Chapter 9 Globalization, Inequality, and Development

Chapter Outline The Creation of a Global Village Globalization Global Inequality Theories of Development and Underdevelopment Neoliberal versus Democratic Globalization

*Globalization In 1980 just 3.5% of the world’s population traveled internationally. By 2001 that figure had more than tripled to 11.3%. In 1980 about 14,000 international organizations existed in the world. By 1999, there were three-and-a-half times as many.

*Indicators of Globalization, Early 1980s – Circa –811998–03 % Change Foreign direct investment as % of Gross Domestic Product International tourist arrivals as % of world population Air passengers (millions)7481,

*Indicators of Globalization, Early 1980s – Circa –811998–03 % Change Air freight and mail (billions of ton km) Internet hosts (millions) 0165undefined Number of international organizations 14,273250,

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Imperialism The economic domination of one country by another. Global commodity chain A worldwide network of labor and production processes whose end result is a finished commodity. *

*The Sources of Globalization Technology - commercial jets, telephone, fax, and Politics -countries that are politically isolated have less integration with the rest of the world. Economics- industrial capitalism is always seeking new markets, higher profits, and lower labor costs.

*Features of Transnational Corporations 1. Depend increasingly on foreign labor and foreign production. 2. Emphasize skills and advances in design, technology, and management. 3. Depend increasingly on world markets. 4. Depend increasingly on massive advertising campaigns. 5. Are increasingly autonomous from national governments.

*Question The term “global commodity chain” refers to: a. a worldwide network of labor and production processes whose end result is a finished commodity b. rationalization involving efficiency, predictability, and calculability c. division of the world into competing economic, political, and cultural areas

*Answer: a The term “global commodity chain” refers to a worldwide network of labor and production processes whose end result is a finished commodity.

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*McDonaldization The spread of the principles of fast-food restaurants, such as efficiency, predictability, and calculability, to all spheres of life. McDonald’s now does most of its business outside the United States. McDonaldization has come to stand for the global spread of values associated with the United States and its business culture.

*Glocalization Simultaneous homogenization of some aspects of life and the strengthening of some local differences under the impact of globalization.

*Regionalization The division of the world into different and often competing economic, political, and cultural areas. World trade is not evenly distributed around the planet or dominated by just one country. Three main trading blocs exist—an Asian bloc dominated by Japan, a North American bloc dominated by the United States, and a Western European bloc dominated by Germany. Each bloc competes against the others for a larger share of world trade.

Question Regionalization is: a. the economic domination of one country by another b. a form of rationalization involving efficiency, predictability, and calculability c. the division of the world into often competing economic, political, and cultural areas

Answer: c Regionalization is the division of the world into often competing economic, political, and cultural areas.

Levels and Trends in Global Inequality The total worth of the world’s 358 billionaires equals that of the world’s 2.3 billion poorest people. The 3 richest people in the world own more than the combined GDP of the 48 least- developed countries. The richest 1% of the world’s population earns as much as the bottom 57%.

Levels and Trends in Global Inequality According to the UN: 800 million people in the world are malnourished. 4 billion people lack the ability to obtain adequate food, clothing, shelter, and basic needs. 1/5 of the developing world’s population goes hungry every night.

*Global Priorities: Annual Cost of Various Goods and Services Good/Service Annual Cost (U.S. billion) Education for everyone in the world6 Cosmetics in the U.S.8 Water and sanitation for everyone in the world 9 Ice cream in Europe11

*Global Priorities: Annual Cost of Various Goods and Services Good/Service Annual Cost (U.S. $billion) Reproductive health for all women in the world 12 Perfumes in Europe and U.S.12 Health and nutrition for everyone in the world 13 Pet foods in Europe and U.S.17

Gross Domestic Product Total value of goods and services produced by labor and property located in the United States during a specific period. In 1991, GDP became the US government's primary measure of economic activity in the nation, replacing gross national product (GNP), which is the total value of goods and services produced by labor and property supplied by US residents (but not necessarily located within the country).

*Gross Domestic Product per Capita, World Regions

*Number Living on Less Than $1 a Day PercentMillions Region Sub-Saharan Africa East Asia (excluding China) South Asia

*Number Living on Less Than $1 a Day PercentMillions Region Latin America East Europe and Central Asia Middle East and North Africa

Question Terrorism is more likely to take place in the wealthy nations. a. Strongly agree b. Agree somewhat c. Unsure d. Disagree somewhat e. Strongly disagree

*Theories of Global Inequality Modernization theory –Global inequality results from dysfunctional characteristics of poor societies. Dependency Theory –Economic underdevelopment is the result of exploitative relations between rich and poor countries.

*Core, Periphery, and Semiperiphery Immanuel Wallerstein argues that capitalist development resulted in a world system composed of three tiers: –core capitalist countries - major sources of capital and technology –peripheral countries - major sources of raw materials and cheap labor –semiperipheral countries - former colonies that are becoming prosperous

*Characteristics of Countries That Emerged From Poverty Have a colonial past that left them with industrial infrastructures. Enjoy a favorable geopolitical position. Implement strong, growth-oriented economic policies and have socially cohesive populations.

