On Monday, the World Bank announced that it expects the share of the world’s population living in extreme poverty — meaning on $1.90 a day or less — to fall below 10 percent in 2015. “This is the best story in the world today,” Jim Yong Kim, the bank’s president, said in a press release. “These projections show us that we are the first generation in human history that can end extreme poverty.” It is a remarkable human achievement. The drop in the extreme-poverty rate has meant millions more birthdays, tallied by infants making it to childhood and women surviving childbirth. It has meant millions fewer bouts of diarrhea and malaria and countless more hours spent at work or in school. It has meant the erasure of a truly extraordinary amount of the worst sort of human misery.
But according to the New York Times, it has been bought and paid for by the immiseration of the American working class. In a bizarrely wrongheaded and economically illiterate opinion piece, Paul Theroux, the travel writer, argues, well, something about the costs and benefits of globalization.
I found towns in South Carolina, Alabama, Mississippi and Arkansas that looked like towns in Zimbabwe, just as overlooked and beleaguered. It’s globalization, people say. Everyone knows that, everyone moans about it. Big companies have always sought cheaper labor, moving from North to South in the United States, looking for the hungriest, the most desperate, the least organized, the most exploitable. It has been an American story. What had begun as domestic relocations went global, with such success that many C.E.O.s became self-conscious about their profits and their stupendous salaries. To me, globalization is the search for a new plantation, and cheaper labor; globalization means that, by outsourcing, it is possible to impoverish an American community to the point where it is indistinguishable from a hard-up town in the dusty heartland of a third world country.
I cannot believe I am actually writing this, but here goes: No, economically depressed towns in the United States are not “indistinguishable” from economically depressed towns in countries like Zimbabwe. Even the poorest regions of the United States are vastly wealthier and better developed than comparable regions in Sub-Saharan Africa. Pick your data point. The state of Mississippi, the poorest in the country, generates about $30,000 of goods and services per person every year. In Zimbabwe, that number is $1,700. In one, infants frequently die of diarrhea. In the other, adults frequently die of heart disease. I think I’d rather be in the latter camp.
Nevertheless, Theroux, in his travels, repeatedly asks people in low-income communities in the South whether the Clinton philanthropies have done anything to help them. “It really bothers me that Clinton does so little here,” one woman tells him. “I wish he’d help us. He’s in Africa and India, and other people are helping in the third world and those countries. We don’t see that money. Don’t they realize our people need help?” Not in the way that people in Zimbabwe do, lady. Not even close.
Moreover, Theroux muddles the evidence on the economics of globalization to make his tragicomic-absurd point about Harare-on-the-Mississippi. His world is zero-sum: Poor Chinese peasant takes factory job from middle-class American, Chinese peasant benefits, American Southerner suffers, America looks like Zimbabwe.
The reality, you’ll be surprised to hear, is more complicated. Globalization certainly was not an unalloyed good for the American middle class; the economist Branko Milanović has shown that lower-income workers in rich countries were among those who benefited least from global growth between 1988 and 2008, whereas China’s middle class were among those who benefited the most. That big drop in global extreme poverty does have something to do with the stagnation of wages for many workers in the United States. But American workers did benefit from having cheaper and better products to purchase. American businesses in many cases benefited from cheaper production costs. And many workers did manage to pivot into new industries.
More to the point, in human terms, globalization has absolutely, completely proven positive-sum. Think back to that World Bank announcement about extreme poverty falling into the single digits: That is one of the products of globalization and global growth, in particular of China soaking up manufacturing jobs and growing at a breakneck pace over the past few decades. Millions and millions and millions of deeply impoverished people becoming less impoverished, Americans benefiting from cheaper, better goods at the same time.
Theroux, though, runs the karmic calculus his own way and decides that the solution demands that we undo what is done in order to save the South. Corporate titans, driven by some strange sense of patriotic isolationism, should bring unskilled manufacturing back to states like Alabama and Mississippi, he argues, lest all those undeserving Asians make off with what is rightfully ours. We’ll have higher-priced products made with American labor. Then we won’t look like Zimbabwe anymore!
But the United States is working on opening the world to trade, not closing it off, as evidenced by today’s announcement that a dozen countries, including the United States, have reached a deal on the so-called Trans-Pacific Partnership. And what would be better for the South and its workers would not be to wrench back those unskilled manufacturing positions, but to be better at supporting workers whose industries are going through the kind of upheaval that globalization causes. Rather than stealing back a shoe manufacturing plant, in other words, train Americans in faster-growing sectors like nursing and information technology, and give better support for the laid-off and the long-term unemployed. We’ll never look like Zimbabwe if we do that.