Globalisation and Inequality
Globalisation has transformed the nature and scale of social stratification, creating new patterns of inequality both within and between nations. The key sociological move in this topic is to lift the analysis of stratification from the national to the global scale: just as Marx and Weber analysed class within a society, neo-Marxist theorists analyse stratification between societies, and a new transnational capitalist class that transcends national borders. While defenders argue that globalisation has lifted hundreds of millions out of absolute poverty, critics contend that it has intensified exploitation, hollowed out national sovereignty and widened the gap between a global elite and the rest. A further influential argument — Wilkinson and Pickett's — is that it is inequality itself, more than absolute poverty, that damages societies. 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, and it reshapes stratification at both the global and the national level.
Spec Mapping (AQA 7192 — Paper 2, Section B: Stratification and Differentiation)
This lesson addresses the specification requirements on:
- The relationship between globalisation and stratification — how global economic integration creates new patterns of inequality within and between societies.
- Theories of global stratification — neo-Marxist world-systems theory (Wallerstein), the transnational capitalist class (Sklair), and the role of TNCs and international institutions.
- The consequences of inequality — Wilkinson and Pickett's argument (The Spirit Level) that more unequal societies do worse on a range of social outcomes.
- Competing perspectives — neoliberal/modernisation optimism versus Marxist, Weberian, feminist and postmodern accounts.
- It scales up the foundational theories from the opening lesson (especially Marxism and Weber) to the global level, and connects to the class, ethnic-inequality and gender-inequality lessons.
This material supports both the 10-mark "analyse two…" question and the 20-mark "evaluate…" essay on Paper 2.
Synoptic Links
- Theory: World-systems theory (Wallerstein) and the transnational capitalist class (Sklair) are neo-Marxist theories — the perspective from Lesson 1 applied globally; the optimist case rests on functionalist modernisation theory.
- Methods: Measuring global inequality raises methodological issues — comparing incomes across currencies and cost-of-living differences, and the political contestability of poverty thresholds and inequality measures (the Gini coefficient).
- Social Class (Lesson 2): Deindustrialisation, the offshoring of manufacturing and the rise of the precariat — the causes of UK working-class decline — are products of economic globalisation.
- Ethnic Inequality (Lesson 5): Colonial legacies, migration and the racialisation of migrant labour tie ethnic inequality to global processes (Castles and Kosack's reserve army).
- Gender Inequality (Lesson 4): Export-processing zones and global care chains give globalisation a strongly gendered character.
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.
Sklair: The Transnational Capitalist Class
Whereas Wallerstein analyses inequality between zones of the world economy, Leslie Sklair (2001), in The Transnational Capitalist Class, argues that globalisation has produced a new, global ruling class that transcends nation-states. For Sklair, the key unit of analysis is no longer the national bourgeoisie but a transnational capitalist class (TCC) whose interests, lifestyles and outlook are global rather than tied to any one country. He identified four overlapping fractions:
| Fraction of the TCC | Who they are |
|---|
| Corporate | Executives and owners of transnational corporations |
| State / political | Globalising bureaucrats, politicians and officials of bodies such as the IMF, World Bank and WTO |
| Technical / professional | Globalising professionals — lawyers, accountants, consultants, management experts |
| Consumerist | Merchants and media who promote a global culture-ideology of consumerism |
Sklair's central argument is that this class promotes a culture-ideology of consumerism — the idea that the meaning of life is to be found in ever-greater consumption — which legitimises global capitalism and drives accumulation regardless of national borders or environmental limits. The TCC, not nation-states, is the real driver of globalisation. This neo-Marxist analysis updates Marx's concept of the bourgeoisie for a global age and dovetails with Savage's identification of a wealthy, mobile elite at the top of the British class structure (Lesson 2).
Evaluation:
- Sklair captures the genuinely transnational organisation of contemporary capitalism and elites, which a nation-bound analysis misses.
- Critics argue he overstates the coherence of a single global class — the interests of corporate, state and professional fractions often conflict, and nation-states remain powerful (the sceptic critique).
- Like world-systems theory, it can be seen as economically reductionist, downplaying culture, religion and politics as independent forces.
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.
Critics argue that SAPs have increased inequality and poverty in many developing countries:
- Cuts to public services disproportionately affect the poor.
- Privatisation has led to higher prices for essential services (water, electricity) and the loss of public assets.
- Opening markets to foreign competition has destroyed local industries that cannot compete with subsidised imports from wealthy countries.
- Stiglitz (2002), a former World Bank chief economist, argued that the IMF's policies were driven by the interests of Wall Street rather than the needs of developing countries.
