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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
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