[saymaListserv] Fwd: TQE#121

[Janet Minshall]

>  NOTE: I recommend reading this letter on the web, where it has better
>  formatting and where responses to it are also shown: 
>http://tqe.quaker.org/2005/TQE121-EN-Globalization.html
>
>               THE QUAKER ECONOMIST #121
>
>           Globalization and the World's Poor
>
>       Do we have a realistic view of world poverty?
>
>                  by Janet Minshall
>
>  Dear Friends,
>
>  Globalization and its proponents are widely mistrusted and their
>  achievements denied and denounced. Some vocal representatives of the labor
>  movement have said that any production done outside the US or Europe which
>  is provided at lower than US or European wages amounts to exploitation.
>  Similarly they say any places and conditions of employment which do not meet
>  the standards of those in the US and Western Europe are sweatshops. Further,
>  anyone who works in production in countries outside of the US or Western
>  Europe is said to be at risk for being kidnapped and forcibly enslaved.
>
>  All of these conclusions are false.
>
>  The clear implication of these messages is that we consumers in the US
>  should feel guilty about buying anything made in other countries by
>  "foreigners," and that we should demand that no one else in the world be
>  permitted to do the work of US, European and multinational corporations but
>  the highly paid middle-class workers who have done that work in the past.
>  Those of you who actually research the issue of globalization will find
>  that such misrepresentations are egregiously self-serving on behalf of the
>  US and Western European labor unions and grossly unfair to workers and the
>  poor in the rest of the world.
>
>  The reality is that the overall effects of globalization are primarily
>  positive. Globalization is actually achieving a major economic goal in the
>  world which Quakers have long sought, i.e. rapidly bringing the poor out of
>  poverty in those countries which are in process of globalizing.
>
>  Nevertheless, there have been abuses of globalization. The situation is
>  quite similar to the first burst of industrialization, when people flocked
>  from the countryside to the new factories and mines of 17th century Britain.
>  These new industrial workers felt that they had improved their lives - farm
>  life was difficult and prone to disaster - but the fact remains that they
>  were then exploited by the owners of the new factories. Beautiful townships
>  were devastated by factory construction, and by air and water pollution.
>
>  Entire livelihoods vanished almost overnight. Urban slums expanded rapidly,
>  without public health or indeed any civic services or regulation. Only
>  gradually, over a period of a century or more, were the excesses of rapid
>  industrialization ameliorated. We can expect similar developments with
>  globalization, though the evidence so far suggests to me that the negative
>  consequences will be (a) mild compared to what happened during the early
>  centuries of the industrial revolution, and (b) insignificant in comparison
>  to the worldwide decrease in poverty.
>
>  THE HARD EVIDENCE
>
>  Economic analyses indicate that the globalization which took place in the
>  early part of the twentieth century was actually more rapid than what is
>  occurring at present. Because the process is now old enough to examine
>  thoroughly, there are many good articles and books available on the actual
>  effects of globalization on the peoples of the world. While some are slanted
>  to support particular political agendas, many are written objectively by
>  people from a wide variety of cultures and countries.
>
>  For example, there is Martin Wolf's book, Why Globalization Works, published
>  by Yale University Press, 2004. Martin Wolf is The Associate Editor and
>  Chief Economics Commentator at the Financial Times of London. Another good
>  book from a slightly different perspective is In Defense of Globalization by
>  Jagdish Bhagwati, also published in 2004. Bhagwati is University Professor
>  at Columbia University and Andre Meyer Senior Fellow in International
>  Economics at the Council on Foreign Relations. He is also a former Special
>  Advisor to the United Nations on Globalization.
>
>  Contrary to what you may read in anti-globalization leaflets and press
>  releases, between 1980 and 2000 75% of the world's population achieved an
>  enormous increase in both average incomes and living standards due to the
>  effects of globalization. Summarized from Wolf's book in the chapter "Why
>  The Critics Are Wrong", p. 143, "never before have so many people, or so
>  large a proportion of the world's population, enjoyed such large rises in
>  their standard of living - India produced an approximately 100% increase in
>  real GDP per head and China nearly a 400% increase in real GDP per head.
>  This is an enormous improvement, experienced by some two billion people.
>
>  Meanwhile, GDP per head in high income countries (with only 15% of the
>  world's population) rose by 2.1% between 1975 and 2000, and by only 1.7% per
>  year between 1990 and 2001.
>
>  A much shorter piece appeared in the Nov/Dec 2004 issue of Foreign Affairs
>  which helps, along with the data cited above, to explain some of the intense
>  reactions against globalization by the middle class around the world
>  (including many Quakers). The article is "Globalization's Missing Middle" by
>  Geoffrey Garrett. He, too, describes the net positive effect of
>  globalization on the poor of the world and admits that the rich also
>  benefit, but his primary focus is the fact that "middle income countries
>  have not done nearly as well under globalized markets as either richer or
>  poorer countries..."
