Globalization and Trade and Poverty: Crash Course Economics #16

Summary

In this Crash Course Economics episode, Adriene Hill and Jacob Clifford explore the complexities of poverty and extreme poverty, discussing the UN's Millennium Development Goals and their progress by 2015. They highlight globalization and trade as key factors in reducing poverty, with mobile phones and microcredit playing significant roles in economic participation. However, they also address the downsides of globalization, such as exploitation and environmental concerns, emphasizing the need for sustainable solutions to combat poverty without harming the planet.

Takeaways

• 📈 The United Nations set Millennium Development Goals in the 1990s with a target to eradicate extreme poverty and hunger by 2015.
• 🌐 Extreme poverty is defined by the U.N. as living on less than $1.25 a day, characterized by severe deprivation of basic human needs.
• 📉 Despite progress, as of 2015, 836 million people still live in extreme poverty, though it's a significant reduction from 1.9 billion.
• ⏫ The World Bank predicts a continued decrease in extreme poverty, potentially dropping below 400 million by 2030.
• 🌡 Climate change poses a threat to the ongoing improvements in global poverty reduction.
• 🤝 Factors contributing to the decline in extreme poverty include education, humanitarian aid, and international policies, with globalization and trade being significant drivers.
• 📲 Mobile phones have been a transformative technology in developing economies, facilitating access to banking, education, and information.
• 🔄 Globalization has allowed developing countries to participate in the global marketplace, creating jobs and economic growth, but also causing displacement of high-wage jobs.
• 💼 The Bangladeshi apparel industry, for example, provides jobs that pay above-average wages in the local context, despite being considered sweatshops in developed countries.
• 🛡 Critics of globalization argue that it leads to exploitation, oppression, and a lack of regulation in developing countries, calling for higher wages and protections for workers.
• 🌳 The sustainability of globalization is questioned due to its environmental impact, including deforestation, pollution, and climate change.
• 💼 Microcredit, as implemented by Muhammad Yunus, has been successful in enabling people in extreme poverty to participate in the economy and improve their lives.

Q & A

What are the Millennium Development Goals created by the United Nations, and what was the deadline for these goals?

The Millennium Development Goals were a set of 8 goals established by the United Nations with a deadline of 2015. These goals included reducing child mortality, promoting gender equality, combating major diseases, and the first goal was to eradicate extreme poverty and hunger.

What is the definition of poverty according to the United States and the United Nations?

In the U.S., a person is officially living in poverty if they make less than $11,770 a year, which is around $32 a day. This is referred to as the 'poverty line' or 'poverty threshold'. The U.N. defines 'extreme poverty' as living on less than $1.25 a day and being characterized by severe deprivation of basic human needs.

What was the target set by the United Nations to reduce the number of people living in extreme poverty?

The United Nations set a goal to reduce the number of people living in extreme poverty by half.

How successful was the United Nations in achieving their goal of reducing extreme poverty by 2015?

By 2015, the U.N. reported that 836 million people still lived in extreme poverty, which was a significant reduction from 1.9 billion, indicating progress towards their goal.

What is the potential impact of climate change on the progress made in reducing global poverty?

Climate change poses a threat to the improvements in global poverty as it can affect food production, water availability, and overall living conditions, potentially reversing some of the gains made.

What are some factors contributing to the decline of extreme poverty?

Factors contributing to the decline of extreme poverty include better access to education, humanitarian aid, policies of international organizations like the U.N., and most significantly, globalization and trade.

How has globalization and trade contributed to the reduction of extreme poverty?

Globalization and trade have made the world's economies and cultures more interconnected, allowing for the growth of many developing economies. Free trade agreements and technological advances have facilitated the movement of goods, services, and ideas, contributing to economic growth and job creation.

What is the concept of 'leapfrogging' in the context of economic development?

Leapfrogging refers to the idea that countries can skip the adoption of older, less efficient technologies and move directly to more advanced, cost-effective solutions that were not available in the past. This is often seen in developing countries adopting mobile technology for banking and communication.

What are the potential downsides of globalized trade?

Downsides of globalized trade include the exploitation of low-wage workers in developing countries, hazardous working conditions, and the displacement of high-wage workers in developed countries as jobs move overseas.

What is the role of microcredit in addressing extreme poverty?

Microcredit involves giving small loans to low-income individuals, often in rural areas, to help them start small businesses or fund income-generating plans. This enables them to participate in the economy and improve their living conditions.

How does the concept of 'sustainability' relate to the challenges of globalization and poverty reduction?

Sustainability in the context of globalization and poverty reduction refers to the need to ensure that economic growth does not come at the expense of the environment. The challenge is to lift the poor while maintaining a livable planet, addressing issues like deforestation, pollution, and climate change.