollar a day – that is to say, those in a
situation of extreme poverty – then during that period there was a significant reduction in the number of
poor from 1, 209 million to 1, 101 million.
On the other hand, if the poor are considered to be those living on less than two dollars a day, then the
number increased from 2,689 million to 2,733 million over that period (World Bank, 2004a). Even more
important is the fact that under both these definitions of poverty the regional dispersion is rather
significant. The only region in which poverty went down was Asia; in the other regions the number of poor
increased. Thus, under the definition based on an income of less than one dollar a day, the number of
poor in Asia went down from 934 to 712 million between 1990 and 2001, whereas in Africa it rose from
233 to 321 million over the same period, and in Latin America it went up, albeit only slightly, from 49 to
50 million.
Stefan Bauschard
Globalization and Poverty Release
137
Environmental Destruction Turn
Capitalism destroys the natural ecosystems that destroy life on earth
John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card
At the same time as this social reality was brought home to new audiences, capitalism's drive for
growth at all costs was also shown to be the root cause of the ecological crisis facing the planet.
5 The finite limits of natural ecosystems are unable to support the infinite process of expansion
that capital must engineer in order to prosper, and the consequences of that conflict are
apparent in every new media report detailing the latest evidence of irreversible climate change,
biodiversity loss or resource depletion. Nowhere is this crisis more obvious than in the
additional pressure on the world's natural resource base generated by the rise of today's
emerging economies, whose ‘outward turn’ into the global economy has further intensified a
rush for land, oil, minerals and other strategic resources that was already driving stocks towards
exhaustion. Increasingly, in international conferences as well as local articulations of protest, the
connection between capitalist expansion and its ecological consequences is made explicit, with
system change recognised as the last and only means of avoiding ecological disaster. While this
book focuses primarily on the human poverty of globalised capitalism, the connection between
the social and ecological should be understood as an unspoken reality throughout. Hilary, John
(2013-10-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes
Next (Kindle Locations 215-220). Pluto Press. Kindle Edition.
Environmental destruction causes by globalization increases poverty
Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and
Inequality: Between a Rock and a Hard Place, page number at end of card
All of this global sourcing is at a cost to the environment. Some of this is a direct outcome of
global transport, as in the case of the Exxon Valdez oil-spillage in Alaska during the 1990s. But
the bulk of this negative environmental impact is indirect, particularly through the link between
increased energy consumption and global warming. For much of this intricate system of global
production depends on the low price of energy which makes it profitable to ship low-valueadded commodities and components around the world. Despite the claims of the hydrocarbon
lobby to the contrary, we now know that there is growing evidence of global warming, and that
this is predominantly a consequence of increased carbon emissions. We also are beginning to
realize that one consequence of climate change is its disproportionate negative impact on poor
people and low-income economies. 18 If we are to respond appropriately to global warming,
then energy will have to be priced at its true environmental cost. But, if so, what will be the
impact of this on the profitability of globalized production systems? How many activities which
are currently profitable will be unattractive should energy prices be increased significantly? To
what extent is the current pattern of globalization environmentally sustainable? On the other
hand, it is possible (and perhaps even probable) that, despite the logic of forcing energy prices
to a level which reflects its true environmental cost, the power of the vegetables is, as we have
seen in chapters 1, 5 and 6, replicated at an increasing rate across a wide range of sectors. All of
Stefan Bauschard
Globalization and Poverty Release
138
this global sourcing is at a cost to the environment. Some of this is a direct outcome of global
transport, as in the case of the Exxon Valdez oil-spillage in Alaska during the 1990s. But the bulk
of this negative environmental impact is indirect, particularly through the link between
increased energy consumption and global warming. For much of this intricate system of global
production depends on the low price of energy which makes it profitable to ship low-valueadded commodities and components around the world. Despite the claims of the hydrocarbon
lobby to the contrary, we now know that there is growing evidence of global warming, and that
this is predominantly a consequence of increased carbon emissions. We also are beginning to
realize that one consequence of climate change is its disproportionate negative impact on poor
people and low-income economies. If we are to respond appropriately to global warming, then
energy will have to be priced at its true environmental cost. But, if so, what will be the impact of
this on the profitability of globalized production systems? How many activities which are
currently profitable will be unattractive should energy prices be increased significantly? To what
extent is the current pattern of globalization environmentally sustainable? On the other hand, it
is possible (and perhaps even probable) that, despite the logic of forcing energy prices to a level
which reflects its true environmental cost, the power of the hydrocarbon lobbies to block an
increase in prices makes this an unlikely outcome. In this case, energy-intensive global value
chains are likely to worsen global warming and hence exacerbate poverty and inequality. This
outcome, as we will see in the following discussion, challenges the sustainability of globalization.
So either way – be it through higher energy prices or through the impact on poverty and
inequality – the energy intensity of globalized production systems poses a threat to the
sustainability of globalization. Kaplinsky, Raphael (2013-04-29). Globalization, Poverty and
Inequality: Between a Rock and a Hard Place (Kindle Locations 4348-4351). Wiley. Kindle Edition.
Stefan Bauschard
Globalization and Poverty Release
139
Globalization Increases Inequality
Globalization increasing inequality
The Economist, September 2, 2014, “Why globalization may not reduce inequality in poor countries,”
http://www.economist.com/blogs/economist-explains/2014/09/economist-explains-0 DOA: 1-1-15
GLOBALISATION has made the planet more equal. As communication gets cheaper and transport gets
faster, developing countries have closed the gap with their rich-world counterparts. But within many
developing economies, the story is less rosy: inequality has worsened. The Gini index is one measure of
inequality, based on a score between zero and one. A Gini index of one means a country’s entire income
goes to one person; a score of zero means the spoils are equally divided. Sub-Saharan Africa saw its Gini
index rise by 9% between 1993 and 2008. China’s score soared by 34% over twenty years. Only in a few
places has it fallen. Does globalisation have anything to do with it?
Usually, economists say no. Basic theory predicts that inequality falls when developing countries enter
global markets. The theory of comparative advantage is found in every introductory textbook. It says that
poor countries produce goods requiring large amounts of unskilled labour. Rich countries focus on things
requiring skilled workers. Thailand is a big rice exporter, for example, while America is the world's largest
exporter of financial services. As global trade increases, the theory says, unskilled workers in poor
countries are high in demand; skilled workers in those same countries are less coveted. With more
employers clamouring for their services, unskilled workers in developing countries get wage boosts,
whereas their skilled counterparts don’t. The result is that inequality falls.
But the high inequality seen today in poor countries is prompting new theories. One emphasises
outsourcing—when rich countries shift parts of the production process to poor countries. Contrary to
popular belief, multinationals in poor countries often employ skilled workers and pay high wages. One
study showed that workers in foreign-owned and subcontracting clothing and footwear factories in Vietnam
rank in the top 20% of the country's population by household expenditure. A report from the OECD found
that average wages paid by foreign multinationals are 40% higher than wages paid by local firms. What is
more, those skilled workers often get to work with managers from rich countries, or might have to meet the
deadlines of an efficient rich-world company. That may boost their productivity. Higher productivity means
they can demand even higher wages. By contrast, unskilled workers, or poor ones in rural areas, tend not to
have such opportunities. Their productivity does not rise. For these reasons globalisation can boost the
wages of skilled workers, while crimping those of the unskilled. The result is that inequality rises.
Other economic theories try to explain why inequality in developing countries has reached such heights. A
Nobel laureate, Simon Kuznets, argued that growing inequality was inevitable in the early stages of
development. He reckoned that those who had a little bit of money to begin with could see big gains from
investment, and could thus benefit from growth, whereas those with nothing would stay rooted in poverty.
Only with economic development and demands for redistribution would inequality fall. Indeed, recent
evidence suggests that the growth in developing-country inequality may now have slowed, which will
prompt new questions for economists. But as things stand, globalisation may struggle to promote equality
within the world’s poorest countries.
Less inequality prior to globalization
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Stefan Bauschard
Globalization and Poverty Release
140
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Data on the share of national income going to the richest people are scarcely available
for developing countries. However, other measures support the argument that countries
are becoming more unequal. For instance, between 1988 and 2008, the Gini coefficient
increased in 58 countries for which data are available.13 Seven out of every 10 people in
the world live in countries where inequality has increased. Rising levels of inequality are
also an important feature of populous middle-income countries. These countries matter
because they are where most of the world’s poor now live. Prior to globalization, these
were low-income countries with significantly lower levels of inequality. Economic growth,
however, has graduated them into middle-income status and has driven a wedge
between the haves and have-nots.
Stefan Bauschard
Globalization and Poverty Release
141
Inequality Increasing
Extreme inequality is increasing
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Massive inequality now
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Given the scale of rising wealth concentrations, opportunity capture and unequal political
representation are a serious and worrying trend. For instance:
• _Almost half of the world’s wealth is now owned by just one percent of the population.
• _The wealth of the one percent richest people in the world amounts to $110 trillion.
That’s 65 times the total wealth of the bottom half of the world’s population.
• _The bottom half of the world’s population owns the same as the richest 85 people in
the world
• _Seven out of ten people live in countries where economic inequality has increased in
the last 30 years.
• _The richest one percent increased their share of income in 24 out of 26 countries for
which we have data between 1980 and 2012.
• _In the US, the wealthiest one percent captured 95 percent of post-financial crisis
growth since 2009, while the bottom 90 percent became poorer.
Stefan Bauschard
Globalization and Poverty Release
142
Global elites becoming richer
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Global elites are increasingly becoming richer. Yet the vast majority of people around the world
have been excluded from this prosperity. For instance, while stocks and corporate profits soar to
new heights, wages as a percentage of gross domestic product (GDP) have stagnated. To give an
indication of the scale of wealth concentration, the combined wealth of Europe’s 10 richest
people exceeds the total cost of stimulus measures implemented across the European Union
(EU) between 2008 and 2010 (€217bn compared with €200bn).8 Furthermore, post-recovery
austerity policies are hitting poor people hard, while making the rich even richer. Austerity is
also having an unprecedented impact on the middle classes.
Gains in India going to billionaires
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
India has seen its number of billionaires increase from less than 6 to 61 in the past
decade, concentrating approximately $250bn among a few dozen people in a country of
1.2 billion. What is striking is the share of the country’s wealth held by this elite minority,
which has skyrocketed from 1.8 percent in 2003 to 26 percent in 2008, though it declined
in the aftermath of the global financial crisis.30
By some estimates, half of India’s billionaires acquired their wealth in ‘rent thick’
sectors.31 This means sectors where profits are dependent on access to scarce
resources, made available exclusively through government permissions and therefore
susceptible to corruption by powerful actors – as opposed to creation of wealth. Such
sectors include real estate, construction, mining, and telecommunications. In fact, it is
Stefan Bauschard
Globalization and Poverty Release
143
common knowledge that property development is India’s most opaque business, where
enormous sums of illegal money exchange hands and little tax is collected.32 Wealth
accrued from rents is made possible by the coaction of government and powerful
groups, whereby the economic rules of the game are rigged in favor of elites.
Despite incredible economic gains by a few dozen people in India, poverty and inequality
remain rampant. While the number of billionaires has multiplied by ten, government
spending on the needs of the poorest and most vulnerable groups in society remains
remarkably low. For example, India’s public spending on healthcare is just one percent
of GDP.33 The Asian Development Bank’s recently released the Social Protection Index
(assessing country expenditure on poor and economically vulnerable groups) ranked
India 23 out of 35 countries in the region. Even among the 19 low- to middle-income
countries, India ranked in the bottom half, in twelfth place.34
Stefan Bauschard
Globalization and Poverty Release
144
Globalization Leads to Sex Trafficking
Globalization responsible for increases in human trafficking
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
While recent efforts link human trafficking to economic pull and push factors exacerbated
by globalization and trade liberalization, very little has been done to frame the discussion in
those terms. The current discourse on trafficking fails to admit that human trafficking is the
"underside of globalization." There is no willingness to admit that human trafficking greases
the wheels of the global economy. Instead, this Article argues, we need to develop an
economic analysis of human trafficking –one which primarily looks at globalization, trade
liberalization and labor migration as the core areas that need to be explored to advance the
prevention of human trafficking.
Globalization leads to survival labor migration, inequality, and sex trafficking
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
These push and pull factors are not new. However, they have taken center stage in the era
of contemporary globalization.99 Globalization and trade liberalization led not only to
greater international exchange of capital and goods, but also to increasing labor
migration.100 Alongside general economic benefits,101 globalization increases the wealth gap
between countries and between rich and poor within countries. Such wealth disparities feed
increased survival labor migration as economic opportunities disappear in less wealthy
countries and communities. Those desperate to migrate, however, encounter tightening
border controls and limited options for legal migration at the destination countries
(although those countries generate a growing demand for such migrant workers), which in
turn exacerbates their vulnerability to trafficking.102
Women migrate for survival
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
Stefan Bauschard
Globalization and Poverty Release
145
Women comprise most of those emigrating for survival (due to both economic hardship and
gender-based repression), and relatedly, the overwhelming majority among those who are
exploited in the process and subject to labor trafficking.105 Women, as well as many men
and children, faced with lack of jobs in their domestic markets, may opt to migrate in order
to access developed markets within their region or abroad. Importantly, aside from fulfilling
their own survival needs, migrant women, as well as men and children, are playing an
increasingly critical role in sustaining the global economy as they fill the demand for workers
particularly in informal law-wage earning economic sectors in destination countries.106
Poverty leads to trafficking and gender based violence
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
Human trafficking is very much a manifestation of the feminization of both poverty and
migration.107 Poverty and unemployment increase opportunities for trafficking in women.108
Women are especially vulnerable due to entrenched discriminatory and gender-based
violence practices that relegate them to unregulated law-wage employment in informal
sectors and limited opportunities for legal migration.109 Women particularly are being
pushed out of developing countries due to economic, familial, and societal pressures and
comprise at least 56% of the world’s trafficking victims.110 In enacting TVPA in 2000,
Congress was in fact cognizant of many of these aspects, as it clearly articulated in its
findings.111 Amongst its key findings Congress recognized that traffickers primarily target
women and girls, who are disproportionately affected by poverty, lack of access to
education, chronic unemployment, low status and discrimination, and the lack of economic
opportunities in countries of origin. Consequently, traffickers lure women and girls into their
networks through false promises of decent working conditions at relatively good pay and
also buy children from poor families and sell them into various types of forced or bonded
labor.112
Globalization leads to labor exploitation and trafficking
Dana Ragorski, law professor, University of Washington, Indiana International &Comparative
Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research
Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA:
1-2-15
Bravo is amongst the few who early on recognized that human trafficking takes place
within the legitimate economic activities rather than just being limited to illegal and
aberrational activity.159 Even more so, she correctly observes how restrictive immigration
policies perpetuate the exploitation of migrants and would-be migrants while allowing entire
industries, both legitimate and illegal, to flourish financially.160 Bravo remains amongst the
few who directly confronts the international trade regime in an effort to undermine the
economic foundations of human trafficking,161 even if it requires radical rethinking of
Stefan Bauschard
Globalization and Poverty Release
146
transnational relations.162
Bravo’s trade and labor market analysis, however, is primarily focused on liberalizing and
regulating the supply of workers. While she does, off course, explicitly acknowledge that the
global labor market distortion is tied to the demand for cheap labor, she nonetheless claims
that “it is the vulnerability of human labor providers to that demand that allows human
trafficking to flourish.”163 Therefore, although exploitation is not likely to completely cease,
Bravo does think that by severely decreasing the potential supply, human trafficking will
become an aberrational practice.164 This article suggests that this is not likely to be the case,
exactly because the demand for exploitable cheap labor, both domestically and across
borders, is a structural feature of our liberalized global economy and converging production
chains. Labor exploitation, and with it human trafficking, is needed to sustain open markets,
international trade and the global economy. Until we are willing to admit the true costs of
globalization and until we are willing to redistribute wealth allocation between nations and
within nations human trafficking will continue to increase.
In a global market that seeks out cheap, unregulated, and exploitable labor to produce goods
and services that generate GDP and propel economic growth, human trafficking is anything
but limited to the illegal activity of criminals. Trafficking of people is not merely part of the
shadow economy but is in fact part of the structured global economy and serves leading
economic sectors and places world-wide.165 The economies of developing and underdeveloped regions benefit from exploiting and exporting their populations as cheap labor in
various ways: Migrant wage remittance, including from forced and trafficked labor,
accounts for a huge part of the GDP in many such nations, and entire communities and
some governments are increasingly dependent on those remittances. The economic growth
and global market competitiveness of countries such as BRICS countries, which may be
exporting cheaply produced products and raw materials to fulfill demand in countries with
much higher production costs, depends on their ability to continue to produce significantly
cheaper products, quite often at the expenses of those in these countries who are doing the
work; Similarly, some governments continue to relax labor protections in order to attract
foreign investment and transnational corporations who prefer to use the cheaper labor
services in those countries. Transit countries benefit economically from the flows of
trafficking which utilize available services for transportation, telecommunication, hospitality
and banking. Lastly, with much of the economic industries of destination wealthier
countries depending on cheap, often migrant labor, on the one hand, but with most
countries refusing to formally recognize these economic realities and ease restrictions on
legal migration flows for all forms of labor, on the other hand, most of the demand for labor
is met through the underground economy including human trafficking Much like the cross
Atlantic slave trade of the 19th century that sustained the economy of the U.S. and other
nations prior to the abolition of slavery, so does our global economy continue to grow on
the backs of these modern slaves— except now they are hidden from sight. Until and unless
we acknowledge that the global economy thrives on the vulnerability of certain individuals
and populations to exploitation, we will not be able to truly address human trafficking.
Stefan Bauschard
Globalization and Poverty Release
147
Economic Inequality Undermines Poverty Reduction
Economic inequality is immoral and undermines poverty reduction
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf DOA 1-2-15
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Extreme economic inequality is damaging and worrying for many reasons: it is morally
questionable; it can have negative impacts on economic growth and poverty reduction; and it
can multiply social problems. It compounds other inequalities, such as those between women
and men. In many countries, extreme economic inequality is worrying because of the pernicious
impact that wealth concentrations can have on equal political representation. When wealth
captures government policymaking, the rules bend to favor the rich, often to the detriment of
everyone else. The consequences include the erosion of democratic governance, the pulling
apart of social cohesion, and the vanishing of equal opportunities for all
Stefan Bauschard
Globalization and Poverty Release
148
Other Inequality Impacts
Inequality risks societal break-down
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
This massive concentration of economic resources in the hands of fewer people presents a
significant threat to inclusive political and economic systems. Instead of moving forward
together, people are increasingly separated by economic and political power, inevitably
heightening social tensions and increasing the risk of societal breakdown.
Stefan Bauschard
Globalization and Poverty Release
149
Short-Term Poverty Increase
Short-term increase 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
Even though openness to trade (and capital flows) may help these countries to assimilate technologies
and production techniques over time (thereby enabling them to shift eventually toward the production of
goods and services that are characterized by dynamic gains) there may be a “transition period” during
which globalization may have an adverse effect on growth and poverty. Indeed, opening an economy to
trade may discourage domestic research and development activities, for instance by inducing the poorer
countries to allocate too much of their limited supply of skilled labor to the production of manufactured
goods. In such conditions, restrictions on trade may accelerate growth
Stefan Bauschard
Globalization and Poverty Release
150
Inequality Between Countries
Globalization correlated with increased inequality between countries
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
Globalization is the dominant economic phenomenon of the last 30 years. Openness in trade,
investment, and financial flows has grown dramatically. Inequalities within countries have also
increased significantly during this period.1 The natural question to ask is whether there is a
connection between the two.
Stefan Bauschard
Globalization and Poverty Release
151
Inequality Leads to Poverty
Inequality key – determines if growth reduces inequality
F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home,
“Globalisation,” pp. 292-7
The Kuznets hypothesis of the inverted U-shaped relationship between growth and inequality
that examines the opposite causal flow (i.e., the “growth–inequality” link) is also challenged by a
number of recent studies. Thus, the new political economy of development approach suggests
that growth patterns yielding more inequality in the income distribution would, in turn,
engender lower future growth paths resulting in less of a growth induced poverty reduction, as
Figure 1 illustrates. Thus, we argued that while globalization induced growth may benefit the
poor, the ultimate poverty reduction effects depend on how the growth pattern affects income
distribution, as inequality acts as the filter between growth and poverty reduction.
Stefan Bauschard
Globalization and Poverty Release
152
Violence
Globalization of capital drives a framework of violence
Marc S. Spindelman 2, Isadore and Ida Topper Professor of Law @ OSU Moritz College of Law,
Former Fellow @ Harvard Law, “Legislating Privilege,” Journal of Law, Medicine &Ethics, 30
(2002): 24-33
Serious concerns about pervasive, persistent, and unjustified social inequalities have prompted a
small but growing - number of academic commentators to raise some hard and troubling questions for those who
would like to legalize physician-assisted suicide. In various ways, these commentators have asked: In light of
existing social inequalities - inequalities that operate, for example, along sometimes intersecting lines of
race, class, age, sex (including sexual orientation), and disability - how persuasive are
autonomy based arguments in favor of legalization of assisted suicide when those arguments
depend (as they typically do) on a conception of autonomy that either presupposes social equality or
does not expressly account for its absence ? How compelling are arguments that we ought to
legalize assisted suicide out of feelings of mercy for the sick and dying, when such affective
expressions may actually be the socially acceptable manifestation of private ambivalence
that includes merciless discrimination ? How can we be confident, these commentators have wondered, that
talk of ‘‘autonomy’’ or “mercy” in the assisted suicide debate gets us anywhere - unless and until
such talk squarely confronts
discriminatory cultural ideologies and the
material
forms of
discrimination
they
produce, and expressly objects to the ways discrimination may condition how decisions about life and death are made?
These and other related questions (some of which we will have occasion to consider later on) have been heard: among other places, in congressional
hearings, state-level policy debates, federal and state court litigation, and sometimes in the media. But they remain unanswered. The response by
advocates of assisted suicide to the equality-based concerns with legalization of the practice, to the extent there has been one, has mainly been one,
has mainly been in the register of derision or some other form of dismissal. More commonly, advocates
of assisted suicide have
ignored the equality-based concerns with legalization altogether.
Neoliberal fear politics result in massive structural violence and endless war
Henry Giroux 13, Chair in English and Cultural Studies at McMaster University, Violence, USA,
monthlyreview.org/2013/05/01/violence-usa
Since 9/11, the war on terror and the campaign for homeland security have increasingly mimicked the
tactics of the enemies they sought to crush. Violence and punishment as both a media spectacle and
a bone-crushing reality have become prominent and influential forces shaping U.S. society. As
the boundaries between “the realms of war and civil life have collapsed ,” social relations
and the
have been increasingly privatized and militarized .1 The logic of
profitability works its magic in channeling the public funding of warfare and organized violence
into universities, market-based service providers, Hollywood cinema, cable television, and deregulated contractors. The metaphysics of war
and associated forms of violence now creep into every aspect of U.S. society.
As the preferred “instrument of statecraft,” war and its intensifying production of violence crosses borders, time,
space, and places.2 The result is that the United States “has become a ‘ culture of war’ …engulfed in fear and
public services needed to make them viable
violence [and trapped by a military metaphysics in which] homeland security matters far more
than social security.”3 Seemingly without any measure of self-restraint, state-sponsored violence now flows
and regroups
Stefan Bauschard
Globalization and Poverty Release
153
effortlessly , contaminating both foreign and domestic policies. The criticism of the military-industrial complex, along with
its lobbyists and merchants of death, that was raised by President Eisenhower seems to have been relegated to the trash can of history. Instead of being
disparaged as a death machine engaged in the organized production of violence, the militaryindustrial complex is defended as a valuable jobs program and a measure of national pride and provides a
powerful fulcrum for the permanent warfare state .