>
>  He explains - as I too explained in a 2001 article in "Friendly Women" that
>  was reprinted as TQE #23 - that the middle class workers in many countries
>  like the US don't have the technical and scientific education necessary to
>  compete for the higher wage jobs which have developed over the past twenty
>  years or so. The relatively poorly trained and educated workers in the US,
>  and Europe are vainly trying to force employers to keep those higher wage
>  jobs at home, rather than outsource them to better educated and less
>  expensive workers in China, India and elsewhere.
>
>  THE ROLE OF LABOR
>
>  To his credit, John Sweeney, President of the AFL-CIO, recognized the
>  problem years ago. He funded programs to upgrade the education and skills of
>  layed-off workers. However, many of those who might today benefit from such
>  an upgrade think they are somehow entitled to their previous jobs for the
>  rest of their working lives without any further training.
>
>  Friends frequently express concern for truth, simplicity, equality and
>  peace, all venerable Quaker testimonies. In keeping with those testimonies,
>  Friends are required to search continuously for ways of understanding the
>  realities of the world which put them on the side of the poor and the
>  oppressed. Some middle class labor movement representatives have succeeded
>  in convincing Friends that the workers in the US and European labor
>  movements are the poor and oppressed and that we Friends should take sides
>  with them against those who are truly poor in other countries.
>
>  Companies that outsource generally pay significantly better wages, provide
>  better benefits and combat sexual, class and cultural / tribal / caste
>  discrimination more effectively than local employers in the countries where
>  they send their work. These are effects that Friends want to support.
>
>  SHALL WE DUMB DOWN OR TECH UP?
>
>  As many of us have learned, it is the disaffected middle class which has the
>  time and the resources to organize politically. Rather than organizing
>  against the poor of the world, middle class people and those in middle
>  income countries  need to put their energy into innovation and change.
>
>  Rather than "dumbing down" and trying to retain repetitive manufacturing and
>  service jobs, they need to "tech up" their educational and training programs
>  to acquire and keep the newer jobs being developed. Summarizing from
>  Geoffrey Garrett's article in Foreign Affairs (cited above), organizing in
>  middle income countries should focus on deep reforms in infrastructure and
>  institutions such as "government, banking and law to transform economies
>  that stifle innovation into ones that foster it with strong property-rights
>  regimes, effective financial systems and good governance."
>
>  A CALL FOR THE MIDDLE CLASS TO PUT ITS OWN HOUSE IN ORDER
>
>  First and most importantly, we need to better educate and train our workers.
>  To accomplish necessary institutional change in the US, after exposing the
>  hypocrisy of Bush's "No Child Left Behind" policy, we need to replace the
>  Republican's misdirected and ineffective efforts with significant and
>  substantial upgrades to our educational system. Our workers need to be
>  prepared for the jobs on the cutting edge of innovation and change rather
>  than being dragged along behind the economy kicking and screaming.
>
>  The efforts of crusaders like New York's Attorney General, Elliott Spitzer,
>  who is calling major corporations and industries to account by cleaning up
>  both their boards and their books needs wider support and encouragement.
>
>  Examining the process for casting and counting ballots in this country is
>  equally important and deserves our involvement.
>
>  Finally, the McCain-Feingold initiative to reform campaign financing doesn't
>  go far enough.  We need to build a fire wall between our elected
>  representatives and the corporate and other special interests who have
>  apparently become their primary constituency. All of these efforts are more
>  important for the survival and well-being of workers and their jobs in the
>  US than uselessly shaking our fists at the process of globalization and
>  outsourcing.
>
>  WE CANNOT HAVE IT BOTH WAYS
>
>  We, as Friends, cannot have it both ways. We have constantly demanded a
>  higher income and a better standard of living for the poor for many, many
>  years. Well, now we have both in developing countries that have globalized.
>  To help our own we have to get tougher both on government and labor and
>  insist that our educational system, especially our resources for college
>  preparation, our community colleges and technical schools, be dramatically
>  upgraded so that the middle and working class young people in the US can
>  compete on "a level playing field" with the middle and working class workers
>  in countries such as China and India. We need to upgrade our preparatory
>  programs and then see to it that those prepared for the new job market can
>  actually get into the graduate programs that they may then wish to enter.
>
>  The question has been asked, "to increase the incomes of the poor in the
>  rest of the world, are we willing to have less and buy less?"
>
>  Well? Are we?
>
>  Sincerely your Friend,
>
>  Janet Minshall
>