Chapter 12: Global Stratification
Chapter Overview


  1. Global Inequality: An Overview
    1. A Word About Terminology
    2. High-Income Countries
    3. Middle-Income Countries
    4. Low-Income Countries
  2. Global Wealth and Poverty
    1. The Severity of Poverty
      1. Relative Versus Absolute Poverty
    2. The Extent of Poverty
    3. Poverty and Children
    4. Poverty and Women
    5. Slavery
    6. Correlates of Global Poverty
  3. Global Inequality: Theoretical Analysis
    1. Modernization Theory
      1. Historical Perspective
      2. The Importance of Culture
      3. Rostow's Stages of Modernization
      4. The Role of Rich Nations
    2. Dependency Theory
      1. Historical Perspective
      2. The Importance of Colonialism
      3. Wallerstein's Capitalist World Economy
      4. The Role of Rich Nations
  4. Global Inequality: Looking Ahead
  5. Summary
  6. Key Concepts
  7. Critical-Thinking Questions
  8. Applications and Exercises
  9. Sites to See


  • To be able to define and describe the demographics of the three "economic development" categories used to classify nations of the world
  • To begin to understand both the severity and extensiveness of poverty in the low-income nations of the world
  • To recognize the extent to which women are overrepresented among the poor of the world and the factors leading to this condition
  • To be able to identify and discuss the correlates of global poverty
  • To be able to identify and discuss the two major theories used to explain global inequality
  • To be able to identify and describe the stages of modernization
  • To be able to recognize the problems facing women as a result of modernization in the low-income nations of the world
  • To be able to identify the keys to combating global inequality over the next century



To truly understand ourselves we must explore how life here fits into the larger global order. The interdependence of the nations of the world is an underlying focus of this chapter. The highest fifth of humanity controls 80 percent of the income.

A Word About Terminology Citizens of the U.S. are very well-off relative to people in most other nations. Even our poor have a higher standard of living than most people living in the poorer countries around the world. Over the last half-century societies of the world have been classified into three broad categories based on their level of technological development and their political and economic system. However, this "three worlds" model has lost its validity in recent years. In this model the capitalist West was the First World, the communist East was the Second World, and the rest of the nations represented the Third World.

The new model identifies three categories, focusing on the variable of a nation's economic development. This model includes high-income, middle-income, and low-income countries. Differences do exist within these broad categories. There are 191 nations in the world, each with its own unique history and present way of life.

High-Income Countries The term high-income countries refers to those nations which are industrialized and relatively rich. These nations were the first to go through the Industrial Revolution. Roughly 25 percent of the land surface of the globe and 15 percent of the world's population are identified as being part of this category. Because their economies are all market-driven, economic alliances with other such nations are often made. The roughly forty nations representing this economic level of development control more than one-half of the world's income.

Middle-Income Countries The middle-income countries are composed of nations who have limited industrialization. About ninety of the world's nations fall in this level. Relatively more people, about half, are involved in agricultural production. The old "eastern bloc" nations, the oil-producing countries of the Middle-East, Latin American, and western African nations represent this category. Middle-income countries account for 40 percent of the world's land area and about one-third of humanity.

Low-Income Countries The low-income countries encompass primarily agrarian societies that are poor. Economically these societies are less productive than the rest of the world. These societies inhabit about 35 percent of the earth's land area and include 52 percent of the world's population. Roughly 25 percent of these people live in cities.


The extremes of poverty are emphasized in the account of a visit to the Manila dump in the Philippines. People survive off the garbage of what is called "Smokey Mountain."

The Severity of Poverty

Relative Versus Absolute Poverty In high-income countries poverty is often viewed as a relative matter. In the low-income countries absolute poverty is much more critical. The people there typically lack the resources necessary to survive.

The Extent of Poverty Poverty in low-income countries is also more extensive. Most people in these nations live in conditions far worse than the bottom 15 percent of our population. Overwhelming numbers of people are dying from disease related causes to insufficeint nutrition--40,000 people each day.

Poverty and Children Some 75 million children in low-income countries work on the streets to assist their families. It is estimated that another 25 million have abandoned their families altogether. Many children in urban areas are abused or murdered each year.

Poverty and Women Hardships of poverty fall harder on women than on men. Much of the work women engage in is "invisible," being outside the paid labor force. Traditions of male dominance in kinship systems further subordinate women. Men in poor societies own 90 percent of the land.

Correlates of Global Poverty Several factors related to the severity and extent of poverty in low-income countries are discussed. These include:

  1. technology,
  2. population growth,
  3. cultural patterns,
  4. social stratification,
  5. gender inequalities, and
  6. global power relationships.