It gets worse. One consequence of the permanent warfare state is evident in the recent public revelations
concerning war crimes committed by U.S. government forces. These include the indiscriminate killings of Afghan
civilians by U.S. drone aircraft ; the barbaric murder of Afghan children and peasant farmers
by U.S. infantrymen infamously labeled as “the Kill Team”;4 disclosures concerning four U.S.
marines urinating on dead Taliban fighters; and the uncovering of photographs showing “more than a dozen soldiers of the 82nd Airborne
Division’s Fourth Brigade Combat Team, along with some Afghan security forces, posing with the severed hands and legs of Taliban attackers in Zabul Province in 2010.”5 And,
Bales, who “walked off a small combat outpost in
Kandahar province and slaughtered 17 villagers, most of them women and children, and later walked back to his base and turned himself in.”6 Mindshocking even for those acquainted with standard military combat, there is the case of Army Staff Sergeant Robert
numbing violence, war crimes, and indiscriminate military attacks on civilians on the part of
the U.S. government are far from new and date back to infamous acts such as the air attacks on civilians in Dresden along with the atomic
bombings of Hiroshima and Nagasaki during the Second World War.7
Military spokespersons are typically quick to remind the U.S. public that such practices are part of the price one pays for combat and are endemic to war itself.
State
violence wages its ghastly influence through a concept of permanent war, targeted
assassinations , an assault on civil liberties, and the use of drone technologies that justifies the killing of
innocent civilians as collateral damage. Collateral damage has also come home with a
vengeance as soldiers returning from combat are killing themselves at record rates and
committing mayhem—particularly sexual violence and spousal and child abuse.8 After more than a decade
at war, soldiers in the U.S. military are also returning home and joining the police, thus
contributing to the blurring of the line between the military and law enforcement.
The history of atrocities committed by the United States in the name of war need not be repeated here, but some of these incidents have doubled in on themselves and fueled
public outrage against the violence of war.9 One of the most famous events was the My Lai massacre, which played a crucial role in mobilizing protests against the Vietnam
War.10 Even dubious appeals to national defense and honor can provide no excuse for mass killings of civilians, rapes, and other acts of destruction that completely lack any
Not only does the alleged normative violence of war disguise the moral
cowardice of the warmongers, it also demonizes the enemy and dehumanizes soldiers. It is
justifiable military objective.
this brutalizing psychology of desensitization , emotional hardness, and the freezing of moral
responsibility that is particularly crucial to understand, because it grows out of a formative
culture in which war, violence, and the dehumanization of others becomes routine, commonplace,
and removed from any sense of ethical accountability .
It is necessary to recognize that acts of extreme violence and cruelty do not represent merely an odd or marginal and private retreat into barbarism. On the contrary, warlike
values and the social mindset they legitimate have become the primary currency of a market-driven culture that takes as its model a Darwinian shark tank in which only the
In a neoliberal order in which vengeance and revenge seem to be the most cherished values in a “social order
organized around the brute necessity of survival,” violence becomes both a legitimate
mediating force and one of the few remaining sources of pleasure.11 At work in the new hypersocial Darwinism is a view of the Other as the enemy , an all-too-quick willingness in the
name of war to embrace the dehumanization of the Other, and an all-too-easy acceptance of
violence, however extreme, as routine and normalized. As many theorists have observed, the production of
extreme violence in its various incarnations is now a source of profit for Hollywood moguls, mainstream news,
popular culture, the corporate-controlled entertainment industry, and a major market for the defense industries .12
This pedagogy of brutalizing hardness and dehumanization is also produced and circulated in
schools, boot camps, prisons, and a host of other sites that now trade in violence and punishment for commercial purposes, or for the purpose of containing populations
strongest survive.
that are viewed as synonymous with public disorder. The mall, juvenile detention facilities, many public housing projects, privately owned apartment buildings, and gated
communities all embody a model of a dysfunctional sociality and have come to resemble proto-military spaces in which the culture of violence and punishment becomes the
primary order of politics, fodder for entertainment, and an organizing principle for society. All of these spaces and institutions, from malls to housing projects to schools, are
Stefan Bauschard
Globalization and Poverty Release
154
beginning to resemble war zones that impose needless frameworks of punishment. This is evident not only in New York City’s infamous stop-and-frisk policy, but also in
shopping malls that now impose weekend teen curfews, hire more security guards, employ high-tech surveillance tools, and closely police the behavior of young people.
Similarly, housing projects have become militarized security zones meting out harsh punishments for drug offenders and serve as battlegrounds for the police and young people.
Even public-school reform is now justified in the dehumanizing language of national security, which increasingly legitimates the transformation of schools into adjuncts of the
surveillance and police state.13 The privatization and militarization of schools mutually inform each other as students are increasingly subjected to disciplinary apparatuses that
limit their capacity for critical thinking while molding them into consumers, testing them into submission, stripping them of any sense of social responsibility, and convincing
large numbers of poor minority students that they are better off under the jurisdiction of the criminal justice system instead of being treated as valued members of the public
schools. Schools are increasingly absorbing the culture of prisons and are aggressively being transformed into an extension of the criminal justice system.
Many public schools are being militarized to resemble prisons instead of being safe places that would enable students to learn how to be critical and engaged citizens. Rather
than being treated with dignity and respect, students are increasingly treated as if they were criminals, given that they are repeatedly “photographed, fingerprinted, scanned, xrayed, sniffed and snooped on.”14 The space of the school resembles a high-security prison with its metal detectors at the school entrances, drug-sniffing dogs in school
corridors, and surveillance cameras in the hallways and classrooms. Student behaviors that were once considered child play are now elevated to the status of a crime. Young
people who violate dress codes, engage in food fights, hug each other, doodle, and shoot spit wads are no longer reprimanded by the classroom teacher or principal; instead
their behavior is criminalized. Consequently, the police are called in to remove them from the classroom, handcuff them, and put them in the back of a police car to be carted off
to a police station where they languish in a holding cell. There is a kind of doubling that takes place here between the culture of punishment, on the one hand, and the feeding of
profits for the security-surveillance industries, on the other.
What has emerged in the United States is a civil and political order structured around the problem of violent crime. This governing-through-crime model produces a highly
authoritarian and mechanistic approach to addressing social problems that often focuses on low-income and poor minorities, promotes highly repressive policies, and places
undue emphasis on personal security rather than considering the larger complex of social and structural forces that fuels violence in the first place. Far from promoting
democratic values, a respect for others, and social responsibility, a governing-through-crime approach criminalizes a wide range of behaviors and in doing so often functions
largely to humiliate, punish, and demonize. The abuse and damage that is being imposed on young people as a result of the ongoing militarization and criminalization of public
schools defy the imagination. And the trivial nature of the behaviors that produce such egregious practices is hard to believe. A few examples will suffice:
In November 2011, a 14-year-old student in Brevard County, Florida, was suspended for hugging a female friend, an act which even the principal acknowledged as innocent. A 9year-old in Charlotte, North Carolina, was suspended for sexual harassment after a substitute teacher overheard the child tell another student that the teacher was “cute.” A 6year-old in Georgia was arrested, handcuffed and suspended for the remainder of the school year after throwing a temper tantrum in class. A 6-year-old boy in San Francisco
was accused of sexual assault following a game of tag on the playground. A 6-year-old in Indiana was arrested, handcuffed and charged with battery after kicking a school
principal. Twelve-year-old Alexa Gonzalez was arrested and handcuffed for doodling on a desk. Another student was expelled for speaking on a cell phone with his mother, to
whom he hadn’t spoken in a month because she was in Iraq on a military deployment. Four high school students in Detroit were arrested and handcuffed for participating in a
food fight and charged with a misdemeanor with the potential for a 90-day jail sentence and a $500 fine. A high school student in Indiana was expelled after sending a profanitylaced tweet through his Twitter account after school hours. The school had been conducting their own surveillance by tracking the tweeting habits of all students. These are not
isolated incidents. In 2010, some 300,000 Texas schoolchildren received misdemeanor tickets from police officials. One 12-year-old Texas girl had the police called on her after
she sprayed perfume on herself during class.15
Public spaces that should promote dialogue, thoughtfulness, and critical exchange are ruled by fear
and become the ideological corollary of a state that aligns its priorities to war and
munitions sales while declaring a state of emergency (under the aegis of a permanent war) as a major
reference for shaping
domestic
policy . In addition, the media and other cultural apparatuses now produce,
circulate, and validate forms of symbolic and real violence that dissolve the democratic
bonds of social reciprocity . This dystopian use of violence as entertainment and spectacle is reinforced
through the media’s incessant appeal to the market-driven egocentric interests of the autonomous individual, a fear of the Other , and a strippeddown version of security that narrowly focuses on personal safety rather than collective security nets
and social welfare. One consequence is that those who are viewed as disposable and reduced to zones of
abandonment are forced “to address the reality of extreme violence…in the very heart of
their everyday life .”16 Violence in everyday life is matched by a surge of violence in popular culture. Violence now runs through media and popular culture like
an electric current. As the New York Times reported recently, “The top-rated show on cable TV is rife with shootings, stabbings, machete attacks and more shootings. The top
drama at the box office fills theaters with the noise of automatic weapons fire. The top-selling video game in the country gives players the choice to kill or merely wound their
quarry.”17
Under such a warlike regime of privatization, militarism, and punishing violence, it is not surprising that the Hollywood film The Hunger Games has become a mega-box-office
hit. The film and its success are symptomatic of a society in which violence has become the new lingua franca. It portrays a society in which the privileged classes alleviate their
boredom through satiating their lust for violent entertainment, and in this case a brutalizing violence waged against children. Although a generous reading might portray the film
as a critique of class-based consumption and violence, given its portrayal of a dystopian future society so willing to sacrifice its children, in the end the film should more
accurately be read as depicting the terminal point of what I have called elsewhere the “suicidal society” (a suicide pact literally ends the narrative).18
Given Hollywood’s rush for ratings, the film gratuitously feeds enthralled audiences with voyeuristic images of children being killed for sport. In a very disturbing opening scene,
the audience observes children killing one another within a visual framing that is as gratuitous as it is alarming. That such a film can be made for the purpose of attaining high
ratings and big profits, while becoming overwhelmingly popular among young people and adults alike, says something profoundly disturbing about the cultural force of violence
and the moral emptiness at work in U.S. society. This is not the type of violence that is instructive about how damaging the spectacle of violence can be. On the contrary, such
representations of violence are largely gratuitous, and they create the conditions for a disturbing voyeurism while both mitigating the effects of violence and normalizing it. Of
course, the meaning and relevance of The Hunger Games rest not simply with its production of violent imagery against children, but with the ways these images and the
historical and contemporary meanings they carry are aligned and realigned with broader discourses, values, and social relations. Within this network of alignments,
risk
and danger combine with myth and fantasy to stoke the seductions of sadomasochistic
violence, echoing the fundamental values of the fascist state in which aesthetics dissolves into
pathology and a carnival of cruelty. How else to explain the emergence of superhero films that increasingly contain deep authoritarian strains,
films that appear to have a deep hold on their dutifully submissive audiences. The film critic A. O. Scott has argued that films such as Spider-Man, Dark Knight, and The Avengers
are marked by a “hectic emptiness,” “bloated cynicism,” and “function primarily as dutiful corporate citizens…serving private interests.”19 But most important, they reinforce
the increasingly popular notion that “the price of entertainment is obedience.”20 There is more at work here than what Scott calls “imaginative decadence.”21 There is also the
seductive lure and appeal of the authoritarian personality, which runs deep in U.S. culture and finds its emergence in the longing for hyper-masculine superheroes who merge
vigilante justice with anti-democratic values.22 Equally disturbing is the alignment of such films with a corporate-controlled cultural apparatus that legitimates and celebrates a
passive embrace of authoritarian values, power, and mythic authoritarian figures.
Stefan Bauschard
Globalization and Poverty Release
155
Within the contemporary neoliberal theater of cruelty, war has expanded its poisonous reach and moves effortlessly within and across U.S. national boundaries. As Chris
Hedges has pointed out brilliantly and passionately, war “allows us to make sense of mayhem and death” as something not to be condemned, but to be celebrated as a matter
of national honor, virtue, and heroism.23 One particularly egregious example of this took place in the summer of 2012 when NBC decided to air Stars Earn Stripes, a reality TV
show in which celebrities are matched with U.S. military personnel, including former Green Berets and Navy Seals, in carrying out simulated military training, “including
helicopter drops in water and long-range weapons fire, all under the direction of retired General Wesley Clark.”24 The various contestants compete against each other to win
prizes that are given to various armed forces, charities, and some veterans groups. NBC celebrates the show as a “fast-paced competition” and defends it as a “glorification of
The violence of war and
the human suffering and death it produces is both sanitized and trivialized in this show. Amy Fairweather, a
service” rather than a “glorification of war.”25 War in this rendering becomes a form of sport, amusement, and entertainment.
member of the veterans’ organization Swords to Ploughshares, rightly criticized the program: “The show ‘trivialized’ war, whose real consequences were ‘not that you were
knocked out of the competition next week, the consequences are you don’t get to go on with your life.’”26 Nine Nobel Prize winners, including Desmond Tutu, echoed this view
in a letter to NBC. They wrote:
It is our belief that this program pays homage to no one anywhere and continues and expands on an inglorious tradition of glorifying war and armed violence…. Real war is
down-in-the-dirt deadly. People—military and civilians—die in ways that are anything but entertaining. Communities and societies are ripped apart in armed conflict and the
aftermath can be as deadly as the war itself as simmering animosities are unleashed in horrific spirals of violence. War, whether relatively short-lived or going on for decades as
in too many parts of the world, leaves deep scars that can take generations to overcome—if ever. Trying to somehow sanitize war by likening it to an athletic competition
further calls into question the morality and ethics of linking the military anywhere with the entertainment industry in barely veiled efforts to make war and its multitudinous
costs more palatable to the public.27
Celebrating war, spectacularized violence, and hyper-masculinity reveals more than an
ethical descent into barbarism . It also makes visible a market-driven social and economic
order that is driven by a financial elite who subordinate all ethical, political, and material
considerations to the altar of profit-making and capital accumulation.28 War takes as its aim
the killing of others and legitimates violence through a morally bankrupt mindset in which just
and unjust notions of violence collapse into each other, increasingly in the name of profit and the glorification of celebrity
culture. Consequently, it has become increasingly difficult to determine justifiable violence and humanitarian
intervention from unjustifiable violence involving torture, massacres, and atrocities, which now
operate in the liminal space and moral vacuum of legal illegalities . Even when such acts are recognized as war crimes,
they are often dismissed as simply an inevitable consequence of war itself. This view was recently echoed by Leon Panetta, who,
responding to the killing of civilians by U.S. Army Staff Sergeant Robert Bales, observed: “War is hell. These kinds of events and incidents are going to take place, they’ve taken
He then made clear the central
contradiction that haunts the use of machineries of war by stating: “But we cannot allow
these events to undermine our strategy.”30 Panetta’s qualification is a testament to barbarism
because it means being committed to a war machine that trades in indiscriminate violence,
death, and torture while ignoring the pull of conscience or ethical considerations. Hedges is right when
he argues that defending such violence in the name of war is a rationale for “usually nothing more
than gross human cruelty, brutality and stupidity.”31
place in any war, they’re terrible events, and this is not the first of those events, and probably will not be the last.”29
War and the organized production of violence have also become forms of governance, increasingly visible in the ongoing militarization of police departments throughout the
United States. According to the Homeland Security Research Corporation, “The homeland security market for state and local agencies is projected to reach $19.2 billion by 2014,
up from $15.8 billion in fiscal 2009.”32 The structure of violence is also evident in the rise of the punishing and surveillance state,33 with its legions of electronic spies and
ballooning prison population—now more than 2.3 million. Evidence of state-sponsored warring violence can also be found in the domestic war against “terrorists” (code for
young protesters), which provides new opportunities for major defense contractors and corporations to become “more a part of our domestic lives.”34 Young people,
particularly poor minorities of color, have already become the targets of what David Theo Goldberg calls “extraordinary power in the name of securitization… [They are viewed
The rhetoric of
war is now used by politicians not only to appeal to a solitary warrior mentality in which responsibility is individualized, but also to attack women’s reproductive
rights, limit the voting rights of minorities, and justify the most ruthless cutting of social protections and benefits
for public servants and the poor, unemployed, and sick. There is also the day-to-day effects of a hyped-up and militarized police
as] unruly populations…[who] are to be subjected to necropolitical discipline through the threat of imprisonment or death, physical or social.”35
force that in light of the subordination of individual rights to matters of individual security rarely questions the limits of their own authority. One example of the emerging police
state can be found in roadside police stops in which any regard for privacy, individual rights, and human dignity appears to have been abandoned. John W. Whitehead, the
director of the Rutherford Institute, provides one disturbing but not untypical example of the police state in action. He writes:
Consider, for example, what happened to 38-year-old Angel Dobbs and her 24-year-old niece, Ashley, who were pulled over by a Texas state trooper on July 13, 2012, allegedly
for flicking cigarette butts out of the car window. First, the trooper berated the women for littering on the highway. Then, insisting that he smelled marijuana, he proceeded to
interrogate them and search the car. Despite the fact that both women denied smoking or possessing any marijuana, the police officer then called in a female trooper, who
carried out a roadside cavity search, sticking her fingers into the older woman’s anus and vagina, then performing the same procedure on the younger woman, wearing the
same pair of gloves. No marijuana was found. [And in a hard to believe second example,] Leila Tarantino was allegedly subjected to two roadside strip searches in plain view of
passing traffic during a routine traffic stop, while her two children—ages 1 and 4—waited inside her car. During the second strip search, presumably in an effort to ferret out
drugs, a female officer “forcibly removed” a tampon from Tarantino’s body. No contraband or anything illegal was found.36
The politics and pedagogy of death begins in the celebration of war and ends in the
unleashing of violence on all those considered disposable on the domestic front. A survivalof-the-fittest ethic and the utter annihilation of the Other have now become normalized ,
saturating everything from state policy to institutional practices to the mainstream media. How else to explain the growing taste for violence in, for example, the world of
professional sports, extending from professional hockey to extreme martial arts events? The debased nature of violence and punishment seeping into the U.S. cultural landscape
becomes clear in the recent revelation that the New Orleans Saints professional football team was “running a ‘bounty program’ which rewarded players for inflicting injuries on
Stefan Bauschard
Globalization and Poverty Release
156
opposing players.”37 In what amounts to a regime of terror pandering to the thrill of the crowd and a take-no-prisoners approach to winning, a coach offered players a cash
bonus for “laying hits that resulted in other athletes being carted off the field or landing on the injured player list.”38
The bodies of those considered competitors, let alone enemies, are now targeted as the war-as-politics paradigm turns the United States into a warfare state. And even as
violence flows out beyond the boundaries of state-sponsored militarism and the containment of the sporting arena, citizens are increasingly enlisted to maximize their own
participation and pleasure in violent acts as part of their everyday existence—even when fellow citizens become the casualties. Maximizing the pleasure of violence with its echo
of fascist ideology far exceeds the boundaries of state-sponsored militarism and violence.
exclusively state function , since the market
Violence can no longer be defined as an
in its various economic and cultural manifestations now
enacts its own
violence on numerous populations no longer considered of value . Perhaps nothing signals the growing market-based
savagery of the contemporary moment more than the privatized and corporate-fueled gun culture of the United States.
Gun culture now rules U.S. values and has a powerful influence in shaping domestic policies. The National Rifle Association is the emerging symbol of what the United States has
come to represent, perfectly captured in T-shirts worn by its followers that brazenly display the messages “I hate welfare” and the biblical-sounding message “If any would not
work neither should he eat.”39 The celebration of guns and violence merges in this case with a culture of cruelty, hatred, and exclusion. The National Rifle Association begins to
resemble a regime of terror as politics and violence become an inseparable part of its message and the most important mediating force in shaping its identity. The relationship
Americans have to guns may be complicated, but the social costs are less nuanced and certainly more deadly. In a country with “90 guns for every 100 people,” it comes as no
surprise, as Gary Younge points out, that “more than 85 people a day are killed with guns and more than twice that number are injured with them.”40 The merchants of death
trade in a formative and material culture of violence that causes massive suffering and despair while detaching themselves from any sense of moral responsibility. Social costs
are rarely considered, in spite of the endless trail of murders committed by the use of such weapons and largely inflicted on poor minorities and young people.
With respect to young people, “Each year, more than 20,000 children and youth under age 20 are killed or injured by firearms in the United States. The lethality of guns, as well
as their easy accessibility to young people, are key reasons why firearms are the second leading cause of death among young people ages 10 to 19. Only motor vehicle accidents
claim more young lives.”41 Violence has become not only more deadly but flexible, seeping into a range of institutions, cannibalizing democratic values, and merging crime and
terror. As Jean and John Comaroff point out, under such circumstances a social order emerges that “appears ever more impossible to apprehend, violence appears ever more
endemic, excessive, and transgressive, and police come, in the public imagination, to embody a nervous state under pressure.”42 The lethality of gun culture and the spectacle
of violence are reinforced in U.S. life as public disorder becomes both a performance and an obsession. The obsession with violence is clearly reflected in advertising and other
everyday venues—advertising can even “transform nightmare into desire….[Yet] violence is never just a matter of the circulation of images. Its exercise, legitimate or otherwise,
tends to have decidedly tangible objectives. And effects.”43
An undeniable effect of the warmongering state is the drain on public coffers. The United States has the largest military budget in the world and “in 2010–2011 accounted for
40% of national [federal government] spending.”44 The Eisenhower Study Group at Brown University’s Watson Institute for International Studies estimates that the wars in Iraq
and Afghanistan have cost the U.S. taxpayers between $3.7 and $4.4 trillion. What is more, funding such wars comes with an incalculable price in human lives and suffering. For
example, the Eisenhower Study Group estimated that in these two wars there have been over 224,475 lives lost, 363,383 people wounded, and 7 million refugees and internally
displaced people.45 But war has another purpose, especially for neoconservatives who want to destroy the social state. By siphoning funds and public support away from much
needed social programs, war, to use David Rothkopf’s phrase, “diminishes government so that it becomes too small to succeed.”46
The warfare state hastens the dismantling of the social state and its limited safety net, creating the
conditions for the ultra-rich, mega-corporations, and finance capital to appropriate massive
amounts of wealth, income, and power. This has resulted between 2010 and 2012 in the
largest-ever increase in inequality of income and wealth in the United States.47 One acute register of the
growing inequality in wealth and income is provided by Michael D. Yates:
In the United States in 2007, it is estimated that the five best-paid hedge-fund managers “earned” more than all of the CEOs of the Fortune 500 corporations combined. The
income of just the top three hedge-fund managers (James Simon, John Paulson, and George Soros) taken together was $9 billion dollars in 2007…. Pittsburgh hedge-fund
manager David Tepper made four billion dollars…. If we were to suppose that Mr. Tepper worked 2,000 hours in 2009 (fifty weeks at forty hours per week), he took in
$2,000,000 per hour and $30,000 a minute…. Others are not so fortunate. In 2010, more than 7 million people had incomes less than 50 percent of the official poverty level of
income, an amount equal to $11,245, which in hourly terms (2,000 hours of work per year) is $5.62. At this rate, it would take someone nearly three years to earn what Tepper
got each minute. About one-quarter of all jobs in the United States pay an hourly wage rate that would not support a family of four at the official poverty level of income.48
Structural inequalities do more than distribute wealth and power upward to the privileged few and impose massive hardships on the poorest members of
society. They also generate forms of collective violence accentuated by high levels of uncertainty and anxiety, all of which, as Michelle Brown
points out, “makes recourse to punishment and exclusion highly seductive possibilities.”49 The merging of the punishing and financial state is partly
legitimated through the normalization of risk, insecurity, and fear in which individuals not only have no way of
knowing their fate, but also have to bear the consequences of being left adrift by neoliberal capitalism.
