Chapter 2, Part 3
and industrial countries
The Third World And The Global
South
• First World Problem – these terms
come from outdated and immaculate
ways of talking about global
stratifications
• The terms date back to the Cold War,
when Western policymakers began
talking about the world as three
distinct political and economic blocks
(Tomlinson, 2003)
• Western capitalist countries were
labeled as the “First World”
o Hongkong
o Singapore
o Switzerland
o New Zealand
o Australia
o Ireland
o United Kingdom
o Canada
• The Soviet Union and its allies were
termed the “Second World”
o Soviet Union officially the
Union of Soviet socialist
republic was a socialist state
that spanned most of Europe
and Asia during its existence
from 1922 to 1991
o It was nominally a federal
union of multiple national
republics
• Everyone else was grouped into
“Third World”
o Started as Vague catchhall
term for non-alliance
countries
• Third World – non alliance
• Second World – nominally a federal
union of multiple national republics
• First World – associated with rich
• People often use the term third
world as shorthand for poor for
developing nations, by contrast
wealthier countries such as the
United States and the nations of
Western Europe are described as
being part of the First World
• Gross Domestic Product (GDP)
o Measure to the total output
of the country
• Gross National Income (GND)
o Measures the gross domestic
product per capita
• The terms “Global North” and
“Global South” are a way for
countries in the south to weave a
stand about the common issues,
problems, and even causes in order
to have equality all throughout the
world
o GN and GS are shaped by
migration and globalization
• Nevertheless, the economic
differences between the wealthy
Global North and poor Global South
“have always possessed as a racial
character” (Winant, 2001, p.131)
The Global City
• The rural and urban differentiation
has a significant relationship to
globalization
• Globalization has deeply altered
North-South relations in signature
• Global City also called Power City or
World City or Alpha City and World
Center
• Schlosser (2005) pointed out that as
commercial agriculture replaces local
provisioning, the relations of social
production are also altered. Rural
 economies are exposed to low prices
and mass migration
• A Global City is a city that has the
power to affect global issues and
change the global output and they
can do this through a set of systems
from politics to military and
economics by controlling and
adapting the route the global
economy test
Chapter 2, Part 4
Theories Of Global Stratification
Modernization Theory
• This theory frames global
stratification as a function of
technological and cultural
differences between nations
o Specifically pinpoints to
historical events that
contributed to Western
Europe developing at a faster
rate than much of the rest of
the world
• The first event is known as the
Columbian Exchange
o Refers to the spread of goods,
technology, education, and
diseases between America
and Europe after Christopher
Columbus so-called discovery
of the Americas and this
exchange worked out well for
European countries
• They gained agricultural staples like
potatoes, and tomatoes which
contributed to population growth
and provided new opportunities for
trade while also strengthening the
power of the merchant class. The
Columbian Exchange worked out
much less well, however, for Native
Americans whose populations were
ravaged by the diseases brought
from Europe
o It is estimated that in 150
years over 80% of the Native
American population died
due to diseases such as
smallpox and measles
• The second historical event is the
Industrial Revolution in the 18th and
19th centuries
o When technologies like
steam power and
mechanization allowed
countries to replace human
labor which machines and
increases productivity
• The Industrial Revolution, at first,
only benefited the wealthy in
western countries
o Improve standards of living
for everyone
• Modernization theory rest on the
idea that affluence could be attained
by anyone. Modernization theory
argues that the tension between
tradition and technological change is
the biggest barrier to growth
Walt Rostow’s Four Stages Of
Modernization
• According to American economists
Walt Rostow, the most took place as
it always stands in four stages
• Traditional Stage
o Refers to societies that are
structures around small, local
communities with production
typically being done in family
settings. Because these
societies have limited sources
and technology, most of their
time is spent on laboring to
produced food, which creates
a strict social hierarchy
o Main focus is survival, and
agricultural based economy
with intensive labor and low
level of trading and
population that does not
have a scientific perspective
on the world of technology
• Take-Off Stage
o This innovation creates new
markets for trade. In turn,
 greater individualism takes
hold, and social status is more
closely linked with material
wealth
o People begin to use their
individual accountants to
produce things beyond
necessities
• Drive To Technological Maturity
o Which technological growth
of earlier periods begins to
bear fruit in the form of
population growth, reduction
of absolute poverty levels and
more diverse job
opportunities
o Nations in this phase,
typically begin to push for
social change along with
economic change, like
implementing basic schooling
for everyone and developing
more democratic political
systems
• High Mass Consumption
o When your country is big
enough that production
becomes more about wants
and needs
o Many of these countries put
social support systems in
place to ensure that all their
citizens have access to basic
necessities
o Modernization theory in
general, argues that if you
invest capital in better
technologies, they will
eventually raise production
enough that there will be
more wealth to go around
and overall well-being will go
up
▪ The rich countries can
help other countries
that still growing and
developing by
exporting their
technologies and
things like the
agriculture,
machinery,
information
technology as well as
providing a foreign
trade
Dependency Theory and the
Latin American Experience
• European explorers spread
throughout America, Africa and Asia,
claiming the lands for Europe
• British Empire covered at least ¼ of
the world
• Why are many countries in the world
not developing?(Second World War
After)
o The traditional answer of this
question is because the
countries are not pursuing
their right economic policy or
their government are
authoritarian and corrupt
• The Latin American scholars,
however, are critical of that answer
and are intrigued by their region’s
underdevelopment (Sanchez, 2014)
• Dependency theory was a product of
this experience
o Dependency is the condition
in which the development of
the nation or state of a South
contributed to a decline in
their independence and to an
decrease in economic
development of the countries
of the worth
• Dependency theory was initially The Modern World System
developed by Han’s Singer and Rail • The history of colonialism inspired
Prebisch in the 1950’s and has been American sociologist Immanuel
improved since then Wallerstein model of what he called
o The economies of periphery the capitalist world economy
countries rely on manual • Wallerstein described high income
labor at the export of raw nations as the “core” of the world
materials to core nations in economy are manufacturing base of
the core countries the planet
o Dependency Theory
describes a vicious cycle that
enforces a hierarchy of nation
across the globe
• Dependency theorists saw that the
development of peripheral nations is
stagnant because of the exploitative
nature of the core nations
o Some countries around the
world because the
International System was
actually preventing them
from doing
• Andre Gunder Frank (1969) exposed
the North American Neo-Marxist
approach
• He centered the idea that less
developed countries would develop
by following the path taken by the
developed countries
o Developed countries were
undeveloped in the beginning
but not underdeveloped
• Frank also rejected the idea that
internal sources cause a country’s
underdevelopment; rather, it is their
dependency to capitalist system that
causes lack of development
Chapter 3, Part 1
Introduction
• Integration shows the relationship of
the film in a market
o The extent of integration
influences the conduct of the
firms and consequently their
marketing efficiency
• The behavior of a highly integrated
market is different from that of a
disintegrated market
• Markets differ in the extent of
integration
o Market integration is a
process that refers to the
expansion of firms by
consolidating additional
marketing functions and
activities under a single
management
International Financial
Institutions
• World economies have been brought
closer together by globalization. It is
reflected in the phrase "When the
American economy sneezes the rest
of the world catches a cold.”
