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SOCIAL STRATIFICATION
HAROLD R. KERBO
California Polytechnic State University, San Luis Obispo
S
ince the earliest-known writings on the nature of
human societies, there has been recognition that
social stratification is a central part of all human
organization (Lenski 1966). In his Politics, in 350 BCE,
Aristotle wrote of the natural ranking of free people and
slaves. More recently, during the Age of Enlightenment,
philosophers such as Locke, Rousseau, and Montesquieu
wrote of the feudal system of social stratification and its
inequities (Zeitlin 1968; Strasser 1976). By the mid-1800s,
the classic sociological theorists such as Marx, Durkheim,
and Weber began more systematic analyses of system of
social stratification using concepts that remain with us to
this day.
From the root word strata, we can recognize that social
stratification refers to a ranking of people or groups of
people within a society. But the term was defined by the
earliest sociologists as something more than the almost
universal inequalities that exist in all but the least complex
of societies. Social stratification refers to a system with
rather predictable rules behind the ranking of individuals
and groups, which theories of social stratification are
meant to uncover and understand. The existence of a
system of social stratification also implies some form of
legitimation of the ranking of people and the unequal distribution
of valued goods, services, and prestige. Without
belief systems justifying the inequality and unequal ranking,
it is unlikely that a stratification system would remain
stable over time. Beyond agreement on a definition of
social stratification, however, the classic sociological theorists
agreed on little else. From this classic period of sociology,
we have, in fact, a triple legacy of social
stratification theories from the works of Karl Marx, Émile
Durkheim, and Max Weber.
More than anyone, it was Karl Marx who attempted a
more or less comprehensive theory of social stratification.
Along with Engels, in 1848, Marx began one of the world’s
most famous political writings on the subject, The
Communist Manifesto (Marx and Engels 1964), by writing,
The history of all hitherto existing society is the history of
class struggles. Free man and slave, patrician and plebeian,
lord and serf, guild-master and journeyman, in a word,
oppressor and oppressed, stood in constant opposition to one
another, carried on an uninterrupted, now hidden, now open
fight, a fight that each time ended, either in a revolutionary
reconstitution of society at large, or in the common ruin of the
contending classes. (P. 5)
But when Marx was finally about to undertake a more
detailed and systematic discussion of class at the end of the
third volume of Capital, he died (see Dahrendorf 1959:8).
Although Marx referred to several different classes or class
segments throughout history, he clearly saw the ownership
of property as the basis of class divisions. In preindustrial
agricultural societies, the primary division was between
the landowners, or landed aristocracy, and those who
owned no land, peasants and serfs. In capitalist industrial
societies, the primary division was between the owners of
industrial capital and the working class, or proletariat. It
was this exclusively economic definition of class—that is,
owners versus nonowners—that allowed Marx to conclude
that the elimination of private property in any future communist
nation would eliminate extensive inequality and
even social stratification itself.
In strict contrast to a Marxian theory of social stratification
are functional theories of social stratification. In tracing
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the development of functional theory, most historians of
social thought draw a direct line from Saint-Simon and
Auguste Comte, through Durkheim, to modern functional
theorists such as Talcott Parsons (see Gouldner 1970;
Giddens 1973; Strasser 1976). More than anyone else,
though, it was Durkheim who established this general perspective,
though interestingly he had little to say about
social stratification specifically. This is somewhat understandable
when considering that Durkheim’s holistic
perspective focused on how parts and processes within
societies work for the good of the whole. Divisions between
people within societies were given little recognition.
Durkheim, however, did make brief mention of inequalities
within societies. He saw two types, what he called
external inequality and internal inequality. As he described
them in The Division of Labor, external inequalities are
those imposed on the individual by the social circumstances
of birth, in other words, ascribed status. It was in
mechanical solidarity, or preindustrial societies, that these
external inequalities predominated. In industrial society,
on the other hand, there was a need for internal inequality:
“All external inequalities compromise organic solidarity”
(Durkheim 1964:371)—that is, threaten social order and
the proper functioning of the division of labor in industrial
societies. Internal inequalities were seen as inequalities
based on individual talent, or achieved status. For the
proper functioning of the industrial system, Durkheim
implied that the people with the proper talents must be
allowed to move into positions for which their talents are
best suited.
What Durkheim anticipated was a meritocracy based on
equality of opportunity. Inequality would be there, but he
believed an inequality based on merit was needed. And
although Durkheim’s ideas paralleled somewhat those of
many modern functionalists, given his overriding concern
with solidarity and moral integration in society, his stress
was different. The dominance of internal over external
inequality, he believed, was most important for the maintenance
of social solidarity. If external inequalities were
forced on individuals, “constraint alone, more or less violent
and more or less direct, binds them to their functions;
in consequence, only an imperfect and troubled solidarity
is possible” (see Lukes 1973:175). Thus, in contrast to
Davis and Moore (1945), Durkheim was more concerned
with moral integration and cooperation than he was with
the efficient staffing of “important” positions in industrial
society.