Increasingly, institutions such as schools, prisons, detention centers, and our major economic
institutions are being organized for the
production of violence . Rather than promote democratic values and a respect for others or embrace civic values, they often function largely to humiliate,
punish, and demonize any vestige of social responsibility. Our political system is now run by a financial oligarchy that is comparable to
what Alain Badiou calls a “regime of gangsters.”50 And as he rightly argues, the message we get from the apostles of casino
capitalism carries with it another form of social violence :
Privatize everything . Abolish help for the weak, the solitary, the sick and the unemployed.
Abolish all aid for everyone except the banks. Don’t look after the poor; let the elderly die. Reduce the wages of the poor, but reduce the taxes on the rich. Make everyone work
until they are ninety. Only teach mathematics to traders, reading to big property-owners and history to on-duty ideologues. And the execution of these commands will in fact
ruin the lives of millions of people.51
It is precisely this culture of cruelty that has spread throughout the United States that makes the larger public not merely susceptible to violence but induces it to luxuriate in its
the seductive power of the spectacle of violence is fed through a framework
of fear , blame, and humiliation that circulates widely in popular culture. The consequence is a culture marked by
increasing levels of inequality, suffering, and disposability . There is not only a “surplus of rage,” but also a collapse of civility
alleged pleasures. In U.S. society,
in which untold forms of violence, humiliation, and degradation proliferate.
Hyper-masculinity and the spectacle of a militarized
Stefan Bauschard
Globalization and Poverty Release
157
culture now dominate U.S. society —one in which civility collapses into rudeness, shouting, and unchecked anger. What is unique at this historical
conjuncture in the United States is that such public expression of hatred, violence, and rage “no longer requires concealment but is comfortable in its forthrightness.”52
How else to explain the support by the majority of Americans for state-sanctioned torture, the
public indifference to the mass incarceration of poor people of color, the silence on the part of
many Americans in the face of the increasing use of police and state-sanctioned violence
against peaceful Occupy Wall Street protesters, or the public silence in the face of police
violence in public schools against children, even those in elementary schools? As war
becomes the organizing principle of society , the ensuing effects of an intensifying culture of
violence on a democratic civic culture are often deadly and invite anti-democratic tendencies
that pave the way for authoritarianism.
In addition, as the state is hijacked by the financial-military-industrial complex, the “most crucial
decisions regarding national policy are not made by representatives, but by the financial and military elites.”53 Such
massive inequality and the suffering and political corruption it produces point to the need for critical
analysis in which the separation of power and politics can be understood. This means developing terms that
clarify how power becomes global even as politics continues to function largely at the national level, with the effect of reducing the state primarily to custodial, policing, and
punishing functions—at least for those populations considered disposable.
Stefan Bauschard
Globalization and Poverty Release
158
A2: Inequality Reduction in Asia
Policy, not globalization, responsible for reductions in inequality in Asia
Ravi Kanbur, Cornell University, 2015, Handbook of Income Distribution, Volume 2, pp. 18451881
However, the East Asian experience has also been used to support the thesis that the equity dimensions of
outcomes owe a significant amount to other structural and policy features. Among these are the land
reforms instituted by the occupying American forces in South Korea in the 1940s and 1950s, which meant
that they entered the next phase of development, in the 1960s and 1970s, with supportive initial conditions
for equitable development. Further, in these countries and in other East Asian countries, proactive policy
had ensured a very wide spread of basic education. Here is how Adelman (n.d.), the leading scholar of
South Korean development strategy at that time, sets out these structural factors in the country from the end
of World War II until the beginning of the 1960s:
There were two waves of land reform, in 1947 and 1949. In 1947, the U.S. military government decreed
that the land confiscated from Japanese farmers and Japanese corporations should be redistributed to
tenants… . The second wave of land reform redistributed the holdings of Korean landlords owning more
than 3 chongbo (7.5 acres or about 3 hectares) to tenant farmers and landless farm laborers… . The
distribution of land holdings became very even… . The bulk of government investment during this period
was on social development…Over this period, the literacy rate increased from 30 to over 80 percent.
Asian gains at the expense of the US middle class
Washington Times, October 6, 2014, “Economic Globalization Boosts Asia, bogs down US
Middle Class,” http://www.washingtontimes.com/news/2014/oct/6/economicglobalization-boosts-asia-bogs-down-us-mi/?page=all DOA: 1-2-14
But Mr. Lakner said it’s hard to know whether to celebrate the success of Asia — formerly one of
the poorest parts of the globe — or rue the slow hollowing out of the industrialized West, where
middle-income citizens stand to keep losing more and more income in the competition with the
emerging world for jobs in coming decades. He worries that the slow but steady decline of living
standards for the middle class — even as the wealthiest 10 percent grows richer — poses a threat
to democracy in the West.
Stefan Bauschard
Globalization and Poverty Release
159
A2: Benefits Workers
Liberalization doesn’t benefit the poorest workers
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
In world terms developing countries are clearly labour-abundant, so that freer trade gravitates towards
higher wages in general. However, within those countries it is not clear that the least-skilled workers, and
thus the most likely to be poor, are the most intensively used factor in the production of tradable goods
Stefan Bauschard
Globalization and Poverty Release
160
A2: Capitalism Self Correcting
Capitalism squeezes out wage earners – prevents self correction
Sabnavis ’14 [5/18/14, Madan Sabnavis has been the Chief Economist and General Manager
of Credit Analysis & Research Limited and has a masters in Economics, ~ “Marx for the
millennials”, http://www.thehindubusinessline.com/opinion/marx-for-themillennials/article6022729.ece]
The other law defines the share of income going to capital as the product of return on capital
and capital to income ratio. With the return increasing over time with access to various assets,
capital will get a larger share of income. In fact, when wealth is inherited and can be
diversified the returns are higher than in case of an individual who has limited wealth and
prefers safer avenues which earn lower returns. This, according to French economist Thomas
Piketty, is the crux of the problem of capitalism , which creates a crisis in the long run
because when we over-invest in capital , there is little left for labour which is also what Karl
Marx spoke of. Marx spoke of a revolution, but the basic issue is that if wage earners are
squeezed out, who will buy the goods that the capitalist produces ? Markets are not selfcorrecting as is made out in textbooks and hence bourgeois economics does not quite work.
Markets are not self correcting – their evidence is based off of flawed models
Stiglitz ’13 [5/9/13, Joseph Eugene Stiglitz is an economist and a professor at Columbia
University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the
John Bates Clark Medal (1979). He is a former senior vice president and chief economist of the
World Bank, and is a former member, and Chairman of the Council of Economic Advisers, ~ “The
lessons of the North Atlantic crisis for economic theory and policy”,
http://www.voxeu.org/article/lessons-north-atlantic-crisis-economic-theory-and-policy]
In analysing the most recent financial crisis, we can benefit somewhat from the misfortune of
recent decades. The approximately 100 crises that have occurred during the last thirty years –
as liberalisation policies became dominant – have given us a wealth of experience and
mountains of data. If we look over a 150-year period, we have an even richer data set. With a
century and half of clear, detailed information on crisis after crisis, the burning question is not
‘How did this happen?’ but ‘How did we ignore that long history, and think that we had solved
the problems with the business cycle’? Believing that we had made big economic fluctuations a
thing of the past took a remarkable amount of hubris. Markets are not stable, efficient, or
self-correcting The big lesson that this crisis forcibly brought home – one we should have long
known – is that economies are not necessarily efficient, stable or self-correcting . There are
two parts to this belated revelation: One is that standard models had focused on exogenous
shocks, and yet it’s very clear that a very large fraction of the perturbations to our economy
are endogenous . There are not only short run endogenous shocks; there are long run
structural transformations and persistent shocks. The models that focussed on exogenous
shocks simply misled us – the majority of the really big shocks come from within the
economy. Secondly, economies are not self-correcting . It’s clear that we have yet to fully take
on aboard this crucial lesson that we should have learned from this crisis: even in its
Stefan Bauschard
Globalization and Poverty Release
161
aftermath, the tepid attempts to fix the economies of the United States and Europe have
been a failure . They certainly have not gone far enough. The result is that we continue to face
significant risks of another crisis in the future. So too, the responses to the crisis have not
brought our economies anywhere near back to full employment. The loss in GDP between our
potential and our actual output is in the trillions of dollars.
Capitalism doesn’t have the structures to fix itself
Li, ’10 [Summer 2010, Dr. Minqi Li is an Assistant Professor Department of Economics,
University of Utah, “The 21st Century Crisis: Climate Catastrophe or Socialism”]
The impending climate catastrophe is but one of several aspects of the structural crisis of
capitalism in the 21st century. We are currently in the beginning of a prolonged period of
global instability and chaos . Similar periods of systemic chaos had happened before (for
example, during the first half of the 20th century). Capitalism had managed to survive earlier
crises, through institutional adjustments without changing the system’s essential features
(production for profit and endless accumulation of capital). Because of this historical
observation, some have developed the belief that capitalism is such a remarkably “flexible” and
“creative” system that it can always reform itself, adapt to change, survive crises, and meet
challenges. But this belief is short-sighted and fundamentally ahistorical. Like every other social
system, for capitalism to exist and function, it requires certain necessary historical conditions.
Capitalism would remain viable (and therefore “reformable”) only to the extent the necessary
historical conditions required for its normal operations are present. But the development of
capitalism inevitably leads to fundamental changes in the underlying historical conditions.
Sooner or later, a point will be reached where the necessary historical conditions are no
longer present, and capitalism as a historical system will cease to exist. If one compares the
current systemic crisis with earlier instances of systemic crisis, what are some of the major
differences ? First, in previous periods of crisis, the world’s natural resources remained
relatively abundant and the global environment remained largely intact. Today, the global
ecological system is literally on the verge of complete collapse . The impending climate
catastrophe is only one among many aspects of global environmental crisis . Global capitalism
has already exhausted the environmental space for further capital accumulation. Secondly, the
successful operations of the capitalist world system require it be regulated by an effective
hegemonic power at the systemic level. However, with the decline of the US hegemony, no
other big power was in a position to replace the US to become the new hegemonic power.
Without an effective hegemonic power, the system would be unable to pursue its own longterm interest and solve system-wide problems. Thirdly, in the past the capitalist system had
managed to survive crisis through social reforms . In essence, social reform is for the system to
buy off certain opposition groups by making limited concessions. The concessions have to be
limited so that they do not undermine the essential interest of the ruling class. Today, the
system has run out of its historical space for social compromise. In virtually all the advanced
capitalist countries, now a restoration of favorable conditions for capitalist accumulation would
require nothing short of large and sustained declines of working class living standards. Will the
western working classes simply surrender and give up their entire historical gains since the 19th
century? If not, Western Europe and North America will again become major battlegrounds of
Stefan Bauschard
Globalization and Poverty Release
162
class struggle in the coming decades. Fourthly, the world has reached the advanced stage of
proletarianization. Marx famously predicted that the proletariat would become the grave
diggers of capitalism. For the entire 19th and much of 20th century, the process of
proletarianization was largely limited to the “West” (the advanced capitalist countries). In the
neoliberal era, as capital is relocated from advanced capitalist countries to the rest of the
world to exploit the reserve army of cheap labor force, there have been large formations of
industrial working classes in the non-western world. Over time, the non-western working
classes will have developed the organizational capacity and demand a growing range of
economic, social, and political rights. For the capitalist world system, if its economic and
ecological resources are already so limited that it is no longer possible to accommodate the
historical demands of the western working classes, what is the chance for the system to
accommodate the demands of the much larger non-western working classes? If the system can
no longer survive by buying off its potential oppositions, can it simply survive by repression, and
for how long? How will the combination of these trends play out in the coming decades? Will
the current structural crisis turn out to be the terminal crisis of capitalism? One thing is clear.
If capitalism does survive the current crisis, there is probably not much hope for the humanity
to survive the coming global climate catastrophe . For the humanity’s sake, end capitalism
before we are ended by capitalism.
Stefan Bauschard
Globalization and Poverty Release
163
A2: Government Policies Protect the Poor
Government only responsive to the needs of the rich
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Strong quantitative data support Oxfam’s concerns regarding rising wealth concentration and
unequal political representation. A recent study presents compelling statistical evidence that the
preferences of wealthy Americans are overwhelingly represented in their government,
compared with those of the middle classes. By contrast, the preferences of the poorest people
demonstrate no statistical impact on the voting patterns of their elected officials. If this trend
continues, public policies will most likely reproduce the conditions that are worsening economic
inequality and political marginalization.
Political protections of the wealthy means no policies to protect the poor
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Since the late 1970s, weak regulation of the role of money in politics has permitted
wealthy individuals and corporations to exert undue influence over government policy
making. A pernicious result is the skewing of public policy to favor elite interests, which
has coincided with the greatest concentration of wealth among the richest one percent
since the eve of the Great Depression.
Stefan Bauschard
Globalization and Poverty Release
164
As policies favoring corporations gained ascendancy, the bargaining power of labor unions
plummeted and the real value of the minimum wage and other protections eroded. It is now
harder for unions to organize, and easier for big businesses to suppress wages and erode
workers’ benefits. Wealthy interest groups have also used their financial might to influence
legislators and the general public to keep downward pressure on top income tax rates and
capital gains, and to create corporate tax loopholes. Because capital is taxed at lower rates than
income, millions of average working Americans pay higher tax rates than the rich
Austerity programs eroding labor rights
Oxfam Briefing Paper, 2014, Working for The Few,
http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-fewpolitical-capture-economic-inequality-200114-en_3.pdf
Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is
divided in two: almost half going to the richest one percent; the other half to the remaining 99
percent. The World Economic Forum has identified this as a major risk to human progress.
Extreme economic inequality and political capture are too often interdependent. Left
unchecked, political institutions become undermined and governments overwhelmingly serve
the interests of economic elites to the detriment of ordinary people. Extreme inequality is not
inevitable, and it can and must be reversed quickly.
Even before the financial crisis, a number of European countries were seeing increased
levels of income inequality despite high levels of growth.26 Portugal and the UK already
ranked among the most unequal countries in the Organisation for Economic Cooperation and Development (OECD).27 This raises serious questions as to how equitable
any growth will be when those countries fully emerge from recession.
Under huge pressure from financial markets, austerity programs have been implemented
across Europe in the face of large-scale public protests. Based on regressive taxes and
deep spending cuts – particularly to public services such as education, healthcare and
social security – these moves have started to dismantle the mechanisms that reduce
inequality and enable equitable growth. They have also sought to erode labor rights. The
poorest sections of society have been hit hardest, as the burden of responsibility for the
excesses of past decades is passed to those who are most vulnerable and least to
blame. Although it has come too late, leading proponents of austerity such as the IMF
are beginning to recognize that harsh austerity measures have not delivered the
expected results in terms of growth and recovery, and have in fact harmed the prospects
for growth and equality.28
All the while, the richest 10 percent have seen their share of total income grow. The combined
wealth of Europe’s 10 richest people exceeds the total cost of stimulus measures implemented
across the EU between 2008 and 2010 (€217bn compared with €200bn).29
Stefan Bauschard
Globalization and Poverty Release
165
Bad Growth
Neoliberalism is counterproductive for economic growth. The neoliberal elite
claim benefits will materialize, but studies show growth rates are falling as
neoliberal policies lead to unemployment, decreased demand, and lower
wages.
Monbiot 13 – columnist for The Guardian, has held visiting fellowships or professorships at
the universities of Oxford (environmental policy), Bristol (philosophy), Keele (politics), Oxford
Brookes (planning), and East London (environmental science) [George. “If you think we're done
with neoliberalism, think again”. 1/14/13.
http://www.guardian.co.uk/commentisfree/2013/jan/14/neoliberal-theory-economic-failure.]//
How they must bleed for us. In 2012, the world's 100 richest people became $241 billion richer.
They are now worth $1.9 trillion: just a little less than the entire output of the United Kingdom.
This is not the result of chance. The rise in the fortunes of the super-rich is the direct result of
policies. Here are a few: the reduction of tax rates and tax enforcement; governments' refusal
to recoup a decent share of revenues from minerals and land; the privatisation of public
assets and the creation of a toll-booth economy; wage liberalisation and the destruction of
collective bargaining.
The policies that made the global monarchs so rich are the policies squeezing everyone else.
This is not what the theory predicted. Friedrich Hayek, Milton Friedman and their disciples – in a
thousand business schools, the IMF, the World Bank, the OECD and just about every modern
government – have argued that the less governments tax the rich, defend workers and
redistribute wealth, the more prosperous everyone will be. Any attempt to reduce inequality
would damage the efficiency of the market, impeding the rising tide that lifts all boats. The
apostles have conducted a 30-year global experiment , and the results are now in. Total
failure.
Before I go on, I should point out that I don't believe perpetual economic growth is either
sustainable or desirable. But if growth is your aim – an aim to which every government claims
to subscribe – you couldn't make a bigger mess of it than by releasing the super-rich from the
constraints of democracy. Last year's annual report by the UN Conference on Trade and
Development should have been an obituary for the neoliberal model developed by Hayek and
Friedman and their disciples. It shows unequivocally that their policies have created the
opposite outcomes to those they predicted. As neoliberal policies (cutting taxes for the rich,
privatising state assets, deregulating labour, reducing social security) began to bite from the
1980s onwards, growth rates started to fall and unemployment to rise.
The remarkable growth in the rich nations during the 50s, 60s and 70s was made possible by
the destruction of the wealth and power of the elite, as a result of the 1930s depression and
the second world war. Their embarrassment gave the other 99% an unprecedented chance to
demand redistribution, state spending and social security, all of which stimulated demand.
Neoliberalism was an attempt to turn back these reforms. Lavishly funded by millionaires, its
advocates were amazingly successful – politically. Economically they flopped. Throughout the
OECD countries taxation has become more regressive: the rich pay less, the poor pay more.
The result, the neoliberals claimed, would be that economic efficiency and investment would
Stefan Bauschard
Globalization and Poverty Release
166
rise, enriching everyone. The opposite occurred. As taxes on the rich and on business
diminished, the spending power of both the state and poorer people fell , and demand
contracted . The result was that investment rates declined , in step with companies'
expectations of growth.
The neoliberals also insisted that unrestrained inequality in incomes and flexible wages would
reduce unemployment. But throughout the rich world both inequality and unemployment
have soared . The recent jump in unemployment in most developed countries – worse than in
any previous recession of the past three decades – was preceded by the lowest level of wages
as a share of GDP since the second world war. Bang goes the theory. It failed for the same
obvious reason: low wages suppress demand, which suppresses employment.
As wages stagnated, people supplemented their income with debt. Rising debt fed the
deregulated banks, with consequences of which we are all aware. The greater inequality
becomes , the UN report finds, the less stable the economy and the lower its rates of growth.
The policies with which neoliberal governments seek to reduce their deficits and stimulate
their economies are counter-productive.
The impending reduction of the UK's top rate of income tax (from 50% to 45%) will not boost
government revenue or private enterprise, but it will enrich the speculators who tanked the
economy. Goldman Sachs and other banks are now thinking of delaying their bonus payments to
take advantage of it. The welfare bill approved by parliament last week will not help to clear the
deficit or stimulate employment: it will reduce demand, suppressing economic recovery. The
same goes for the capping of public sector pay. "Relearning some old lessons about fairness
and participation," the UN says, "is the only way to eventually overcome the crisis and pursue
a path of sustainable economic development." As I say, I have no dog in this race, except a
belief that no one, in this sea of riches, should have to be poor. But staring dumbfounded at
the lessons unlearned in Britain, Europe and the US, it strikes me that the entire structure of
neoliberal thought is a fraud. The demands of the ultra-rich have been dressed up as
sophisticated economic theory and applied regardless of the outcome. The complete failure
of this world-scale experiment is no impediment to its repetition. This has nothing to do with
economics . It has everything to do with power.
Stefan Bauschard
Globalization and Poverty Release
167
Economy
Economic crises is an endless repetition of the logic of capital.
Zizek’ 97 – Senior Researcher, Institute for Social Studies [Slavoj. “Multiculturalism, or, the
Cultural Logic of Multinational Capitalism”. Spring 1997.]
So, back to the recent Labour victory, one can see how it not only involved a hegemonic
reappropriation of a series of motifs which were usually inscribed into the Conservative field—
family values, law and order, individual responsibility; the Labour ideological offensive also
separated these motifs from the obscene phantasmatic subtext which sustained them in the
Conservative field—in which ‘toughness on crime’ and ‘individual responsibility’ subtly referred
to brutal egotism, to the disdain for victims, and other ‘basic instincts’. The problem, however, is
that the New Labour strategy involved its own ‘message between the lines’: we fully accept the
logic of Capital, we will not mess about with it. Today, financial crisis is a permanent state of
things the reference to which legitimizes the demands to cut social spending, health care,
support of culture and scientific research, in short, the dismantling of the welfare state. Is,
however, this permanent crisis really an objective feature of our socio-economic life? Is it not
rather one of the effects of the shift of balance in the ‘class struggle’ towards Capital, resulting
from the growing role of new technologies as well as from the direct internationalization of
Capital and the co-dependent diminished role of the Nation-State which was further able to
impose certain minimal requirements and limitations to exploitation? In other words, the
crisis is an ‘objective fact’ if and only if one accepts in advance as an unquestionable premise
the inherent logic of Capital—as more and more left-wing or liberal parties have done. We are
thus witnessing the uncanny spectacle of social-democratic parties which came to power with
the between-the-lines message to Capital ‘we will do the necessary job for you in an even
more efficient and painless way than the conservatives’. The problem, of course, is that, in
today’s global socio-political circumstances, it is practically impossible effectively to call into
question the logic of Capital: even a modest social-democratic attempt to redistribute wealth
beyond the limit acceptable to the Capital ‘effectively’ leads to economic crisis , inflation , a
fall in revenues and so on. Nevertheless, one should always bear in mind how the connection
between ‘cause’ (rising social expenditure) and ‘effect’ (economic crisis) is not a direct
objective causal one: it is always-already embedded in a situation of social antagonism and
struggle. The fact that, if one does not obey the limits set by Capital, a crisis ‘really follows’, in
no way ‘proves’ that the necessity of these limits is an objective necessity of economic life. It
should rather be conceived as a proof of the privileged position Capital holds in the economic
and political struggle, as in the situation where a stronger partner threatens that if you do X,
you will be punished by Y, and then, upon your doing X, Y effectively ensues.
