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216 CHAPTER 7 Global Stratification

nations. But even taken together, these theories yield only part of the picture. None of
these theories, for example, would have led anyone to expect that after World War II,
Japan would become an economic powerhouse: Japan had a religion that stressed
fatalism, two of its major cities had been destroyed by atomic bombs, and it had been
stripped of its colonies.
Each theory, then, yields but a partial explanation, and the grand theorist who will
put the many pieces of this puzzle together has yet to appear.

Maintaining Global Stratification
Know how neocolonialism,
7.8
multinational corporations, and
Regardless of how the world’s nations became stratified, why do countries remain rich—
technology help to maintain global
or poor—year after year? Let’s look at two explanations of how global stratification is
stratification.
maintained.
Neocolonialism
Read on MySocLab
Document: Citizenship and Sociologist Michael Harrington (1977) argued that when colonialism fell out of style, it
Inequality: Historical and Global was replaced by neocolonialism. When World War II changed public sentiment about
Perspectives sending soldiers to conquer weaker countries and colonists to exploit them, the Most
Industrialized Nations turned to the international markets as a way of controlling the
Least Industrialized Nations. By selling them goods on credit—especially weapons that
the local elites desire so they can keep themselves in power—the Most Industrialized
Nations entrap the poor nations within a circle of debt.
As many of us learn the hard way, owing a large debt puts us at the mercy of our
creditors. So it is with neocolonialism. The policy of selling weapons and other manu-
factured goods to the Least Industrialized Nations on credit turns those countries into
eternal debtors. The capital they need to develop their own industries goes instead as
payments toward the debt, which becomes bloated with mounting interest. Keeping
these nations in debt forces them to submit to trading terms dictated by the neocolo-
nialists (Carrington 1993; Smith 2001).

Relevance Today. Neocolonialism might seem remote from your life, but its heritage
affects you directly. Consider the oil-rich Middle Eastern countries, our two wars in the
Persian Gulf, and the terrorism that emanates from this region (Strategic Energy Policy
2001; Mouawad 2007). Although this is an area of ancient civilizations, the countries
themselves are recent. Great Britain created Saudi Arabia, drawing its boundaries and
even naming the country after the man (Ibn Saud) whom British officials picked to lead
it. This created a debt for the Saudi family. For decades, this family repaid the debt by
providing low-cost oil, which the Most Industrialized Nations need to maintain their
way of life. When other nations pumped less oil—no matter the cause, whether revolu-
tion or an attempt to raise prices—the Saudis helped keep prices low by making up the
shortfall. In return, the United States (and other nations) overlooked the human rights
violations of the Saudi royal family, keeping them in power by selling them the latest
weapons. This mutually sycophantic arrangement continues.
Multinational Corporations
Multinational corporations, companies that operate across many national boundar-
ies, also help to maintain the global dominance of the Most Industrialized Nations.
neocolonialism the economic In some cases, multinational corporations exploit the Least Industrialized Nations
and political dominance of the directly. A prime example is the United Fruit Company, a U.S. corporation that used
Most Industrialized Nations over to run Central American nations as its own fiefdoms. The CIA would plot and over-
the Least Industrialized Nations throw elected, but uncooperative, governments (CIA 2003), and an occasional inva-
multinational corporations sion by Marines would remind area politicians of the military power that backed U.S.
companies that operate across corporations.
national boundaries; also called Most commonly, however, it is simply by doing business that multinational corpora-
transnational corporations
tions help to maintain international stratification. A single multinational corporation may