Wolf vs. Wade

In "Incensed about Inequality", Martin Wolf pushes a pro-globalization perspective which proposes that the trends of globalization over the past twenty years have reduced inequality and poverty. His focus rests mainly on Asia, particularly India and China, to demonstrate his claims. He argues that the rapid growth these two nations have experienced profoundly affects the incidence of both inequality among individuals, and world poverty. He uses measurements of GDP per head to assert his claim that living standards in these countries are sharply increasing. He goes on to describe the recent surges in economic growth in a number of other, mostly Asian, countries, and furthermore, declares that their success was a direct result of embracing the principles and practices of a neoliberal capitalist market economy.

Wolf uses population-weighted measures of wealth and equality to claim that while  average incomes between the rich and poor nations are widening, inequality between countries is dropping, when weighted by population. He contends that thanks to the fast growth of major Asian countries, inequality among individuals is also falling. He also says that poverty has become far less widespread than in the past, now only afflicting less than 25% of the world population. Again, he cites growth as the reason for this reduction. Finally, he demonstrates that poverty is decreasing by mentioning several indicators of improved living standards: longer life expectancy, lower infant mortality rates, higher literacy rates, and reduction in fertility; while claiming that food production is growing at a faster rate than the population.

Robert Hunter Wade's article, "Is Globalization Reducing Poverty and Inequality?" sharply contradicts Wolf's. He immediately points out that the arguments about declining poverty are distinctly neoliberally-biased, especially when suggesting that further trade liberalization is the solution for the developing world to be successful.  He also notes that these claims about declining inequality as a result of globalization support the deregulation rationale of the World Bank, the World Trade Organization, and the International Monetary Fund. He points out the opposing perspective, called "anti-globalization" or "anti-neoliberal", which believes that inequality and poverty have been growing; and that both camps propose their opinions as factual.

Wade contends that despite huge growth trends in several developing nations like China, that these growth spurts do very little to close the enormous gaps between wealthy and impoverished nations, "testimony to the failure of 'catch-up'." He then criticizes the evidence many neoliberal pro-globalizers use for their argument, data from the World Bank. He shows that the figures put forth by the World Bank not only have a wide margin of error, but that those errors may indeed bias the results in a direction favorable to the World Bank's interests. He cites several errors and biases in the study which indicate that it severely underestimates accurate levels of poverty, especially in relation to the enormous population explosion.

He goes on to demonstrate how different means of measuring poverty and inequality skew the results in different directions. He quickly deconstructs several arguments which make it appear that poverty and inequality have declined in the past two decades. While China and India, accounting for 38% of the human population, significantly affect the results of these studies, Wade comes to the conclusion that even with their extreme growth spurts, that world inequality is most likely still rising. Absolute income gaps continue to widen. He agrees that the proportion of the planet living in absolute poverty may have dropped, but that any further claim is going out on a limb. Inequality may be falling in a few select nations like China, but overall, there is no unbiased evidence to make this conclusion solid, and it cannot be generalized to the rest of the world. In fact, many reliable studies show opposite trends.

I had a very difficult time understanding the details of Wolf's and Wade's arguments because of their economic and statistical nature. Wolf's article seems to be particularly ideological, written from a distinctly neoliberal, pro-globalization camp. Wade's seems less intensely biased, and more skeptical of the globalist claim that asserts globalization to be reducing poverty and inequality. I am personally far more willing to agree with Wade because his arguments seem far less partial to a particular ideology, and support what I have seen in the world as both a student and a traveller. Wolf seems very adamant to push a strongly neoliberal, globalist perspective that suggests further liberalization of world markets will only improve human life by reducing poverty and inequality. On the other hand, Wade's skeptical response easily deconstructs Wolf's arguments, with far more evidence to the contrary. I suspect that poverty and especially inequality are definitely rising worldwide - certainly, the handful of wealthy nations and their richest citizens are becoming wealthier, but this does nothing to help the extreme poverty evident in the majority of the world. From what I have learned, it seems that globalization involves world domination by superpowers and giant transnational corporations; the inability of small/poor nations to compete in an integrated market; exploitation of the developing world and the natural environment; sweatshop labor and human trafficking, etc.