On New Year’s Day of 1994, a group known as the Zapatistas launched an armed attack in Chiapas, Mexico. Their army was made up of hundreds of farmers. The farmers soon took over government buildings. Their message to the world: “Enough is enough.”

The farmers were angry about the North American Free Trade Agreement (NAFTA). The agreement took effect on the very day of the Zapatista uprising. It lowered trade barriers between Canada, the United States, and Mexico. U.S. President Bill Clinton signed the agreement into law. He claimed it would help Mexico and “create new jobs for America as well.”

But the Zapatistas and other poor farmers believed NAFTA would put them out of business. They feared it would flood Mexico with cheap imported corn from the United States. In the United States, corn growers were heavily supported by the government. Each farmer received $20,000 a year. In Mexico, farmers only got about $100 a year. That meant U.S. farmers were able to price their corn far lower than Mexican farmers could.

Instead of improving the Mexican economy, NAFTA lowered wages. It also drove many small farms out of business. What about the United States? Clinton had promised that NAFTA would create hundreds of thousands of new jobs here. More American workers would be needed to produce the goods that would be exported to Mexico, the president said. But that’s not what happened. Instead, close to 700,000 U.S. jobs were lost in just 15 years. Many were lost because U.S. companies quickly moved their factories to Mexico, where wages were far lower. Factories across the United States were shut down.

Meanwhile, the Zapatistas declared their independence from the Mexican government. They started their own farming cooperatives. This resistance protected the Zapatistas from some of NAFTA’s negative effects. There are about 250,000 Zapatistas today. They are a symbol of anti-globalization.

Does globalization create global prosperity?

Not everyone hates globalization. Its supporters believe it can be a great force for good. They argue that getting rid of trade barriers helps companies open factories in countries that need them. The idea is that this creates jobs and reduces poverty around the world.

Your clothes are proof that globalization has created jobs in poorer countries. Read the tags on your shoes. Were they made in China? Or maybe in Honduras, Bangladesh or some other distant country? But then think: How much do you think the person who glued the soles on your shoes got paid? How many hours do you think they would need to work to be able to buy shoes like yours? What kind of conditions do you think they work in?

Nike produces the world’s most popular sneakers. In recent years, it has described itself as a “social justice” company. Colin Kaepernick¹ appears in its ads. Kaepernick is a well-known social justice champion.

But is Nike really as wonderful as it seems? Perhaps not. Nike’s factories around the world have a long history of problems. In 1997, investigators discovered that workers at a factory making Nike products in Vietnam were forced to work 65 hours a week. Yet, they were paid just $10 dollars a week. Nike did not take responsibility for this terrible situation. Instead, it said the factory was really run by subcontractors.² In the end, Nike was forced to set labor standards. However, it still does not meet those standards.

Nike is just one example of a company that benefits from globalization. It is true that these companies have created millions of jobs across the world. But that has not helped to end poverty. In fact, inequality has risen greatly over the past 30 years. The rich have grown far richer. Meanwhile, millions of people are as poor as they ever were.

Austerity and the down-side of globalization

The International Monetary Fund (IMF) plays a big part in globalization. It helps countries borrow from other countries. It sees this as a way to increase trade and growth.

However, the IMF wants something in return for the money it loans. It wants governments to cut spending on social services. These strict and limiting measures are an example of austerity. Countries that borrow money are often forced to do that.

Take the example of Greece. In 2010, the country faced an economic depression. It was bailed out by the European Union and the IMF. Greece was then forced to increase taxes, cut back its pension and health systems, and lower salaries for workers. People protested in the streets for months.

Conclusion

Does globalization help all parts of the world? Supporters of global trade believe it does. But Greece and other examples show that this is not true. As globalization increases, inequality keeps rising. If globalization continues, what will the future look like?

1 Kaepernick is a football player. He is famous for kneeling during the National Anthem. It was his way of calling attention to racism and police brutality.

2 Subcontractor: If my neighbor says he’ll pay me $5 for a glass of lemonade, and then I pay you $2 to make the lemonade, that means I subcontracted the work to you. Subcontracting can be done fairly. If I had paid you $4.50, that would have been fair. But I knew you needed the money so badly I could get you to do it for just $2. That was unfair.