by Bruce Wydick
“They’re too loud, too zealous, and their music is irritating,” Gary blistered.
Sofia raised her eyebrows in mock surprise. “Wow, my dad is a pastor. I should warn him about that.”
Before an obviously flustered Gary could respond, the restaurant hostess interrupted, summoning the students for their table. “Gary, you will join us for dinner?” Alex suggested.
“Be happy to . . . if that’s okay with everybody.” He looked around the group.
“Absolutely, come join us,” invited Sofia with a forgiving smile.
They were given a table directly overlooking the lake. The sun was setting behind a tall bank of puffy cumulous clouds to the west that rose from behind the mountains and extended thousands of feet into the sky. It created a mélange of orange, rose, and pink that formed a backdrop to the volcanoes draped in dark brown shadow in the foreground. The sunset projected onto the lake, creating reflective orange ripples that danced hypnotically on top of the deep blue. The lake was quiet except for a few fishermen working alone in small boats, casting nets in the twilight.
Gary lit a cigarette and exhaled a cloud of exhaust. “Mind if I smoke?” he asked the group. It was a little late to object. The nicotine haze lingered under the thatch roof, slowly dissipating through the small cracks. “Pretty crazy, this coffee business, isn’t it? Such a classic case of a postcolonial system that’s been perpetuated to serve the interests of the corporations in the core countries at the expense of the periphery.”
This vocabulary was somewhat new to Angela. “What’s this core-periphery thing?” she asked him. Must be something she had missed at UCLA. Maybe this would help explain the mystery of how growers like Fernando who grew such high-quality coffee could be so poor.
“Well, the world works like this.” He took a quick drag on his cigarette and blew the smoke upward again with his lower lip and glanced quickly over at Sofia. She was listening, and he straightened up slightly in his seat.
“Internationally speaking, there is a core and a periphery, and a semiperiphery if you want to get technical about it. The core countries are the powerful countries, the ones with all the resources and all the money. By virtue of their power, they write the rules that govern the international economy, naturally to benefit themselves. The periphery, on the other hand, this consists of the poor countries, like Guatemala. The periphery lacks capital, lacks education, lacks most things in fact, which causes them to be exploited by the core. The core countries use the countries in the periphery for their natural resources, agricultural commodities, and low-wage manual labor, while maintaining a grip on technological superiority, advanced forms of capital, and so forth. Military superiority helps lock in power. The semiperiphery is made up of countries like Brazil, Costa Rica, and Mexico, which have some characteristics of the core, but are also subject to its domination. But it’s this peripheral position to the core countries that is the root cause of poverty in poor countries.” There was a short silence.
“Why, that’s a very interesting theory, Gary,” Rich broke in after the pause, flicking a tortilla chip into his mouth and crunching it loudly.
“Yes, it’s called World Systems Theory,” continued Gary. “Do you know it?”
“Oh yes.”
“I take it you’re not a proponent.” Gary suddenly looked agitated.
“You’re right, I’m not,” said Rich. “Gary, my new friend, where do we even start with this? I mean where does, say, China fit into this theory about the world? Shoot, there’s no country that makes as much stuff for the ‘core,’ as you call it, than China. And here you’re talking about somewhere around half a billion people being pulled out of poverty by being part of your ‘periphery.’ Now they hold over a trillion dollars of US debt in their hands. Does that make China a core team member now?”
Gary thought for a moment and took another reflective drag on his cigarette, the burnt end lighting up to a bright orange glow. He expelled the smoke. “China is a country that has been exploited by the West for centuries. Part of the people’s movement that led to socialism in China was a reaction to their status on the periphery. A very natural reaction.”
Rich responded quickly. “Yes, but while it stewed in its own Marxist juices for three decades, it remained poor. Only when it reintegrated with the world economy and became a big exporter to the ‘core,’ did it start becoming rich. It doesn’t fit with your theory. Your theory says that integration into the world economy causes poor countries to remain poor. The greatest movement out of poverty in the history of the world controverts bankrupt ideas like World Systems Theory, which are essentially just recycled Marxist gibberish.”
“Hmmph.” Gary stood up. “Anyone want a drink?” His offer was to the group, but his eyes were directed only at Sofia.
Sofia smiled. “No thanks, Gary, I’m good.” As Gary headed to the bar, Angela caught Sofia’s eye and winked at her. Sofia shook her head as she smiled back and subtly rolled her eyeballs. Angela had watched countless episodes of guys hitting on girls before, but this particular one was special to behold. She could tell that Gary saw Sofia as a prize that could only be won by the mind of an incisive scholar. In her mind she likened the conversation that had arisen to an intellectual bullfight where Gary was the matador and Rich was the bull. To win his prize, Gary had to slay the bull.
Alex kept the discussion going while Gary got his drink at the bar. “Rich, China has reintegrated on its own terms. China is a very proud, independent country, and difficult to compare to, say, Latin America.” They discussed China for a while.
