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Global Inequalities Global Inequalities (continued)(continued)
Dr Christopher KollmeyerDr Christopher Kollmeyer
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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)
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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)
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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
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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
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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.
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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
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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
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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
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Dependency and World-System Theory highlight the legacy of
colonialism
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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.
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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
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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
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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
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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
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