Bringing the Third World Home

Globalization has led to a tremendous growth in wealth in some of the poorest countries, but it hasn’t benefited everyone equally. This unevenness has become some prominent that parts of the developed countries — especially the US — are becoming worse off.

The other day I overheard someone describe the US as a “Third World country wearing a Gucci belt.” It is a pretty stinging indictment, probably made worse by the fact that someone dared to say this outloud where they could be overheard in Trump’s America. I also thought it was poignant and evocative. The contrast between the existing conditions and they are dressed up and made to look lux.

While I liked that description I felt it missed something fundamental about how the global economy has changed since the term Third-world came into popular use. Starting in the 90s the processes associated with globalization allowed the national stratification of wealth and poverty — where countries were wholly rich or poor — to an internalization of those contradictions so that every country has both the very rich and very poor. For the former Third World this meant uneven growth and development that created small concentrations of wealth where there had been only poverty. For the rich countries, like the US, this meant an increase in poverty where there had previously been prosperity. Rather than be strictly a Third World country, the US has in the past 25 plus years brought the underdevelopment indicative of the Third World home to America.

There is a little bit of unpacking that needs to be done with the term Third-world. Initially it referred to the non-aligned countries during the Cold War. Those countries not allied with the capitalist West and NATO (first) or Soviets in the Warsaw Pact (second) made up a third grouping — the Third World. But in popular discourse it was mostly used to refer to the economic conditions of those countries, which was mostly undeveloped. These countries became identified not by their allegiances or political structures, but by the common economic conditions that marked them.

Generically speaking, the term Third World wasn’t just a mark of poverty, but of universal poverty. It wasn’t just a lack of wealth that made a country Third World, but also a lack of things needed to create growth. Problems like a lack of investment in human capital. A Third World country would have too little education, no or little access to healthcare. Life expectancy would be lower than in more developed, including communist, countries. Likewise, infrastructure would be insufficient or provide basic necessities such as clean water or food security. These are conditions where everyone is poor and there is little prospect of positive change.

But these days the term Third World has become doubly outdated; first there is no second world (unless you think North Korea and Laos represent a viable alternative form of political economy) and second there aren’t really any absolutely poor countries anymore. Some countries are less developed than others, but the economies of previously undeveloped countries — what were traditionally thought of as the Third World, have had incredible growth during the neoliberal period that commenced after the end of the Cold War. Countries that had been nearly synonymous with poverty and starvation, India and China, have grown into powerhouses. It is incredible to think that Ethiopia, a country known for starvation if it was known at all, was the fastest growing economy on Earth before the disruptions caused by COVID. The former Third World countries, now described as “emerging” or “developing”, have been growing at rates typically about double that of the already developed countries for the past twenty years. During this time extreme poverty has been cut in half, and overall life expectancy has increased for the world as a whole. But inside each of these countries the growth has been uneven. Some much wealth has been created that the number of billionaires has increased by four times over and their total wealth has grown almost ten times in value. These countries are not universally poor but they aren’t universally rich either. Poverty still exists, and many people have been excluded from the gains or gained much less than others, but now there is also a lot of wealth.

For people who have been fortunate enough to travel globally during the recent past, the changes have been obvious in the former Third World. Typically, a traveler will arrive at a beautiful airport, get on a fast and efficient light rail to be whisked away to a steel and glass city center with high end restaurants and modern amenities. There might even be a signature architectural piece. This is basically the same reception whether you arrive in Oslo or Kuala Lumpur, Hong Kong or Shanghai. Places that are used to being rich and the newly or just-getting-rich have started to have the same look and feel.

For the most part, the former Third World countries haven’t reached the prosperity of the already developed countries yet, and the differences are still stark. Kuala Lumpur has massive poverty living in the shadows of massive wealth. What is surprising about the transformation isn’t that Malaysia has homelessness and poverty, the surprise is that it has luxury malls. It is not shocking that the poor still exist in these countries, in conditions that are mostly unchanged from when they were considered Third World, but rather that concentrations of wealth have blossomed beside them. In the developed countries, however, it is the poverty that is growing and taking on the characteristics that were previously described as Third World.

And this is what I mean by bringing the Third World home. America had wealth and poverty, but the poor end of the spectrum was relatively prosperous compared to the rest of the world. That has been changing in ways that we have been able to measure. For example, overall US life expectancy is decreasing. That is shocking on its own, but it is also complicated by the fact that life expectancy has continued to increase for the wealthy. It is only for the poor that conditions are getting worse — objectively and measurably worse. And this has been occurring during times of economic growth, not contraction. Similarly, homelessness rises when rent becomes less affordable, and rents typically increase during periods of growth. Strong economic growth has caused boom times in cities like San Francisco, the center of the internet revolution, but it has also contributed to a crisis of homelessness. Likewise in Seattle, where Microsoft and Amazon are headquartered and two of the richest humans who ever lived call home, we see the parallels of economic growth and concentrations of wealth alongside spikes in homelessness and absolute forms of deprivation. The drinking water crisis in Flint, MI; the rise of precarious labor at Amazon and Uber; the lack of investment in infrastructure; the increase in the uninsured: these are all marks of what we consider a Third World country to be.

Normally, observations of an underdeveloped economy arising inside of an advanced economy is something that we would only learn about second hand. It is something we would read about and slowly put the pieces together. But it is increasingly a lived experience for the people there. Here in Jersey City, NJ my home lost power during a windstorm. It wasn’t a hurricane, just the remnants of one, not a big deal. The wind blew for about 90 minutes and the lights flickered and died. I expected them to come back on quickly but they didn’t. Instead the power was out for four days. The food I had stockpiled in the freezer defrosted and rotted. It was only after I threw it all out that I realized that I live in a food desert, the nearest grocery store located miles away. Fortunately I have a car, so my wife and I were able to flee. She has trouble working from home in the best of times since internet service in our area is so spotty (it’s never close to what the companies claim to provide) but during this time it became impossible to work from home. Fleeing to other places proved a challenge since 1.4 million other homes were without power. And driving had its own challenges since street lights were out. Luckily it was just a wind storm, one particular intersection we drove through floods horribly in the rain. The infrastructure of our region was so fragile that a little bit of wind shut the whole thing down.

Fortunately, my wife and I were able to stay somewhere else for a few days. Arriving there I felt like a refugee being welcomed into a prosperous land. It felt like I had left a Third World country because in many ways I had. The US isn’t a Third World country wearing a Gucci belt, it is a normal country divided into the haves and the have-nots. The wealthy sections have healthcare, good education, food, water and strong infrastructure. The rest has been left to rot and is becoming a Third World inside the land of plenty.