In the early stages of Globalisation (1600 -1950s especially) Nation States were very powerful – Colonialism for example was led by European governments and monarchies and the most serious conflicts tended to be between nation states – culminating in World War 2. However, since then, many globalisation theorists argue that increasing global flows in trade and communications have reduced the relative power of Nation States…..
Evidence for the power of Nation States declining
National Governments increasingly face problems that are too big for them to deal with on their own – examples of such global problems include – dealing with these problems increases the need to co-operate and reduces the power of individual nation states environmental problems, international terrorism, drug and people trafficking and the threat of global pandemics.
Are nation states too small to deal with the problem of global warming?
The United Nations and The Universal Declaration of Human Rights – limits the power of Nations to restrict the freedoms of individuals. Linked to this we have an international court where some dictators have been tried for crimes such as genocide.
Global Social Movements such as the green movement and the occupy movement are increasingly interconnected – which are critical of nation states – also part of ‘cultural globalisation’.
Some Transnational Corporations are bigger than Nation States – and so wield power over them – BP for example makes £25 billion profit every year and employs thousands of British workers – it is so crucial to the UK economy that the government has little choice but to keep it sweet, and the same is the case with many of our largest banks.
Transnational Corporations increasingly hide their money in Tax Havens, it is difficult to see how individual governments can stop this happening without some kind of global regulation in place that goes above the level of Nation States.
According to the United Nations there are nearly 80 million refugees in the world – more people who are effectively ‘rejected’ by the Nation State system.
Evidence for Nation States still retaining power
The World’s leading Nation States still maintain huge military capacity – the US spends more than $680 billion in 2010 on its military and Britain maintains a standing peace-time army of around 100 000 troops.
Only the richest nation states can afford these
Pessimists argue that the World Trade Organisation simply represent the interests of the most powerful nations – namely America.
‘National Identity’ is still important to billions of people – there is a trend to more nation states – as present nations divide.
Brexit and the election of Donald Trump also suggest an increase in the number of people wanting to restrict the free-migration of people, no other institution can realistically do this, other than the nation state.
Government responses to Covid-19 in 2020 have been a reminder of the power and possible important of Governments in dealing with international pandemics.
One illustration of the global commodity chain can be found in the manufacture of the Barbie doll, the most profitable toy in history. The 50-something teenage doll sells at a rate of 2 per second, bringing the Mattel Corporation, based in Los Angeles, USA, well over a billion dollars in annual revenues. Although the doll sells mainly in the United States, Europe and Japan, Barbie can also be found in 150 countries around the globe: she is truly a global citizen.
Barbie is global not only in sales, but in terms of her birthplace as well. Barbie was never made in the United States. The first doll was made in Japan in 1959, when that country was still recovering from the Second World War and wages were low. As wages in Japan rose, Barbie moved to other low-wage countries in Asia. Her multiple origins today tell us a great deal about the operations of global supply chains.
Barbie is designed in United States, where her marketing and advertising strategies are devised and where most of the profits are made. But the only physical aspect of Barbie that is ‘made in the USA’ is her cardboard packaging, along with some of the paints and oils that are used to decorate the doll.
Barbie’s body parts and wardrobe span the globe in their origins:
Barbie begins her life in Saudi Arabia, where oil is extracted and then refined into ethyne that is used to create her plastic body
Taiwan’s state-owned oil importer, the Chinese Petroleum Corporation, buys the ethylene and sells it to Taiwan’s largest producer of polyvinyl chloride (PVC) plastics, which are used in the toys. Formosa plastics coverts the ethylene into the PVC pellets that will be shaped to make Barbie’s body.
The pellets are then shipped to one of the four Asian factories that make Barbie – two in southern China, and one in Indonesia and one in Malaysia. The plastic mould injection machines that shape her body, which are most expensive part of Barbie’s manufacture, are made in the United States and shipped to the factories.
Once Barbie’s body is moulded, she gets her nylon hair from Japan. Her cotton dresses are made in China, with Chinese cotton – the only raw material in Barbie that actually comes from the country where Barbie is made.
Hong Kong plays a key role in the manufacturing process of Barbie – nearly all the material used in her manufacture is shipped into Hong Kong, one of the world’s largest ports – and then trucked to the factories in China. The finished Barbies leave by the same route. Some 23 000 trucks make the daily trip between Hong Kong and southern China’s toy factories.