Soon after Marx’s death, sociologist Max Weber took
issue with Marx’s unidimensional view of social stratification
in writings often referred to as a debate with Marx’s
ghost. Weber recognized that humans have always been
divided by not only economic ownership but also occupational
skills, status, and organizational power or class, status,
and power/party (see Gerth and Mills 1946:181–94).
In a sense, Weber recognized two forms of economic divisions
under the term class—divisions based on ownership
as well as divisions based on occupational skills (or one’s
relation to the marketplace). Weber then recognized that
people could be divided over honor, status, or prestige with
respect to a strongly held value system (particularly one
based on religion) and political or organizational power. It
was this power/party dimension that Weber believed would
be increasingly important in modern industrial societies,
especially because of the necessity of political and corporate
bureaucracies and organizations (such as labor
unions), which challenge those in higher ranks in these
bureaucracies.
Max Weber’s multidimensional view of social stratification
became the most accepted perspective among
twentieth-century sociologists. Among other things,
Weber’s more complex view of social stratification allow
sociologists to explain the rapidly growing middle class, as
more occupations emerged between the owners of capital
and the unskilled working class. Equally important,
Weber’s multidimensional view of social stratification
could explain why social stratification and inequality did
not go away in twentieth-century societies that called
themselves communist. As Weber predicted, when one
dimension of social stratification is minimized, such as private
ownership of property, another dimension would come
to be more important. In communist societies, this was the
dimension of power and control over state bureaucracies.
A HISTORY OF SOCIAL
STRATIFICATION IN AMERICAN
VERSUS EUROPEAN SOCIOLOGY
Although today most American sociologists consider
social stratification as one of the most important areas of
study, this has not always been the case. In fact, the importance
of this subject in understanding societies and human
behavior has been widely recognized by American sociologists
only in the past 50 years. The contrast to European
social thought is clear. Sociology as a separate discipline
of study in the United States dates back only to the early
1900s. But in the works of the founders of American sociology
(e.g., William Graham Sumner, Albion Small, and
Edward Ross), we find a rather classless view of American
society (Gordon 1963; Page 1969; Pease, Form, and Huber
1970). The relative neglect of social stratification is not
surprising, however. Unlike in European societies, the old
rigid class and estate inequalities were less in evidence.
The value system stressed equality of opportunity for all,
and at least an appearance of opportunity and democracy
was in greater evidence. Not until the Great Depression of
the 1930s was this classless image seriously reexamined,
and then only by a few American social scientists. Even
then, many years passed before the study of social stratification
was able to make a significant break with American
classless mythology.
The first detailed American study in social stratification
appeared in 1929 with Robert and Helen Lynd’s (1929)
Middletown, followed later by Middletown in Transition
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(1937). This first work was to establish a long tradition of
stratification studies of small community life in the United
States. But the general conflict perspective of this study
was only much later a part of this tradition. The Lynds’
focus was on power and economic inequalities, and the
overpowering image of equality of opportunity in
American society was exposed as a myth (see Gordon
1963:66). With the end of the Great Depression, their view
of American society was placed on the shelf and all but
forgotten for three decades.
Of the social stratification research stimulated by the
Great Depression, Lloyd Warner’s work (in the 1930s and
1940s) had the most significant impact, at least for the next
20 to 30 years. Like the Lynds’ research, Warner’s manyvolume
Yankee City study was centered on social stratification
in small communities (Warner and Lunt 1941, 1942;
Warner and Srole 1949). Using various methods of study,
from survey research to detailed participant observation,
these works sought to examine the extent of inequality and
social mobility, as well as the meaning of social stratification
for the people involved. But the Warner School differed
from the Lynd tradition in three ways. Most
important, the Warner School came to define social stratification
in terms of status (Weber’s second dimension of
social stratification). As Warner and Lunt (1941) wrote,
“By class is meant two or more orders of people who are
believed to be, and are accordingly ranked by the members
of the community, in superior and inferior positions”
(p. 82). With such a view, inequalities of economics and
power were easily ignored, and the dynamics of conflict
related to these stratification dimensions were dismissed.
Second, the Warner School failed to examine the actual
extent of equality of opportunity critically. In the face of
contrary experience highlighted by the Depression, this
research tradition continued to stress a reality of social
mobility for all who had the talent and ambition to succeed,
a finding now disputed in a reanalysis of Yankee City
(Thernstrom 1964). We find in the Warner School, therefore,
an emphasis on social stratification as functional and
necessary for complex societies like our own. The conflict,
the structured and hereditary nature of inequalities, the
harsh conditions for workers, and the extensive poverty all
too often found in the expansion of American capitalism
were all but ignored.
