The New Poverty…

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Poverty isn’t what it used to be. If one takes the time to characterize the modern poor vs. the historical poor, they would find that the avenues out of poverty are quickly being closed by the new world economy and the dynamic that is ‘globalism.’

The postmodern American economy is in utter disarray and social safety net policies used throughout the 20th century, have de-evolved, resulting in a new demographic of poor people. The most visible result of this disarray is that poor children are relatively worse off now than at the beginning of the 20th century despite all of the political rhetoric through the years. More alarmingly, their opportunities out of poverty are slim and none. Maanufactuing jobs that could be had on a high school diploma have evaporated to a large extent, and many are simply priced out of trade school or college.

What is so dangerous about the new poverty is the sense of surprise it brings. Poverty can hit so suddenly, that people can fall so far behind so fast, and lose everything they’ve worked for in a matter of a few months, because they are literally living paycheck by paycheck. The new poverty is about our loss of faith in relationships we once had with companies and the government. It seems nothing is guaranteed anymore. Many people work for several companies in their lifetime because they are simply burned out or pushed out or outsourced out of their old one. Workers cannot depend on a pension, savings, or even Social Security. The new poverty is a complex sociological issue that has many causes and seemingly fewer and fewer solutions. 

Globalism has clearly not helped the situation. For years talk of free trade and the benefits of that trade, was standard political speak. Bob Zoellick, a U.S. trade representative at a recent press conference said, “If one is concerned about developing countries, both history and recent studies would suggest an open system is going to be the formula for them. Others like Joseph S. Nye, Jr., Dean of Harvard’s Kennedy School, claim that globalization “has improved the lot of hundreds of millions of poor people around the world.” I do not agree.

I would argue that globalization has been a losing proposition for most of the countries, including the U.S. When you talk to people like Robert Reich or anyone else that supports free trade, and express concerns, you’re labeled as an isolationist. However, I’m not arguing for an isolationist position – merely to construct free trade in a common sense fashion that softens the broad sword that usually comes down on the world’s poor with brutal consequences. Reich and others suggest that these people must simply get themselves re-educated and lift themselves up. The problem is they often do not have the resources to do so, so they are simply cast aside as a necessary evil of global economic expansion. 

The visible results of globalism do not appear to be as positive as supporters would have us believe. The vast majority of countries, over the last two decades, have experienced slower growth than was seen in the previous two. Moreover, poorer countries have generally suffered the worst declines in the growth of income per person. 

Then there is China. Supporters of free trade point to China as a beacon of progress – but at what cost? China has highly protected domestic markets that close off foreign import across broad sectors of their economy, illegal currency manipulation, and a state owned banking system…remember…they are a Communist nation. As a result, China has been able to resist import pressure from the West especially in the areas of durable goods and technology, as they jail anyone who dissents and poison they’re rural inhabitants with a level of pollution the world has never seen. It begs the question – is this free trade or trade for free?

There is clearly something wrong with the prevailing orthodoxy. Strategies for common sense economic development have been abandoned in the name of profit, and it is generally assumed that open markets, privatization, and attracting foreign investors will do the job in a humane fashion. So far this is not the case. 

The last two decades of globalization have also shown substantially diminished progress in health outcomes for infants and older children, as well as life expectancy, which has also dropped in the U.S. recently. The same is true for other social indicators, including education and literacy, with the slowdown in progress far worse among lower-income countries.

A world in which many third world countries enslave poor children for the purpose of making consumer goods, and where half of all people survive on less than $2 a day, speaks volumes to the failure of globalization, especially whens world trends are moving in the wrong direction from a human rights perspective. The U.S., nor can the rest of the world, afford not to re-think economic policy simply because free trade is fashionable, or to bow to the whims of special interests and their paymaster multinational corporations. No one is arguing to quell the expansion of trade to international markets, however it must be done with humanity as a primary concern, not a socio-economic afterthought.

In short, the globalists have it wrong, and people are beginning to wise up…finally.

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Posted on November 1, 2007, in Economic Policy, Financial Markets, Free Trade, Globalism, Human Rights, Politics, Poverty and tagged , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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