 I'm Salvatore Bobonis and today's lecture is the structure of the contemporary world system. Levels of income inequality in the contemporary world system are so large that they are hard to comprehend. For example, national income per capita, GDP per capita, ranges from around $500 in the poorest countries to around $50,000 in the richest, a factor of about 1 to 100. To get some idea of the structure of this global inequality, the countries of the world can be organized in the three broad groups, core countries, semi-perforable countries, and peripheral countries. More than just levels of GDP per capita, these categories also represent structural positions in the global economy, the structural positions that generate the income levels we observe. Core countries are the rich, post-modern, post-industrial countries of the world. North America, the United States, Canada, Western Europe, Japan, Australia, New Zealand, Korea, and Taiwan are all, or together, form the world system core. GDP per capita in these countries is greater than $20,000 per year, running up to between $50,000 and $60,000 per person per year. And nobody in these countries really has to suffer the kinds of life-threatening material hardship that are pretty ordinary in some of the poorest countries of the world. The semi-perfor of the world consists of middle income countries that are still dealing with the challenges of modernity and nationalism. They're either industrial or industrializing. These are places like China, Eastern Europe, Brazil, Russia, places that are dealing with serious problems caused by the fact that these countries straddle the rich world and the poor world. The periphery of the world system is composed of poor, traditional, culturally poorly integrated countries, places that have not yet modernized and are not yet characterized by a coherent nationalism. Many of these countries are former colonies where the borders were drawn by colonial powers without reference to ethnicity or national identity. And so many peripheral countries don't have the kind of national cohesion that core and most semi-perfor countries do. These countries are largely agricultural or very simple industrial countries. To give an example of a typical industry, in Bangladesh one of the major industries is ship-breaking. Ships are brought to tow to Bangladesh at the end of their working lives to be torn apart with sledgehammers by workers in a very labor-intensive process of just taking apart the ship to use it for scrap metal. Those are the kind of industries found in peripheral countries. GDP per capita in peripheral countries is generally less than $5,000 per person per year and in some of the poorest peripheral countries much of the economy is still non-monetized meaning that people are working merely for subsistence. They may be growing their own food or working for favors from others rather than actually producing for sale in a market. Some pictures might illustrate what life means in different zones of the global economy. I mean here are some pretty typical core office workers in Sydney, Australia. You can see these are people who are generally well-fed, who aren't suffering severe physical stress in life. They have problems. Everybody in the world has problems but these are not people whose life expectancy is reduced by the sheer physical difficulty of living day-to-day. These are people who are all well-dressed, who again may have financial problems but don't have the kinds of financial problems that would lead to their children not being able to eat on a daily basis. If we move to the semi-periphery, the classic semi-peripheral image is that of the Chinese factory worker. Now these women on a factory assembly line in China again are not living lives where they're unable to eat enough to survive. They're not suffering from malnutrition. But nonetheless they're leading physically stressful lives having to stand for 10 or 12 or 14 hours a day in unpleasant conditions with extreme supervision. And these kind of conditions are fairly typical of the semi-periphery. Of course there are many people in semi-peripheral countries like China that have perfectly good lives. But the typical person in a semi-peripheral country has only a primary and maybe some high school education and has a job that is highly routinized and requires very low levels of skill. Here's a picture of life in the periphery. These are cocoa farmers in Ghana and West Africa. These people are producing for a market. Cocoa is a cash crop sold on world markets. It's not a subsistence crop. Many other farmers in the periphery are growing food for their own consumption, their subsistence farmers outside the cash economy. Life in conditions like this is characterized by widespread malnutrition. People live day to day depending on market prices for their produce or depending on the weather. A bad harvest can mean that families simply don't eat resulting in serious malnutrition and extreme cases in death. The global public intellectual Andre Gunter-Frank famously argued that these three zones are linked in what he called the development of underdevelopment. Now I call Andre Gunter-Frank a global intellectual because he was born in 1929 in Germany, fled Hitler's Germany to live as a refugee in Latin America, was active in Cuba and Chile under leftist governments in both countries, eventually fled to Canada and spent his later life teaching in Canada. So it's difficult to say what country Andre Gunter-Frank is from. He was born in 1929 and died in 2005. Frank Gunter-Frank argued that today's poor countries are not merely undeveloped or not yet developed. Their underdevelopment is part and parcel of the development of the world system as a whole. His example was poverty in Brazil. Northern Brazil is one of the poorest areas of the world. It is highly racialized poverty. Black Brazilians who are the descendants of slaves who were brought to Brazil in the 1500s, 1600s, and 1700s to work on sugar plantations form an underclass in Brazil that are heavily concentrated in northern Brazil. Now these are not people