THE

CONTEMPORARY
WORLD
 THEORIES OF GLOBAL
STRATIFICATION

For much of human history, all of the societies on earth

were poor. Poverty was the norm for everyone but
obviously, that is not the case anymore. Just as you find
stratification among socioeconomic classes within a
society like the Philippines, you would also see across
the world a pattern of global stratification with
inequalities in wealth and power between societies.
 THEORIES OF GLOBAL
STRATIFICATION

As with any social issue, global or otherwise,

scholars have developed a variety of theories to
study global stratification. The two most widely
applied perspectives are modernization theory
and dependency theory.
 THEORIES OF GLOBAL
STRATIFICATION
Modernization Theory
 According to modernization theory, low-income countries are
affected by their lack of industrialization and can improve their
global economic standing through (Armer and Katsillis 2010):
 an adjustment of cultural values and attitudes to work
 industrialization and other forms of economic growth
 Critics point out the inherent ethnocentric bias of this theory. It
supposes all countries have the same resources and are capable of
following the same path. In addition, it assumes that the goal of all
countries is to be as “developed” as possible. There is no room
within this theory for the possibility that industrialization and
technology are not the best goals.
 THEORIES OF GLOBAL
STRATIFICATION
Dependency Theory
 Dependency theory was created in part as a response to the Western-
centric mindset of modernization theory. It states that global
inequality is primarily caused by core nations (or high-income
nations) exploiting semi-peripheral and peripheral nations (or middle-
income and low-income nations), which creates a cycle of
dependence (Hendricks 2010). As long as peripheral nations are
dependent on core nations for economic stimulus and access to a
larger piece of the global economy, they will never achieve stable and
consistent economic growth. Further, the theory states that since core
nations, as well as the World Bank, choose which countries to make
loans to, and for what they will loan funds, they are creating highly
segmented labor markets that are built to benefit the dominant market
countries.
 MODERNIZATION THEORY

Modernization theory refers to a body of theory that

became prominent in the 1950s and 1960s in relation to
understanding issues of economic and social development
and in creating policies that would assist economic and
social transitions in poorer countries. The various
components of modernization theory received critiques
from the outset but their influence within policy making
endured for a significant period of time.
 MODERNIZATION THEORY

Modernization theory rests on the idea that affluence

could be attained by anyone. But why did the industrial
revolution not take hold everywhere? Modernization
theory argues that the tension between tradition and
technological change is the biggest barrier to growth. A
society that is more steeped in family systems and
traditions may be less willing to adopt new technologies
and the new social systems that often accompany them.
EXAMPLES:

Improvements in human well-being in areas such

as health
 Education
 Safety
 Cities
 Work
 Standard of living and leisure
 WALT ROSTOW’S FOUR STAGES OF
MODERNIZATION

According to American economist Walt Rostow,

modernization in the west took place, as it always tends
to, in four stages. First, the traditional stage. This refers to
societies that are structured around small, local
communities with production typically being donein
family settings. Because these societies have limited
resources and technology, most of their time is spent on
laboring to produce food, which creates a strict social
hierarchy.
 WALT ROSTOW’S FOUR STAGES OF
MODERNIZATION

 Critiques of Rostow’s Modernization theory:

 The goal is industrialized, capitalist liberal democracy; the U.S. is the model.
 The model assumes development in the U.S. and Europe can be copied
elsewhere. One size fits all.
 It ignores a lot of geography and history, such as the impact of colonization
on economic development.
 It does not address the obstacles to development that previously colonized
regions face: exploitation of resources, genocide, political domination during
long periods of time, civil unrest, extreme poverty, artificial boundaries
(Africa).
 Countries that do not develop like the U.S. or Europe are seen as “problems”.
 There are ecological limits to high mass consumption (the final goal).
WALT ROSTOW’S FOUR STAGES OF
MODERNIZATION

 Traditional stage
 Take – off stage
 Technological maturity
 High mass consumption
 WALT ROSTOW’S FOUR STAGES OF
MODERNIZATION

