The State of the World



This summer, the United Nations Development Programme issued its annual Human Development Report. The document is a stinging indictment of globalization and its horrific impact on the well-being of so many of the world’s people.

According to the Report, in developing countries nearly 1.3 billion people do not have access to clean water, one in seven children of primary school age is out of school, 840 million people are malnourished, and an estimated 1.3 billion people live on incomes of less than $1 a day. Even in the industrial countries, globalization has taken a grim toll. One person in eight suffers from either long-term unemployment, illiteracy, a life-expectancy of less than 60 years, or an income below the national poverty line.

This human misery is not a consequence of globalization’s insufficient advance. "More than 80 countries still have per capita incomes lower than they were a decade or more ago," comments the Report. In sub-Saharan African and some other least developed countries, per capita incomes are lower than they were in 1970. And some of the countries that are worst off are those that are most integrated into the global economy. Exports account for close to 30% of the gross domestic product of impoverished sub-Saharan Africa, for example, compared to less than 20% for the industrial nations. In Eastern Europe and the former Soviet Union, where privatization and the market have expanded most rapidly, "the dismantling and weakening of the welfare state have meant cuts and deterioration in services in health and education — across the board — contributing to the deteriorating human outcomes. Life expectancy was lower in 1995 than in 1989 in 7 of 18 countries — falling as much as five years since 1987. Enrolment in kindergarten declined dramatically."

The gap between rich and poor has, in the words of the report, today "reached grotesque proportions." In 1960, the countries with the wealthiest fifth of the world’s people had per capita incomes 30 times that of the poorest fifth. By 1990, the ratio had doubled to 60 to one, and by 1995 it stood at 74 to one. And the Asian economic crisis of the past few years has exacerbated the marginalization of the poorest countries.

Within nations, the income gap has been growing as well. Eastern Europe and the former Soviet Union have experienced "the fastest rise in inequality ever." Russia now has the world’s greatest inequality, with the richest 20% having 11 times the income of the bottom 20%. Income inequalities have also grown dramatically in China, Indonesia, Thailand, other East and South-East Asian countries, and in the industrialized countries, especially Sweden, Britain, and the United States. A recent study by the Center on Budget and Policy Priorities (reported in the New York Times of Sept. 5, 1999) found that the richest 1 percent of Americans earned as much after taxes as the poorest 100 million; in 1977 the top 1 percent only (!) had as much as the bottom 49 million. The poorest 20 percent are making less today in real terms (adjusting for inflation) than they were in 1977.

The assets of the world’s three richest people, notes the Human Development Report, are more than the combined GNP of all least developed countries on the planet. (This piece of information is already out of date: the statement was based on a report in Forbes magazine for Oct. 12, 1998, when Bill Gates, Warren Buffett, and Paul Allen had combined assets of $110 billion; on July 17, 1999, the NYT reported that the first two of these individuals alone were worth more than $140 billion.) The assets of the 200 richest people in 1998 were more than the total income of 41% of the world=s people. The Report observes that a measly 1% tax on the wealth of these 200 people could fund primary education for all the world’s children who lack access to schooling.

One major source for the growing inequality and the global suffering is the spread of markets. For example, as the Report points out, for much of human history care-giving — attending to the young, the old, the sick, and the rest of us — was performed by women outside the market, based on a gender division of labor and female subordination. As women have entered the market — partly by choice and partly by economic pressures — they are still largely responsible for care-giving activities, which has forced a reduction in the time devoted to care, just as state services are being cut back as well. The "expansion of markets tends to penalize altruism and care."

Markets also undermine the environment. "Despite widespread public support for environmental action, the driving forces of globalization still put profit before environmental protection, preservation and sustainability." The World Trade Organization, the international body responsible for aligning environmental and trade policy, has instead acted to protect the trading system from government policies designed to protect the environment. The WTO, like the other main international institutions, reflects the interests of the rich nations, "often those of the G-7 [the seven largest industrial economies], or sometimes just the G-1 [the United States]."

But it should not be thought that the rich countries and the multinational corporations are consistent defenders of markets. They favor markets except when it advances their interests to favor state action on their behalf. And so a major aspect of the current globalization is extending the reach of patents to enhance corporate profits. As the Human Development Report notes, "most developing countries previously exempted agriculture, medicines and other products from national patent laws, but with the passage of the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), almost all knowledge-based production is now subject to tight intellectual property protection, unified internationally." Products developed with public funds are increasingly being monopolized by private firms.

The 1999 Human Development Report is unusual for an official document in being so critical of the powerful and the wealthy. In fact, the new UNDP Administrator Michael Malloch Brown, perhaps worried about his funding, felt obliged to remind us in his foreword to the Report that its authors enjoy "robust editorial independence" and to assure us that the Report "comes down clearly in favour of the power of globalization to bring economic and social benefits to societies." Brown gently admonished the Report’s authors: "In listing the negative impacts of markets on people, it is important not to appear to be rejecting markets as the central organizing principle of global economic life. Markets need institutions and rules — and too frequently in the global setting they are not yet adequately subjected to the control of either. But the unleashing of competition within countries and between countries has ushered in for many an era of prosperity and liberty." Brown goes on to note that where he "fully agree[s] with the authors is that this empowerment has been uneven." His conclusion is that we need to "keep markets free but fair."

Brown’s formulation, however, begs the question. What if "free markets" are inherently unfair? Markets produce and allocate goods based on the number of dollars that demand them, not on the basis of need. A million dollars from a wealthy individual creates more market demand than ten dollars from a thousand needy individuals. Moreover, even if everyone started out with equal incomes, markets work by creating winners and losers, thus generating inequality and leading to domination by the rich. In addition, markets are fundamentally incompatible with building community: they depend on ruthless competition and penalize those who regard others as human beings. Thus, the necessary consequence of markets is self-centeredness, inequality, and a lack of democratic control over the economy.

Fortunately, however, there is nothing inevitable about globalization. It is the result of political decisions and as such can be contested. Grassroots political action managed to stop the Multilateral Agreement on Investment, and September 15 has been declared an International Day of Action against the World Trade Organization. All who can ought to add their voices to the protest.


The full text of the 1999 Human Development Report is on-line at:


For many useful resources on the anti-World Trade Organization campaign, go to Public Citizen’s Trade Watch site: http://www.tradewatch.org/publications/gtwpubs.htm.

For information on how you can participate in the September 15 International Day of Action against the World Trade Organization, go to http://www.citizen.org/pctrade/activism/activist.htm.


Stephen R. Shalom teaches political science at William Paterson University in NJ. He is the author of Imperial Alibis (South End, 1993) and is currently working on Which Side Are You On? An Introduction to Politics.


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