SS - What about the Rest of the World? Lesson

 

What about the Rest of the World? Lesson

Social stratification exists in all societies. The poor and wealthy and everyone in between live in all of the nations on our planet. However, the heights of the wealth and the depths of the poverty vary drastically depending on the nation. Most of America's poor experience  relative poverty . This means that they lack what is taken for granted by the rest of society. When we shift the topic to include a global perspective we find another prevalent type of poverty, absolute poverty .   Those who live in absolute poverty experience life threatening conditions. When we study the almost two hundred other nations in the world, we find a glaring variety in the economic conditions in which people live. The map below displays the percentage of a nation's population that lived on less than $1.25 a day according to the United Nations during the period between 2000 and 2006. Sociologists generally agree that people living on less than $1 a day have reached the absolute poverty level.

 

World Poverty 

 

 

As you can surmise from this map, absolute poverty is very present in some parts of the world. There is also a very stark contrast between those nations that "have" and those that "have not" to borrow a perspective from Karl Marx.  Global stratification  is a comparison of the economic stability, power, status and wealth between nations (rather than between individuals) that focuses on the unequal distribution of resources. Every nation has wealthy citizens; therefore, global stratification reveals itself more through the patterns of social inequality found in the social stratification within each nation.  Just as sociologists categorize the different classes in social stratification, so too do they categorize the different classes in global stratification. One of the first socioeconomic models used to classify global stratification divided the planet into First, Second and Third World Countries. Developed during the Cold War that followed World War II, this model referred to rich, industrial nations as the First World, nations that were part of the Communist Bloc as the Second World, and non-industrialized nations as the Third World. There were several problems with this model as it was very ethnocentric, did not take into consideration the variety found within the nations lumped together, and reflected cold war politics more than it explained global economic reality. With the demise of the Soviet Union as a communist nation in the 1990s, accompanied by the fall of communism in other European nations, this model went out of favor. After all, there was no longer a Second World. The model that replaced it divided the planet again into three categories, but this time according to standards of living rather than by political or economic systems. In this sense, the new classification model resembles the class system used in the United States to classify social stratification as it is based on per capita income. Sociologists use the terms High Income, Middle Income  and Low Income  Countries  to differentiate between the nations of the world as they study global stratification and classify nations. High Income Countries have the highest standards of living with comparatively high incomes per capita and a long history of industrialization that has now entered the post-industrial stage. Middle Income Countries have average standards of living with incomes per capita that resemble the global national average.  Low Income Countries are those nations with the lowest standards of living and the highest populations to experience absolute poverty. These are the nations most afflicted by those characteristics associated with global poverty:

• Reduced presence of technology
• High population growth
• Rigid cultural norms based on tradition
• Extreme social stratification differentiating between the wealthiest and the poorest
• High levels of gender inequality
• Weak international relationships with little global power

 

 

Gross National Income

The map below allows you to see which nations are most likely to fall into which categories.

 

While this newer model does focus on economic development over political systems and does take a less restrictive view of the diversity found within each category, it still has its problems. Essentially the use of the terms "High, Middle and Low Income Countries" to sort global stratification relies on a comparison of standards of living found within each along with a comparison of per capita income.  Critics point out that not all cultures or their societies have the same standards nor do all economies require the same income amount to reach those standards. So whose standards do you use to determine which country is experiencing a higher standard of living versus which country is experiencing a lower one?  An example of the difference in ways people measure standards of living can be seen in the nation of Bhutan's use of the Gross National Happiness Index. In 1972, the king of Bhutan announced that he would rather measure his nation's wealth according to their satisfaction with their lives rather than by the money they generated. Upon that announcement, Bhutan began work to develop a survey index to measure Gross National Happiness (GNH) as a means of replacing the Gross Domestic Product index. The result? At the beginning of the 21^st  Century, the Centre for Bhutan Studies released their Bhutan GNH Index by which the nation tracks its development and success. Bhutan ranks among the lower Middle Income Nations according to the global classification system based on standards of living. The 2012 Bhutan GNH Index results, however, show that roughly 40% of the population of Bhutan has achieved happiness with an additional 56% having achieved sufficiency. The Bhutan GNH system gives a more optimistic picture of how the Bhutanese see their own nation than the global classification system based on standards of living does. It would seem that these two systems do not really agree with one another.

Systems that classify global stratification aren't the only things to disagree though. There are also multiple theories to explain the paths that resulted in a nation being labeled a High, Middle or Low Income Country.

