Explaining Global Inequality
For many years, sociologists weren’t worried about the causes of global inequality as
much as its cure, how to help the underprivileged countries “get ahead.” Today,
social scientists are less optimistic and are at least equally concerned with what keeps
poor countries poor.
Market Theories.These theories stress the wisdom of the capitalist marketplace. They
assume that the best possible economic consequences will result if individuals are free
to make their own economic decisions, uninhibited by any form of governmental
constraint; government direction or intervention, the theorists say, will only block
economic development. However, they shouldn’t make just any economic decisions:
The only avenue to economic growth is unrestricted capitalism (Berger, 1986; Ranis
and Mahmood, 1991; Rostow, 1962).
By far the most influential market theory was devised by W. W. Rostow, an
economic advisor to President Kennedy. His modernization theoryfocuses on the
conditions necessary for a low-income country to develop economically. He argued
that a nation’s poverty is largely due to the cultural failings of its people. They lack
a “work ethic” that stresses thrift and hard work. They would rather consume today
than invest in the future. Such failings are reinforced by government policies that set
wages, control prices, and generally interfere with the operation of the economy. They
can develop economically only if they give up their “backward” way of life and adopt
modern Western economic institutions, technologies, and cultural values that empha-
size savings and productive investment.
According to Rostow’s theory, countries desiring to break out of poverty must
go through four stages:
1.Traditional economy. This is the “starting point” of impoverished countries, char-
acterized by a lack of a work ethic and a fatalistic worldview that encourages
people to accept hardship and suffering as the unavoidable plight of life. They
are therefore discouraged from working hard and saving their money.2.Takeoff to economic growth. When the people in impoverished countries begin to
jettison their traditional values and start to work hard and save money to invest in
the future, they begin to experience some economic growth. Wealthy countries have
an essential role to play in assisting this growth: They can help control the popu-
lation by introducing birth control and family planning techniques, increase food
production by introducing modern agricultural techniques, and provide investment
capital or low-cost loans for roads, airports, new industries, and so on. Perhaps
most importantly, they can teach the values and ideals of modern capitalism.3.Drive to technological maturity. Wealthy countries still play an important role,
providing both financial assistance and training in modern values, as the impov-
erished countries slowly climb to an increased level of economic functioning
(“cruising altitude”). Gradually they improve their technology, reinvest their
recently acquired wealth in new industries, and adopt the institutions and values
of the wealthy countries.4.High mass consumption. Finally, people in the impoverished countries would
enjoy the fruits of their labor by achieving a standard of living similar to that of
the wealthy countries.It is somewhat difficult to believe that the people of Somalia, with per capita
income of about $500, or Mali, at $900, fail to stash their money in savings accounts
GLOBAL INEQUALITY 233