Resolved: On balance, economic globalization benefits worldwide poverty reduction 3



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Globalization Reduces Inequality




Inequality is going down and these slight improvements enable adaptation.


Goklany 07 – Assistant Director for Science and Technology Policy [Indur, “IS A RICHER-BUT-WARMER WORLD BETTER THAN POORER-BUT-COOLER WORLDS?”, http://www.ce.cmu.edu/~gdrg/readings/2006/02/14/Goklany_160.pdf]

It has been sometimes argued that the extent to which economic growth increases society’s (or another entity’s) capacity to reduce climate change damages via adaptation or mitigation, this capacity would depend considerably on the distribution of the determinants of human well being (such as economic growth) between and within countries. For example, if economic growth is concentrated on countries that are already wealthy, as sometimes has been claimed to be the case in recent decades, then today’s poorer countries’ ability to reduce future climate impacts (due to higher adaptive capacity because of economic growth) could be seriously overestimated. While there is some merit to this argument, it should be noted that in the recent past, economic growth in some of the most populous developing countries (e.g., China and India) has outstripped that in developed countries. As a result, income inequalities have, for the world population as a whole, shrunk around the world (Sala-i-Martin, 2007; Bhalla, 2002), as have inequalities between developing and developed countries since the 1950s in terms of determinants of human well-being. 6 More importantly, according to the IPCC scenarios, between 1990 and 2100 income growth in developing countries relative to developed countries will be greater by a factor of 3.6 to 9.4 (IPCC, 2000: 301). Secondly, an examination of Figures 1 and 2 indicates that the dependence of virtually all determinants of human well-being on income is highly non-linear (generally logarithmic) with their improvements occurring much more rapidly at the lowest levels of income (Goklany, 2007a). Thus even a small improvement in income for poor societies (or the poor within a country) could enhance their adaptive capacity more than a larger increase for richer societies (or the rich). Thirdly, over the long haul (say, 50 to 100 years), secular improvements in technology could dominate over increases in income with respect to enhancing adaptive capacity, particularly at low income levels (see Figure 3). The long term impact of technological change is one reason for the remarkable declines—99 percent or greater—during the 20th century in mortality and morbidity rates in the United States for various waterrelated diseases, e.g., typhoid, paratyphoid, dysentery, malaria and various gastrointestinal diseases) (Goklany, 2007b: 153; USBC, 1975: 77).


Every indicator of inequality is trending down.


Segerstrom 10 – Stocholm School of Economics professor [Paul, “Naomi Klein and the Anti-Globalization Movement”, 6-23, http://www2.hhs.se/personal/segerstrom/naomiklein.pdf]

Much of what Naomi Klein writes about the marketing behavior of large corporations is true. But I want to focus on her reason for being concerned. According to Naomi Klein (NL, p.122), “over the last decade [the 1990s], there has been a massive redistribution of the world’s resources, with everyone except those in the very highest tier of the corporate elite…getting less.” There appears to be a general consensus among anti-globalization activists that the world we live in is characterized by disturbing increases in poverty and income inequality. But is this really the case? Economists have devoted a lot of energy to measuring poverty and income inequality in the world. I want to discuss at length the influential paper “The World Distribution of Income: Falling Poverty and…Convergence, Period” by Xavier Sala-i-Martin (2006), an economist at Columbia University. Sala-i-Martin (2006) uses aggregate Gross Domestic Product data and within-country income shares for the period 1970-2000 to assign a level of income to each person in the world. All income data used are purchasing-power-parity-adjusted since people tend to buy goods where they live and one wants to compare incomes across people who live in different countries. Also all income levels are converted to 1996 constant US dollars and are thus corrected for inflation. Sala-i-Martin estimates a densit function for the world distribution of income. The implications for poverty and income inequality are surprising. Sala-i-Martin finds that the percentage of people in the world with incomes below $1 per day (one commonly used measure of poverty) has fallen from 15.4% in 1970 to 5.7% in 2000 and the percentage of people in the world with incomes below $2 per day (another commonly used measure of poverty) has fallen from 29.6% in 1970 to 10.6% in 2000. The recent period of globalization has been associated with a substantial decrease in the fraction of the world population living in poverty (using either measure). Indeed, the entire distribution of income in the world has shifted significantly to the right (see Sala-i-Martin’s Figure 4). 5 Turning to income inequality, Sala-i-Martin uses eight different popular indexes to measure income inequality. All indexes show a reduction in global income inequality between 1980 and 2000. Within-country income inequality has increased slightly during the sample period but not enough to offset the substantial reduction in across country disparities. 6 The reduction in global income inequality is driven by China, where 1.2 billion people (20% of the world population) have benefited from high economic growth rates since 1978. If one removes China from the data, then global income inequality would be roughly constant over time.


Reject nightmarish depictions of free markets; the opposite is the true. Neoliberalism enables huge gains in prosperity across-the-board.


Butters 7 – Ph.D., President – Nebraska Council on Economic Education, Assistant Professor of Economics – University of Nebraska at Lincoln [Roger B. “Teaching the Benefits of Capitalism”. http://www.hillsdale.edu/images/userImages/afolsom/Page_6281/Butters.pdf]

There is a reason J.K. Rowling wrote Harry Potter: Capitalism. Rowling lived in a society that defines and enforces property rights, promulgates the rule of law, relies on competitive markets and fosters entrepreneurial activity. All these together created the incentive for an out of work, single mother to sit down in a café and record her thoughts knowing full well that if she created something of value that value would accrue to her and enable her to provide for herself and her loved ones. Those incentives made a poor woman into the richest woman in the world and a celebrated author that enriched and created wealth for millions of readers throughout the world. It is fitting contrast to the traditional Bogeymen of capitalism; wealthy elites unconcerned with the plight of the poor. Texts and manuals are replete with political cartoons from the 1920s illustrating fat cats smoking rolled money, giant octopi stretching over the land to lay claim to everything or, more offensively, the huddled masses begging for the drippings and scraps from the table of the rich. The reality, again, is exactly the opposite. In a market‐based society, where property is secure it is impossible to amass wealth without creating wealth for everyone else.