Despite its neglect of class and class conflict, a tradition
of stratification theory and research was at least begun.
The Warner School stimulated many students, and there
was soon a wide variety of research on subjects such as
differing class values and lifestyles, occupational prestige,
and the degree and causes of social mobility (Pease et al.
1970). One review of the early stratification literature
found at least 333 research articles and books on the
subject published between 1945 and 1953 (Pfautz 1953).
By 1954, the first American textbook on the subject was
published (Cuber and Kenkel 1954).
The break with functional theory came first with Floyd
Hunter’s (1953) study of community power, then most
dramatically with C. Wright Mills’s (1956) description of
a power elite on the national level. Before Watergate,
Vietnam, and America’s discovery of poverty and discrimination
in the 1960s, these works were ahead of their time.
There were soon new neo-Marxist theories, more empirical
research on elite power and conflict, and a greater
recognition of the long history of conflict theories of social
stratification from the European traditions.
SOCIAL STRATIFICATION
THEORY TODAY
Toward the end of the twentieth century, many theorists
began combining the insights of Marx and Weber for more
realistic explanations of social stratification. For example,
rather than accepting Marx’s view of the state as simply an
institution run by and for the capitalist class to control
others, the concept of state autonomy emerged as a means
of understanding how political elites are able to control or
regulate modern economic systems to prevent the meltdown
of capitalism predicted by Marx (see, e.g., Skocpol
1979; Skocpol and Amenta 1985).
Class Categories and the Meaning of Class
Other theorists began combining dimensions of stratification
from Marx and Weber for more sophisticated
conceptions of class categories. The most impressive of
these attempts has been Erik O. Wright’s empirical work
(Wright 1978a, 1978b, 1997; Wright et al. 1982; Wright
and Martin 1987). By following Marx’s idea that class
must be defined in relation to the productive system in
the society (i.e., by one’s relation to the means of production),
rather than simply occupational status levels, as
functionalists suggest, Wright has developed a four-class
model. With this four-class model, Wright is able to show
the usefulness of both the Marxian and the Weberian
views of class.
Defining class in relation to the productive system, we
have what Wright calls capitalists, managers, workers, and
the petty bourgeoisie. Capitalists own the means of production
(factories and banks), purchase the labor of others,
and control the labor of others. Managers merely control
the labor of others for capitalists and sell their labor to capitalists
(such as managers of corporations). Workers, of
course, have only their labor to sell to capitalists, while the
petty bourgeoisie own some small means of production but
employ very few or no workers.
Most previous empirical research in social stratification
has been done from the functional perspective. Class positions,
or, more accurately, occupational status positions,
are viewed by functionalists as skill and status rankings on
a continuum from lowest to highest. Pay, status, and education
levels are all assumed to roughly follow this continuum.
In other words, functionalists do not consider class
divisions, but rather rankings, as on a ladder. However,
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these previous functional studies have many problems. For
one, research shows no simple relation between these
occupational grades and income. Another problem is that
education level does not predict income very well (see
Jencks et al. 1972 on these problems).
Research by Wright (1978b, 1997) has produced some
interesting findings using these new class categories. With
national samples of people in the labor force, Wright’s
research found class position (the four categories
described earlier) to be about as good in explaining differences
in income between people as are occupational status
and education level. It is also interesting that capitalists
have higher incomes, even controlling for or eliminating
the effects on income from education level, occupational
skill, age, and job tenure. In other words, being a capitalist,
and especially a big capitalist, irrespective of other
factors such as education and occupational skill, brings
more income (see also Aldrich and Weiss 1981).
There are other interesting findings using Wright’s
class categories. For example, education does not on the
average help workers attain a higher income, but more
education does bring more income for the managerial
class. And, examining people within class categories,
there is not much difference between males and females,
blacks and whites on income. The male-female and
black-white overall income differences (males and
whites have higher incomes) are due primarily to class
position. That is, females and blacks have lower average
incomes because they are proportionately more often
than white males to be in the working class, as defined
by Wright.
Another recent conceptualization of class has been made
by Pierre Bourdieu, a French sociologist who came to be
respected in the United States in the 1990s. From a French
structuralist tradition, Bourdieu (1993) focused on how
meanings people have of the world are shaped or limited by
objective structures in the society. In social stratification,
Bourdieu argued that economic class positions shape the
worldviews of members of distinct class positions. Thus,
these class subcultures result in class differences in tastes,
lifestyles, and even preferences of values (Bourdieu 1984,
1996). Through differing class subcultures, people of
different classes tend to draw lines around their class
“in-group” and the “out-group” of people in other class
positions. Thus, people in higher-class positions come to
define those of lower-class positions as different and perhaps
not as capable of fitting into higher positions in the
class system. One can say that from this perspective,
“people compete about culture and they compete with it”
(Jenkins 1992:128). While there are questions about the
extent to which these class subcultures are as important in
the American mass culture context, this perspective has
contributed to our understanding of how social mobility
might be restricted or enhanced by how people in higherclass
positions (such as teachers with lower-class children)
evaluate others in terms of their knowledge of higher
culture (DiMaggio 1982; DiMaggio and Mohr 1985).
