A New International Division Of Labor

"… it is exactly at one year old that I propose to provide for them [Irish children] in such a manner as instead of being a charge upon their parents or the parish, or wanting food and raiment for the rest of their lives, they shall on the contrary contribute to the feeding, and partly to the clothing, of many thousands."

Jonathan Swift, A Modest Proposal (1729)

The world has never shown a greater, more deeply felt solicitude for thewretched of the earth-the hundreds of millions who die miserable deaths on lessthan a dollar a day-as it has in the six months since September 11, 2001. Theseconcerns are being showcased at the Conference on Financing Developmentthat is even now underway in Monterrey, Mexico, where the heads of the richest,most powerful nations will pen their signatures to a Consensus on how toeradicate global poverty in our lifetime.

It is indeed gratifying that the Core countries, so soon after the dastardlyattacks of September 11, have recovered their sense of the great civilizingmission inaugurated by Christopher Columbus, and are once again fully seized ofthe few remaining tasks that still demand their attention. In the firstaftermath of the September 11 attacks, it had appeared that the righteous angerof the American public-which never fails to produce great consequences when itis unjustly provoked-would incinerate any country even remotely connected to thehijackers. Thankfully, President Bush was fully apprised of the need to placatethis great Moloch. Having accomplished this task quickly and brilliantly-byscattering the Al-Qaida and their Taliban hosts to the four winds-he has nowjoined his war against terrorism with a war on poverty.

In case my reference to America’s anger is misconstrued, I wish to make itclear that I consider this response justified in the fullest measure. This angerwas justified because of all the burdens United States has carried in the past:most importantly, advancing the West’s universal project of civilizing therest of the world. We have intervened repeatedly, by force of arms as well asstealth, to make the world safe for capitalism. No great power in the recordedhistory of mankind has dedicated itself so selflessly-and may I add,ceaselessly-to propagating freedom; but unlike romantics, anarchists, and othermuddle-heads, we have never pursued these goals in reckless disregard of thenative conditions which sustain free institutions. American presidents havenever lost sight of the fundamental principle that the lesser breeds will neverbe ready for freedom until they can first embrace free markets, free trade, andfree mobility of capital across national frontiers.

In the pursuit of these great goals, United states has waged a relentlesscampaign since the start of the twentieth century to rid the world of its chiefscourges: in succession, these have included fascism, communism, and a hundredinsidious chauvinisms. Having engineered the collapse of Soviet Union in 1990,and having finally established the firm foundations on which the world couldbuild a millenium of prosperity, the least United States could expect from therest of the world was gratitude. A vote of thanks for establishing an epoch ofunprecedented prosperity based on irreversible globalization.

So when the terrorists struck on September 11, bringing down the twin symbolsof the world’s financial capital and the military headquarters that make theworld safe for capitalism, Americans were understandably in deep shock. Theywere dismayed, discomfited and disoriented. Those who understand the deepdiscomfiture of United States, and her inconsolable sorrow, could scarcely blameAmericans if they responded with a sense of outrage, or if their demand forjustice occasionally sounded like a call for vengeance.

After this clarification, I wish to return to the subject of the Monterrey Consensus.On my first reading of this historic document, I was moved to tears by the grandvision of its framers; and every one of its eleven printed pages carries stainsto prove the depth of my gratitude. Each one of the goals of this Consensus-"toeradicate poverty, achieve sustained growth and promote sustainable developmentas we advance to a fully inclusive and equitable economic system"-deserves tobe inscribed permanently in laser lights on the night sky so that they may beread in all quarters of the world.

More incredibly, each one of these goals is faithfully translated into astunning array of policy recommendations. Space prevents me from listing all;but each one of them deserves our attention. The Monterrey Consensus calls for"collaboration among all stakeholders," and "national and global economicsystems based on the principles of justice, equity, democracy, participation,transparency, accountability, and inclusion." It urges corporations "to takeinto account not only the economic and financial but also the developmental,social, gender and environmental implications of their undertakings." Itwelcomes the "WTO’s decisions to place the needs and interests of developingcountries at the heart of the WTO Work Programme." It calls on developedcountries "to provide duty-free and quota-free access for all LDC’s exports."It demands that "immediate attention should go to strengthening and ensuringthe meaningful and full participation of developing countries, especially theLDCs, in multilateral negotiations." Finally, amongst many other equallyweighty recommendations, the Consensus urges "developed countries …to make concrete efforts toward the target of 0.7 % of GNP as ODA [aid] todeveloping countries."

