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The New Global Inequalities David Brady Duke University BLUE JEANS SOLD AT WALMART (Jennifer Bair) Sent over land from Mexico to Wal-Mart DC in Bentonville, Ark. Retailer (Wal-Mart) Brand (Levi’s) U.S. Manufacturer Factory in Mexico Inputs: Cotton (Texas) Thread (S. CA) Denim (Mexico) Shipped by container from Shenzhen to West Coast ports Taiwanese Manufacturer Dominican Manufacturer Factory in DR Inputs: Cotton (India) Thread (China) Denim (China) Factory in Haiti Factory in China Shipped by container from Santo Domingo to Miami OUTLINE 1. What is Globalization? 2. Trends in Globalization 3. Traditional Global Inequalities 4. Newly Emerging Global Inequalities 5. Possibilities for Global Social Justice? What Is Globalization? • Growth of ties/connections; compression of world; reduction of international barriers • Growing irrelevance of geographical distance • Growing Flows across national borders – people, capital, information, goods & services – including greater share of world and leading to increasing integration across spaces • -Timing: – long history of international economic integration that began with the rise of capitalism in 1500s – Early wave peaked in early 20th century: before WWI – Recent wave rising since early 1970s Globalization’s First Wave: Steamship Routes, 1900 Globalization’s Second Wave: The Internet, 2002 Dimensions of Globalization 1) 2) 3) 4) Diffusion Interdependence Organization Culture Concrete Economic Aspects -int’l exchange and flows of goods, services, people, information and capital across nation-states -Exports & Imports -Direct & Portfolio Investment -Migration Concrete Organizations 1) Global Actors International Monetary Fund (IMF) -goal: monetary cooperation & coordination -job: credit-rating agency BUT lends money with conditions World Bank -goal: poverty reduction, development and reconstruction -job: lend to poor countries BUT debt relief and research 2) Global Institutions World Trade Organization -goal: promote free trade, fair competition, dispute resolution -job: forum for negotiations BUT administers agreements European Union -goal: avoid conflict and enable free movement -job: manage EU BUT growing judiciary and bureaucracy Trends in Globalization: Trade 1820-1995 (% of World GDP) 0.25 0.2 0.15 0.1 0.05 1992 1983 1974 1965 1956 1947 1938 1929 1920 1911 1902 1893 1884 1875 1866 1857 1848 1839 1830 0 Trends in Globalization: Trade & FDI 1960-2006 (% World GDP) 60 50 40 Trade % of GDP 30 FDI % of GDP 20 10 07 20 05 20 00 20 95 19 90 19 85 19 80 19 75 19 70 19 65 19 19 60 0 Figure 1. Trade Plus Investment Openness in 18 Affluent Democracies, 1975-2003 180 160 140 W. Europe 100 Mean 80 U.S. Japan 60 40 20 0 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 % of GDP 120 Trade % GDP in Key Regions 90 80 70 60 50 40 1970 2006 30 20 10 S. . U .S ro Eu A fr ic a si a A S. S. as t .E M er ic a e L. A m ro p Eu E. E. A si a 0 S. L. ro p ic a si a U .S . Eu ro A fr S. A as t M .E S. e si a er ic a Eu A m E. E. A % Immigrant in Key Regions 14 12 10 8 6 4 1970 2006 2 0 Net Migration (Thousands) in Key Regions 8000 6000 4000 2000 0 1970 2006 -2000 -4000 -6000 S. . U .S ro Eu A fr ic a si a A S. S. as t .E M er ic a e L. A m ro p Eu E. E. A si a -8000 Persistent Global Inequalities (Ravallion & Wade Readings): GDP 2005 Billions US Dollars 35,000 30,000 25,000 20,000 15,000 10,000 5,000 M Lo w .S . U Eu ro W or ld In co id m dl e e In co H m ig e h In co m e E. A si E. a Eu ro L. pe A m er ic a M .E as t S. A si S. a S. A fr ic a 0 GDP Per Capita ($) & Population (Billions) 2005 45,000 40,000 7 6 35,000 5 30,000 25,000 4 20,000 3 15,000 2 10,000 5,000 Lo w W or ld M id Inc om dl e e I H nc ig om h In e co m E. e E. Asi Eu a L. r o A pe m er ic M a .E as