Globalization's Have and Have-Nots

I've been listening to a podcast lecture by Michael Goldman, an Associate Professor at the University of Minnesota, entitled "Social Justice and Prosperity in a World City? Rethinking the 'Flat World' Thesis in Bangalore India". In this lecture Goldman describes a dark side to the rise of Bangalore as a modern BRIC mega-city. Despite the outward appearance of progression and rising wealth, Bangalore's growth has come at the expense of the rural people around it. Voracious need for land fueled by the growth of IT service companies and manufacturers (like Infosys and Tata) have driven the government to snap up surrounding farmland for very small amounts of money. This land is then sold to developers, who then resell for tremendous profits. The tenant farmers thrown off the land drift into the city in which they cannot afford to live, due to the high cost of living driven by the growth in the services industries and real estate prices. Public services are largely absent, only wealthy sub-communities have clean water and sewer services, again, out of reach for all but the most affluent citizens.

Goldman argues that the rise of the IT services industry in Bangalore has not been a tide that lifts all boats, but instead has lifted only a few yachts. While given land below market prices, the IT industry does not pay taxes, and indeed, only employs about 3% of the country's population. Many IT jobs created by Infosys and similar companies are now being moved to China, eastern Europe, and other areas of lower cost, highly skilled labor.

While globalization has many benefits, and is anyways probably not stopable, this lecture is a reminder that there are losers as well as winners, and perhaps the losers are more numerous. I have always looked at globalization as inevitable, but also desirable for the promise of world-wide economic integration which will hopefully encourage peace through shared interests and rising incomes for large segments of the world's population. However, it is impossible not to see the loss of manufacturing jobs here in the States and wonder if globalization is uniformly good for everyone. How many blue-collar workers can be "retrained" for other industries, for example? Adding to my growing sense of doubt, this lecture paints a picture that people in other nations are displaced as well in this process.

In the end, perhaps the lesson to be learned is that not everyone can be a winner in the spread of technology and wealth around the world. Perhaps it will eventually become clear that while globalization does benefit many nations, the side effects of income inequality and social stratification in each nation will become serious counterweights that must be addressed if we are to decree that globilizaiton really is good for the world.

Podcast link to the lecture:
http://uc.princeton.edu/main/index.php?option=com_content&task=view&id=3640


Bangalore skyline: