Collin Li
GlobalisationEconomic DevelopmentPoverty
January 29, 2012

My opinion is that globalisation is essential for dealing with poverty. While programs like World Vision’s Area Development Program may be helpful, I would argue they are only a small part of the effort in relieving poverty, because while the motive may seem more pure, it may be a smaller pool of energy to draw from. I would argue that the profit motive, provided by globalisation, has a far greater and wider appeal, as I believe people are inherently interested in their own well-being than others’.

Usually, only people who are well-off enough have the liberty to care about others (and actually meaningfully devote resources toward the cause). On the contrary, typically everyone will care about themselves primarily. This is why I believe the profit motive is a far more powerful force.

The profit motive that is “legalised” (by which I mean, allowing companies to freely establish, employ/outsource and sell/export) via globalisation encourages self-interested agents to produce better and cheaper goods in order to remain competitive against other organisations and companies. Furthermore, globalisation increases the level of competition, as companies compete on a global scale rather than a local scale.

This is good because in-turn it requires companies to employ at cheaper rates whenever possible, in order to provide cheaper goods, which may mean transferring jobs from rich nations with high wage expectations to impoverished nations with no wage expectations (because they have no better alternative). Basically, it encourages companies to use resources that have lower costs (in this case, impoverished workers, rather than fortunate, and typically unionised workers).

Thus, globalisation is actually a force that impels companies to search for the “best” method of production. This not only benefits them (and their consumers), but it also helps the worst off, as they are the direct beneficiaries of such a scheme. Although the pay and conditions may be deplorable from the “fortunate unionised” worker’s perspective, the impoverished worker would accept the job offered by the multinational in a heartbeat, and hence globalisation is also an equalising force.

We have seen globalisation transform countries that have accepted free-market reforms like Hong Kong, Taiwan, Japan and even China (Shanghai is often believed to be generally free-market overall, even if the entire nation is communist). These countries have flourished and grown, and Made in Taiwan and Made in China is now shifting to Made in Thailand and Made in the Phillipines as they are the next in line (now China and Taiwan have the rich unionised workers, while Thailand and Phillipines have the cheap and impoverished workers). So globalisation has a proven record of success of allowing the worst off to get opportunities as well.