Thursday, June 21, 2007

Globalization works...

Michael Novak in an essay on economic myths common in Christian activist circles, and discusses globalization's actual impact on poverty.

The Myth:Globalization is bad for the poor of the world and reduces the number of jobs in America.

It is true that some concrete industries in some parts of America are hurt by globalization. Overall, though, this country has gained some 29 million new jobs since 1992 (twenty million under Clinton and more than nine million under George W. Bush, through 2006). During the era of globalization, in other words, job growth has been spectacular. The unemployment rate is also remarkably low, 4.6 percent. Median, average, and overall income levels have been rising, not falling. A higher proportion of the lowest 20 percent is employed than was the case fifteen years ago. Some concrete cases aside, it is hard to show that globalization is hurting employment in the United States.

As for the poorest countries of the world, globalization has brought in a swiftly rising tide of hope, growth, and opportunity. In 1980 the poorest continent in the world was Asia, with soaring poverty rates in India and China.

Then those two nations became capitalist systems and entered the waters of globalization. They thus launched the greatest gains against poverty ever seen on this earth—after 1980, a half-billion Indians and Chinese moved out of poverty. The eminent economist Jagdish Bhagwati writes: “Poverty declined from an estimated 28 percent in 1978 to 9 percent in 1998 in China. Official Indian estimates report that poverty fell from 51 percent in 1977–78 to 26 percent in 1999–2000.” For China and India, globalization has been an indispensable benefit.

Economists today list four different components of the new meaning of globalization:

1. A dramatic drop in transportation and communication costs
2. The shrinkage of the world into one small “village”
3. A single global market
4. Steep increases in cross-border trade

While globalization is all these things, it also has an interior dimension. Globalization has changed the way individuals experience themselves and the way they think. People everywhere are much more keenly aware of worlds far beyond their borders.

I confess that I find none of these components objectionable, from a Christian view of economics. If the poor of the world are to be liberated from the shackles of poverty, it seems plain to me that they must be “allowed into the circle of development”; join in economic solidarity with the wealthier nations; and subsequently benefit from the upward draft of liberty, trade, and closer communications. In short, globalization is patently good for the poor of the developing world. It certainly seems better for the poor than any previous alternative. That meets the test of Christian realism.

Michael Novak has been a member of the First Things board since its founding and was the winner of the Templeton Prize in 1994.

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