THE ORIGINS OF SOCIAL PROBLEMS AND GLOBAL IMBALANCES

Why are there rich and poor countries? What is the consequence of a global market economy in each country?

SHORT HISTORY OF GLOBAL IMBALANCES:

-16th century: Colonization of America and parts of Asia by European powers. Foundations of global capitalism: metropolitan elites get richer from the colonial raw materials and manpower.

- 1750: Beginning of the Industrial Revolution in Great Britain. Acceleration of production, trade, transportation, financial needs. 

- 1815–1914:  New industries and social and economic transformations spread across Europe, North America, Japan, and parts of Australasia. The countries in these regions formed the "core" of the modern economic system. Colonies become an important asset for the industrialized countries.

 

- From the 20th century on: global trade developed with the integration of new countries, including some former colonies, into the "system" of global capitalism. 

As a result of colonisation and industrial revolution, industrialized countries spread capitalistic relationships of production all over the World. We can say that global relationships themselves are the origin of global imbalances, since Western countries started to classify the rest of the World on what they lacked, referring on what Western countries do have achieved. 

Activity: What are the historical causes of modern inequalities? 

DEVELOPED - DEVELOPING 

Probably, the most popular classification is between "developed countries", "developing countries" and "underdeveloped countries". However, it is mainly an economic classification, that not always takes on account human welfare, and it is always relative. What is exactly an industrialized country? At what point it gets "industrial"? Are there only two types of countries according to the GDP? Do the two blocks share the same circumstances? Are developed countries "better" than the others? Those questions discuss this classification as a generalization, we should keep in mind that this is only an statistical quantification, not a judgement over the countries.

Nowadays, the criteria used to establish the degree of development are:

•  Gross Domestic Product (GDP) per capita. The higher it is, the more developed the country is.GDP per capita

Average GDP per capita above and below the median 2010

• Industrialisation; countries in which the tertiary and quaternary sectors of industry dominate would thus be described as developed. 
• Human Development Index (HDI), which combines national income with other measures, such as life expectancy and education. This criterion would define developed countries as those with a very high (HDI) rating. The index, however, does not take into account several factors, such as the net wealth per capita or the relative quality of goods in a country.

Human Development Index (2019 data)

Activities: What are the criteria to establish the degree of development? 

Apart from that, maybe you have heard about the "first world" and the "third world" (but what about the "second world"?). Look at the maps above: what countries and regions are part of the first, second and third world? 

WALLERTEIN'S WORLD-SYSTEM THEORY

Wallerstein rejected the idea that the "third world" was simply underdeveloped. After analyzing the economic links and the process that they structure, the global economy succeeded in showing that, although the position that a country previously occupied in the world-system was the result of its history and geography, the market dynamics of global capitalism itself accentuated the differences between the periphery and the center, thereby inequality is strengthened. According to Wallerstein's theory, there are three types of countries: 

1) Central countries: industrialized, developed and rich, with a dominant position in the modern world-system.

2) Countries of the semi-periphery: they have medium levels of wealth, with some autonomy and economic diversity

3) Peripheral countries: They lack power and are poor. Its agricultural and mining economy is very limited. These nations provide the semi-periphery and the center with raw materials, products and labor at low prices.

Image and text from: http://www.nocierreslosojos.com/sistema-mundo-wallerstein/

Image from: https://www.coursehero.com/sg/introduction-to-sociology/world-systems-theory/

Activity: What regions or countries include the core? And semi and periphery nations? 

Compare your answer with your classmates.