The Impact of Global Capitalism on Social Stratification

This essay delves into the complexities of social stratification as shaped by global capitalism. It defines social stratification as the hierarchical ordering of individuals within a society, primarily based on socioeconomic status in Western contexts. The paper examines the characteristics of global capitalism, including globalized production, flexible labor relations, a global financial system, and the emergence of a transnational capitalist class. It explores the concept of exploitation in third-world countries through unfair trade practices, tax burdens, and the dominance of multinational corporations. The essay further investigates the notion of a 'war of wages,' analyzing how income distribution favors capital over labor, leading to widening inequalities and the exploitation of workers. The research employs qualitative techniques to analyze secondary data, investigating the impact of capitalism on global inequality, exploitation, and poverty, and concludes that global capitalism places significant pressure on developing countries, exacerbating social stratification and hindering the progress of smaller firms.

Running head: SOCIAL STRATIFICATION
SOCIAL STRATIFICATION
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1SOCIAL STRATIFICATION
Part one: Introduction
Social stratification can be defined as the way people in society are ranked or ordered.
Stratification can be done on the basis of individual’s sex, age or any personal characteristic
(House et al. 21). The western societies primarily see and understand stratification as a result of
socio-economic status. Social stratification produces a hierarchy that gives access to possessions,
resources and social strata. Sociologists are often found using the term in order to refer to social
authorities. It is vividly visible that in society people in the higher hierarchy have greater access
to resources and power. Capitalism is an economic system that gives the ability to control trade
and industry to private companies. In the 21st century, the current epoch of capitalism is global
capitalism. The fact that makes global capitalism different from the earlier concept of capitalism
is that it has crossed the national borders and the power of the private companies have reached a
global perspective. The aim of the paper is to discuss the ways global capitalism form a social
stratification and the way it is based on the stratification system. The paper discusses the concept
of global capitalism followed by research questions that would be in relation to the main topic.
In a capitalist system, private individuals and cooperation are the owners of the means of
production including factories, raw materials, and natural resources (Burkett 195). Income
generated by these owners which is the wealth they make is again invested in order to create
more wealth. The main aim of the capitalists is to make more and more profit (Piketty and
Zucman 1260). Under capitalism, a highly competitive market includes other owners, it is the
pursuit of growth and profit that helps to maintain the price from rising too high. The other
important factor in the capitalist society is the workers. Workers sell their labour to the capitalists
for wages. This makes the labour as a commodity that can be bought or sold and capitalists, in
order to gain more profit, will try to get cheaper labour.

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In the global form, every aspect of the company including production, accumulation,
class relations and governance reorganised itself from the nation to a globally integrated way that
involves freedom and flexibility (Piketty 52).
Global capitalism has the following characteristics:
 The production of goods is from a global perspective.
 Labour and capital relationship is of global scope which is highly flexible unlike the past
epoch
 The financial system is operates on a global level (Borio 186)
 The emergence of a transnational class of capitalist who is the maker of the policies and
practices of global production, finance and trade.
 Variety of institution together creates the global production, business and finance.
Due to freed cooperation from the nation it is highly developed countries such as
environmental regulations, labour laws and corporate taxes the new phase of capitalism has
become capable of obtaining unprecedented levels of wealth and expanded power in society
(Peck and Zhang 386).

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It is already discussed how the capitalist society is based on two sections, the capitalists
and the workers. Social stratification is the division of society, and in a capitalist society, the
society is divided into two groups according to hierarchy (Tonnies and Loomis 360). It is not the
only the division into two groups but also the hierarchy of the group determines their access to
power and resources. There are inequalities between the two groups. Considering the capitalist
society the division of the society was prominent, the capitalist and the workers (Boston 23). In
global capitalism, the concepts are different leading to a separate division of groups. In the
global context, the stratification is based on the socioeconomic status as well. Due to a diverse
population, the resources are divided unequally making the rich countries richer and the poor
counties poorer. There is a rising inequality among the nations. In the following questions below,
the social issue is explored more elaborately.
Research question:
Open-ended Research Question:
How the capitalist exploit the third world counties?
The issue of global inequality is one of the significant problems in the world. The wealth
of the world is found only driven toward the wealthier populations only. The financial inequality
among different countries around the globe and various people is becoming a worldwide
problem.
Global wealth distribution has never been topic of discussion until recently. Therefore, in
recent days the reasons for global inequality has been studied not only on a domestic level but
international level as well (Piketty and Saez 842). With the rise in globalisation and industries
spreading across borders the wealth is bound to move, shift and transfer from one place to

