Wk9: Inequality, class and the global economy

Question 1

Social Stratification

Answer 1

relates to the ranking of people and the rewards
they receive based on objective criteria, often including wealth, power and/or prestige

Question 2

An economic system, or economy

Answer 2

is the social system that helps a
society organise what it produces, distributes and consumes.
* Every society across the world stratifies its members within an
economy.
In Australia, we tend to divide groups by their access to income
and/or wealth.

Question 3

Income

Answer 3

refers to the money received through work or investments

Question 4

Wealth

Answer 4

refers to all your material possessions, including income minus your liabilities

Question 5

social wage

Answer 5

which is the state’s redistribution of
income and wealth to citizens through the taxation system (e.g., Centrelink benefits).

Question 6

The 4 Major Systems of
Social Stratification

Answer 6

Slavery
Caste System
Estate
Class

Question 7

Slavery

Answer 7

“ownership” of other people.
Initially, slavery was based on debt,
punishment, or defeat in battle rather than
race. It could be temporary and permanent
and was not necessarily passed on to one’s
children

Question 8

Caste System

Answer 8

status is determined by birth
and is lifelong

Question 9

Estate

Answer 9

the feudal European system which
consisted of nobility, clergy and peasants
(serfs)

Question 10

Class:

Answer 10

Industrialisation encouraged
groupings based primarily on wealth and
income. Class is a basic social division in
capitalist societies.

Question 11

Gini coefficient

Answer 11

A widely used index of inequality.
0 = perfect equality
1 = complete inequality

Question 12

power and prestige

Answer 12

Another way to measure social stratification is by
power and prestige

Question 13

Power

Answer 13

is the ability to carry out our will and
impose it on others

Question 14

Delegated power

Answer 14

means given or assigned power.

Question 15

Power elite

Answer 15

is a small group of people who hold
immense power

Question 16

Prestige

Answer 16

refers to the level of esteem associated
with our status and social standing

Question 17

Upper Middle Class

Answer 17

a social class that consists of high-income members of society who are well-educated but don’t belong to the elite super-wealthy class

Question 18

Lower Middle Class:

Answer 18

a social class comprising
those with a moderate income

Question 19

Middle class in AU

Answer 19

The middle class may account for 60% of
Australian population, depending on how it
is defined.
* Most Australians think they are middle class
and live in a fairly egalitarian society.

Question 20

The groups that comprise the middle class have
in common:

Answer 20

• Individualism
• Relative affluence
• Control over knowledge
• Status
• Respectability and cultural influence
• The middle class serve as a benchmark for
  others through the demonstration of hard-work
  and self-responsibility. If the benchmark is not
  reached, then the false message is sent that the
  individual is to blame.

Question 21

Working class:

Answer 21

a social class generally made up of
people with high school certificates and lower levels of education

Question 22

Underclass:

Answer 22

a social class living in disadvantaged
neighborhoods that are characterised by four
components:
* 1) a lack of individuals in high-status occupations
* 2) male unemployment
* 3) family disruption
* 4) poverty

Question 23

Absolute poverty:

Answer 23

An absence of the
material resources required to meet
an individual’s or family’s basic
needs

Question 24

Relative poverty:

Answer 24

Where living
standards and lifestyles are below
those deemed acceptable within the
nation (e.g., quality of education and
medical services

Question 25

Marginal poverty:

Answer 25

When there is a
lack of stable employment

Question 26

Transitional poverty:

Answer 26

Temporary
state of poverty (e.g., tutors
dependent on trimester work)

Question 27

Who is at Risk of
Poverty?

Answer 27

• The unemployed
• Sole parents
• Public housing tenants
• Children in sole parent households
• Aboriginal and Torres Strait
  Islander people
  Employment will not stave off
  poverty with people relying on
  wages falling beneath the poverty
  line.

