Globalization and poverty

1. Dec 17, 2004

Math Is Hard

Staff Emeritus
I have a final tomorrow and I need to be able to talk a little bit about globalization and the poverty related to it.

I think the question I am trying to work out is how free trade zones are established. I am specifically trying to figure out how sweatshops came about. Why do countries enter into these agreements that have no legal restrictions to protect the workers? Are corrupt (greedy) governments to blame?

I have been reading about a garment worker in Nicaragua who earns about $15 dollars a week, but her expenses of living are closer to$30 a week. I don't know how these people survive.

Incidentally, the corporation she produces garments for earns several billion dollars in profits each year.

2. Dec 18, 2004

Aquamarine

First, as discussed in the capitalism thread, global poverty is declining rapidly. And fastest in those countries most capitalistic.

Secondly, multinational corporations often pay much higher wages than the local average. So even if people are working hard for low pay in sweatshops compared to the western world, they still earn much more than the alternatives in their countries. Alternatives like prostitution, begging or primitive agriculture.
http://www.aworldconnected.org/article.php/525.html

Thirdly, regarding the workers in Nicaragua. Here are their own opinions. (And note that the criticism are often from their competitors, western world unions.)
http://www.aworldconnected.org/article.php/507.html

3. Dec 18, 2004

loseyourname

Staff Emeritus
Please tell me you weren't reading those exposes by the LA Times.

4. Dec 18, 2004

Math Is Hard

Staff Emeritus
Thanks for the feedback. LoseYourName, all my data came from my teacher in my anthropology class. We had essay exams this morning and I was just trying to prepare to answer the questions.
I ended up not writing about sweatshops, but I did write a little bit about the global expansion of corporations and the extent of their control. I mentioned specifically the example of Montesanto requiring farmers to pay use their seeds. (Actually I think I accidentally said "rice", instead of "seeds" so I probably botched that essay.)

5. Dec 18, 2004

Staff: Mentor

Did these topics come from your teacher? They sound pretty left-wing and maybe a little misleading.

Ie, Monsanto sells seeds - farmers buy them. This benefits both the farmers and Monsanto. There was a recent essey about Monsanto and Iraqi seeds written for and promulgated by various anti-globalism/anti-US websites that was factually inaccurate.

6. Dec 18, 2004

Math Is Hard

Staff Emeritus
Hi Russ, yes these are topics we are discussing in class. We do talk about problems associated with capitalism and globalization. It is a cultural anthropology class so we have to look at the effects that this has on other societies around the world.
I try to be as objective as possible, and I realize that I might only be seeing one side's viewpoint. These particular topics were difficult for me because it is hard to write convincingly about a subject if I'm not quite finished forming my opinion. I think it would probably take me a few years of looking into this subject in detail (and also gaining better knowledge of history) to actually form a solid opinion on these issues.
That said, there still were certain things that I learned in that class that were upsetting to me.

7. Dec 19, 2004

Dayle Record

I just read about a projected disemployment of millions of garment workers in Pakistan, because of globalization that is expected to shift their jobs to China and India. When the world globalizes, and the world economy answers only to the lowest bid for goods and services, then employers will shake their workers down, to the lowest wages possible to maximize their profits. The corporate milieu has no personal interest, and in fact loses, if it does have a personal interest in the plight of individuals that come out to work. When the wealth of nations is held by a few, then workers, and the people of those nations, foot the bills created by the wealthy few. There are blazing instances where the privileged in power make deals with the world bank that result in crushing debt, that the people of nations have to retire, by surrender of their natural resources.

A great example of this kind of stuff, occurred in Bolivia. Bechtel came in at the invite of the elite, payed off the elite, and took over the water supply of Bolivia. Then Bechtel set forth to raise water rates to the very poor people of Bolivia, at a rate of 300% or more. The people could not pay for their water, and felt that they should not have to pay exhorbitant prices for their own natural resources, that they never chose to outsource in the first place. They threw Bechtel out.