Out of her retail price, China gets about 4%, mainly in wages paid to the 11 000 peasant women who assemble her, 6.5% covers all of the other aspects of the manufacturing and distribution process, 10% goes back to Matell in profit, and 80% is the mark-up which companies like Toys R Us who sell the product add to the cost.
The case study of Barbie shows us both the effectiveness of globalisation, and the unevenness of the process.
Sources used to write this post.
I took this from Giddens’ ‘Sociology’ (2009) – it may be old, but I liked it as an illustration of globalisation and global commodity chains.
‘Until the end of the Second World War, national governments were traditionally responsible for ensuring the welfare of their citizens, however since 1945, more and more governments have become members of International Institutions, such as the United Nations and the European Union, through which they agree to stick to International guidelines on issues such as citizenship and human rights. In this way, global political ideals restrict the freedom of governments to shape domestic social policy. ‘
Anthony Giddens (2009) notes the following features of Political Globalisation
The collapse of Communism in the 1990s meant the end of the divided ‘cold war’ world, and now these ex-communist countries are themselves democracies and integrated into the global economy.
The growth of international and regional mechanisms of government such as the United Nations and European Union – governments of Nation States are increasingly restricted by international directives and laws stemming from these international bodies.
International Non-Governmental organisations such as OXFAM or Greenpeace operate in dozens of countries, and members tend to have an international outlook.
Economic Globalisation involves the global expansion of international capitalism, free markets and the increase in international trade, a process which has accelerated since the 1950s.
Nearly every country on earth now imports and exports more from and to other countries than it did immediately after World War Two, and even ex-communist countries are now part of the global capitalist economy.
Britain for example imports around 60% of its food, with only 40% of the food supply being grown in Britain, and if you take a look around any class room, or any living room, and you will probably find that the majority of products were imported from somewhere else.
This post focuses on four key aspects of economic globalisation: global supply chains, the growth of Transnational Corporations, and the increasing importance of the post modern, weightless economy.
This post has been written primarily for students studying the Global Development option for A-level sociology.
The emergence of global Commodity chains
Manufacturing is increasingly globalised as there are more worldwide networks extending from the raw material to the final consumer. The least profitable aspects of production – actually making physical products, tend to be done in poorer, peripheral countries, whereas the more profitable aspects, related to branding and marketing, tend to be done in the richer, developed, core countries.
The role of Transnational Corporations (TNCs) is particularly important
TNCs are companies that produce goods in more than one country, and they are oriented to global markets and global products, many are household names such as McDonald’s, Coca Cola and Nike. The biggest TNCs have annual revenues which are greater than the economic output of middle-income countries. Apple, for example, generates more income than Finland does every year, and many oil companies such as Shell and Exxon-Mobile generate revenue several times that of the poorer countries they extract from.
The global economy is Post Industrial
The global economy is increasingly ‘weightless’ (Quah 1999) – products are much more likely to be information based/ electronic, such as computer software, films and music or information services rather than actual tangible, physical goods such as food, clothing or cars.
The Call Centre is a common ‘post industrial’ work setting, taking over from the ‘factory’ in industrial society. The call centre is ‘instantaneously global – connecting workers immediately to clients, via IT.
The electronic economy underpins globalisation
Banks, corporations, fund managers and individuals are able to shift huge funds across boarders instantaneously at the click of a mouse. Transfers of vast amounts of capital can trigger economic crises.
Food, tourism, the media, sport, are all examples of cultural globalisation
Cultural globalisation refers to the rapid movement of ideas, attitudes, meanings, values and cultural products across national borders.
The process of cultural globalisation is a dynamic one which implies the emergence of a global culture which influences and possibly transcends local cultures and shapes people’s values, tastes and everyday activities where ever in the world they may be.
Some easy examples of global culture include the emergence of global sporting events such as the Olympics and the World Cup, and the globalisation of food through international companies such as Mcdonalds and CocaCola.
Global culture may be transmitted and reinforced by global communications systems such as the internet, the growth of global popular culture, increasingly global consumption patterns, and increased tourism and migration.
Global institutions such as Transnational Corporations and the United Nations may also play a role in spreading global culture.
This post considers some of the main drivers of cultural globalisation before looking at two contemporary events: the Coronavirus Pandemic and the 2020 American Election and considering whether they can be regarded as being part of cultural globalisation in any way.
Examples of cultural globalisation
Any process which involves an increasing movement of people or ideas across the world can be regarded as an example of cultural globalisation including:
Increasingly global consumption patterns: where people around the world consume similar products in similar ways, such as with the rise of global shopping malls, fashions and food.
