Poverty At Intervals Of Wealth

Harms Of The Global Economy On The Periphery

Term Paper (Advanced seminar), 2017

12 Pages, Grade: A

Moses Appiah (Author)

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Table of Contents


1. Historical Institutionalism and Genealogies of Inequalities

2. Poverty At Intervals Of Wealth

3. Global Justice, A Utopian Ideal

4. Conclusion



Several studies have contributed to the discourse of globalisation and how it has adversely impacted positively or negatively on the development of some third-world countries. Thus, in a way creating the incidence of a “race to the bottom” of some nations. This essay shares some perspectives on the ailing defects of the global economy on third-world countries. It problematises the process of globalisation as a network of capitalists that operates to the disadvantage of the periphery. A more complex dynamics of trade exchanges can be envisaged in an era where developed countries are increasingly subsidising industrial production; and on the other hand, the lack of opportunity for industrial growth in developing countries to match free-market competition within an emerging integration of global economies. Historical perspectives of colonialism and the continuous process of neoliberalism are an inevitable facet of this stymied discourse. Global trends on human development indexes indicates significant growth in sectors of health, education, and infrastructure in most developing countries, especially in the regions of Sub-Sahara Africa, Central and South Americas, and parts of Asia. Amidst these facts are also the widening gaps of inequalities that exist between the periphery and developed countries. Two main dimensions are engaged to examine the given circumstance of poverty at intervals of wealth. The first has to do with the concentration of wealth in highly developed countries and the second to do with resource-rich but third-world economies caught in the gambit of dependency, as they languish amidst their own natural and human resources. The interconnectedness of global institutions (actor-ship) roles within this discourse cannot be disjointed, but concerted, in those processes which often ignores contingencies of effects and harms asserted on the poor and vulnerable people.

KEY WORDS: Globalisation, Africa, periphery, international relations, trade, historic institutionalism, applied ethics, justice, poverty, corruption, exploitation, resources.


Over the past few decades, conceptions of globalisation have been recognised as a crucial developmental process, and has come to remain as the term of reference in explaining today’s world; it is indeed the defining term of the contemporary society (Scholte, 2005, p1). In a technical sense, it is viewed as the “increase in cross-border economic interaction and resource flows, producing a qualitative shift in the relations between national economies and between national states” — the global order of today (Baker et al., 1998, p 5). Though the contributions of globalisation are remarkable and reflect to an extent positive impacts on the day to day activities of people, it as well, comes with some consequential effects, thereby leaving the remnants on the quality of livelihood and increasing gaps of global inequalities that exist between people in our geographical spaces, that is, the global north and south divides. Globalisation, uniquely defines the varied reflections between the north and south, and as such, it gives rise to the need for bridging the gaps of inequalities that exist between the two regions. Whereas the north has dramatically influenced the globalisation process through institutional structures, factors of production, and supply chains; the south has merely been at the receiving end of the “spine-offs” globalisation offers.

Ideal contributions and interpretations have come to stay within the discourse of global inequalities. For example, interceptive programs from global organisations like the UN’s Millennium Development Goal (MDG’s) and now the Sustainable Development Goals (SDG’s) are all in efforts to achieve some levels of parity. Bridging gaps of inequalities through means of justice for the global poor becomes even more imminent for the realisation of such an utopian quest. The significance of justice in today’s world remains very basic and fundamental for peace, growth, and prosperity. Global justice, in theory, therefore “entails an assessment of the benefits and burdens of the structural relations and institutional arrangements that constitute and govern globalisation” (Collste, 2016, p 5). This paper tries to present a dual dimension that defines the situation most developing countries find themselves and further argue against the injustices that economic globalisation, together with its cognates of capitalism presents. Martin Hart-Landsberg refers to this impasse as “capitalist globalisation” (2013). Goran Collste on the other hand views “economic globalisation’ as the driving force that has integrated the world, notably through trade and multinational institutions, causing economic leaps in China and elsewhere – and similarly the adverse effects of inequalities it present to other places” (Collste, 2016, p 6).

