# Sociological Theories and Global Inequality

## The Functionalist Perspective: Motivating Qualified People

From a functionalist point of view, inequality plays a role in holding society together and encouraging efficiency.

### Learning Objectives

Review the functionialist perspective on inequality

### Key Takeaways

#### Key Points

• According to a functionalist perspective, differences in power, wealth, and other rewards within the social structure are justified, because they motivate the most qualified people to exercise their talents in the most important jobs.
• Society is unequally structured because of people's inherent inequality in functional importance.
• A problem with this view is that it is difficult to determine the functional importance of any job.
• Another problem with this view is that it assumes that the current system of stratification is fair and rational, which is not always the case.

#### Key Terms

• social stratification: The hierarchical arrangement of social classes, or castes, within a society.
• functional importance: The degree to which a job is unique and requires skill.

The structural-functional approach to stratification asks the same question that it does of the other components of society: What function or purpose does it serve? The answer is that all aspects of society, even poverty, contribute in some way to the larger system's overall stability.

According to structural-functionalists, stratification and inequality are inevitable and beneficial to society. The layers of society, conceptualized as a pyramid, are the inevitable sorting of unequal people. The layering is useful because it ensures that the best people are at the top and those who are less worthy are further down the pyramid, and therefore have less power and are given fewer rewards than the high quality people at the top. The Davis-Moore hypothesis, advanced by Kingsley Davis and Wilbert E. Moore in a paper published in 1945, is a central claim within the structural functionalist paradigm, and purports that the unequal distribution of rewards serves a purpose in society. Inequality ensures that the most functionally important jobs are filled by the best qualified people. In other words, it makes sense for the CEO of a company, whose position is more important functionally, to make more money than a janitor working for the same company.

A job's functional importance is determined by the degree to which the job is unique and requires skill, meaning whether only a few, or many other people, can perform the same function adequately. Garbage collectors are important to public sanitation, but do not need to be rewarded highly because little training or talent is required to perform their job. For example, according to this theory doctors should be rewarded highly, because extensive training is required to do their job. It is logical that society must offer greater rewards (e.g., income, vacations, promotion) to motivate the most qualified people to fill the most important positions.