 Traditional Society: This stage is characterized by a subsistent,

agricultural based economy, with intensive labor and low levels of
trading, and a population that does not have a scientific perspective
on the world and technology.
 Preconditions to Take-off: Here, a society begins to develop
manufacturing, and a more national/international, as opposed to
regional, outlook.
 Take-off: Rostow describes this stage as a short period of intensive
growth, in which industrialization begins to occur, and workers and
institutions become concentrated around a new industry.
 WALT ROSTOW’S FOUR STAGES OF
MODERNIZATION

 Drive to Maturity: This stage takes place over a long period of

time, as standards of living rise, use of technology increases, and
the national economy grows and diversifies.
 Age of High Mass Consumption: At the time of writing, Rostow
believed that Western countries, most notably the United States,
occupied this last "developed" stage. Here, a country's economy
flourishes in a capitalist system, characterized by mass
production and consumerism.
 DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE

Some authors identify two main streams in dependency theory: the

Latin American Structuralist, typified by the work of Prebisch,
Celso Furtado, and Aníbal Pinto at the United Nations Economic
Commission for Latin America (ECLAC, or, in Spanish, CEPAL);
and the American Marxist, developed by Paul A. Popular in the
1960s, dependency theory sought to explain the lack of
development in Latin America. Two versions emerged: one which
argued that external actors prevented and/or hindered development
in the region, and one that highlighted countries’ reliance on capital
and technology from abroad.
 DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE

A suggestion from this latter version was that countries in Latin

America needed to start building their industries at home in order to
modernize and develop, thus leading to decades of what would be
known as the import substitution industrialization (ISI) strategy in
the region—an economic policy that favors self-reliance and seeks
to protect domestic industries via subsidies and a variety of trade
barriers to foreign goods. However, as dependency theory began to
travel to other parts of the world, it became “too fuzzy” to
disentangle how dependency was linked to development—or the
lack thereof, as highlighted by Professor Stallings during her talk.
 DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE

She suggests using three causal mechanisms to better understand

this relationship: market relations (i.e. trade, investment, finance),
leverage (the use of power—economic and/or political—to
influence outcomes), and linkages (sets of relationships that are
used to advance the dominant country’s interests in the dominated
one). None of these are mutually exclusive.
 DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE

Contrary to popular belief, it is not doctrines that are dominating

Latin American politics, but globalization. If we still use
neoliberalism or any other concept invented by Western scholars to
explain what Latin America is passing through, our understanding
of the continent may not be right. We can only understand the
problems of Latin American countries by observing them in an
already globalized world, especially comparing them with Asian
countries.
 DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE

The fact is simple to understand: Globalization has increased the

flow of goods and formed a complete industrial chain. A country
will gradually retreat to the bottom of the global industrial chain
if the length of its railways begins to decrease, factories start to
close, consumer goods start to depend on import,
manufacturing jobs are reduced and no one in the country is
willing or able to become blue-collar workers. The country will
become more vulnerable as it has to export raw materials to
sustain its economy. Thus, it will be the first to become a victim
of global recession.
 THE MODERN WORLD - SYSTEM

This history of colonialism inspired american sociologist

Immanuel Wallerstein model of what he called the capitalist world
economy. Wallerstein described high income nations as the “core”
of the world economy. This core is the manufacturing base of the
planet where resources funnel in to become the technology and
wealth enjoyed by the western world today. Low – income
countries, meanwhile, are wallerstein called the “periphery,”
whose natural resources and labor support the wealthier countries,
first as colonies and now by working for multinational
corporations under neocolonialism.
 THE MODERN WORLD - SYSTEM

Middle-income countries, such as india or brazil, are

considered the semi periphery due to their closer ties to the
global economic core. In Wallerstein’s model, the periphery
remains economically dependent on the core in a number
of ways, which tend to reinforce each other. First, poor
nations tend to have few resources to export to rich
countries. However, corporations can buy these raw
materials cheaply and then process and sell them in richer
nations.
 THE MODERN WORLD - SYSTEM

As a result, the profits tend to bypass the poor countries. Poor

countries are also more likely to lack industrial capacity, so they
have to import expensive manufactured goods from richer
nations. All of these unequal trade patterns lead to poor nations
owing lots of money to richer nations and creating debt that
makes it hard to invest in their own development. In sum, under
dependency theory, the problem is not that there is a lack of
global wealth; it is that we do not distribute it well.