Chapter 9
Global Inequality
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Global Development
• 17th-18th centuries saw a wave of colonialism where
traditional societies were located and eventually destroyed
by Western industrialized nation-states
• Colonialism gave form to today’s social map
• Countries in Africa, South America and others are now
referred to as developing countries (as opposed to
developed/industrialized countries)
• This dialectic (2 opposing elements) description is unfair to
developing countries as development is equated to
technological advances rather than social advancement
and /or human cooperation
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The “Developing” World
• Colonized countries eventually gained their independence
• However, their economies are being compared to
industrialized countries and are considered to be “lagging
behind”
• Conditions in poor nations have deteriorated over the last
few years
• 1.5 billion lived in poverty in 2005
• 3,000 children (under 5) die of hunger each day
• Malnutrition, lack of education, low life expectancy, gender
inequality
• Those conditions do have consequences in terms of migratory
patterns of population seeking better lives for their families
•Example: Mexican immigrants coming to the U.S.
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Global Inequality (1)
• Globalization (p. 267)
• It refers to the increased political, economic and social
interconnectedness of the world
• It has produced widespread poverty
• While most sociologists think about stratification within
one country, it is also possible to talk about global
stratification across countries
• Global inequality (p. 268)
• It refers to the systematic differences in wealth and power that
exists among countries
• It is possible for Country A and Country B to be equally rich,
whereas inside Country A the gap between rich and poor is
greater than inside Country B
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Global Inequality (2)
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Global Inequality (3)
(pp. 268-272)
• The United States, Canada, Japan, Australia, and a
dozen or so western European countries, including
Germany, France, and the United Kingdom, are the
world’s richest postindustrial societies
• The world’s poorest countries cover much of Africa,
Latin America and the Caribbean, and Asia
• Inequality between rich and poor countries is staggering
• Nearly one-fifth of the world’s population lacks adequate
shelter, and more than one-fifth lacks safe water.
• About one-third of the world’s people are without
electricity, and more than two-fifths lack adequate
sanitation
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Global Inequality (4)
Gross Domestic Product Per Capita, World Regions, 1975–2000 (2000 purchasing power parity, $ U.S.) Source: United Nations (2002: 19)
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Global Inequality (4)
• From 1988 to 2002, average per person GDP increased by
34 % in low-income countries compared to 54% in highincome countries
• The GDP per capita in high-income countries is on
average $39,654 in 2010 compared to $503 in a lowincome countries
• Life expectancy in high-income countries is on average 79
years in 2010 compared to 59 years in low-income
countries
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Global Inequality (5)
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Megaslumming
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Global Inequality (6)
• Universal Declaration of
Human Rights (1948)
• “No one shall be held in
slavery or servitude; slavery
and the slave trade shall be
prohibited in all their forms.”
• International Labor
Organization (ILO) report
(2005) estimated
• Number of slaves to be
around 12.3 million
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Global Inequality (7)
•
United Nations 1956 Supplementary Convention on the Abolition of Slavery
(summarized)
•
Article 1: The parties commit to abolish and abandon debt bondage, serfdom, servile marriage and
child servitude.
Article 2: The parties commit to enacting minimum ages of marriage, encouraging registration of
marriages, and encouraging the public declaration of consent to marriage.
Article 3: Criminalization of slave trafficking.