Question 28

Social exclusion can be divided into
three domains:

Answer 28

1. Lack of social interaction (being
   unable to go out once a fortnight)
2. Domestic deprivation (going without
   food)
3. Extreme consumption hardship

Question 29

Social mobility:

Answer 29

The ability to change social classes. To
be able to move upwards is considered the great
Australian dream

Question 30

Horizontal mobility:

Answer 30

Staying within the same class but
changing occupation

Question 31

Vertical mobility:

Answer 31

Moving between classes. There is
both upward and downward mobility

Question 32

Intragenerational mobility:

Answer 32

We move between classes
within our own generation

Question 33

Intergenerational mobility:

Answer 33

Movement across
generations between classes

Question 34

Structural mobility:

Answer 34

Where an entire geographical area
might move in class (e.g., mining towns)

Question 35

Exchange mobility

Answer 35

Equilibrium in class – for x number of
the population that go up in class, x number will go down

Question 36

Conflict Theory

Answer 36

the competition for
resources isn’t limited to
economic assets like income or
wealth. It also encompasses
resources like social networks,
educational access, healthcare,
and job opportunities. The list of
contested resources is endless.
Social inequality is rooted in a
system that is most likely to
reward you based on where you
start – not solely based on the
abilities you have

Question 37

Marxist Conflict Theory

Answer 37

The way money and jobs work in a society shapes everything else, from our politics
to our culture.
* Marx believed that if you want to understand why a society’s culture or politics is
the way it is, you should first look at its economic system.

• Inequality is seen as the result of a society with more wealth than what is
  needed for survival.
• Different classes have different interests that arise from unequal distribution
  of economic resources. This is the foundation for exploitation and
  domination.
• Revolution and resolution between classes drives social change
• Our free will is constrained by economic arrangements.
• We enter relations determined by the arrangements of society
• It is the economy that shapes society – political, law, culture, beliefs,
  ideas, consciousness.
• The economy doesn’t just shape our material conditions but influences
  our beliefs, values, and perceptions. The economic base of society plays
  a pivotal role in determining the dominant ideas and ideologies, which in
  turn shape individual consciousness.

The capitalist system contains contradictions that inevitably lead to evolution:
1. The bourgeoisie (upper class AKA ruling class) depend on the proletariat yet
maximise profit by paying as little as possible while the proletariat want
more.
2. To have profit there must be a market, but if the proletariat cannot afford to
purchase then the economy goes into a depression

Question 38

MARX CT: Mode of production:

Answer 38

How a society produces its wealth, including the means of production (e.g., technological knowledge and relationships between groups of
people (bosses and employees).

Question 39

MARX CT superstructure

Answer 39

Marx argued that infrastructure (the economic basis of society) defines the
superstructure (non-economic aspects, e.g., politics and culture)

Question 40

MARX CT: Dialectical materialism:

Answer 40

Change through revolution that is required due to the advantaged who do not wish to relinquish neither power nor wealth

Question 41

MARX CT: historical materialism

Answer 41

Same as Dialectical materialism due to an emphasis on pre-existing
conditions shaping the future

Question 42

MARX CT: Economic depression

Answer 42

a long period of severe economic downturn, where businesses close, people lose jobs, and the economy struggles to grow

Question 43

MARX CT: Socialism

Answer 43

Marx believed a revolution would occur where power and control are seized
from the upper class.

He believed that socialism would replace capitalism and communism would
eventually replace socialism

Socialism: an economic and political system where the community or the state owns and controls the main means of production, rather than individual
capitalists, with the goal of achieving equality and fairness in society

Question 44

MARX CT: Communism

Answer 44

a political and economic system where all property is publicly owned, and each person works and is paid according to their abilities and
needs.

Question 45

Marxist Conflict Theory: Criticisms

Answer 45

• It is deterministic and overemphasises the role of material conditions
  determining all aspects of society (e.g., culture)
• Social change is progressing towards the ultimate goal of communism,
  i.e., its explanation is teleological in that the thinking focuses upon goals
  and purposes. We do not know what the future holds.
• There is a reliance on the idea of social evolution leading to guidance in
  how to act. This is scientism, where we believe that scientific knowledge
  can provide values and guide what should be.
• A difficulty in accounting for the significance of the middle class in
  contemporary society because Marx underplayed the significance of
  knowledge and intellectual skills alongside property.
• Marx believed that socialism and communism would come after
  industrialisation, yet it has come before in China and Russia.
• An underestimation of the capacity for capitalism to accommodate for
  conflict.

