Globalisation and Inequality
Globalisation has transformed the nature and scale of social stratification, creating new patterns of inequality within and between nations. While some argue that globalisation has lifted billions out of poverty, others contend that it has intensified exploitation and widened the gap between the rich and the poor. The AQA specification requires you to understand the relationship between globalisation and inequality, evaluate competing perspectives, and apply your knowledge to contemporary examples.
Key Definition: Globalisation is the process by which the world is becoming increasingly interconnected through the movement of goods, services, capital, people, information, and ideas across national borders. It involves economic, political, cultural, and technological dimensions.
What is Globalisation?
Dimensions of Globalisation
Globalisation is not a single process but involves multiple, interconnected dimensions:
- Economic globalisation: The integration of national economies through trade, foreign direct investment, and the activities of transnational corporations (TNCs). Global financial markets operate 24 hours a day, and capital can move instantly across borders.
- Political globalisation: The growth of international organisations (UN, WTO, IMF, World Bank, EU) and the increasing importance of global governance. National governments find their sovereignty constrained by international agreements and economic pressures.
- Cultural globalisation: The spread of ideas, values, and cultural products — from Hollywood films and K-pop to social media and fast food — across the world. This can lead to cultural homogenisation (the spread of Western consumer culture) or hybridisation (the blending of local and global cultural forms).
- Technological globalisation: The internet, social media, and mobile technology have compressed time and space, enabling instant communication and the rapid flow of information worldwide.
Perspectives on Globalisation
David Held et al. (1999) identified three positions on globalisation:
- Hyperglobalisers argue that globalisation represents a fundamental transformation — the nation-state is losing power, a global economy has emerged, and national cultures are converging. Writers such as Ohmae (1995) proclaimed "the end of the nation-state."
- Sceptics argue that globalisation is exaggerated. Hirst and Thompson (1996) pointed out that trade was proportionally as high in the pre-World War I era, that most economic activity remains national, and that nation-states retain significant power. What we call globalisation is really the intensification of internationalisation — increased links between distinct national economies, not the emergence of a single global economy.
- Transformationalists — Held's own position — argue that globalisation is real and significant but its outcome is uncertain. Nation-states are being transformed, not abolished. Globalisation creates new patterns of inclusion and exclusion, and its effects are uneven across the world.
Globalisation and Global Inequality
Wallerstein: World-Systems Theory
Immanuel Wallerstein (1974) developed world-systems theory, a neo-Marxist approach that analyses the global economy as a single capitalist system divided into three zones:
| Zone | Characteristics | Examples |
|---|
| Core | Wealthy, industrialised, technologically advanced; dominates global trade and finance | USA, Western Europe, Japan |
| Semi-periphery | Industrialising, mix of core and peripheral characteristics; acts as a buffer between core and periphery | Brazil, India, South Korea, Mexico |
| Periphery | Poor, dependent on commodity exports, provides cheap labour and raw materials; exploited by the core | Many countries in Sub-Saharan Africa, parts of South Asia |
Wallerstein argued that the core exploits the periphery through unequal trade — peripheral countries export cheap raw materials and import expensive manufactured goods. This relationship of dependency keeps peripheral countries poor while enriching the core. The system is maintained by political and military power, international institutions (IMF, World Bank), and ideological domination.
Evaluation:
- World-systems theory provides a powerful macro-level analysis of global inequality and correctly identifies the historical roots of contemporary power imbalances in colonialism and imperialism.
- However, it has been criticised for being too deterministic — it implies that peripheral countries cannot develop, ignoring examples of successful industrialisation (South Korea, Singapore, China).
- It also underestimates the role of internal factors — governance, corruption, conflict — in perpetuating poverty in developing countries.
- The semi-periphery category is vague, and the theory struggles to explain the rise of China and India.
Neoliberalism and Global Inequality
Neoliberalism is the dominant economic ideology of globalisation. It holds that:
- Free markets are the most efficient way to allocate resources and generate wealth.
- Government intervention distorts markets and reduces efficiency.
- Economic growth is best promoted through deregulation, privatisation, free trade, and the removal of barriers to capital movement.
- The benefits of growth will "trickle down" to the poor.
Structural Adjustment Programmes
The International Monetary Fund (IMF) and the World Bank have promoted neoliberal policies in developing countries through Structural Adjustment Programmes (SAPs) — conditions attached to loans that require governments to:
- Cut public spending (including on health, education, and welfare).
- Privatise state-owned industries.
- Deregulate labour and financial markets.
- Open the economy to foreign trade and investment.