Sociology Exam 3 Review REAL

Between-Country (Income) Inequality:

The inequality that exists between Gross Domestic Product (GDP) or Gross National Income (GNI) per capita between countries (the difference between poor and rich countries)

Within-Country Inequality:

The inequality that exists within any given country, examines how a country's income and wealth are divided among social classes

Development:

A multifaceted concept that reflects sovereignty, productivity (mode
of production), levels of debt, economic diversification, educational levels of the
population, inequality, population health, sanitation and water resources, social
safety nets, housing, workers' rights, and other infrastructure. GDP alone does not
capture all of these dimensions

Privatization:

Selling off a state-owned enterprise or public part of the economy to
private investors.

Imperialism:

“The relationship in which the ruling interests of one country dominate,
through the use of economic and military power, the land, labor, natural resources,
finances, and politics of another country” (Parenti 2011: 150)

Colonialism:

A form of imperialism where a foreign power directly administers a country's political and economic system for the benefit of capital in the so-called "mother" country. It enriches the colonizing country at the expense of the colonized country and people. It is direct and obvious, often resulting in a small indigenous elite emerging to align their interests with the colonizer.

Neocolonialism:

A form of imperialism where a foreign power grants formal
independence but retains economic and political power through debt, currency
control, control over global financial institutions, unfair trade, and at times direct
political interference and sabotage.

2014 Milestone:

In 2014, just 62 people owned as much wealth as the poorest half
of the planet (62 out of 7 billion people, or 0.000000009%), with a combined wealth
of $1.76 trillion (Oxfam 2016).

2017 Billionaires Growth:

In 2017, there were 2,043 billionaires whose wealth increased by $762 billion—enough to end global poverty seven times over (Oxfam 2018)

Concentration (2017):

Wealth concentrated even further: just 42 people held as much as the combined wealth of the poorest half of the world (Oxfam 2018).

2018 Disparity:

In 2018, 26 people had the same amount of wealth as the 3.8 billion
poorest individuals (Oxfam 2019). Billionaire wealth increased by $2.5 billion per day
while the wealth of the poorest half of humanity (3.8 billion people) fell by 11%.

Debt Transfer (2025):

According to Oxfam's 2025 report, roughly $30 million US
dollars per hour are transferred from Global South countries to the richest 1% in
interest on debt alone (Taneja et al. 2025).

Top 1% Dominance:

"Since 2015 the richest 1% has owned more wealth than the rest of the planet" (Oxfam 2017)

Scale of Wealth:

The world's richest man, Jeff Bezos, saw his fortune increase to
$112 billion. Just 1% of his fortune is equivalent to the entire health budget of
Ethiopia, a country of 105 million people (Oxfam 2019: 12).

Tax Regressivity:

In countries like Brazil and the UK, the poorest 10% pay a higher proportion of their incomes in tax than the richest 10% (Oxfam 2019: 13).

2024 Growth:

The richest 10 billionaires saw their wealth increase in 2024 by over $100 million per day (Oxfam 2025).

Political Power:

Billionaires are 4,000 times more likely to hold public office (Oxfam 2026).

2025/2026 Statistics:

Just the amount earned by billionaires in 2025 could have given EVERY SINGLE PERSON on Earth (over 8 billion people) $250 and left the billionaires $500 billion richer! The 12 richest billionaires have more than the poorest half of humanity—over 4 billion people combined (Oxfam 2026).

Trickle-Down Failure:

Between 2010 and 2016, the wealth of the poorest 50% of the world's population (3.6 billion people) decreased by $1 trillion. The poorest 10% saw annual earnings increase by less than $3.00. From 2006 to 2015, ordinary workers saw annual gains of 2%, billionaires 13%, and the poorest half saw no increase (Oxfam 2018).

Opportunity Lost:

200 million more people would have moved out of poverty had inequality not grown since 1990 (Oxfam 2016).

Poverty Stagnation:

Since 2020, poverty reduction claimed by the World Bank (achieved in part by redrawing the poverty line lower in real terms, Hickel 2019) ground to a halt. Roughly 48% of the global population lived under the World Bank's absolute poverty line (Oxfam 2026; World Bank 2025).

China's Role:

The vast majority of reported poverty reduction took place in China. 