### Critiques of the Functionalist Perspective

There are several problems with this approach to stratification. First, it is difficult to determine the functional importance of any job, as the accompanying specialization and inter-dependence make every position necessary to the overall operation. According to this critique, the engineers in a factory, for example, are just as important as the other workers in the factory to the success of a project. In another example, a primary school teacher in the U.S. earns $29,000 per year, whereas a National Basketball Association player can earn as much as$21 million per year. Are basketball players more essential to society than teachers? Are basketball players more functionally important than teachers? In 2009, comedian Jerry Seinfeld earned $85 million. Do his earnings demonstrate his contribution to society? If NBA players or famous comedians went on strike and decided not to work, most people would not notice. However, if teachers, bus drivers, nurses, cleaners, garbage collectors, or waitresses stopped working, society would close down. Thus, functionalism can be critiqued on the basis that there is little connection between income and functional importance. Second, functionalism assumes that the system of social stratification is fair and rational, and that the "best" people end up on top because of their superiority. But in real life, the system does not work so easily or perfectly. For example, some would argue that former U.S. president George W. Bush was not the smartest or most politically talented individual, but he was well connected and born at the top of the stratification system (white, male, wealthy, American), and therefore was elected to a position with great power—the U.S. presidency. The Legal Field: Lawyers and judges tend to work very long hours and are often subject to high stress situations; for example, as they determine the fate of individuals' freedom and the allocation of large sums of money. Functionalists hold that the high pay and status granted to lawyers acts as incentive to motivate qualified people to accept these drawbacks. ## The Conflict Perspective: Class Conflict and Scarce Resources Conflict theory of stratification holds that inequality is harmful to society because it creates a fixed system of winners and losers. ### Learning Objectives Compare the conflict theory of inequality to the funcionalist theory of inequality ### Key Takeaways #### Key Points • According to conflict theory, capitalist economic competition unfairly privileges the rich, who have the power to perpetrate an unfair system that works to their advantage. • "Losers" who are at the bottom of the social stratification have little opportunity to improve their situation, since those at the top tend to have far more political and economic power. • Functionalists argue against the conflict theory approach by contending that people don't always act out of economic self-interest, and that people who want to succeed can do so through hard work. #### Key Terms • conflict theory: A social science perspective that holds that stratification is dysfunctional and harmful in society, with inequality perpetuated because it benefits the rich and powerful at the expense of the poor. • social stratification: The hierarchical arrangement of social classes, or castes, within a society. • tax break: A deduction in tax that is given in order to encourage a certain economic activity or a social objective. Conflict theorists argue that stratification is dysfunctional and harmful in society. According to conflict theory, social stratification benefits the rich and powerful at the expense of the poor. Thus, it creates a system of winners and losers that is maintained by those who are on the top. The people who are losers do not get a fair chance to compete, and thus are stuck on the bottom. For example, many wealthy families pay low wages to nannies to care for their children, to gardeners to attend to their rose gardens, and to maids to pick up their dirty socks. These low wage workers do not make enough to move beyond a paycheck-to-paycheck lifestyle, and have no means to move ahead. Therefore, conflict theorists believe that this competitive system, together with the way the game is "fixed", ends up creating and perpetuating stratification systems. According to conflict theory, capitalism, an economic system based on free-market competition, particularly benefits the rich by assuming that the "trickle down" mechanism is the best way to spread the benefits of wealth across society. Governments that promote capitalism often establish corporate welfare through direct subsidies, tax breaks, and other support that benefit big businesses. They assume that the market will allow these benefits to the rich to make their way to the poor through competition. For example, the Walton family, the owners of Wal-Mart, receives enormous tax breaks. Whether the benefits of these tax breaks have made their way down to ordinary people through better business practices or better working conditions for Wal-Mart employees is questionable. Conflict theorists would argue that they haven't, but rather have been used by the Walton family to solidify the patterns of stratification that keep the family rich. Functionalists criticize this approach by arguing that people do not always act largely out of economic self-interest. For example, Chuck Feeney, the creator of Duty Free Shoppers, has given$4 billion to charities. Bill Gates has given 58% of his wealth to charity. Functionalists also argue that conflict theorists underestimate people's ability to move upward in society. They argue that if people really want to succeed, they can do so through hard work.

Nanny with European Children: Nannies, who are often minority women, are one example of lower class workers with little chance for upward mobility.

## The Interactionist Perspective

The interactionist perspective on social inequality focuses on the way that micro-interactions maintain structural inequality.

### Learning Objectives

Design a scenario which illustrates the interactionist perspective on inequality in action

### Key Takeaways

#### Key Points

• Interactionists often consider the question of how power is exchanged in a situation.
• The interactionist perspective on inequality looks at how certain social roles have more power or authority than others.
• Micro-interactions all have the ability to reinforce or undermine power and status differentials. Thus, social stratification is a result of these individual interactions.

#### Key Terms

• Social Roles: One's position and responsibilities in society, which are largely determined in modern developed nations by occupation and family position.
• Interactionist Perspective: An approach to inequality that focuses on how micro-interactions reflect and create unequal power dynamics.

The interactionist perspective on inequality focuses on how micro-interactions reflect and create unequal power dynamics. Interactionists consider the question of how power is exchanged in a situation. For example, when a child and an adult engage in conversation, the adult establishes their power by claiming knowledge and authority that the child cannot. When considering larger systems of inequality, interactionists look at the inequality between social roles. Social roles refer to one's position and responsibilities in society, which are largely determined in modern developed nations by occupation. The interactionist perspective on inequality looks at how certain social roles have more power, or authority, than others.