Gary returned as Sofia was commenting, “There is certainly some truth to this. For example, in the 1990s the International Monetary Fund wanted China to liberalize its capital markets with the other emerging Asian economies. To its benefit, China held its ground and as a result was able to withstand the Asian economic crisis, while the countries that followed the bad IMF advice, like Thailand, Malaysia, and Indonesia, fell into huge recessions.” Angela could read Gary’s mind: critical view of the IMF, another plus.
“Sof, sure . . . right, but this is beside the point,” said Rich, only slightly annoyed. “The main issue is whether, as ‘World Systems Theory’ says, integration with the world economy causes poor countries to remain poor. I’ve got nothing against leftist theories about the world, but what really steams up my goggles is when people keep promoting their favorite economic theories without empirical evidence to back them up, just assuming they’re true because it’s what they want to believe, supporting them with a few spicy anecdotes here and there. It’s storytelling, not solid science.”
Gary was sitting at the table again, John Lennon peering through his gold wire glasses at the group, captivated by the long, shiny brown hair flowing delicately across the bronzed shoulders of the social scientist sitting across the table. He lit another cigarette, waved out the match, and began again. “Since colonial times the poor countries of the world have played servant to the European and European-settled nations. The patterns of trade that emerged in the twentieth century followed the patterns that had been established by colonialism. It was clear that the nature of engagement between the periphery and the core had to change.”
Alex interjected, “You’re talking about import-substitution-led industrialization.”
Gary nodded favorably, like a teaching assistant at a research university affirming the response of a younger student-disciple. “Yes, exactly, Alex. Countries like India, Mexico, Brazil, well, most of Latin America actually and a lot of the rest of the developing world, protected themselves against the imports from the core and developed their own manufacturing industries. India called it the Third Way, between the communism of the East and the capitalism of the West.”
Rich butted in. “And so, Gary, tell us how that all worked out.”
“Well, it led to the industrialization of much of the periphery,” he responded, “and a lot of economies being at least somewhat liberated from their peripheral, subservien
t role to the core.” The matador bowed toward the crowd after a difficult pass by the bull.
Rich retorted sharply, “Yes, and a world full of bankrupt economies. Definitely a case of the grass being greener above the septic tank. You see, a lot of these wonderful industries Gary is talking about couldn’t get going unless they had help from the political system, and boy, they got it. So much so, that these industries couldn’t exist without dipping their hands in the government kitty around election time. They were like heroin addicts, quiverin’ little hands reaching for the needle of government cash to shoot into their veins. Politicians lived off the monopoly profits of the state enterprises, and the state enterprises were protected by the benevolence of the politicians they bought off. And guess what? By the 1970s and early 1980s, the governments couldn’t support them anymore, so you know what they did? Because no politician could get elected without shaking out the goody bag to these industry captains who now had control over a good part of the economy, they printed money and gave it to them that way. Guess what they got in return? Hyperinflation. These people; if they had only slightly less brains, you’d have to plant ’em in dirt and water ’em twice a week . . .”
Sofia commented, “Yes, that definitely gave the World Bank and the IMF something to do after they finished cleaning up Western Europe after World War II. Their new mission became rescuing the bankrupt economies of the developing world.”
Alex looked around the table and couldn’t resist—“Ah yes, the World Bank, the IMF, and the WTO. The Axis of Evil.” He grinned menacingly, glancing over at Rich for a reaction.
“Yeah, right . . . the Axis of Evil,” Rich repeated satirically in a dramatic, diabolical voice.
Sofia broke in, “The truth is, though, Gary, that with few exceptions, the import-substitution strategy was mostly a bust, especially in India and Latin America. Regardless of what you think about the World Bank, Rich is correct: the best evidence shows that as countries have opened up to world markets, economic growth is somewhere between one and a half to two points higher.” The sharp horn of the bull had just inflicted a significant wound on the matador.
Angela decided it was time to enter the fray, even in a small way. “It’s hard to point to many cases where countries have thrived by turning inward, at least in the long run—doesn’t seem like socialism provides good incentives for long-term prosperity.”
Rich jumped in again. “Does the pope wear a funny hat? Yes, Angela, socialism does not provide very good incentives for long-term prosperity.” Rich could have been more affirming; she was only trying to help.
Gary looked again at the Argentinian economist with the long dark hair. At this point he seemed to merely be fighting for her respect by finding pertinent anecdotal exceptions to Rich’s generalizations.
Gary contended, “Okay, if globalization helps the poor, then shouldn’t it benefit people in all parts of the world? Sure, there are always going to be a few capitalists who get rich in the globalization game, bringing up the average income in a country while the poor are left behind, but with globalization inequality has increased.”
Rich interrupted him. “Now, Gary, let’s not move the target to the other side of the barn. Your claim was that developing countries get poorer when they trade with the rich countries, while the evidence indicates the opposite. Now you seem to admit that this may be true, but that it’s inequality that’s getting worse. Gary, in your world if you have two people in poverty, and one becomes wealthier, is that a bad thing?”
“Not if that increased wealth is used for socially beneficial purposes,” said Gary.
“Are you kidding?” Rich exclaimed. The bull was very much alive and continuing to charge the cape aggressively. “So we take it from the guy who’s taken the risks and worked hard to improve his family’s life, and give it to the guy who didn’t? You’d have to be dumber than the back end of a chicken to ever try to accomplish anything under that set of rules.”