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another. The world has become more integrated, and the global dimension of inequality has
become increasingly relevant. The two main reasons for the global disparity are a more
significant movement of factors of production across the international boundaries and more
significant influence of other people’s standard of living and the way one perceive income
position as well as aspiration (Skocpol 433).
There are a few ways the capitalist society exploit the countries which are in the lower
section of social stratification. Wealthy nations have a considerable role to play. According to the
capitalist countries who are the main controller of the market tend to spread false notions of
medicines that are not required. Not everyone is keen on medications however due to these
notions people are forced to think themselves the consumer of these medicines. Taxes are
another way the capitalist countries remain to maintain their high economic status on the globe.
The third world countries pay an enormous amount of charge to the developed countries. It is
found that nearly half of the country’s money that is invested in the developing countries are put
into a tax. The tax avoidance if adopted by the third world countries will result in three times the
states get as help. The cost of running a clinical trial in the United States is up to 20times higher
in the capitalist countries than the countries belonging to the third world. Although several non-
profit organisations are organizing for low cost medical test free of cost, there are still different
stories that make the developing countries pay a big amount for these tests. Another way the
capitalist countries make money is by opening multinational fast food companies. These are the
food companies that are not functional in their own home country however they make notions
which make the food the most wanted fast food. Also, not the forget the most profitable way
capitalist make money is by hiring professionals from the third world countries. In order to make

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extra money, the third world citizens fly to the foreign countries however they are not paid as per
their talent, capability and their colleagues.
How capitalism is a war of wages?
The income distribution is certainly not based on equality. The real wage is said to be
staggering since last three decades. The income that is shared is only going to the capital and it is
rising to a much higher rate than what is expected. The high income earners are making most of
it whereas the low income group is only becoming poorer. This is making the social stratification
in the society. This is the change that is occurring and it is occurring at a great speed. The
laborers are exploited. Three economic relationships demonstrate what the real circumstance of
the wages is. Firstly, the situation was different when productivity grew and wages grew along
with it. Second, the situation was changed. When profits rose, wages rose. In the present, the
situation is totally different. The situation that is present now is that wages do not budge. Third,
it used to be that when employment rose, average wages did so too. The average wage now can
fall any moment since the new jobs pay less. It is hard for the people in the precariat work. They
are the one facing slim prospects of escaping from a life with economic insecurity. The longer
this system remains the longer danger arises. The only way of getting out of this issue is to create
a new form of income distribution. This income distribution should be according to 21st century.
Close-ended Research Question:
Do you know the percentage of world lives in poverty?
Yes. Over three billion people live on less than $2.50 a day. This when interpreted, mean
almost 80 per cent of the world’s population lives in countries where income differentials are
widening (Shah)

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Part Three: Research Method
Research method:
A research method can be defined as a strategy that would be used by the researchers.
The researcher implement the strategy to carry out the plan. Depending on the research goal
research method is chosen (Neuman 416). In this particular paper there would be three research
methods used in order to find the answers of the research questions.
The research method that would be used to find the first research question, ‘How the
capitalist exploit the third world counties?’ is mentioned below:
The research method for this question would encompass qualitative techniques. The data
collection method would be based on secondary data. The design of the research would be
exploratory as it seeks the answer of the ways capitalists exploit the third world countries.
The research method that would be used to find the first research question, ‘How
capitalism is a war of wages?’ is mentioned below:
The research method for this question would encompass qualitative techniques. The data
collection method would be based on secondary data. The design of the research would be
exploratory as it seeks the answer of the ways capitalism is a war of wages.
The research method that would be used to find the first research question, ‘What is the
percentage of world lives in poverty’ is mentioned below:
The research method for this question would encompass quantitative techniques. The data
collection method would be based on secondary data.

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Conclusion:
Capitalism is a monetary system that gives the ability to control trade and industry to
private companies. In this contemporary era, it is hard to stop industries from expanding. Any
industry that is capable of making the profit will intend to make the profit only as it is the nature
of capitalism. By the above discussion, there are some of the things that can be concluded.
Global capitalism has put unwelcome pressure on developing countries. It is only the wealthier
companies that are making progress as the small firms do not have the capital to invest in
modern technology. Therefore, these small scales or middle scale firms fails to achieve the
higher positions in the social stratification that are occupied by the global capitalists.

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