Despite the wide acceptance of these new conceptualizations
of class, there are still retractors who favor older,
more functionalist views of continuous hierarchies rather
than classes at all. Years ago, Dennis Wrong (1959, 1964)
outlined what he called realist versus nominalist definitions
of class. As Kingston’s (2000) recent attempt at
revival shows, the realist places emphasis on clear class
boundaries in people identifying themselves as members
of a particular class and interacting most with others in the
same class; in other words, forming distinct social groupings
based on class divisions. There is evidence that
Americans are less likely to think about common economic
class interests and are more likely to associate with
others on the basis of nonclass lifestyle or subcultural preferences
rather than within their own economic class
(Kingston 2000). For the nominalist, however, most important
are the common characteristics that groups of people
may have that influence their life chances and share of valued
rewards in the society, such as education level, occupational
position, or bureaucratic power position. People
are then placed in class categories in terms of these common
characteristics whether or not they are aware of these
characteristics and associate with others in the same class.
Related to this realist view of class are recent questions
about the extent to which economic class conflicts are
important enough to influence voting behavior. There is
evidence that voting in national elections is now more
likely based on moral or value issues rather than economic
class issues (LeDuc, Niemi, and Norris 1996; Evans 1999;
Clark and Lipset 2001). However, this decline in class voting
is occurring to a great extent in the United States only,
and the United States is most unique in lower-class nonvoting.
In other words, something in the United States has
led to the neglect of issues important to the less affluent
(Kerbo and Gonzalez 2003). The majority of sociologists
who continue to argue that class divisions remain powerful
argue that when the interests of the less affluent are being
ignored in the political system, this in itself suggests an
element of class conflict.
SOCIAL MOBILITY
AND STATUS ATTAINMENT
During the second half of the twentieth century, there has
been more research in the area of social mobility and status
attainment in the United States than any other area in
social stratification (Kerbo 2006a, chap. 12). Social mobility
refers to the extent of movement up and down the stratification,
while the subject of status attainment refers to
the process and factors leading individuals to movement
up or down with respect to their parents’ position. The
most detailed studies of social mobility in the United
States following the functionalist occupational categories
were conducted by Blau and Duncan (1967), and then
11 years later by Featherman and Hauser (1978). Since the
1973 data, there has been no research as comprehensive
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from a functionalist perspective, though we have smaller
studies providing updated information. Blau and Duncan’s
(1967) mobility data were collected with the help of the
U.S. Bureau of the Census in 1962, with detailed information
on the family backgrounds, educational experience,
and occupational history of over 20,000 males in
the labor force. Blau and Duncan’s study The American
Occupational Structure is considered the landmark study
of social mobility in the United States. The Featherman
and Hauser study (1978) Opportunity and Change is
designed as a replication of this landmark study, with a
similar sample of over 30,000 employed males in 1973.
Hout (1988) updated this research with new data from
1972 to 1985.
The basic conclusions of this research are that intergenerational
mobility has been rather extensive in the United
States, at least between the 1950s and 1980s. Furthermore,
there has been more upward mobility than downward
mobility, primarily because of changes in the American
occupational structure. That is, with more jobs being created
in the middle and upper-middle occupational categories
compared with lower occupational positions in this
time period, there has been more upward mobility due to
occupational changes. However, most people move only
short distances in the occupational structure, and those
toward the bottom have substantially lower rates of upward
mobility than those born toward the middle.
Unfortunately, large-scale social mobility studies of the
Blau and Duncan or Featherman and Hauser type have not
been done since the 1970s. But smaller studies indicate
that changes in the American occupational structure due to
corporate restructuring and changes in the global economy
have led to much less upward social mobility. Even during
the 1972 to 1985 time period, Hout (1988) found that the
overall rate of social mobility was slowing for the first time
in the years we have data on the subject. He also found that
while there was still more upward than downward social
mobility, upward social mobility had slowed. When we
move from indicators of intergenerational occupational
mobility to the intergenerational changes in income attainment,
all indicators suggest less upward mobility and significant
increases in downward mobility. For example, data
on income attainment between 1980 and 1995 in Europe
and the United States show that the income of the middle
class, or incomes of 25 percent above and below median
income, has shrunk by 4 percent in the United States, the
highest shrinkage of all industrial nations (Pressman
2001). In almost half of the European Union countries, in
contrast, there was in fact an increase in the percentage of
the income of middle class. In another study of income
mobility employing a sample of over 6,000 American
families, Hertz (2004) found considerable drops in upward
social mobility and increases in the inheritance of low
income over the generations. Other research has found the
rate of income mobility to drop between 1979 and 1998. In
this time period, almost 70 percent of sons remained in the
same 20th percentile income position as their fathers. At
the top 20 percent income group, however, most sons had
attained more income than their fathers, indicating only
significant upward mobility for those born toward the top
(Perrucci and Wysong 2003). And finally, other research
shows that the position of the United States has dropped
below that of Canada and several European countries with
respect to income mobility in recent decades (Solon 1992).