Article 4: Runaway slaves who take refuge on flag vessels of parties shall thereby attain their
freedom
Article 5: Criminalization of the marking (including mutilation and branding) of slaves and servile
persons
Article 6: Criminalization of enslavement and giving others into slavery
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Can Poor Countries Become Rich? (1)
(pp. 276-280)
• Historically, some former colonized countries were able to
grow economically
• Newly Industrialized Economies (NIEs)
•Hong Kong, Taiwan, South Korea, Singapore and most
recently China and Malaysia
•It was possible for those countries to grow because of the
American and European demands for clothing, footwear and
electronics (was not available in Latin America or Africa)
•Their economic growth was fueled by direct aid and loans for
investment in certain technologies while keeping labor costs
low
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Can Poor Countries Become Rich? (2)
(pp. 276-280)
• Not every former colonies benefited from
independence and access to direct aid
• Most African and Latin American countries are still
suffering today from former colonial regimes
• By the 1980s, colonialism was almost gone, as most
colonies had established independence
• Colonialism
• Maintenance of political, social, economic, and cultural
domination over a people by a foreign power for an
extended period of time
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Can Poor Countries Become Rich? (3)
(pp. 276-80)
• Today, neocolonialism is the rule
• Continuing dominance and foreign domination that keeps
former colonies in a subservient position
• Organizations like the World Bank, IMF and the WTO play the
roles that former countries played during the colonial period
•Role of transnational corporations
•Role of the global elite
•An analysis of over 43,000 transnational corporations (TNCs)
has identified a relatively small group of companies, mainly
banks, with disproportionate power over the global economy
•The 1318 companies represents around 60 per cent of global
revenues by collectively owning through their shares the majority
of the world’s large blue chip and manufacturing firms — the
“real” economy
•An even tighter 147 (about 1%) of these were described as “super
entities” that controlled 40 per cent of the total wealth
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Transnational Corporations
• 1. Traditional corporations [multinational corporations] rely on domestic
labor and domestic production while transnational corporations depend
increasingly on foreign labor and foreign production.
• 2. Traditional corporations extract natural resources or manufacture
industrial goods while transnational corporations increasingly emphasize
skills and advances in design, technology, and management
• 3. Traditional corporations sell to domestic markets while transnational
corporations depend increasingly on world markets
• 4. Traditional corporations rely on established marketing and sales outlets
while transnational corporations depend increasingly on massive
advertising campaigns
• 5. Traditional corporations work with or under national governments
while transnational corporations are increasingly autonomous from
national governments
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Globalization
• The simultaneous
homogenization of
some aspects of life
and the strengthening
of some local
differences under the
impact of globalization
The Regionalization of World Trade This graphic illustrates the network of world trade in 1992. The thickness of
lines shows the volume of trade between countries. Colors distinguish regional trading blocs. Note that most world
trade took place within regional trading blocs, with the United States, Germany, and Japan at the center of each of
the three main blocs. Source: Reprinted with permission of Max Planck Institute for the Study of Societies.
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Market-Oriented Theories (1)
(pp. 280-281)
•This theory states possible economic consequences
can only occur if individuals are completely free from
governmental agencies to make their economic
decisions
•This theory states governments of poor countries
block economic growth because of their internal
policies
•“do it our way and you will be okay”
• U.S. government and U.S. corporations motto
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Market-Oriented Theories (2)
(pp. 280-281)
•Modernization theory is a sub-theory of market–
oriented theories
•It argues that poor countries can only develop
economically if they give up their traditional
ways
•It therefore involves new technologies, changes
in cultural values and emphasis on production
• Example: urbanization, nuclear families, work ethic
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Market-Oriented Theories (3)
(pp. 280-281)
• Cultures of poor countries are described as fatalistic
• Those theories argue that their cultures represent the main reasons
for their economic backwardness
• They could follow the following stages to get out of poverty
if they really desired
• Traditional stage (current)
• Takeoff to economic growth (changes in values)
• Money is invested, control of population through birth control, providing
low-cost loans for modernization
• Drive to technological maturity
• Follow advice from high-income countries
• Improvement in technology
 High mass consumption
• People are able to enjoy the fruits of their labor
• Reach ranks of high-income countries
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Market-Oriented Theories (4)
(pp. 280-281)
•Criticisms
• Those theories promote a modern capitalist system for economic
growth (very ethnocentric)
• Fails to recognize that rich nations, which benefit from the
status quo, often block the path to development for poor
countries
• Treats rich and poor societies as separate worlds ignoring that
the global economy affects all nations. They ignore the relations
between poor and wealthy countries in terms of trade and
production
• They tend to blame poor countries rather than looking at
external global factors
• They favor technology over basic needs
•Maslow’s Pyramid of needs
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Market-Oriented Theories (5)
(pp. 280-281)
• Neoliberalism: The Dominant Ideology
• Faith in the virtues of markets: the best allocator of resources
• Claim that government regulation or intervention generally
make things worse
• Deregulation and privatization as key policy goals—power and
resources should be shifted from the public to the private
sphere
• “Freedom” = unfettered markets, trade, mobility of capital =
freedom from regulation or restriction in the service of social
goals
• Choice, Personal Responsibility, Individualism as paramount
values
• Minimal collective responsibility.