Question 46

teleological

Answer 46

relating to or involving the explanation of phenomena in terms of the purpose they serve rather than of the cause by which they arise.

Question 47

scientism

Answer 47

where we believe that scientific knowledge
can provide values and guide what should be

Question 48

Weber’s
Multidimensional Theory

Answer 48

There are three sources of power
* Class: Economic factors such as wealth and income
* Status: Social honour
* Party: Political organisation and influence (formal
and informal)

• Class and status can be independent in their influence on social inequality.
• Power within any of the three may contribute to
  power in another
• Classes are grouped by people’s possession of skills or goods that reap a similar reward in the marketplace (e.g., social workers, occupational therapists etc).
• Status groups tend to share a common lifestyle and form communities.
• Status groups utilise social closure – the restriction of access to resources and
  opportunities to its members.

Question 49

Functionalism

Answer 49

• Functionalists believe that systems find equilibrium or balance, so social stratification must be the result of functional balance.
• Meritocracy argument: to attract the most capable people to fill its important positions, society must offer them great rewards .
• Intelligence, drive and personal choice influence a person’s social class.
• All people are different, so it makes sense that differences in social class exist.
• Difference is due to merit.
• Cooperation is made possible through the establishment of an order that
  members of society are socialised into accepting as normal.
• In a modern society we are socially cohesive because we are different yet need
  each other (the doctor needs the cleaner and the cleaner needs the doctor).
• We are tolerant and cooperative as this ensures our needs are met. Thus,
  society is maintained.
• Hierarchy is necessary and inevitable in a complex society held together
  by interdependence.
• When there is no transparency or meritocracy (e.g., there is corruption),
  then there will be social conflict.
• It is through credentials, that we can provide objective measures of
  talent and knowledge that justify the unequal distribution of resources.

Question 50

Symbolic Interactionism

Answer 50

• Symbolic interactionists are interested in how people perceive poverty and wealth. They seek to understand if people actually have a sense of social class.
• Social class and our understanding of it are relative to our own personal belief system.
• Status symbols are important in terms of establishing a class identity.
• Status doesn’t necessarily equate with material wealth and, as such, need not be equated with economic class.

Question 51

Nolan (1960s)

Answer 51

suggested an additional
measure of political position to account for
libertarians

Question 52

Statists

Answer 52

Top-Left: (communitarian):
Government control of
economic and personal matters.

Question 53

Liberals

Answer 53

Bottom-left: Government intervention or
controls on economy (e.g. regulations) but
more personal freedoms (e.g,
relationships & guns)

Question 54

Conservatives

Answer 54

Top-right: Free market (i.e. economic freedom)
but government intervention in
personal matters(e.g. drug laws)

Question 55

Libertarians

Answer 55

Bottom-right: Both economic and
personal freedom. Opposed to all
government intervention

Question 56

How Social Stratification is
Maintained Globally

Answer 56

Neo-colonialism, Trans-National Corporations
(TNCs), Economic rationalism and/or
neo-liberalism:

Question 57

Neo-colonialism:

Answer 57

the political rule of the least-industrialised
countries by the most-
industrialised

Question 58

Trans-National Corporations
(TNCs):

Answer 58

the presence of TNC’s in
disadvantaged countries

Question 59

Economic rationalism and/or
neo-liberalism:

Answer 59

the belief of free
markets as the arenas which
best enable individual autonomy
and produce efficient economic
outcomes

Question 60

Trans-National Corporations
(TNC’s)

Answer 60

*Are involved in economic activities in at least two or more nations

*Seek to profit from establishing the best
combination of labour skills, wage rates, government subsidies, taxation regimes, market opportunities and political conditions that exist in and between nation-states

