Global Inequality And How To Fight It (III)

Part I, Part II

A term and notion of development are very contested in academic circles. In its most general sense, development simply means change but is usually considered as positive change or the change going forward. The term as well as is often used to describe processes of becoming modern that means progressive. However, in the more specific connotation, development is mostly understood from a very West-Eurocentric position: development as progress is considered regarding the experiences of West European civilization, society, politics, technology, and economy. Therefore, from this centric perspective, development contents industrialization and urbanization followed by increasing living standards in relation to health, education, and housing.

West-Eurocentric viewpoint concerning development and modernization describes the characteristics of believing that the West European experience is the only right way to modernization, i.e., progress. One good reason why such an approach exists is the fact that there is no awareness of any other alternative but, in essence, the West-Eurocentric viewpoint reflects a belief in West European civilizational and even racist superiority vs. the rest of the world (“The West and the Rest”). This viewpoint is very often used to refer to theories and perspectives coming more generally today from the Global North or post-industrial societies.

Constructions of development are not, nevertheless, value-free. Theorists of post-development, for instance, are stressing the way definitions and discourses of development reflect and reinforce existing power relations. Post-developmentalism is a radical critique of developmentalism, which is requiring the self-empowerment of poor Global South or marginalized societies in opposition to the powers of the Global North and financial capital. In sum, several definitions of development vary greatly and reflect understandings of the world and unequal power relations by different schools. Nevertheless, the notion of development is usually regarded as both a goal and a process with importance to take into consideration scale in any examination of development. However, the notion of development, basically, became a synonym for modernization and modernity.

The ideas of modernity and modernization are most commonly understood by their opposition to the old and the traditional or conservative. From this point of view, the term modern is a synonym with newness. The term modernity refers both to 1) The post-traditional historical approach within which newness is produced and valued, as well as to 2) The political, social, cultural, and economic formations to be characteristic of the period. The term modernism, basically, applies to intellectual, architectural, and artistic movements exploring ideas of newness developing new aesthetics and ways of thinking in order to express these ideas. Modernity is historically most located in the societies of West Europe and North America from the mid-18th century onwards. Modernity is associated with a combination of capitalist economies, the political organization within the framework of nation-states, and cultural values of secularity, rationality, and progress (the ideas of Enlightenment). Nonetheless, modernity is in essence global phenomenon that is taking several different forms through time and locations.

Capitalist World-system and the increase of global economic inequality 

As a direct impact of economic turbo-globalization since 1990, today there is a huge academic debate over the question of whether inequality on the global level of comparison is increasing or decreasing. All anti-globalists argued that turbo-globalization creates inequalities due to a capitalist World-system of a division of production and labor which produces a system of economic and financial dependency. However, the defenders of turbo-globalization are in the opinion that globalization, in general, is acting toward minimizing differences between poor and reach nations in the world.

Historians of globalization will point that the first visible and dramatic changes in the inequality in the world occurred some 250 years ago and are created by the Industrial Revolution (first started in the UK). The direct consequence of this revolution was that first West Europe and then other European regions followed by ex-British colonies of the USA, Canada, etc. underwent fast economic development and expansion but leaving the rest of the global population far behind them with regard to the issue of wealth and technological development.

Sydney Harbor at night
Sydney Harbor at night

The modern capitalist world-system emerged in West Europe from a feudal world and led to the rise of West Europe between 1450 and 1700. After a time of stagnation that started circa 1300, a capitalistic system of production became revived followed by the creation of centralized states. The system was expanded beyond Europe during the time of colonization, creating a world economic system that overpassed the borders of nation-states. Such a capitalist World-system created a global division in labor within which umbrella some regions are prospering but others are languishing.

