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Reading Lec 12 - Global Inequality

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Sheldon Ungar

of 3
Sociology January 26th, 2011.
Development and Underdevelopment
New Society – Ch. 9
What is Development?
After WII development – process that generates economic growth,
industrialization, and modernization in region and countries perceived to be poor,
traditional, and underdeveloped
Recently development – progress for women, empowerment of underprivileged,
and environmental sustainability
2 main factors motivated interest in development after WWII:
1.Cold War
-Broke out b/w developed capitalist countries led by U.S. and communist countries
led by Soviet Union
- Involved intense competition b/w 2 rival blocs to amass power by gaining
influence and control over less developed countries
2.Business in developed West (U.S.) were interested in new markets outside
traditional spheres of operation
-Latin Am9erica, Africa, and Asia, were great interests to Western powers for
geopolitical and economic reasons
1960s modernization theory – emphasizes importance of value and norms as
drivers of development
All modernization theories assume that most of responsibility for economic
backwardness lies w/ societies of “third world” or “global south” themselves
Modernization theorists: development happens when citizens of poor countries
adopt virtues of development North. If they fail to do so, remain pathological,
underdeveloped state
Dependency theory – challenged notion that development is due to deficiencies
of less developed countries. Did so by taking holistic viewrecognizing each
part of world is shaped by, and helps shape, a wider, global reality—and attending
to history and structure of relations b/w countries
Dependency theorists: economic and social relationships b/wmetropolitan
powers, Spain, Portugal, Britain and France, and “satellite regions, of global
south. Focusing on Latin America and Caribbean, establish that nature of
relationship b/w metropolitan powers and satellite regions that blocked economic
progress in global south
Another disruptive relationship b/w Europe and global south was West African
slave trade—undermined traditional state structures and forms of governance in
West Africa and created ethnic hostility
Agrarian Class Structure and Underdevelopment:
Sociology January 26th, 2011.
For 3 reasons , estate agriculture—large, privately owned agriculture enterprises
producing coffee, wheat, cotton, in diverse societies like Chile Brazil, and Egypt
was more of an obstruction to development than were agrarian structures
dominated by small family farms
1.Estate owners compensated workers with small plots of land rather than
money wages
-Greatly restricted purchasing power of rural workers, therefore demand for goods
that small manufacturers could have produced locally
2.With ready supply of cheap labour, estate owners had little incentive to
employ advanced agricultural machinery on estates
-Limited local market for manufacturers of agricultural machinery, who in N.A.
was central to early industrialization
3.Estate owners exercised enormous political power
-Influenced govts to maintain free trade policies so could export agricultural
products and import whatever machinery needed, unhindered by tariffs
-Made it difficult for local industry to develop
-In contrast, Canada and U.S. tariffs protected local manufacturing in early stage of
Diamond’s proximate (immediate) and ultimate (fundamental) cases of development:
1.Proximate causes – development of firearms and modern metallurgy by
Europeans, lack of resistance to deadly diseases in people of Americas. Conquest
set emergence for commercial, administrative, military, and industrial structures,
which helped enrich Europe while delaying progress in Americas, Australia,
Africa, and much Asia
2.Why did Europeans alone enjoy advantages in all these, what were ultimate
causes – geographical features of different continents and biological resources
available to early people were fundamentally important. Europe especially rich in
plants and animals for domestications, unlike rest of world. Wealth of species
available for Europe and Middle East allowed accumulation and storage of food
surpluses, enabling growth of large, complex, hierarchical societies.
For Diamond, early domestication of plant and animals made agriculture possible
and was prerequisite for development of guns, germs, and steel, ensuring
dominance of European colonizers in Americas and later Asia and Africa
The Rise of Neoliberalism
Neoliberal theory – only in societies where markets are free of govt interference
can competitive entrepreneurs maximize growth for benefit of themselves and rest
of society
Keynesian approach – gov’ts should intervene in market. Resulted in inflation w/
low or stagnant economic growth
Sociology January 26th, 2011.
IMF and World Bank offered help debtor countries if they met set harsh conditions:
Privatize state-owned enterprises (telephone and oil companies and national
Let in international corporations and goods produced in developed countries
End tariff protection of local industry and agriculture
Radically curtail social welfare programs
Encourage new lines of agriculture exports
All key aspects of SAPs—needed to provide economic discipline and achieve economic
growth. Critics argued SAPs would cause social upheaval and misery
Neoliberalism and SAPs as Solutions to Poverty
Neoliberliams has raised incomes in poor countries and lifted millions out of
Critics argue neoliberalism has produced dramatic increase in global income
inequality, widespread misery and social dislocation
Wealth and standard of living have increased in some countries, and new