Globalization Helps the Poor

From Alvaro Vargas Llosa, and account of a conference he attended where leftists derided free trade.

MONTERREY, Mexico—Is global capitalism making the poor even poorer, or is it in fact rescuing millions of people out of their misery?

I recently had the chance to participate in a series of debates here about this issue organized by Foreign Policy magazine and Letras Libres, a Mexican cultural publication. Nothing I heard at that meeting changed my conviction that the glass is half-full despite the doomsayers who predict horrific calamities.

Ever since the Industrial Revolution, poverty has been significantly reduced throughout the world. Two hundred years ago, the average income per person worldwide was the equivalent of less than $2 a day; the figure is $17 today. This fact is relevant to the current discussion on globalization because, even though the information technology revolution, biotechnology, the emergence of new world players and outsourcing may give us the impression that we are in the midst of something entirely new, we are simply witnessing a new phase in the process of innovation that is the market economy—and this began a few hundred years ago.

The fact that 20 percent of the world’s population is extremely poor should not make us forget that millions of lives have improved dramatically in the last three decades. Illiteracy has dropped from 44 percent to 18 percent, and only three countries out of a total of 102 included in the U.N.’s Human Development Index have seen their socioeconomic conditions deteriorate. China’s economy used to represent one-26th of the average economy of the countries that comprise the Organization for Economic Cooperation and Development; today it represents one-sixth.

If globalization is so good, why is it that leftist activists -- including the “social justice” crowd around Marquette -- don’t like it?

The reason is simple. It’s the market helping the poor. It’s global business, and not government bureaucrats, nor political activists nor multinational organizations that are creating the benefits.

Thus the process is going on without the transfer of a massive amount of power to the people with whom the “social justice” crowd identifies.

And truth be told -- although they would never admit it, even to themselves -- those folks would rather that poor remain poor than for the poor to prosper in a way that doesn’t increase their power.