Question

Wallerstein and Meyer are debating the reasons for contemporary global economic inequality. Who are Wallerstein and Meyer? What is global economic inequality? Why is it important? How do the respective theorists explain global inequality? Which theorist do you agree with most? Why?

Answer 1

Immanuel Maurice Wallerstein is an American sociologist, historical social scientist, and world-systems analyst, arguably best known for his development of the general approach in sociology which led to the emergence of his world-systems approach.

John Wilfred Meyer is a sociologist and emeritus professor at Stanford University, located in Palo Alto, California. Beginning in the 1970s and continuing to the present day, Meyer has contributed fundamental ideas to the field of sociology, especially in the areas of education, organizations, and global and transnational sociology. He is best known for the development of the neo-institutional perspective on globalization, known as world society or World Polity Theory. In 2015, he became the recipient of American Sociological Association's highest honor - W.E.B. Du Bois Career of Distinguished Scholarship Award.

Economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. Economic inequality sometimes refers to income inequality, wealth inequality, or the wealth gap. Economists generally focus on economic disparity in three metrics: wealth, income, and consumption. The issue of economic inequality is relevant to notions of equity, equality of outcome, and equality of opportunity.

Economic inequality varies between societies, historical periods, economic structures and systems. The term can refer to cross-sectional distribution of income or wealth at any particular period, or to changes of income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality. A widely used index is the Gini coefficient, but there are also many other methods.

Research suggests that greater inequality hinders long term growth. Whereas globalization has reduced global inequality (between nations), it has increased inequality within nations.

Global inequality involves the concentration of resources in certain nations, significantly affecting the opportunities of individuals in poorer and less powerful countries. But before we delve into the complexities of global inequality, let us consider how the three major sociological perspectives might contribute to our understanding of it.

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

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.

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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.