Stefan Bauschard
Globalization and Poverty Release
168
Environment Extensions
Capitalism is quickly approaching an ‘ecological Armageddon’ – a global
environmental crisis manifesting in uncontrollable climate change, ocean
acidification, water shortages, all culminating in planetary extinction
Foster & Clark 12
(John Bellamy Foster, professor of sociology at University of Oregon, and Brett Clark, assistant professor of sociology at the
University of Utah., “The Planetary Emergency,” Monthly Review, December 2012, vol. 64, issue 7) BSH
Capitalism today is caught in a seemingly endless crisis, with economic stagnation and upheaval
circling the globe.1 But while the world has been fixated on the economic problem, global
environmental conditions have been rapidly worsening, confronting humanity with its
ultimate crisis: one of long-term survival. The common source of both of these crises resides
in the process of capital accumulation. Likewise the common solution is to be sought in a “revolutionary
reconstitution of society at large,” going beyond the regime of capital.2¶ It is still possible for humanity to avert what
economist Robert Heilbroner once called “ecological Armageddon.”3 The means for the creation of a just and sustainable
world currently exist, and are to be found lying hidden in the growing gap between what could be achieved with the resources
already available to us, and what the prevailing social order allows us to accomplish. It is this latent potential for a quite different
human metabolism with nature that offers the master-key to a workable ecological exit strategy.¶ The Approaching Ecological
Precipice¶ Science
today tells us that we have a generation at most in which to carry out a radical
transformation in our economic relations, and our relations with the earth, if we want to
avoid a major tipping point or “point of no return,” after which vast changes in the earth’s climate will likely be
beyond our ability to prevent and will be irreversible.4 At that point it will be impossible to stop the ice sheets
in Antarctica and Greenland from continuing to melt, and thus the sea level from rising by as
much as “tens of meters.”5 Nor will we be able to prevent the Arctic sea ice from vanishing
completely in the summer months, or carbon dioxide and methane from being massively released by the
decay of organic matter currently trapped beneath the permafrost—both of which would represent positive
feedbacks dangerously accelerating climate change. Extreme weather events will become
more and more frequent and destructive. An article in the Proceedings of the National Academy of Sciences
demonstrated that the record-breaking heat wave that hit the Moscow area in 2010 with disastrous effect was made five times
more likely, in the decade ending in that year as compared with earlier decades, due to the warming trend, implying “an
approximate 80% probability” that it “would not have occurred without climate warming.” Other instances of extreme weather such
as the deadly European heat wave in 2003 and the serious drought in Oklahoma and Texas in 2011, have been shown to be
connected to earth warming. Hurricane
Sandy, which devastated much of New York and New Jersey at the end of October
2012, was impacted and amplified to a considerable extent by climate change.6¶ The point of
irreversible climate change is usually thought of as a 2°C (3.6°F) increase in global average temperature, which has been described as
equivalent at the planetary level to the “cutting down of the last palm tree” on Easter Island. An increase of 2°C in global average
temperature coincides roughly with cumulative carbon emissions of around one trillion metric tons. Based on past emissions trends
it is predicted by climate scientists at Oxford University that we will hit the one trillion metric ton mark in 2043, or thirty-one years
from now. We could avoid emitting the trillionth metric ton if we were to reduce our carbon emissions beginning immediately by an
annual rate of 2.4 percent a year.7¶ To be sure, climate science is not exact enough to pinpoint precisely how much warming will
push us past a planetary tipping point.8 But all
the recent indications are that if we want to avoid planetary
disaster we need to stay considerably below 2°C. As a result, almost all governments have signed on to staying
below 2°C as a goal at the urging of the UN’s Intergovernmental Panel on Climate Change. More and more, 2°C has come to
symbolize the reality of a planetary point of no return. In this sense, all the discussions of what the climate will be like if the world
warms to 3°C, or all the way to 6°C, are relatively meaningless.9 Before such temperatures are attained, we will have already
reached the limits of our ability to control the climate- change process, and we will then be left with the task of adapting to
apocalyptic ecological conditions. Already Arctic sea ice experienced a record melt in the summer of 2012 with some scientists
predicting an ice-free Arctic in the summer as early as 2016–2020. In the words of James Hansen, the world’s leading climatologist,
we are facing a “planetary emergency”—since if we approach 2°C “we will have started a process that is out of humanity’s
control.”10¶ Given all of this, actually aiming for the one trillion metric ton mark in cumulative carbon emissions, or a 2°C increase in
global temperature, would be courting long-term disaster. Some prominent climate analysts have proposed a target of staying
below 750 billion cumulative metric tons of carbon—estimated to provide a 75 percent chance of staying below the climate-change
tipping point. At current rates of carbon emissions it is calculated that we will reach the 750 billion metric tons mark in 2028, or
Stefan Bauschard
Globalization and Poverty Release
169
sixteen years. We could avoid emitting the 750 billionth metric ton if we were to reduce our carbon emissions beginning
immediately at an average annual rate of 5.3 percent.11 To get some perspective on this, the Stern Review on The Economics of
Climate Change issued by the British government in 2007, which is generally seen as representing the progressive side of the carbon
debate, argued that a reduction in emissions of more than a 1 percent annual rate would generate a severe crisis for the capitalist
economy and hence was unthinkable.12¶ Many
thought that the Great Financial Crisis would result in a
sharp curtailment of carbon emissions, helping to limit global warming. Carbon emissions dipped by 1.4
percent in 2009, but this brief decline was more than offset by a record 5.9 percent growth of carbon
emissions in 2010, even as the world economy as a whole continued to stagnate. This rapid increase has
been attributed primarily to the increasing fossil-fuel intensity of the world economy, and to the continued expansion of emerging
economies, notably China.13¶ In an influential article published in Nature Climate Change, “Asymmetric Effects of Economic Decline
on CO2 Emissions,” Richard York
used data for over 150 countries between 1960 and 2008 to
demonstrate that carbon dioxide emissions do not decline in the same proportion in an economic
downturn as they increase in an economic upturn. Thus for each 1 percent in the growth of GDP per capita,
carbon emissions grew by 0.733 percent, whereas for each 1 percent drop in GDP, carbon emissions fell by only 0.430 percent.
These asymmetric effects can be attributed to built-in infrastructural conditions—factories, transportation networks, and homes—
meaning that these structures do not disappear during recessions and continue to influence fossil-fuel consumption. It
follows
of necessity that a boom-and-bust economic system cannot reduce carbon emissions; that
can only be achieved by an economy that reduces such emissions on a steady basis along with
changes in the infrastructure of production and society in general.14¶ Indeed, there is reason to believe
that there is a strong pull on capitalism in its current monopoly-finance phase to seek out more fossil-fuel
intensive forms of production the more deeply it falls into the stagnation trap, resulting in repeated
attempts to restart the growth engine by, in effect, giving it more gas. According to the Low Carbon Index,
the carbon intensity of world production fell by 0.8 percent in 2009, and by 0.7 percent in 2010. However, in 2011 the carbon
intensity of world production rose by 0.6 percent. “The economic recovery, where it has occurred, has been dirty.”15
The notion that a stagnant-prone capitalist growth economy (what Herman Daly calls a “failed growth economy”) would be even
more intensively destructive of the environment was a thesis advanced as early as 1976 by the pioneering Marxist environmental
sociologist Charles H. Anderson. As Anderson put it, “as
the threat of stagnation mounts, so does the need for
throughput in order to maintain tolerable growth rates.”16¶ The hope of many that peak crude oil production
and the end of cheap oil would serve to limit carbon emissions has also proven false. It is clear that in the age of enhanced
worldwide coal production, fracking, and tar sands oil there is no shortage of carbon with which to heat up the planet. Today’s
known stocks of oil, coal, and gas reserves are at least five times the planet’s remaining
carbon budget, amounting to 2.8 gigatons in carbon potential, and the signs are that the
capitalist system intends to burn it all.17 As Bill McKibben observed in relation to these fossil-fuel reserves: “Yes, this
coal and oil is still technically in the soil. But it’s already economically aboveground.”18 Corporations and governments
count these carbon resources as financial assets, which means they are intended for
exploitation. Not too long ago environmentalists were worried about the world running out of fossil fuels (especially crude oil);
now this has been inverted by climate-change concerns.¶ As bad as the climate crisis is, however, it is important
to understand that it is only a part of the larger global ecological crisis—since climate change is
merely one among a number of dangerous rifts in planetary boundaries arising from human
transformations of the earth. Ocean acidification, destruction of the ozone layer, species
extinction, the disruption of the nitrogen and phosphorus cycles, growing fresh water
shortages, land-cover change, and chemical pollution all represent global ecological
transformations/crises. Already we have crossed the planetary boundaries (designated by scientists based
on departure from Holocene conditions) not only in relation to climate change, but also with respect to species extinction and the
nitrogen cycle. Species extinction is occurring at about a thousand times the “background rate,” a
phenomenon known as the “sixth extinction” (referring back to the five previous periods of mass extinctions in earth history—the
most recent of which, 65 million years ago, resulted in the extinction of the dinosaurs). Nitrogen
pollution now
constitutes a major cause of dead zones in oceans. Other developing planetary rifts, such as ocean
acidification (known as the “evil twin” of climate change since it is also caused by carbon emissions), and chronic loss of
freshwater supplies, which is driving the global privatization of water, are of growing concern. All of this
raises basic questions of survival: the ultimate crisis confronting humanity.19¶ The Ultimate Crisis¶
Stefan Bauschard
Globalization and Poverty Release
170
The scale and speed of the emerging ecological challenge, manifested not only in climate change but also in
numerous other planetary rifts, constitutes irrefutable evidence that the root cause of the
environmental problem lies in our socioeconomic system, and particularly in the dynamic of
capital accumulation.¶ Faced with such intractable problems, the response of the dominant interests has
always been that technology, supplemented by market magic and population control, can solve all problems,
allowing for unending capital accumulation and economic growth without undue ecological effects by means of an absolute
decoupling of growth from environmental throughput. Thus, when
asked about the problems posed by fossil
fuels (including tar sands oil, shale oil and gas, and coal) President Obama responded: “All of us are going to
have to work together in an effective way to figure out how we balance the imperative of
economic growth with very real concerns about the effect we’re having on our planet. And
ultimately I think this can be solved with technology.”20¶ Yet, the dream that technology alone,
considered in some abstract sense, can solve the environmental problem, allowing for unending economic growth
without undue ecological effects through an absolute decoupling of one from the other, is quickly fading.21 Not only are
technological solutions limited by the laws of physics, namely the second law of thermodynamics (which tells
us, for example, that energy is partially dissipated upon use), but they are also subject to the laws of capitalism
itself.22 Technological change under the present system routinely brings about relative efficiency gains in
energy use, reducing the energy and raw material input per unit of output. Yet, this seldom results in absolute
decreases in environmental throughput at the aggregate level; rather the tendency is toward
the ever-greater use of energy and materials. This is captured by the well-known Jevons paradox, named after the
nineteenth-century economist William Stanley Jevons. Jevons pointed out that gains in energy efficiency almost invariably increase
the absolute amount of energy used, since such efficiency feeds economic expansion. Jevons highlighted how each new steam
engine from Watt’s famous engine on was more efficient in its use of coal than the one before, yet the introduction of each
improved steam engine nonetheless resulted in a greater absolute use of coal.23
Capitalism is the root of environmental destruction – only the alt can solve
Foster associate professor of sociology at the University of Oregon 2011 John Monthly Review
63.4 (September) http://monthlyreview.org/2011/09/01/the-ecology-of-marxian-politicaleconomy
It is no secret today that we are facing a planetary environmental emergency, endangering most
species on the planet, including our own, and that this impending catastrophe has its roots in the
capitalist economic system. Nevertheless, the extreme dangers that capitalism inherently poses to the
environment are often inadequately understood, giving rise to the belief that it is possible to create a new
“natural capitalism” or “climate capitalism” in which the system is turned from being the enemy of the
environment into its savior.1 The chief problem with all such views is that they underestimate the
cumulative threat to humanity and the earth arising from the existing relations of production. Indeed,
the full enormity of the planetary ecological crisis, I shall contend, can only be understood from a
standpoint informed by the Marxian critique of capitalism.
Capitalist modes of production  environmental destruction
Foster associate professor of sociology at the University of Oregon 2011 John Monthly Review
63.4 (September) http://monthlyreview.org/2011/09/01/the-ecology-of-marxian-politicaleconomy
The ecological critique generated by twentieth-century monopoly capital theory—the bare
outlines of which I have sought to present here—only adds additional force to Marx’s classical
ecological critique of capitalism. Every day we are destroying more and more public wealth—air, water,
land, ecosystems, species—in the pursuit of private riches, which turns consumption into a mere adjunct
to accumulation, thereby taking on more distorted and destructive forms.
The metabolic rift in the relation of humanity to the earth that Marx described in the nineteenth
century has now evolved into multiple ecological rifts transgressing the boundaries between humanity
Stefan Bauschard
Globalization and Poverty Release
171
and the planet. It is not just the scale of production but even more the structure of production that is at
fault in today’s version of the capitalist Raubbau. “Such is the dialectic of historical
process,” Baran wrote, “that within the framework of monopoly capitalism the most abominable, the
most destructive features of the capitalist order become the very foundations of its continuing
existence—just as slavery was the conditio sine qua non of its emergence.”40
Capitalism makes environmental extinction inevitable
Schwartzman Professor Department of Biology Howard U 2008 David Ecosocialism or
Ecocatastrophe (The 2007 Daniel Singer Millennium Prize Submission, August, 2007, revised
February 11, 2008)
http://dccofc.org/Documents/David/Ecosocialism/Ecosocialism%20or%20Ecocatast.pdf
The “practical struggle” opening up a path to a socialist future is now compelled to confront the
looming threat of ecocatastrophe from global warming. Confront, meaning a full recognition of the
centrality of this challenge with its practice drawing from a truly ecosocialist theoretical
foundation. This threat is no longer a potential contingent outcome in some indefinite future of the
unsustainable mode of production and consumption of global capital reproduction, but now is highly
probable in the near future unless radical changes in both political and physical economies are made in
time.
We face an unprecedented bifurcation in humanity’s future. Never before has the technological creation
of humankind has posed such a global threat. Recognition of the imminence of this threat is
very recent, informed from the state of the art understanding of the global climate and
anthropogenic greenhouse forcing.
Capitalism  extinction – only revolution solves
Angus veteran of the socialist and environmental movements in Canada and internationally
10/7/2011 Ian http://climateandcapitalism.com/?p=5449
One hundred and fifty years ago, Karl Marx predicted that unless capitalism was eliminated the
great productive forces it unleashed would turn into destructive forces. And that’s exactly what has
happened.
Every day we see more evidence that capitalism, which was once the basis for an unprecedented
wave of creativity and liberation, has transformed itself into a force for destruction, decay and
death.
It directly threatens the existence of the human race, not to mention the existence of the millions of
species of plants and animals with whom we share the earth.
Many people have proposed technological fixes or political reforms to address various aspects of the
global environmental crisis, and many of those measures deserve serious consideration. Some
of them may buy us some time, some of them may delay the ecological day of reckoning.
Contrary to what some of our critics claim, no serious socialist is opposed to partial
measures or reforms – we will actively support any measure that reduces, limits or
delays the devastating effects of capitalism. And we will work with anyone, socialist or
not, who seriously wants to fight for such measures. In fact, just try to stop us!.
But as socialists, we know that there
can be no lasting solution to the world’s multiple environmental crises so long
as capitalism remains the dominant economic and social system on this planet.
We do not claim to have all the answers, but we do have one big answer: the only basis for
long-term, permanent change in the way humanity relates to the rest of nature, is an ecosocialist
revolution.
If we don’t make that transformation we may delay disaster, but disaster remains inevitable .
Stefan Bauschard
Globalization and Poverty Release
172
Globalization Causes War
The new international order is the prime justification for global violence. The
United States violently reorders the world through the idea of “economic
security”.
Neocleous 8 – Professor of Critique of Political Economy at Brunel University [Mark. “Critique
of Security”. Pg. 95-102.]//
In other words, the new international order moved very quickly to reassert the connection
between economic and national security: the commitment to the former was simultaneously
a commitment to the latter, and vice versa. As the doctrine of national security was being born,
the major player on the international stage would aim to use perhaps its most important
power of all – its economic strength – in order to re-order the world. And this re-ordering was
conducted through the idea of ‘economic security’ .99 Despite the fact that ‘economic security’
would never be formally defined beyond ‘economic order’ or ‘economic well-being’,100 the
significant conceptual consistency between economic security and liberal order-building also
had a strategic ideological role. By playing on notions of ‘economic well-being’, economic
security seemed to emphasise economic and thus ‘human’ needs over military ones. The
reshaping of global capital , international order and the exercise of state power could thus
look decidedly liberal and ‘humanitarian’. This appearance helped co-opt the liberal Left into
the process and, of course, played on individual desire for personal security by using notions
such as ‘personal freedom’ and ‘social equality’.101 Marx and Engels once highlighted the
historical role of the bour geoisie in shaping the world according to its own interests. The need
of a constantly expanding market for its products chases the bourgeoisie over the whole
surface of the globe. It must nestle everywhere, settle everywhere, establish connections
everywhere . . . It compels all nations, on pain of extinction, to adopt the bourgeois mode of
production; it compels them . . . to become bourgeois in themselves. In one word, it creates a
world after its own image. 102 In the second half of the twentieth century this ability to
‘batter down all Chinese walls’ would still rest heavily on the logic of capital , but would also
come about in part under the guise of security . The whole world became a garden to be
cultivated – to be recast according to the logic of security. In the space of fifteen years the
concept ‘economic security’ had moved from connoting insurance policies for working people
to the desire to shape the world in a capitalist fashion – and back again. In fact, it has
constantly shifted between these registers ever since, being used for the constant reshaping of
world order and resulting in a comprehensive level of intervention and policing all over the
globe. Global order has come to be fabricated and administered according to a security
doctrine underpinned by the logic of capital accumulation and a bourgeois conception of
order. By incorporating within it a particular vision of economic order, the concept of national
security implies the interrelatedness of so many different social, econ omic, political and
military factors that more or less any development anywhere can be said to impact on liberal
order in general and America’s core interests in particular. Not only could bourgeois Europe be
recast around the regime of capital, but so too could the whole international order as capital
not only nestled, settled and established connections, but also ‘secured’ everywhere. Security
Stefan Bauschard
Globalization and Poverty Release
173
politics thereby became the basis of a distinctly liberal philosophy of global ‘intervention’,
fusing global issues of economic management with domestic policy formations in an
ambitious and frequently violent strategy. Here lies the Janus-faced character of American
foreign policy.103 One face is the ‘good liberal cop’: friendly, prosperous and democratic,
sending money and help around the globe when problems emerge, so that the world’s nations
are shown how they can alleviate their misery and perhaps even enjoy some prosperity. The
other face is the ‘bad liberal cop’: should one of these nations decide, either through
parliamentary procedure, demands for self-determination or violent revolution to address its
own social problems in ways that conflict with the interests of capital and the bourgeois
concept of liberty, then the authoritarian dimension of liberalism shows its face; the ‘liberal
moment’ becomes the moment of violence. This Janus-faced character has meant that through
the mandate of security the US, as the national security state par excellence, has seen fit to
either overtly or covertly re-order the affairs of myriads of nations – those ‘rogue’ or ‘outlaw’
states on the ‘wrong side of history’.104 ‘Extrapolating the figures as best we can’, one CIA
agent commented in 1991,‘there have been about 3,000 major covert operations and over
10,000 minor operations – all illegal, and all designed to disrupt, destabilize, or modify the
activities of other countries’, adding that ‘every covert operation has been rationalized in
terms of U.S. national security’.105 These would include ‘interventions’ in Greece, Italy, France,
Turkey, Macedonia, the Ukraine, Cambodia, Indonesia, China, Korea, Burma, Vietnam, Thailand,
Ecuador, Chile, Argentina, Brazil, Guatemala, Costa Rica, Cuba, the Dominican Republic,
Uruguay, Bolivia, Grenada, Paraguay, Nicaragua, El Salvador, the Philippines, Honduras, Haiti,
Venezuela, Panama, Angola, Ghana, Congo, South Africa, Albania, Lebanon, Grenada, Libya,
Somalia, Ethiopia, Afghanistan, Iran, Iraq, and many more, and many of these more than once.
Next up are the ‘60 or more’ countries identified as the bases of ‘terror cells’ by Bush in a
speech on 1 June 2002.106 The methods used have varied: most popular has been the
favoured technique of liberal security – ‘making the economy scream’ via controls,
interventions and the imposition of neo-liberal regulations . But a wide range of other
techniques have been used: terror bombing; subversion; rigging elections; the use of the CIA’s
‘Health Alteration Committee’ whose mandate was to ‘incapacitate’ foreign officials; drugtrafficking;107 and the sponsorship of terror groups, counterinsurgency agencies, death
squads. Unsurprisingly, some plain old fascist groups and parties have been co-opted into the
project, from the attempt at reviving the remnants of the Nazi collaborationist Vlasov Army for
use against the USSR to the use of fascist forces to undermine democratically elected
governments, such as in Chile; indeed, one of the reasons fascism flowed into Latin America was
because of the ideology of national security.108 Concomitantly, ‘national security’ has meant a
policy of non-intervention where satisfactory ‘security partnerships’ could be established with
certain authoritarian and military regimes: Spain under Franco, the Greek junta, Chile, Iraq,
Iran, Korea, Indonesia, Cambodia, Taiwan, South Vietnam, the Philippines, Turkey, the five
Central Asian republics that emerged with the break-up of the USSR, and China. Either way, the
whole world was to be included in the new ‘secure’ global liberal order. The result has been
the slaughter of untold numbers. John Stock well, who was part of a CIA project in Angola
which led to the deaths of over 20,000 people, puts it like this: Coming to grips with these
U.S./CIA activities in broad numbers and figuring out how many people have been killed in the
jungles of Laos or the hills of Nicaragua is very difficult. But, adding them up as best we can, we
come up with a figure of six million people killed – and this is a minimum figure. Included are:
one million killed in the Korean War, two million killed in the Vietnam War, 800,000 killed in
Stefan Bauschard
Globalization and Poverty Release
174
Indonesia, one million in Cambodia, 20,000 killed in Angola – the operation I was part of – and
22,000 killed in Nicaragua.109 Note that the six million is a minimum figure, that he omits to
mention rather a lot of other interventions, and that he was writing in 1991. This is security as
the slaughter bench of history. All of this has been more than confirmed by events in the
twenty first century: in a speech on 1 June 2002, which became the basis of the official National
Security Strategy of the United States in September of that year, President Bush reiterated that
the US has a unilateral right to overthrow any government in the world, and launched a new
round of slaughtering to prove it. While much has been made about the supposedly ‘new’
doctrine of preemption in the early twenty-first century, the policy of preemption has a long
history as part of national security doctrine. The United States has long maintained the option
of pre-emptive actions to counter a sufficient threat to our national security. The greater the
threat, the greater is the risk of inaction – and the more compelling the case for taking
anticipatory action to defend ourselves . . . To forestall or prevent such hostile acts by our
adversaries, the United States will, if necessary, act pre emptively.110 In other words, the
security policy of the world’s only superpower in its current ‘war on terror’ is still
underpinned by a notion of liberal order-building based on a certain vision of ‘economic
order’. The National Security Strategy concerns itself with a ‘single sustainable model for
national success’ based on ‘political and economic liberty’, with whole sections devoted to the
security benefits of ‘economic liberty’, and the benefits to liberty of the security strategy
proposed.111 Economic security (that is, ‘capitalist accumulation’ ) in the guise of ‘national
security’ is now used as the justification for all kinds of ‘intervention’ , still conducted where
necessary in alliance with fascists, gangsters and drug cartels, and the proliferation of
‘national security’ type regimes has been the result. So while the national security state was in
one sense a structural bi-product of the US’s place in global capitalism, it was also vital to the
fabrication of an international order founded on the power of capital . National security, in
effect, became the perfect strategic tool for landscaping the human garden .112 This was to
also have huge domestic consequences, as the idea of containment would also come to
reshape the American social order, helping fabricate a security apparatus intimately bound
up with national identity and thus the politics of loyalty.