Question The citizens of poorer nations are more likely to be lazy when compared to the citizens of richer nations. a. Strongly agree b. Agree somewhat c. Unsure d. Disagree somewhat e. Strongly disagree

*Neoliberal Globalization A policy that promotes private control of industry, minimal government interference in the running of the economy, the removal of taxes, tariffs, and restrictive regulations that discourage the international buying and selling of goods and services, and the encouragement of foreign investment.

*National Priorities, U. S Priority % “Too Little” 1. Improving the nation’s health Improving the education system Social Security Protecting the environment Assistance with child care Dealing with drug addiction Halting the rising crime rate Solving problems of the big cities Mass transportation37.0

*National Priorities, U. S Priority % “Too Little” 10. Scientific research Highways and bridges Parks and recreation Improving conditions of blacks Military, armaments, and defense Welfare Space exploration program Foreign aid6.7

Question Global environment problems can be solved without any international agreements to handle them. a. Strongly agree b. Agree somewhat c. Unsure d. Disagree somewhat e. Strongly disagree

*Democratic Globalization Research shows democracy lowers inequality and promotes economic growth: –Makes it more difficult for elite groups to misuse their power. –Increases political stability and provides a better investment climate. –Encourages broad political participation.

*Neoliberal Globalization to Democratic Globalization Four Reforms: 1.Stronger support for democracy in the developing world. 2.More and better foreign aid. 3.Forgiving debt owed by developing countries to rich countries. 4.Eliminating tariffs that restrict exports from developing countries.

Quick Quiz

1. Which of the following factors do sociologists consider sources of globalization? a. technological progress in such areas as transportation and communication b. political developments such as democratization c. economic developments such as the formation of global commodity chains d. all of these choices

Answer: d Sociologists consider all of the following to be sources of globalization: –technological progress in such areas as transportation and communication. –political developments such as democratization –economic developments such as the formation of global commodity chains

2. Transnational corporations: a. rely on domestic labor and domestic production b. sell to domestic markets c. are increasingly autonomous from national governments d. all of these choices

Answer: c Transnational corporations are increasingly autonomous from national governments.

3. George Ritzer coined the term "McDonaldization" to describe: a. a worldwide network of labor and production processes whose end result is a finished commodity b. the economic domination of one country by another c. a form of rationalization involving efficiency, predictability, and calculability d. the homogenization of life worldwide

Answer: c George Ritzer coined the term "McDonaldization" to describe a form of rationalization involving efficiency, predictability, and calculability.

4. Regionalization is: a. a worldwide network of labor and production processes whose end result is a finished commodity b. a form of rationalization involving efficiency, predictability, and calculability c. the division of the world into often competing economic, political, and cultural areas d. the homogenization of many aspects of life worldwide

Answer: c Regionalization is the division of the world into often competing economic, political, and cultural areas.

5. According to dependency theorists, rich nations now rely on which of the following to exercise domination and control over poor nations: a. military occupation b. support for authoritarian governments c. substantial foreign investment d. all of these choices e. military occupation and support for authoritarian governments

Answer: d According to dependency theorists, rich nations now rely on military occupation, support for authoritarian governments and substantial foreign investment to exercise domination and control over poor nations.

6. Peripheral countries are: a. capitalist countries that are the major sources of capital and technology in the world b. former colonies that are major sources of raw materials and cheap labor c. former colonies that are making considerable headway in their attempts to industrialize d. colonies that have not yet gained independence and are therefore subject to exploitation

Answer: b. Peripheral countries are former colonies that are major sources of raw materials and cheap labor.

7. According to ______________, global inequality results from various dysfunctional characteristics of poor societies themselves.

Answer: modernization theory According to modernization theory, global inequality results from various dysfunctional characteristics of poor societies themselves.

8. In a survey conducted in 2000 in which Americans were asked to list spending priorities, foreign aid ranked: a. first on the list b. in the top half of the list c. in the bottom half of the list d. last on the list e. foreign aid did not make the list

Answer: d In a survey conducted in 2000 in which Americans were asked to list spending priorities, foreign aid ranked last on the list.

9. A large body of research shows that democracy lowers inequality and promotes economic growth. a. True b. False

Answer: a A large body of research shows that democracy lowers inequality and promotes economic growth.

10. Which of the following policies have been put forward by sociologists and others as effective ways of helping developing countries? a. increasing the amount of foreign aid and redesigning its delivery b. debt cancellation c. elimination of tariffs by the world’s rich countries d. all of these choices

Answer: d Each of the following policies have been put forward by sociologists and others as effective ways of helping developing countries: –increasing the amount of foreign aid and redesigning its delivery –debt cancellation –elimination of tariffs by the world’s rich countries