U.S. Inequality:

The 3 wealthiest U.S. individuals have the same wealth as the poorest 160 million people in the U.S. (Oxfam 2018).

Global Poverty Threshold:

Oxfam estimated that 3.6 billion people (44% of the global population) make less than the World Bank's low poverty line of $6.85 PPP per day.

Metric Manipulation:

From 2001 to 2015, extreme poverty (<$1.90/day) was reported halved (29% down to 15%). However, $1.90/day was less in real terms than the previous $1.25/day measure. Furthermore, roughly 70% of this alleviation was in China, while poverty increased in Sub-Saharan Africa.

Income Distribution Bands:

56% of the planet makes between $2 and $10 per day (up from 50% in 2001); 13% earn between $10 and $20 per day (Pew Research Center 2015; Oxfam 2018).

Underestimated Realities:

The $1.90/day mark grossly underestimates extreme poverty. The World Bank adopted $3.20 for lower-middle-income countries and $5.50 for wealthy countries (while the UN still used $1.90). With realistic measures, 2.4 billion people remain in extreme poverty (Oxfam 2018), and at a $5/day measure, 4.3 billion people (60% of the world's population) lived in poverty in 2010.

Absolute Poverty Definition:

A condition where the lack of resources becomes life-threatening, characterized by inadequate housing, sanitation, nutrition, viable living, and super-exploitation in sweatshops. Associated with higher infant, child, and maternal mortality, lower longevity, higher illiteracy, and chronic malnourishment.

Chronic Hunger:

Roughly 11.3% of the world's population (805 million people)

Gender Disparities:

Women suffer disproportionately—70% of those in absolute or near-absolute poverty are women, many lacking access to reproductive healthcare.

Resource Drain:

Despite aid and remittances, wealth and resources flow continuously from poor to rich countries, and from the poor within countries to their respective wealthier classes.

Hickel's Net Resource Appropriation Study:

Hickel and colleagues (2022) calculated net resource appropriation by the Global North from the Global South between 1990 and 2015 as summing to $242 trillion in Northern prices. This equaled 12 billion tons of raw materials, 822 million hectares of land, 21 exajoules of energy (3.4 billion barrels of oil), and 188 million person-years of labor (392 billion hours of work), causing severe ecological damage in the South. This extracted energy alone was enough to provide infrastructure for 6.5 billion people in the South to have adequate housing, public transit, healthcare, education, and sanitation.

Modernization Theory Overview:

A model of socio-economic development holding that global stratification results from technological and cultural differences between societies. It seeks to explain affluence rather than poverty, attributing wealthy nations' success to the productive nature of industrial production and widespread benefits raising living standards.

Cultural Impediments:

Holds that traditional cultural values are the primary impediment to development (recalling Weber and the Protestant Ethic).

Rostows 1st Stage of Development:

Traditional stage: attached to the past, spiritually rich but materially poor

Rostows 2nd Stage of Development:

Pre-conditions for take-off: promoting business-friendly environments

Rostow’s 3rd Stage of Development:

Take-off stage: emerging export- oriented capitalist markets receiving foreign aid, individualist social arrangements

Rostow’s 4th Stage of Development:

Drive to technological maturity: less absolute poverty, more urban dwellers

Rostow’s 5th Stage of Development:

High mass consumption

Policy Implications:

For wealthy nations: control population growth/family planning in poor nations, increase food production, export agricultural and industrial technologies. For poor nations: utilize comparative advantage, encourage foreign investment via tax, labor, and legal incentives.

Critiques of Modernization Theory:

Assumes development is a single linear process; ignores how wealthy nations actively block poorer nations from accessing technology and industrialization; exhibits ethnocentric bias; blames the victim; ignores the historical (colonialism, slavery) and ongoing extraction of labor and resources from poor nations that fueled wealthy nations' development.

Dependency Theory Overview

Rejects poverty as natural or inevitable, explaining global stratification as the result of historical and ongoing exploitation of poor nations by rich ones. Colonialism and slavery extracted raw materials and cheap labor under slave-like conditions. For example, between 1765 and 1900, roughly $64.82 trillion was siphoned from India to the UK, of which $33.8 trillion was drained directly to the richest 10% in the UK

Core & Periphery Dynamics:

The world is divided into core and peripheral nations. Unequal trade impedes peripheral development by forcing them to export cheap primary goods and import expensive finished goods. Outsourcing pays workers in the Global South substandard wages, while unequal exchange extracts massive wealth.