• Everyone responsible for themselves and no one else
• An updated version of 19th century “laissez-faire” liberalism
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Dependency Theories (1)
(pp. 281-283)
• A model of economic and social development that explains global
inequality in terms of the historical exploitation of poor nations by rich
ones
• Poverty of low-income countries comes from the exploitation
of high-income countries as well as multinational
corporations
• They are on a downward spiral because of the expansion of
global capitalism
• Colonialism started this downward spiral
• Procurement of raw materials and cheap labor
• According to dependency theory
• Political liberation has not meant economic independence
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Dependency Theories (2)
(pp. 281-283)
• Raw materials such petroleum, diamonds, copper, iron are
extracted by foreign-based corporations, whose
headquarters are in high-income countries
• Poor countries do not economically benefit from their
great raw resources
• Corporations are the support of banks and powerful
governments
• They institute a system of extraction and of labor
exploitation
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Dependency Theories (3)
(pp. 281-283)
• Dependency theorists call for revolutionary changes
• Economic elites in poor countries control their population
through force (military) and back up global capitalism so
they can personally benefit from it
• Mounting debt
• By 2008 the total debt of poor countries amounted to $2.74 trillion
(African countries owed $300 billion)
• For every African, $14 is used to service debt, while only $5 is
geared toward health care. Foreign aid helps, but not very much
• For every dollar in foreign aid, poor countries pay $5 to service
debt (Jubilee Debt Campaign, 2008)
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Dependency Theories (4)
(pp. 281-283)
• According to dependency theorists, multinational corporations
and rich countries continued their exploitation of the poor
countries in the postcolonial period by giving economic and
military support to local authoritarian governments
• They maintain that power relations are important and point
out to the role of the CIA overthrowing Marxists government
in Guatemala (1954) and in Chile (1973)
• In 1952 the democratically elected government of Guatemala began to
redistribute land to impoverished peasants. Some of the land was owned
by the United Fruit Company, a U.S. multinational corporation and the
biggest landowner in Guatemala
• Two years later, the U.S. Central Intelligence Agency (CIA) backed a
right-wing coup in Guatemala, preventing land reform and allowing the
United Fruit Company to continue its highly profitable business as usual
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Global Poverty
A half-hour’s drive from
the center of Manila, the
capital of the Philippines,
an estimated 70,000
Filipinos live on a 55-acre
mountain of rotting
garbage, 150 feet high. It is
infested with flies, rats,
dogs, and disease. On a
lucky day, residents can
earn up to $5 retrieving
scraps of metal and other
valuables. On a rainy day,
the mountain of garbage is
especially treacherous. In
July 2000 an avalanche
buried 300 people alive.
People who live on the
mountain of garbage call it
“The Promised Land.”
