Feminization of Poverty or Consumption and Globalization
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10.docx10.3 Globalization, Modernization, and Dependency Theory
Societies may be categorized in a number of ways. One simple distinction isoften made on the basis of industrialization. Developed countries are the industrialized nations of the world: primarily the countries of North Americaand Europe, along with Japan, Taiwan, Russia, South Korea, parts of China,and a few others. Developing countries are the remaining, largely nonindustrialized societies of the world, including most of Africa and much ofAsia, and Latin America. The distinction between developed and developing countries is widely used, but the dichotomy is simpler than the reality it represents. The world's developing countries vary from extremely poverty-stricken societies in which hunger and starvation are daily problems to others that have incorporated a great deal of industrialized technology into their economy and will soon be viewed as developed countries. Because the survival of their people depends on their current economic interaction with other nations, many of these poor countries find themselves economically unable to undergo development, largely due to severe shortages of capital and the fact that land is often owned by a small, elite minority. Using their own natural resources for their development remains impossible for them because these resources must be exported in return for needed food imports.
Living standards are very low in many developing countries, and their current economies can rarely support industrial development. Most developing countries suffer from severe shortages of land, capital, or labor. Land is often largely owned by a small, elite minority, with there maining land fragmented into plots too small to do more than meet the minimal needs of the families who farm them. Given the absence of capital, there may be roads that are impassable when it rains, schools that lack enough books, and per capita incomes that are extremely low.While urbanization is occurring everywhere, the concentration of people in cities is much higher in developed countries than in developing countries, where most people still live in rural environments. As of 2008, 74% of people in developed countries lived in urban areas, whereas only 44% of people in less developed countries did so (Population Reference Bureau, 2013).
Al Qaeda and Modernization
Al Qaeda was born during the Soviet War in Afghanistan. In response to perceived Soviet expansionism, the United Statesfunneled money to support the Afghan Mujahideen guerilla fighters who were resisting the Soviets there. The United States wasnot alone in opposing the Soviets in Afghanistan. For instance, both the Saudi government and Osama bin Laden supported ArabMujahideen forces by funding them. In addition to economic support, bin Laden and others built military training camps inPakistan (near the border with Afghanistan) for guerrilla fighters they were recruiting into the anti-Soviet cause. Their fundingorganization established recruiting facilities in the United States to bring fighters to Pakistan for training. In 1989, the Soviet Unionwithdrew its troops from Afghanistan, and the communist government of Afghanistan fell to the (mostly Afghan) guerillas 3 yearslater. After the Soviet withdrawal from Afghanistan, bin Laden returned to his homeland, Saudi Arabia, which was experiencingthreats of possible war with Iraq, a long-time supporter of westernization.
Even though bin Laden saw Iraq as a threat to his own country, he saw the U.S. war with Iraq as simply another example ofsecular Western expansionism that left American troops on the ground in an Islamic country—and not just Iraq but also his ownSaudi Arabia. This led to the United States's being singled out by al Qaeda as the prime symbol of the Western threat to Islam.
Osama bin Laden was the central figure in organizing al Qaeda, his own faction of Arab Muhajideen, in 1988. Despite the clearpolitical nature of the Arab Muhajideen support of the Afghanistani Muhajideen war against Soviet occupation and thecommunist government, bin Laden began formally incorporating the language of an extremist Salafi form of Sunni Muslim religioninto his efforts to rally support for al Qaeda's cause and to resist Western powers—not only in Afghanistan but also elsewhere inthe Muslim world. Al Qaeda's co-opting of extremist Sunni religious language into its political cause was followed by its attacks onmoderate Muslim religious groups, especially Shias and Sufis, whom Salafists regard as religious heretics. These attacks includedthe bombing of Muslim mosques in Iraq. Al Qaeda goals were the elimination of Western influence (which it portrayed as aconspiratorial effort to destroy Islam) in all Muslim countries and the establishment of an Islamic Caliphate that would rule bysharia (Islamic religious law).
Even though al Qaeda fosters its political agenda by supporting an extremist religious ideology, it is best understood as a politicalmovement that uses religion to further its goals—not as a religious movement with a political agenda. The latter view places thecart before the horse. The fundamental political (rather than religious) nature of the movement is well illustrated by thebackgrounds of al Qaeda leaders, who were typically educated at universities in Europe and America, not in the extremistreligious madrassas (religious schools) that are used to train al Qaeda recruits. In fact, over 60% of the members of al Qaeda havebeen educated at universities.