Global events: more counties taking part in global sporting events such as the Olympics and the World Cup, and more people watching and travelling to these events.
The growth of global popular culture: more people accessing media products through Netflix for example.
Increasing migration: increasing numbers of people choose or are forced to permanently migrate from one country to another.
A rising global consciousness: this might be a sense of us living as a ‘global village’ or a sense of more uncertainty emerging with ‘detraditionalisation’ and a ‘global risk consciousness’.
Global institutions and global values? The United Nations Declaration of Human Rights could possibly be the starting point for a new set of global values.
Converging Global Consumption Patterns
Today you can go to pretty much any major city in the world and share in a similar ‘consumption experience’. Also, more and more people in Asia and South-America are coming to enjoy high-consumption lifestyles like in the West – car ownership and tourism are both on the increase globally for example. Central to this is the growth of similar styles of shopping malls, and leisure parks which provide a homogeneous cultural experience in different regions across the world.
Food
The globalisation of food is one of the most obvious examples of cultural globalisation – food consumption is an important aspect of culture and most societies around the world have diets that are unique to them, however the cultural globalisation of food has been promoted by fast food giants such as McDonald’s, Coca-Cola and Starbucks. The spread of these global food corporations has arguably led to the decline of local diets and eating traditions.
Sport
The Globalisation of sport is another fairly obvious example of cultural globalisation – think of all the international sporting events that take place – most notably the World Cup and The Olympics, and Formula 1, which bind millions together in a shared, truly global, ‘leisure experience’.
Migration
Migration is an important aspect of cultural globalisation, and in this sense, this process has been going on for several centuries, with languages, religious beliefs, and values being spread by military conquest, missionary work, and trade. However, in the last 30 years, the process of cultural globalisation has dramatically intensified due technological advances in both transportation and communications technology.
The Global Village/ Global Consciousness
Individuals and families are now more directly plugged into news from the outside world – some of the most gripping events of the past decade have unfolded in real time in front of a global audience. According to Giddens this means that more and more people have a more ‘global outlook’ and increasingly identify with a global audience – for example, television reporting of natural disasters in developing countries result in people in wealthier countries donating money to charities such as Oxfam to assist with relief efforts.
Giddens developed the concept of ‘Cosmopolitanism’ to describe this process of an emerging global identity.
A criticism of Giddens is that some people perceive increasing globalisation as a threat to their ways of life and retreat into Fundamentalism and/ or Nationalism as a defensive response, suggesting that Globalisation could go into reverse…
Detraditionalisation
In his classic 1999 text, Runaway World, Anthony Giddens argues that one consequence of globalisation is detraditionalisation – where people question their traditional beliefs about religion, marriage, and gender roles and so on. He uses the concept of ‘detraditionalisation’ rather than ‘decline of tradition’ to reflect the fact that in many cases people continue with their traditional ways of life, rather than actually changing them, but the very fact that they are now actively questioning aspects of their lives means cultures are much less stable and less predictable than before globalisation, because more people are aware of the fact that there are alternative ways of doing things and that they can change traditions if they want to.
The above processes are related to growth of urbanisation, especially the growth of global cities which have highly educated, politically engaged middle classes.
Global Risks/ Global Risk Consciousness
Ulrich Beck (1992) argues that a fundamental feature of globalisation is the development of a global risk consciousness, which emerges due to shared global problems which threaten people in multiple countries – examples include the threat of terrorism, international nuclear war, the threat of global pandemics, the rise of organised crime funded primarily through international drug trafficking, and the threat of planetary melt-down due to global warming.
On the downside, the constant media focus on such global problems has led to a widespread culture of fear and increasing anxiety across the globe, which has arguably contributed to things such as Paranoid Parenting and Brexit, but on the plus side, new global international movements and agencies have emerged through which people come together across borders to tackle such problems.
Coronavirus and global consciousness?
It’s debatable whether Coronavirus has fostered an increasing sense of cultural globalisation – while in one sense the virus doesn’t discriminate across cultures, and many countries are working in similar ways to combat the virus (lockdowns, facemasks), it’s difficult to argue that the closing down of borders and the restriction of international travel fosters globalisation!
And people seemed to have turned to the national governments, their nation states, to guide them through the pandemic, which hardly seems like a ‘global response’…>?
