Not Why, Why Not?

A Blog About Relevant World Wide Issues

Sunday, March 20, 2005

Charting Globalization: Consuming the Third World

Here's my thesis: Globalization (the opening up of markets to increased commerce, trade, industry, and pollution) has thus far created great wealth for a few people and arguably raised the standard of living in a few places like China and India; it has also contributed to the plight of billions living in extreme poverty across the world, while somewhat ironically, driving down the standard of living for most Americans.

I am going to use charts to give a view of globalization that reaches my thesis by asking you to simply connect-the-dots. All charts, or the information in them, are taken directly from Time Magazine, the BBC, or PBS. Clicking on them makes them bigger and very easy to read, so click on them, and then use the back browser to continue.

Chart #1. Globalization And The Extremely Poor:


Globalization really got going during the last twenty-five years with the practices of the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO). Backed and administered primarily by the United States, Western Europe, and Japan, the World Bank uses the IMF to make and collect on loans to “developing nations” while the WTO ostensibly exists to monitor fair trading practices. A quarter-century of these practices has left a world where China and India have marginally better standards of living* while Africa, Latin America, Eastern Europe, and the Middle East have all suffered declines. Africa, in particular, has been a victim of globalization. Through heavy borrowing and the mandate of economic restructuring (which often requires third world nations to "open" natural resources and precious minerals to Western industrials), some sub-Saharan African nations no longer even own their indigenous water supply, yet somehow owe billions to the World Bank.

* China has moved 500 million Chinese out of extreme poverty though a combination of its socialist government and a slowed, measured opening-up of commercial markets, primarily through the use of its natural resources (pollution is notoriously devastating in China) and human workforce (like factory workers making products for Wal-Mart). India has seen gains among some well-educated caste members, less so among the poor. One could argue all day about whether either country has truly raised standards of living with the help of globalization.

Chart #2. The Wealthiest Regions of the World Over Time:


The chart above really tells it’s own story.

Remember when the United States was "shamed" into donating more money for Tsunami relief? There is a pattern.

Chart #3. The Giving Gap:


Why does to the United States, the richest country in the world give so little to the rest of the world? One answer has to do with tough love. The political and industrial leaders of the United States focus on international trade, so that developing nations might “raise themselves up”(!). Meanwhile, the United States has become the stingiest nation in the world.

(!) Phil Knight, founder of Nike, was quoted saying this when asked about Nike sweatshop conditions in Indonesia. Incidentally, Knight also admitted he had never been to Indonesia to look at factory conditions.

Chart #4. Spreading American Culture Abroad:

I saw the movie "Super Size Me," and I should never need to go into another McDonalds again. For those of you who may have missed this smart documentary about the horrors of fast-food hamburger joints, suffice it to say, that McDonalds is not healthy for you. McDonalds, as an American corporation, is obsessed with growth. How then do you grow as a company in a saturated market, especially when the American public is wisening up to a national health crises? McDonalds has the answer - spread your wonderful product abroad - another key strategy for the first world in terms of globalization.

Chart#5. Where the United States Stands in the Eyes of the World:


Many people have focused the much talked about "anti-U.S. sentiment" on the war with Iraq. Certainly, this has an effect (especially among our oldest allies). Yet when I look at the above chart, I see the world fearing our ideas and products just as much, and that means we are going about globalization in the worst possible ways.

Chart #6. Economic Snapshot of the United States:


The above chart brings me at last to the United States, where 1% of the nation controls 40% of the wealth. Meanwhile, the bottom 40% own just 0.5% of the wealth.

Chart#7. Who is Making the Most from Globalization:


The above chart demostrates just who globalization has enriched (no need to click on it).

Chart #8. American Buying Power:


Remarkably, the minimum wage has barely kept up with inflation, while buying power, the true measure of the standard of living for most Americans, has shrunk to the levels of the Great Depression. Even though globalization has made huge profits for the corporate leaders who make the transnational deals, they have not passed it on to their employees. Quite the opposite, Wal-Mart, which uses cheap labor in China, then hires illegal immigrants to clean stores in the United States to avoid paying even minimum wage and benefits.

As the United States plans to put the architect of the Iraq War, Paul Wolfowitz, in charge of the World Bank, and George W. Bush touts the spread of freedom, I wonder if the world’s interests are at the heart of those in charge of the United States’ interests. As for my thesis, I do not believe globalization has thus far helped "raise up" suffering nations. Again, quite the opposite, globalization has crippled nations, created obscene wealth for a few, and even managed to outsource American jobs and money.

I hope my generation, and those in the next and the next, will see these trends and take action to define themselves as part of a global community, and not just isolated consumers of the world’s riches.

Visit my website at David Frick

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