Al Qaeda and its supporters do not reject the practical benefits of modernization such as labor-saving devices, electronic devicessuch as computers and iPads, or the use of the Internet. What they oppose, like fundamentalists in other religious traditions, isthe secularization that comes with it—secularization that is fostered by Western education (particularly the humanities and socialsciences) and Western media and entertainment.
Economic Change
Industrialization has greatly influenced the economic and social life of societies in which it has occurred. Preindustrial economies are fundamentally systems of family-based production, with food and other goods produced primarily for the families' own consumption. Traditional farming peoples who produce for their own consumption were likely to produce as many as 20 to 30 different kinds of crops and animals. This diversity minimized risks and maximized their autonomy. Trade existed mostly to distribute the surpluses from the family and community stock rather than to specialize in the production of food or other goods for the purpose of trade. In contrast, market-oriented farmers tend to invest in a smaller number of more specialized crops for sale, produce less for their own consumption, and rely more on their cash incomes to purchase the foods and other commodities their families need.
With industrialization comes a decline in the value of family-based labor and production and a major increase in the number of specialized paid occupations. Industrialization has created a great demand for wage laborers at centralized locations who do not produce their own food, thus creating a situation where the economy is no longer a family-oriented subsistence activity but a market-oriented enterprise. Industry also fosters the production of nonessential food crops, such as cocoa and coffee, and nonfood products, such as wool for textiles or sisal for twine and cordage manufacturing. So industrialization fosters a move of a large percentage of farmers away from staple food production. In an industrialized economy, the food-producing sector of farming becomes increasingly mechanized and competitive, so that small-scale farms become less viable.
As was discussed in Chapter 9 , societies have changed over the millennia from simple hunting-and-gathering ways of life to extremely complexones based upon industrialized technologies. The dominant nation-states of the world are now interacting economically in ways that are resulting in even greater interconnectedness. For the most part, the countries of today's world are no longer economically isolated from other nations. The economies of nations have become a worldwide network that forms a global economy, such that economic changes in one country impact the economies of other nations. The economic interconnectedness of the world has resulted in many social changes, including the widespread exchange of knowledge (even on an individual level, particularly via the Internet), political ideologies and practices, music, and even religious practices. Kenny Rogers Roasters and McDonalds outlets are found in Singapore, and Bollywood movies are shown in the United States.And linguistic diversity is declining as smaller ethnic languages are being replaced by Mandarin, English, and Spanish. This ongoing process ofcross-border exchanges in cultural characteristics that go far beyond strictly economic influences is called globalization, a new form ofworldwide interconnectedness of societies.
Globalization
The global economic interdependence of today's world is not a totally one-sided system. Although the economic roles of developed nations provide their societies with the world's highest standards of living, they too are dependent upon the continued participation of developing countries in theworld economic system. Thus, although the economies of less developed nations may be extremely dependent on an inflow of loans that allows them to improve their productivity and create new possibilities for employing their growing urban populations, defaults on these loans by impoverished debtor nations would be disastrous for the industrialized countries, whose economies would be impacted if these loans were not repaid. For instance, in 1995, the United States played a major role in helping Mexico avoid defaulting on its international loans. Although this move was not politically popular within the United States, it was not simply a humanistic decision onthe part of the U.S. government. Rather, U.S. banks had made major loans to Mexico and benefitted by governmental action that prevented default ontheir repayment. If Mexico had been allowed to default on its international debts, which in 1995 had reached $150 billion, the loss to American banks would have had tremendous impact on the entire U.S. economy.Today, there are no truly self-sufficient economies, and despite the inequalities of the average per capita incomes and standards of living of participating nations, those nations are interdependent parts of the world economic system. This global interdependence is not a new phenomenon, but it has been increasingly fostered during the past 3 decades by a growing number of political agreements resulting in the faster movement of goods, services, and capital across national boarders.