Having said that Nation States have been taking guidance from the World Health Organisation, a global institution, and Bill Gates seems to be a leading proponent of vaccinating our way out of this crisis, which has to be done on a global scale for it to be effective, so there is an aspect of the global to the way we are managing this crisis!
The 2020 American Election: A Global Event?
Another recent event which shows how ambiguous cultural globalisation can be is the reaction to the 2020 United States general election – while this is a national election, it certainly was a global event, watched by hundreds of millions of people the world over, so it was a global event.
However, judging by the mixed reactions, we can hardly call this evidence of a unified consciousness – there’s a lot of division amongst world leaders over the result.
Signposting
This post has primarily been written for sociology students studying the Global Development module, a second year option within A-level sociology.
Cultural Globalisation is one type of globalisation, and students may like some of these other posts below:
An introduction to the concept of globalisation looking at cultural, economic, political and technological aspects.
There are four main Factors contributing to Globalisation:
information technology
economic factors
cultural factors
political changes.
‘Globalisation refers to the fact that we all increasingly live in one world, so that individuals, groups and nations become ever more interdependent.’ (Giddens, Sociology, 2009)
Globalisation in this sense has been occurring over a very long period of human history, but the sheer pace and intensity of it has increased in the last 40 years or so.
The rise of information and communications technology
The move from telephonic communication to cable and satellite digital communication have resulted in increasing information flows
Time-space compression – people in faraway places feel closer together as they can communicate instantaneously.
Individuals and families are more directly plugged into news from the outside world – some of the most gripping events of the past decade have unfolded in real time in front of a global audience.
Some individuals identify being more ‘cosmopolitanism’ as a result and increasingly identify with a global audience; others perceive increasing globalisation as a threat to their ways of life and retreat into Fundamentalism and/ or Nationalism as a defensive response.
Cultural Factors
The emergence of global sporting events such as The Olympics , Formula 1 and Football all bring people together across boarders.
Music, film, and celebrity culture more generally often draw audiences from several different countries.
Global consumption patterns have become increasingly similar in recent decades, with the rise of shopping malls and online shopping.
International migration is a key aspect of cultural globalisation – the more people move around the globe, the more global connections there tend to be.
There is an emerging global risk consciousness – the sense that we are all at threat from global problems such as the Environmental Crisis, Terrorism and more recently Coronavirus, and that we all need to work together (even if that means staying apart?) to combat such problems.
Manchester United Football club are a good example of how global football is – despite being based in one of the largest cities in England, fewer than half the players are from England, the rest being from a diverse array of countries in Europe, Africa and Latin America, and the UK only ranks 10th on Facebook for the number of Man United fans – there are more fans in Egypt and Indonesia than there are in the UK, for example! (source.)
Economic factors
The global economy is Post Industrial – as a result it is increasingly ‘weightless’ (Quah 1999) – products are much more likely to be information based/ electronic, such as computer software, films and music or information services rather than actual tangible, physical goods such as food, clothing or cars.
The role of Transnational Corporations (TNCs) is particularly important. These are companies that produce goods in more than one country, and they are oriented to global markets and global products.
Global Commodity chains – manufacturing is increasingly globalised as there are more worldwide networks extending from the raw material to the final consumer. The least profitable aspects of production – actually making physical products, tend to be done in poorer, peripheral countries, whereas the more profitable aspects, related to branding and marketing, tend to be done in the richer, developed, core countries.
Production is much more flexible than in the past – companies are much more likely to hire people on short term contracts and move around the globe seeking cheaper labour costs, as a response to increased global economic competition.
The electronic economy underpins globalisation – Banks, corporations, fund managers and individuals are able to shift huge funds across boarders instantaneously at the click of a mouse. Transfers of vast amounts of capital can trigger economic crises.
Political changes
The collapse of Communism in the 1990s meant the end of the divided ‘cold war’ world, and now these ex-communist countries are themselves democracies and integrated into the global economy.
The growth of international and regional mechanisms of government such as the United Nations and European Union – governments of Nation States are increasingly restricted by international directives and laws stemming from these international bodies.
International Non-Governmental organisations such as OXFAM or Greenpeace, operate in dozens of countries, and members tend to have an international outlook.
Signposting and Related Posts
This post has been written primarily for A-level sociology students studying the Global Development module, and is intended as part of an introduction to the concept of Globalisation.
Outline and Explain two ways in which globalisation may impact family life in the UK (10)
A good strategy to answer this question is to pick two different aspects of globalisation and discuss how these influence different aspects of family life. For more specific advice on how to answer these see ‘10 mark questions‘.
