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March 30, 2006

Does Globalization Help or Hurt the World's Poor?

From Scientific American:World

Globalization and the attendant concerns about poverty and inequality have become a focus of discussion in a way that few other topics, except for international terrorism or global warming, have. Yet the strength of people's conviction is often in inverse proportion to the amount of robust factual evidence they have.

As is common in contentious public debates, different people mean different things by the same word. Some interpret "globalization" to mean the global reach of communications technology and capital movements, some think of the outsourcing by domestic companies in rich countries, and others see globalization as a byword for corporate capitalism or American cultural and economic hegemony. So it is best to be clear at the outset of this article that I shall primarily refer to economic globalization--the expansion of foreign trade and investment. How does this process affect the wages, incomes and access to resources for the poorest people in the world?

More here.

Posted by Azra Raza at 07:13 AM | Permalink

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My feeling is that globalization will, in the short run, raise the standard of living of the poorest workers in the poorest countries and lower the standard of living of the poorest workers in the richest countries. In the long run, "working class" will be internationalized, so that workers everywhere in the world will have the same standards of living, will get the same wages.

Whether this is good or not depends on how far above subsistence level that international wage will be. My pessimistic hunch is that supply and demand will drive worldwide wages to the subsistence level; with 6 billion (or however many it is) potential workers, the worldwide supply of labor is tremendous.

Posted by: Daryl McCullough | Mar 30, 2006 7:26:19 AM

This is a strange article for Scientific American. "Globalization" is too vague a concept to be amenable to scientific investigation, and the author certainly fails to apply any original thinking to the questions. The conclusion is "Well, globalization is a little bit good, and a little bit bad, but it really depends on the circumstances." The article could have appeared in any middle-of-the-road political journal (if there are any left). It's worthy in it's attempt at evenhandedness, I just don't see the scientific angle.

Posted by: faze | Mar 30, 2006 10:31:10 AM

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