An example using real social roles can help illustrate the interactionist perspective: A CEO has more power than a receptionist. Macro-sociologists may explain this disparity by pointing to the unequal education of the two employees, the unequal salaries they earn, or the differing skill levels required to fulfill each job. Interactionists, on the other hand, would focus on the way that day-to-day exchanges demonstrate and reinforce the gap between the CEO and receptionist. When the receptionist hangs up the CEO's jacket, he takes on a subservient position; when the receptionist makes excuses for the CEO missing a deadline, he accepts responsibility for the CEO's mistake; when the receptionist laughs at jokes that he does not find funny, he flatters the CEO because he recognizes that his job depends on doing so. All of these micro-interactions, which may seem trivial at the time, add up to status inequality, according to the interactionist.

Wal-Mart's CEO: Interactionalists would argue that Walmart's CEO maintains his status and power through the accumulation of interactions with others.

## Lenski's Synthesis

In Lenski's view, inequality is a natural product of societal development.

### Learning Objectives

Paraphrase the process which led to inequality, according to the Gehard Lenski's theory, including different levels of society

### Key Takeaways

#### Key Points

• As societies moved from hunter/gatherer to pastoralist/horticulturalist to agricultural to industrial and then to post-industrial structures, more surplus goods were created.
• Surplus goods created the possibility for some people to accumulate more possessions than others.
• Individuals with more goods have an economic advantage relative to those with less good because they have greater bargaining power, creating social inequality.

#### Key Terms

• Societal Development: The process of transitioning from a hunter/gatherer economic model to an industrialized one.
• surplus: That which remains when use or need is satisfied, or when a limit is reached; excess.
• Hunter-gatherer: Describes societies with no division of labor in which people hunt and gather food and materials to meet their basic needs.

In sociologist Gerhard Lenski 's view, inequality is a product of societal development. Lenski differentiated societies based on their level of technology, communication, and economy. Human groups begin as hunter-gatherers, move toward pastoralism and/or horticulturalism, develop toward an agrarian society, and ultimately end up industrializing (with the potential to develop a service industry following industrialization ). While this is a common progression, not all societies pass through every stage.

### Hunting, Gathering, Subsistence

The origins of inequality can be found in the transition from hunter/gatherer societies to horticultural/pastoralist societies. In hunter/gather societies (around 50,000 B.C.), small groups of people gathered what they could find, hunted, and fished. People collected enough food to satisfy all of their needs, but no more—there was no surplus of goods. There was little trading between the groups, and there was not much inequality between groups because everyone possessed basically the same goods as everyone else. Division of labor was virtually non-existent—people working for subsistence completed all steps of each job. Food gathering and food production were the focus of work.

### Horticulture, Pastoralism, Surplus

In horticultural/pastoralist societies (around 12,000 B.C.), groups grew very large, and humans began to settle in one place. For the first time, people had more time to do work other than producing food, such as making leather and weapons. This new division of labor led to surplus goods and the accumulation of possessions. Groups traded these surplus goods with each other, and trade led to inequality because some people accumulated more possessions than others. As societies developed more advanced technologies and underwent industrialization, more surplus was created, increasing the potential for social inequality. According to Lenski, inequality is the result of increasing surplus—some individuals will have ownership of surplus goods, others will not. Those with more goods have an economic advantage relative to those with less goods because they have greater bargaining power, creating social inequality.

Modern-day Hunter/gatherer Societies: Nearly all societies have become industrialized to varying extents, but a few continue to function based on hunting and gathering. In these societies, there are few surplus goods. According to Lenski, this means that such societies do not exhibit inequality.

## Marx's View of Class Differentiation

In the Marxist perspective, social stratification is created by unequal property relations, or unequal access to the means of production.