For example I would choose economic globalisation and migration as my two aspects of globalisation. Then I would discuss how these lead to a variety of changes to family life.
It is generally good advice to avoid overlap between your two points.
This post is written as a summary answer to the above exam question. For a more in-depth look at this topic see: Globalisation and Family Life.
Two ways in which globalisation may impact family life
One aspect of globalization is increased immigration to the UK. This has affected family life in the following ways:
There are more ethnically diverse families as British born people form relationships and families with people originally from other countries.
This means there are more families stretched across borders. This could mean more travel abroad to maintain family connections, for those who can afford it.
There are more people sending money to other countries if their partners have not come to Britain with them.
Immigrants have higher birth rates so this has positively affected the dependency ratio.
One downside of the above may mean increased pressure on public services.
Increased immigration doesn’t necessarily mean increased integration. Migrant families may remain relatively isolated in their own communities.
For very wealthy families, some have taken advantage of cheap migrant labour to employ cleaners and child carers.
In extreme cases this is related to an increase in modern slavery, hidden in the domestic sphere.
Another aspect of globalisation is a more globalised economy.
In general this has resulted in economic growth in the UK. This is correlated with lower birth rates and a smaller family size.
Recently increased amounts of university students from abroad means fewer places for British children. Some choose not to go to university, which could increase the number of households with young adults.
There has been a shift in manufacturing abroad. This means a decline in traditional male jobs, more equality between men and women in relationships (link to topic 5)
There are more financial crises (‘credit crunch’) – more divorce/ family instability (link to topic 2).
Signposting
This material is mainly relevant to the families and households module.
For more information on exam advice for the AQA’s A-level sociology please see my page on essays and exams.
Global wealth inequality is increasing, but how can we explain this, is this is a problem, and what could we do to make the world a more equal place?
Trends in Global Wealth Inequality and Poverty
According to the 2016 Global Wealth Report produced by Credit Suisse, wealth inequality in 2016, measured by the share of the wealthiest 1 percent and wealthiest 10 percent of adults, as compared to the rest of the world’s adult population, continues to rise.
While the bottom half collectively own less than 1 percent of total wealth, the wealthiest top 10 percent own 89 percent of all global assets.
NB – You need to look at the pyramid below carefully, what it shows (to compare the very top and bottom) is as follows:
The richest 33 million people (0.7% of the world’s population ) control $116 trillion, or 45.6% of the world’s wealth, or more than $1 million each
The poorest 3.5 billion people (73% of the world’s population) control only $6.1 trillion of wealth, or less than $10, 000 in wealth each.
NB – Inequality is no longer simply a matter of poor people living in less developed countries and rich people living in more developed countries -there are plenty of millionaires in low and middle income countries – the report notes that ‘today, emerging nations are home to 18 percent of the world’s ultra-high net worth population. China alone accounts for 9 percent of the top decile of global wealth holders, which is well above France, Germany, Italy, and the United Kingdom.’
However, this is hardly cause for celebrations, it simply means that not only is global inequality increasing across the world as a whole, but also within most countries in the world – there are billions of poor people living right alongside those millionaires in low income countries!
The infographic below, taken from the World Economic Forum Website (published 2015), displays global wealth inequality more simply, and it’s also easier to remember:the richest 1% control 50% of the world’s wealth, while the poorest 50% control less than 1%.
Finally, to turn to trends in inequality over time, the chart below, also taken from the World Economic Forum website, shows how the global share of wealth controlled by the wealthiest 1% has increased from 45% to 50%, while the share of the ‘other 99%’ has decreased from 55% to 50%. (The chart below is derived from Oxfam’s 2016 Report: An Economy for the 1%?)
Oxfam further notes that:
The wealth of the richest 62 people has risen by 45% in the five years since 2010 – that’s an increase of more than half a trillion dollars ($542bn), to $1.76 trillion.
Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period – a drop of 38%.
Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%
Some Potential Problems with Statistics on Global Wealth Inequalities
Firstly, there are issues with reliability when tracking global inequality – different nations tally income and wealth in different ways, and some nations barely tally reliable stats at all
Secondly, you may have noticed that you get different figures depending on what groups your comparing – things look very different if you compare the top 1% to the rest, rather than comparing the top ten percent to the the bottom ten percent, or the top 50% to the bottom 50%. You might like to think about which is the most ‘valid’ comparison to give you a fair idea of global wealth inequalities (tough question!?)
