The Global Divide

It is Week 2 of the winter quarter and our discussion topic this week is the double divide --- the "big gap between rich and poor nations and a big gap between the rich and poor within nations. Working in the gap are members of the global middle class. Still, the richest 5 percent of the world's people receive more than 100 times the income of the poorest 5 percent "(Sernau 16) 

Why are poverty and inequality greater in some countries than others?  We are exploring different perspectives or theories of global inequality to answer this question.  These include modernization, dependency and world systems theories.   Modernization holds that poor countries are poor because they lack modern technology and values.  Dependency theorists acknowledged that the Western or First world did bring many things to poor nations (i.e., The Third World), but that most of them were negative and destructive.  The destruction came with colonial empires but continued (via neocolonialism) after poor countries achieved independence" (Sernau 26-30).  Following the approach of dependency theory, world systems theory takes dependency theory a step further with the view that "colonial powers created a world economic system that enriched the core nations at the expense of the periphery (i.e., their colonies)" (Sernau 30).

Economist, Hernando de Soto, author of the book The Mystery of Capital, has a unique perspective on global inequality.  According to de Soto, entrepreneurism is part of human nature and capitalism works as long as certain conditions exist.   The source of extreme poverty in developing countries is a lack of property rights.  With property rights, he argues, "capitalism is a tool for poor people to prosper",(Commanding Heights Chapter 19: Capitalism Redefined).

Another approach to solving the problem of global poverty is the formation of cooperatives. 

"A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise"  (Source: ICA Statement on the Cooperative Identity).

The following video from the National Cooperative Business Association explains how cooperatives work to give the poor in developing countries a chance to improve their economic future.
http://www.youtube.com/watch?v=GXGm_ZG55Eg

Last year, while in Mexico, I visited an agricultural cooperative near San Miguel de Allende.  In response to the growing demand for organically-grown produce, this group of farmers formed a cooperative where they grow organic tomatoes for sale at the organic farmers' market in downtown San Miguel.  A local non profit, the Center for Global Justice, provided farmers with loans for the construction of greenhouses.  To read more about my trip to this cooperative, go to my January, 2010 blog postings.

International Co-operative Alliance - Statement on the Co-operative Identity February 1996 accessed 1/25/11 http://www.uwcc.wisc.edu/info/i_pages/prin.html  

National Cooperative Business Association    Cooperatives:  Building A Better World  video accessed 1/25/11.  http://www.youtube.com/watch?v=GXGm_ZG55Eg

Sernau, Scott (2009) Global Problems: The Search for Equity, Peace, and Sustainability. 2nd ed. Instructor Resources. New York: Pearson Publishing (Allyn & Bacon).

The Global Divide I  Sample Video Clip  The Commanding Heights:  The Battle for the World Economy http://www.youtube.com/watch?v=JWakV0L8XWI  Accessed 1/9/11.