 Lesson 19: Global Inequality Social Problems Robert Wonser 1

 The 85 richest people on the planet now have as much money as the poorest 3.5 billion.  Oxfam estimates that between March 2013 and March 2014, those same 85 billionaires saw their wealth grow by $668 million every day. 2

 These people are so grotesquely rich that if Bill Gates, for example, spent $1 million every day, it would take him 218 years to exhaust his funds.  That, of course, would never happen because Gates would be earning millions of dollars a day in interest on the rest of his wealth. 3 When you have more money than you could possibly spend in several lifetimes, you can afford to do some pretty crazy things. Like spend $95,000 on a 4 lb white truffle that looks like a turd because when your name is Vladimir Potanin, the Russian mining tycoon, and you have a net worth of $13.9 billion, $95,000 is pocket change.

World Systems Theory  World-systems theory (also known as world-systems analysis or the world- systems perspective), a multidisciplinary, macro-scale approach to world history and social change, emphasizes the world-system (and not nation states) as the primary (but not exclusive) unit of social analysis. 4

 "World-system" refers to the inter-regional and transnational division of labor, which divides the world into core countries, semi- periphery countries, and the periphery countries. Core countries focus on higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor- intensive production and extraction of raw materials. 5

 This constantly reinforces the dominance of the core countries. Nonetheless, the system has dynamic characteristics, in part as a result of revolutions in transport technology, and individual states can gain or lose their core (semi-periphery, periphery) status over time. 6

 For a time, some countries become the world hegemon ; during the last few centuries, as the world-system has extended geographically and intensified economically, this status has passed from the Netherlands, to the United Kingdom and (most recently) to the United States of America. 7

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 Wallerstein begins with Max Weber’s definition of the Nation-State:  The State is an:  1.organization given  2.legitimacy by the people  3.and has power  4.over a given territory 9

 Then he looks at Nation-States in relation to other Nation-States. The result is a Marxist analysis on an international scale:  Some Nation-States have a great deal of economic power and influence (bourgeoise states)  Some Nation-States have very little economic power and influence (proletarian states) 10

 Nation-States are organized into networks or what Wallerstein calls “World-Systems”  There are two essential types of “World- Systems” World Empires (like the Roman Empire, Europe in the Middle Ages) The Modern Capitalist World Economy (a true World-System) 11

 Wallerstein is interested in the Modern Capitalist World Economy.  Characteristics of the Modern Capitalist World Economy: 1. Contains multiple Nation-States 2. Competition through trade and warfare 3. Different Nation-States have different levels of power 4. An economic division of labor develops between Nation-States on a global scale 5. Usually one Nation-State emerges as the dominant state  World-Systems Theory helps to answer the question why there has not been the proletarian revolution that Marx emphasized. 12

The World-Systems Theory 13

Core Countries  the dominant Nation-States  have a wide range of products, use advanced technology, and enjoy relatively high wages.  Play major roles in world trade by importing raw materials from poorer countries and export manufactured goods and services back to them 14

Periphery  the exploited Nation-States  have narrow ranges of products, less advanced technology, and lower wages  primarily produce raw materials and provide labor power for the world economy  play a secondary role in world trade  commonly depend on core countries for purchasing their exports, supplying their imports, and providing capital. 15

Semi-Periphery  in the process of moving between the two extremes  retain dependent relationships with core countries, but have peripheral countries dependent upon them  dominant core countries almost always come from the semi-periphery and return to the semi-periphery 16

External Areas  those areas not yet incorporated into the capitalist world economy  do such areas exist today?? 17

 Who has been the dominant core Nation- State through history:  /40Spain  1600s-1750Netherlands (France)  Britain  1917-presentUnited States 18

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