Stefan Bauschard
Globalization and Poverty Release
175
A2: Gartzke
Gartzke’s model is bias. He’s missing significant values.
Han 12 – British Columbia political science MA [Zhen, “The Capitalist Peace Revisited: A New
Liberal Peace Model and the Impact of Market Fluctuations”, March,
https://circle.ubc.ca/bitstream/handle/2429/41809/ubc_2012_spring_han_zhen.pdf?sequence
=1.]//
The missing value problem needs serious attention for the students who study liberal peace
models. Dafoe finds that missing values in Gartzke’s models are systematically associated
with its major explanatory variable—market openness 96 , thus leads to a biased
conclusion. For example, China, the U.S.S.R, and North Korea were involved in several
militarized interstate conflicts, but a significant part of the market openness is missing for
these countries 97, and excluding these cases from the model leads to a bias.
Correcting for those missing values proves market liberalization causes conflict.
Gartzke has it backwards.
Han 12 – British Columbia political science MA [Zhen, “The Capitalist Peace Revisited: A New
Liberal Peace Model and the Impact of Market Fluctuations”, March,
https://circle.ubc.ca/bitstream/handle/2429/41809/ubc_2012_spring_han_zhen.pdf?sequence
=1.]//
Model 1 replicates Model 5 of Gartzke’s capitalist peace paper 100. A major difference
between the findings of Model 1 and Gartzke’s capitalist peace Model 5 is that, Model 1 of this
paper shows that higher level of financial market openness is positively associated with more
conflict , while Gartzke finds his market openness index is negatively associated with more
conflict 101. As Dafoe points out, Gartzke’s finding can be damaged by the missing values in
his market openness variable , and the temporal dependence and cross-sectional
dependence are not properly controlled 102. Model 1 pays close attention to these problems,
and finds that, at least in this period, market openness is positively associated with more
conflicts. As the data of this paper focuses on a different time period, this result does not
suggest Gartzke is wrong, but further explanation of why market openness is positively
associated with more conflict is necessary. The low value of democracy is negatively associated
with conflicts, and this finding is consistent with the argument of democratic peace theory. The
positive impact of the high value of democracy possibly shows that a discrepant dyad—when
the democracy low value is controlled—is more likely to fight each other. As Choi points out, the
interpretation of the democracy high variable is often difficult, but it seems the democratic
peace theory is well supported by this data. The traditional commercial peace theory, which
focuses on the trade dependency created by international commodity trade, is also supported
by this model. Development makes noncontiguous states more likely to fight each other, as the
development facilitated the capacity of states to project power to a longer distance, but
development also makes contiguous states less likely to fight each other103. This finding
supports that the interaction effect between contiguity and development is also robust in this
period. Being a major power makes the state more likely to be involved in conflicts. Similar to
this finding, a state is more likely to be involved in MIDs if its national power index is higher.
Stefan Bauschard
Globalization and Poverty Release
176
However, formal alliances have no significant impact on the probability of MIDs. Model 2
replaces the high value of democracy with the democracy distance variable104 . Since the
democracy distance variable is a linear transformation of the high value of democracy105 , this
replacement produces identical results to Model 1, but the interpretation of democratic peace
in this model is much easier. The positive and significant impact of the democracy distance
variable supports the expectation from Choi: politically different countries— the authoritarian
states and the democratic states—are more likely to fight each other 106 . Different political
ideology can be the underlining reason for tension. As this paper suggests before, since many
pacifying mechanisms available for democracies do not exist in autocratic and discrepant dyads,
the same democracy distance should have different impact in different types of dyad. Model 3.1
applies this proposal and makes the lower value of democracy interact with the democracy
distance variable. The findings are impressive: The negative coefficient of the lower value of
democracy becomes significant again; the coefficient of democracy distance loses its
significance, but the interaction effects between these two variables are positively significant.
This finding supports the democratic peace argument: countries are less likely to fight if they
both are highly democratic, but this pacifying effect has been mitigated if the democracy
distance is getting bigger. Figure 1 presents a prediction of the probability of conflict based on
Model 3.1. It shows that the probability of conflict is almost the same for autocratic and
discrepant dyads, and both of them are much higher than the probability for democratic dyads.
Model 3.2 replaces the low value of democracy with a three-category indicator of dyad type 107
and makes the dyad type indicator interacting with the democracy distance variable. The result
shows that, compared with the base category (democratic dyad), the risk of fighting is higher in
the other two types of dyads. In the base category, democratic distance does not have
significant impact on their chance of fighting. Figure 2 shows how the predicted probability of
conflict, based on Model 3.2, changes across different dyad types. The predicted probability
shows that one can confidently claim that democratic dyads are more peaceful than other types
of dyad, but the upward trend, which is similar to the trend showing in the predicted chance of
fighting for autocracies, shows that bigger democracy distance leads to more conflicts in these
two types of dyads. The discrepant dyad group generally behaves similarly to the autocracy
group, except that the downward trend of the curve, showing that instead of fighting for
different democratic ideology, shows discrepant dyads often fight for other reasons. However,
the confidence interval of the discrepant dyad group largely overlaps with the confidence
interval of the autocracy group, so more data are needed to distinguish whether discrepant
dyads behave differently from autocracy dyads. In conclusion, this paper argues that the
democratic peace model can be improved by interacting the democracy distance variable with
the other democracy measurement of the dyad. Findings from these interaction models support
the dyadic claim that ―democratic countries are unlikely to fight each other‖, but they also
suggest one cannot extend this claim to the monadic level. Democratic countries are not more
peaceful, as the chance of conflicts is high in a discrepant dyad. Increasing ideological
differences, as measured by the democracy distance variable in these models, can increase the
chances of conflicts. On the commercial peace aspect, Model 1 of this paper suggests that
higher market openness can lead to more conflicts. This positive correlation might be
explained by the spillover effect of market fluctuation. In order to capture the impact of
market fluctuation, Model 4 added a set of variables related to the measurement of foreign
capital net inflows to the model. The results show that, once the capital flow factors are
considered in the model, the market openness variable loses its significance, and a higher level
of capital net inflow is positively associated with more interstate conflicts. The missing value
indicator of capital net inflows is included in the model to control the damage caused by missing
Stefan Bauschard
Globalization and Poverty Release
177
data in the capital net inflow variable. This missing indicator is positive and significant,
suggesting that missing economic data are systematically associated with militarized conflicts.
The lagged capital net inflows variable, measured as the percentage of GDP, is included in the
model, and higher level of capital net inflows is associated with a higher risk of conflicts. The
change of capital net inflow variable, which is measured by the level of current capital net
inflows minus the level of the one-year lagged capital net inflows, is also positively associated
with more conflicts, meaning the risk of conflict is higher if there are more foreign capitals
pouring into the country. These findings support the theory of this paper that large capital
inflows can destabilize the domestic economy and cause crises, but they are also contrary to
the conventional understanding that foreign capital will leave the conflicting region. However, it
can be explained by the following reasons.
Stefan Bauschard
Globalization and Poverty Release
178
A2: Tech Solves
Complexity’s diminishing returns and Jevon’s paradox means innovation is
counter-productive and hastens collapse.
Tainter and Patzek 12 – Tainter: Professor, Department of Environment and Society, Utah
State University; Patzek: Professor, Department of Petroleum and Geosystems Engineering, The
University of Texas at Austin [Joseph and Tadeusz. “Drilling Down: The Gulf Oil Debacle and Our
Energy Dilemma”. pg. 84-92.]/
In our technologically creative society, we place great faith in innovation. In the United States,
creativity and innovation form a large part of the stories that we tell about our history.
Alexander Graham Bell, Thomas Edison, and Henry Ford are among the pantheon of American
heroes. We have to this point achieved so much innovation that we assume we will be able to
rely on it in the future. In particular, we assume that any future shortage of resources,
including energy, will be solved by innovations that improve technical efficiency, or we will
develop new resources. In this view, we will be able to power automobiles for as long as we can
improve miles per gallon. The current popularity of hybrid vehicles expresses this faith in
technical innovation. Our faith in innovation is enshrined in the pronouncements of both
politicians and scholars. The first chapter has such a statement by Steven Chu, currently the U.S.
Secretary of Energy. Secretary Chu’s statement continues a long tradition of confidence in
innovation. Here are some representative statements: No society can escape the general limits
of its resources, but no innovative society need accept Malthusian diminishing returns. (Harold
Barnett and Chandler Morse, Scarcity and Growth: The Economics of Natural Resource
Availability, 1963) All observers of energy seem to agree that various energy alternatives are
virtually inexhaustible. (Richard Gordon, An Economic Analysis of World Energy Problems, 1981)
By allocation of resources to research and development (R&D), we may deny the Malthusian
hypothesis and prevent the conclusion of the doomsday models. (Ryuzo Sato and Gilbert S.
Suzawa, Research and Productivity: Endogenous Technical Change, 1983) Based on this faith,
many economists believe that energy and resources need not be considered in economic
models. Resources are never scarce, they assert, just priced wrong. As a resource becomes
harder to obtain, these economists believe, prices will rise and markets will signal that there
are rewards to innovation. Responding to such signals, entrepreneurs will discover new
resources, or develop more efficient ways of using the old ones. All it takes are incentives to
do so. This belief is known as technological optimism. Clearly it is worth exploring this belief in
some detail, for it is fundamental to questions about complexity, energy, and our future. If we
can counter the cost of increasing complexity by becoming more efficient, perhaps this book is
unnecessary. In Chap. 3 we suggested that the productivity of our system of innovation may
actually be in decline. Now, to evaluate further the possibility of continual technological
improvements, we need to understand how scientific disciplines develop. There are many
assumptions underlying technological optimism, one being that markets always work with
perfect efficiency as long as there are no government distortions. The financial crisis of 2008–
2009 has caused many people to question this assumption. We report here a different line of
reasoning: technological optimists ignore complexity. Innovation is like any living system,
human or otherwise. It grows in complexity and is subject to the benefits and costs that this
imposes. Institutionalized innovation as we know it today is a recent development. Our
ancestors experienced periods of centuries to millennia with little or no technological change.
Stefan Bauschard
Globalization and Poverty Release
179
In the Paleolithic (Old Stone Age, from the emergence of human ancestors to about 10,000 B.C.)
there were even periods of technological stasis lasting hundreds of thousands of years. This is
the statistically normal condition of human inventiveness. Innovation as we practice it today
is an anomaly. Innovation was rare in past societies in part because scientists were rare. As
Derek de Solla Price suggested, “Society almost dared [scientists] to exist,” throughout much of
history. From the time of the ancient world through the eighteenth century, scholars and
scientists were wealthy and selfsufficient, supported by students (as were ancient Greek
philosophers) or by wealthy patrons, or were religious practitioners (such as Egyptian priests or
medieval monks) who had time for inquiry. Toward the end of this period, the gentlemanscholar or -naturalist (or gentlewoman-scholar, such as Marie Curie-Skłodowska) emerged in the
eighteenth and nineteenth centuries. The gentleman-naturalist (and his variant, the mad
scientist) is an image that persists to this day in the public understanding of science, although it
has long been quaint. Today only a minority of research is done by an individual scientist in a
white lab coat, working long into the night on some quixotic idea. Research today is mostly
done by interdisciplinary teams. The reason for this development is that the early naturalists
made themselves obsolete by depleting the stock of research quandaries that were relatively
easy to answer. As the simplest research questions are answered, those next in line are
more difficult and require the attention of diverse research teams. This is a normal and
unavoidable process. In every scientific and technical field, early research plucks the lowest
fruit: the questions that are easiest to answer and most broadly useful. The principles of
gravity and natural selection no longer wait to be discovered. Garvin McCain and Erwin Segal
expressed this best. Science, they observed, is not likely to be advanced much farther by flying a
kite in a thunderstorm or peering through a homemade microscope. As general knowledge is
established early in the history of a discipline, the knowledge that remains to be developed is
more specialized. Specialized questions become more costly and difficult to resolve.
Research organization moves from isolated scientists who do all aspects of a project (the
gentleman-naturalist), to teams of scientists, technicians, and support staff who require
specialized equipment, costly institutions, administrators, and accountants. As one outcome of
this process, the average number of contributors to scientific papers has been increasing. This is
because research now requires the integration of more scientists who each specialize in some
part of the whole. Thus fields of scientific research follow a characteristic developmental
pattern, from general to specialized; from wealthy dilettantes and gentleman-scholars to large
teams with staff and supporting institutions; from knowledge that is generalized and widely
useful to research that is specialized and narrowly useful; from simple to complex; and from
low to high societal costs. As this evolutionary pattern unfolds, more resources and training
are needed to innovate. In the first few decades of its existence, for example, the United
States gave patents primarily to inventors with minimal formal education but much hands-on
experience. After the Civil War (1861–1865), however, as technology grew more complex and
capital intensive, patents were given more and more frequently to college-educated individuals.
For inventors born between 1820 and 1839, only 8% of patents were filed by persons with
formal technical qualifications. For those born between 1860 and 1885, 37% of inventors were
technically qualified. As innovation grows harder, it takes more education and training to
become a successful inventor. It has long been known that within individual technical sectors,
the productivity of innovation declines over time. In 1945, Hornell Hart showed that innovation
Stefan Bauschard
Globalization and Poverty Release
180
in specific technologies follows a logistic curve: patenting rises slowly at first, then more rapidly,
and finally declines. The great physicist Max Planck thought that science as a whole would
experience diminishing productivity as it grew and exhausted the stock of things that are easy to
learn. The philosopher Nicholas Rescher, paraphrasing Planck, observed that “… with every
advance [in science] the difficulty of the task is increased.” Writing specifically in reference to
natural science, Rescher suggested: Once all of the findings at a given state-of-the-art level of
investigative technology have been realized, one must move to a more expensive level .... In
natural science we are involved in a technological arms race: with every “victory over nature”
the difficulty of achieving the breakthroughs which lie ahead is increased (Unpopular Essays on
Technological Progress, 1980). In tribute to the famous physicist, Rescher termed this “Planck’s
Principle of Increasing Effort.” Planck and Rescher suggest that exponential growth in the size
and costliness of science is needed just to maintain a constant rate of innovation. Science
must therefore consume an ever-larger share of national resources in both money and
personnel. Jacob Schmookler, for example, showed that although the number of industrial
research personnel increased 5.6 times from 1930 to 1954, the number of corporate patents
over roughly the same period increased by only 23%. Such figures prompted Dael Wolfle in 1960
to write an editorial for Science titled “How Much Research for a Dollar?” Derek de Solla Price
observed in the early 1960s that science even then was growing faster than both the population
and the economy and that, of all scientists who had ever lived, 80–90% were still alive at the
time of his writing. At the time of our own writing, there are discussions of boosting the
productivity of American science by doubling the budget of the National Science Foundation,
just as the research budget of the National Institutes of Health was doubled a few years ago.
The stories that we tell about our future assume that innovation will allow us to continue our
way of life in the face of climate change, resource depletion, and other major problems. The
possibility that innovation overall may produce diminishing productivity calls this future into
question. As Price pointed out, continually increasing the allocation of personnel to research
and development cannot continue forever or the day will come when we must all be
scientists. In 2005, Jonathan Huebner published an article with the provocative title, “A Possible
Declining Trend for Worldwide Innovation.” Huebner is a physicist at the Naval Air Warfare
Center in China Lake, California (although his innovation research was done independently).
Using 7,200 major innovations listed in an important work, The History of Science and
Technology, by Alexander Hellemans and Bryan Bunch, he plotted key innovations over time
against population to investigate whether there is an economic limit to innovation. Looking at
today’s unending stream of inventions and new products, most people assume that
innovation is accelerating. Ever-shorter product cycles would lead one to believe so. In fact,
relative to population, innovation is not accelerating . It is not even holding steady. Huebner
found that major innovations per billion people peaked in 1873 and have been declining ever
since. Then, plotting U.S. patents granted per decade against population, he found that the peak
of U.S. innovation came in 1915. It, too, has been declining since that date. Compare this
observation to Fig. 3.16 in Chap. 3. Huebner’s analysis produced some other startling facts.
Although every year we are offered new or improved electronic gadgets, in fact key innovations
in 2005 had dropped to the same rate that humanity achieved in 1600. Despite massive
spending on research and education, it is harder today to make a fundamental breakthrough
than it was 100 years ago. We are indeed, suggests Huebner, approaching an economic limit
to innovation . There have been criticisms of Huebner’s work, particularly the selection of key
innovations on which he relied. Recently Deborah Strumsky of the University of North Carolina
Stefan Bauschard
Globalization and Poverty Release
181
and José Lobo of Arizona State University teamed with one of us (Tainter) in a systematic
investigation of the productivity of innovation. Employing the very large database of the U.S.
Patent and Trademark Office (USPTO), we investigated the productivity of innovation in a
number of fundamental technical fields, including surgery and medical instruments,
metalworking, optics, drugs and chemicals, energy technologies, information technologies,
biotechnology, and nanotechnology. Our results are consistent with Huebner’s general findings.
Our measure of productivity is patents per inventor. The USPTO has only recently begun to keep
records that allow such an analysis. The results are illuminating. Figure 5.5 shows that from 1974
to 2005, the average size of a patenting team increased by 48%. This parallels the trend, noted
above, toward increasing numbers of authors per scientific paper. The increasing numbers of
authors in both invention and publication derive from the same source. This is the increasing
complexity of the research enterprise, required to meet the increasing difficulty in the questions
addressed or the breakthroughs sought, and leading to the incorporation of more and more
specialties in an individual project. The scientific enterprise has been growing larger and larger,
but it is producing fewer and fewer innovations per inventor . Over the period shown in Fig.
5.5, again from 1974–2005, patents per inventor declined by 22%. We should emphasize that in
a period of just over 30 years, the length of an average career, the productivity of innovation has
declined by more than onefifth. That is a finding of the highest importance for assessing our
future. As Hornell Hart showed in 1945, the characteristic evolution of a technology is logistic:
innovations come slowly at first, then accelerate for a while, and finally come more slowly and
with greater difficulty. This opens the possibility that higher productivity in newer technical
fields might offset declines in older ones. To investigate this possibility, we produced the chart
shown in Fig. 5.6. Even in the new fields of biotechnology and nanotechnology there is
diminishing productivity of innovation. If this occurs even in new fields, then the problem is
clearly intrinsic to science as a whole, and not limited to individual fields. We have also
investigated the productivity of innovation in the energy sector, as shown in Fig. 5.7. Here as in
other technical fields, the productivity of innovation is declining. It is declining not only in
older fossil fuel technologies, but also in the wind and solar technologies that many people
hope will power our future. The reason for the diminishing productivity of innovation is
complexity. Scientific fields, as we have described, undergo a common evolutionary pattern.
Early work establishes the boundaries of the discipline, sets out broad lines of research,
establishes basic theories, and solves questions that are inexpensive but broadly applicable. Yet
this early research carries the seeds of its own demise. As pioneering research depletes the
stock of questions that are inexpensive to solve and broadly applicable, research must move to
questions that are increasingly narrow and intractable. Research grows increasingly complex
and costly as the enterprise expands from individuals to teams , as more specialties are
needed, as more expensive laboratories and equipment are required, and as administrative
overhead grows. We have an impression today that knowledge production continues
undiminished. Each year sets new records in numbers of scientific papers published.
Breakthroughs continue to be made and new products introduced. Yet we have this impression
of continued progress not because science is as productive as ever, but because the size of the
enterprise has grown so large. Research continues to succeed because we allocate more and
more resources to it. In fact, the enterprise does not enjoy the same productivity as before. It
is clear that to maintain the same output per inventor as we enjoyed in, say, the 1960s, we
would need to allocate to research even greater shares of our resources than we do now.
Stefan Bauschard
Globalization and Poverty Release
182
Without such an allocation, the productivity of research declines. In 1963, Derek de Solla Price
wrote that science could not continue to grow as it has over the past two centuries. He
suggested that growth in science could continue for less than another century. As of this writing,
nearly half that time has elapsed. This does not mean that there will be a quick end to
improvements in technical efficiency in the energy-consuming machines on which we rely. For
some time we surely will continue to experience such improvements. It seems likely, though,
that such improvements will become harder and harder to achieve and that increments of
improvement will become smaller and smaller . Consider the improvements to the steam
engine, as shown in Fig. 5.8. Here the major improvements came with Watt’s steam engine.
Improvements thereafter became smaller and smaller as thermal efficiency increased. A
doubling of efficiency in the twentieth century would save much less fuel per engine than a 10%
increase in the eighteenth century, and the savings would be much harder to achieve. This is the
typical evolutionary pattern of efficiency improvements. Moreover, improvements in efficiency
often produce paradoxical results. As we noted in Chap. 2, in 1865 the noted British economist
William Stanley Jevons (1835–1882) published a now-classic work titled The Coal Question.
Jevons was concerned that Britain would lose its economic dynamism and pre-eminence in the
world due to an inevitable depletion of its reserves of easily mined coal. Of course he did not
foresee the dominance of petroleum, even denying its likelihood, and so the central worry of
the book turned out to be misplaced. But The Coal Question contains a gem that enshrines the
book as among the most significant works of resource economics. That gem is known today as
the Jevons paradox. It cannot be expressed better than in Jevons’ own Victorian prose. It is
wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a
diminished consumption. The very contrary is the truth [emphasis in original]. As a rule, new
modes of economy will lead to an increase of consumption …. Now, if the quantity of coal
used in a blast-furnace, for instance, be diminished in comparison with the yield, the profits of
the trade will increase, new capital will be attracted, the price of pig-iron will fall, but the
demand for it increase; and eventually the greater number of furnaces will more than make
up for the diminished consumption of each. In short, as technological improvements increase
the efficiency with which a resource is used, total consumption of that resource may increase
rather than decrease. This paradox has implications of the highest importance for the energy
future of industrialized nations. It suggests that efficiency, conservation, and technological
improvement, the very things urged by those concerned for future energy supplies, may
actually worsen our energy prospects.
Innovation has peaked and about to sharply decline because of complexity.
There is no chance technological advancements can save us.
Tainter and Patzek 12 – Tainter: Professor, Department of Environment and Society, Utah
State University; Patzek: Professor, Department of Petroleum and Geosystems Engineering, The
University of Texas at Austin [Joseph and Tadeusz. “Drilling Down: The Gulf Oil Debacle and Our
Energy Dilemma”. pg. 84-92.]//
We are often assured that innovation in the future will reduce our society’s dependence on
energy and other resources while providing a lifestyle such as we now enjoy. We discuss this
point further in Chaps. 5 and 9. Here we observe that rates of innovation appear to change in a
manner similar to the Hubbert cycle of resource production. This finding has important
implications for the future productivity and complexity of our society. Energy flows,
technology development, population growth, and individual creativity can be combined into
Stefan Bauschard
Globalization and Poverty Release
183
an overall “Innovation Index” which is the number of patents granted each year by the U.S.
Patent Office per one million inhabitants of the United States of America. This specific patent
rate has the units of the number of patents per year per one million people. Figure 3.16 is a
decomposition of this patent rate into multiple Hubbert-like cycles between 1790 and 2009.
Interestingly, the fundamental Hubbert cycle of the U.S. patent rate peaked in 1914, the year
in which World War I broke out. The second major rate peak was in 1971, coinciding with the
peak of U.S. oil production. The last and tallest peak of productivity occurred in 2004. Note that
without a new cycle of inventions in something, the current cycles will expire by 2050. In
other words, the productivity of U.S. innovation will decline dramatically in the next 20–30
years , with some of this decline possibly being forced by a steady decline of support for
fundamental research and development.
