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1 2 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) 3 4 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 5 6 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 7 8 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 9 10 11 12 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) 12 13 14 15 16 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) 17 18 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 19 20 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 21 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 22 23 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 24 “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 25 26 27 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 28 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 29 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 30 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 31 32 33 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 34 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 35 The carving up of three unequal economic zones, with the wealthier exploiting the poorer ones 35 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 36 37 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 38 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 39 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 40 41 42 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) 42 43 44 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