For hours upon reading the Consensus I was ecstatic, overwhelmed byvisions of the new global economy it would help to create. But being a realist,I had to pull myself together. While the Consensus will always beremembered as a testament to the vision of its signatories, I knew that thisvision would unfold only slowly, and this not because there are forces that willobstruct the progress of the poor countries. I have to acknowledge that thisprogress, as in the past, will be hindered by the refractory cultures-stillstruggling to cope with modernity-that continue to clog the wheels of progressin Africa, Asia and Latin America.

This retreat from euphoria, however, does not lead to pessimism. On thecontrary, I rest confident in the thought that the new wave of globalizationthat began in the 1990s is more inclusive and more durable than any we have seenin the past. It is more durable because it is managed by multilateralinstitutions-the IMF, the World Bank, and WTO-rather than a gaggle of greatpowers. In turn, these institutions derive their legitimacy from United States,as benign a hegemon as there ever existed in the annals of human history.

It is this global economy that has created the prospect for a newinternational division of labor: one that I hope to demonstrate will reverse themarginalization of the Periphery. At this point, the orthodox economist islikely to yawn since this is what his theory of international trade has alwayspredicted. That is not a prediction that anyone would contest lightly, sinceorthodox economics always takes great care to choose assumptions which guaranteeits results. My concern at the moment, however, is with the real world. Andthough this concern is not valid in the eyes of orthodox economists-and rightlyso, since their function is to provide impenetrable arguments for the world asit is-this writer feels that we may be allowed occasional glimpses of thereal world, especially when it is thrust upon us violently, as it was by thesuicidal hijackers on September 11.

Now while the arguments favoring free trade remain unassailable-and I cannotemphasize this enough-there are some countries at the Periphery that haveperversely failed to benefit from the global economy. There are two reasons forthis, quite unrelated to any asymmetries in the workings of the global system.Rather, driven by irrational fears, their xenophobic leaders have chosen to shutoff their people from energizing contacts with foreign capital. But even whenfree trade was thrust upon them by European powers-motivated only by a Christianaltruism-their response has at best been sluggish. As Sir Arthur Lewis has sobrilliantly explained, they could derive no benefits from their primary exportsbecause they failed to raise their productivity in food.

The countries at the Periphery have paid dearly for their failures. Startingfrom positions of near parity in 1800, they have been falling behind the Corecountries ever since, so that in 1999 the gap between the high income and lowincome countries stood at 63 to one. It is a testimony to the power of globalcapitalism to generate unremitting growth-a power that Karl Marx had glimpsedquite early on-that the owners of dogs and cats in the Core countries spendconsiderably more on their pets than most parents in the Periphery can spend ontheir children. These disparities offer a sobering measure of the opportunitiesfor growth squandered by the Periphery.

But all is not lost for the Periphery. Global capitalism does not consign thesinners to eternal perdition: it is continuously creating new opportunities andinviting past sinners to make a fresh start. When the Core countries firstprospered in the eighteenth century, this created demand for the Periphery’ssugar, tea, coffee, cocoa and tobacco. Later, when the industrial revolution gotunderway, this translated into a massive demand for wheat, cotton, jute, sisal,and vegetable oils. Even some Core countries organized to meet this demand. Thiscreated a huge demand for workers in the Periphery; most notably, millions ofunderemployed Africans found themselves permanently employed in the plantationsof United States and the Caribbean. Finally, as the Core countries acceleratedtheir growth in the 1950s, they generously let go of their most labor-usingindustries. Those countries that embraced this opportunity with laissez fairepolicies are now the miracle economies of East Asia. Thus, growth in the Corecountries has never failed to transmit its dynamic impulse to the Periphery.

And now a variety of developments in the Core have converged to create vastnew opportunities for a new international division of labor. First I will drawyour attention to advances in the medical field that have made organ transplantssafe, and that are generating drugs and cosmetic products derived from fetaltissues and body wastes. This has created a growing demand for a variety of bodyparts and body wastes (BPWs). At present, the body parts in greatest demandinclude heart valves, livers, kidneys, corneas, skin, ovum, sperm, bone marrow,and muscle tissue. A variety of body wastes are also in growing demand,including fetuses, brain cells, umbilical cords, foreskins, placenta andinfected cells. As the Core countries get richer, as their incomes become moreskewed, and as their population ages, we can safely predict a sustained growthin the global demand for BPWs.

This growing demand for BPWs carries an enormous-and I would hasten to add,unprecedented-opportunity for growth in the poorest of the poor countries. Asimple application of the standard theory of international trade would suggestthat the production of BPWs will occur in the poorest countries of thePeriphery. The logic is quite transparent. The production of BPWs, since theseare harvested from the bodies of workers, is a very strongly labor-usingactivity; and since labor is cheapest in the poorest countries, the globalmarkets will ensure that their production is concentrated in the thesecountries.