Energy and Complexity
Each new complex addition to the already overwhelmingly complex social and scientific
structures in the United States is less and less relevant , while costing additional resources
and aggravation . Most of this complexity is apparent to the naked eye: look at the global
banking and trading system, the healthcare system, the computer operating systems and
software, military operations, or government structures. The scope of the problem is also
obvious in the production pains of Boeing’s 787 Dreamliner, and in the drilling of the BP
Macondo well.
Stefan Bauschard
Globalization and Poverty Release
184
A2: Status Quo Improving, Collapse Not Inevitable
The status quo is only improving for a select few. Neoliberalism increases
poverty and hunger. In addition, long term trends prove neoliberalism is
unsustainable, and will inevitably cause environmental collapse.
Goodman 11 – Lecturer in Nursing at Plymouth University [Benny. “Transformation for Health
and Sustainability: “Consumption is Killing Us’”. 6/11/11.
http://www.academia.edu/666114/Transformation_for_health_and_sustainability_Dualism_an
d_Anthropocentrism.]
Ben Ami (2010) tells us however that growth is good, consumption is good and we could have
"Ferraris for air. He argues that in advanced industrial societies we have seen decreases in
infant and maternal mortality rates and increasing life expectancy coupled with control of
infections. We live longer healthier lives. Hans Rosling in his online gapminder series also
points out that these indicators are also rising in many developing countries, but he warns that
success may literally cost the earth. So how can consumption be killing us?
Well, it isn't. Goklany (2006) argues that economic growth, technological change and free
trade has helped to power a "cycle of progress" that in the last two centuries enabled
unprecedented improvements in every objective measurement of human well-being. Poverty,
hunger, malnutrition, child labor, illiteracy and unsafe water have ceased to be global norms;
infant mortality has never been lower; and we live longer and healthier lives. Further,
Goklany’s research suggests that global agricultural productivity is up, food prices are down,
hunger and malnutrition have dropped worldwide, public health has improved, mortality
rates are down, and life expectancies are up. So that its then, we are fine.
Except that since he wrote that in 2006 the world saw one food crisis in 2008 and this year
2011 the UN's Food and Agriculture Organisation are giving the global food market 'critical'
status, again. The Millennium Development Goals have still to be met and maternal and
infant mortality is still at numbers too high in many countries to enable any level of
complacency.
However, if you view the world anthropocentrically within the frame of reference of
consumer capitalism and you happen to live in advanced industrial nations in wealthy
suburbs. You can even muster hard empirical evidence to show the beneficence of the global
economic system.
The problem with this viewpoint is time frame. Seen from the last 200 years enormous,
unprecedented progress has without doubt been made. However the time frame for a proper
assessment of the current global system is much longer than that. Even in human time frames
the last 200 years is a very short period of history. Depending on definition, the Roman Empire
lasted over 400 years, and from the steps of the senate, Julius Ceaser may have dreamed of a
millennium of Roman domination. World history is littered with the ruins of human
civilizations, hubris comes before a fall. We are not Rome or Byzantium. We have controlled
the natural environment (up to a point) to produce food and shelter for billions. However
there is a poverty of spirit, a neglect of the 'bottom billion' , willful ignorance of the
casualties of inequalities based capitalism , a disconnect from environmental destruction and
Stefan Bauschard
Globalization and Poverty Release
185
a lack of vision of alternatives that may lead to more healthy, sustainable lives on a finite
planet as we bump up against limits.
Of course, assertions about limits needs some evidence. A key paper in this respect is that which
addresses the issue of planetary boundaries - i.e. that there are limits to what we can achieve
on this planet, that we need urgently to identify what these limits are and then to address
what socioeconomic conditions would allow all of humanity to live within the planet
boundaries. If we do not do this, the argument runs, then the ecosystem services upon which
all of us (the biosphere) may well collapse leading to a cull of humanity in line with the
extinctions we are already exacting on the living world right now. Rockstrom et al (2009) have
tried to identify what the key boundaries are and what the limits are within each. They suggest
that humanity has already transgressed three of nine boundaries:
1. CO2 emissions for climate change.
2. Biodiversity loss.
3. Biochemical boundaries - the nitrogen cycle (the phosphorous cycle has not yet been
transgressed)
The other boundaries discussed include:
4. Ocean acidification
5. Stratospheric ozone depletion
6. Global fresh water use
7. Change in land use
8. Atmospheric aerosol loading (not yet quantified).
9. Chemical pollution (not yet quantified). They also argue:
"In the last 200 years, humanity has transitioned into a new geological era—termed the
Anthropocene —which is defined by an accelerating departure from the stable
environmental conditions of the past 12,000 years into a new, unknown state of Earth".
"In order to maintain a global environment that is conducive for human development and
well-being, we must define and respect planetary boundaries that delineate a 'safe operating
space' for humanity. We must return to the long-term stable global environment that
nurtured human development'.
Neoliberalism makes cooperation impossible and war inevitable. Capitalist
countries will compete with each other for profit and control. And as capitalism
rapidly depletes the planet’s resources, countries lash out to secure their
economic interests.
Spector 10 – Associate Professor of Sociology at Purdue University Calumet [Alan. “Neoliberal
Globalization and Capitalist Crises in the Age of Imperialism” in “Globalization in the 21st
Century: Labor, Capital, and the State on a World Scale”. Pg. 48-51.]//
How might this impact international relations? One might assume that the biggest, wealthiest
nations will see a need to cooperate to solve their common problems, and indeed, in the short
term, we can see meetings and conferences designed to encourage cooperation. But
underlying this whole process are serious potential problems as the advanced capitalist
countries compete with each other for profits and control over the less developed countries
(what Lenin called “interimperialist rivalry”), and that can set the stage for sharper conflicts
Stefan Bauschard
Globalization and Poverty Release
186
among the imperialist countries themselves (Lenin 1969). This intense economic crisis puts
even greater strains on these capitalist economies and pressures them into finding more
international sources of profits , and this, in turn, increases the possibilities for various types
of conflicts , not just with smaller countries but with larger ones as well. World War I
appeared to have been started by a conflict between two different factions from small
countries in the Balkans, but these countries were proxies for the powerful nations that were
battling for much bigger prizes, including Arabian oil. More recently, the U.S. war in Iraq, begun
in 2003, has been characterized by some as a war for democracy. This has been critiqued by
those who point out U.S. military inaction in the many other areas of the world where the lack
of democracy has hurt many more people. Others see it as a war for oil. This has been critiqued
by those who point out that the United States has vast quantities of oil, and, in fact, imports
very little oil from Iraq. A more subtle but still economically based analysis sees the war as
largely motivated by the need to control the flow of oil to Europe, China, and other rivals of
U.S. imperialism. Stabilizing a regime in Iraq that would be friendly to U.S. corporate interests
is seen as providing a military base to protect U.S. oil company interests in the whole region. It
is seen as a way to neutralize Iran, perhaps turning it into a U.S. ally, as it had been for a part
of the twentieth century. It would protect the profits that U.S. corporations reap as
middlemen, resellers of the region’s oil to others (e.g., Europe). It is not so much the actual oil
that the U.S. needs, but rather the huge profits that are made acquiring and then reselling that
oil to others who need it. Finally, controlling that oil has other important political economic
benefits. Neither France, nor Germany, Japan, Italy, or Spain own significant sources of oil.
Russia has huge amounts of natural gas, but also eyes the clean, inexpensive Arabian and Iranian
oil. China has growing needs and is fervently seeking new sources of oil from the Sudan, Eastern
Ethiopia, and Nigeria to Venezuela and Mexico. India, too, will have growing needs. If the U.S.
corporations can maintain tight control on the oil resources of Iraq, and by extension parts of
that region, they can maintain an advantage over those competing oil importers and thus
assure U.S. control and domination over the oil resources of the Middle East. It might seem
counterintuitive to see allies such as the United States, France, Germany, India, and Japan as
rivals to be outmaneuvered by each other, but in a capitalist world, all alliances are
ultimately temporary while competition is fundamental . Wallerstein, among others, has
argued that there was a sizeable faction within the erstwhile Bush administration that was
motivated not just by the so-called Clash of Civilizations between the United States and the
radical Islamic movement, but by the economic and political power of Western Europe, Russia,
and China as well. More recently, President Obama has sent a force of over 30,000 more troops
to Afghanistan. While Afghanistan may seem to be a poor country with few resources, the
reality is that it is strategically located for gas and oil pipelines and for military positioning
near Russia, China, and the oil-rich areas in that region. When the USSR collapsed and much of
Eastern Europe pushed aside the various Soviet-style regimes, many mainstream politicians
and political theorists postulated that the United States would be the sole superpower for
many years to come, the premier world power in a world that was embracing free market
capitalism. Even China was opening up its economy to U.S. investments. Within a few years,
however, various regional nationalists, especially in the Islamic world, were working to
expand their political and economic influence. It was not only the United States that would
gain from the collapse of Soviet influence in much of the world. Meanwhile, much of Western
Europe moved toward closer economic and political integration, with a unified currency,
political alliances, and more coordinated international cooperation on environmental and
Stefan Bauschard
Globalization and Poverty Release
187
other policies. This unity might appear to help stabilize the global political situation, but it also
creates pressure on some political and economic interests within the United States. The Euro
is being used in place of the U.S. dollar in parts of the world, the opposition to U.S. foreign
policy, military action, and human rights and environmental policy seems to be growing, and
European investments in areas formerly secure for U.S. investments, such as Latin America,
are competing with U.S. interests. The European Union, much of which President Bush derided
as “Old Europe” in decline, has helped bolster the Hugo Chavez regime in Venezuela and
continues to trade with Cuba, as well as lending support to other political movements that are
at odds with U.S. imperialism. Currently, the European Union is investing heavily in Mexico.
China, too, is rapidly increasing its investments in Latin America. The recent war of words
between Russia and the United States, because Russia sees U.S. missiles near its border as a
threat, is another example of increased tensions among the great powers. This has been further
intensified by the recent conflict between Russia and the former Soviet republic of Georgia,
where the United States has been propping up a regime to stir up trouble along the Russian
border. No one is predicting a massive inter-imperialist World War in the near future. The big
powers have much to gain from cooperation and much to lose from a major war. However, the
increased rivalry among the major capitalist powers in a shrinking world , combined with the
rise in economic, technological, and political power of China and India , will create more
pressure on all the major capitalist powers . World War I was unthinkable in the early 1890s,
the 1917 Bolshevik Revolution and the big influence that the Soviet government had over
hundreds of millions of people over the next seventy years was not imagined by anyone twenty
years earlier, the rise of defeated Germany to world power status just twenty years after its
crushing defeat in World War I was not predicted by many, and the rather sudden collapse of
the Soviet Bloc around 1990 and the very different world that has developed since then were
also unexpected just twenty years earlier. How the increased economic pressures of today will
be resolved cannot easily be predicted, but history should caution us against predicting one
hundred years of world peace, especially as today’s pressures and crises have become
globalized in this shrinking world.
Stefan Bauschard
Globalization and Poverty Release
188
A2: IKC – Inequality Kuznet’s Curve
Kuznet’s methodology is bad. It’s founded on speculation, relied on a small data
set, and is tainted with wishful thinking.
Gallup 12 – has a PhD in Economics, University of California; MA in Demography, University of
California; BA in Economics and Political Science, Swarthmore College, High Honors [John. “Is
There a Kuznets Curve?”. 8/25/12.
http://www.pdx.edu/econ/sites/www.pdx.edu.econ/files/kuznets_complete.pdf.]//jwang
Kuznets’ hypothesis about the relationship between inequality and economic growth in his
1955 address was based on time-series data for just three countries and his intuition about
the mechanisms of economic development. His conjecture was audacious given the data he
had to work with. He acknowledged this, saying that his “paper is perhaps 5 per cent
empirical information and 95 per cent speculation , some of it possibly tainted by wishful
thinking ” (Kuznets, 1955, p. 26).
New international panel data with the first internally consistent time series for
a large number of countries shows no evidence of a Kuznets curve.
Gallup 12 – has a PhD in Economics, University of California; MA in Demography, University of
California; BA in Economics and Political Science, Swarthmore College, High Honors [John. “Is
There a Kuznets Curve?”. 8/25/12.
http://www.pdx.edu/econ/sites/www.pdx.edu.econ/files/kuznets_complete.pdf.]//jwang
Kuznets used data he helped collect for the United States combined with data for the United
Kingdom and two states in Germany. He also found point estimates of inequality in India, Puerto
Rico, and Ceylon. Figure 1 presents the inequality data from Kuznets's original article combined
with historical estimates of GDP per capita from Maddison (2010) to show the patterns he was
visualizing. It is striking that his data do not provide much support for his own hypothesis ,
except that United Kingdom and United States had substantial declines in their inequality
before World War II. Kuznets discusses the likelihood that inequality worsened in both of
these countries in the nineteenth century before his time series start, but he had no
empirical evidence for it. Besides the U.S. and the U.K, the other countries for which he has
inequality estimates do not indicate an inverted-U curve. Kuznets’ presumption was that
inequality is very low in agrarian societies before the advent of industrialization. Pre-modern
inequality data are hard to come by, but Milanovic and others (2007) were able to reconstruct
inequality data for eleven preindustrial societies ranging from the Roman Empire in AD14 to
China in the 1880s. As shown in Figure 2, inequality in these agrarian societies was not
particularly low. All but three of the estimates of inequality are higher than the median
inequality in countries today (calculated from the data described in the next section). Half the
preindustrial Gini coefficients are above the 75th percentile of modern inequality estimates,
including the estimates of inequality in England and Wales in the 17th and 19th centuries. The
data do not suggest that one can assume low inequality in pre-industrial societies. Feudalism
didn’t promote particularly equal distribution. Kuznets showed that inequality fell in two highincome countries as they grew richer after World War I, but he had no evidence of rising
Stefan Bauschard
Globalization and Poverty Release
189
inequality at low income levels. Ironically, Kuznets’ prediction that inequality will rise during
the early stages of development, for which he had no evidence, is better remembered than his
prediction that inequality will fall at higher incomes. One reason that Kuznets's paper had a big
impact was his model explaining the path of inequality. In its simplest form, if agricultural
workers all earn a low wage and industrial workers earn an identical higher wage, then the
transition from agriculture to industry will create an inverted-U curve in inequality. The
movement of the first workers out of agriculture into higher wage industry will increase
inequality, but beyond a certain point, inequality will fall as the majority of workers receive the
constant industrial wage. A vulnerability of Kuznets’s theory is that minor changes in the story
change the prediction. For instance, if agricultural incomes are more unequal than industrial
wages, perhaps due to unequal land ownership, movement out of agriculture into industry
could reduce inequality right away. Furthermore, all kinds of other dynamics of economic
development are likely to have implications for inequality besides the movement of labor out
of agriculture into industry. International trade, the spread of education, and transportation
linking previously isolated regions, to name just a few dynamics, are all likely to have major
impacts on income distribution in ways that do not naturally suggest an inverted-U shaped
curve.
Stefan Bauschard
Globalization and Poverty Release
190
A2: EKC – Enviroment Kuznet’s Curve
Vast scientific consensus disprove the thesis of EKC and the connection
between growth and the environment. In addition environmental problems are
caused by economic growth.
Brulle et al. 12 –Buelle: PhD, Professor of Sociology and Environmental Science, and Professor
of Environmental Policy, Drexel University; Jenkins: Professor of Sociology, Mershon Center for
International Security Studies, Ohio State University; Dunlap: PhD, Regents Professor of
Sociology, Oklahoma State University [Robert, Craig, and Riley. “The Break Through Illusion: A
Social Science Critique of Nordhaus and Shellenberger,” Forthcoming in Bill Chaloupka, Jay
Odenbaugh, and Jim Proctor (eds). Post Environmentalism: Debating and Extending the Death of
Environmentalism Thesis. MIT Press: Cambridge MA,
http://www.pages.drexel.edu/~brullerj/SN_Critique.pdf.]//
The most central problem is N&S ‘adoption of the ecological modernization thesis that
economic growth and advanced technology will solve environmental problems. They trace both
the rise of modern environmentalism (see below) and the long-term solution to environmental
problems to economic affluence Based on the EKC thesis. The EKC has been subjected to
extensive scientific analysis . The net conclusion of over a hundred empirical studies is that
the EKC may apply with regard to localized pollutants, which have a direct and immediate
impact on human health, but this does not hold for most pollutants , especially greenhouse
gases (Dinda 2004: 448, Cavlovic et al. 2000: 40 IPPC 2007b). Cavlovic et al. (2000) suggest that
the income tipping point at which CO2 might decline is $199,345/capita income, several times
above the income level of any current wealthy country. In short, there is some evidence that
affluence does lead to reduced air pollution and immediate and visible toxins (Vehemas et al
2007; Managi 2006) but little evidence that this holds for greenhouse gases and non-localized
pollutants (Cavlovic et al. 2000; Dinda 2004; York, Rosa and Dietz 2003; but see Li 2006).
The major root causes of greenhouse gases and environmental problems turn out to be
economic growth and population , magnified by open trade policy and foreign investment in
developing countries (York, Rosa and Dietz 2003; Dinda 2004; Jorgensen and Burns 2006;
Jorgensen, Dick and Mahutga 2007). Hence, on the fundamental question of what causes global
warming, N&S are wrong. Rarely does a scientific consensus speak so consistently to a political
argument.
Why are N&S so drawn to this perspective? Ecological modernization is appealing because it
eliminates the need for zero-sum solutions . In this view, capitalism can be readily modified
to be ecologically sustainable and no changes in our style of living, consumption patterns, or
basic institutions are needed (Buttel 2000). This argument has obvious appeal to entrenched
interests (Bernstein 2001), and to those who wish to avoid significant change, but the
scientific evidence shows it to be a false hope . N&S do not bother to address the significant
scientific evidence against ecological modernization theory or the assumptions on which it
rests (York and Rosa 2003).
Stefan Bauschard
Globalization and Poverty Release
191
A2: Trade Increases Democracy
Trade only works if countries are already democratic
Gelpi 2001 – political science professor at Duke (Christopher and Joseph Grieco, Economic
Interdependence, the Democratic State, and the Liberal Peace, http://psweb.sbs.ohiostate.edu/faculty/bpollins/book/Gelpi&Grieco.pdf)
We seek in this paper to explore a new path for analyzing democracy, interdependence, and
war. Specifically, we explore the possibility that the impact of trade and democracy may be
contingent upon one another. We ground this interest in the possible interaction between
economic interdependence and democracy in a review of the work of Immanuel Kant and a
number of modern writers on interdependence and on the domestic incentives of political
leaders. We contend that this literature implies that economic interdependence may reduce the
risk of war between democracies, but exacerbate the risk of such conflicts between nondemocracies. Thus – along with Oneal and Russett - we suggest that the classic liberals may
indeed have been right, but in a manner more complex than had been anticipated by many
modern scholars. Rather than acting independently, the combined influence of democracy and
interdependence may create a powerful web of constraint that reinforces the zone of peace
among increasingly interdependent democracies. However, the absence of mutual democracy
may vitiate the pacifying effect of economic interdependence between nations.
And, free trade doesn’t increase democracy
Buzzanco 2001 – professor of history, Houston (Bob, We're on 'Fast Track' to Trading Away
Democracy, http://www.commondreams.org/views01/0630-01.htm)
Organized secretively by national leaders and representatives of multinational corporations
from all over the globe, NAFTA, WTO and now FTAA take decision-making power out of the
hands of states or local communities and transfer it to faceless bureaucracies controlled by
unelected corporate representatives. Under these transnational institutions, anything construed
as a barrier to "free trade" can be challenged and repealed.
Stefan Bauschard
Globalization and Poverty Release
192
Country-Based Policies Best to Solve Poverty
Transnational politics are socially unsustainable and serve the interests of
global capitalism—nation-state based strategies are necessary to combat global
inequality
Cheah, Professor of Rhetoric at UC-Berkeley, 2006 [Pheng, “Cosmopolitanism,” Theory Culture
Society 2006; 23; 486, sage publications, p. 494-495]
Although it offers a thorough elaboration of the normative implications of globalization for the formation of a new cosmopolitanism for the
contemporary world, Habermas's project is unfeasible for three reasons. First, because the key features of Habermas's
cosmopolitan vision are projected from the Euro-American-centric prototype of the Northern
constitutional welfare state, it relies on a utopian over-idealization of the cosmopolitan
virtues of Northern states, something that must increasingly be doubted after the US
invasion of Iraq. Second, the criteria that make the First World welfare state the ideal model
depend on a high degree of economic development that cannot be attained in the
postcolonial South because its capacities have been actively deformed by the structures of
the global economy. Postcolonial states forced to undergo structural adjustment, especially those in
Africa and Latin America, are too impoverished to provide social welfare to their citizens. Worse still, states
adopting the neoliberal path of export-oriented industrial development actively sacrifice the
welfare of their people to provide conditions to attract transnational capital flows. This
scenario is not exactly friendly to any of the three aspects of democratic will-formation
(political participation, the expression of political will or the public use of reason) Habermas desires and
celebrates. Finally, while a degree of mass-based cosmopolitan solidarity has arisen in the
domestic domains of Northern countries in response to exceptionally violent events such as
the Vietnam War, the Rwandan genocide, or the war in Iraq, it is unlikely that this solidarity will be directed in
a concerted manner towards ending economic inequality between countries because
Northern civil societies derive their prodigious strength from this inequality. Indeed, we can even say that
global economic inequality is simultaneously the material condition of possibility of democratic
legitimation in the North Atlantic and that which hampers its achievement in the postcolonial South.
The impasses of Habermas's cosmopolitan project raise several broader questions: Is the international division of labor the unacknowledged condition and therefore also
the nontranscendable limit of all new cosmopolitanisms? If national forms of solidarity remain important, especially for economically weak countries bearing the brunt of
capitalist exploitation, does uneven development constitute a crippling impediment to the formation of cosmopolitan solidarity? Does it place such constraints on
cosmopolitanism's efficacy that we may regard it as a constitutive condition of contemporary arguments for the transcendence of nationalism, the limit beyond which
although transnational
advocacy networks at the grassroots level may be animated by principles that are global in
scope, although they are unconnected to traditional political parties within the national system of electoral democracy or national unions, and are able to voice their
interests at global fora such as the World Social Forum, members of these movements and the participants in such
fora may not have transcended feelings of national solidarity or the desire to make their
respective nation-states take better care of its people. For instance, the central concept of food sovereignty theories of cosmopolitanism lose their coherence and become unworkable? In this regard, it is important to note that
the idea that 'every people, no matter how small, has the right to produce their own food' - articulated by the Sem Terra Movement, a movement of landless agrarian
indicates that although the movement's goals are global in scope, it begins from
the principle of a people's national integrity (Stedile, 2004: 43). Moreover, the activities of these social
movements have to connect with the nation-state at some point because it is the primary
site for the effective implementation of equitable objectives for redistribution on a large
scale.
The feasibility of institutionalizing a mass-based cosmopolitan political consciousness therefore very much remains an open question today. It is not enough
to fold the pluralistic ethos of older cosmopolitanisms into the institutionalized tolerance of
diversity in multicultural societies. This kind of cosmopolitanism is only efficacious within the
necessarily limited frame of the (now multiculturalized) democratic state in the North Atlantic that is
workers based in Brazil,
Stefan Bauschard
Globalization and Poverty Release
193
sustained by global exploitation of the South. This type of limited cosmopolitanism has a
more insidious counterpart in the state-sponsored cosmopolitanism of developed countries
in Asia. Here, cosmopolitanism degenerates into a set of strategies for the biopolitical
improvement of human capital. It becomes an ideology used by a state to attract high-end
expatriate workers in the high-tech, finance, and other high-end service sectors as well as to justify its exploitation of its own
citizens and the lower-end migrant workers who bear the burden of the country's successful adaptation to flexible accumulation.