Why has Wealth Inequality Increased?
What we are asking here, in short form is – how have the rich got so rich, and why have the poor lagged behind? In this section I summarise for changes which are correlated with increasing wealth inequality, all taken from the the Oxfam Report referred to above: Neoliberal economic policy; the global tax haven system, the growth of the financial sector and increasing returns to capital versus labour:
Neoliberal Economic Policy
Neoliberal Economic and policy changes over the past 30 years – including deregulation, privatization, financial secrecy and globalization – have supercharged the ability of the rich and powerful to to further concentrate their wealth.
For example, companies working in oil, gas and other extractive industries are using their economic power in many different ways to secure their dominant position. They lobby to secure government subsidies – tax breaks – to prevent the emergence of green alternatives. In Brazil and Mexico, indigenous peoples are disproportionately affected by the destruction of their traditional lands when forests are eroded for mining or intensive large-scale farming. When privatized – as happened in Russia after the fall of communism for example – huge fortunes are generated overnight for a small group of individuals.
The Global Network of Tax Havens
A powerful example of an economic system that is rigged to work in the interests of the powerful is the global spider’s web of tax havens and the industry of tax avoidance, which has blossomed over recent decades. The system is maintained by a highly paid, industrious bevy of professionals in the private banking, legal, accounting and investment industries.
As taxes go unpaid due to widespread avoidance, this leads to cuts in vital public services and that governments increasingly rely on indirect taxation, like VAT, which falls disproportionately on the poorest people.
This global system of tax avoidance is sucking the life out of welfare states in the rich world. It also denies poor countries the resources they need to tackle poverty, put children in school and prevent their citizens dying from easily curable diseases.
Almost a third (30%) of rich Africans’ wealth – a total of $500bn – is held offshore in tax havens. It is estimated that this costs African countries $14bn a year in lost tax revenues. This is enough money to pay for healthcare that could save the lives of 4 million children and employ enough teachers to get every African child into school.
Tax avoidance is a problem that is rapidly getting worse and has rightly been described by the International Bar Association as an abuse of human rights and by the President of the World Bank as ‘a form of corruption that hurts the poor’.
Increasing Returns to Capital Versus Labour
One of the key trends underlying increasing wealth inequality is the increasing return to capital versus labour. In almost all rich countries and in most developing countries, the share of national income going to workers has been falling. This means workers are capturing less and less of the gains from growth. In contrast, the owners of capital have seen their capital consistently grow (through interest payments, dividends, or retained profits) faster than the rate the economy has been growing.
NB This article in The Economist challenges the idea that there are increasing returns to capital versus labour!
The Growth of the Financial Sector
The financial sector has grown most rapidly in recent decades, and a recent study by the OECD10 showed that countries with oversized financial sectors suffer from greater economic instability and higher inequality. Certainly, the public debt crisis caused by the financial crisis, bank bailouts and subsequent austerity policies has hurt the poorest people the most.
NB2 – given that measuring inequality involves measuring relative wealth – that is what percentage share to the richest 10% control compared to other 90%, for example, then we’re necessarily looking at a zero sum game – If the richest 10% go from controlling 40% of the world’s wealth to 60% of the worlds wealth, then the amount of wealth controlled by the other 90% of the population must fall from a 60% share to a 40% share.
Is Increasing Global Inequality a Problem for Humanity?
Neoliberals argue that increasing inequality isn’t necessarily a bad thing, the important thing is that even though the rich have got richer compared to the poor, the poor have also got richer, just not as rapidly as the rich and the middle.
However, Oxfam argues that growing economic inequality is bad for us all for the following reasons:
It undermines growth and social cohesion and the consequences for the world’s poorest people are particularly severe.
Had inequality within countries not grown since 2010, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth.
The International Monetary Fund (IMF) recently found that countries with higher income inequality also tend to have larger gaps between women and men in terms of health, education, labour market participation, and representation in institutions like parliaments.
The gender pay gap was also found to be higher in more unequal societies. It is worth noting that 53 of the world’s richest 62 people are men.
From and ecological point of view, there’s even more injustice: the poorest people live in areas most vulnerable to climate change, the poorest half of the global population are responsible for only around 10% of total global emissions. The average footprint of the richest 1% globally could be as much as 175 times that of the poorest 10%.
What can we do to make the world a more equal place?
