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Lesson 19: Global Inequality

Social ProblemsRobert Wonser

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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.

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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.

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.

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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.

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"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.

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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.

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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.

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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

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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)

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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)

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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.

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The World-Systems Theory

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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

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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.

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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

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External Areas

those areas not yet incorporated into the capitalist world economy

do such areas exist today??

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Who has been the dominant core Nation-State through history:

1450-1620/40 Spain

1600s-1750 Netherlands (France)

1750-1917 Britain

1917-present United States

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