Four main perspectives are analysed in this presentation. We argue that, though the process of globalisation has contributed through innovations, that enhances human activities, it also has at the same time created gaps of inequalities among people. First of all, the historical context that revolutionised the world from the 19th century are remarkable events and can be considered as the pre-condition for what we experience in contemporary times. Secondly, those pre-conditions spanning several decades has influenced and shaped our conceptions and views of the world and has settled us to global divisions (north or south), categorisations (poor or affluent), segregation (minority or majority groups), ethnic and racial sentimentalisations. These conceptions forms the basis for our conscious or unconscious interpretations and perambulations of the world. Thirdly, we consider dimensions of the harms exerted on poor developing countries by global capitalist structures, and the deficiencies of global governance and actor-ships. These dimension points to the internal and external influences that underscores the economic conditions of developing countries. Finally, we engage John Rawls “justice as fairness” theoretically; notwithstanding the facts that proponents of this school are often mistaken by pundits, we strongly argue here that Rawls contribution advances ‘justice as fairness’ as an alternate worth.

1. Historical Institutionalism and Genealogies of Inequalities. .

Inequalities in our arguments here does not seek to enforce that all persons or national economies must possess equal wealth, a “hard power” or a kind of “soft power” (Nye, 2004: 2011), but rather, to affirm with John Rawls assertions that “one reason for reducing inequalities within the domestic society is to relieve the suffering and hardship of the poor” (Rawls, 2001, p114). In other words, the gaps of inequalities between the rich and the poor is neither critical nor relevant under the underlying assumption that, the gap must not be “more extensive than the criterion of reciprocity allows, so that the least advantaged have sufficient all-purpose means to make intelligent and capable use of their freedoms and lead reasonable and worthwhile lives (Rawls, 2001, p114). These propositions can certainly not be said of the cases we find in many of our contemporary societies.

The challenges on global economies are enormous and also comes with varied complexities; the underlining effects are the ‘injustices’ it presents to the most vulnerable people in the world. About 1.4 billion people live in extreme poverty on less than $1.25 per day, and another 2.6 billion live in moderate poverty on less than $2.00 and less than $9.05 per day for a total of 4 billion people living below $9.05 per day at the BoP (World Bank, 2011; Arnold and Valentin, 2013). Giving these background defects, influenced by hierarchical stratifications of the social classes and to the more considerable extent the nation-states; globalisation breeds inequalities and hence Sigmund Bauman’s terms ‘the globals’ to refer to those who benefit from the processes of globalisation and ‘the locals’ to those who are least advantaged (Collste, 2016, p 7). The discourse of global justice has gained much attention, thus, to address and critically debate the current challenges globalisation brings, and to encourage some levels of parity, thus, bridging the gaps of inequality through the promotion of fairness and equality.

It is not misplaced to re-echo the historical factors that even preceded globalisation. The structures of the world economy have longed been ‘held in trust’ by complex manifolds off historical institutionalism. History even becomes more important here, because it helps unravel events, proxy, and actor-ships that has greatly influenced the global economy and also how it has “shaped political outcomes” (Fioretos, 2011). The economies of most developing countries are dependent on revenues generated from the export of resources, usually in its raw state; this has been the long-held traditional patterns of trade exchanges that entangles the South-North relations. Such practice of trade exchanges does not encourage the creation of local industries that will transform resources into value-added products, which will, in turn, create jobs and earn their ailing economies more export revenues. Who gains the most benefits from these provisions of standards? What underpinning factors have resulted in these vast economic disparities? How can the challenges of inequalities be met? We may not be able to address these queries here, but worth the cogitations.