Oxfam notes that inequality is not inevitable. The current system did not come about by accident; it is the result of deliberate policy choices, of our leaders listening to the 1% and their supporters rather than acting in the interests of the majority. It is time to reject this broken economic model.
As a priority, Oxfam is calling on all world leaders to agree a global approach to end the era of tax havens
World leaders need to commit to a more effective approach to ending tax havens and harmful tax regimes, including non-preferential regimes. It is time to put an end to the race to the bottom in general corporate taxation. Ultimately, all governments – including developing countries on an equal footing – must agree to create a global tax body that includes all governments with the objective of ensuring that national tax systems do not have negative global implications.
In addition Oxfam is calling on leaders to take action to show they are on the side of the majority through doing the following:
Keep the influence of powerful elites in check: for example by reforming the regulatory environment, particularly around transparency in government; separating business from campaign financing; and introducing measures to close revolving doors between big business and government.
Share the tax burden fairly to level the playing field: by shifting the tax burden away from labour and consumption and towards wealth, capital and income from these assets; increasing transparency on tax incentives; and introducing national wealth taxes.
Pay workers a living wage and close the gap with executive rewards: by increasing minimum wages towards living wages; with transparency on pay ratios; and protecting workers’ rights to unionize and strikes.
Use progressive public spending to tackle inequality: by prioritizing policies, practice and spending that increase financing for free public health and education to fight poverty and inequality at a national level. Refrain from implementing unproven and unworkable market reforms to public health and education systems, and expand public sector rather than private sector delivery of essential services.
In this talk Noam Chomsky emphasises that Trump’s election and his climate change denial threaten the very existence of the planet and the human species; and he also reminds us that despite America’s increasing political isolationism, U.S. Corporations still reign supreme.
Chomsky starts by saying that he was in Spain when he heard the results of the U.S. election, and the various commotion and commentary which surrounded it, but in fact the first very real negative consequence of Trump’s victory happened on the very same day and yet went largely unnoticed by the world’s media.
At the very same time as the U.S. presidential election results were being announced and analysed, COP 22 was taking place in Morocco, which was the first meeting of the signatories to the Paris Climate Change agreement (COP21) at which most countries agreed in principle to take concrete action to reduce dependence on fossil fuels and try to slow down global warming.
The Paris Climate Change Agreement – Ruined by the Election of Donald Trump?
Because the specifics of the actions to be taken had been left vague after the Paris meeting, the point of COP 22 in Morocco was to start to add in the specific details of the agreement, however, following Trump’s election, and his commitment to scrapping current environmental regulation and monitoring in the U.S., COP 22 ended with no further progress having been made.
In fact, the agenda of the global climate change framework has now changed to one of ‘how can we combat global warming without the U.S. on board’, and nations have now started to look to authoritarian, anti-democratic China for leadership if any progress is to be made in this area.
Chomsky is very clear that environmental catastrophe is now one of the biggest threats facing the survival of the species (the other is nuclear war), and he focuses on Asia to highlight the coming global problems.
In the next few years, 10s of millions of people will be fleeing from Bangladesh because of the severe level of global warming resulting in sea levels rising, which would be a real refugee crisis, unlike the present one which he casts as a ‘moral crisis’ of the European Union.
(According to one climate change scientists, these climate change migrants should have the right to move to the United States and other rich countries that are causing global warming.)
Again in Asia, a second environmental crisis looms in India and Pakistan, in the form of potential conflict over scarce water resources – two states with nuclear weapons, which potentially trigger a survival crisis for the human species.
Chomsky’s next point is that U.S. isolation in the world is increasing in remarkable ways: the U.S. had been heavily involved in South and Latin America in the decades following World War Two, but the IMF has been completely kicked out of some countries in this region and has no military basis in the region at all; elsewhere in the world the TTIP has all but collapsed and other trading blocks are growing in scope, mainly centring around China, which are drawing in some of America’s historical allies such as Peru and New Zealand; finally with Brexit America has lost it’s main ally in Europe, the U.K., which could reduce its influence in Nato.
By looking at national wealth, it seems that U.S. influence is in decline, as its share has shrunk from 50% in 1945 to 25% today,
However, these measurements fail to take into account the crucial factor of the ownership of the world economy – which is virtually never discussed – CORPORATE ownership of wealth.
U.S. Companies still own 50% of the world’s wealth
If we look at Corporate wealth, U.S. Companies are well in the lead in terms of ownership of the the global economy, and they are own over 50% of the world’s wealth in nearly every sector of the global economy – manufacturing, finance, services etc… of course although this wealth is held in the U.S. and supported by public money, it is not shared by all the citizens of the U.S.
