Wolf Why Globalization Works

Wolf, "Why Globalization Works"

Martin Wolf begins his argument about "Why Globalization Works" with evidence of globalization's role in the widening gap between the world's richest and poorest groups, with statistics quoted in which the world's richest 200 individuals own more than the total combined income of the world's poorest 2 billion people. Wolf examines the claim that globalization is responsible for a massive growth in inequality, which as he summarizes it contains seven different points: the gap between average incomes in the richest and poorest countries continues to grow, so has the gap in living standards, overall global inequality among individuals is rising, the number of people in extreme poverty has grown, so has the overall percentage those people comprise of the world's population, the poor are worse off in terms of most other quality of life measurements, and finally income inequality is increasing within countries in direct proportion to their participation in the globalized economy.

But Wolf notes that "critics of globalization have themselves often rightly argued that there is more to life than income" (Wolf 703) and thus a focus on the mere statistics of inequality may be looking in the wrong place. It is possible for the increase in the incomes of the rich at the expense of the poor, or with no change whatsoever for the poor, or else it might be possible that, metaphorically speaking, a rising tide lifts all boats. In a purely utilitarian calculus, Wolf argues, the only one of these that is unambiguously bad is the scenario in which the rich get richer at the expense of the poor. To object to the rich getting richer with no change for the poor, Wolf slyly argues, is to show oneself prejudiced against the welfare of the rich. In any case, Wolf also notes that the relation of globalization to any one of these outcomes is going to be complicated, and it may not be possible to lay the blame for negative outcome specifically on the pressures and priorities that come with participation in the globalized economy.

Wolf then speaks from his experience as a senior economist with the World Bank, in charge of overseeing India. The change in India and China over the past four decades as they have gradually introduced market reforms, as Wolf describes it, is not only phenomenal in terms of the economic growth that followed, it was also particularly remarkable in terms of its real-world positive outcome for the poorest in those countries (who surely would otherwise count, in such populous conditions, among the poorest in the world). Wolf identifies globalization as having a net positive effect on the lives of the poor, and "in a nutshell," he states bluntly, this improvement in quality of life "is why" the focus on inequality "is wrong," since "globalization has not increased inequality." (Wolf 705). Wolf notes that overall the only thing held in common by all countries where conditions are improving is that each "chose, however haltingly, the path of economic liberalization and international integration. This is the heart of the matter: all else is commentary…" (Wolf 706). He notes that this kind of rapid growth is "bound to be uneven" and addresses critics like Pogge and Reddy, who suggest that rather than looking at income the welfare of the poorest countries should be measured in terms of "calories and essential nutrients" (Wolf 707). But Wolf cites improving statistics on life expectancy, infant mortality, literacy, reduced fertility rates -- and a decline in malnourishment and child labor, together with global trends toward democratic government and women's equality. Wolf notes that "social progress has been greatest where incomes have risen fastest" (Wolf 710). And in his conclusion he returns to the seven points usually claimed about globalization and inequality which he had summarized at the beginning. In light of the additional information he has offered, he now suggests that the only facts advanced by critics of globalization which are actually true are the first two points: that overall inequality between richest and poorest countries has increased, and the gap in living standards between them has grown. But the other five points, he reveals, are all entirely false because the material sitation of the poor has improved vastly under globalization. At this point, he notes in conclusion, the "problem of the poorest is not that they are exploited, but that they are almost entirely unexploited: they live outside the world economy" (Wolf 711).