Again I say that the western economic system, doesn't have to become the world's economic system. All our food, doesn't now have to be raised in the middle of South America, so that we can sell all our farmland to developers. Now food from foreign nations doesn't have to be labeled as to its foreign origin. So even if you felt badly about what they do to workers here, or there, or if you wanted to boycott foods from one repressive regime or another, now you don't get to know where things come from. Ahhhh globalization, it isn't in the best interests of the people of the world, in my opinion. It just means, that we have created an even bigger set of fish to feed at the top of the food chain.

8. Dec 19, 2004

the number 42

You can't have it both ways i.e. you can't have people in S.America on decent wages without putting the prices of sneakers etc through the roof.

9. Dec 19, 2004

plus

What do you class as descent wages? If the cost of living in a place is 5 dollars a day, then clearly it is better to recieve 10 dollars a day over there than it is to recieve 50 dollars a day in the USA.
Some countries are richer than other and poverty should be compared with respect to others living in the same society rather than in different societies.

10. Dec 19, 2004

sage

globalisation(or capitalist economy for that matter) is simply not that magic wholesale poverty removing medicine to be applied wherever possible. it has its advantages and disadvantages and it needs to be carefully tailored to the specific needs of the country or culture at large. if globalisation means companies can get away with producing cheaper goods in third world countries at the cost of local environment, or submit ignorant people to potentially lethal trials of their new drugs by luring them with money then globalisation is bad. these things happen. vital inustrial processes that have been banned in the west due to their toxicity, are being done instead in the thirld world. global companies had gone away with mass murder in the past. perpetrators of bhopal gas tragedy still roam free in USA. after all poor workers in a far off country is an "expendable commodity" is'nt it?

11. Dec 19, 2004

Staff: Mentor

There are two sets of people being discussed here: the people in the prosperous, capitalist country who'se companies are exporting jobs and the people in the 3rd world countries who are getting those jobs. In this thread, people are arguing separately that globalization hurts both sets of people (and benefits only a handful of people who own these companies, which really is another misconception altogether). Does it really?

We've had threads before where we discussed the effect of companies outsourcing jobs from the US. Being the most prosperous country in the world, outsourcing should hurt us more than it hurts anyone else. So does it hurt us when a $10 an hour job in the US gets sent to China and given to someone who makes$10 a day? The state of the US economy (high/increasing GDP, extremely low unemployment) says no.

For the people getting those low-pay jobs, does it hurt them? While there certainly are examples of companies that have exploited workers and caused injury or death, the fact of the matter is that most of these low-paying jobs are going to places where there is extremely high unemployment and poverty (that's why you can pay people $10 a day and they'll accept it). So if the alternative to$10 a day is starvation, how can it be said that it is exploitation to pay someone \$10 a day? Answer: it can't be.

The one real problem with globalization I alluded to in the last paragraph, but didn't really say what the real cause is. If companies are doing things that are hurting people, the real problem is the governments of those countries aren't doing their jobs. The US (and every industrial country) went through the same problems early in the industrial revolution. We fixed our problems: these 3rd world countries need to fix theirs. It all goes back to democracy: set up a good democracy and these problems are easily dealt with.

12. Dec 19, 2004

Aquamarine

The developing countries have nothing except low wages with to compete. If they had the same wage as in the western world, their companies would go into bankruptcy. They have problems with poor infrastructure, corruption, long distance to consumer markets in the west, crime and little education. It is those wages or nothing except prostitution, begging or primitive agriculture.

And these jobs are soon abandoned as the country get richer. Like in Japan or the East Asian tigers before. Therefore, those jobs have moved to Southeast Asia, Latin America and China. And may move in the future to Africa when the wages get to high in the current countries. And after that, there will be no place to go and those jobs will disappear. But they are essential for building capital and skills in the countries. Global poverty is rapidly declining due to globalization and most in the developing countries most capitalistic.

Regarding Bolivia and water, another myth. From the company website, which they are legally responsible for, unlike the lies perpetrated on the anti-globalization websites under the protection of free speech.

http://www.bechtel.com/iraqdemonstrationresponse.htm [Broken]
http://www.bechtel.com/cochabambaresponse.htm [Broken]

Last edited by a moderator: May 1, 2017
13. Dec 19, 2004

Math Is Hard

Staff Emeritus
What's the problem with "primitive agriculture"? For that matter, what's wrong with foraging? It's the oldest subsistence technology known to Man.

