Globalisation is improving the lives of the poor in the South

The issue perhaps most often raised by the anti-branders in their attacks upon the corporations is that corporate activity and globalisation is making the condition of the poor in the South worse. The United Nations Human Development Report 2001152 tells a rather different story. It shows that much of the world still lives in horrific poverty: in the developing world 1.2 billion people live on less than $1 a day in purchasing power parity terms to a 1993 US dollar; 2.8 billion live on less than $2 a day; 325 million children do not go to school; more than 850 million are illiterate; 11 million children under 5 die each year from preventable causes; nearly a billion people do not have access to improved water sources; and 2.4 billion lack access to basic sanitation.153

The situation, contrary to the anti-branders claims, is, however, improving. Between 1975 and 1998 average incomes in developing countries almost doubled in real purchasing power parity terms from $1,300 to $2,500. Adult literacy has increased from 47 per cent in 1970 to 73 per cent in 1999. The number of rural families with access to clean water has grown more than fivefold, with 80 per cent of people in the developing world having access to improved water supplies. The number of undernourished people fell by 40 million between 1990-92 and 1996-98. Infant mortality has been reduced by more than 10 per cent from 1990 to 1999. The number of those living on less than $1 per day in constant terms, in spite of a rising world population, fell by 120 million between 1993 and 1998, and 200 million since 1980.154 This represents the first fall in absolute numbers of those living in extreme poverty, ever. It does not reflect the anti-globalisers claims of an ever worsening situation for the poor of the South. These reductions in poverty may seem trivial to some in comparison with the overall scale of the problem, but they are far from trivial to those involved. They can quite literally be a matter of life and death.

These improvements have not, however, occurred uniformly. To give just one indicator, in East Asia average incomes were one tenth of those in the OECD countries in 1960. By 1998, even though incomes in the OECD countries have increased massively, East Asian average incomes had reached nearly one fifth of those in the OECD countries. On the other hand, in Sub-Saharan Africa incomes in 1960 were slightly higher than in East Asia at one ninth of those in the OECD countries, in 1998 they were an eighteenth.155 Research by the World Bank shows that the most significant factor in explaining such differentials is the degree to which countries have been integrated into the global economy. East Asian countries, by and large, have successfully integrated into the world economy; Sub-Saharan African countries, by and large, have not.

Those economies that have globalised most have seen the fastest rates of poverty alleviation - non-globalising economies have seen static, or rising rates of poverty

The World Bank's report, Globalization, Growth and Poverty156, examines the economies of 24 globalising countries, which have integrating into the world economy since 1980, and 49 non-globalising countries, which are no more integrated into the global economy today than they were twenty years ago, and in many cases are less so. In the 1990s the globalisers had an average GDP per capita growth rate of 5 per cent, compared to 2.2 per cent in the rich countries, and 1.4 per cent in the non-globalisers. In 1980 the 24 countries embarking upon globalisation were poorer than the 49 non-globalisers.

Today the globalisers are richer. Anti-globalisation protesters will respond that GDP is not everything, and globalisation has reduced living standards, and increased poverty and inequalities. The World Bank study shows that 'in general, the more rapid growth that developing countries experience as they integrate with the global economy translates into poverty reduction...the only countries in which we have seen large-scale poverty reduction in the 1990s are ones that have become more open to foreign trade and investment'.157 China has for example had the most dramatic poverty reduction in history since opening up its markets. In Vietnam, another leading globaliser, those living in absolute poverty have fallen from 75 per cent of the population in 1988 to 37 per cent in 1998.158 Ninety eight per cent of the very poorest households in Vietnam became better off during the 1990s. They became better off because of the new opportunities offered in labour intensive industries, in the very sweatshop so strongly attacked by the anti-branders. This increased wealth has led to a fall in child labour and an increase in school enrolment.159 In the globalising countries life expectancy, infant mortality and under-five mortality have all improved rapidly. These figures are fast approaching those prevalent in the West as recently as the 1960s.

