Globalization : Economic Growth And Its Implications On Poverty
Mahatma Gandhi once wrote, “Poverty is the worst form of violence.” Few would disagree. Rural poverty, low-wage jobs, poor labor rights and lopsided trade policies are fast killers of human capability and encourage extremist behavior. To reduce poverty, neoclassical economists & neoliberal politicians argue that trade liberalization contributes to overall growth, however, growth is simply not enough, trade should only be considered valuable if it protects the most vulnerable.
The hallmark of contemporary globalization is the illusion of free trade. Free trade, in theory, requires a reasonable amount of macroeconomic stability, perfect competition, modern institutions, prices reflecting scarcity and producers attempting to maximize profits. But life is not macroeconomic theory. Poverty is largely associated with imperfect markets, like in the film Blood Colton. Imperfect markets, information asymmetry, currency manipulation and ethnic conflict occur and are exploited by quasi-monopolistic firms under the guise of “free markets”. Ironically, on the flip side, a large amount of Northern Trade is still dominated by mercantilist philosophy. The Global North exploits the poor while complicating their trade policies to make sure the Global South gets a little piece of the “globalized pie” much like the earlier forms of trade that transferred wealth from the rich to the poor.
The Basic Value Proposition by the…