o It is important to remember
that it is not only the
economy of the United States
but also the economies in the
world that have a significant
impact on the global market
and finance
• An Internal Financial Institution (IFI)
is a financial institution that has been
established (or chartered) by more
than one country and hence is
subject to international law. Its
owners or shareholders are generally
national governments, although
other international institutions and
other organizations occasionally
figure out a shareholder
The Bretton Wood System
• Established in 1944
• The major economies in the
world had suffered because of
World War I, the Great
Depression in the 1930s, and
World War II
o Fear of recurrence of lack
of cooperation among
nation-states, political
instability, and economic
turmoil especially after
the World War
• Create a set of rules that would
maintain fixed exchange rates in
the face of short-term
fluctuations
o It is a large capital
movement and less
controllable requirement
of stability system,
financial security, and
stable situation
The main goal of BWS was to regulate the
international monetary and financial
The General Agreement On Tariffs and Trade
(GATT) And The World Trade Organization
(WTO)
• According to Peet (2003), global
trade and finance were greatly
affected by the BWS
• One of the systems born out of
Bretton Woods was the GATT which
was established in 1947
o GATT was a forum for the
meeting of representatives
from 23 member countries
and it focused on trade goods
through multinational trade
agreements conducted in
many rounds of negotiations
 • The WTD headquarters is located in
Geneva, Switzerland with 152
member states as of 2008
(Trachtman, 2007)
o WTD is an independent
multilateral organization that
become responsible for trade
in services
• The general idea where the WTD is
based was that of neoliberalism. This
means that by reducing or
eliminating barriers, all nations will
benefit
The International Monetary
Fund (IMP), And The World Bank
• IMF and the World Bank were
founded after World War II
o Their establishment was
mainly because of Peace
Advocacy after the war
• IMF and WB aimed to help the
economy the economic stability of
the world and both of them are
basically banks
• Most of the World’s countries were
member of the two institutions
o The richest countries were
those who handled most of
the financing and who had
greatest influence
o IMF and WB were to designed
to complement each other
• IMF main goal was to help countries
which are in trouble and who could
not obtain money by any means
• World Bank had more long-term
approach and work goal revolt
around the eradication of poverty
and it founded specific projects that
helped them reach their goals,
especially for the poor countries
Chapter 3, Part 2
North American Free Trade
(NAFTA)
• It is a trade pact between the United
States, Mexico, and Canada created
on January 1, 1994. When Mexico
joined the two other nations. It was
first created in 1989 with only
Canada and the United States as
trading partners.
o NAFTA help to develop, and
explore world trade by
broadening international
cooperation
o NAFTA aims to increase
cooperation for improving
working conditions in North
America by reducing barriers
of trade as it expands the
markets of 3 countries which
are the United States,
Mexico, and Canada
History Of Global Market
Integration
• Nowadays, economy demands the
different sectors to work together in
other to produce to distribute an
exchange products and service
o Role of Galleon Trade and
Globalization
Capitalism And Socialism
• The competing economic models
that sprung up around in the time of
the Industrial Revolution
• Economic Capital became more and
more important to the production of
goods
• Socialism is an economic and
political system under which the
means of production are publicly
owned. Production and consumer
prices are controlled by the
government to best meet the needs
of the people
• Capitalism is an economic system
under which the means of
production are privately owned.
Production and consumer prices are
based on a free market system o
“supply and demand”
• Socialism is more often criticized for
its provision of social services
program requiring high taxes that
may decelerate economic growth
• Capitalism is most often criticized for
the tendency to allow income
inequality and stratification of socio-
economic classes
The Information Revolution
• Technology has reduced the role of
human in labor and shifted it from
manufacturing based economy to
one that is based on service work and
the production of ideas rather than
goods. And this had a residual effects
on our economy and computers and
other technologies are beginning to
replace many jobs because of
automation or outsourcing job
offshore
• We also see the decline in Union
Membership and Nowadays, most
Unions are for public section like
teachers