A large crowd of students and Upper Valley residents gathered last night to hear a debate on the question, "Is Globalization Improving Living Standards of Poor People and Poor Nations?"
Economics department chair Douglas Irwin argued the affirmative position and was opposed by David Ranney '61, professor emeritus of the University of Illinois at Chicago.
Speaking first, Irwin argued that "the only truly effective and time-proven way to reduce poverty is to raise income through economic growth," a process that Irwin believes can be facilitated by the expansion of world trade.
Irwin based his argument on examples culled from three decades by looking at how various countries' economies have been affected by changes in foreign trade policy.
Irwin looked primarily at India and China, two countries that opened their economies to international trade within the last 25 years.
The result in China was a steep increase in GDP. India's annual rate of economic growth rose from 2 to 7 percent after the country liberalized its economy in 1991, an increase that Irwin called "absolutely unbelievable." Irwin attributed the growth experienced by India and China directly to the countries' revised international trade policies and added that this growth led to "material improvements in standard of living."
Irwin invoked similar examples of economic growth resulting from international trade in Vietnam, Uganda and Bangladesh.
Many developing countries have chosen not to participate in the global trade, a decision that Irwin said has hurt their economies.
He suggested that a number of countries' failure to participate in the World Trade Organization resulted in reductions in per capita incomes in the period when WTO members enjoyed an increase in income. "Countries that choose to be disengaged from the world economy will fall farther and farther behind," he said.
Ranney took a somewhat different approach to the issue. While acknowledging the potential benefits of globalized trade on a theoretical level, Ranney criticized the current state of globalization for promoting inequality among and within nations and ignoring social issues.
"The fact of the matter is this system does benefit some," he said, "but it has been largely detrimental to poor people and workers throughout the world."
According to Ranney, some of these detrimental effects include the uprooting of rural workers, an undermining of worker health and safety regulations and a reduction of permanent jobs in favor of temporary work.
"The human dimension of the New World Order," he said, "is not simply captured in GDP growth rates."
Globalization, according to Ranney, has created "greater inequality among nations and within nations."
He cited a dramatic increase in the gap of median income between the richest and poorest 10 percent of nations since 1980, adding that wage inequality has also increased within developed and developing nations over this time period.
Ranney attributed problems with the current system of globalization in part to a lack of input by workers and social organizations in the formation of world trade policies. "The development of these rules ... disenfranchises much of civil society," he said, "In short, this is a global system that is undermining democracy."
Ranney is currently involved in the Hemispheric Social Alliance, an organization formed with the goal of incorporating social groups in the process of creating new global trade policy.
"I agree that economic cooperation among nations can lead to a better world," said Ranney, "but the rules under which this occurs are what are really critical."Following their remarks, the speakers presented brief rebuttals and fielded questions from the audience.
Last night's debate was presented by the war and peace studies program through the John Sloan Dickey Center for International Understanding.