As noted, one of the limitations of previous research on
social mobility has been exclusive focus on occupational
status. In addition, this earlier research was primarily limited
to social mobility patterns for sons compared with
their fathers. Wright, with research using class categories
developed from both Marx and Weber, has overcome
these limitations. In particular, the capitalist ownership
category and the authority category have been completely
missed in previous studies of social mobility. Using a
large data set from the United States, Canada, Norway,
and Sweden, Wright found that the capitalist property
boundary is the least permeable, while the authority
boundary is the most permeable in all four countries
(Western and Wright 1994; Wright 1997:169–201). In
other words, there is more intergenerational mobility into
higher positions of authority than mobility into the category
of capitalist property ownership. This is especially so
for the United States (and to some extent Canada), which
in many ways is the most capitalist of all the industrial
societies, has more inequality based on the ownership of
property, and has more power in the hands of capitalists
and the corporate class than other industrial nations
(Wright 1997:186–90).
In this research, they also investigated the expertise
category, which we can generally call a category of professionals
and technical experts. The likelihood of moving
into this expertise category was mixed in the four
countries, but generally between the capitalist property
category and authority category in permeability. Thus,
given the importance of wealth in the United States, and
given that there are different chances of mobility into the
capitalist (or owner) class than into a higher occupational
position (occupational skill level and expertise category)
and authority positions, it is here that we find the old studies
of social mobility focused only on occupational status.
In an interesting addition to this research, Wright also
examined cross-friendship patterns in these four countries
with respect to these class categories (Wright and Cho
1992; Wright 1997:203–22). As expected, fewer people
from outside the capitalist property boundary had friendship
ties to people in this capitalist class category compared
with friendship ties across the other class categories.
In other words, it is harder to break into the capitalist class
and even more difficult to form friendship ties with people
in this class if the person is not already in it.
Another issue of comparative mobility rates can now
be addressed that was impossible to address before the
Erikson and Goldthorpe (1992) study and Wright’s
(1997) class categories research on comparative rates of
social mobility for women. If the family unit of women is
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considered (thus the position of the husband entered into
the measure), what is most significant “is the evidence of
how little women’s experience of class mobility differs
from that of men” (Erikson and Goldthorpe 1992:275).
On the other hand, when the occupations of women are
considered, there is more social mobility compared with
men, but much of it is downward to manual employment.
Women tend to experience more limited prospects of
moving into top positions in the society, even when born
into families at or close to the top of the occupational
structure.
Wright (1997) has found some differences in the social
mobility patterns for women across countries. For
example, higher-authority positions are slightly less difficult
for women to attain in the United States compared
with Europe (Wright 1997:192). Recent research in the
United States on women engineers has also suggested that
the “glass-ceiling” effect for American women may be
becoming less of a problem for younger women (Morgan
1998).
Finally, another issue of comparative mobility rates can
be made clear with the studies of Erikson and Goldthorpe
(1992) and Wright (1997). The United States has the reputation
of being the land of opportunity among many people
in the world. These studies, however, indicate that the
United States is only about average with respect to its rate
of circulation mobility, or equality of opportunity in general.
In fact, none of the advanced capitalist societies are
radically different with respect to their overall rates of circulation
mobility. But in some places in the stratification
system, especially toward the bottom, the chances of
moving up are below average in the United States.
RECENT TRENDS IN SOCIAL
STRATIFICATION AND
STRATIFICATION RESEARCH
In terms of the specific subjects researched in the second
half of the twentieth century, a content analysis of the five
leading sociology journals in the United States showed
that more than half of the published research in the general
area of social stratification focused on some aspect of
social mobility (Kerbo 1981, 2006a, chap. 12). In the last
couple of decades of the twentieth century to the present,
there is a shift toward more research on race, ethnic, and
gender inequalities. But there remains a kind of ambivalent
relationship between the field of social stratification
and these areas of research. Are theory and research on
race, ethnic, and gender inequalities to be considered subareas
of social stratification, or are they to be considered
subareas of sociology in their own right? The trend seems
to be toward the latter as more and more of the research
and theory seem less connected to broader theories of
social stratification. There are, however, other recent
trends in research and theory on social stratification in
recent decades.