Globaphobia: American Consumers and Foreign Workers
Moreover, global economic interdependence has had positive effects. Chief among these are that poverty and the wealth gap between rich and poor nations has been reduced for countries undergoing their own industrialization. For instance, 30 years ago Bangladesh, India, and China were among the world's poorest countries but are now no longer in that category. However, at the same time, there is a significant, and growing, gap between the rich and poor within some developed countries. In the United States today, the wealthiest 1% of Americans own about one third of the country's wealth. In 2001, the top 10% of Americans owned about 70% ofthe country's wealth. By contrast, in Japan in 1999, the top 10% owned about 40% of that country's wealth, while in Denmark in 1996, the top 10%owned about 76% of the wealth (Weissman, 2013).
Globalization and Capitalism
The new technologies that arose during industrialization led to a new economic system known as capitalism, a form of economy in which the means of production are privately owned, and marketing is based on the profit motive. While industrialization is defined in terms of technology, capitalism is a matter of social organization that focuses on the relationship between employer and employee. Capitalism implies a degree of governmental constraint that permits contractual freedom—acceptance ofproperty rights (in which the government cannot arbitrarily reassign property and does not arbitrarily interfere with prices being set by the marketplace).Capitalism is now the dominant economic form throughout the world, and the primary economic difference among countries is simply the degree to which their governments play a role in making or limiting corporate policies and decision making. No national economy has a truly "free-market"economy. Rather, countries fall along a continuum depending on the degree of governmental involvement in corporate practices. For instance, some governments play a strong role in business decisions based on centralized economic planning by the government, even though companies may be privately owned. Other countries give a freer reign to corporate planners themselves. Still others practice various types of middle-ground involvement in the economy, such as simply passing legislation against corporate practices the governments deems unfair or exploitive or mandating various forms of environmental and employee protections. For instance, Brazil illustrates this middle range approach. In Brazil, arapidly developing country, government does not simply regulate business practices in the effort to minimize what it regards as unfair or harmful economic practices. It is also a frequent minority shareholder in corporations. By buying into companies, the government provides funds to companies to stimulate their growth. Yet, because the government is a minority owner of these companies, private owners enact the actual economic decision making.
Modernity
Modernity is a term that has come to be used for the shift from feudalism to a lifestyle molded by industrialization, capitalism, increased geographical mobility, widespread secular education, and a rational/secular worldview in the governing of life in nation-states (Barker, 2005).Cultural modernity is spreading as a result of globalization, but it is unclear whether industrialization, globalization, and the spread of modernity are moving the world's nations toward greater equality. As early as the 1960s, what was called modernization theory argued that the world's poorer countries would simply move to modernity in the same way it originally developed in Western Europe and North America. More recently,this view has been criticized by those working in international development, who espouse a different view called dependency theory.Dependency theorists argue that there is evidence that the process of industrialization and economic globalization is not actually moving poorer nations toward equal partnership in a global economy, but that they may simply be moving toward industrialization and modernization in waysthat will maintain their economically dependent roles within the global economy.
Dependency Theory
According to dependency theory, one of the main reasons why development efforts may not eliminate inequality among nations is poor nations'continued role in the international economic system as providers of natural resources, cheap labor, and as destinations for obsolete technologies. Moreover, rich nations sometimes adopt policies that inhibit economic growth in poor nations, including economic sanctions and military intervention in poorer countries. In this view, today's poorer countries may remain at the periphery of the world economy because the way in which industrialization is occurring within the poorer nations is integrating them into the world economy as suppliers of resources and services rather than as equal consumers of the benefits of those resources and services.
Immanuel Wallerstein's world-system theory (1974, 2011) seeks to explain today's capitalist world economy, which emerged in the late 15th century and spread globally by 1900. He argues that there are no "First" and "Third" Worlds; rather, all countries are now part of one world, connected by economic relationships. Yet there is a stark division of labor among nations, which can be categorized as "core," "periphery," or "semi-periphery" nations. Core nations, such as the United States and many western European nations, have more power and wealth due totheir greater control over the means of production, ability to accumulate profit, use of technologies, and strong state institutions. Periphery nations, such as parts of South America and much of Africa, tend to be dominated by core nations, exporters of raw materials, less economically diversified, and have weak state institutions. Semi-periphery nations, such as Brazil, India, and China, are either core or periphery nations, depending on the nation with which they are interacting. These differences among nations, whereby periphery nations provide resources and services that enrich core nations, are integral to perpetuating the capitalist world economy.
