Globalization, Inequality, and Development

Chapter Outline Globalization Global Inequality Theories of Development and Underdevelopment Neoliberal versus Democratic Globalization

Indicators of Globalization

Triumph and Tragedy of Globalization In 1930 a 3-minute call from New York to London cost $250 and only a minority of Americans had telephones. Today the same call costs 5¢ and telephones seem to be everywhere. The Internet did not exist in 1982, but by 2009 it comprised 681 million servers connecting people around the world.

Foreign Visits to Top Ten Visited Countries

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.

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.

Media Imperialism The domination of a mass medium by a single national culture and the undermining of other national cultures.

Glocalization The 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.

Regionalization 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.

Regionalization of World Trade

Anti-Globalization Some groups (e.g., Islamic fundamentalists) have become uncomfortable with the effects of globalization on their society Some groups have resisted with violence (e.g., al Qaeda and the September 11, 2001 attacks) Other groups have been non-violent (e.g., WTO street protests in 2001)

Levels of Global Inequality The UN calls the level of inequality worldwide “grotesque” 20 richest countries in the world spend more on cosmetics or alcohol or ice cream or pet food than it would cost to provide basic education or water and sanitation for everyone in the world

Global Priorities

Global Inequalities Individual income inequality was astoundingly steep in 1985 and rose even higher over the next 20 years. Today, the riches 1% of the world’s population (about 70 million) earn as much as the bottom 66% (about 4.6 billion) Of the world’s 7 billion people, more than 1 billion live on less than $1/day and more than 3 billion live on less than $2/day

Three Concepts of World Inequality

Theories of Development and Under Development Modernization theory (Functional approach) Global inequality results from dysfunctional characteristics of poor societies. Dependency Theory (Conflict approach) Economic underdevelopment is the result of exploitative relations between rich and poor countries.

Modernization and Dependency Theories

Colonialism The political control of developing societies by more developed, powerful societies.

World Systems Theory 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 1. Have a colonial past that left them with industrial infrastructures. 2. Enjoy a favorable geopolitical position. 3. Implement strong, growth-oriented economic policies and have socially cohesive populations. 4. Socially cohesive populations whereby policy makers can garner consensus regarding development policies

Polling 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.

Polling 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

Globalization Reform Foreign Aid: can be beneficial but strict oversight is required to ensure it is helpful Debt Cancellation: would help poor countries build infrastructure to compete in global economy Tariff Reduction: stimulate economic growth to developing countries as they could export their goods Democratic Globalization: democratization lowers inequality and promotes economic growth

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. 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.

4. 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.

5. 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.

6. 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.

7. 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.