How has globalization lessened inequality around the world?

Question

what are some major tenets of the argument that would support this claim

Answer 1

There have been cases where certain groups of people have been hurt by globalization, but on average, it has cause nations to come to converge in wealth more then had been prviously. You cant falsly look at a poor nation and say that globalization hasnt helped because it is still poor. You have to look at rate of change. And on average emerging market nations have faster economic growth then the developed world. Europe and the US have averaged between 2-3.5 percent annual growth the past decade (the US has been higher then Europe). China and India ont he other hand, as an example, have averaged about 10% annual growth.


Here is a reposnse I made recently to a similar question on "how deos gloabalization help the poor?"

Its a shame that there is such an inherent bias against free trade and open and free international interaction... but anyway...

Globalization allows specialization of production. Poorer countries with cheaper labor are able to produce labopr intensive goods more efficently and wealthy nations can create capital intensive gods more efficiently. They both then trade and both are made better off.

In fact, if done well, even though both countries are better off via trade, the poorer countries benift more because of the deminishing marginal return to capital. A deminishing marginal return means thata ll else equal, the addition of an aditional unit of capital will be less productive then the previous. So poorer nations which have less capital, will benift more from having say an addition factory then a rich nation does.

Before the 1980s or so, most 3rd world countries practiced what is called import substitution. The theory is that will high trade tariffs and other restrictions, the nation will foster its own industry. But this largely ended up failing because the industries were not efficient ad did niot have access to adaquate capital. This is why most countries have now engaged globalization.

China began to open itself up in 1979, and since then their standard of livign has been expanding rapidly. based on whether you use $1 or $2 per day as the international poverty line, it is estimated that between 200 and 400 million chinese have now moved above that line since China started opening up. Theire economy has been growing at over 10% per year lately. This is compared to the developed worlds average of around 3%. As you can see, the poorer nation benifts more, butboth still benifit. India is in a similar situation.

Furthermore, technology gets spread around. Fr example, farmers in rural african nations now have cell phones so that they can call to markets to check the farm goods prices,a llowing them to sell at a better price. This increases their standard of living.

With that said though, there is a trasnision cost. Some jobs are destoyed while otheres are created, but the new ones pay more. Also, if the government has bad policy or is corrupt or restricts trade, it can be diasterous, and this is what happened all to often, for instance in Zimbawe, where the leeader is insain and driven his country into an inflation rate over 1000%. Many nations still have too high tarriffs, and a lot of developed nations have heavy tarriffs and substidies on agricultural products in particular. This really harms poorer nations comparative advantage.

Here is one link with an article for more detail:

http://www.radford.edu/~mthong/benefits_...

Just google "globalization benifits poor nations" or variations of that. There is a ton of literature on the topic.

Answer 2

Globalization has increased the inequality within countries, but decreased inequality between countries. I have not seen recent calculations but as of the late 90's your claim is not true when measured for the population of the world as a whole. However the recent growth in China and India may have changed this result. You need data to support of disprove your claim. It is not a matter of opinion,

Answer 3

As long as population growth is not restricted then nothing will lessen inequality.

Answer 4

It hasn't.

Africa is still poor.