Last week the Resolution Foundation, a UK think tank and charity that supports the interests of those on lower incomes, published a widely-noted and compelling report. Its central claim was that, contrary to what many people have argued, globalisation is not the bete noire for the less well-off. It suggested that the real problem for those on low and middle incomes has been shortcomings in domestic policy. (The RF’s Director, Torsten Bell, wrote his own synopsis for Prospect here.)
This is significant because it shows that we must be careful not to throw the baby—globalisation—out with the bathwater—its inadequately addressed consequences. Treading this line will involve fine judgement. While the chances of us demonstrating this are not zero, they are not great, either.
Since the opening up of China under Deng Xiaoping—China’s paramount leader from 1978 to 1989—and the fall of the Berlin Wall, we have experienced a form of globalisation that is unprecedented in its depth and scope. A sharp fall in global poverty over the last 30 years is a result of this. According to the UN, the share of people in less developed countries classified as poor fell from 43 to 21 per cent of the population over this time—that’s roughly one billion people whose lives have improved. Global programmes such as the Millennium Development Goals have played an important role, but without rapid globalisation we would not have had the same advances in human development, income and output. The maturing of the Asian Tiger economies, and the rise of China to become the world’s second biggest economy, might never have happened—nor the benefits that these changes had for other countries and the global economy.
Globalisation’s winter of discontent
Yet things are clearly changing. This isn’t the first time in human history that globalisation has been under threat. The silk road disintegrated, as did the Roman version of globalisation. The latter of these was followed by darker times—known more simply as the Middle Ages. The more familiar globalisation of the nineteenth century was eventually consumed by two world wars and the Great Depression.