### Learning Objectives

Diagram the relationship between the owners of production, the proletariat, the substructure and the superstructure according to Marx's view

### Key Takeaways

#### Key Points

• In capitalist societies, the bourgeoisie class owns the means of production while the proletariat class sells their labor to the bourgeoisie.
• The bourgeoisie have power and status, which they use to maintain the society's superstructure —it's values, ideologies, and norms.
• In an ideal Marxist communist society, everyone would share access to the means of production and social stratification would be nonexistent.

#### Key Terms

• egalitarian communist society: A society in which the state owns the means of production and equally distributes resources.
• superstructure: The ideas, philosophies, and culture that are built upon the means of production.
• substructure: The base of society, which in Marxist terms includes relations of production.

In Marx's view, social stratification is created by people's differing relationship to the means of production: either they own productive property or they labor for others.

In Marxist theory, the capitalist mode of production consists of two main economic parts: the substructure and the Superstructure. In a capitalist society, the ruling class, or the bourgeoisie, owns the means of production, such as machines or tools that can be used to produce valuable objects. The working class, or the proletariat, only possess their own labor power, which they sell to the ruling class in the form of wage labor to survive. These relations of production—employer-employee relations, the technical division of labor, and property relations—form the base of society or, in Marxist terms, the substructure. From this material substructure, the superstructure emerges. The superstructure includes the ideas, philosophies and culture of a society. In a capitalist society, the ruling class promotes its own ideologies and values as the norm for the entire society, and these ideas and values are accepted by the working class.

A temporary status quo could be achieved by employing various methods of social control—consciously or unconsciously—by the bourgeoisie in various aspects of social life. Eventually, however, Marx believed the capitalist economic order would erode, through its own internal conflict; this would lead to revolutionary consciousness and the development of egalitarian communist society. In this communist society, the state would own the means of production, and it would equally distribute resources to all citizens. The means of production would be shared by all members of society, and social stratification would be abolished.

Marx Memorial in Moscow: This memorial to Karl Marx in Moscow reads, "Proletarians of all countries unite! " Marxism is associated with a view of stratification that pits the owners of means of production against the laborers.

## Weber's View of Stratification

Max Weber formed a three-component theory of stratification in which social difference is determined by class, status, and power.

### Learning Objectives

Recall the three components of stratification in Weberian theory, including their definitions

### Key Takeaways

#### Key Points

• Class is a person's economic position, based on birth and individual achievement.
• Status is one's social prestige or honor, which may or may not be influenced by class.
• Power is one's ability to get one's way despite the resistance of others.

#### Key Terms

• power: The ability to get one's way even in the face of opposition to one's goals.
• status: A person's social position or standing relative to that of others.
• class: A person's economic position in society, based on birth and individual achievement.

Classic sociologist Max Weber was strongly influenced by Marx's ideas, but rejected the possibility of effective communism, arguing that it would require an even greater level of detrimental social control and bureaucratization than capitalist society. Weber criticized the dialectical presumption of proletariat revolt, believing it to be unlikely. Instead, he developed the three-component theory of stratification and the concept of life chances. Weber supposed there were more class divisions than Marx suggested, taking different concepts from both functionalist and Marxist theories to create his own system. Weber claimed there are four main classes: the upper class, the white-collar workers, the petite bourgeoisie, and the manual working class. Weber's theory more closely resembles theories of modern Western class structures embraced by sociologists, although economic status does not seem to depend strictly on earnings in the way Weber envisioned.

Working half a century later than Marx, Weber derived many of his key concepts on social stratification by examining the social structure of Germany. Weber examined how many members of the aristocracy lacked economic wealth, yet had strong political power. He noted that, contrary to Marx's theories, stratification was based on more than ownership of capital. Many wealthy families lacked prestige and power, for example, because they were Jewish. Weber introduced three independent factors that form his theory of stratification hierarchy: class, status, and power. He treated these as separate but related sources of power, each with different effects on social action.