Sofia intervened. “Look, these are obviously difficult issues. International economics and poverty traps are a lot more complicated than people want to think, but this is exactly what makes me uncomfortable about ideas like World Systems Theory as well as blanket statements about the free market taking care of everything. First of all, people in poverty traps aren’t poor because they don’t work hard; they’re poor because their economy is stuck in a low-level trap. Second, having an economy open to trade may spur economic growth, but it is obviously insufficient alone to eliminate poverty. Look around us.” Angela watched Gary as he became mesmerized by Sofia’s articulacy and her smooth features dancing in the candlelight.
Sofia continued, “But as for the inequality in developing countries getting worse with globalization, international trade gets blamed for a lot of inequality, but there are a lot of other factors that increase inequality, like the introduction of new technologies that decrease the demand for unskilled workers and increase the demand for skilled ones, even in rich countries. This is a much bigger contributor to inequality than international trade.”
Gary seemed to be relieved to have discovered a patch of common ground with Sofia on the inequality issue. “Yes, the inequality globalization creates in rich countries is just one more reason to oppose free trade. One of the great social movements of our time has been through the alliance of American blue-collar workers whose jobs are threatened by globalization and those who stand against offshore manufacturing and Third World sweatshops.”
“With no mixed motives, whatsoever, of course,” quipped Rich. “Forcing firms to offer industrialized country wages to people in poor countries is a surefire way to keep those workers in developing countries wading around in their rice fields filled with poisonous snakes and away from their manufacturing jobs . . . American unions . . . such big hearts for social justice.”
Rich continued, “Gary, you’re right. The main two groups of people protesting those jobs you call ‘sweatshop’ work are brainless leftists who probably need to find a job themselves, and overpaid union workers who are internationally noncompetitive. It sure ain’t the people in developing countries working in the factories. There are lines around the block to get those jobs. I’ve seen them all over the world. And they don’t need guys like you to watch their backs by taking their jobs away. What poor countries need is capital investment, not boycotts. And I’m going to say something even more shocking to you, Gary. My concern with Africa is not that there are too many of what you call sweatshops there, but too few.”
Angela watched Gary sit blankly at the table, too stunned by this overwhelming barrage of apostasy for an immediate response. The bull was snorting and rearing up on its hind legs, directing its horns at the matador for the kill. But Sofia gazed at Rich pensively for a moment across the candle on the table.
“Rich, you’re just a little too . . . homo-economicus for me.” She smiled wryly at him.
“Sof, you’re breakin’ my heart. Does that mean we shall never wed?” Rich teased her affectionately.
“Yes, unfortunately so, I’m afraid.” The matador was still alive.
“I agree with you that globalization is mainly a good thing, but there are a lot of other noneconomic factors involved that I think should make economists more sensitive than they typically are about job losses.”
“Like what?”
“Like the importance of identity, for example,” Sofia replied. “A steel worker, say, derives his happiness not just from income, but from his identity as a steel worker, being part of a group of steel workers. It’s the focal point for his relationships and how he regards himself.”
Gary saw an opportunity and jumped in. “I couldn’t agree with you more about identity, Sofia. Any sociologist would tell you that identity trumps income.” Angela watched him glance a little nervously at the bull. “Why do you want to publish research articles anyway, Rich? It can’t be for the money because there isn’t any money in it. It’s about identity, isn’t it? Conforming to a vision of what you think you
should do and be.” He had managed to deliver the aggressive bull a flesh wound with his rapier.
The dinner arrived, and the students eagerly dug into their food. The Sunset Café specialized in Mexican cuisine, and a cast-iron skillet sizzling with chicken, beef, and an assortment of vegetables was delivered to the table along with warm sacks of tortillas.
Gary crumpled his cigarette in an ashtray when his burrito arrived. He took a bite and continued, washing down a mouthful of cheese and beans with his drink. “Really what I’m talking about is the simple issue of exploitation. Even if some people get rich from globalization, it’s all too often corporations increasing their profits on the sweat of low-income workers in poor countries. How can you justify a system that allows American consumers to save a few dollars on a pair of jeans that have been sewn up by a woman slaving for fifty cents an hour? It’s unethical, and I can’t see how anyone can defend such a system in good conscience.”
Just then a Quiché woman approached their table, selling a potpourri of handmade Guatemalan products, which she carried on her head wrapped together in a blanket. She approached the group and unpacked the blanket at the end of the table, displaying small leather purses, bracelets, and even a Rastafarian skullcap made of Guatemalan cloth with a set of dreadlocks hanging from the back. Alex tried on the skullcap, displaying it for the group.
The woman approached Gary. “Quiere, señor?”
“No gracias,” Gary answered. He turned to the group. “I’ll bet the women who made those things earned even less than fifty cents an hour. Won’t be part of that.”
All of a sudden Sofia interjected, “Gary, that’s sort of it, isn’t it?”
“What?” he asked. The matador had either just achieved something brilliant or delivered himself a mortal, self-inflicted wound with his weapon.