The dependency theorists are pointing out the importance of the capitalist world-system as one of the focal features of global inequality. In essence, world-system theorists are concerned with the lack of Third World development trying to understand different forms of development of world’s regions (social, economic, political). In order to investigate and explain the global existence of uneven development, the researchers are examining developed and underdeveloped nations and the causes of obvious differences between them. The final goal of such investigation is not only to fix the causes of the developing gaps but as well as to understand and predict the fate of different parts of the world. Anyway, the priority is to understand the global system from a historical perspective as only after that the conditions of separate nations or societies can be understood and evaluated. As a matter of fact, different types of World-system theorists (not necessarily Marxist or neo-Marxists) consequently have been interested in the nature, forms, and practical effects of globalization before the turbo-globalization started after the end of the Cold War 1.0.

The concept of dependency is based on the assumption that low-income nations of the Third World or South are economically subordinated to serve primarily the interests and advantages of high-income Core nations (nations of the First World or North). Nevertheless, in class-analytical terms, urban workers and countryside peasants in the global perspective are subordinated and exploited to different levels by capital-owning classes in their own states including those coming from the First World. According to the dependency theorists, the crucial reason for uneven global development is the tendency in the capitalist economy for industries, economic sectors, and countries to develop at very different rates. The reason is the pressures generated by the quest for profit, competition, and economic exploitation. A dependency theory is stressing structural imbalances within the framework of international capitalism that impose dependency and underdevelopment on poorer states and regions in the world. The theory is pointing out Western capitalistic neo-colonialism, economic imperialism, and dollar imperialism in the contemporary world.

An American scholar Immanuel Wallerstein is the best researcher of World-system theory followed by others in attempting to understand the origins and dynamics of the contemporary global political economy and the existence of global uneven social, economic, technological, and political development. His World-system theory he developed in the work The Capitalist World-Economy (Cambridge: Cambridge University Press, 1979).

Global North and Global South.svg
Global North and Global South

I. Wallerstein started to analyze the beginning of capitalism in West Europe by tracing its development which created a modern World-system which is composed of three different groups of the global nations: Core, Periphery, and Semi-periphery. World-system theory advocates that global economy, development, and politics are a system of interrelationships between these three categories of nations. The focal feature of the Core nations (West Europe, USA, Canada, Australia, Japan) is that historically they have engaged in the most advanced economic activities (banking, manufacturing, technologically advanced agriculture, shipbuilding, etc.). They have developed research centers, an education system, and, therefore, supremacy over technological innovations. They have a concentration of capital, high wages, high-skilled manufacturing production, and have huge benefits from technological innovations and high levels of investment. The Periphery nations (the Third World states) are providing raw materials (timber, minerals, oil) in order to fuel the development and expansion of the Core nations. In other words, the Periphery nations are exploited by the Core nations by their dependency on the export of natural sources, subsistence wages, and weak frameworks of state protection. The Third World states are characterized by an unskilled labor force followed by the fact that the Peripheral nations are denied advanced technology in those areas of the economy that might make them to be more competitive with the Core nations and, therefore, be richer. The nations from the third category – the Semi-peripheral (ex-Soviet republics, former countries of Socialist orientation in East Europe, oil producers in the Middle East) are characterized by a mixture of production activities, in the majority of cases they are economically subordinated to the Core nations but at the same time, they are taking advantage of the periphery. The Semi-peripheral nations consist of a buffer between the Core and the Periphery nations. However, the group of Semi-peripheral nations is quite heterogeneous composed of two sub-groups: associated more with the Core nations and associated more with the Periphery nations. The semi-periphery serves a number of other functions (states for investments when wages in the Core nations become too high). Historically, some nations or regions in the world are fluctuating between the Core and the Periphery nations. The theory of World-system in essence is pointing out inherited inequalities and injustices brought by global capitalism.

People walk past roadside stalls with umbrellas in the central business district, near Marina in Lagos
People walk past roadside stalls with umbrellas in the central business district, near Marina in Lagos, Nigeria, December 13, 2016

In each of these three zones, the class structure differs depending on how the dominant class relates to the global economy. The global division of labor requires increases inequality between regions even the continents of the world. It is true that the Periphery nations are economically weak and, consequently, they are not fully able to control their destiny while the Core nations are financially, militarily, economically, and politically strong and, therefore, dominant in global politics and economic development of the world. In the capitalist world, the fundamental function of the state and state authorities is to ensure the functioning of the capitalist system of production and political order.