Higher incomes among the rich decrease poverty because it leads to more gains for the poor.


Norton 2 – Aldeen Professor of Business – Wheaton College [Seth W. Fall, http://www.cato.org/pubs/journal/cj22n2/cj22n2-5.pdf]

The pattern that emerges in Table 3 is that the components of the HPI [Human Poverty Index] are mostly negatively related to the incomes of the poor and the incomes of the rich, as well as to the geographic variables. Consequently, higher income to either group tends to reduce poverty rates. The most salient feature in Table 3 is the fact that the coefficients for the rich incomes have a stronger effect on poverty reduction than the coefficients for the poor incomes. That observation is true for all cases. Restricted coefficient estimates (Wald’s) tests reveal that the coefficients for the rich income category are (absolutely) greater than the coefficients for the poor income category for survival, illiteracy, and undernourished children. The significance tests for access to safe water and access to health services indicate that while those measures are more sensitive to the incomes of the rich than to those of the poor, the differences are not statistically significant. More generally and more importantly, there is no evidence that the income gains to the rich do not benefit the poor, at least as evidenced by broad and well-established measures of poverty. The results for undernourished children merit special attention. The coefficient for the rich incomes is negative and significant, indicating that an increase of rich people’s incomes reduces this measure of children’s malnutrition. The coefficient for poor peoples’ incomes is slightly positive but not significant. Presumably, the estimate reflects multicollinearity. Regressing the undernourishment variable on just the incomes of the poor does lead to a reduction in the proportion of undernourished children. However, the comparable simple regression estimate for the incomes of the rich is still substantially greater.2 Thus, the easiest interpretation is that the relationship between the incomes of the rich and undernourished children is negative and robust, but the relationship between the incomes of the poor and reduced children’s malnutrition is weaker and perhaps nonexistent. [Spelling-out of Human Poverty Index not in original.]



Historical data and developments prove neoliberalism isn't the root cause of economic inequality or crises.


Norfield 12 – PhD Candidate in Economics at SOAS - University of London [Tony. "‘The most detailed account available’ – more praise for ‘The Failure of Capitalist Production’," http://plutopress.wordpress.com/2012/03/22/the-most-detailed-account-available-more-praise-for-the-failure-of-capitalist-production/]

Writing on the Economics of Imperialism blog, Tony Norfield praises Andrew Kliman’s The Failure of Capitalist Production as “probably the most detailed, and effective, assessment of the economic statistics behind what happened [during the economic crisis] that is available”. Norfield writes: The Failure of Capitalist Production has two main theses. Firstly, it argues that the major post-war crisis of the 1970s did not result in enough destruction of capital values to provide the basis for sustained accumulation thereafter. This meant that profitability showed little, if any, sign of recovery and economic growth remained weak. This, in turn, set the stage for credit-driven, speculative bubbles, not least the biggest and most recent one that has burst with such intractable consequences. Secondly, and following from this analysis, it argues that the common radical arguments about the nature of the crisis are myths. ‘Neoliberal’ economic policies did not cut real wages and did not divert resources into finance and away from production. A close look at the data for the US finds no evidence for these assertions. Instead, the slow growth of incomes and investment is shown to be a consequence of problems with capital accumulation, problems that resulted from inadequate profitability… His case is well made, and is convincing. These are critical points for an attack on the notion that mistaken government policies – or a ‘neoliberal coup’, as some writers suggest – are the root cause of the crisis. Kliman shows that the deterioration in profitability, investment, growth, etc, began in the late 1960s or in the 1970s, prior to the beginnings of the ‘neoliberal’ era that is usually dated from 1979-81 with the Reagan (US) and Thatcher (UK) political regimes.


Global free trade volume empirically best measure for economic equity


Perry 12/31/13 http://www.aei-ideas.org/2013/12/chart-of-the-greatest-and-most-remarkable-achievement-in-human-history-and-one-you-probably-never-heard-about/comment-page-1/ Dr. Mark J. Perry is a full professor of economics at the Flint campus of The University of Michigan, where he has taught undergraduate and graduate courses in economics and finance since 1996. Starting in the fall of 2009, Perry has also held a joint appointment as a scholar at The American Enterprise Institute.
It turns out that between 1970 and 2010 the worst poverty in the world – people who live on one dollar a day or less – that has decreased by 80 percent (see chart above). You never hear about that. It’s the greatest achievement in human history, and you never hear about it. 80 percent of the world’s worst poverty has been eradicated in less than 40 years. That has never, ever happened before. So what did that? What accounts for that? United Nations? US foreign aid? The International Monetary Fund? Central planning? No. It was globalization, free trade, the boom in international entrepreneurship. In short, it was the free enterprise system, American style, which is our gift to the world. I will state, assert and defend the statement that if you love the poor, if you are a good Samaritan, you must stand for the free enterprise system, and you must defend it, not just for ourselves but for people around the world. It is the best anti-poverty measure ever invented.



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