Historical and Comparative Research
Within sociology more generally, there has been a clear
trend toward more historical and comparative research,
especially in American sociology. As many have observed,
since the early days of American sociology there was less
interest in research that compared different societies on the
same issue, or even research focused on historical trends
within the United States. The research methodologies and
interests of the classic European sociologists seemed to
fade quickly as the young discipline was transported to the
United States (Gouldner 1970). Perhaps globalization has
had its impact on American sociologists, but new research
methods requiring fewer cases and allowing for time
series analysis no doubt helped bring about this new
research trend.
Despite the value of more historical and comparative
research, most of this research has been quantitative and
less sensitive to the qualitative differences that exist across
societies thereby making indicators and measures of key
variables misleading. For example, when comparing rates
of social mobility across a sample from modern industrial
societies, the issue is whether social mobility up and down
a standard ranking of occupations is equally important in
all societies. It is known that there is a strong correlation
between how people in different countries rank occupations
in terms of status (Treiman 1977). But there are certainly
other dimensions to status or economic ranking that
differ cross-culturally. In Japan, being an electrician or a
manager for Toyota or Sony brings much more status and
long-term rewards than holding similar positions in small
companies (Kerbo and McKinstry 1995). There has
recently been more qualitative historical-comparative
research that can counter these problems in the quantitative
historical-comparative research, which will likely expand
in coming years.
Modern World-Systems Theory and Research
Over the last couple of decades, it has become clear that
one of the most important new theories related to social
stratification comes under the general title of the modern
world-systems theory. It is now evident that no clear
understanding of social stratification in the United States
or any other country can be achieved without reference to
the affects of the modern world system. The growing
income inequality in the United States, the growing class
conflict in Europe over changes in class relations and
rewards, the Asian economic crisis beginning in 1997 (earlier
for Japan), to name just a few topics, must be considered
in relation to changes in the modern world system. We
must also include major world events, such as colonialism,
World War I, World War II, and the Cold War, along with
all the events and conditions these world-shaping events
caused, as related to changes in the modern world system.
In brief, from the works of Wallerstein (1974, 1977,
1980, 1989, 1999), Frank (1969, 1975, 1978, 1998),
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Bornschier (1995), Chase-Dunn (1989), and Chirot
(1986), modern world-systems theory considers nations to
be ranked in ways similar to the international system of
social stratification. From about 1500 AD, when the new
modern world system began, nations have been in competition
with each other for dominance over other nations,
especially with respect to economic domination. Core
nations are the richer nations on top of the modern world
system, with semiperiphery and periphery nations in lower
ranks in this system, much like middle class, working
class, and the poor in an internal stratification system.
Throughout this period of core nation competition and
conflict, aspects of a country’s political economy, including
its system of social stratification, have had negative or
positive affects on the country’s ability to maintain or
improve its ranking in the world of nations. Conversely,
this modern world system has had effects on domestic
political economies and systems of social stratification in
both rich and poor countries.
THE GREAT U-TURN
Another new topic of comparative-historical research in
social stratification shows the importance of the modern
world system in understanding domestic trends in social
stratification. Earlier research had established that as
nations become more economically developed, there was
a clear long-term trend toward reduced income inequality
(Jackman 1975; Harrison and Bluestone 1988). New
research, however, has shown a clear trend toward increasing
inequality in the most advanced and richest nations in
the world, especially in the United States (Alderson and
Nielsen 2002). Other research has recently shown that government
policies can strongly affect the level of income
inequality and poverty in advanced industrial nations. The
questions become, Why is income inequality increasing in
several advanced industrial nations (most extensively in
the United States), and why have not more governments
attempted to reduce income inequality and poverty?
Modern world-systems theory suggests two related
explanations (Kerbo 2006a, 2006b). First, the greater ability
of corporations to move across the world more freely
has brought many workers in advanced industrial nations
in more direct competition with low-wage labor in less
affluent countries. Where the working class has less political
influence in rich nations, these workers have their
standards of living eroded. Second, in advanced industrial
societies where workers have less protection, corporations
from these countries are in a stronger position to compete
successfully for greater profits in the global economy.
While the incomes, benefits, and job security of workers in
countries with stronger traditions of working-class political
action are more protected in the short term, a history of
core competition in the modern world system suggests that
the competitive position of their corporations in the global
economy may be eroded, and thus their standards of living
may be reduced in the future. But this outcome is far from
certain because, as German unions and many German
executives argue, more job security and employee influence
within the company will give German and other
European corporations a long-term advantage in global
competition (Thelen 1991; Turner 1991; Kerbo and
Strasser 2000).