Orfeo Fioretos, in his work, historic institutionalism in international relations (2011), makes account of “international cooperation and the international system as — covering multiple domains of international relations—war and peace, finance, trade, development, law, the digital world and further highlights the interconnectedness of the long temporal processes over the several decades that has characterised the global political system” (Fioretos, 2011, p 370). Historical perspectives of colonialism and the continuous process of neoliberalism are an inevitable facet of this stymied discourse. Historic institutionalist seek to emphasis structural preferences as their focal point to explain the calls for changes within global institutions. Global institutions at the founding moments, has long occupy what historic institutionalist call a “power strategic position, as a result, interest groups often see greater benefits from reproducing extant arrangements than from embracing radical changes” (Fioretos, 2011, p376). The reluctancy or the disinterest to pursue radical reforms can be attributed to investments made in drafting modules and designs, “such costs and other legacy effects as key factors that shape the evolution of designs” (Fioretos, 2011, p376). In sum, global institutions are autonomous and serve interest groups, thereby administering successive regimes along the lines of a path dependence system. Here, path dependence defines the process where existing structures “shapes the subsequent trajectory in ways that make alternative institutional designs substantially less likely to triumph (Fioretos, 2011, 376).

2. Poverty At Intervals Of Wealth.

The outcomes of historical evolutions on the periphery are diversely debated. But here we engage two main dimensions to examine the given conditions of poverty at intervals of wealth. The first has to do with the concentration of wealth in highly developed countries and the inability or for want of better words, the reluctance of global actor-ship and affluent societies to develop holistic approaches in alleviating the plights of developing countries. According to Thomas Pogge, “today’s massive and severe poverty manifests a violation by the affluent of their negative duties: an immense crime in which we affluent citizens of the rich countries (as well as the political and economic “elites” of most poor countries) are implicated” (Pogge, 2005, p37). Secondly, most resource-rich but third-world economies rely on developed countries for aids and support, as they languish amidst their own natural and human resources; that is to say, the lack of political will by leaders (elite class) and their ineptitude to turn the fortunes of their countries into the outmost benefits for their people. Thus to say, in the abundance of wealth, poverty travail. It can further be argued in other accounts, that, perhaps weak and developing economies have little or no alternatives for solutions to their misfortunes, but are bounded by the so-called ‘global economic relations’ that regulate or influence institutions of governance, and that leaders of developing countries cannot entirely be indicted of negligence, ineptitude or corruption. A fair share of implication can however be equally directed at agents and international actor-ships of those bureaucratic processes that pursue the interest of western capitalist structures. An example of such asymmetries can be cited on the conditions and factors that influence the pricing of natural resources or commodities, this remains obscure to many because poor producing countries have little or no influence in the price settings, as Jan Aart Scholte will describe these price settings or market indicators as ‘neoliberalist formulas’ (Scholte, 2005, p 330).

Global economic systems are influenced by the use of state-supported agents like Transnational Corporation(TNC), global organisation, and through bilateral, regional and international trade agreements— such agreements and the likes of aid, grants, loans from global regimes have often exposed poor developing countries to economic exploitations and coercive measures of controls. The operations of Transnational Corporations (TNC), together with some regulation of regional and international organisations, are implicated in the sufferings of developing countries. “Transnational corporation has shaped a global system of production and consumption that have created tremendously harmful international and national imbalances, instabilities, and inequalities” (Harts, 2013). TNC’s operations cover varied market industries; for example, the mining, agriculture, trade, manufacturing, construction, and fashion industries. Earned returns are sent back home, thereby growing the economies of developed sending countries to the disadvantage of resource rich but poor hosting countries. Additionally, poor developing countries that open their country to TNC’s mainly in the mining and manufacturing industries are usually burdened with the noncompliance of both local and international standards and laws, thereby exposing the natives to health and social-economic challenges. The Niger delta is a unique example, where offshore oil drilling by Shell has resulted in the spillage and pollution of the entire region, affecting the livelihood of inhabitants of ‘Ogoni state’ predominantly a fishing community (Nnadozie, 2004).

Similarly are the mining activities of transnational mineral extracting corporations that pollute the water bodies, degrade the environment, and forest region, affecting wildlife and aquatic life. The ailing defect is that such TNC actions of negligence and disregard for national and international laws can mainly be witnessed in developing countries, as they are practically an infeasible phenomenon in developed countries. The assertion here is that the act of serving justice for the global poor are even approached with unequal measures. These raise questions to infer if ‘justice’ remain features of only the developed world; as developing countries are exploited by some TNC.