who are part of a traditional society who simply have not yet decided to join the modern world. Black Brazilians are people who are only in Brazil because of the modern world. That is, modern production networks, cash cropping of sugar in a plantation system that was highly capital intensive, this economy brought them to Brazil, made them slaves there, and ultimately led to their current status in the world system. So they're not yet developed or part of a traditional society. They're actually the negative side or the negative face of the same development that led to great wealth, especially in the Netherlands, which owned many of the slave plantations, sugar plantations in Brazil. These low income zones of the world like northern Brazil are part of an integrated political economic system. They're not places that were left out of modernity. They are the negative side of modernity. This basic observation was further developed by the sociologist Immanuel Wallerstein into a coherent framework for what we call world systems analysis. Immanuel Wallerstein's a contemporary of Frank. He was born in 1930 and is still alive in publishing as of 2016. Here's Immanuel Wallerstein and Andre Gunter-Frank. More than just income levels, core semi-privary and periphery are structural locations in global value chains that connect together the world economy. High value added activities are concentrated in the world system core. Things like design, development, and marketing, the ownership of intellectual property, banking, finance, and of course, corporate control. The archetype of this is Apple. The Apple iPhone is designed and conceived in California. Marketing is done in places like California and New York and London. The intellectual property is owned in developed countries that is the patents behind the iPhone and that protect its proprietary systems. And of course, the financing is all done in the United States and other developed countries. Corporate control is in California. On the other hand, the actual manufacturing of the iPhone occurs in semi-proferral countries like China and Mexico. Low value added activities are concentrated in the world system peripheries. And when I say peripheries, I mean both the semi- periphery and the periphery of the world economy. These are activities like assembly work or dirty manufacturing. We may have kinds of clean manufacturing in the world system core, super advanced manufacturing of video cards for computers, but dirty manufacturing, steel production, aluminum smelting. I mentioned earlier, ship breaking. These kinds of manufacturing activities occur in the peripheries of the world economy. On the very periphery, the edges of the world system are countries that rely heavily on foreign assistance just to provide the basic necessities of life. The value added of activities that occur in the periphery of the world economy, things like cocoa farming and ship breaking, the weaving of textiles and the sewing of textiles into clothing, these activities provide so little value added that they don't even generate enough income to provide the basic necessities of life. And as a result, countries like much of Sub-Saharan Africa, countries like Bangladesh and the countries of Central America depend heavily on foreign aid just to keep schools open in public health systems running. Now, there are plenty of rich core-like places that are in the semi-periphery of the world economy. But from a structural standpoint, they're not part of the core of the system. The best example of this is Singapore. Singapore looks like the most modern city in the world. It's certainly a very rich place. This is the new Marina Bay Sands Casino and Hotel Complex in Singapore, one of the richest places in the world. Yet Singapore's prosperity depends on the labor of 1.4 million guest workers out of a population of 5.4 million. So if you're going to Singapore, one third of the people working there are not actually Singaporean. They are the people who mow the lawns, who work as maids in people's houses, who do all of the construction work, all the dirty jobs. So in a place like Singapore, there are lots of poor people. They're just invisible or below the surface. Many of them aren't even in Singapore itself. Singapore is the pinnacle of an economic system that really extends across the borders into Malaysia and Indonesia. That is to say that the top value-added activities, the banking and finance and port services for the entire area, are done in Singapore. Singapore used to be part of Malaysia and only became independent of Malaysia in 1965. If Singapore had remained in Malaysia, we would now just be talking about it as a rich city in Malaysia as opposed to thinking of it as a rich country in the world. And that difference is really illustrated by other cities like Moscow and Rio de Janeiro and Shanghai. These are cities that all have very rich central districts. But of course, they are surrounded by poor countries. Because they're surrounded by poor countries and they're part of those poor countries, no one would call Shanghai or Moscow or Rio de Janeiro part of the world system core. They're simply the tip of the iceberg of poor and middle-income countries in the world system semi-for-free. There is no standard accepted list of core semi-for-free and for free countries, though you can find lists like that on Wikipedia. Common sense notions of what core semi-for-free and for free are usually pretty close to correct. Core parts of the world system are places where everyone can live a decent life. Now, it doesn't mean that everyone does live a decent life. There are problems everywhere. And all countries have problems of distribution, of getting everyone the resources they need. That said, in countries like Australia, the United States, Germany and Japan, it's very rare to find anyone who's suffering from outright malnutrition. It's very difficult to find people who just can't find enough food to eat. There are serious challenges in these countries and especially challenges to human dignity. But core countries are countries where social