RESEARCH ON POVERTY
One of the biggest contrasts between sociological research
in the 1960s and 1970s compared with the present has been
a lack of research on domestic poverty in recent years. The
reason is rather obvious; the Great Society Programs of the
1960s generated more interest and funding for research on
American poverty in these years. There is evidence of new
interest and research on American poverty, however, with
several recent books with 1960s-style titles and tables of
contents recently published (e.g., Danziger and Haveman
2001; Iceland 2003; Rank 2004). Ironically, with this new
interest in American poverty, under the American administration
of the early 2000s, there has been less research support
and even less data, as shown in the 2004Annual Census
Bureau report, which combined the previously separate census
reports on income and poverty into one report that left
out much of the information about poverty that has been
provided for many years (U.S. Bureau of the Census 2004).
The reemergence of interest in American poverty is
likely related to the continued growth of inequality in the
United States as well as the fact that poverty was reduced
only slightly and temporarily with the longest economic
boom in American history between 1991 and 2001. New
data also show that the poor are poorer in the United States
than in previous years as measured by how many are below
50 percent of the poverty line, and the percentage of poor
people in families with a full-time worker has been
increasing steadily in the last two decades (Kerbo 2006a,
chap. 9).
The new interest in comparative research in social stratification
has also been evident in research on poverty in
rich nations. Not surprisingly, comparative research has
shown less government action to reduce poverty in the
United Sates than other rich nations, with U.S. government
programs reducing American poverty by about 28 percent
of what it otherwise would be compared with reductions of
50 to 80 percent in the original 15 European Union nations
(Smeeding 1997; Mishel, Bernstein, and Schmitt
1999:377; Smeeding, Rainwater, and Burtless 2001).
There is something of a surprise in this area of research,
however. Previous comparative studies of poverty in rich
nations had to use spotty data on absolute poverty rates
compared with relative poverty rates. Absolute poverty
rates are measured using a poverty line that estimates the
actual costs of basic necessities. Relative poverty rates are
set at 50 percent of median income in each nation. With
the United States having the highest rates of income
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inequality, the finding of higher rates of relative poverty in
the United States is hardly surprising. Now, although, the
new Purchasing Power Parity (PPP) measures of income
across nations has provided a new tool. The measures for
PPP are set at what U.S. dollars would buy and then adjustments
are made for real currency when comparing incomes
across nations. The current U.S. poverty line is set at about
$11 per day using PPP. Thus, we now have figures for
many more countries on a poverty line also set for $11
per day in these other countries. The surprise is that about
13 percent of the American population lives below $11 per
day (about the figure below the poverty line estimated by
the U.S. Census Bureau), while the figures from Great
Britain is 15.7 percent and Australia is 17.6 percent
(Smeeding et al. 2001). Absolute poverty rates for other
rich countries range from 9 to 4 percent of the population.
There has also been increased interest in global inequality
and poverty in recent years, no doubt stimulated by
figures showing that world inequality has been at unprecedented
levels in recent decades (Kerbo 2006a, chap. 17,
2006b), and growing protest since the 1999 World Trade
Organization protests in Seattle. New PPP measures have
provided new perspectives on world poverty, especially
with findings that about 1.3 billion people live on less than
$1 per day and almost half the world’s population lives on
less than $2 per day (World Bank 2000).
The belief among antiglobalization protestors has been
partly supported by research from the modern worldsystems
perspective. One of the most important research
questions has been whether poor countries have more or
less long-term economic growth when they become extensively
tied to multinational corporations from rich nations.
While there is certainly variability among periphery
nations, especially in Asia, several early studies indicated
that many periphery nations do have less long-term economic
growth when overly dominated by outside multinational
corporations (Chase-Dunn 1975, 1989; Bornschier,
Chase-Dunn, and Rubinson 1978; Snyder and Kick 1979;
Stokes and Jaffee 1982; Nolan 1983; Bornschier and
Chase-Dunn 1985). Poor nations that receive extensive
multinational corporate investments, of course, tend to
have some economic growth in the short term. But the
longer-term prospects for growth (over five years or more)
are in many cases actually harmed by the kinds of outside
aid and investment these nations have received. This
research has also indicated that outside corporate investment
increases income inequality within poorer nations.
As noted above, the historical pattern for rich nations until
recently has been one of reduced income inequality as economic
development proceeds (Jackman 1975; Hewitt
1977; Stack 1978a, 1978b; Weede 1980). In the case of
poor nations, however, the rich tend to get richer while the
poor are either poorer or no better off (Chase-Dunn 1975;
Rubinson 1976; Bornschier et al. 1978; Stack 1978b;
Bornschier and Ballmer-Cao 1979).