Modernization Theory

Using the Structural-Functional Approach, this theory explains how those nations dubbed "High Income Countries" came to land on that list.  Fittingly, the Modernization Theory  begins with history, especially the history of Western European nations.  First, Western European explorers took to the land and sea to step up international trade opportunities. Then, the Protestant Reformation changed cultural norms to allow for further change. This was followed by the Industrial Revolution that introduced new technology reconfiguring the social stratification at home.  With this makeover, absolute poverty declined, social mobility increased, and economic growth exploded.  As a result, all of the Western European nations are now designated as High Income Countries.  With some slight variations of the historical path, so too did the rest of the nations labeled High Income Countries arrive at their present conditions. In the 1960s, American economist Walt Rostow identified the stages of modernization that lead a nation to becoming what is now termed a High Income Country:

So what does the Modernization Theory offer by way of an explanation as to why all nations aren't in the High Income Country category?  One word- Culture. According to the Modernization Theory, not all societies have cultural norms that espouse the concepts of material wealth or technological innovations. In some societies, a rigid adherence to traditional cultural norms set up roadblocks on the nation's path to economic expansion resulting in a lower ranking according to global stratification.  However, the Modernization Theory does not claim that all is lost for the poorer nations. It does make the case that wealthier nations should help poorer nations through programs that will limit population growth, increase food production, introduce new technology and provide foreign aid in the forms of financial assistance and manpower.

Critics of the Modernization Theory point out that it blatantly praises one type of economic system (capitalism) while using ethnocentric standards to lay the blame for global poverty at the feet of the Low Income Countries. They suggest that this theory ignores the High Income Countries' role in blocking economic expansion outside of their own borders.

Dependency Theory

In contrast to the Modernization Theory, the Dependency Theory  employs the Social-Conflict Approach to global stratification.  Suitably, this theory focuses on how the richer nations of the world have historically, and even currently, exploited the poorer nations.  Similar to the Modernization Theory, the Dependency Theory begins with a look at history, but rather than praise the industriousness of High Income Nations on their roads to wealth, the Dependency Theory explores the responsibility of colonialism in setting Low Income Nations on their roads to poverty.

Essential to Dependency Theory is Immanuel Wallerstein's  Capitalist World Economy Theory, also known as the World System Theory.  As an American sociologist, Wallerstein introduced his theory by describing how the colonial powers became the core nations of the world's economy and that the poor nations that were colonized by those powers became periphery nations within that system.  Look at the map below to identify those nations which Wallerstein identified as core versus those identified as periphery.

Core and Periphery Map

 

Wallerstein argued that those nations that served as the core nations in the global economy worked to insure that periphery nations were stuck in an economic rut characterized by:

1. A dependency on a narrow, export-oriented economy. From history, colonial powers established economies in the periphery nations that relied on a single resource exported to the core nations where that resource was then transformed into a marketable product.  In the course of this interaction, the majority of the profits gleaned from the use of the resource stayed in the pockets of the core nations' economies. Currently, many of those periphery nations continue to rely on a single resource to accrue a national income resulting in, what is called, a "resource curse."
2. A limited industrial infrastructure. Again from history, the colonial powers were more interested in extracting the natural resources from the periphery countries to enhance their own wealth. Therefore, within periphery countries there is an absence of an industrial infrastructure that prevents them from converting their own raw materials into a marketable product. The periphery countries rely on shipping out their raw materials for a source of income but are then burdened with importing the products made from those raw materials at a higher cost.
3. A massive foreign debt. Since the periphery countries make their money from the export of raw materials but then have to pay for the import of useable goods made from those raw materials, they are caught within a fiscally unequal trade pattern that prohibits economic growth and increases their debt to core nations.

Wallerstein's explanation of global stratification is crucial to the general outlook established by the Dependency Theory- that rich nations overdeveloped themselves at the cost of under developing others.

Critics of the Dependency Theory counter that this view is simplistic as it ignores the actions of toxic leaders within periphery nations while blaming capitalism for the plight of Low Income Countries.  A toxic leader is one who abuses his or her power as the leader of a country and ultimately leaves the nation worse off than before his or her reign. These critics quickly use examples of Low Income Nations that were never colonized by High Income Nations, like Ethiopia, to argue that not all poor nations got their starts as abused colonies. They also argue that in blaming the wealthy for the existence of the poor, the Dependency Theory is spending too much time pointing fingers and not enough time developing solutions to global poverty.

 

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