Globalisation does not necessarily increase inequalities

Moving on to the issue of inequalities, the period of rapid globalisation since 1980 has been the first period of a reduction in global income inequality in over 200 years.160 Within countries, the research shows that there is no systematic relationship between increased integration into the world economy and rising inequality. In some of the globalisers, such as Malaysia and the Phillipines, inequality of income has fallen. In others, such as Costa Rica and Vietnam, it has been stable. In yet others, especially China, inequalities have risen. The Chinese example, however, shows that rising inequalities are not necessarily a bad thing. China used to be very equal and very poor; now it is somewhat less equal and, as shown, somewhat less poor.161 Whatever else may be said of China's Communist Party government and its appalling human rights record, its decision to open up and globalise the Chinese economy has undoubtedly benefited the Chinese people as a whole.

The presence of multinationals in the South tends to have a beneficial impact upon pay and working conditions

Within the South, those working for Western multinationals enjoy the highest incomes. In low income countries, wages in foreign affiliates to American owned companies are on average twice those of domestic manufacturing wages.162 What of those not working for Western companies directly, but for companies supplying Western businesses and especially those supplying Western high street brands? The establishment of such factories supplying clothing and footwear to the West has been a first step on the route out of poverty for Hong Kong, Singapore, Korea and Taiwan.163 A study for the respected Institute for International Economics shows that conditions in such factories vary tremendously. 'They varied greatly from plant to plant, from deplorable to commendable. In some, by any definition, sweatshop conditions did prevail. But in others it was hard to find significant fault with working conditions.... The worst working conditions I observed were to be found in locally owned plants that did not serve the international market.'164

It is precisely the global brands, fearing for their reputations, which impose the most stringent conditions on their suppliers and insist on improved employment conditions. Making these companies pull out of the South would make the poor worse off. Kevin Watkins of the international development charity Oxfam puts it thus: 'There is no case you can point at where sanctions have improved labour standards. It's about a labour aristocracy in the North protecting its jobs and conditions.'165 Do the campaigners really claim to know better what is in the interests of those working in the sweatshops than the workers themselves do? The sweatshops are an escape route from grinding rural poverty.

The new anti-capitalism has given new life to old, discredited claims

The anti-branding, anti-globalisation activists' romanticisation of conditions for the rural poor of the South working outside of the globalised economy shares much with Friedrich Engels' vision of the rural poor of England before the Industrial Revolution: 'They did not need to overwork; they did no more than they chose to do, and yet earned what they needed...work which, in itself, was recreation for them... games contributed to their physical health and vigour. They were "respectable" people, good husbands and fathers, led moral lives... The young people grew up in idyllic simplicity and intimacy with their playmates until they married.'166

This is not the only similarity the new protesters have with their predecessors. To answer the question raised at the start of the study, the new anti-capitalism does not offer any new, radical insights. Instead it reheats old, long discredited arguments. There are obviously some changes: corporations are still sometimes attacked for their conservatism, but more often for what the activists perceive as their feigned liberalism; the villains have, for most of today's protesters, ceased to be the bourgeoisie or capitalism per se, and have become the corporations instead; today's protesters, in general, do not believe they have all the answers, in fact they do not offer solutions; and very few of today's protesters believe that there was much in the 'real existing socialism' of the Soviet Union that is worth emulating.

Anti-branding should be understood as a marketing exercise, and as marketing exercises are prone to do, the message has both been made more amusing, more self-consciously clever and has been dumbed down. For many activists, the marketing, the anti-branding, has itself become the message; clever parodies and visual jokes is what it is about for them. The underlying motivations behind these campaigns - a belief that profit is immoral by definition, a blinkered vision of society as neatly dichotomised into the exploiting few and the exploited many, and a passionate commitment to equality of outcome regardless of consequence - however remain the same. It is an irony that at a time when the achievements of capitalism are becoming ever more apparent capitalism is on the defensive, while the manifest failures of anti-capitalism seem to have done little to diminish the ardour many have for finding 'an alternative'. Perhaps the wrong people are apologising.

Biographical note

Michael Mosbacher is Deputy Director of the Social Affairs Unit. He studied politics at Exeter University, writing his Master's dissertation on the impact of the collapse of communism in Eastern Europe and the Soviet Union upon the British Communist movement. He is Editor (with Digby Anderson) of The British Woman Today: a qualitative survey of images in women's magazines and Another Country. He is a contributor to Scot-Free: How England would fare without Scotland and The Dictionary of Dangerous Words.