In relations to the activities of international organisation, like the World Trade Organisation (WTO) trading negotiations between low developed countries and highly developed countries, turn to protect the markets of affluent countries through tariffs, quotas, anti-dumping duties, export credits, and subsidies to domestic producers, substantially impairing the export opportunities of even the very poorest countries; this in effect cost developing countries billions of dollars in lost export revenues (Pogge, 2005, p 50).” Additionally, in highlighting the social hierarchies between countries, “it does capture an important confederation of the world social relations, that is to say, people leaving in affluent societies, for example, member countries of G7, the OECD and NATO have generally held structural advantages over people of countries that have lain outside such clubs (Scholte, 2005, p 326).” This often creates gaps in opportunities that exist between the two divides. Global financial organisations, on the other hand, offer grants or loans to developing countries to stabilise their economies, but usually, the features of these loan agreements turn to impose controls on the various sectors of their economies.

On the issue of trade, current trading structures position resource-rich but poor developing countries at a disadvantage, as they gain less from trade exchanges as Andre Gunder Frank puts “Unequal exchanges” (1967) to portray a “more for less” (Wolpe, 1975) trading relations. As noted previously, Trade agreements have taken diverse dimensions, with imminent integration of world trade; the shortfalls, however, are the concerns of the competition it exposes local industries in developing countries. Relatedly, agreements like the Trade-Related Intellectual Property agreement (TRIPS) received a fair share of criticisms, mainly because most governments of the ‘South’ signed this accord before they adequately understood its terms and implication— due to pressure from pharmaceutical companies” (Scholte, 2005, p 331). Prices of some medicines were hiked in poor countries, this can be viewed as discriminatory acts that deprive the ‘South’ of the fundamental rights of access to health care, and such acts can be considered as morally unjustified on the grounds that, health-threatening condition must not be substituted for capital gains at the expense of human lives. Therefore blocking patent rights that give a vast majority of people access to affordable medication is worse off than any crimes against a category of people; this can equally be likened to a decree of indirect modern-day genocide. The poor people of the world also need access to affordable medications and quality health care.

3. Global Justice, A Utopian Ideal.

Theories relating to global justice mainly premised on global distributive and rectificatory justice, and their development and advocacy are widely accredited to the works of John Rawls’ ‘theory of Justice’ (1971). From the Rawlsian’s school of thought, ‘Theory of Justice’ accounts for an idealistic approach where “justice as fairness can be extended to international law” (Rawls, 2001, p4). Though a utopian ideal, John Rawls prescribes five hierarchies of domestic society to depict those he refers to as the reasonable liberal people, the decent people, the outlaw states, the societies burdened by unfavorable conditions, and the benevolent absolutism society. We will lay emphasis on the relationship that exists between the liberal or decent society and that of the societies burdened by unfavorable conditions, for the sheer reason that they represent the majority of the divisions that we seek to address in this paper. It can be argued for Rawlsian’s reasoning that a normative and moral approach in which realistic attainment of global justice can be envisage would mean equal rights for all people (Rawls, 2001).

The infliction of harm and the ideal of ‘restoring the dignity of victims’ through a distributive and rectificatory approach of justice; and its feasibility are worth considering. Primarily, the concern has to do with the extent of assistance owed to these burdened societies. John Rawls has emphasise in varied considerations that, duty of assistance must not necessarily mean to “carry out principles that will regulate economic and social inequalities among societies” because most of such interventions have not been sustainable or lacks — “clear definition of goals, aims or cut off point beyond which this assistance may cease” (Rawls, 2001, p106). Rawls’ portrayal of the burdened societies rather emphasis that, not all of such societies are poor in the real sense, neither are all decent societies wealthy. However, less wealthy societies can as well become decent under circumstances where “political tradition, law, property and class structures with their underline religious and moral beliefs and cultures are such that they sustain a liberal or decent society” (Rawls, 2001, p106).

Secondly, we argue here that states need a certain level of economic autonomy that will enable them to have controls over resources and input contribution on “capital flows” under an idealist systemised regime of global capital controls. The former has to do with a system of trade that does not inhibits the maximisation of accrued revenue and the latter being the establishment of a global capital controls system that accounts for capital flows across national borders as a measure of constraining money laundry, corruption, and exploitation by regimes of capitalist, political elite, war financiers, and among others.