Transnational Corporations and Labour
Transnational corporations (TNCs) are the primary agents of economic globalisation. The largest TNCs — Apple, Amazon, Walmart, Shell, Toyota — have revenues larger than the GDP of many countries. They organise production on a global scale, locating different stages of the production process in whichever country offers the greatest advantage — cheap labour, weak regulation, tax incentives, or proximity to markets.
The Impact of TNCs on Inequality
Arguments that TNCs reduce inequality:
- TNCs bring investment, jobs, technology, and skills to developing countries.
- Workers in TNC factories typically earn more than those in the local economy.
- TNCs can drive economic growth and industrialisation — as seen in China, Vietnam, and Bangladesh.
Arguments that TNCs increase inequality:
- Klein (2000), in No Logo, documented the exploitation of workers in global supply chains — long hours, low wages, unsafe conditions, and the suppression of trade unions.
- The race to the bottom: TNCs can play countries off against one another, threatening to relocate unless governments reduce wages, lower taxes, and weaken environmental and labour regulations. This creates a race to the bottom in which countries compete to offer the most exploitative conditions.
- Tax avoidance: TNCs use complex corporate structures to shift profits to low-tax jurisdictions, depriving developing countries of tax revenue that could fund public services. The OECD estimated that developing countries lose $100-240 billion per year to corporate tax avoidance.
- Transfer pricing: TNCs can manipulate prices within their own supply chains to minimise tax liabilities — for example, by selling goods to subsidiaries in tax havens at artificially low prices.
- Precarious labour: Much TNC production in the Global South involves precarious, informal, or outsourced labour. The Rana Plaza disaster in Bangladesh (2013), in which 1,134 garment workers died when a factory collapsed, highlighted the human cost of global supply chains.
Global Inequality: The Broad Picture
Despite claims that globalisation has reduced poverty, inequality remains extreme and, on many measures, has intensified:
- A very small fraction of the world's population — frequently summarised by campaigning organisations such as Oxfam — owns a share of global wealth vastly disproportionate to its size, while the poorest half of humanity owns a tiny fraction.
- Between-country inequality has narrowed somewhat, chiefly because of the rapid growth of China and India, but within-country inequality has risen in most nations, including the UK and the US, since the 1980s. This combination is central: globalisation can reduce inequality between nations while widening it within them.
- Climate change disproportionately harms the Global South — the societies least responsible for carbon emissions tend to suffer the most severe consequences — adding an environmental dimension to global stratification.
(Treat specific figures qualitatively in the exam unless you are certain of the current statistic; the pattern and its causes matter more than a memorised number, and campaign statistics are contested.)
Wilkinson and Pickett: Inequality and The Spirit Level
A distinct and highly influential argument shifts the focus from poverty to inequality itself. Richard Wilkinson and Kate Pickett (2009), in The Spirit Level: Why More Equal Societies Almost Always Do Better, compared rich developed nations and argued that it is the degree of income inequality within a society — not its average wealth — that best predicts a wide range of social outcomes. They claimed that more unequal affluent societies (such as the US and the UK) tend to do worse than more equal ones (such as the Nordic countries) across a battery of measures, including:
- Physical and mental health, and life expectancy.
- Levels of trust and social cohesion.
- Educational attainment.
- Rates of imprisonment, violence and teenage births.
Their explanation is that inequality generates status anxiety: in steeply hierarchical societies, the constant evaluation of self against others corrodes trust, raises stress and damages wellbeing throughout the social scale — affecting not only the poor but also the relatively affluent. The radical implication is that reducing inequality would improve outcomes for almost everyone, not merely the worst-off. This connects directly to the relative conception of poverty (Townsend) and to the social-democratic case for redistribution (the welfare-state lesson).
Evaluation:
- The thesis powerfully reframes the debate around inequality rather than absolute poverty, and is backed by a large body of comparative data.
- Critics challenge the correlation-versus-causation problem — the associations may reflect other national differences (culture, history, ethnic composition) rather than inequality itself.
- Some statisticians dispute the robustness of the relationships and argue the results are sensitive to which countries are included.
- Nonetheless, The Spirit Level remains a key reference for any argument that inequality is socially corrosive, and is highly relevant to a global age in which within-country inequality is rising.
The relationship between globalisation, inequality and its consequences can be represented as a chain:
flowchart TD
A["Economic globalisation: TNCs, free capital, neoliberal policy"] --> B["Rising within-country inequality (Wilkinson and Pickett)"]
A --> C["Falling between-country inequality (China and India grow)"]
B --> D["Status anxiety, eroded trust, worse health and social outcomes"]
A --> E["Transnational capitalist class (Sklair) drives accumulation"]
E --> F["Core exploits periphery (Wallerstein)"]
F --> G["Persistent global stratification and a race to the bottom"]
Migration and Globalisation