The general consensus on globalization is that its benefits, great as they may be, are spread somewhat slowly and unevenly. Even the most passionate supporters of globalization concede that the transition to an open economy can be painful and that it should always be carefully managed.
The distribution of the fruits of globalization has much to do with the preexisting conditions of an economy, and of course, the first world once again has a significant advantage. For example, in societies that lack a transparent political process, a fair and efficient tax system, or a lagging education (among many other things), it is very possible that the rich get richer and the poor get poorer. Argentina, for instance, following some liberal economic reforms, saw a significant growth in employment thanks to the creation of "call centers." In order to be able to get such a job you have to be able to speak English fluently and be able to convince the person on the other end of the line that your name really is Buck and that you are based in Dallas. Needless to say, the poor need not apply.
This has largely been what has happened in Latin America over the last decades. For a wide variety of reasons, including cronyism, corruption, and inefficiency, the poverty gap in many counties in the region has been growing or staying about constant.
For example, in Brazil, notorious for its inequality, the poorest 50 percent of the people are only able to pull in 10 percent of the total national income, the same percentage earned by the richest 1 percent of the population. No matter what free-traders advertise, in the short run, there is little we can do but sit back and hope that in the longer term, globalization delivers what has been promised: making everyone better off.
In the meantime, Latin America is being forced to cope with certain systemic problems that globalization has spurred. A friend of mine recently returned from Caracas and, despite the many things that might shock a person in Venezuela, he spotted one such draw back of globalization. Coming from Buenos Aires, it was not so much the vast shantytowns that impacted him, but rather the fact that huge cell phone advertisements hung on the outer fences of these poor neighborhoods.
The cell phone ad simply goes to show that as tariffs are dropped and trade accords are signed, a culture of consumerism has been extended across all sectors of society. Coupled with increased urbanization and mass communication, there is little way for the standard lower-class citizen to avoid flat panel TVs and sleek, shiny iBooks. Advertisers now see the benefits of showing off their products everywhere, despite clear, endemic poverty.
Until the next "phase" of globalization sets in, the result will be a stagnant lower class with increasing ambitions. I like to believe that crime stems from need, and therefore the most commonly stolen goods should be milk, bread, and so forth. Instead, among marginalized Latin American young men, it is brand name sneakers. Many are starting to attribute this change in criminal patterns to the spread of globalization.
According to CEPAL (or, in English, ECLAC, the Economic Commission for Latin America and the Caribbean, a UN group), expectations for consumption have been on the rise, and in fact, they have reached levels comparable to the United States.
Like in most other parts of the world, brand names have become a way of life. The media increasingly determines tastes, while, simultaneously, its reach continues to extend itself. Consider the following: even though approximately a quarter of Brazilians and almost half of Venezuelans live beneath the poverty line, 86 percent of Brazilian homes and 89 percent of Venezuelan homes have color TVs.
It is not surprising that most security experts in the region thus attribute the majority of criminal acts to what is referred to as the "young man from a marginal neighborhood." In this sector of society, violence and crime has become an essential way for establishing identity and social status.
Worse yet, this might be a self-perpetuating cycle. Prospects for this type of social actor are bleak, and so they often resort to crime. The opportunity cost of not dealing drugs or peddling small arms, and going to school instead, is exceptionally high.
Modifying the culture of consumerism in poverty-stricken regions presents a colossal challenge for policy makers. Instead, governments here should turn their weaknesses into strengths. A wide-scale ad campaign celebrating the achievements of members of the lower class who have risen in the social strata might boost optimism and promote faith in hard work and effort. (Typically such campaigns are likened to leaders such as Stalin or Per??®¬ but as long as they promote democracy and stability and not a cult of personality, I feel that they would be justified.) Moreover, public education should continue to be advanced and efforts to disarm the civilian population should be strengthened.
Unquestionably, the transition into the open market has been and will continue to be hard on the lower classes of Latin America. But if the transition is not handled in an adroit fashion and is instead left unto itself, the outcomes could be counterproductive. Crime and insecurity could seriously stunt growth and toss the region into economic turmoil. If governments here do not prove to the people that globalization eventually will make everyone better off, the liberal agenda will be faced with rejection and its future will be placed in jeopardy.