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World-Systems Theory (1)
(pp. 283-288)
•Theorists tend to the world as one single economic
system
•The world capitalist economic system is not a
collection of independent countries engaged in
diplomatic and economic relations with each other
but rather a single unit
•Global modern capitalism has historically existed
since the 15th and 16th century
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World-Systems Theory (2)
(pp. 283-288)
•The world system is comprised of four elements
• A world market for goods and labor
• A division of the population into different economic
classes (capitalists and workers)
• An international system of formal and informal
political relations among the powerful countries,
whose competition shapes the world economy
• The carving up of three unequal economic zones,
with the wealthier exploiting the poorer ones
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Wallerstein’s Capitalist World Economy
(pp. 283-288)
•Suggests that prosperity or poverty of any
country results from the operation of the global
economic system
• Rich nations are the core of the global economy
• Low-income nations are the periphery of the global
economy
•Global economy
• Benefits rich societies by generating profits
• Harms the rest of the world by causing poverty
• Makes poor nations dependent on rich ones
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World-Systems Theory (3)
(pp. 283-288)
•Unequal economic and political relationships in
which certain industrialized nations and global
corporations dominate the system’s core
Core: Bourgeoisie
Semiperiphery: Marginal
economic status
Periphery: Poor, developing
countries, exploitation
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World-Systems Theory (4)
(pp. 283-288)
• Core countries
• Most industrialized nations
• Get the lion’s share of profits
• Semiperipheral countries
• Intermediate position
• Semi-industrialized
• Get profits from the peripheral countries
• Peripheral countries
• Largely agricultural countries
• Manipulated by the core
• Raw materials move from the periphery to the core, for profits for the
core
• Used a market of consumption for products no longer used in the core
• Their economic development is limited by the core
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World-Systems Theory (5)
(pp. 283-288)
•The world-system changes very slowly
• Decades and centuries
•Some argue that the U.S. is losing its
dominance and it slowly sharing it with
Europe and Asia
•The use of war, weapons (influence through
force) might signal the end of hegemonic
legitimacy through consent
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World-Systems Theory (6)
(pp. 283-288)
• Global commodity chains
• Worldwide networks of labor and production processes
yielding a finished product
• Manufacturing is becoming increasingly global
•The most profitable activities in the commodity chains (such
as engineering, design, advertising) are found in the core
• Some are now talking about the peripheralization of the
core as sweatshops are now being set up in the New
York, Los Angeles etc… where workers re in direct
competition with workers in the peripheries
•Garment industry and sweatshops in Los Angeles reminds of
the working conditions in the periphery
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State-Centered Theories (1)
(p. 288)
•Appropriate government policies do not interfere
with economic development and can rather bring
it about
• Social services program, labor laws, minimum wage
laws etc...
•The development of the NIEs was in part due to
government policies
• Even the World Bank would somewhat agree that it
can achieve sustainable economic and social
development
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State-Centered Theories (2)
(p. 288)
• They offer a true alternative to market-oriented theories
• Combined with World-System theory, it can bring
about some real radical changes especially if it is done
through a true social (popular) democratic process
• Social democracy would ensure the voice of the
workers would be heard, and at the global level, this
would mean that core countries would not control the
periphery for their economic gains
• Workers in the periphery could have a real voice in
dealing with working conditions
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Impact of Globalization (1)
•Developed and developing countries are
interconnected
• Industrialized nations depend on the raw resources
and manufactured products coming from developing
countries
•Cultures are not isolated anymore
• Media, means of communication and transportation
have brought people closer but have also changed
many cultures (positively and/or negatively)
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Impact of Globalization (2)
•The world is now a single system because of our
interconnectedness
•Globalization might threaten certain cultures, but
one can witness the resurgence of local cultures
through
• Nationalism
•Common set of strong held beliefs (generally political) than
views a nation as superior to others
• Resurgence of cultural identities in opposition to
threatening global culture
• Religious practices
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Why Should Global Inequality Matter to You?
(pp. 290-292)
•China is adopting a capitalist model
• Increasing demand in oil
•Workers are competing around the world for fair
wages and decent working conditions
• You are affected as well because wages might
decrease
• Competition is global
•Technology is widening the gap between poor and
rich countries
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