CHAPTER 9

• What share of the world’s people live in absolute poverty?

• Why are some of the world’s countries so rich and others so poor?

• Are rich nations making global poverty better or worse? How?

• Global perspective– Social stratification (inequality) is far greater

than in the U.S.

• People in U.S. with income below the poverty line live far better than the majority of the people on the planet

A Word About Terminology• Various models of classification• “Three Worlds” Model– “First World” – rich industrial countries– “Second World”-less industrialized socialist– “Third World”-non-industrialized poor countries

• Two reasons model does not work today– Grew out of cold war politics• Changes in Eastern Europe and Society Union collapse

means there is no distinctive Second World

– Model lumped together more than 100 countries as Third World inaccurately

• Revised system of classification• HIGH-INCOME COUNTRIES– The fifty-five richest nations with the highest overall

standards of living• MIDDLE-INCOME COUNTRIES– The seventy-five nations with a standard of living

about average for the world as a whole• LOW-INCOME COUNTRIES– The remaining sixty-two nations with a low standard

of living in which most people are poor• Two advantages over “three worlds” model– Focuses on economic development and does not

lump together all lower-income nations

High-Income Countries• 25% of Earth’s land area and lie mostly in the

Northern Hemisphere• Significant cultural differences exist• All produce enough economic goods to enable

people to lead comfortable lives• People enjoy 79% of the world’s total income• Production is “Capital Intensive”– Based on factories, big machinery, and advanced

technology

Middle-Income Countries• Industrial jobs are common• 1/3rd of people live in rural areas – Poor, lack access to schools, medical care, adequate

housing, and safe drinking water

• Former Soviet Union and Eastern Europe were socialist economies

• 55% of world’s land area and home to 70% of humanity– Societies are densely populated compared to high-

income countries

Low-Income Countries

• Societies are agrarian and severe poverty• Follow cultural traditions• Limited industrial technology• People’s lives are shaped by hunger, disease,

and unsafe housing• People in rich nations have difficulty grasping

the extent of human poverty and famine

• Low-income nations are home to some rich and many poor

• Most people live with incomes of a few hundred dollars a year

• Burden of poverty in low-income countries are greater than among the poor of the U.S.

The Severity of Poverty• Reason quality of life differs so much around the

world– Economic productivity is lowest in regions where

population growth is the highest• High-income countries have the advantage– 79% of global income supporting just 18% of

humanity• Middle-income countries– 20% of global income support 70% of humanity

• Leaves 12% of planet’s population with1% of global income

Relative Versus Absolute Poverty

• People in rich nations focus on relative poverty– Some people lack resources that are taken for

granted by others– Exists in every society; rich and poor

• Absolute poverty is more important in the global perspective– Lack of resources that is life-threatening– Lack the nutrition necessary for health and long-term

survival

• Global indicator of absolute poverty– Median age of death– Rich countries – most people die after 75– Poor countries• Half of all deaths occur among children under age

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The Extent of Poverty

• Poverty is more widespread in poor countries• Absolute poverty is greatest in Africa – High death rate of children– Half the population is malnourished

• Worldwide• 15% or 1 billion people suffer from chronic

hunger• 400,000 people per day or 15 million die each

year from hunger

Poverty and Children

• At least 100 million children in poor countries provide income for their families– Beg, steal, sell sex, or work for drug gangs– Means dropping out of school– Children are at high risk of disease and violence

• Another 100 million leave families and live on the streets

• Half of all street children found in Mexico City or Rio de Janeiro

Poverty and Women• Rich societies– Women work is undervalued, underpaid, or overlooked

• Poor societies– Work in sweatshops– Tradition keeps women out of many jobs– Traditional norms give women the responsibility for child

rearing and household maintenance– Men own 90% of the land

• 70% of world’s 1 billion people living in absolute poverty are women

• Women in poor countries receive little or no reproductive health care – limited access to birth control

Slavery• 200 million-about 3% of humanity live in

conditions that amount to slavery• Four types of slavery– Chattel slavery – one person owns another– Child slavery – desperate families let children do what

they can to survive– Debt bondage – employers hold workers captive by

paying them too little to meet their debts– Human trafficking – movement of men, women, and

children from one place to another for forced labor

• Universal Declaration of Human Rights (1948)– “No one shall be held in slavery or servitude;

slavery and the slave trade shall be prohibited in all their forms.”

• Six decades later– Slavery still exists

Explanations of Global Poverty

1. TECHNOLOGY¼ of people in low-income countries farm the land

using human or animal power

2. POPULATION GROWTH– Poorest countries have the highest birth rates– Despite the death toll, double every five years

3. CULTURAL PATTERNS• Poor societies are usually traditional• Resistant to change

4. SOCIAL STRATIFICATIONLow-income nations distribute wealth unequally

5. GENDER INEQUALITYExtreme and keep women from holding jobsTypically means they have many children

6. GLOBAL POWER RELATIONSHIPSCOLONIALISM• The process by which some nations enrich themselves

through political and economic control of other nations• Global exploitation allowed some nations to develop

economically at the expense of others

• Two major explanations:– Modernization Theory– Dependency Theory

Modernization Theory• Modernization Theory– A model of economic and social development that

explains global inequality in terms of technological and cultural differences between nations

– Structural-functional approach

• Historical Perspective– Theory proposes that it is affluence that demands

explanation– Industrialization’s productivity improved the living

standards of even the poorest people

• The Importance of Culture– Tradition as barrier to economic development– Technology opposed as a threat• Family relationships• Customs• Religious beliefs

Rostow’s Stages of Modernization1. TRADITIONAL STAGE– Socialized to honor the past– Cannot imagine that life can or should be different– Life is spiritually rich but lacking in material goods