Quite apart from its tremendous economic advantages, this internationaldivision of labor, once established, will create a hitherto inconceivableorganic bonding between the Center and Periphery. When the populations at theCenter-the men, women and children-realize that some of their body parts areimported from the Periphery, one hopes that this will finally erode the age-oldracisms that have poisoned relations between the world’s peoples.

I am aware that there is some work to be done before this new division oflabor can be implemented. We will have to work out a legal framework, includingproperty rights, to foster this trade in BPWs. I will not trouble you with thedetails of these legal questions, since I am confident that the WTO can betrusted to work out both the legal framework and the standards that will governand guide this trade. I have been warned of the inevitable objections that somehumanitarians and other busybodies will raise concerning the morality of a tradein BPWs. Such objections will be quickly laid to rest by economists. Clearly,the economic benefits to humanity from these exchanges exceed by a wide margintheir moral costs to a few finicky humanitarians.

If the assorted humanitarians, ethicists and anarchists in the Core countriesshould succeed in erecting barriers to this trade, I am confident that they willbe quickly circumvented. Instead of importing the BPWs, the consumerswill simply move to the Periphery. The Core country patients will now travel tothe Periphery, creating a new transplant tourism; and the pharmaceuticalswill sub-contract their research to the Periphery. All this may not be such abad thing. The Periphery can now add tourist dollars to the revenues from thesale of BPWs.

I should have ended this essay at this point-since I have already made a mostcapital suggestion for improving human welfare in the Periphery. But once I hadstarted upon this exciting train of thought, I was ineluctably drawn to severalrelated proposals. And since I am convinced of the great advantages they willconfer on the poor and the meek, I think it would be criminal if I held themclose to my chest for too long. But I promise to be brief, since I know that thereader might be better employed examining a variety of perceptive proposals forextending the war on terrorism.

In recent years, the pharmaceuticals in the Core countries have encounteredgrowing problems in finding human subjects for testing their drugs; it is thoseethicists again. Needless to say, the delays this causes in marketing new drugshave cost lives, lowered people’s beauty coefficients, and, most importantly,cost billions of dollars in lost profits. These losses can now be remedied bytesting the new drugs in the Periphery. Once again, the moralists-if there areany-will be quickly answered by the economists. Since markets value life muchmore highly in the Core than in the Periphery, it is efficient to allocate thehuman costs of developing drugs where life is cheapest.

The disposal of toxic wastes too has become a serious problem in the Corecountries: they are now producing 300-500 million tons of toxic wastes annually.As the environmentalists gain strength, a growing number of districts in theCore countries have prohibited the dumping of toxic wastes. Providentially, thisis opening up a vast new trade opportunity for the Periphery: a few islandeconomies are already specializing as dumping sites for toxic sites. I do nothave an accurate figures for the price which the markets will fix for suchdumping, but assuming a price of $100 for each ton of waste, this has thepotential of generating a revenue of $30-50 billion dollars annually for thePeriphery. That would be a bonanza for many.

I must admit, though, that the potential for this trade in toxic wastes wasbrilliantly anticipated by Lawrence H. Summers in December 1991 when he wasChief Economist for the World Bank. As he explained, the water and air qualityespecially in Africa are at levels that are "vastly inefficiently" high.Clearly, this is an unconscionable waste. The high water and air quality of thePeriphery should be reduced by encouraging the dumping of toxic wastes.

I have one final proposal in my bag; and though some might consider thisoutlandish, I believe it can stand on its economic merits. There also exists nowa modest opportunity for promoting sex tourism for pedophiliacs. It appears fromthe growing incidence of child abuse cases that sexual tastes in the Corecountries are now slowly shifting towards pedophilia. Given their superabundancein children, I should think that the poorest countries could promote themselvesas a paradise for pedophiles -- the alliteration sounds inviting. Those whowould shrink from such a degradation of children only need to be reminded thatthis may be the only alternative that some children in the Periphery have tocertain death. Let them choose between abuse and death.

I launch these proposals for a new international division of labor in thefirm conviction that this is not some utopian project. Five centuries of globalcapitalism have produced a superabundance of bodies in the Periphery, butnow, at last, the same forces promise to process these bodies for the enrichmentof the Periphery. This is the latest, most cunning twist in the dialectics ofcapitalist development.

M. Shahid Alam is professor of economics at Northeastern University, Boston.His recent book, Poverty from the Wealth of Nations was published byPalgrave (2000). Copyright: M. Shahid Alam