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September 18, 2013

Globalisation can reduce poverty

  • World poverty is on track to be reduced by 75% from its 1990 level by 2015
  • Leading economist criticises self-styled anti-poverty campaigners for siding with the anti-globalisation movement
  • Argues that such campaigners will lose credibility because of their inaccurate predictions unless they admit they got it wrong and apologise to those whom they misled


Anti-globalisation campaigners like the Occupy movement need to accept they have misunderstood globalisation and apologise to those they have misled.


Anti globalisation campaigners have in the past claimed that globalisation only helps rich people and nations and that the current world trading system will not reduce poverty by anything like the 50% targeted by the Millennium Development Goals by the target date of 2015.


But new and credible data from the respected Brookings Institute suggests that far from poverty not being reduced by as much as 50%, it is likely over this period to be reduced by over 75%.


Gresham Professor of Commerce Douglas McWilliams this evening in his first Gresham lecture of the new academic year 2013/14 asks the anti-globalisation campaigners ‘to be brave enough to admit they were wrong’ and to ‘apologise to those who have been misled’.


In the lecture ‘Globalisation and Inequality’ Professor McWilliams shows how globalisation has been associated with rising inequality within countries as low skilled jobs have migrated from richer economies to poorer economies but that this has been offset by falling inequality between rich and poor countries.


He uses the example of Premier league footballers’ salaries to illustrate how income disparities have risen. ‘Sir Bobby Charlton in the early 1970s was paid about twice the average pay in the top league and about ten times what a player in the lower leagues would be paid. Today Wayne Rooney is paid about ten times the average pay for a premiership footballer and about five hundred times what a lower league footballer would earn. Professor McWilliams argues that this widening of the income gap in top football probably has further to go. ‘It all depends on what incomes the clubs achieve – if they get more from pay per view and from opening up the international market for soccer it remains feasible that we could see a footballer earning £100 million a year within the next 10-15 years.


Professor McWilliams warns against intervening directly to stop high pay or to tax it. ‘Excessive pay is the symptom, not the underlying problem. Where pay is too high, the need is to deal with the excessive profits and exploitation of the consumer that allows pay to be too high in the first place. This should be done through enforcing competition policy so that consumers benefit from lower prices and better service. Simply trying to cap pay may make people feel good but will not make any consumer any better off.’


Professor McWilliams draws attention to the spread of anti-globalisation sentiment including an example on the BBC GCSE Bite Size page for geography :


‘Globalisation operates mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries. The role of LEDCs in the world market is mostly to provide the North and West with cheap labour and raw materials.’ The BBC quotes in support of this ‘environmentalists, anti-poverty campaigners and trade unionists’.


Professor McWilliams argues that the BBC should not be spreading anti-globalisation propaganda that is contradicted by all reputable studies, particularly on a website aimed at children. He has written to Lord Hall, Director General of the BBC, asking for the misleading site to be corrected. A copy of the letter is below.




The Lord Hall of Birkenhead

Director General


Broadcasting House

Portland Place

London W1A 1AA


18 September 2013


Dear Tony


BBC GCSE Bite Size


This is a relatively minor matter, but it reflects the extent to which tendentious and rather political claims have permeated parts of the BBC – one of your many challenges.


The BBC runs something (of which you may well be unaware) called GCSE Bite Size giving help to children sitting exams.


When searching for quotes for globalisation on the BBC website I found this gem[1]: ‘Although globalisation is probably helping to create more wealth in developing countries – it is not helping to close the gap between the world’s poorest countries and the world’s richest.




Globalisation operates mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries. The role of LEDCs in the world market is mostly to provide the North and West with cheap labour and raw materials’.


Cited in favour of the latter claim are ‘anti poverty campaigners, environmentalists and trade unions’!


Both comments may have been written at the time when the results of globalisation were unclear. But even then they would have been politically biased and tendentious.


But now the impact of globalisation on poverty is known and it has turned out that world poverty has been reduced dramatically – and very clearly as a result of globalisation, not aid or charity. See the attached copy of my Gresham Professorial lecture on the subject which I am giving this evening.


So the comments on your website are not only politically biased but have clearly been disproved by the evidence.


Obviously you need to take down these particular comments.


I’m sure you will agree that the BBC should not be in the business of feeding out propaganda. And you particularly should not be feeding propaganda to children.


But I suspect this is just a symptom of a wider malaise. You need someone to look at your whole output and weed out not only those claims that have now been disproved by the evidence (there are some on global warming that look to have been proved wrong) but also those that seem to owe more to political conviction than the evidence.


I have mentioned your site in my lecture and the press release about the lecture not in the sense of an attack on the BBC but in the context of pointing out that many of the claims of the effects of globalisation are simply factually inaccurate and can be proved to be wrong. Sorry to have had to use you as an example!


Yours ever,




Douglas McWilliams


Chief Executive


cc Stephanie Flanders (by email)


[1] http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev1.shtml

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