### Three Sources of Power

Class is a person's economic position in a society, based on birth and individual achievement. Weber differs from Marx in that he did not see this as the supreme factor in stratification. Weber noted that managers of corporations or industries control firms they do not own; Marx would have placed such a person in the proletariat.

Status refers to a person's prestige, social honor, or popularity in a society. Weber noted that political power was not rooted solely in capital value, but also in one's individual status. Poets or saints, for example, can possess immense influence on society, often with little economic worth.

Power refers to a person's ability to get their way despite the resistance of others. For example, individuals in state jobs, such as an employee of the Federal Bureau of Investigation, or a member of the United States Congress, may hold little property or status, but they still hold immense power.

US Congress in Present Times: Using Weber's theory of stratification, members of the U.S. Congress are at the top of the social hierarchy because they have high power and status, despite having relatively little wealth on average.

## Market-Oriented Theories

Market-oriented theories of inequality argue that supply and demand will regulate prices and wages and stabilize inequality.

### Learning Objectives

Evaluate the concept of the market-oriented theory of inequality

### Key Takeaways

#### Key Points

• When supply meets demand, prices reach a state of equilibrium and cease fluctuating.
• According to market-oriented theories, over time the low wages earned by agricultural laborers will induce more people to learn other skills, thus reducing the pool of agricultural laborers.
• The supply and demand model is commonly applied to wages, in the market for labor. The typical roles of supplier and consumer are reversed.

#### Key Terms

• supply and demand: An economic model of price determination in a market based on the relative scarcity or abundance of goods and services.
• equilibrium: In economics, the point at which supply equals demand and prices cease fluctuating.
• free market: Any economic market in which trade is unregulated; an economic system free from government intervention.

Market-oriented theories of inequality are focused on the laws of the free market. The free market refers to a capitalist economic order in which prices are set based on competition. In a free market, prices are supposed to be regulated by the law of supply and demand. According to supply and demand, if a produce or service is scarce but desired by many, it will fetch a high price. Conversely, if a product or service is readily available and desired by few, it will fetch a low price. When the supply of a product exactly meets the demand for it, the price reaches a state of equilibrium and no longer fluctuates.

The model is commonly applied to wages, in the market for labor. The typical roles of supplier and consumer are reversed. The suppliers are individuals, who try to sell (supply) their labor for the highest price. The consumers of labors are businesses, which try to buy (demand) the type of labor they need at the lowest price. As populations increase, wages fall for any given unskilled or skilled labor supply. Conversely, wages tend to go up with a decrease in population. When demand exceeds supply, suppliers can raise the price, but when supply exceeds demand, suppliers will have to decrease the price in order to make sales. Consumers who can afford the higher prices may still buy, but others may forgo the purchase altogether, demand a better price, buy a similar item, or shop elsewhere. As the price rises, suppliers may also choose to increase production, or more suppliers may enter the business.

Considering inequality, market-oriented theories claim that if left to the free-market, all products and services will reach equilibrium, and price stability will reduce inequality. For example, in countries with huge pools of unskilled agricultural laborers but limited agricultural land, agricultural land is very poorly compensated. According to market-oriented theories, over time the low wages earned by agricultural laborers will induce more people to learn other skills, thus reducing the pool of agricultural laborers. With less supply and stable demand, the wage for agricultural labor will rise to a sustainable level. Thus, the status of agricultural laborers will rise, and inequality will be reduced. Generally, market-oriented theories hold that when supply of labor and goods meets demand, the economic order will reach equilibrium, and inequality will either be non-existent or will be stable.

## Dependency Theories

Dependency theory states that colonialism and neocolonialism have created unequal economic relations between poor and wealthy countries.

### Learning Objectives

Explain malnourishment and hunger in the "third world" through dependency theory

### Key Takeaways

#### Key Points

• In the past, colonialism allowed wealthy countries to plunder their colonies for material benefits—raw materials like rubber, sugar, and slave labor.
• Today, poor countries have taken enormous loans from wealthy countries in order to stay afloat. Paying off the compound interest from this debt prevents them from investing resources into their own country.
• Foreign trade gets in the way of local governments' ability to improve the living conditions of their people by encouraging the export of food and other raw materials to wealthy consumer markets.