systems basically work for most people most of the time. Semi-for-free countries are places where the rich, skilled and educated can live a core lifestyle but where many people are left behind. You can live in a core type bubble in cities like Moscow, Singapore and Rio de Janeiro, never coming into contact with people who are truly needy. You can shop in Western-style supermarkets, you can dine out at fancy restaurants, you can go to refined coffee shops and bars and pubs and clubs and never have to deal with people who are not living a core lifestyle. But when you live that way in a semi-for-fro country, you live inside a bubble. Anyone who lives in that kind of bubble can just drive a few miles out of town to find other people who are living in shanty towns, other people who are living on refuse stumps. In semi-for-fro countries, the rich and skilled and educated may live in a core bubble but it's definitely a bubble in a country that is otherwise not up to core standards. Peripheral parts of the world system are countries where even rich people can't live in a bubble. They have to confront the fact that they live in poor countries on a daily basis. In part, that means no matter how rich you are, when you walk out your door, you see poor people, beggars, people who are crippled and sitting in the streets begging for money. You're confronted by poverty and the sights and smells of poverty every day no matter what you do whenever you go outside. But part of this is that the services that we take for granted in core countries just aren't there. Roads are not paved, airports don't function properly, electricity is not on and reliable 24 hours a day. You can't drink the water. In most countries there is no public water supply. So in peripheral countries, it's impossible even to live in a core bubble. So these three criteria, in the core people live, can live a basically decent life and everyone can live a basically decent life. In the semi-periphery, people can live an acceptable life in a bubble but whenever they leave that bubble, they're confronted by poverty versus in peripheral countries, it's impossible even to live in a bubble. That pretty well in a common sense way defines these three zones of the world economy. The general structure of this world economy has been stable for at least 200 years. Things have not changed very much. This graph shows GDP per capita on a logarithmic scale for 1820. A logarithmic scale is just a compression of the scale so that for instance two would equal 103 equals $1,000 and four would equal $10,000. GDP per capita in 1820 versus GDP per capita in 2008, again $1,000, $10,000, $100,000. As you can see the correlation is near perfect. The places that were poor 200 years ago are still poor today. The places that were rich 200 years ago, Western Europe and the British offshoots of the US, Canada and Australia are still rich today with other areas of the country, other areas of the world falling in the middle. This pattern has probably existed since the beginning of the modern era around 1500 but it has certainly existed for at least 200 years. As a result, many of the important global social problems that are generated by the wealth and power differentials existing in the structure of the world economy are generated by the same structure as they were 500 or 200 years ago. The problems of the past are different from the problems of today but they're generated by the same underlying structure of the world economy. So in the past, the massive differences in power and wealth between Europe and the Americas created a catastrophic genocide in the Americas. It created slavery of African slaves being brought to the Americas. It created colonialism, it created world wars. These historical social problems were generated by the big wealth and power gap between European countries and the rest of the world, especially Africa and the Americas. Contemporary social problems are generated by this same gap. It's the same cause, just a different problem resulting. So for example, terrible working conditions in factories in the semi-privary and periphery of the world economy are generated by the fact that people in the core don't have to be confronted by the problems of factory work in places like China or Southeast Asia. Severe poverty is generated by the power differentials that result in African cocoa growers gaining only a few cents for the final price of a chocolate bar in the developed world. Irregular immigration is generated by these massive differentials because there are enormous rewards for people like the Rohingya who want to get, who are migrants ultimately from Bangladesh who now live in Myanmar. So they're moving from a very poor peripheral area to an emerging semi-peripheral area. There are strong incentives to stay in Myanmar as opposed to be expelled to Bangladesh. But in the same way, Syrian migrants who are seeking refuge in Europe have a very strong incentive to get into Germany rather than be stuck in Jordan or Turkey in the semi-peripheral zones of the world economy. Global warming of course is generated by the massive over-consumption in core countries where people in developed countries are consuming anywhere from 10 to 100 times as much as people in the peripheries of the world economy. Key takeaways. First, core semi-periphery and periphery are structural positions in the contemporary world system and they're structural positions that go back a very long time, perhaps as much as 500 years. The relative positions of regions of the world in this structure of the global world system have been stable for centuries. And global social problems are generated by these wealth and power differentials in the global world system. There are different problems every year and there are different problems in this century from the problems of previous centuries, but those global social problems nonetheless are still being generated by the huge differentials between rich and poor in the contemporary world system. Thanks for listening to this lecture. 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