Test 3: Global Inequality Flashcards
Average Annual Income, by Country, 2011
- Blue = rich (North America, Western Europe, Japan, Australia)
- Red = poor (Africa)
- Avg. income in blue is only $12,275
- Avg. income in red only $1005
Where Do the 1% Live?
- 1/2 ppl have after-tax income below $1,225 a year
- after-tax income of US $34,000+ per year is in the world’s top 1 percent of income earners (= 60 million people).
- most in US
Gross Domestic Product Per Person, Sub-Saharan Africa vs High-Income Countries, 1975-2010
- Dynamism in inequality
- Sub Saharan Africa: shrinkage of 11.6% in GDP, became poorer
- Blue countries 143% growth
- Rich become a lot richer, poor somewhat poorer
GDP Growth in 2000 Dollars, 1969-2008
Chinese + Canadian economy bigger
•Upstarts
3 Concepts of World Inequality: Inequality of income for each individual in the world
-inequality betw. Individuals
•Inequality extraordinarily high, it is increasing
•Even in rich countries there are poor ppl, in poor countries there are rich ppl
•Very few ppl make a lot, lots of ppl make very little
3 Concepts of World Inequality: Inequality of average income for each country, weighted for population size
-letting bigger countries count for much more than tiny places, when we weight countries we find higher level of inequality + declining inequality
•Because of China + India effect, huge expansion of big countries makes inequality smaller
3 Concepts of World Inequality: Inequality of average income for each country
find avg income for each country and see gap betw lowest + highest, comparing countries
•Inequality betw countries have increase
Global Priorities, 2011 (in US$ billions)
- Instead of spending money on perfume, cocaine, strip clubs, adverts, we should spend in on providing world water, education, health care, nutrition
- These are our decisions, we decide to spend money on these stupid things
Indicators of Gender Inequality
- Richer countries have more gender equality
* Industry needs W into paid labour force, so they require education, brings up literacy, education + higher wages
Indicators of Gender Inequality
- Economic pull drives them from domestic to labour force
* More liberal mindset recognizes need for equality
Modernization Theory
inadequacies in poor societies themselves, including lack of:
capital sufficient capital they can use in western agriculture
Western business techniques in finance, high profitability
Modernization Theory
stable governments do not attract investment
Solve it by moving western culture + values into poor countries emphasizing savings, investment, innovation, education, high achievement, and self-control in having children
Dependency Theory I
-most powerful countries impoverished the least powerful countries
•Ought to focus on relationship betw rich + poor countries, not on internal characteristics
•It wasn’t always the way it is, before industrial revolution
Dependency Theory I
•Global south produced used to be industrial giants
•rest of world fallen productivity by 1/3 while richest countries have gone up existentially in production
-Industrial Revolution enabled rich to amass enormous wealth
Dependency Theory II
-establish powerful armed forces to subdue + colonize rest of the world
•taxed ppl to build militaries, ships
•decided to go out to pillage, enslaved ppl, conquered, stole their things
•put poor countries in dependency of them
Dependency Theory II
-Main exception: Japan
considered less valuable: no natural resources, resisted West
•started its own industrialization because it was left alone by the West became a superpower itself
Dependency Theory III
Substantial foreign investment
•Multinational corps: invested in poor countries to get new markets for groups + cheap raw material, created blue collar work/labour
•Took raw materials back home, manufactured it then sold it back to the countries for a profit, providing profit of corps with HQs in West
•Create lousy jobs + little domestic industrialization
Dependency Theory III
Support for authoritarian gov economically + politically managed to keep them quiet, relied on rich countries to help put rebels down
Mounting debt: after independent after WWII, struggled to create transportation, health care, had no one to tax, tended to loan from rich countries to create economic infrastructure
•Many of corrupt gov became rich while ppl stayed poor
•Interest payments were crippling, many tax
•Foreign aid is very small
Main Determinants of Gender Inequality
GDP per capita: rich countries = low inequality
Percent Muslim: high muslim=high inequality
Former or current Communist regime: lower ineqaulity
Core, Periphery and Semiperiphery (Wallerstein)
Semiperiphery: former colonies making considerable headway in attempts to become prosperous (South Korea, Taiwan, Singapore; Israel, China, India, Brazil)
many at one time colonized by Japan, Japanese handled colonialism, built steel mills, transportation, involved creating local infrastructure which helped a lot after being freed
How Semi-Peripheral Countries Differ from Peripheral Countries
having key position of Singapore that US liked gave it an edge in ship building
•Widespread fear of domino effect went to Vietnam in fear of countries becoming communists, opened up american market to south Korea + Taiwan
•Countries with strategic importance to US got benefits which helped them
Geopolitical position
How Semi-Peripheral Countries Differ from Peripheral Countries
- Statist pro growth model like Japan, gov heavily involved in economic growth, crated policies to make sure you can’t buy outside country, huge tax on foreign goods, make sure not a lot of consumer goods to buy, so you put money in bank, high savings, make sure it is invested in export goods
- Labour unrest, labour cost, ruthless breaking up of strikes
- Grew economically quickly
How Semi-Peripheral Countries Differ from Peripheral Countries
Social structure: ethnic homogeneity
•Agriculture broke up land gave it to small land owners, worked hard, birth rate declined, land reform increased productivity
•Took land away from enterprise owners
•Rich countries escaped homogeneous: tended to draw boundaries that included other ethnic groups, we want instability so we can be called in to make peace
Core, Periphery and Semiperiphery (Wallerstein)
Core: major sources of capital and technology (USA, Japan, Germany)
Periphery: major sources of raw materials and cheap labour (most former colonies)
Life Expectancy + Income
- Health outcomes improve: ppl are healthier + live longer
* Growing income: has many beneficial