#### Key Terms

• foreign trade: The exchange of capital, goods, and services across international borders or territories.
• foreign debt: A debt that a country, an organization in a country, or a resident individual in a country owes to those in other countries.
• neocolonialism: The control or domination by a powerful country over weaker ones (especially former colonies) by the use of economic pressure, political suppression, and cultural dominance.
• dependency ratio: an age-population measurement of those typically not in the labor force (the dependent part) and those typically in the labor force (the productive part)

Dependency theories propose that colonialism and neocolonialism —continuing economic dependence on and exploitation of former colonial countries—are the main causes global poverty. Countries have developed at an uneven rate because wealthy countries have exploited poor countries in the past and continue to do so today through foreign debt and foreign trade.

### Historical Dependency

Historically, wealthy nations have taken a great quantity of materials from poor countries, such as minerals and metals necessary to make automobiles, weapons, and jewelry. Large amounts of agricultural products that can only be grown in the hot climates of the poor countries, such as coffee, tea, sugar, and cocoa, have been exported to and manufactured in the wealthy countries. Wealthy countries would not be as rich as they are today if they did not have these materials. Wealthy countries increased their own profits by organizing cheap labor through slavery.

King Leopold II, for example, who was King of Belgium from 1865-1909, forced hundreds of thousands of men, women, and children to work as slaves in the Democratic Republic of Congo. The invention of the bicycle tire in the 1890s and later the automobile tire meant that rubber was in high demand; wild rubber vines were widespread in the Congo, earning Leopold millions. The Democratic Republic of Congo is still suffering from the plunder of natural resources, torture, and killing that was endured during Leopold's reign.

### Modern Dependency

Today, poor countries are trapped by large debts which prevent them from developing. For example, between 1970 and 2002, the continent of Africa received $540 billion in loans from wealthy nations—through the World Bank and IMF. African countries have paid back$550 billion of their debt but they still owe \$295 billion. The difference is the result of compound interest. Countries cannot focus on economic or human development when they are constantly paying off debt; these countries will continue to remain undeveloped. Dependency theorists believe large economic aid is not necessarily the key to reducing poverty and developing, but rather debt relief may be a more effective step.

In addition, foreign trade and business often mitigate local governments' ability to improve the living conditions of their people. This trade often comes in the form of transnational corporations (TNCs). The governments of poor countries invite these TNCs to invest in their country with the hope of developing the country and bringing material benefit to the people. However, workers' time and energy are often poured into producing goods that they themselves will not consume. For example, some of the land in Cape Verde could be planted and harvested to feed local people, but it is planted instead with cash crops for foreign exchange. Fresh produce is regularly sold or changed to a nonperishable type such as tuna canned for export rather than consumed by the population.

### Malnutrition and Dependency

Widespread malnutrition is one of the effects of this foreign dependency. This is common around the globe. Brazil is the second largest exporter of agricultural products, but 50 percent of its population is malnourished. Although Ethiopia has one of the largest populations of cattle in Africa, much of the population suffers from malnutrition and the government continues to export large numbers of cattle to the Middle East. Even during the peak of the infamous 1985 famine, the government was sending dried meat to Egypt.

Through unequal economic relations with wealthy countries in the form of continued debts and foreign trade, poor countries continue to be dependent and unable to tap into their full potential for development.

Map of Empires and Colonies: 1800: By the end of the 19th century, most of the Americas were under the control of European colonial empires. At present, much of South and Central America is still economically dependent on foreign nations for capital and export markets.

## World-Systems Theory

World Systems Theory posits that there is a world economic system in which some countries benefit while others are exploited.