An ideology of the capitalist World-system is liberalism as the motorhead of the idea of globalization and the practice of imperialistic colonialism. At the time of turbo-globalization, the basic division of the world is not political and ideological as it was during the Cold War on the East-West georelations but rather an economic one based on developed North and developing South. Concerning North-South historical relations, the wealth of the northern nations, according to I. Wallerstein, is largely the result of a transfer of surplus value from the southern parts of the globe. Immanuel Wallerstein in his book After Liberalism (New York, 1995) claims that a huge disbalance of the distribution of material gains contributes to multiple strains in the World-system and at the same time undermining state structures, in fact, the most important their ability to protect order in a world of expended civil warfare on both levels of state and world. Therefore, I. Wallerstein advocated a direct link between the continual deepening of global capitalism, inequality, crisis, and rising conflicts.

Economic structuralists are those who are extremely interested in dealing with the causes and effects of global inequality within the framework of the world’s development. Their major contribution is in stressing alternative theoretical approaches to the development of the global political economy. However, the issue is that when development is put within a historical context, provocative arguments are put forward that draws our attention to alternative ways of interpreting the poverty of the vast majority of the global population. It is this global poverty that remains one of the most significant 21st-century challenges as both sides of rich and poor nations proceed down the paths of what they hope will be sustainable development.

Final words

There is a question for debate of whether global inequality is rising or falling which divided both experts and public opinion into two antagonistic blocs. Anti-globalists share the opinion that globalization is constantly creating and deepening worldwide inequality but their opponents argue that economic globalization is, in fact, proper leveling power between those rich and poor nations.

Historically, the initial dramatic changes in inequality across the globe happened some 250 years ago with the rising of the Industrial Revolution for the reason that firstly West Europe and then other regions experienced fast economic expansion by leaving the others in the world far behind with regard to material wealth, capital accumulation, and technological innovations.

Nevertheless, all those who advocate that global inequality is expanding, basically, argue that during the last 30 years of turbo-globalization the trend towards inequality is fasted – a global trend that started with the process of industrialization. The critics of globalization present, for instance, the evidence from The Economist (2002-07-18) that in 1960, 20% of the people in the First World countries possessed 30 times the income of the poorest 20% but by the beginning of this century, they had 74 times the income of the poorest 20%.

Contrary to anti-globalists, those who support globalization argue that during the last three decades the general living standard globally has slowly risen. The same is with the living standard of the Third World nations too followed by the fact that illiteracy is down, infant death rates and malnutrition are falling, people, in general, are living longer, and finally, poverty is down compared with the situation in the 1960s or before.

Nonetheless, as a matter of very fact, globally exist huge differences between nations. In fact, many of globalization’s gains happened in the Second and First World nations but not too much in the Third (the poor South). Actually, the real living standard of many nations of the poorest regions of the world declined. Finally, the enormous inequality exists within many countries that means at what price integration into the global economy is.

The unfair economic relations between the Global North and the Global South are one of the focal causes for the feature of global inequality. For instance, the industry of agriculture in the Global North has managed to be at a high degree exempted from the international trade liberalization during the last seven decades and, in many developed states enjoys huge subsidization by their Governments and economic protection that, in fact, very much undermine the capacity of the economies of the countries of the Global South to export their food products to the market of the Global North.

Dependency theories are explaining levels of economic and social development with reference to global economic structures. However, in particular, the idea is that Global South is exploited by Global North and will remain in a post-colonial position of dependency until the global economic system is changed. Nevertheless, the term post-colonialism has two distinct meanings: 1) The post-colonial time, i.e., the historical period following a time of colonization; and 2) Post-colonial political, cultural, and intellectual movements, and their perspectives, which are critical of the past and ongoing efforts of West European and other colonialisms.

Reposts are welcomed with the reference to ORIENTAL REVIEW.
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