Globalization Helps the Rich Get Richer and Punishes Workers

laylorIn a lecture in New Kingston recently, Prof. Gerald Lalor of the University of the West Indies at Mona (photo at right), quoted a recent report by the Population Reference Bureau that showed a widening chasm between rich and poor in the world. At the same time in Paris, a 30-nation study by the Organization for Economic Cooperation and Development yielded the same disheartening conclusion. You might think that with the technological advances and worldwide growth in industry, trade and commerce, the lot of the world’s poor would have brightened. But, evidently, it’s the rich who are really benefiting.

And the gap is not restricted to the so-called Third World. The United States has the third-highest inequality and poverty rates in the OECD (after Mexico and Turkey), and the widening of this gap has accelerated since 2000. Wealthy households are not only widening the gap with the poor, but in countries such as the U.S., Canada and Germany they are also leaving middle-income earners further behind, according to the OECD report.

gap graphThe period covered in the study – 1985-2005 – saw rapid expansion of global trade and the Internet, as well as strong overall economic growth. But the greatest beneficiaries of this boom were the rich, not the poor or middle class.

There is a school of thought that insists enrichment of the rich is a good thing (see graph at right, published by “Freedom Keys” web site). On the “Freedom Keys” web site, for example, there’s a hodgepodge of quotes from people like Ayn Rand that defend this view. Here’s an example:

If the rich weren’t free to “get ever richer,” developing or investing in ever-increasing productivity, the poor would NEVER have any chance to improve their conditions at all, let alone to obtain their ever-increasing access to the latest tools of that expanding productivity, making every hour of their labor ever-more valuable. And YOU wouldn’t EVER have the chance to read this or anything else brought to you by advanced technology.

This is nonsense, of course; it’s government policy that creates wealth and determines its distribution. In my view, governments should operate on the principle that business (like government) exists for the benefit of people, not the other way around. But the “Freedom Keys” gibberish is the kind of thing being taught in some American universities as “economics.” It is really propaganda, financed by robber barons in an attempt to brainwash the population and get voters to support the Republican Party. The truth is that as the rich become ever richer and more powerful, the poor and middle class are ever more oppressed. The rich aren’t interested in making everyone richer; they want to have all of the wealth and all of the power.

Eliminating tariffs is one way to achieve this. With free trade, global corporations can take advantage of the cheapest labor and most corrupt governments around the world, and ship the goods produced there into the American market duty-free. The Bush Administration has been in the vanguard of this abusive movement, and we can only hope that with Barack Obama in the White House and Democrats in control of Congress, we will see a reversal of the Bush policies in the years to come.