The Globalization Gap: How the Rich Get Richer and the Poor Get Left Further Behind: Seven Essential Quotes

The rich have always lived differently than the poor. What is new is that globalization speeds up the economy, magnifying the chasm between them. Both at home and abroad, the extremes of wealth and deprivation have become so great that the stability of the global system is threatened. Indeed, the very existence of individual freedom and dignity promised by the Western democratic tradition is at risk. Globalization has not only boosted the technological capacity to increase productivity, development, and progress but has accelerated the spread of poverty, disease, and the disintegration of traditional cultures. Those at the top of the global heap have great buffers of wealth to help them cope with the radical transformations, but the poor do not.

Left to the free market rules alone, large corporate lobbies dominate the globalization agenda to the point that thousands can die from the results. The most notorious case is the pharmaceutical lobby. Until August 2003, the conservative Bush administration supported the U.S. pharmaceutical lobby’s demand that the patents on expensive medicines should be strictly enforced and that no cheap generic versions should water down these profits, no matter what the consequences (i.e. epidemics of devastating diseases in African countries).

As the economy speeds up, becoming more complex, the rich have the resources to cope. They seek out buffers against change and “future shock.” Psychotherapists, Zen gurus, exotic vacation spots, and luxury health clubs massage their angst generated by the cultural disintegration resulting from the increasing tempo of global innovation. Rather than organizing to slow things down, the rich are preoccupied with the increasing complexity of managing to keep up with the pace of globalization. They seek to postpone inevitable physical losses and death through sophisticated distractions.

Meanwhile, the poorest of the poor are increasingly left out of the globalization game: Without resources, they fail to attract investments, jobs, or recognition. Without schooling, job training, and work opportunities, they are left in dependent shadow economies. The poor wither like plants without sun and water. They are barely kept alive by accidental spillovers from overabundant gardens nearby (“trickle-down economics”). They are relegated to the shadows, sometimes in shadow countries, removed from the bright lights and economic stimulation of the “casino capitalism” of rich and developed regions.

Meanwhile, the poorest of the poor are increasingly left out of the globalization game: Without resources, they fail to attract investments, jobs, or recognition. Without schooling, job training, and work opportunities, they are left in dependent shadow economies. The poor wither like plants without sun and water. They are barely kept alive by accidental spillovers from overabundant gardens nearby (“trickle-down economics”). They are relegated to the shadows, sometimes in shadow countries, removed from the bright lights and economic stimulation of the “casino capitalism” of rich and developed regions.

Moreover, without the barriers of protectionism, the United States, Germany, France, Japan, and the East Asian “tigers” could not have become wealthy and powerful. These barriers included such means as government-targeted subsidies for firms and for R&D (research and development), export subsidies, import substitutions, and government regulations to bolster the domestic savings rate and keep down the cost of capital for local companies.[5] As journalist Tina Rosenberg noted, free trade is a religion, and religions come with hypocrisy.[6] Powerful economic states became so by protecting their markets until they were ready to compete globally. But the existing “free trade” rules block developing countries from following this strategy. Meanwhile, rich countries take protectionist exceptions to the rules in order to lock in their global position.

Not able even to protect their commodities, the poorest developing countries hardly stand a chance of modernizing their economies beyond dependence on agriculture and natural resources. Not surprisingly, between 1960 and 2002, there has been a long-term downward trend in nonfuel commodity prices. Indeed, the commodity price recession of the 1980s was more severe and more prolonged than that of the Great Depression of the 1930s.[7] A clear link between dependence on the export of these primary commodities and the incidence of extreme poverty is well known but often ignored by richer nations. Over the last three decades of the twentieth century, UNCTAD studies confirm that the long-term decline in the price of primary commodities, relative to the price of manufacturing, undermined the terms of trade of the world’s poorest commodity-exporting countries (including Bukina Faso, Burundi, Chad, the Democratic Republic of the Congo, Ethiopia, Guinea-Bissau, Madagascar, Malawi, Mali, Niger, Rwanda, Sierra Leone, Sudan, Tanzania, and Zambia).