Global Economic Inequalities

1. Global Economic Inequalities Today: Global Poverty, Modernisation theory Tomorrow: Theories regarding Colonialism/Neo-colonialism, Dependency, World System, Critiques of Neo-liberalism

2. Global Poverty 6.5 billion world population 5-5.5 billion in developing nations, or nations ‘in transition’ (Russia, Bulgaria, etc) Live on under $1 per day: 1.2 billion 850 million ‘hungry’ 2.7 billion live on under $2 per day 71 million HIV+; 68 million in developing nations (mostly sub-Saharan Africa)

3. 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

4. National Inequalities High 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

5. Inequalities Low income nations – little industrialization; hunger, disease, poor housing; 3.2+ billion e.g. Ethiopia – GDP per capita $900; 41 years Further features: War, refugees Children, women badly affected Uncontrolled, uneven development Severe inequalities Corrupt governance

6. Social Science Theories: Modernisation Theory Strong in 1950s Favoured by Western regimes WW 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

7. Modernisation Theory Rostow: stages of modernization • Traditional – resist innovation; some societies stuck • Take-off – rise of individualism, market, achievement culture, progress • Technological Maturity – seek higher living standards, poverty declines • High mass consumption – high output, consumerism

8. 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

9. Mod Theory - Criticisms Nice idea UN 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?

10. Sum Up Vast global inequalities Have grown since 1945 Modernization theory flawed Need more critical standpoints

12. Explaining Global Inequalities • Colonialism, etc • Dependency • World System – Wallerstein • Recent Policies - Neo-liberalism

13. 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

14. Neo-colonialism 19th 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

15. Dependency Theory Focus 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

16. Wallerstein Neo-Marxist view ‘World System’ Theory - World is a single economic system - Capitalism is dynamic globalizing force; - divides nations, workers

17. 3 kinds of nations A) Core - strong government, national culture, developed, rich, powerful e.g. EU, USA, Japan Wallerstein B) Periphery - weak states, weak/colonised culture, dependent on core e.g. Latin America, Africa C) Semi-periphery - Moderate government power, low-tech or single product, significant dependence on Core e.g. SE Asia, Eastern Europe now

18. Wallerstein • Poor nations hit by: • Restricted export economies • Limited industry • Debt • World capitalism in crisis: • Decline in rural/cheap labour • Environment, resource problems • Democracy, pressure for welfare • All world systems come to an end

19. 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

20. 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

21. 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

22. Sum Up Still vast global inequalities Modernisation theories – greater wealth creation and global trade Other theories – world economy organised by rich, penalises poor