*Benefit from economies of scale: Increasing
production to save in cost. Spread out its fixed costs over those items, where they buy materials in bulk for cheaper, and improve its production process

*Utilise geographical flexibility, shifting resources
between locations on a regular basis to take
advantage of price differentials and changing
conditions

• Take advantage of intra-corporate trade
• Seek to provide the greatest economic returns
  to shareholders
• Are powerful within particular nations, as well
  as at the global level
• The transnational capitalist class dominates
  and controls consumerism, media, political
  parties and cultural ideological practices.

Question 61

5 Main Features of Globalisation

Answer 61

1. Be global in distance, penetrating most nations and parts of nations.
2. Be globally inclusive in inputs wherein components must be combined from throughout
   the world, not simply arise in one country and be exported to another.
3. Require interdependency in that global interactions will ensure that changes in one part of
   the world will impact directly upon others.
4. Have stability and regularity in relations over space and time—there needs to be some
   permanency in the structures of global interaction.
5. Show evidence of a global consciousness – an emerging awareness of the globe as ‘one
   world’ shared by all peoples.

Question 62

Global Culture:

Answer 62

Where symbols and spatial referents
are known, and shared, by
citizens throughout the world.
Symbols can be readily
created, easily transported
and eagerly consumed

Question 63

Global Economy:

Answer 63

The global economy is one where
production, finance and trade
—facilitated by the latest in
World Wide Web and other
information technologies—is
organised at a global level

Question 64

Creolisation:

Answer 64

the blending of ideas, symbols,
meanings, and tangible elements like food,
clothing, and music from different societies.
It refers to how diverse cultural influences
merge in unique and unexpected ways,
leading to new creations, such as jazz or new
languages

Question 65

Cosmopolitanism:

Answer 65

the belief that everyone is
morally connected, regardless of race,
ethnicity, gender, or religion. It’s often seen
as the idea of being a “world citizen,” where
one’s identity isn’t strictly tied to a specific
nation

Question 66

Globo-Enthusiasts

Answer 66

consider that an integrated world will
be one that is both more prosperous and more
peaceful. As they embrace globalisation, nations can be liberated from undemocratic
political regimes.

Globalisation can also improve the lives of their citizens through increased income-
earning potential.

Question 67

Globo-Sceptics

Answer 67

view globalisation as socially divisive.
They consider that globalisation
has polarising economic and
social effects and weakens
democratic systems. Jobs are
exported to low-paid workers in
the developing world. The rise of
elites and the concentration of
wealth and power in the hands of
those people/groups are viewed
as arising from deregulation and
economic rationalism

Question 68

International Monetary Foundation

Answer 68

was established to correct balance-of-payments
difficulties and so maintain global financial
stability

Question 69

World Bank

Answer 69

established as primary institution
for economic development

Question 70

World Trade Organisation

Answer 70

has a main objective to promote global trade by administering trade agreements, settling trade disputes, reviewing national trade policies, and establishing ways of removing barriers to trade

Question 71

a model of infinite growth

Answer 71

Capitalism provides more opportunities for individuals on the basis that there is not a limited amount of wealth but rather, a model of infinite growth

Question 72

Gold standard:

Answer 72

A monetary system where a nation’s
currency or wealth is directly linked to the amount of gold that it could be traded for.
* In the 1930s the gold standard was partly abandoned then completely eradicated in the 1970’s. This meant that money was no longer representative of any value other than money itself. Countries or banks could print
as much money as they wanted.

Question 73

Financialisation

Answer 73

refers to the growing
importance of finance-related activities,
such as motives, markets, players, and
institutions, in shaping both local and
global economies

Financialisation helped to create the
global financial crisis. Yet, ironically,
they were subsequently financially
assisted by governments (i.e. the
public), to the tune of trillions of dollars
in order to keep trading—indicating the
central importance of finance capital in
today’s global economy.