For instance, many of the factories that industrialization is producing in former poor countries are taking the form of contract factories, which employ people locally to produce goods that are contracted by companies, often in "core" nations, that market those goods to consumers within wealthier countries. While the opportunity for relatively well-paid wage labor (by local standards) may benefit the poor who are hired, the goods these factories produce are not available to consumers within the countries in which they are found. Similarly, poorer countries are now providing services, such as "customer service" work, for companies that serve customers in richer countries.
The recent reference to countries such as the United States becoming "postindustrial" societies highlights the possibility of the poorer countries reproducing the former role of peasant cultures as producers whose work maintained the luxury of their own elites. A postindustrial society is one in which the service sector produces more wealth than does manufacturing. In such a system, manual labor and blue-collar workers necessarily decline in value, while professional workers grow in value. The most valued services are those that involve the production of new ideas, which enhances the status of scientists and those involved in information technology services. To enjoy the benefits of a post industriallife, industry would still have to produce needed commodities, but they would be produced elsewhere, in other countries whose own economies could never become postindustrial themselves. This example is, however, purely conjectural, and it is not clear yet whether modernization theory or dependency theory is more correct.
Costs of Globalization
Another effect of the spread of industrialization is the increasing economic interdependence of the entire world. Over 2 decades ago, Eric Wolf(1982) wrote:
On one level it has become a common place to say that we all inhabit "one world." There are ecological connections: New York suffers from the Hong Kong flu; the grapevines of Europe are destroyed by American plant lice. There are demographic connections: Jamaicans migrate to London; Chinese migrate to Singapore. There are economic connections: a shutdown of oil wells on the Persian Gulf halts generating plants in Ohio; a balance of payments unfavorable to the United States drains American dollars into bank accounts in Frankfurt or Yokohama; Italians produce Fiat automobiles in the Soviet Union; Japanese build ahydro-electric system in Ceylon. There are political connections: wars begun in Europe unleash reverberations around the globe;American troops intervene on the rim of Asia; Finns guard the border between Israel and Egypt. (p. 3)
The interconnectedness of the world is even greater today. This growing interconnectedness, called globalization, is influenced by many technological and economic changes that are bringing people together in ways that were unheard of in earlier times. These changes include new systems of international communication such as telephones and the Internet, news and entertainment media that cross national boundaries, and the expansion of business across national boundaries. Today, the multinational McDonald's has outlets in 119 countriesthroughout the world. While Toyota is headquartered in Japan, it manufactures vehicles in Kentucky as well as in numerous other parts of the world, and it markets its products in 140 countries.
At one time, it was common for each company to be known for producing and marketing a single product in a single region. Success typically brought two kinds of growth: expansion of the market and the introduction of new products. The new products might begin as variations on the original theme, such as the addition of new flavors or diet versions of a soda. But, in other cases, single companies have developed into mega-corporations that own numerous subsidiary corporations and market tremendously diverse products. For instance, Kraft Foods does not just market Kraft products but is also the owner of Maxwell House, Trident, Cadbury, and Oscar Mayer. Pepsico, originally known for the soft drink for which it was named, merged with Frito Lay and Quaker Oats and now sells foods and drinks as diverse as Gatorade, Rice-A-Roni, Cheetos,and Cap'n Crunch.
The geographical expansion of companies did not stop at national borders. Economic globalization is seen in the rise of international business across national boundaries, multinational corporations that are headquartered in one country but manufacture and market products in other countries, and even transnational corporations that are not headquartered in a single country. Many companies, both large and small, have international connections, but the largest have achieved tremendous economic power internationally. For instance, 1,318 company’s currently control 60% of world trade, and just 147 of these control two thirds of that trade. Such multi- and transnational corporations are more than simply economically influential; they also have tremendous political influence. For instance, establishing a presence of multinational corporationsin Third World countries can have a significant economic effect both in terms of the hiring that such companies will do and in terms of the money they spend in building plants and purchasing resources. This gives such corporations great influence as they negotiate with local governments for their entry and continued presence in the countries they expand into. Even in developed countries, corporations influence legislation and government policies. Advantages for corporations are built into the current structure of governments in all countries. Forexample, in the United States "insider trading" is a felony under federal law, but members of the congressional branch of government are exempted, which allows them to invest legally in corporations based on nonpublic information they acquire from corporations about impending business changes that will affect their stock value. Since legislation that would adversely affect corporate sources could make those sources less forthcoming, legislators may be less likely to support such legislation.