S. t S. As S. ia A fr ic a U .S . Eu ro 0 1 0 GDP Per Capita Population Three Ways to Measure Global Income Inequality 70 65 60 55 Unweighted B/w Weighted B/w Weighted B/w & W/in 50 45 40 35 0s la te -9 -9 0s m id -8 0s m id -6 0s m id W W II 30 Eu ro . U .S si E. a Eu ro pe L. A m er ic a M .E as t S. A si S. a S. A fr ic a E. A Life Expectancy in Years 80 70 60 50 40 30 1970 2007 20 10 0 Under-5 Mortality Rate per 1,000 250 200 150 1970 2007 100 50 ro Eu . U .S E. A si E. a Eu ro pe L. A m er ic a M .E as t S. A si S. a S. A fr ic a 0 Newly Emerging Global Inequalities • From Dependency to New International Division of Labor – Historically, poor countries were source of natural resources and agricultural products for rich countries – Natural Resource Trap: drive up currency, volatile boom-bust cycles, corrupt governments – In past 30 years, poor countries have industrialized because of FDI and exports Exports and FDI in Developing Countries, 1985-2003 70 60 50 1985 % 40 1995 30 2003 20 10 0 Exports as a % of Manufacturing percentage of GDP Exports in all Exports % of World Manufacturing Exports FDI inflows as a percentage of GDP % of all epmloyment Figure 1. Trends in Manufacturing Employment in 64 Developing Countries, 1980-2003 45 40 35 30 25 20 15 10 5 0 1980 1985 1990 1995 2000 2003 Years Mean 5th Percentile 95th Percentile • Triggered Massive Social Changes – Migration to cities in poor countries – Migration to rich countries – Dramatic advances in technology for communication, transportation and travel • Rapid and Uneven Urbanization (Goldman & Longhofer Reading) Eu ro . U .S si E. a Eu ro pe L. A m er ic a M .E as t S. A si S. a S. A fr ic a E. A Urbanization Rate 90 80 70 60 50 40 30 1970 2007 20 10 0 Dharavi in Mumbai, India Landfill New Delhi India 2007 HIV Prevalence Rate (% 15-49) 2007 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 Eu ro . U .S ic a S. A fr si a S. A S. as t .E M er ic a A m L. Eu E. E. A ro p e si a 0 Possibilities for Global Social Justice? • Economic Growth? – World composed of rich billion, middle four billion and “bottom billion” – Middle four billion grew 2.5% annually in 1970s, 4% annually in 1980s & 1990s, and 4.5% annually since 2000 – Bottom billion grew only .5% in 1970s, DECLINED .4% in 1980s, and DECLINED .5% in 1990s – Bottom billion was poorer in 2000 than 1970 – Paul Collier “Growth is not a cure-all, but the lack of growth is a kill-all. •The World Polity (Meyer & Lerner Readings) – Canopy of international governmental organizations (IGOs) and international non-governmental organizations (INGOs) – United Nations, Amnesty International, etc. – Global civil society and superstates have potential to improve world well-being 350 300 IGOs 250 200 States 150 100 50 0 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 Secondary School Enrollment Rate 100 90 80 70 60 50 1991 2007 40 30 20 10 . U .S ic a S. A fr si a S. A S. as t .E M er ic a A m L. Eu E. E. A ro p e si a 0 Eu ro . U .S si E. a Eu ro pe L. A m er ic a M .E as t S. A si S. a S. A fr ic a E. A Fertility Rate 7 6 5 4 3 2 1970 2007 1 0 A us A tral B us ia el tr C giu ia D an m en ad Fi m a a nl rk a G Fra nd er n m ce G an r Ireeecy la e nd N I et J ta N he ap ly ew rl a a n Ze nd N a. s Poorw.. rt ay ug Sw S Sp al a itzwed in er e la n U nd K UM SA Aid as % of GDP in 2007 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Anti-Immigrant Attitude by Unemployment Rate 0.5 0.45 Predicted Probability 0.4 0.35 0.3 0.25 Low Immigration 0.2 Medium Immigration High Immigration 0.15 0.1 0.05 0 1.3 10 20 Unemployment Rate 30 36 Figure 2. U.S. Earnings Inequality, 1973-2003: Actual and Simulated 90/10 Ratios 5 4.5 Actual 4 3.5 3 19 73 19 76 19 79 19 82 19 85 19 88 19 91 19 94 19 97 20 00 20 03 2.5 1 SD Less Trade Openness 1972 Trade Openness