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Who was the world’s richest person in
2012?
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(a) Bill Gates, founder of Microsoft
(b) Warren Buffett, investor, CEO of
Berkshire Hathaway
(c) Carlos Slim Helu, head of Grupo Carso, a
global conglomerate based in Mexico
GLOBAL INEQUALITY
Learning Objectives
Basic Concepts
– Understand the systematic differences in wealth and
power among countries
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Theories of Global Inequality
– Recognize the impact of different economic standards of
living on people throughout the world
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Stratification around the World
Research on Global Inequality Today
– Analyze the success of newly industrializing economies
Concepts
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Globalization
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The increased economic, political, and
social interconnectedness of the world
“Nowhere to Everywhere”
Global inequality
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The systematic differences in wealth and
power between countries
Industrial Revolution and
increased agricultural productivity resulted in explosive
economic growth

To understand global inequality…
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Countries divided by per-person gross
national income (GNI)
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70 high-income countries
54 upper-middle-income countries
54 lower-middle-income countries
36 low-income countries
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Like the individuals in a society, the countries of
world as a whole can be seen economically

How the lives of people differ depending on the
income class of the country in which they live?
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High-income countries
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Highly industrialized
Industrialize earlier(exceptions)
14.2 percent of the world’s population
66 percent of the world’s total income
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Middle-income countries
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Diverse group
This group is often divided into upper- and
lower-middle-income groups.
Varying levels of industrialization
71.7 percent of the world’s population
31 percent of the world’s total income
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The standards of living are generally higher than
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Low-income countries
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Diverse group
Mostly agricultural, in early phase of
industrialization
12 percent of the world’s population
7 percent of the world’s total income
High population growth
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Widespread poverty
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THEORIES OF GLOBAL INEQUALITY
Four Categories in General
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Market-oriented,
Dependency,
World-systems, and
Global commodity chains theories.
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Market-oriented theories
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Argue that the best possible economic
consequences will result if individuals are
free to make their own economic decisions,
uninhibited by governmental restraint
Governments should not dictate which goods to produce,
what prices to charge, or how much to pay workers.
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Market-oriented theories
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W. W. Rostow’s modernization theory
suggests that low-income societies develop
economically only if they give up their
traditional ways and adopt modern
economic institutions, technologies, and
cultural values that emphasize savings and
productive investment.
•
Market-oriented theories
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W. W. Rostow’s modernization theory
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Traditional stage
Takeoff to economic growth
Drive to technological maturity
High mass consumption
Market-oriented theories
Modernization
Process by which nations pass
from traditional forms of social organization
toward forms characteristic of post–Industrial
Revolution societies
 Concepts of modernization and development
contain an ethnocentric bias!
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Market-oriented theories
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Neoliberalism
– Today it is called neoliberalism!
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Free market forces, achieved by minimizing
government restrictions on business, provide the
only route to economic growth
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Dependency theories
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Marxist theories that argue that the poverty
of low-income countries stems directly from
their exploitation by wealthy countries and
the multinational corporations that are
based in wealthy countries
Reject the notion that a society’s values and
norms are to blame for its economic status
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Colonialism
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the root of economic exploitation
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Although colonialism ended, the exploitation did not
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Neocolonialism
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Cheap labor, raw materials
Continuing dependence of former colonies on
foreign countries
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Dependency theories
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Dependent development
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Poor countries can still develop economically
but only in ways shaped by their reliance on the
wealthier countries
Brazilian sociologist Fernando Henrique
Cordoso
Still it has the potential to be exploitative
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World-systems theory
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Immanuel Wallerstein
Countries are connected by the expansion of a
capitalist world economy made up of core,
semiperiphery, and periphery countries
The economic success of the advanced
industrial countries(core), is dependent upon
the exploitation of the less advanced
countries(semiperiphery and the periphery
zones of the system).
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World-systems theory
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World market for goods and labor
Division of population into economic
classes- say – capitalist and workers
system of formal and informal political
relations designed to maintain
Division of world into three unequal
economic zones
The wealthiest zones exploiting those in the poorer
zones.
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World-systems theory
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Core
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Periphery
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Made up of the most advanced industrial countries that
share most of the profits of the world economic system
Made up of countries that have a marginal role in the
world economy and are thus dependent on the core
producing societies for their trading relationships
Semiperiphery
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Made up of countries that supply sources of labor and raw
materials to the core industrial countries and the world
economy but are not themselves fully industrialized
societies
Simple depiction
(collected)
World-systems theory in action
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Global commodity chains theory
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Worldwide networks of labor and
production processes yielding a finished
product
Manufacturing is becoming increasingly
globalized
According to Hopkins, a ‘Global Commodity Chain’ (GCC) is
“a network of labor and production processes whose end
result is a finished commodity”.

