Overview
This lecture discusses the global economic system in the modern world, focusing on Emanuel Wallerstein's model of the capitalist world economy and its impact on inequality between nations.
The Modern World and Global Economy
- The modern world includes not only technology and social media, but also the global economy.
- Modernization affects profits and economic activities worldwide, beyond just technology’s impact on industry and agriculture.
Wallerstein’s Capitalist World Economy Model
- Emanuel Wallerstein introduced the model of the capitalist world economy to explain global economic changes.
- The model divides countries into core, semi-periphery, and periphery based on wealth and roles in the global economy.
- Core countries are high-income, focus on manufacturing, and enjoy advanced technology and wealth.
- Periphery countries are low-income, provide raw materials and cheap labor, and remain economically dependent on core countries.
- Semi-periphery countries are middle-income, have closer economic ties to core countries, and strive to join the core.
Inequality and Economic Dependence
- Periphery countries have few resources to export and little industrial capacity.
- Raw materials from poor nations are bought cheaply by multinational corporations and sold at higher prices in richer countries.
- Profits largely bypass poor countries, limiting their development.
- Poor nations import expensive manufactured goods from rich countries, resulting in debt and stunted growth.
- These patterns reinforce wealth in rich countries and poverty in poor nations.
Issues of Global Wealth Distribution
- According to dependency theory, global wealth is poorly distributed, not insufficient.
- The real issue is the unequal distribution and movement of resources and goods in the world economy.
- Some countries progress while others are left behind due to systemic inequalities and lack of competence.
Key Terms & Definitions
- Modern World — the current era marked by technology, innovation, and global economic integration.
- Capitalist World Economy — Wallerstein's model describing the global economic system divided into core, semi-periphery, and periphery nations.
- Core Countries — wealthy, industrialized nations at the center of global trade and profit.
- Periphery Countries — poorer nations supplying raw materials and labor, remaining economically dependent.
- Semi-Periphery Countries — nations between core and periphery with developing economies.
- Dependency Theory — the idea that global inequality is maintained by the economic dependence of poorer countries on wealthier ones.
Action Items / Next Steps
- Review and understand Wallerstein’s model for class discussion.
- Reflect on current examples of core, periphery, and semi-periphery countries.
- Prepare to discuss solutions for improving global wealth distribution.