Most of the ardent supporters of economic globalization state that when developing countries lower trade barriers and tariffs and open their countries to international investment and trade, economic growth occurs. Most often, they simply equate economic growth with lowering poverty levels, validated by the supposed trickle-down theory of economics, which would have us believe that as economic growth occurs in a country, some of the benefits will eventually “trickle down” to those at the bottom of the economic spectrum.
In recent years, however, the fallacy of trickle-down economics has become ever more apparent to individuals and organizations that promoted neoliberal economic policies aimed at opening the economies of developing countries. Even the International Monetary Fund (IMF), one of the most zealous defenders of the trickle-down theory in the 1980´s and 1990´s, recently published a document stating: “when the rich get richer, benefits do not trickle down.”
The IMF paper goes on to argue for policies directed specifically at raising the income of the poorest 20% of a country, even if these policies “sacrifice” percentage points of overall economic growth. In the past, the poorest of the poor who were evidently negatively affected by economic globalization were simply expected to “adapt or die.” When huge surpluses of government subsidized grain from First World industrial farmers flooded the markets of Third World countries, smaller farmers from these countries simply could not compete and were forced to leave their agrarian livelihoods, often for poorly paid jobs (when they could find them) in marginalized urban areas.
Nina Pavcnik, associate professor of economics at Dartmouth College, when looking at some of the negative aspects of globalization on unskilled workers in developing countries, believes that “these (negative effects) are short-term costs of globalization, and over time you would hope that these workers would be able to move toward the exporting sectors and share in the benefits of globalization.”
It is somewhat cynical to believe that people who have been systematically oppressed over decades should be able to simply leave behind a profession that their families have practiced for generations (in the case of rural farmers) and learn to speak English in order to work at a call center. Pavcnik goes on to say that “the best way to help the poor in poor countries is for them to have the employment opportunities that arise when there is demand in rich countries for products that they produce.”
The status quo of economic globalization, however, is proven to only exacerbate global inequality. If economic globalization is going to be able to offer some sort of benefit to the poorest of the poor, then simply letting the globalized market “go its course” is not a suitable solution. Rather, specific policies that are directed towards improving the livelihoods of the poorest need to be the focus of action, even if this “limits” sectors of economic growth. Additionally, consumers in the developed world need to take more responsibility for the consumer habits and accept that shopping does not occur in a moral vacuum.
How to Connect with Conscientious First World Consumers
One of the main problems with the globalization of our economy is that has massively separated producers from consumers. This distancing between the origins, the supply lines, and the eventual end places of the waste associated with our consumption has made it difficult to live an ethical life as a consumer. The anonymity of globalization offers a sense of impunity to consumers who consider “shopping” to be an amoral act.
Since we do not know who made the shoes we buy, who grew the food we eat, or who answers the phones when we call a customer service representative, we can claim ignorance and rest in our indifference.
Much of the responsibility for creating the conditions for a more just and fair economic globalization rests on the shoulders of First World consumers who need to accept the task of being ethically accountable for what they buy. This is an aspect of justice that is rarely focused on. While it is easy to rail against a big corporation using child labor in their sweatshops around the world, it is more difficult to accept our own individual responsibility that comes with not doing the necessary research to know how the products we use and buy are produced.
While attempting to “re-locate” our economic livelihoods through supporting local small businesses and shopping at farmers markets is certainly a step in the right direction, finding ways to align our globalized economy with the ethic of justice and inclusion is also an essential task. ChocoSol, to name just one example, is a Toronto-based company that connects directly with small, indigenous producers of Cacao in different areas of Latin America. According to ChocoSol, “our horizontal trade relationships with our farmers go beyond the mere exchange of commodities and extends to the exchange of reciprocity, best practices, social enterprise models, forest garden re-generation and friendship.”
Small farmers, business owners and entrepreneurs in the developing countries can also play an integral part in reaching out to the conscientious consumer population and to groups like ChocoSol who are interested in establishing horizontal, direct, and just trade relationships with farmers and businesses in the developing world.
The internet provides as global platform that anyone with a smartphone or Wi-Fi connection can access. Teaching young people how to set up, maintain, and take advantage of simple online business opportunities is essential if globalization is ever going to benefit the small farmer, entrepreneur, or small business owner. This should be a central element of education in the developing world.
Once young people learn how to manage social media and perhaps a simple website, the language barrier is another challenge that needs to be confronted in order to get their business idea in front of individuals who are ethically minded consumers and in the view of organizations that promote horizontal, direct commercialization methods.
Fortunately, several professional localization services offer translation services. Small businesses can thus translate their webpages, blogs, and social media profiles with a focus on search engine optimization to increase the likelihood of having their business or product show up on the browsers of consumers from around the world.
The Market for Justice
As some of the negative effects of globalization have begun to become much more visible to consumers in the First World, there has been a push to create more sustainable, healthy, just, and eco-friendly international trade markets. While First World people have historically been absolved of any sort of culpability for their participation as consumers of products or services produced unfairly and unjustly, the connections provided by the internet should create more impetus for people to find ways to connect directly with small businesses and producers from around the world. Additionally, as technology reaches to the farthest corners of the globe, small farmers, entrepreneurs, and business owners need access to education that will teach them how to take advantage of the market for justice that is beginning to flourish.