### Learning Objectives

Produce a map of the world that shows some countries as core, peripheral, and semi-peripheral according to Wallerstein's theory

### Key Takeaways

#### Key Points

• Immanuel Wallerstein developed World Systems Theory and its three-level hierarchy: core, periphery, and semi-periphery.
• Core countries are dominant capitalist countries that exploit peripheral countries for labor and raw materials.
• Peripheral countries are dependent on core countries for capital and have underdeveloped industry.
• Semi-peripheral countries share characteristics of both core and peripheral countries.

#### Key Terms

• peripheral: Peripheral countries are dependent on core countries for capital and have underdeveloped industry.
• core: Describes dominant capitalist countries which exploit the peripheral countries for labor and raw materials.
• semi-peripheral: Countries that share characteristics of both core and periphery countries.

World Systems Theory, like dependency theory, suggests that wealthy countries benefit from other countries and exploit those countries' citizens. In contrast to dependency theory, however, this model recognizes the minimal benefits that are enjoyed by low status countries in the world system. The theory originated with sociologist Immanuel Wallerstein, who suggests that the way a country is integrated into the capitalist world system determines how economic development takes place in that country.

According to Wallerstein, the world economic system is divided into a hierarchy of three types of countries: core, semiperipheral, and peripheral. Core countries (e.g., U.S., Japan, Germany) are dominant, capitalist countries characterized by high levels of industrialization and urbanization. Core countries are capital intensive, have high wages and high technology production patterns and lower amounts of labor exploitation and coercion. Peripheral countries (e.g., most African countries and low income countries in South America) are dependent on core countries for capital and are less industrialized and urbanized. Peripheral countries are usually agrarian, have low literacy rates and lack consistent Internet access. Semi-peripheral countries (e.g., South Korea, Taiwan, Mexico, Brazil, India, Nigeria, South Africa) are less developed than core nations but more developed than peripheral nations. They are the buffer between core and peripheral countries.

Core countries own most of the world's capital and technology and have great control over world trade and economic agreements. They are also the cultural centers which attract artists and intellectuals. Peripheral countries generally provide labor and materials to core countries. Semiperipheral countries exploit peripheral countries, just as core countries exploit both semiperipheral and peripheral countries. Core countries extract raw materials with little cost. They can also set the prices for the agricultural products that peripheral countries export regardless of market prices, forcing small farmers to abandon their fields because they can't afford to pay for labor and fertilizer. The wealthy in peripheral countries benefit from the labor of poor workers and from their own economic relations with core country capitalists.

11th Century World System: In the 11th century, international production and trade was dominated by the exchange of silk, and thus countries along the silk route were the dominant participants in the "world-system. " Today, with vast communications and transportation technology, virtually every society participates in the world-system as either a source of raw materials, production, or consumption.

## State-Centered Theories

According to state-centered theories of inequality, the government should regulate the distribution of resources to protect workers.

### Learning Objectives

Compare socialist and communist state-centered theories

### Key Takeaways

#### Key Points

• Socialist and communist economic systems operate on the premise that inequality is best addressed by the state, rather than through the free-market.
• State-centered theories of inequality critique market-driven theories on the basis that capitalists embroiled in the free-market will act to increase their own wealth, exploiting the lower classes.
• State-centered theories propose that states should enact policies to prevent exploitation and promote the equal distribution of goods and wages.

#### Key Terms

• State-Centered Theories of Inequality: Theories that emphasize the role of governmental policy and economic planning in producing economic stratification. These theories assert that intentional state policies must be aimed at equitably distributing resources and opportunities.
• Market-Oriented Theories of Inequality: Economic models that assert that the capitalist free-market will naturally regulate prices and wages.

State-centered theories of inequality emphasize the role of governmental policy and economic planning in producing economic stratification. In contrast to market-oriented theories of inequality, state-centered theories do not assert that the capitalist free-market will naturally regulate prices and wages. State-centered theories assert that intentional state policies must be aimed at equitably distributing resources and opportunities.

