Global Inequality

Read this chapter for a review of global inequality. As you read through each section, consider the following points:
  • Read about the UN member nations' goals to eradicate global inequality. While reading about these goals, be sure to consider "extreme poverty" in a global context as well as how we might be able to address the needs of the world's population.
  • Take note of the terms global inequality and global classification. Also take note of high-, middle-, and low-income nations as well as factors contributing to a nation's classification.
  • Focus on the differences between relative, absolute, and subjective poverty. Write down some ideas on the cyclical impact of the consequences of poverty.
  • Read about the differences between modernization and dependency theory pertaining to global stratification. On a separate piece of paper, create a compare/contrast list of each of the theories. Then, look at the list you've made and draw conclusions as to how each of these theories attempts to explain global stratification.

Key Terms

absolute poverty
the state where one is barely able, or unable, to afford basic necessities

capital flight
the movement (flight) of capital from one nation to another, via jobs and resources

chattel slavery
a form of slavery in which one person owns another

core nations
dominant capitalist countries

debt accumulation
the buildup of external debt, wherein countries borrow money from other nations to fund their expansion or growth goals

debt bondage
the act of people pledging themselves as servants in exchange for money for passage, and are subsequently paid too little to regain their freedom

the loss of industrial production, usually to peripheral and semi-peripheral nations where the costs are lower

dependency theory
a theory which states that global inequity is due to the exploitation of peripheral and semi-peripheral nations by core nations

first world
a term from the Cold War era that is used to describe industrialized capitalist democracies

fourth world
a term that describes stigmatized minority groups who have no voice or representation on the world stage

GINI coefficient
a measure of income inequality between countries using a 100-point scale, in which 1 represents complete equality and 100 represents the highest possible inequality

global feminization of poverty
a pattern that occurs when women bear a disproportionate percentage of the burden of poverty

global inequality
the concentration of resources in core nations and in the hands of a wealthy minority

global stratification
the unequal distribution of resources between countries

gross national income (GNI)
the income of a nation calculated based on goods and services produced, plus income earned by citizens and corporations headquartered in that country

modernization theory
a theory that low-income countries can improve their global economic standing by industrialization of infrastructure and a shift in cultural attitudes towards work

peripheral nations
nations on the fringes of the global economy, dominated by core nations, with very little industrialization

relative poverty
the state of poverty where one is unable to live the lifestyle of the average person in the country

second world
a term from the Cold War era that describes nations with moderate economies and standards of living

semi-peripheral nations
in-between nations, not powerful enough to dictate policy but acting as a major source of raw materials and an expanding middle class marketplace

subjective poverty
a state of poverty composed of many dimensions, subjectively present when one's actual income does not meet one's expectations

third world
a term from the Cold War era that refers to poor, unindustrialized countries

underground economy
an unregulated economy of labor and goods that operates outside of governance, regulatory systems, or human protections