After the first wave of research on the effects of multinational
corporate investments in poor countries, however,
more recent research has shown less consistent and even
contradictory results. Some research using larger and more
recent data sets of poor nations has found that extensive
multinational corporate investment now tends to produce
more positive economic growth in the long term, while
another using recalculations of older data also finds outside
investment results in more long-term economic
growth (Firebaugh 1992, 1996; de Soysa and Oneal 1999).
Other research has shown that outside corporate investment
in poor nations does not lead to less economic development
when the types of goods imported or exported to
and from the poor nations are considered, or if the outside
corporate investment is accounted for by several rich
nations rather than just one or two (Bollen and Appold
1993; Kentor 2001; Kentor and Boswell 2003). When
many multinational corporations have smaller amounts of
investment within a poor country, they are less able to
dominate the economy and political system and, in fact,
must compete among themselves giving workers in poor
countries some advantage. Still other studies have questioned
the negative effects of multinational investments in
poor nations, such as increases in income inequality and a
lower standard of living among the poor masses of people.
These studies suggest a more complex relationship
between multinational corporate investment and income
inequality with evidence that the poor in many of these
nations do have improved lives because of multinational
investment (Alderson and Nielsen 1999; Firebaugh and
Beck 1994). Some authors of original research showing
that multinational corporate investment harms poorer
nations have conducted research using data from the 1990s
to conclude that their original research was correct but that
the negative effects on poor countries tend to be less today
(e.g., Herkenrath and Bornschier 2003). The current conclusion
is that the effects of location in the modern world
system are more complex than originally thought, and the
global economy itself is changing. The conflicting
research results on the impact of outside corporate investment
on poorer countries is also due to rapid economic
growth in Asian nations with extensive outside investments
compared with countries in Latin America and Africa
(Kerbo 2006b).
GLOBALIZATION AND THE
FUTURE OF DOMESTIC SYSTEMS
OF SOCIAL STRATIFICATION
One has to be cautious about overstating the impact of
globalization on domestic systems of social stratification
around the world, but we must recognize that the impact
is certainly increasing for both rich and poor nations.
Furthermore, new comparative analyses of political
economy, or social stratification more generally, show
that a nation’s competitive position in the modern world
system is affected by the nature of its system of social
stratification.
Social Stratification–•–235
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Esping-Anderson (1990) and Goodin et al. (1999) have
specified two distinct models of capitalism and shown
their differing outcomes for people in differing class positions
within a nation. To their two models of capitalism,
which are found mostly in Europe and North America, we
can add a third Asian model as indicated below (Kerbo and
McKinstry 1995; Kerbo 2006b). There are differing outcomes
for people in different class positions in each of
these three models of capitalism as summarized in
Table 22.1. As noted earlier, much future research on class
systems and the modern world system, such as the great
U-turn, will be devoted to whether or not one of these three
models will become the dominant one as global competition
proceeds throughout the twenty-first century.
Less-developed nations in the modern world system
today are divided between those forced into the neoliberal
model of capitalism by rich nations and the International
Monetary Fund (especially in Latin America and the
Philippines), those with development states (primarily in
East and Southeast Asia), and those that can best be
described as “predator states,” that is, states captured by
particular subgroups in the society and used primarily
for the enrichment of that subgroup only (most often in
Africa, but also in some other countries such as Burma)
(see Kerbo 2006b). The questions for these countries will
be which form of capitalism will be able to sustain economic
development in the twenty-first century, and which
form of capitalism will be able to promote more equally
spread economic development that reduces poverty.
Current trends point to the Asian development model as
being most sustainable and able to reduce world poverty,
though Japan’s long stagnation since 1990 and the Asian
economic crisis of 1997 suggest that the answers are far
from certain.
236–•–SOCIAL DISTINCTIONS AND DIVERSITY
Table 22.1 Competing Forms of Capitalism
Countries
Characteristics
Outcomes
Corporate-Dominated Capitalism
(Neoliberal)
United States, Canada, United
Kingdom
Small state, little government
regulation, weak unions,
low labor costs
Cheap production costs, high
inequality, low benefits to
workers, less job security, low
unemployment, high poverty,
low taxes
Cooperative Capitalism
(Corporatist)
Western European Union
countries
Large welfare state, state
regulation of the economy,
economic planning, strong
unions
High production costs, low
inequality, high worker benefits,
high job security, high
unemployment, low poverty,
high taxes
State Development Capitalism
(Asian Development Model)
Japan and developing countries
in East and Southeast Asia
Strong state intervention,
extensive regulation/planning,
weak unions
Medium production costs, low
inequality, medium worker
benefits, medium job security,
low unemployment, low
poverty, low taxes
SOURCE: Kerbo (2006b, chap. 3, 2006a, chap. 14). Also see Esping-Anderson (1990), Goodin et al. (1999), and Kerbo and McKinstry (1995).
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