14. Dec 19, 2004

Staff Emeritus
So the consortium is unable to meet its debt service now? Also, if the rollback was mandated by the government, how is that a point for capitalism? Seems to me from the point of view of the peasants, it's a point for mixed economy, or even dirigisme. From the point of view of the investors, it just proves that you can't make this kind of investment pay; the government will always take away your toys.

15. Dec 19, 2004

Aquamarine

One problem with primitive agriculture and foraging is that it cannot feed many people. The population growth, even if stabilizing, means that more capital-intensive agriculture is required to avoid starvation.

And primitive agriculture is hazardous, dirty and hard. Requiring living in close proximity to animals and their pests. Being exposed to the many tropical diseases spread by contaminated water and insects. Absence of health care, meaning even teeth diseases can bring miserable pain and small cut can mean death from infection. Little education, entrainment or news. Little possibility to get a loan in order to realize new ideas. Oppression from officials, big landowners or traditional customs. Often deficient nutrition from eating similar food every day, meaning various diseases like blindness or mental retardation.

Regarding Bolivia, I am not saying that the water privatization was any good example of how privatization should be done. But that the statements of the anti-globalization movement in the case are outright wrong. Here are more detail.
http://www.bechtel.com/cochabambaresponse.htm [Broken]

http://www.rppi.org/water/index.html [Broken]

Last edited by a moderator: May 1, 2017
16. Dec 19, 2004

Dayle Record

Here is a discussion of this thing with Bechtel and Bolivia. One statement was that the water bill was 1/4 of the Bolivian personal income. Anyway. Here is a link. There was another lengthy discussion of economic hit men, who start out in US Government, but are moved over into corporations like Bechtel, to aquire the natural resources of poor nations, by paying off the wealthy ruling class, in exchange for miring poor nations in debt. Then the people of the poor nations, Ecudor was mentioned especially, have to surrender their oil and whatever else to service debt, they never agreed on. It is our operational policy, in the third world. The pretense is that we are offering a great new life.

http://www.earthjustice.org/urgent/display.html?ID=107 [Broken]

Last edited by a moderator: May 1, 2017
17. Dec 19, 2004

Dayle Record

And here is this article. I just found these interesting, and the authors won't be Time's Person Of The Year.

http://www.democracynow.org/article.pl?sid=04/11/09/1526251 [Broken]

Last edited by a moderator: May 1, 2017
18. Dec 19, 2004

Aquamarine

1. Saying that "Families received water bills equal to as much as 25 percent of their monthly income." says nothing about the average family. And the rate increase was 35%, meaning that this extreme family paid 18% of their income before the raise.
2. The protests started 2 months after the rate increases had been taken back.
3. The consortium did not buy and did not own Cochabamba’s water utility or water resources. It operated the water and wastewater system.
4. It was the government who increased prices to pay back old debt and improve the infrastructure.
5. Bechtel owned only a minority of the project.

Regarding "Confessions of an Economic Hit Man", it describes a large scale conspiracy between the CIA, NSA, World bank and IMF. Even if true, this is an example of government intervention and central planning. And not something done by the free market. So it is in fact an argument for capitalism, a system where the government intervene as little as possible.

19. Dec 19, 2004

Staff: Mentor

You're serious? The average life expectancy of a primitive hunter-gatherer is like 35! and and the quality of life is just dismal. I though the point here was its better to not live in poverty/squalor - now you're arguing in favor of it?!? Beyond bizarre.

20. Dec 19, 2004

Math Is Hard

Staff Emeritus
Actually, the foragers we studied about (primarily the !Kung San people of the Kalahari) did not lead dismal lives. They had good diets and were choosy about what they ate. They worked about 3 hours a day and were quite content with their situation.
I really felt sorry for them and the situation they are in now. Most of them no longer have access to the land where they used to hunt and gather food. They have been herded into small communities where the staple of their diet has become government-rationed meal. This certainly can't be better than their previous way of life.