Question

In the past there have been violent protests against the World Bank and the World Trade Organization. The protesters argued that these institutions promote free trade and also encourage corporations in rich countries to invest in poor countries. The protesters contended that these practices make rich countries richer and poor countries poorer. An economist would?

Answer 1

An economist might analyze protests against the World Bank and WTO by considering both the criticisms, such as environmental and labor concerns, and the achievements of globalization, including economic growth from international trade. Economists may also evaluate the policies of these organizations for their impact on both rich and poor countries and the debate over sustainable development versus the interests of multinational corporations.

Step-by-step explanation:

An Economist's Perspective on Protests Against the World Bank and WTO Protests against the World Bank and the World Trade Organization (WTO) by a diverse group of students, labor union representatives, environmentalists, and activists have highlighted concerns regarding the effects of globalization and free trade policies. These institutions promote free trade and investment by corporations in rich countries into poorer countries, leading to debates about the consequences for wealth distribution and economic power dynamics between developed and developing nations. Critics argue that the policies backed by these organizations often lead to environmental degradation, exploitation of labor, and undermining of local economies in favor of multinational corporations and industrialized nations.

High-profile economists such as Joseph Stiglitz have criticized the conditions imposed by organizations like the IMF, such as privatization and austerity measures, which may harm the local workforce and benefit foreign creditors. There is also concern about inadequate representation from developing countries within these organizations, potentially skewing policy decisions towards the interests of wealthier nations.

However, it is also essential to note that international trade has contributed to the success of many economies around the world. Countries that have embraced globalization and reduced trade barriers have often seen economic growth and improved standards of living. Yet, the debate continues, with critics calling for trade and globalization to be managed in a way that promotes sustainable development, addresses the inequities of global trade, and supports ethical standards that cover human rights, environmental protection, and worker welfare.

Answer 2

An economist would most likely disagree with those positions.

Step-by-step explanation:

Most economists agree that free trade (a policy that is actively promoted by the World Trade Organization and the World Bank) is a positive-sum game, meaning that all countries that engage in trade benefit from it.

Economists would point out that the policies of the WTO have reduced tariffs, making consumer goods cheaper for people in low-income countries. They would also agree (some would disagree) in that the World Bank is an institution that has provided much needed economic aid to poor countries.