Mechanisms of Dependency & Wealth Drain:

Hickel (2017) documented massive annual leakages from the Global South: Trade-Related Intellectual Property Rights

Disarticulation (Samir Amin):

Periphery nations relying on export-oriented industrialization (EOI) experience what Samir Amin called "disarticulation"—where supply-side economies with low wages produce entirely for export rather than internal consumption, preventing forward and backward domestic economic linkages and pulling resources away from domestic needs.

Food Production & Hunger:

Lappe and Collins (1986) argued that hunger results from profit-driven food production, where poor nations export food despite local scarcity, dedicating arable land to cash crops for export while state funds pay foreign debt.

Policy Alternatives:

Import Substitution Industrialization (ISI): De-linking from multinationals to focus domestic production on internal population needs and local industry (e.g., Echeverría in Mexico).

Critiques of Dependency Theory:

Critics note it does not explain all global poverty, ignores internal class divisions within peripheral nations (where local elites produce luxury goods for the wealthy rather than necessities for the poor), and fails to fully account for the success of the East Asian "Asian Tigers" (who utilized state-guided industrial policies rather than pure neoliberalism).

Core Framework:

Focuses on the global capitalist economy starting in the 1600s, incorporating semi-peripheral nations that act as a buffer between core and periphery.

International Division of Labor

Focuses on long-term waves of development and an international division of labor, arguing the world economy leaves little autonomy for independent national paths to development.

Systemic Constraints:

Global demand historically fueled industrial development in nations like England. Argues no nation can develop socialism while integrated into the global market, reducing national agency even further than classical dependency theory while permitting upward mobility from periphery to semi-periphery.

Agricultural Transformation & Labor:

Subsistence agriculture has been replaced by mono-crop agricultural export production (e.g., Latifundios in Latin America). A global "reserve army of labor" and global labor arbitrage depress global wages worldwide (Foster 2012).

Development of U.S. Empire Post-WWII:

The U.S. emerged from WWII with industrial infrastructure intact, aiding Western Europe via the Marshall Plan while launching military interventions and supporting proxy wars (Vietnam, Cambodia, Haiti, Dominican Republic, Grenada, Iraq, Afghanistan, Cuba, and dirty wars in El Salvador, Honduras, Nicaragua, Indonesia, Panama) to secure geopolitical and economic hegemony.

Multinational Corporations (MNCs):

Corporations headquartered in industrial countries operating across multiple nations. By the 21st century, sales of U.S. firms abroad were three times total U.S. exports (three-fourths of U.S. firm production takes place outside the U.S.; Hodson and Sullivan 2012). Sklair (1995) identifies the transnational capitalist class as the main driver of globalization.

Current Economic Trends:

Growth in industrialized economies has slowed due to competition and MNC mobility, alongside the rise of BRICS+ economies and lower developing-nation wages undercutting domestic labor.

Protectionism, GATT, and WTO:

The use of tariffs to protect local industry and reduce foreign underselling. Tariffs can be a double-edged sword. GATT reduced global tariffs, and the WTO (replacing GATT in 1995) promoted "free trade," which critics argue has stripped governments of regulatory power, making it harder to ban goods made with child labor, prison labor, or unsafe conditions. Furthermore, recent tariff wars (such as U.S. tariffs) have largely increased consumer prices without reindustrializing the economy.

Barriers to Development:

Export-oriented industrialization dynamics, the immense power of multinational corporations, global commodity chains, the logic of capital ("race to the bottom" dynamics), the commodification of agriculture, and transfer pricing all inhibit genuine development in peripheral nations.

Alternative Models (BRICS):

The rise of the BRICS nations is leading to alternative models of development that are increasingly attractive to many countries seeking alternatives to Western-dominated financial institutions.

Root Cause of Global Inequality:

Global inequality is not a natural occurrence but is largely a function of historical and modern imperialism, unequal exchange, and systematic wealth extraction.