### Socialism and Communism

Socialism and communism operate on the assumption that states can regulate (and potentially eliminate) inequality. Socialism is an economic and political system in which the state owns the majority industry, but resources are allocated based on a combination of natural rights and individual achievements. Communism operates on the principle that resources should be completely equally distributed, on the basis that every person has a natural right to food, shelter, and generally an equal share of a society's wealth. Socialism includes a combination of public and private property, while under communist systems all property is publicly held and administered by the state.

A socialist economic system would consist of an organisation of production to directly satisfy economic demands and human needs. Goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital. Accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time. Distribution of output would be based on the principle of individual contribution.

State-centered theories of inequality critique market-driven ones on the basis that capitalists embroiled in the free-market will act to increase their own wealth, exploiting the lower classes. Accordingly, these theories propose that states should enact policies to prevent exploitation and promote the equal distribution of goods and wages.

Map of Socialist States: This map of all states to declare themselves officially socialist at some point in history illustrates the spread of state-centered theories of inequality.

## Evaluating Global Theories of Inequality

Social theorists think differently about global inequality based on their sociological perspective.

### Learning Objectives

Differentiate between the positions on social inequality taken by functionalists, Marxists, modern liberalism, and social justice advocates

### Key Takeaways

#### Key Points

• Functionalists are likely to believe that inequality is beneficial to societies and is naturally regulated by market forces to foster economic growth.
• Marxists, on the other hand, are likely to see inequality as detrimental to society and to advocate government regulation of the means of production and distribution of property.
• In modern liberal societies, individuals tend to value human rights according to the idea that all people are born with equal value.
• Social justice advocates generally argue that inequality is unfair, as it leaves some individuals with greater life chances and higher standards of living than others regardless of individual worth or merit.

#### Key Terms

• State-Oriented Approach: A strategy for reducing inequality in which governments instate policies to equally distribute opportunities and resources.
• Market-Oriented Approach: A perspective on inequality that asserts that a free market will result in prices that benefit the smooth functioning and growth of economies.
• Functionalist Approach: An approach that asserts that global inequality is not a problem at all, but rather benefits society as it produces an incentive structure to motivate highly capable individuals to pursue positions of power.

There is significant debate among sociologists, other social scientists, and policy makers over the best approach to global inequality. Some theorists who embrace a functionalist approach assert that global inequality is not a problem at all, but rather benefits society as it produces an incentive structure to motivate highly capable individuals to pursue positions of power. Functionalists are likely to embrace market-oriented approaches to inequality, on the basis that a free market will result in prices that benefit the smooth-functioning and growth of economies. Marxists, by contrast, see global inequality as indicative of exploitation and consider it a detriment to society. These thinkers are likely to support state -oriented approaches to regulating inequality, with governments instating policies to equally distribute opportunities and resources. Interactionists recognize global inequality, but consider it only in the context of individual relations and, therefore, see no role for state intervention.

Whatever sociological theory one adopts to explain the existence of inequality, not all theorists consider inequality to be a problem that needs correction. The idea that all members of a society should be equal is often associated with modern liberalism. In modern liberal societies, individuals tend to value human rights according to the idea that all people are born with equal value. The logic of human rights does not necessarily imply that all people should achieve equal status, but it does assume that all should have equal opportunities to advance, or Weberian life chances. Those who evaluate global inequality and consider it to violate human rights may advocate for solutions to inequality using the language of social justice. Social justice advocates generally argue that inequality is unfair, as it leaves some individuals with greater life chances and higher standards of living than others, regardless of individual worth or merit.

Occupy Wall Street: Protestors at Occupy Wall Street adhere to the position that income inequality is a detriment to society. By protesting the financial institutions that provide capital to economic enterprises, "occupiers" suggest that the market-driven approach to inequality, embraced by financiers, has not resulted in a fair and equitable economic order.