Cosmopolitanism is here merely a symbolic marker of a country's success at climbing the competitive hierarchy of the international division of labor and maintaining its
The inscription of new cosmopolitanisms (and theories about them) within the force field of
uneven globalization must be broached at every turn.
position there.
Stefan Bauschard
Globalization and Poverty Release
194
Nation-State Key—Global Capitalism
Nation-state strategies are the center-piece of the resistance to global
capitalism—all external strategies rely on a privileged and unsustainable
politics of mobility
Cheah, Professor of Rhetoric at U. C. Berkeley, 1997 [Pheng, “Given Culture,”
boundary 2 24.2, p. 170-173]
The shortcomings of unmooring cultural agency from the field of empirico-material forces
that overdetermine it are especially pronounced in hybrid revivals of cosmopolitanism. These
new cosmopolitanisms cannot explain why globalization has paradoxically led to the
intensification of nationalism in the postcolonial South without resorting to the knee-jerk
dismissal of the national/local as an ideological form. As we have seen, for Bhabha, hybridity's denaturalizing power is also an
antinationalism: for him, the postcolonial nation is a naturalized ethno-national culture imposed from above, and its internal identification is plagued by the
indeterminacies of signification. Because his focus on the internal destabilization of national cohesion extracts the nation from its geopolitical context, Bhabha ignores the
national consciousness can be formed through negative identification, induced by
political-economic factors, such as interstate relations within a neocolonial capitalist world
economy (see LC, 147-48). While Clifford's position is not explicitly antinationalist, his chronotope of traveling culture does not give equal time to the tenacity of
national dwelling. Neither can explain the persistence of the postcolonial nation-state in contemporary globalization, for their heady celebration of the
subversive possibilities of global flows prevents them from grasping that, in the absence of a
world-state capable of ensuring an equitable international political and economic order, the
unevenness of political and economic globalization makes the nation-state necessary as a
political agent for defending the peoples of the South from the shortfalls of neocolonial
capitalist global restructuring. Contra Bhabha, it is the defense against neocolonial globalization
that makes national formation through negative identification both historically unavoidable
and ethically imperative.
fact that
But perhaps it is asking too much from these hybrid cosmopolitan-isms to expect them to respond to the precarious necessity of postcolonial nationalism in neocolonial
is it not obvious, from the start, that the paradigm for these radical cosmopolitanisms is
not really de-colonized space but the metropolitan scenario of migrancy and mobility?
globalization. For
Notwithstanding Bhabha's copious sermonizing about postcoloniality, the occluded model for hybridity turns out to be the migrant "minority" subject who subverts
metropolitan national space: "colonials, postcolonials, migrants, minorities—wandering peoples who will not be contained within the Heim of the national culture . . . but
are themselves [my emphasis] the marks of the shifting boundary that alienates the frontiers of the modern nation" (LC, 164). I should not, of course, be understood as
dismissing the pain and suffering of migrants, political refugees, and exiles. However, my point is that
they do not represent the whole
picture of contemporary globalization. For even when Bhabha makes the rare reference to transnational capitalism, the focus is not on the
exploitation of labor in free-trade zones in the South but instead on migrant workers who move to wealthier territory: "Transnational capitalism and the impoverishment
of the Third World certainly create the chains of circumstance that incarcerate the Salvadorean and the Filipino/a. In their cultural passage, hither and thither, as migrant
workers, part of the massive economic and political diaspora of the modern world, they embody . . . that moment blasted out of the continuum of history" (LC, 8; my
emphasis).
Indeed, we discover that in essence,
hybrid cultural agency consists of physical freedom from being tied to
the earth. Such freedom is the phenomenal analogue and material condition of possibility for endless hybrid self-creation and autonomy from the given: "there is a
return to the performance of identity as iteration, the re-creation of the self in the world of travel" (LC, 9). This is why Bhabha is not
interested in those who do not migrate, those who cannot migrate and for whom coerced
economic migration would be a plus, or in the vicissitudes of uneven economic development
in the postcolonial South. Indeed, he cannot even be said to be very interested in those who
leave the South temporarily, in order to return, or in the repatriation of funds by migrant workers to feed
their kin in the Third World. In Bhabha's world, postcoloniality is the hybridity of metropolitan migrancy. Everything happens as if there are no postcolonials left in
decolonized space. With the onset of decolonization, all the former colonial hybrids have become postcolonials. And it seems that to keep their hybrid powers and status
intact, they have had to depart for the metropolis, following on the heels of their former colonizers, to torment them and enact moral retribution by subverting their
cultural identity.
It is, therefore, at least tendentious to personify linguistic freedom and hybrid cultural flux in the diasporic subject and to celebrate these forms of cosmopolitanism, at the
expense of nationalism, as the most progressive form of postcolonial transformative agency in contemporary globalization. Hence, even though Bhabha allegedly considers
subalternity, his "postcolonial perspective" is devoid of any analytical specificity since hybrid freedom is an abstract theory of marginality general enough to accommodate
experiences as diverse as slavery, diaspora, ethnic/racial minority experiences in constitutional democracies, queer sexuality, as well as subaltern resistance.
This
Stefan Bauschard
Globalization and Poverty Release
195
general postcolonial perspective effaces the unbridgeable divide between the migrant
literary critic in the metropolis and the subaltern in decolonizing space. It elevates the time-lag-diagnosing
postcolonial critic into the best resistant hybrid who is able to grasp the condition of possibility of resistance before it is realized in experience. My point here is that
Bhabha's picture of contemporary globalization is virulently post-national because he pays
scant attention to those postcolonials for whom postnationalism through mobility is not an
alternative.
It is true that, unlike Bhabha, Clifford cautions that he is not offering a nomadology: "I'm not saying there are no locales or homes, that everyone is—or should be—
traveling, or cosmopolitan, or deterritorialized" (TC, 108). He tries to reconsider dwelling in its dialectical relationship with traveling and gestures toward a redefinition of
mobility beyond literal travel to include different modalities of inside-outside connection so that "displacement can involve forces that pass powerfully through—
television, radio, tourists, commodities, armies" (TC, 103). Yet, the primary emphasis of his analysis of discrepant cosmopolitanisms still remains on physical mobility.
When generalized into an account of hybrid resistance, it is inevitably confined to the scene of metropolitan migrancy, border transactions, and those subjects who have
"cosmopolitan,
radical, political culture" from below also leaves out the subaltern subjects in decolonizing
space who have no access to globality and view coerced economic migration as a plus. The
subaltern lies outside the circuit of the international division of labor and must bear the
impact of global-systemic neocolonialism on food production, consumption, and
superexploitation outside wage labor. Such actions of survival cannot easily be romanticized
or recuperated as hybrid resistance.
class access to globality. Limited to the viewpoints of translators, guides, suppliers of anthropologists, and migrant labor, Clifford's
My position on hybridity theory can be summed up as follows. First, as a paradigm of postcolonial agency in globalization, hybridity is a closet idealism. It is an
anthropologistic culturalism, a theory of resistance that reduces the complex givenness of material reality to its symbolic dimensions and underplays the material
institution of neocolonial oppression at a global-systemic level. Second, as a new internationalism or cosmopolitanism, it is only feasible to the extent that it remains
confined to metropolitan migrancy and forecloses the necessity of the postcolonial nation-state as a precarious agent that defends against neocolonial global capitalist
cosmopolitanisms can ignore the
necessity of the nation-state precisely because they regard cultural agency as unmoored
from, or relatively independent of, the field of material forces that engenders culture. They privilege migrancy as the most radical form of transformative
accumulation. Third, there is a fundamental link between this new cosmopolitanism and culturalism. Hybrid
agency in contemporary globalization because, for them, it is the phenomenal analogue of hybrid freedom from the given. As Bhabha puts it, "the great connective
narratives of capitalism and class drive the engines of social reproduction, but do not, in themselves, provide a fundamental framework for those modes of cultural
identification and political affect that form around issues of the lifeworld of refugees or migrants" (LC, 6).
although the
meaning and symbols of neocolonial culture are unmotivated, their materialization via
economic and political institutional structures in an unequal global order means that they
cannot be translated, reinscribed, and read anew in the ways suggested by theories of hybridity. For
thoroughgoing global transformation to occur, some recourse to the ambivalent agency of
the postcolonial nation-state and, therefore, to nationalism and national culture seems
crucial even as we acknowledge that this agency is not autarchical but inscribed within a
global force field. Clifford is not entirely unaware of this, since he notes that he has not gone far enough in reconceiving practices of dwelling in a
However, as purported analyses of globalization, these accounts of transformative agency and cosmopolitanism sadly miss the mark. For
transnational context (TC, 115). My point is that in the current conjuncture, such practices of dwelling, if they are to be mass-based, necessarily engender a national
consciousness rather than a cosmopolitanism, no matter how "discrepant." To comprehend the possibility of the national-in-the-cosmopolitical — and I use this awkward
we need to
understand postcolonial national culture in terms other than as an immutable organic
substrate or as an ideological form imposed from above, a constraint to be transcended by the formation of an
phrase to indicate a condition of globality that, in the current conjuncture, is short of a mass-based cosmopolitan consciousness—
emancipatory cosmopolitan consciousness.
Third world nation-state is necessary check against imperialism—only
nationally based challenges to global inequality are sustainable
Cheah, Professor of Rhetoric at UC-Berkeley, 2006 [Pheng, “Cosmopolitanism,” Theory Culture Society 2006; 23;
486, sagepublications, p. 490-492]
Marx's proletarian cosmopolitanism is thus different from Kant's pre-nationalist cosmopolitanism. Kant missed the potential of popular nationalism as an emancipatory
force against statism because he could not predict that the material interconnectedness brought about by capitalism would engender the bounded political community of
the nation. Marx's socialist cosmopolitanism is an anti- and post-nationalism that reduces the nation to an ideological instrument of the state. He dismissed nationalism
although he witnessed its rise. Identifying the nation too hastily with the bourgeois state, Marx reduced the nation to an ideological instrument of the state and saw
nationalism as a tendentious invocation of anachronistic quasi-feudal forms of belonging in modernity. However, this antagonistic relation between socialist
cosmopolitanism and nationalism has almost never been maintained from a historical-practical standpoint. The uneven character of capitalism as an actually existing
global system implies an irreducible disparity between the working class in different parts of the world. This has repeatedly posed obstacles for the formation of a global
proletarian consciousness or world community based on labor. The national question was most notably raised in response to anti-colonialist struggles in Asia and Africa. In
the historical scene of decolonization, it is not only the material economic wealth that workers have produced that needs to be reappropriated. The nation's spiritual or
cultural personality has been taken away by territorial imperialism and continues to be expropriated by neo-colonial forces. In Amilcar Cabral's exemplary reformulation,
national liberation
[is] the phenomenon in which a socio-economic whole rejects the denial of its historical process . . . [T]he national liberation of a people is the regaining of the historical
personality of that people, it is their return to history through the destruction of the imperialist domination. (1979: 130)
Stefan Bauschard
Globalization and Poverty Release
196
Imperialism determines that the primary shape of struggle for the (neo)colonized peoples
who make up the mass of the world's population is nationalist. To remove the nation from
the global circuit of property and commodification so that its people can have access to the
products of their labor, the people must first achieve or regain their rightful cultural
personality, which imperialism has violently usurped.
The same challenges to the formation of cosmopolitan solidarity continue to be raised today by popular nationalist responses to neocolonialism and uneven development.
in a world where the nation-state is the primary form of political
organization, can socialist cosmopolitanism have an adequate institutional basis if it does not
work through a form of popular nationalism that seeks to shape state actions in accordance with the interests of humanity? Second,
does a postnationalist form of cosmopolitan solidarity leave peoples in the postcolonial
South vulnerable to the unequal and predatory imperatives of capitalist globalization under
its current neoliberal dispensation?
Two central issues stand out here. First,
The Challenges of Contemporary Globalization: A New Cosmopolitanism?
institutional
grounding has been put into question by the uneven character of global capitalism. There is
an inadequation or lack of fit between the material interconnectedness brought about by
global capitalism and the degree of formation of global solidarities. In other words, we cannot
automatically assume that experiences of a globalizing world where people, things, and
events have become more and more connected necessarily lead to and form the substrate
for a cosmopolitan form of politics that displaces that of the nation-state. In the past decade, various
Although visions of cosmopolitanism have mutated from an intellectual ethos to an institutionally grounded global political consciousness, this
processes of contemporary globalization such as transcultural encounters, mass migration and population transfers between East and West, First and Third Worlds, North
and South, the rise of global cities as central sites for the management of global financial and business networks, the formation of transnational advocacy networks, and
the proliferation of transnational human rights instruments have led to greater hopes that this inadequation can be overcome and that feasible global forms of political
consciousness have in fact arisen. It is suggested that whatever its shortcomings, contemporary transnationalism furnishes the material conditions for new radical
cosmopolitanisms from below that can regulate the excesses of capitalist globalization. In comparison with older philosophical approaches, some of the proponents of new
cosmopolitanism attempt to dissociate it from universal reason, arguing that cosmopolitanism is now a variety of actually existing practical stances that are provisional and
can lead to strategic alliances and networks that cross territorial and political borders. However, these new cosmopolitanisms still contain a normative dimension. It is
claimed that they are normatively superior to more parochial forms of solidarity such as nationalism and that they represent, however provisionally, the interests of
humanity because they exhibit a degree of autonomy from the imperatives of economic globalization.
Theories of new cosmopolitanism are essentially syntheses of three different arguments, which can be found in different combinations. First, it is suggested that cultural
and political solidarity and political agency can no longer be restricted to the sovereign nation-state as a unified spatio-temporal container because globalization has
undermined many of the key functions from which the nation-state derives its legitimacy. Second, the various material networks of globalization are said to have formed a
world that is interconnected enough to generate political institutions and non-governmental organizations that have a global reach in their regulatory functions as well as
global forms of mass-based political consciousness or popular feelings of belonging to a shared world. Third, this new cosmopolitan consciousness is characterized as a
more expansive form of solidarity that is attuned to democratic principles and human interests without the restriction of territorial borders. In some cases, it is also
suggested that the new cosmopolitan consciousness is in a relation of mutual feedback with emerging global institutions, taking root and finding sustenance from these
institutions and influencing their functioning in turn.
The thesis of the spatial-geographical destriation of the world economy is most clearly expressed in Saskia Sassen's work on global cities. Whereas the globalization of
industrial production under post-Fordism created a hierarchical new international division of labor between center and periphery, Sassen argues that the outstripping of
industrial capital by much more profitable non-industrial forms of capital such as international finance and the production of high-value specialized producer services
crucial for the managing of global production networks (such as legal, accounting and business management services) have led to the rise of new geographical formations,
global networks of interlinked cities, that no longer respect the center–periphery distinction. New York, London and Tokyo, the paradigmatic global cities, have become
dislocated from their respective nation-states, and function instead as 'a surplus-extracting mechanism vis-à-vis a "transnational hinterland"', 'as a transterritorial
marketplace' in which each plays a different complementary role (Sassen, 1991: 127, 327). These networks are a complex border-zone that facilitates the penetration of
the nation-state by global forces.
for 'the partial unbundling' of the nation through global economic processes to have
any normative significance, it has to be aligned with the rise of new supranational political
formations that can replace the normative deficit caused by the nation's weakening. Otherwise, the denationalization of the
state merely serves the predatory rights of global capital. Here, the focus inevitably shifts to the concomitant
However,
proliferation of global political institutions radiating from the UN system and organizations and discourses centered on human rights and the rise of a new cosmopolitan
culture through transnational migration and global cultural and media flows (Sassen, 1998: 21-2). A combination of these two phenomena is seen as constituting
globalization's normative payoff, namely a cosmopolitan political culture that exceeds the imperatives of merely economic globalization.
Stefan Bauschard
Globalization and Poverty Release
197
Nation-State Key—Global Capitalism
Third World nation state strategies key to check global capitalism—
transnational politics can’t solve nationalism, and has no sustainable existential
basis
Cheah, Professor of Rhetoric at U. C. Berkeley, 1997 [Pheng, “Given Culture,”
boundary 2 24.2, p. 183-185]
in the current conjuncture, nationalism cannot be transcended by
cosmopolitan forms of solidarity no matter how pathological it may appear in its
ineradicably oppressive moments. Firstly, transnational networks are, in and by themselves,
neither mass-based nor firmly politically institutionalized. Proponents of a global civil society
or an international public sphere that already exists independently of nation-states must
gloss over the fact that we inhabit a decentralized political system in which global loyalty is
thin, an ideal vision largely confined to activists and intellectuals.42 This means that in order to be
effective at the level of political institutions or the people, transnational networks have to
work with and through the nation-state in order to transform it. They have to negotiate
directly with the state in the hope of influencing its political morality and/or mobilize local
support into popular national movements that press against the state. As Alexander Colas observes, the
nation-state is both a constraining factor and an emancipatory potential in its relation to
global networks. Global networks are subject to the same constraining social and historical forces that shape other social actors, but "the nationstate is not necessarily at odds with the emancipatory aspirations of cosmopolitanism . . . [and]
cosmopolitan political action would actually involve the defense of social and political rights
via the democratic nation-state." 43
Secondly, the necessity of the nation-state as a terminal that progressive global-local
networks must pass through is especially salient in the postcolonial South, where economic
poverty is the root cause of economic, social, and political oppression. While foreign capitalled market growth and development may alleviate poverty when actively regulated by strong
host governments to serve official national interests such as in high-growth Southeast Asia, high economic growth cannot lead
to social development or gender equity unless the existing inequitable socio-politicaleconomic structures within these nation-states are overhauled. Indeed, high growth may provide greater legitimation
The aporia, however, is that
to authoritarian regimes, as in the case of Singapore. In the worst-case scenario, as in some African nations, we have the development of underdevelopment that produces
in the absence of a world-state capable of ensuring an equitable
international political and economic order, economic globalization is uneven. Instead of
engendering an emancipatory cosmopolitan consciousness, globalization produces a
polarized world in which bourgeois national development and industrialization in the
periphery are necessarily frustrated by state adjustment to the dictates of transnational
capita1.44 To alleviate the shortfalls of global restructuring in the South, the state needs to
be an autonomous agent of economic accumulation. But the state can only resist
capitulation to transnational forces if it is transformed from a comprador regime into a
popular national-state. This is why popular rearticulations of postcolonial national identity
are ethically imperative and cannot be dismissed per se as statist ideologies that hinder the
rise of a more equitable cosmopolitan consciousness, even though the exclusionary
dimension of popular nationalism can always be manipulated by state elites and captured by
official nationalism.
the Fourth World. The point is that
Stefan Bauschard
Globalization and Poverty Release
198
Stefan Bauschard
Globalization and Poverty Release
199
Nation-State Key—A2: Global Solidarity
There is no material grounding to produce a rich, connected life world for global
solidarity
Cheah, Professor of Rhetoric at UC-Berkeley, 2006 [Pheng,
“Cosmopolitanism,” Theory Culture Society 2006; 23; 486,
sagepublications, p. 492-494]
The progressive implications of a cosmopolitanism arising from the social experience of
global cities – a cosmopolitan corporate work culture, the sophisticated consumption
patterns of this high-income bracket, and the global culture of its growing immigrant population from the Third
World, who are needed to support the lifestyle of the former group – are, however, dubious. The
cosmopolitanism of corporate workers is essentially the cosmopolitanism of a new
technocratic professional class whose primary aims in life are making a profit and
conspicuous consumption. The only feelings of solidarity manifest here are to the global firm
as a terrain for professional self-interest and advancement. This type of attachment is gradually disseminated throughout
the world through the global outsourcing of white-collar jobs, which in turn establishes more bridges for higher-end South–North migration.
Similar questions should be raised about the cosmopolitanism of transnational underclass
migrant communities in the North. Contemporary studies of global culture that focus on post-colonialism often connect this kind of cosmopolitanism to
the political culture of human rights activism as evidence of the postnational spatialization of politics. For example, Arjun Appadurai has grouped
transnational NGOs and philanthropic movements, diasporic communities, refugees, and
religious movements under the rubric of actually existing 'postnational social formations', arguing
that these organizational forms are 'both instances and incubators of a postnational global order' because they challenge the nation-state and provide non-violent
institutional grounding for larger-scale political loyalties, allegiances and group-identities (1993: 421). It is claimed that these global social and political movements
emanate from the grassroots level and exhibit autonomy from dominant global economic and political forces ('grassroots globalization' or 'globalization from below') and
that they can be the sustaining basis for transcending or overcoming the constraining discourse of nationalism/statism (Appadurai, 2000).
The connection between transnational migrant experiences of global cultural diversity and
institutionalized forms of cosmopolitan solidarity, however, remains largely unelaborated. The world is undoubtedly interconnected and
transnational mobility is clearly on the rise. But this does not inevitably generate meaningful cosmopolitanisms
in the robust sense of pluralized world political communities. One should cast a more discriminating eye on the various
emergent forms of cosmopolitanism and distinguish them in terms of how they are connected to the operations of neoliberal capital. For instance, over and above
to what extent can activist cosmopolitanisms
take root in the latter in a consistent manner to generate a genuinely pluralized mass-based global political community within the
interventions on behalf of underprivileged migrant minority groups on an ad hoc basis,
Northern constitutional nation-state as distinguished from the defensive identity politics of ethnic, religious or hybrid minority constituencies? Can these
cosmopolitanisms be embedded in a global community in the South forged from transnational media networks?
It is unclear
how many of these migrants feel that they belong to a world. Nor has it been ascertained whether this
purported feeling of belonging to a world is analytically distinguishable from long-distance, absentee national
feeling. It is, moreover, uncertain that cultural minorities who have achieved multicultural recognition in Northern constitutional democracies are naturally sensitive
It is doubtful whether transnational migrant communities can be characterized as examples of cosmopolitanism in the robust normative sense.
to the plight of their former compatriots in the peripheries. They are more likely to be driven by the desire for upward class mobility and to become the new bearers of the
imperatives of national/regional economic competition. The example of Asian-American entrepreneurship shows that Americans of South Asian, Chinese or Vietnamese
heritage often lead the vanguard of outsourcing initiatives in their countries of origin, justifying super-exploitation in the name of transnational ethnic solidarity.
