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Global Economic Inequalities

Today: Global Poverty, Modernisation theory

Tomorrow: Theories regarding Colonialism/Neo-colonialism, Dependency, World System, Critiques of Neo-liberalism

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Global Poverty

Live on under $1 per day: 1.2 billion850 million ‘hungry’2.7 billion live on under $2 per day71 million HIV+; 68 million in developing nations (mostly sub-Saharan Africa)

6.5 billion world population

5-5.5 billion in developing nations, or nations ‘in transition’ (Russia, Bulgaria, etc)

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Measuring Global Inequalities

• Vast ‘global’ inequalities• By nation, by GDP, by

average income• Measure re GDP per

capita; • Human Development

(HDI) e.g. life expectancy, infant mortality, education

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National InequalitiesHigh income nations – rich,

early industrialization, high GDP; 1 billion

e.g. US – GDP per capita $40,000; life - 78 years

Middle income nations – limited industrialization, urban/rural inequalities; 2+ billion people

e.g. Brazil – GDP per capita $8,100; life – 71 years

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InequalitiesLow income nations – little

industrialization; hunger, disease, poor housing; 3.2+ billion

e.g. Ethiopia – GDP per capita $900; 41 years

Further features: War, refugeesChildren, women badly affectedUncontrolled, uneven developmentSevere inequalitiesCorrupt governance

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Social Science Theories: Modernisation Theory

Strong in 1950sFavoured by Western

regimesWW Rostow promoted

Enabling affluence is crucial

West powerful due to industrialization, technological advance

Other societies must follow West; abandon ‘traditions’ that impede progress e.g. certain religious beliefs

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Modernisation TheoryRostow: stages of modernization

i) Traditional – resist innovation; some societies stuck

ii) Take-off – rise of individualism, market, achievement culture, progress

iii) Technological Maturity – seek higher living standards, poverty declines

iv) High mass consumption – high output, consumerism

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Modernisation Theory

General argument that wealth production helps poorer nations

All nations pass through same stages of modernisation

Capitalism more international, helps poorer societies

Argue that greater economic globalization helps poor

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Mod Theory - CriticismsNice ideaUN approaches to help

development

BUT: - doesn’t fit reality- low modernisation in poor

nations- rich nations hold back others?- blames the victims- ignores colonialism- ethnocentric – not only one

model- Western ideology – anti-

Communist, pro-American?

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Sum Up

Vast global inequalities

Have grown since 1945

Modernization theory flawed

Need more critical standpoints

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Explaining Global Inequalities

• Colonialism, etc• Dependency• World System – Wallerstein• Recent Policies - Neo-

liberalism

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Colonialism

Long-term process

16th C onwards - European nations invade Africa, Americas; later, Asia

Seize natural and human resources

e.g. slave trade, sugar, gold, rubber

Creates greater wealth for European nations – later United States, Australia

Sets global power relationships

                                                          

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Neo-colonialism19th and 20thC - ‘independence’ in Latin America, Africa, Asia

But ‘neo-colonialism’:

Economic exploitation continues

                                    

- IMF/World Bank – lend huge sums, but industries collapse, nations owe huge debts - Western states – e.g. military, loans- Western corporations – products for export not local people - Rich/corrupt elites

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Dependency TheoryFocus on Latin America

Similar points re neo-colonialism

Add emphasis: developed nations undermine development in other nations

A.G. Frank: ‘development of underdevelopment’

e.g. European banks pressure Brazil to produce cash crops

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WallersteinNeo-Marxist view

‘World System’ Theory

- World is a single economic system

- Capitalism is dynamic globalizing force;

- divides nations, workers

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Wallerstein3 kinds of nations

A) Core - strong government, national culture, developed, rich, powerful e.g. EU, USA, Japan

B) Periphery - weak states, weak/colonised culture, dependent on core e.g. Latin America, AfricaC) Semi-periphery - Moderate government power, low-tech or single product, significant dependence on Core e.g. SE Asia, Eastern Europe now

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WallersteinPoor nations hit by:

i) Restricted export economies

ii) Limited industry

iii) Debt

World capitalism in crisis:

- Decline in rural/cheap labour

- Environment, resource problems

- Democracy, pressure for welfare

- All world systems come to an end

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Recent Policies: Neo-liberalism• 1990s: ‘Neo-liberal’ policies

• Imposed by World Bank, IMF, high-income nations, on poorer nations

• ‘Structural Adjustments’ - poor nations forced to cut spending, so cut welfare/state programmes

• Social disasters: healthcare, education, employment

• Poor nations: told to get wealth by making products for global market

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Neo-Liberalism• BUT: Trade barriers suit rich nations

e.g. US on food, steel• Africa’s share of world trade is 2%!

Was 6% in early 80s!• New social movements challenge

these policies e.g. Live-8, World Social Forum, ‘Anti-globalization’ demos

• Many social scientists critique neo-lib, as new neo-colonialism

- after 9/11– military thrust – US in Iraq – oil, power in Middle East

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Pros and Cons of Theories- Dependency theories –

strong re Latin America; can’t explain growth elsewhere e.g. east Asia

- Wallerstein – strong global model; underplays TNCs; world capitalism adapts?

- Critiques of Neo-liberalism – add military focus?

BUT: theories do focus on structures of power in global economy

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Sum UpStill vast global inequalities

Modernisation theories – greater wealth creation and global trade

Other theories – world economy organised by rich, penalises poor