Download Global Inequality - Tony S. Jugé, Ph.D.

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Global Inequality
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)
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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
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.
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
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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
Global Inequality (2)
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
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
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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 twofifths lack adequate sanitation
Global Inequality (4)
Global Inequality (4)
From 1988 to 2002, average per person GDP increased by 34 % in low-income
countries compared to 54% in high-income countries
The GDP per capita in high-income countries is on average $39,654 in 2010
compared to $503 in a low-income countries
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Life expectancy in high-income countries is on average 79 years in 2010
compared to 59 years in low-income countries
Global Inequality (5)
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
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
Global Inequality (8)
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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
Global Inequality (8)
Global Inequality (9)
Global Inequality (10)
Global Inequality (11)
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)
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Their economic growth was fueled by direct aid and loans for investment in
certain technologies while keeping labor costs low
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
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
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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
Can Poor Countries Become Rich? (4)
(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
Can Poor Countries Become Rich? (5)
(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
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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
Transnational Corporations
1. Traditional/multinational 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
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5. Traditional corporations work with or under national governments while
transnational corporations are increasingly autonomous from national
governments
Globalization
The simultaneous homogenization of some aspects of life and the strengthening
of some local differences under the impact of globalization
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
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“do it our way and you will be okay”
U.S. government and U.S. corporations motto
Market-Oriented Theories (2)
(pp. 280-281)
Modernization theory is a sub-theory of market–oriented theories
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
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It therefore involves new technologies, changes in cultural values and emphasis
on production
Example: urbanization, nuclear families, work ethic
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
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
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
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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
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
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Colonialism started this downward spiral
Procurement of raw materials and cheap labor
According to dependency theory
Political liberation has not meant economic independence
Dependency Theories (2)
(pp. 281-283)
Raw materials such petroleum, diamonds, copper, iron are extracted by foreignbased 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
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They institute a system of extraction and of labor exploitation
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
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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)
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
Global Poverty
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
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Global modern capitalism has historically existed since the 15th and 16th century
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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The carving up of three unequal economic zones, with the wealthier exploiting
the poorer ones
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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
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Global economy
Benefits rich societies by generating profits
Harms the rest of the world by causing poverty
Makes poor nations dependent on rich ones
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
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
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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
World-Systems Theory (5)
(pp. 283-288)
The world-system changes very slowly
Decades and centuries
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
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The use of war, weapons (influence through force) might signal the end of
hegemonic legitimacy through consent
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
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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
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
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
Impact of Globalization (1)
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Workers in the periphery could have a real voice in dealing with working
conditions
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)
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
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