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Also during the Cold War, global inequality was described in terms of economic development. Along with developing and developed nations, the terms less-developed nation and underdeveloped nation were used. This was the era when the idea of noblesse oblige (first-world responsibility) took root, suggesting that the so-termed developed nations should provide foreign aid to the less-developed and underdeveloped nations in order to raise their standard of living.

Immanuel wallerstein: world systems approach

Wallerstein’s (1979) world systems approach uses an economic basis to understand global inequality. He conceived the global economy as a complex system supporting an economic hierarchy that placed some nations in positions of power with numerous resources and other nations in a state of economic subordination. Those that were in a state of subordination faced significant obstacles to mobilization.

Core nations are dominant capitalist countries, highly industrialized, technological, and urbanized. For example, Wallerstein contends that the U.S. is an economic powerhouse that can support or deny support to important economic legislation with far-reaching implications, thus exerting control over every aspect of the global economy and exploiting both semi-peripheral and peripheral nations. One can look at free trade agreements such as the North American Free Trade Agreement (NAFTA) as an example of how a core nation is able to leverage its power to gain the most advantageous position in the matter of global trade.

Peripheral nations have very little industrialization; what they do have often represents the outdated castoffs of core nations or the factories and means of production owned by core nations. They typically have unstable government, inadequate social programs, and are economically dependent on core nations for jobs and aid. There are abundant examples of countries in this category. Check the label of your jeans or sweatshirt and see where it was made. Chances are it was a peripheral nation such as Guatemala, Bangladesh, Malaysia, or Colombia. One can be sure the workers in these factories, which are owned or leased by global core nation companies, are not enjoying the same privileges and rights of American workers.

Semi-peripheral nations are in-between nations, not powerful enough to dictate policy but nevertheless acting as a major source for raw material and an expanding middle-class marketplace for core nations, while also exploiting peripheral nations. Mexico is an example, providing abundant cheap agricultural labor to the U.S., and supplying goods to the U.S. market at a rate dictated by the U.S. without the constitutional protections offered to U.S. workers.

World bank economic classification by income

While there is often criticism of the World Bank, both for its policies and its method of calculating data, it is still a common source for global economic data. When using the World Bank categorization to classify economies, the measure of GNI, or gross national income, provides a picture of the overall economic health of nation. Gross national income equals all goods and services plus net income earned outside the country by nationals and corporations headquartered in the country doing business out of the country, measured in U.S. dollars. In other words, the GNI of a country includes not only the value of goods and services inside the country, but also the value of income earned outside the country if it is earned by U.S. nationals or U.S. businesses. That means that multinational corporations that might earn billions in offices and factories around the globe are considered part of the United States’ GNI if they have headquarters in the U.S. Along with tracking the economy, the World Bank tracks demographics and environmental health to provide a complete picture of whether a nation is high-income, middle-income, or low-income.

Questions & Answers

what is the difference between demand and supply
Peter Reply
what is the national income
Kamara Reply
oils and resources
Peter
What's current account?
Che Reply
Demand refers to goods and services that the buyer is willing and able to buy at a price over a period of time
Che
Can it be possible to have two level of comparative advantage in a country ?
Louise Reply
.no.its not possible
Asanda
Why ?
Louise
I think no possible
Sadiq
No
Nwanne
why do oligopoly increase on the elastic segment of the demand curve
Tintswalo Reply
what is all about production possibility curve
Nice Reply
help me about the assumption of possibility curve
Nice
-The quantity and quality of economic resources are fixed. -only two types of goods can be produce out of this resources (that is,producer and consumer goods). -Resources are fully utilised. -The resources are mobile. -The state of technology is constant.
Louise
What is utility
chisom Reply
what is the meaning of money and inflation
Tinuke Reply
Money can be define as anything acceptable as a medium of exchange and mean of payment
Cynthia
inflation is when everything seemed to cost so much less
Nwanne
what is a bar chart
Godwin Reply
what's economic
John Reply
Economics can be define as a study of how human beings make decisions in the face of scarcity it can also be define as using one wealth to make more wealth
Cynthia
Or in Nigerian way Economics is a science (social science) which studies human behavior as a relationship between Ends and Scarce which have alternative uses
Cynthia
Economics is the study of how human make decision in the face of scarcity
Nwanne
what is the meaning of imperfect market structure
Hoyindamolah Reply
the theroy of demand
Tinuke
what is market economy
Jusu Reply
Market Economy:Is a system where the laws of supply and those demand direct the production of goods and services.
Iyabo
what is the meaning of money and inflation
Tinuke
what's demand in economics?
Abi Reply
Demand in economic is the good a consumer is willing or able to purchase at a particular time
Hoyindamolah
explanation of graph,bar chart,pie chart with examples
Abdulmojeed
4. Assume, after completing your economics class, you explain your friend that about 65% of GDP is spending on consumption. Your friend tells you that people are greedy and it is better for GDP if they spend on services or experiences. What would be your answer to your friend?
Javohir Reply
What is power
Ahmad Reply
What is society and how society understand
Ashmi Reply
Deceit social imitation bye C.Writ
Ashmi
What is called research problem and how we narrow down a research question and why it is needed
Karamat Reply

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Source:  OpenStax, Introduction to sociology. OpenStax CNX. Jun 12, 2012 Download for free at https://legacy.cnx.org/content/col11407/1.7
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