Thomas Pogge’s claims for ‘a duty not to harm’ are that developed countries being in their current state of affluence is because of historical injustices and as such owe victims of these injustices ‘a duty of assistance.’ Global distributive and rectificatory justice remain significant as ideals that need consideration. In this light, political theorist seek to call for a more holistic and fair approach to overcoming the ever-increasing gap of inequalities. An approach that will restore the dignity of people who historically may have lost or been deprived of decent livelihood and further ascertain the feasibility of contributions of theories. Quantifying the amounts of rectification may appear impractical. Political theorist like Gorran Collste introduces a trans-generational view of the historical fact and hold the position, “so long as there are at present identifiable beneficiaries and victims of past injustice – former colonial powers can in different ways and to the best of their efforts contribute to change the present inequalities that are the legacy of history” (Collste, 2010, p1). As the discourse of global rectification justice attracts varied contributions, it remains infeasible the amount of compensation that would be enough to reconcile the acts of injustice against victims. To overcome theses lapses, measures to avoid similar injustices, and all other present and dangerous actions and inactions that continues to engrave the sufferings of the global poor. What matter in tackling global inequalities, is to abate economic exploitation and its agnates of the quest for capital accumulation, and by extending the moral duty of assistance to others, as in Brock’s global cosmopolitan justice (Brock, 2009). An idea that provides for the poor a basic minimum standard, where their social needs will be met in preserving their human dignity. The world has journeyed with persistent levels of injustices, hence the rising concern for human rights, labor rights, fairer economic and trade relations in a just world. Answers to questions of who serves as actors or agents changes and global justice are theoretically limited. Some contributions have noted that, responsibility requires the moral agency, and as such, we owe to others as members of the global community. Also, the state owes members responsibility—‘statism’ (Nagel, 2005), likewise are those of regional, international organisations and transnational corporations.

4. Conclusion.

The harms associated with the process globalisation are enormous, issues of human rights, labor exploitation, poverty, conflicts, and wars are challenges that confront the world, the reverberating effects are human displacement and irregular migration flows across national and regional boundaries. The global economic regime’s role within “the present world order is characterised by huge gaps between rich and poor and one challenge for ethicists engaging in the discussions of global justice is to find criteria for fair - or at least fairer - sharing of resources” (Armstrong, 2012). Our commitment toward fairness implies all aspects of engagement and processes of internationalisation, that is, economic, political, bilateral, multilateral decision must put the global poor at the foremost consideration. Global concerns for these disparities are evident, hence the efforts for poverty alleviation through various intervention programs, for example, the UNDP Africa poverty reduction (UNDP, 2013) and IFAD strategy for rural poverty reduction in Latin America and the Caribbean (IFAD, 2016). Additionally, the Sustainable development goals enrich these developments, with binding and adherence obligations on member states to ensure implementation of set goals. The outcomes of the SDGs are even more vital because of the variety of features it covers. The seventeen goals are all critical to the fight against global inequalities and presents a more underlying determinant for serving global justice.

Historical injustices are grievous, and undeniably, compensation to victims appear infeasible. The harms done are practically impossible to quantify in the financial sense. Additionally, “the main actors of such injustices, that once existed are gone forever; however, beneficiaries from past injustices can closely relate to those devastated by such injustices in different ways, and they can do their best to change present inequalities that are the legacies of history” (Collste, 2010, p 96). In this article, we have argued that historic occurrences could not be in isolation to current inequalities in the world and the need for the stakeholder to engage measures that draw some level of parity between increasing gaps. It further affirms the discourse on global justice as plausible, and that Rawls accounts for justice as fairness remains valid and fundamental for change in the global political economy.


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Poverty At Intervals Of Wealth
Harms Of The Global Economy On The Periphery
Globalisation and Global Justice
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poverty, intervals, wealth, harms, global, economy, periphery
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Moses Appiah (Author), 2017, Poverty At Intervals Of Wealth, Munich, GRIN Verlag, https://www.grin.com/document/513913


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