2. TAKE-OFF STAGE– Start to use talents and imagination sparking

economic growth– Market emerges as goods are produced– Greater individualism, willing to take risks, desire

for material goods

3. DRIVE TO TECHNOLOGICAL MATURITY– Growth is a widely accepted idea that fuels pursuit

of higher living standards– Diversified economy– Industrialization weakens traditional family and

local community life– Absolute poverty reduced in nations the this stage– Basic schooling for all and advanced training for

some– Social position of women steadily approaches that

of men

4. HIGH MASS CONSUMPTION– Economic development driven by industrial

technology raises living standards– Mass production stimulates mass consumption– People learn to “need” the expanding selection

of goods produced

The Role of Rich Nations– High-income nations play four important roles in

global economic development

1. CONTROLLING POPULATION– Help limit population growth by exporting birth

control technology

2. INCREASING FOOD PRODUCTION– Export high-tech farming methods– Referred to as the “Green Revolution”

3. INTRODUCING INDUSTRIAL TECHNOLOGY– Introduce machinery and information technology

which raises productivity– Industrialization shifts the labor force from

farming to skilled industrial and service jobs

4. PROVIDING FOREIGN AID– Investment capital from rich nations boost

prospects of poor societies– Foreign aid help raise agricultural productivity– Financial and technical assistance to build power

plants and factories

• CRITICAL REVIEW– Most serious flaw of modernization theory• Has not occurred in many poor countries

– Fails to recognize that rich nations, which benefit from the status quo, often block the path to development for poor countries

– Treats rich and poor societies as separate worlds ignoring that the global economy affects all nations

– Ethnocentric - Holds the world’s most developed countries as the standard for judging the rest of humanity

– Suggests that the causes of global poverty lie entirely within the poor societies themselves – blaming the victim

Dependency Theory• Dependency Theory– A model of economic and social development that

explains global inequality in terms of the historical exploitation of poor nations by rich ones

– Social-conflict approach• Historical Perspective– People living in poor countries are better off

economically– Based on the idea that the economic positions of rich

and poor nations are linked– Prosperity of developed countries come at the

expense of less developed ones

The Importance of Colonialism– Europeans established colonies• Americas, Africa, Asia

– United States• Alaska, Haiti, Puerto Rico, Guam, Philippines, Hawaiian

Islands, Guantanamo Bay in Cuba– European powers dominated most of the continent

until early 1960s– According to dependency theory• Political liberation has not meant economic independence

– Neocolonialism• Economic relationship between rich and poor nations

continue colonial pattern of domination• Heart of the capitalist world economy

Wallerstien’s Capitalist World Economy– Suggests that prosperity or poverty of any country

results from the operation of the global economic system

– Rich nations are the core of the world economy– Low-income nations are the periphery of the global

economy– World economy• Benefits rich societies by generating profits• Harms the rest of the world by causing poverty• Makes poor nations dependent on rich ones

Dependency involves three factors1. NARROW EXPORT-ORIENTED ECONOMIES– Poor nations develop few industries of their own

2. LACK OF INDUSTRIAL CAPACITY– Poor societies depend on selling their inexpensive

raw materials to rich nations and try to buy from rich nations the few expensive manufactured goods they can afford

3. FOREIGN DEBT– Unequal trade patterns plunged poor countries into

debt causing high unemployment and rampant inflation

The Role of Rich Nations– Modernization theory • Rich societies produce wealth through capital investments

and new technology

– Dependency Theory• Views global inequality in terms of how countries distribute

wealth• Rich nations have overdeveloped themselves as they

underdeveloped the rest of the world• Claim that population and agricultural programs actually

benefit rich nations and the ruling elites; not the poor majority

• Lappe and Collins (1986)– Capitalist culture encourages people to think that

poverty is inevitable– Dependency Theory• Global poverty results from deliberate politics• World produces enough food to feed the planet

– Contradiction of poverty amid plenty• Stems from rich nation policy of producing food for profit• Governments of poor countries support this because they

need food profits to help pay off their huge foreign debt• Capitalist corporate structure of the global economy is at

the core of this vicious cycle

• CRITICAL REVIEW– Dependency theory treats wealth wrongly– Dependency theory is wrong in blaming rich nations

for global poverty– Dependency theory is simplistic• Claims capitalist market system is the cause of global

inequality• Rich societies cannot be held responsible for corrupt and

militaristic foreign leaders• Wrong to claim that global trade always makes rich

nations richer and poor nations poorer

– Dependency theory offers only vague solutions to global poverty

• Most important trend is the expansion of the global economy

• Supporters of the global economy claim– Expansion of trade results in benefits for all

countries involved• Endorse NAFTA

• Greatest concern is the vast economic inequality that separates the world’s nations

• Modernization and Dependency Theory offer some understanding– Must consider empirical evidence– Although all people are better off in absolute terms,

there was almost twice as much relative economic inequality

• Degree of inequality has declined since 1970• Greatest reduction in poverty took place in Asia

• Latin America enjoyed significant growth– Little overall improvement

• Half the nations of Africa are showing economic growth– In many countries south of the Sahara, extreme

poverty has become worse

• Insight of modernization theory– Poverty is partly a problem of technology

• Insight of dependency theory– Global inequality is also a political issue

• Human community must address crucial questions– Distribution of resources• Within societies• Around the globe

• Though economic development raises living standards– Places greater strain on the natural environment

• Gulf that separates world’s richest and poorest– Puts everyone at risk of war and terrorism– Poorest people challenge social arrangements

that threaten their existence

• Planetary peace can be achieved– Ensure that all people enjoy • Significant measure of dignity and security