In terms of global power relationships, three key concepts are introduced. First, is the historical factor of colonialism, or the process by which some nations enrich themselves through political and economic control of other nations. As a result of this, it is argued, many nations were exploited and remain underdeveloped. A second concept is neocolonialism, referring to a new form of economic exploitation involving not direct political control but the operation of multinational corporations. The argument here is focused on multinational corporations, or huge businesses that operate in many countries.


Modernization Theory Modernization theory is a model of economic and social development that explains global inequality in terms of technological and cultural differences among societies.

Historical Perspective In historical perspective until a few centuries ago, all people in the world were poor. The development of cities during the Middle Ages and the trade and exploration that emerged, coupled with the influence of the Industrial Revolution in the eighteenth and nineteenth centuries, raised living standards in a number of societies. Thus, affluence, is what requires explanation, not poverty.

The Importance of Culture Modernization theorists suggest that new technology is likely to be exploited only in certain cultural environments. Traditionalism is the greatest barrier to economic development. Modernization Theory also suggests that all societies are converging on one general form, the industrial model.

Rostow's Stages of Modernization According to W. W. Rostow, four general stages are followed by all societies. These include:

  1. the traditional stage,
  2. the take-off stage,
  3. the drive to technological maturity stage, and
  4. the high mass consumption stage.

The Role of Rich Nations Rather than seeing the high-income countries as part of the cause for global inequality, modernization theorists see it as part of the solution. They see this to be so in the following respects:

  1. assisting in population control through exportation of birth control technologies and the promotion of their use,
  2. increasing food production by introducing "high-tech" farming methods (collectively referred to as the Green Revolution),
  3. introducing industrial technology to increase productivity, and
  4. instituting programs of foreign aid, particularly in the form of investment capital.

This theory has helped provide perspective in understanding how industrialization affects other dimensions of social life. Modernization theorists point out that several societies have demonstrated significant economic development with the help of rich nations. However, others argue that modernization theory is an attempt to defend and spread capitalism, and in many ways has fallen short in its own standards of success. Further, this approach tends to ignore historical facts that interfere with development. Other limitations involve a failure to make connections between rich and poor societies to see how the development of poor countries affects rich countries. Finally, the fact that this approach holds rich nations as the standard by which to judge all development is ethnocentric.

Dependency Theory Dependency theory is a model of economic and social development that explains global inequality in terms of the historical exploitation of poor societies by rich ones. Dependency theorists argue that people in poor societies were better off in the past. They believe the economic positions of the rich and poor societies are interdependent.

Historical Perspective Once again historical perspective is critical. The colonial process that helped to develop the rich nations simultaneously underdeveloped poor societies.

The Importance of Colonization Colonialization in Africa, Asia, and the Americas by European societies gave countries like Great Britain and Spain great power and wealth. Colonialism is no longer a force in the world; however, political liberation of low-income countries has not meant economic autonomy. Exploitation continues through neocolonialism.

Wallerstein's Capitalist World Economy Immanuel Wallerstein developed a model that attempts to explain modern world inequality. He stresses that the world economy, a global system, is beyond the control of traditional nations and is dominated by capitalism. Thus, the world economy makes poor nations dependent on rich ones. This dependency is caused primarily by three factors:

  1. narrow, export-oriented economies,
  2. lack of industrial capacity, and
  3. foreign debt.
The Role of Rich Nations Modernization theorists argue that rich societies create new wealth through technological innovation. Dependency theorists cast global inequality in terms of the distribution of wealth, claiming that rich nations have overdeveloped themselves as they simultaneously have underdeveloped pooor nations.

Critics point out weaknesses to this perspective. First, dependency theorists seem to assume all wealth generated by rich nations makes poor countries poorer. Second, while blaming world capitalism, dependency theorists ignore factors within poor nations themselves which lead to poverty. Third, dependency theorists underestimate the economic dependency fostered by the former Soviet Union in poor nations. Finally, dependency theory does not produce clear policy-making alternatives.


Poor nations that have surged ahead economically seem to have two qualities in common: (1) they are relatively small, and (2) they have traditions emphasizing individual achievement and economic success. In about 60 nations of the world people are enjoying a higher standard of living than ever before. For most of the world's countries however, standards have remained the same or declined.

These approaches have uncovered two keys to success during the next century in combating global poverty. The first, offered by modernization theory, is understanding poverty as being in part a problem of technology. The second, derived from dependency theory, is to see poverty as a political problem.


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