The Difference Between the Global North and South in Terms of Economic Prosperity

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  • Topic: Poverty, Poverty threshold, Poverty in the United States
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  • Published : October 16, 2012
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Why has the global north developed and prospered, but the global south has not?

To address the question of inequality of the Global North vs. South, one must begin at the point of origin; in which the two drastically diverged with respect to the differences in standards of living, thus creating the inequality gap we know today that separates the global north and south. It can be said that standard of living is directly related to the rate of productivity of a country (Clark, 1987). Therefore to address the question as to why the north became rich and the south poor, once must ask the question why the north was able to become so productive and the south not. Throughout history world GDP growth has followed a fairly equal linear trajectory up until the industrial revolution takes hold (Sachs, 2005). From there we see a rampant acceleration of productivity, rapid acceleration of economic growth and by extension, an increase to the standard of living in the north. During this time growth in the south remains stagnant, or occurs at a much slower rate. In this essay I will address the question as to why the industrial revolution happens first in the global north and also why the inequality gap still exists today. First we have to look at what prompted the Industrial Revolution to take hold. Many theories point to technological innovation, greater options for trade, geographic factors, access to raw materials and inexpensive travel routes. Britain was one of the most significant countries where the industrial revolution first occurred. The land was filled with resources that they could easily access and use in industrialization (Clark, 1987). They were also surrounded by other nations in Europe who were industrializing which offered them excellent access to trade. Finally, the natural canal and river systems offered an inexpensive and easily accessible way to transport goods and raw materials throughout the country, and being an island country offered easy access to trade routes to the rest of the world. Although these were all important contributing factors to maintain the momentum of innovation and productivity during the industrial revolution, they were supporting factors and not the primary catalysts. If we look at Gregory Clarks paper Why the World Isn’t Developed: Lessons from the Cotton Mills, he illustrates a comparison between the rates of production of countries considered developed and those considered non-developed in the textile industry. The textile industry is one of the best examples to illustrate how this divergence of wealth began, as most countries begin their journey towards industrialization with textiles. In Clark’s paper, he highlights productivity per unit of labour in the production of textiles. He concludes that given the data sets available, the developed nations were sometimes as high as 16 times more productive per unit as the non-developed (Clark, 1987, p. 158). After conducting his regressional analysis, and factoring out conditions such as cotton quality, differences in technology, and access to raw materials and other additional costs, he concludes that one of the primary factors for the difference in this production is the attitudes of the local communities in the non-developed countries. He states “Whatever limits the efficiency of workers in low-wage countries seems to attach to the local environment, not to the workers themselves.” (Clark , 1987,p. 168). He describes in the case of the workers of India, the “local effect” (Clark, 1987, p. 169). This effect prevented the companies from increasing production per worker, as workers were unwilling or uninterested in increasing their production. Perhaps this was derived from centuries of working together to survive, and this new idea of competing between neighbours was foreign to them, however that notion is beyond this essay. Ultimately it seemed that attitudes and local resistance to the new idea of organisation of labour...
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