Global commodity chains theory
From your text
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It can be interesting to trace products like the Barbie
doll from raw material to finished product. Barbie’s
production story begins in a petroleum field in Saudi
Arabia and ends in a toy factory in China before
showing up on the shelves of your local retail store. So
where is Barbie actually from? The cardboard and
cellophane box containing the “My First Tea Party”
Barbie is labeled “Made in China,” but almost none of
the materials that go into making her originate there.
For a $20 Barbie, China gets only about $0.70, mainly
in wages paid to the 11,000 peasant women who
assemble her in the two factories. Back in the United
States, however, Mattel makes about $2 in profits
Note: Number of minutes it takes a worker with an average net
wage to earn sufficient income to purchase a Big Mac. Source:
Assinger and Kutz 2012.
Global Ineq. talk
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https://www.youtube.com/watch?v=d6NKdnZvdoo
From The Newsroom
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https://www.youtube.com/watch?v=q49NOyJ8fNA
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Evaluating theories of global inequality
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Market-oriented theories recommend adoption of
modern capitalist institutions.
Dependency theories emphasize how wealthy
nations have exploited poor ones.
World-systems theory analyzes the world economy
as a whole, looking at the complex global web of
political and economic relationships that influence
development and inequality in poor and rich
nations alike.
The theory of global commodity chains focuses on
global businesses and their activities rather than
relationships between countries.

Income and Wealth
 In
at least 20 nations, most affluent 10% of the
population receives at least 40% of all income
 Top 10% of world’s population
own 85% of global household
wealth, and top 1% own over 45%
 Women in developing countries
face significant obstacles
Income status increases, its mortality rates
increase and life expectancy decreases
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Health
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Differences in access to and quality of
health care facilities
Differences in overall cleanliness (water,
sanitation, soil, air)
Rates of infectious diseases vary
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Hunger, Malnutrition, and Famine
Many people around the world lack the diet
that provides enough calories and nutrients
to live an active, healthy lifestyle
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Differences in access to and quality of food
due to natural and social forces
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Droughts
Conflict
Economic problems
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Hunger is a global problem though disproportionate
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870 million people worldwide undernourished, 850
million of which are in developing countries
Education and Literacy
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Quality and years of education affect
economic development
High-wage industries need skilled workforce
• Educated people are more likely to escape
poverty
• Educated people have fewer children
So, a country’s economic development depends on
the education and literacy of its population
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Unsolved Questions
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Is Global Poverty Increasing or
Decreasing?
Debatable
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Percentage of people living on less than
$1.25 per day declined between 2005 and
2008
But, the world population has grown during
the past 30 years; thus, this figure relatively
shows no progress.
What about Inequality Between
Countries?
–Widening global gap between rich and poor
countries, more in last two decades
–a typical high-income country earned nearly $36,000, which is almost 150
times greater than the $250 earned by his or her counterpart in Burundi that
same year.
–Average GNI increased nearly fourfold in high-income
countries but barely doubled in low-income countries
–Newly industrializing economies (NIEs)
–emerging economies
Global Inequality

https://www.youtube.com/watch?v=19WmfKE1Rtc
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What Does Rapid Globalization Mean for
the Future of Global Inequality?
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Technology innovators
Technology adopters
Technologically disconnected
(Jeffrey Sachs’s Categorization of world)
Documentary on Jamaica(DVD)
Question

Summarize the four types of theories that
explain why there are gaps between
nations’ economic development and
resulting
global
inequality: marketoriented theories, dependency theories,
world-systems theory, and state-centered
theories. Briefly discuss the distinctive
characteristics of each type of theory and
how it differs from the others. Which theory
do you feel best explains economic
development gaps?