The
NRI (Non-Resident Indian) businessman or multinational executive professes diasporic
patriotism as he sets up call centers in India, just as the diasporic Chinese investor who
exploits cheap female labor in Southern Chinese factories wishes to benefit people in his
ancestral village. The argument that transnational print and media networks extend a world
community beyond transnational migrancy to include peoples dwelling in the South has to reckon with the banal fact that
many in the South are illiterate and/or do not have access to a television or hardware
capable of receiving CNN and Rupert Murdoch's Asia-based Star TV
What is sadly missing from celebrations of new cosmopolitanism in the softer social sciences and cultural studies is
a thorough discussion of the normative implications of globalization, or more precisely the
Stefan Bauschard
Globalization and Poverty Release
200
relationship between universality or weaker normative forms of wide inclusivity and the
global extensiveness of economic, political, and cultural processes. There are, however, more recent arguments
from philosophy that suggest that contemporary post-Cold War human rights regimes, other emergent transnational legal and political institutions, and the so-called
international civil society of NGOs constitute a contemporary revival and updated affirmation of Kant's vision of cosmopolitanism. Among these arguments, that of the
German philosopher, Jurgen Habermas, is the most sophisticated. For Habermas, the curse of globalization turns out to be a blessing in disguise. In his view, globalization is
not reducible to global capitalism, but has relatively autonomous cultural and political aspects that create the conditions for an Aufhebung (transcendence/sublation)
whereby the earlier national shell that imprisoned democratic republicanism will be destroyed and its kernel or truth-content, preserved in the form of deliberative
democratic procedures, will rise up, phoenix-like, to a higher supranational state of existence.
the homogeneous national-cultural base of civil-political solidarity, which is already
undermined by the global dissemination of mass culture, is further eroded by economicallydriven South to North and East to West migration, which changes the ethnic, religious and cultural composition of European nations. Habermas regards such
First,
cultural pluralization/multiculturalization of society as a boon. Xenophobic conflicts and the tyranny of the hegemonic cultural majority can only be controlled by the
construction of a multicultural civil society that respects the differences of minority cultures. Hence, transnational migration, Habermas argues, actually accelerates the
decoupling of political culture from the pre-political identity of the majority cultural group so that it can be completely co-extensive with the public-discursive democratic
process (2001: 71-6). Second, following Ulrich Beck's thesis of the rise of a world risk society, Habermas suggests that political solidarity is also decoupled from its national
base by the creation of globally shared risks such as ecological and environmental damage, international organized crime such as the traffic in arms, drugs and women.
Because the political interests of the people affected by such global issues will no longer be co-extensive with the territorially-based decisions of nation-states, these
actions will suffer from a legitimation deficit (Habermas, 2001: 68-71). Third, the growing number of regulatory political institutions and forms of cooperation at various
levels beyond the nation-state that attempt to compensate for its declining competencies suggest the blurring of the distinction between foreign and domestic policy,
thereby indicating the irreversible development of a genuinely global politics (Habermas, 2001: 70-1). These bodies range from the United Nations and its agencies to
international regimes, some more tightly organized than others, such as NAFTA, ASEAN, and the European Union, as well as informal networks of NGOs. Finally, the
increasing proliferation of human rights instruments indicates the emergence of a weak form of cosmopolitan solidarity, that of a quasi-legal community of world citizens.
Stefan Bauschard
Globalization and Poverty Release
201
Nation-State Key—A2: Nationalism
Third World nationalism is a necessary response to coloniialism and economic
inequality
Cheah, Professor of Rhetoric at U. C. Berkeley, 1997 [Pheng, “Given Culture,”
boundary 2 24.2, p. 181-182]
postcolonial national identity-formation is in part a response to neocolonial
economic globalization.37 The uneven accumulation of capital and distribution of wealth and
resources on a global scale exacerbates the unequal distribution of political power and
economic resources within decolonized countries. At the same time, globalization is accompanied by the spread of a political
In macrosociological terms,
culture that historically emerged in the West: human rights, women's rights, equality, democratization, and so on. This intersection of cultural change and economic
decline leads to resentment and resistance on the part of disadvantaged groups who may use "cultural resources to mobilize and organize opposition . . . even though a
motivation and cause of opposition is economic and social disadvantage" (IP, 8). Political elites may also draw on "tradition" or "intrinsic cultural values" to maintain
hegemony and justify their actions, sometimes overemphasizing cultural issues such as religion, morality, cultural imperialism, and women's appearance to divert
attention from economic failures and social inequality. As Moghadam notes with regard to Islamic cultural reassertions, "culture, religion, and identity are thus both
defense mecha nisms and the means by which the new order is to be shaped. Islamist movements appear to be archaic but in fact combine modern and premodern
discourses, means of communication and even political institutions [, and] . . . must therefore be seen as both reactive and proactive" (IP, 11).
It would be precipitous to dismiss all postcolonial national-cultural reassertions as fanaticist
pathologies or statist ideologies. In the first place, they are not necessarily religious or confined to
Islamic Middle Eastern states whose economies are weakened by the falling price of oil. Reassertions of nationalcultural identity occur in most postcolonial states, ranging from weak neocolonial African
states to the high-performing, newly industrializing economies of East and Southeast Asia.
The seemingly undivided stand by Asian governments in rejecting intervention by Northern
states in human rights issues at the Vienna Convention on the basis of cultural differences is
in small part a collective assertion of postcolonial national sovereignty in response to the
history of colonialism and the inequality of contemporary North-South relations.38 Hence, Islamic
fundamentalist nationalism ought to be analyzed alongside the Confucian chauvinism championed by the Singaporean government as the basis of the East Asian path of
these cultural reassertions are not
necessarily ideological constructions of state elites, since they also express the needs of
disadvantaged social groups in changing economic conditions. Although human rights NGOs from the South have
global capitalist development 39 as cases of postcolonial nationalism in the New World Order. Moreover,
rejected the position of Asian states on human rights, they have also been careful to distinguish their criticisms of their own governments from the position of Northern
governments by asserting the need to respect cultural differences and the urgency of establishing an equitable international economic order and interstate system.
Stefan Bauschard
Globalization and Poverty Release
202
Turns Economy
Economic crisis is inevitable - capitalists love it. They rather let the economy
stagnate to gain more power
Bichler and Nitzan ’14 [Shimshon Bichler is an educator who teaches political economy at
colleges and universities in Israel, Jonathan Nitzan is Professor of Political Economy at York
University in Toronto, ~ “How capitalists learned to stop worrying and love
the crisis”, http://www.paecon.net/PAEReview/issue66/BichlerNitzan66.pdf]
Accumulation of what? The answer depends on what we mean by capital accumulation. The
common view of this process is deeply utilitarian. Capitalists, we are told, seek to maximize their
so-called ‘real wealth’: they try to accumulate as many machines, structures, inventories and
intellectual property rights as they can. And the reason, supposedly, is straightforward.
Capitalists are hedonic creatures. Like every other ‘economic agent’, their ultimate goal is to
maximize their utility from consumption. This hedonic quest is best served by economic growth:
more output enables more consumption; the faster the expansion of the economy, the more
rapid the accumulation of ‘real’ capital; and the larger the capital stock, the greater the utility
from its eventual consumption. Utility-seeking capitalists should therefore love booms and hate
crises.2 But that is not how real capitalists operate. The ultimate goal of modern capitalists –
and perhaps of all capitalists since the very beginning of their system – is not utility , but
power . They are driven not to maximize hedonic pleasure, but to ‘beat the average’. This
aim is not a subjective preference. It is a rigid rule, dictated and enforced by the conflictual
nature of the capitalist mode of power. Capitalism pits capitalists against other groups in
society, as well as against each other. And in this multifaceted struggle for power, the yardstick
is always relative. Capitalists are compelled and conditioned to accumulate differentially, to
augment not their absolute utility but their earnings relative to others. They seek not to
perform but to out-perform, and outperformance means re-distribution. Capitalists who beat
the average redistribute income and assets in their favour; this redistribution raises their share
of the total; and a larger share of the total means greater power stacked against others. Shifting
the research focus from utility to power has far-reaching consequences. Most importantly, it
means that capitalist performance should be gauged not in absolute terms of ‘real’ consumption
and production, but in financial-pecuniary terms of relative income and asset shares. And as we
move from the materialist realm of hedonic pleasure to the differential process of conflict and
power, the notion that capitalists love growth and yearn for recovery is no longer self evident.
The accumulation of capital as power can be analyzed at many different levels. The most
aggregate of these levels is the overall distribution of income between capitalists and other
groups in society. In order to increase their power, approximated by their income share,
capitalists have to strategically sabotage the rest of society. And one of their key weapons in
this struggle is unemployment. The effect of unemployment on distribution is not obvious, at
least not at first sight. Rising unemployment, insofar as it lowers the absolute (‘real’) level of
activity, tends to hurt capitalists and employees alike. But the impact on money prices and
wages can be highly differential, and this differential can move either way. If unemployment
causes the ratio of price to unit wage cost to decline, capitalists will fall behind in the
redistributional struggle, and this retreat is sure to make them impatient for recovery. But if the
opposite turns out to be the case – that is, if unemployment helps raise the price/wage cost
Stefan Bauschard
Globalization and Poverty Release
203
ratio – capitalists would have good reason to love crisis and indulge in stagnation . So which
of these two scenarios pans out in practice? Do stagnation and crisis increase capitalist power?
Does unemployment help capitalists raise their distributive share? Or is it the other way
around? Unemployment and the capitalist income share Figures 1 and 2 examine this process in
the United States, showing the relationship between the share of capital in domestic income
and the rate of unemployment since the 1930s. The top panel of Figure 1 displays the levels of
the two variables, both smoothed as 5-year moving averages. The solid line, plotted against the
left log scale, depicts pre-tax profit and net interest as a percent of domestic income. The dotted
line, plotted against the right log scale, exhibits the rate of unemployment as a share of the
labour force. Note that the unemployment series is lagged three years, meaning that every
observation shows the situation prevailing three years earlier. The bottom panel displays their
respective annual rates of change of the two top variables, beginning in 1940. The same
relationship is shown, somewhat differently, in Figure 2. This chart displays the same variables,
but instead of plotting them against time, it plots them against each other. The capitalist share
of domestic income is shown on the vertical axis, while the rate of unemployment three years
earlier is shown on the horizontal axis (for a different examination of this relationship, including
its theoretical and historical nonlinearities, see Nitzan and Bichler 2009: 236-239, particularly
Figures 12.1 and 12.2). Now, readers conditioned by the prevailing dogma would expect the
two variables to be inversely correlated. The economic consensus is that the capitalist income
share in the advanced countries is procyclical (see for example, Giammarioli et al. 2002;
Schneider 2011). Expressed in simple words, this belief means that capitalists should see their
share of income rise in the boom when unemployment falls and decline in the bust when
unemployment rises. But that is not what has happened in the United States. According to
Figures 1 and 2, during the post-war era, the U.S. capitalist income share has moved
countercyclically, rising in downturns and falling in booms . The relationship between the two
series in the charts is clearly positive and very tight. Regressing the capitalist share of domestic
income against the rate of unemployment three years earlier, we find that for every 1 per cent
increase in unemployment, there is 0.8 per cent increase in the capitalist share of domestic
income three years later (see the straight OLS regression line going through the observations in
Figure 2). The R-squared of the regression indicates that, between 1947 and 2012, changes in
the unemployment rate accounted for 82 per cent of the squared variations of capitalist
income three years later.3 The remarkable thing about this positive correlation is that it
holds not only over the short-term business cycle, but also in the long term . During the
booming 1940s, when unemployment was very low, capitalists appropriated a relatively small
share of domestic income. But as the boom fizzled, growth decelerated and stagnation started
to creep in, the share of capital began to trend upward. The peak power of capital, measured
by its overall income share, was recorded in the early 1990s, when unemployment was at postwar highs. The neoliberal globalization that followed brought lower unemployment and a
smaller capital share, but not for long. In the late 2000s, the trend reversed again, with
unemployment soaring and the distributive share of capital rising in tandem. Employment
growth and the top 1% The power of capitalists can also be examined from the viewpoint of the
infamous ‘Top 1%’. This group comprises the country’s highest income earners. It includes a
variety of formal occupations, from managers and executives, to lawyers and doctors, to
entertainers, sports stars and media operators, among others (Bakija, Cole, and Heim 2012), but
most of its income is derived directly or indirectly from capital. The Top 1% features mostly in
‘social’ critiques of capitalism, echoing the conventional belief that accumulation is an
Stefan Bauschard
Globalization and Poverty Release
204
‘economic’ process of production and that the distribution of income is merely a derivative of
that process. 4 This belief, though, puts the world on its head. Distribution is not a corollary of
accumulation, but its very essence. And as it turns out, in the United States, the distributional
gains of the Top 1% have been boosted not by growth, but by stagnation . Figure 3 shows the
century-long relationship between the income share of the Top 1% of the U.S. population and
the annual growth rate of U.S. employment (with both series smoothed as 10-year moving
averages). The overall relationship is clearly negative. When stagnation sets in and employment
growth decelerates, the income share of the Top 1% actually rises - and vice versa during a
long-term boom (reversing the causal link, we get the generalized underonsumptionist view,
with rising overall inequality breeding stagnation – see Box 1). Historically, this negative
relationship shows three distinct periods, indicated by the dashed, freely drawn line going
through the employment growth series. The first period, from the turn of the century till the
1930s, is the so-called Gilded Age. Income inequality is rising and employment growth is
plummeting. The second period, from the Great Depression till the early 1980s, is marked by the
Keynesian welfare-warfare state. Higher taxation and spending make distribution more equal,
while employment growth accelerates. Note the massive acceleration of employment growth
during the Second World War and its subsequent deceleration bought by post-war
demobilization. Obviously these dramatic movements were unrelated to income inequality, but
they did not alter the series’ overall upward trend. The third period, from the early 1980s to the
present, is marked by neoliberalism. In this period, monetarism assumes the commanding
heights, inequality starts to soar and employment growth plummets. The current rate of
employment growth hovers around zero while the Top 1% appropriates 20 per cent of all
income – similar to the numbers recorded during Great Depression. How capitalists learned to
stop worrying and love the crisis If we follow the conventional macroeconomic creed, whether
mainstream or heterodox, U.S. capitalism is in bad shape . For nearly half a century, the
country has watched economic growth and ‘real’ accumulation decelerate in tandem – so
much so that that both measures now are pretty much at a standstill (Bichler and Nitzan
2013: 24, Figure 12). To make a bad situation worse, policy attempts to ‘get the economy
going’ seem to have run out of fiscal and monetary ammunition (Bichler and Nitzan 2013: 213). Finally, and perhaps most ominously, many policymakers now openly admit to be ‘flying
blind when steering their economies ’ (Giles 2013). And yet U.S. capitalists seem blasé about
the crisis. Instead of being terrified by zero growth and a stationary capital stock, they are
obsessed with ‘excessive’ deficits, ‘unsustainable debt’ and the ‘inflationary consequences’ of
the Fed’s so-called quantitative easing. Few capitalists if any call on their government to lower
unemployment and create more jobs, let alone to rethink the entire model of economic
organization. The evidence in this research note serves to explain this nonchalant attitude:
Simply put, U.S. capitalists are not worried about the crisis; they love it. Redistribution, by
definition, is a zero-sum game : the relative gains of one group are the relative losses of
others. However, in capitalism, the end goals of those struggling to redistribute income and
assets can differ greatly. Workers, the self-employed and those who are out of work seek to
increase their share in order to augment their well being. Capitalists, by contrast, fight for
power. Contrary to other groups in society, capitalists are indifferent to ‘real’ magnitudes.
Driven by power, they gauge their success not in absolute units of utility, but in differential
pecuniary terms, relative to others. Moreover – and crucially – their differential performanceread-power depends on the extent to which they can strategically sabotage the very groups
Stefan Bauschard
Globalization and Poverty Release
205
they seek to outperform . In this way, rising unemployment – which hammers the well-being of
workers, unincorporated businesses and the unemployed – serves to boost the overall income
share of capitalists. And as employment growth decelerates, the income share of the Top 1% –
which includes the capitalists as well as their protective power belt – soars. Under these
circumstances, what reason do capitalists have to ‘get the economy going’? Why worry about
rising unemployment and zero job growth when these very processes serve to boost their
income-share-read-power?
Stefan Bauschard
Globalization and Poverty Release
206
A2: Sustainability
Global collapse of capitalism is inevitable – Chinese economic collapse and
shrinking energy supplies
Li Associate Prof of Economics at U of Utah 2010 Minqi The End of the “End of History”: The
Structural Crisis of Capitalism and the Fate of Humanity Science & Society 74.3
http://guilfordjournals.com/doi/pdf/10.1521/siso.2010.74.3.290
By about 2015, however, the irreversible decline in world oil production will become apparent. As
the decline of the energy supply takes place against the continuing growth of demand in China
and possibly in other large semi-peripheral states, world energy prices will again rise rapidly, generating
global inflationary pressure.
Squeezed between shrinking export markets (as the advanced capitalist countries suffer from economic stagnation) and
rising energy costs, China’s trade surpluses will likely disappear and China may be forced to sell
some of its foreign exchange reserves to stave off economic crisis. The combination of China’s
dollar sales, global inflationary pressure, and the U. S. fiscal crisis will greatly increase the
likelihood of a general dollar collapse that will take the global economic crisis into a second,
more violent and more destructive phase.
Chinese capitalism will not be able to postpone the crisis forever. In perhaps five to ten years from now,
China will likely be hit by an insurmountable economic crisis as its export-oriented
manufacturing industries suffer from the shrinking of the global market and its massive
demand for energy and materials can no longer be sustained. The third and final phase of the
global economic crisis is likely to see the general collapse of the Chinese, and with it the
global, capitalist economy.
Revolution in the periphery  global shift of power
Li Associate Prof of Economics at U of Utah 2010 Minqi The End of the “End of History”: The
Structural Crisis of Capitalism and the Fate of Humanity Science & Society 74.3
http://guilfordjournals.com/doi/pdf/10.1521/siso.2010.74.3.290
Confronted simultaneously with the collapse of global trade, decline of world energy
production, and the prospect of growing working-class militancy, the semi-periphery is likely
to prove to be the “weakest link” in the global capitalist chain and a key battleground of
global class struggle. If working-class revolutions take place and get consolidated in Russia,
China, and Latin America in the coming one or two decades, then the global balance of power could be
turned decisively in favor of the global working classes and revolutionary forces.
Stefan Bauschard
Globalization and Poverty Release
207
A2: Capitalism Solves War
Their concept of security is depoliticized – capitalism necessitates insecurity of
the periphery – their focus preserves the status quo
Goodman Senior Lecturer at the University of Technology Sydney 2009 James Global
Capitalism and the Production of Insecurity Rethinking Insecurity War and Violence, edited by
Grenfell and James page 44-45
In capitalist societies insecurity is systemic. Capitalism literally produces insecurity. The
opportunity to profit and the risk of loss is capitalism’s life-blood. Capitalist security hinges on
private property, on “having” rather than “not having” and on the security that possessions provide. As
wealth is stratified, so is security and with the concentration of property ownership comes the
concentration of security. Here the question of pursuing security is profoundly political. When
security is defined by the powerful, “making safe” tends to serve the status quo. When
security is defined by the sub-ordinated, it tends to challenge the social order. Removing
sources of insecurity for the subordinated means removing the means to dominate, and under
capitalism this means removing the “inalienable right” to private property.
With deepening capitalist relations, systemic insecurities are intensified. The process of
commodification and financialization has gained global reach, deepening the integration of livelihoods and living
environments into a universal cash nexus (Rupert 2003). Societies as a result become ever-more vulnerable to
volatile flows of liquid assets, rendering them radically insecure. This globalization of
insecurity is deeply stratified, with sharpening divides between those suffering under it and
those profiting from it. Indeed, globalizing capitalism is best understood as a system displacing
insecurity from rich to poor across the globe. Such systemic insecurity is socially concentrated at the collision
between living environments and marketization, and profoundly exacerbates social divides, including contributing to the
feminization of poverty. It is spatially concentrated in a growing range of poorer and vulnerable states,
but, as argued here, the side-effects of systemic insecurity rebound on the center. There is increasing anxiety
amongst dominant states about vulnerability to refugee flows, to the “contagion” of financial instability, to cross-border environmental crises, to
subversive information flows, to transnational political violence, to flows of laundered money, to illicit drugs and arms flows. Reflecting this, there are
increasingly intensive efforts to secure external borders and escalating interventions against “failed” or “rogue” states on the periphery.
The logic of commodification makes war inevitable
Goodman Senior Lecturer at the University of Technology Sydney 2009 James Global
Capitalism and the Production of Insecurity Rethinking Insecurity War and Violence, edited by
Grenfell and James page 52
In a global system that relies upon opportunity and risk, insecurity is always on the horizon. As
the United States and its allies take on “the impossible task of suppressing the expressions of the fundamental problems of the
world today” we
are forced to live with endemic instability and violence (Ichiyo2002). The war for
security must go on forever - there is “never enough”- and thus war has to be domesticated
and naturalized (Ferguson and Turnbull2004). This systemic insecurity may however be seen as the
central and even fatal flaw of commodification. The totalizing command state can never secure control (James
2004). Security can only be achieved by forcing instability to the margins, even as it erupts
across the multiplying arcs of instability.
Capitalism necessitates imperialist wars
Harvey Distinguished Professor at the Graduate Center of the City University of New York
2008 David The Right to the City New Left Review 53 Sept/Oct
http://newleftreview.org/?view=2740
Stefan Bauschard
Globalization and Poverty Release
208
The perpetual need to find profitable terrains for capital-surplus production and absorption
shapes the politics of capitalism. It also presents the capitalist with a number of barriers to continuous and trouble-free
expansion. If labour is scarce and wages are high, either existing labour has to be disciplined—technologically induced
unemployment or an assault on organized working-class power are two prime methods—or fresh labour forces must be found by
immigration, export of capital or proletarianization of hitherto independent elements of the population. Capitalists
must also
discover new means of production in general and natural resources in particular, which puts
increasing pressure on the natural environment to yield up necessary raw materials and
absorb the inevitable waste. They need to open up terrains for raw-material extraction—often
the objective of imperialist and neo-colonial endeavours.
Stefan Bauschard
Globalization and Poverty Release
209
A2: Democratic Globalization Good
Democracy and freedom are excuses for intervention
Cuadro 11 (Mariela, PhD in IR at the National University of La Plata, BA in Sociology at the University of Buenos Aires, Master
in IR at the National University of La Plata (IRI), Researcher at the Department of Middle East in International Relations Institute (IRI)
at the University of La Plata, Member and researcher at the Center for International Political Reflection (CERPI), “Universalisation of
liberal democracy, American exceptionalism and racism" Transcience Volume 2—Issue 2, http://www2.huberlin.de/transcience/Vol2_Issue2_2011_30_43.pdf)
The advent of liberalism would change this conception and postulate a game where sum is
different from zero. That is to say that liberalism conceived the improvement of one state (the
state-centered objective of the reason of state remained the same) as linked to the improvement of the others.
Neoliberalism, for its part, adds to this the necessity of intervention. Kant’s Perpetual Peace fit in this context.
Following the German author, perpetual peace would be guaranteed by the globalization of commerce. During the decade of 1990s
a similar thesis took force: The
so-called ‘Democratic Peace Theory’ postulated that perpetual peace
could be achieved via the globalization of democracy. George W. Bush administration would take
this thesis as its own and argue that imposing democracy (on Iraq) would make the world safer
and more peaceful, implicitly arguing that US democracy is the best socio-political model. Finally,
such voices would also be specially heard during the first weeks of the still ongoing Arab uprising. Homologated with
freedom, liberal democracy appears (mainly in liberal powers’ discourses, but not just there) as a universal
claim of people all over the world, thereby becoming a necessity of history (claimed once by
Fukuyama), and justifying, once more, interventionist policies in its name. Democracy, Human
Rights and Freedom, as we will see, have been homologated. Clearly different and Western
notions have been thus mixed, confused and universalized. Freedom, as a governmental
technique, is at the center of the liberal practice. Indeed, liberalism -understood not as an ideology, but rather
as a technology of power- is characterized as a freedom-consuming practice. That is to say that
it can only function if some liberties exist 7. In consequence, if liberalism has a need of freedom, then,
it is obliged to produce it, but, at the same time, to organize it. In other words, it is not only a
producer of freedom, but also an organizer of it: its administrator . This administration of
freedom leads to the necessity of securing those natural phenomena (i.e.: population) and, with that
objective, to interventionist practices . The fact that the police device be dismantled, Foucault asserts, does not mean
that governmental intervention ceases to exist. On the contrary, this is an essential feature of liberal
government.