Global Inequality Chapter 9

Stratification, Class, and Inequality Who was the world’s richest person in 2012? (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

Unanswered Questions

Basic Concepts Globalization Global inequality The increased economic, political, and social interconnectedness of the world Global inequality The systematic differences in wealth and power between countries The increased economic, political, and social interconnectedness of the world, plays an important role in establishing differences in wealth

Countries divided by per-person gross national income (GNI) Basic Concepts GNI is a measure of a country’s yearly output of goods and services per person. Countries divided by per-person gross national income (GNI) 70 high-income countries 54 upper-middle-income countries 54 lower-middle-income countries 36 low-income countries

Basic Concepts

Basic Concepts

Basic Concepts

High-income countries Basic Concepts High-income countries Highly industrialized 14.2 percent of the world’s population 66 percent of the world’s total income the standards of living are generally higher than in other parts of the world

Middle-income countries Basic Concepts Middle-income countries Most diverse group Varying levels of industrialization 71.7 percent of the world’s population 31 percent of the world’s total income

Basic Concepts Low-income countries 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 (Grew 2.6 times faster than high income countries)

Theories of Global Inequality The theories that attempt to explain global inequality fall into four categories: Market-oriented Dependency World-systems Global commodity chains theories

Theories of Global Inequality Market-oriented theories 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.

Theories of Global Inequality Market-oriented theories 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.

Theories of Global Inequality Market-oriented theories W. W. Rostow’s modernization theory Traditional stage Takeoff to economic growth-poor countries begin to save and invest money for the future Drive to technological maturity-countries continue to invest in industry and infrastructure to support it High mass consumption

Theories of Global Inequality Market-oriented theories Neoliberalism Free market forces, achieved by minimizing government restrictions on business, provide the only route to economic growth Neoliberalism is built into many arguments in favor of economic globalization.

Theories of Global Inequality Dependency theories reject the notion that a society’s values and norms are to blame for its economic status. 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

Theories of Global Inequality Dependency theories Colonialism is the root of economic exploitation Western nations and Japan established colonies to acquire raw materials such as the petroleum, copper, and iron needed for factories or to control markets.

Theories of Global Inequality Dependency theories Dependent development Poor countries can still develop economically but only in ways shaped by their reliance on the wealthier countries still has the potential to be exploitive

Theories of Global Inequality World-systems theory Countries are connected by the expansion of a capitalist world economy made up of core, semiperiphery, and periphery countries

Theories of Global Inequality World-systems theory World market for goods and labor Division of population into economic classes-particularly capitalists and workers International system of formal and informal political relations between countries Division of world into three unequal economic zones-wealthy exploit poor

Theories of Global Inequality World-systems theory Core Made up of the most advanced industrial countries that share most of the profits of the world economic system The United States, Japan, and western Europe are part of the core.

Theories of Global Inequality World-systems theory Periphery (low-income, mostly agricultural) The core exploits the periphery’s natural resources and labor. 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 Child labor and other humanitarian issues

Theories of Global Inequality World-systems theory Semiperiphery (semi-industrialized, middle-income countries) 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

Theories of Global Inequality World-systems theory (Nigeria)

Theories of Global Inequality Global commodity chains theory Worldwide networks of labor and production processes yielding a 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

Theories of Global Inequality Global commodity chains theory

Theories of Global Inequality Evaluating theories of global inequality 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.

Research on Global Inequality Today

Research on Global Inequality Today Health Differences in access to and quality of health care facilities Differences in overall cleanliness (water, sanitation, soil, air) Rates of infectious diseases vary

Research on Global Inequality Today Hunger, Malnutrition, and Famine Differences in access to and quality of food due to natural and social forces Droughts Conflict Economic problems

Research on Global Inequality Today

Research on Global Inequality Today Education and Literacy 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

Is Global Poverty Increasing or Decreasing? Unanswered Questions Is Global Poverty Increasing or Decreasing? Percentage of people living on less than $1.25 per day declined between 2005 and 2008 The steep drop in the percentage of people living in extreme poverty is not matched, unfortunately, by an equally steep drop in the number of people.

Unanswered Questions

What about Inequality Between Countries? Unanswered Questions What about Inequality Between Countries? Widening global gap between rich and poor countries Newly industrializing economies (NIEs)

Unanswered Questions What Does Rapid Globalization Mean for the Future of Global Inequality? Technology innovators-regions that provide most of the world’s technological inventions (15%) Technology adopters-regions adopt tech developed elsewhere (50%) Technologically disconnected (35%)

Discussion Question: Thinking Sociologically Summarize the four types of theories that explain why there are gaps between nations’ economic development and resulting global inequality: market-oriented 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?

Discussion Question: Thinking Sociologically This chapter states that global economic inequality has personal relevance and importance to people in advanced, affluent economies. Briefly review this argument. Explain whether you were persuaded by it or not.