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. Wallerstein 3 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, 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