I recently had a discussion with my brother’s girlfriend about the benefits (or lack thereof) of globalization, especially with regard to the world’s poor. The argument is often made against globalization that it hurts either US workers losing jobs to lower-wage workers abroad, or that those workers gaining those jobs are being exploited by the companies involved.
First, the second argument. We’ll assume the absence of some sort of totalitarian command economy whereby citizens are ordered to work (possibly at gunpoint) making sneakers or cheap plastic merchandise for export to the west. If someone is working at such a factory, then, it is because they’ve chosen to do so. So why, if the exploitation of these workers is so extreme, do they choose to work in these factories? Well the answer is, as it turns out, really quite simple: the combination of pay and conditions in those factories is better than what they had available before. In fact, it’s typically much better. Take one particularly infamous example, Nike shoe factories. In Vietnam, the “average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise.” ((“The Noble Feat of Nike,” The Spectator, June, 7, 2003, Accessed July 2, 2007)). So are these people being exploited? No! This is the best thing that ever happened to them.
Globalization is like a targeted cruise missile. It will seek out with great precision the poorest, most destitute people on the planet. But instead of killing them, it will give them jobs. If you were to design a program for eliminating poverty, you could hardly do better than a vast, self-sustaining, profitable system whereby the poorest people in the world are provided with jobs.
At this point in the discussion, my brother’s girlfriend changed to a new, rather unusual position. Not only were the workers being exploited, but eventually, the local economy would improve to the point where the western company could now get cheaper wages in another, poorer country. At this point, apparently, the factories would all close and the local people would again be plunged into abject poverty. First, even if this were true, those people would still be better off than they were before because all the abandoned infrastructure built by the western companies would then be applied to new industry. And second, of course this is nonsense; if all the foreign companies decided to all leave at once, the best place in the world to build a factory would suddenly be the place they’d just abandoned. ((I imagine she was picturing a rapidly moving oscillation of western investment, leaving a trail of destruction in its wake))
Certainly there are losers here: in the short run, unskilled labor in rich countries takes it in the pants, though the landing is typically pretty soft compared to the “normal” condition of the poor outside the western economies. This argument seems to be mostly an invocation of the anti-foreign bias. I don’t see why I should be more concerned about US unskilled laborers and those in the third world. Does the fact that a worker does not live in the US make that worker less entitled to those basic needs taken for granted in the US? And the investment of large western firms into these poor economies absolutely, unequivocally makes these workers better off. And the US economy is better off as a whole and on the average as a direct result of this policy as well.
As a whole, the people in western countries need to stop thinking with nationalistic, “us versus them,” mentalities, and start thinking about the world as a global economy. Recently, McDonald’s has launched a program whereby your order in the drive-thru window will be taken not by a worker in the store you’re visiting, but by a worker in a call center located in Illinois. ((“Outsourcing Drive Thru?,” CBS News, March 11, 2005, Accessed July 2, 2007)) Why has there not been a furor over those ungrateful, unwashed Illinois ingrates who are stealing the jobs of fast food workers in other states. The difference seems to be only the color of the skin or the national origin of the people involved. There are not Mexican stealing our jobs, just as there are not Illinois residents stealing our jobs. There are only people in global competition to market their labor services.
There is no greater force for improving the lives of real people in real ways than that of economic development. Foreign aid is a drop in the bucket (and there are reasons to believe it does more harm than good). You can try to rely on a local economic revolution, but this is a slow process and may never occur at all (and may be hindered by local corruption). At stake here is no less than the entire future of the human race. This is too important an opportunity to miss.