If you look at the military dimension, the U.S. is of course still supreme.
Chomsky finishes by reminding us that the threats we now face are matters of human survival and they cannot be ignored, they need to be faced directly and soon if the human experiment is not to be a disastrous failure!
How to use this in the Global Development Module?
Basically it fits into the ‘how important are nation states’ aspect of the course.
Firstly, Chomsky seems to be suggesting that the United States still has enormous influence in the world – in that its lack of action on climate change means that it is able to disrupt the ability of other nation states to take coordinated action on climate change (whether this actually happens remains to be seen).
Secondly, it seems that other countries are becoming more powerful than the United States, and the U.S. is losing its political influence in certain ways.
However, if we look at the real ‘power indicators’ – wealth and military expenditure – the U.S. is still by far the dominant superpower.
Trump’s political appointments seem to illustrate an extreme neoliberal approach to politics – those who are successful at business are being placed into senior positions in the U.S. political system which will allow them more power to shape domestic and foreign policy.
Trump’s Appointments – Transnational Corporations to Shape U.S. Social Policy
According to a recent Guardian article on Donald Trump’s political appointments he ‘has so far nominated a number of billionaires, three Goldman Sachs bankers and the chief executive of the world’s largest oil firm to senior positions…. His team [has been] dubbed the “team of billionaires”.
Trump’s (neoliberal) argument for these appointments is that the accumulation of wealth is a sign of success and that having internationally successful business people in positions of power to negotiate (or renegotiate) trade-deals will benefit the U.S. economy and the the American people.
Two of Trumps appointments demonstrate this neoliberal approach (and its problems) perfectly: his appointment (still prospective at time of writing) of the CEO of Exxon-Mobile to Secretary of State and the appointment of Steve Mnuchin to the position of treasury secretary
It is the selection of Exxon’s chief executive, Rex Tillerson which has caused the most controversy. Tillerson has a close relationship with Vladimir Putin and some years ago agreed a joint venture with Russia to drill for oil in Siberia and the North Sea, however this venture was shelved following sanctions against Russia when it annexed Crimea. As secretary of state, Tillerson (who has $250 million of Exxon stock) will be leading discussions on whether the US should maintain sanctions against Russia.
According to this article from the Daily Kos, Tillerman’s appointment would be a disaster for business ethics…
‘Rex Tillerson is exactly the man you would expect a man who rose to the top of the oil industry to be. He has no evident morals or concerns about the world that supersede a paycheck. His respect for his own nation ends when there is a business deal to be made somewhere else.’
Trump’s pick for treasury secretary, Steven Mnuchin, is also a multimillionaire former Goldman Sachs banker who went on to be dubbed a “foreclosure king” for buying up distressed mortgages and evicting thousands of homeowners during the financial crisis.
Potential problems with Trump’s neoliberal agenda
Increasing wealth and income inequality in the U.S. – With the transnational capitalist class now in direct control of U.S. domestic and foreign policy, there is every likelihood that the super rich will get richer while the income and wealth of the majority of U.S. citizens will stagnate or even go into reverse. Critics such as Warren (above) argue that Donald Trump has every intention of running Washington to benefit himself and his rich buddies”.
Less respect for human rights globally. The appointment of Tillerson as Secretary of State and his close relations with the human-rights abuser Vladimir Putin suggests that the financial interests of the super-rich will trump (excuse the pun) issues such as respect for universal human rights – it’s more likely that the U.S. will turn a blind eye to dictators who trample on human rights, so long as there’s a profit to made for U.S. companies.
More economic instability – The fact that Goldman Sachs executives now have greater say in shaping U.S. economic policy could mean more deregulation of financial markets and more instability in the global economy in the long run.
Environmental decline – this is possibly the beginning of the end of life on planet earth as oil companies will almost certainly be given the green light to dig up the arctic.
Where can you use this in the A Level Sociology Course?
Unfortunately for those of you who haven’t been given the option of studying global development, this is just extension work, but if you are one of the fortunate few studying this most relevant and interesting topic – this info fits in as follows:
It’s a great example of current neoliberal policy (so neoliberalism is still very much relevant)
It demonstrates the increasing power of TNCs – yet how they need control over nation states to empower themselves.
It’s a great example of how the global super-class work – at a level above that of the nation state.
