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Global Inequalities Global Inequalities (continued)(continued)
Dr Christopher KollmeyerDr Christopher Kollmeyer
Suggested Readings and Suggested Readings and Web SiteWeb Site
Readings:• World-systems theory: An introduction by
Emmanuel Wallerstein (chapter 2)
• The stages of economic growth: A non-communist manifesto by W.W. Rostow (Chapter 1 & 2)
Web site:UC Atlas of Global Inequality (http://ucatlas.ucsc.edu)• Especially debate on whether global inequality is
increasing or decreasing (http://ucatlas.ucsc.edu/income/debate.html)
Conceptualizing the problem
What’s the correct analogy for understanding the distribution of
wealth between countries?
1. Global class system(mobility is possible)
2. Global caste system(mobility is very unlikely)
Modernization and Neoliberal Modernization and Neoliberal TheoriesTheories
•Focuses on individual countries and problems with their socio-economic structures
Dependency and World-System Dependency and World-System TheoriesTheories
•Focuses on dynamics of interdependencies between rich and poor countries
Explaining Global Inequality: Competing Theories, Emphasizing
Different Problems
Explaining Global Inequality: Competing Theories, Emphasizing
Different Problems
Traditional Take-off
Drive totechno-logicalmaturity
Age of highmass consumption
Modernization Theory: Modernization Theory: Stages of Economic Stages of Economic
GrowthGrowth
Modernization Theory: Modernization Theory: Stages of Economic Stages of Economic
GrowthGrowth
Modernization Theory: Modernization Theory: UUneven spread of modern economic neven spread of modern economic
systemssystems
Source: Rostow, W.W. 1960. Stages of Economic Growth: A Non-Communist Manifesto. Cambridge Press.
Modernization Theory:Further Explanations for
Poverty
Modernization Theory:Further Explanations for
PovertyArgues that low-income countries are poor because:
–Traditional values
–Low rates of savings and investment
–Corrupt / inefficient institutions
–Too much government control of economy
IMF and World Bank oversee “structural adjustments”
–Privatize government-owned industries
–Promote free trade
–Reduce economic regulation (labor, environment)
–Cut government spending on social services
Neoliberalism: Updated version of modernization
theory
Neoliberalism: Updated version of modernization
theory
Key Concepts• International division of labour
1. Classic International Division of Labor» 1500s to 1960s
2. New International Division of Labor» 1970s to the Present
• Core vs peripheral countries• Core vs peripheral economic processes • Imperialism
Dependency and World-Systems Theories
Dependency and World-Systems Theories
Dependency and World-System Theory highlight the legacy of
colonialism
Rapid industrialization in the Rapid industrialization in the South does not produce South does not produce
income convergence with the income convergence with the NorthNorth
Source: Arrighi, Giovanni, et al. 2003. “Industrial Convergence, Globalization, and the Persistence of the North-South Divide.” Studies in Comparative International Development 38(1): 3-31.
If Southern countries are increasingly becoming integrated into the global economy, why aren’t they becoming wealthier?Answers:
• To some degree they are becoming wealthier.
• Product cycle• Global commodity chains
Product Cycle: Product Cycle: Core vs Peripheral in Products Core vs Peripheral in Products
and Countriesand Countries
1850 1900 1950 1970 2000
Year
Peripheral product
Core productCore Countries
Peripheral countries
Global Commodity Chains
Definition: A dynamic network of business functions and production processes that results in a finished product.
Key Point: Global North retains high-value added activities, while leaving the low-value added activities to the Global South.
reproduces global income inequality
A £100 Dress: Who gets what?A £100 Dress:
Who gets what?
•Retailer: £50.00
•Designer: £35.00(pays £22.50 for fabric)
•Subcontractor: £15.00(pays £6 to workers)
Customer Pays: £100
This money stays in the UK
This money stays in the UK
This money goes overseas
