No. 056



October 1979


Distributed as part of the
TRANSFORMING SOCIOLOGY SERIES of The Red Feather Institute, 8085 Essex, Weidman, Michigan, 48893.

A version of this article under the title, Socialism, Capitalism, and Inequality," is in the Insurgent Sociologist 11 (2) Spring 1982.


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EDITOR'S COMMENT on the importance of this Article

     This paper is concerned with the desperate plight of the
impoverished people of the world and with the academic theories which
are formulated to explain the problem.  The objective is to examine
four prominent theoretical explanations of inequality, and to test
empirically the fundamental propositions of each concerning the major
determinants of inequality.  Two components of inequality are
investigated: inequality of income distribution and inequality in
fulfillment of basic human needs.  The latter is being defined in the
new basic human needs approach to development in terms of rates of
infant mortality, life expectancy, literacy, and other conditions
related to the physical quality of life.  The relative explanatory
power of the four theoretical models will be evaluated by an analysis
of relevant statistical data for 120 countries (97 percent of the
global population).  
	Inclusion of data for socialist countries, as a distinctive 
mode of production, is a crucial feature of this study, which has been
curiously absent from the research on cross country inequality.  
	The distinctive contribution of this research is the
presentation of empirical data evaluating the efforts made by the
socialist countries compared to developing capitalist countries in the
same income range, in reducing inequality and the problems associated
with abject massive poverty.  The major significance of this evidence
is to determine whether any program of development can be effective in
reducing inequality and improving life for the billions of persons on
*In the 1960s, the notion of changing the attitudes and values of the
people of other countries came under attack as being ethnocentric and
imperialistic.  This aspect was subsequently toned down.  The emphasis
was shifted to financial, technological, and scientific assistance in
economic development.  Modernization theory became development theory.
     Of the numerous explanations of inequality which have been
advanced, there are four which continue to be formidable contenders. 
Of the conventional approaches, population and development models
remain the most influential.  Of the Marxist approaches, dependency
theories have gained the greatest prominence and use in the West in
recent years.  Dependency theories seek to explain the inequality
which exists in the capitalist world system.  A mode of production in
Marxist model, hardly tested in the West, specifies the differences to
be expected between capitalist and socialist systems with regard to
inequality.  A substantial body of data exists in support of certain
aspects of each of the four models, thus none can legitimately be
ignored. take into account and explain can legitimately be ignored.
take into account and explain will examine each of the four
propositions which need to be
     Proponents of any one of these models must the data supporting
the other models, thus none Proponents of any one of these models must
the data supporting the other models.  We models in turn and extract
the central tested in order to evaluate the power of each.
*Computations were done at the Computer Center of California State
University at Valazquez.  I wish to thank Josef Velazquez, Computer
Programmer, for his invaluable work and assistance on this research
project.  I also wish to thank Sandra Hunt, Christopher Chase-Dunn,
David Dowell, Jerry Lembcke, and Ann Gregory for their comments on an
earlier version of this paper.
Neo-Malthusian Theories of Overpopulation
     The oldest and perhaps most influential explanation of inequality
and deprivation of basic human needs was first formulated by Malthus
almost two centuries ago.  There were fewer than a billion people on
earth then (less than a quarter of the present population), but the
earth, according to Malthus, was already overpopulated.  The poverty,
disease, and starvation which existed in the slums of wealthy England
and in the British colonies, Malthus said, were direct results of the
irrational propensity of the lower classes to proliferate.
     There were, Malthus (1798) proclaimed, two "eternal laws of
nature" governing the rates of growth of population and of
subsistence.  The former increases geometrically, while the latter
increases only arithmetically.  Thus, population, if unchecked, would
outstrip the food supply.  If there were no moral restraint (sexual
abstinence) to curb population growth, then famine, misery,
pestilence, or war would do the job.
	The advocacy of sexual abstinence and the crude, harsh 
condemnation of the poor were quite congruent with 19th century laissez-
faire capitalism, but became outmoded and an embarrassment to the liberal
ideology underpinning the later stages of modern capitalism.  Thus,
contemporary neo-Malthusian theories have been modified considerably. 
Many are quite sophisticated and complex.  The essence of the
Malthusian argument, however, remains unchanged.  The inequality
between rich and poor is still seen in terms of overpopulation, and-
more specifically, over-breeding by the poor.  According to neo-
Malthusian theorists, overpopulation represents an imbalance between
population and resources.  Land and resources are limited relative to
population.  In countries where rapid population growth outstrips
resources and the growth of food, poverty and hunger are inevitable. 
There is not enough for all, and the segments of the population with
high birth rates will be deprived.  Moreover, the burden and heavy
costs of maintaining an increasingly large portion of the population
which is young, nonproductive, and dependent diverts funds which are
needed for national investment, thus preventing the economic
development of the poor countries.  A vicious circle is produced.  The
increase in impoverishment associated with the current global crisis
has been brought about by the mushrooming population growth, the
population explosion.  This model leads to an interest in birth
control technology and coercion to accept it.
     While population density has not received empirical corroboration
as a determinant of underdevelopment or inequality (Hernandez, 1974),
there is strong evidence supporting the relationship between high
rates of population growth, underdevelopment, and inequality (World
Bank Staff, 1974; Ahluwalia, 1976).  Interpretations of the nature of
those relationships, however, differ considerably (Syzmanski, 1974;
Cereseto, 1977) as will be indicated later.
Modernization and Development Model.  
In the aftermath of the second World War and the formation of the 
United Nations, the new international organization was faced with 
many grave problems.  Among the most urgent was the underdeveloped 
state of most of the countries of the world and the conditions of 
poverty, chronic starvation, squalor, disease, and illiteracy which 
Affected hundreds of millions of people in those countries.
     The enormity and urgency of the problems led officials to seek
the aid and advice of social scientists, and created the initial
impetus for the outpouring of studies on underdevelopment in
subsequent years.
     The task for Western social scientists was: first, to explain why
such deplorable conditions existed in the underdeveloped world, and
second, to propose methods whereby the poor countries could be helped
along the capitalist road to development so that the dangerous
inequality gap might be reduced.  Western social scientists
conscientiously and energetically devoted themselves to their task
and, in due time, a promising theoretical explanation emerged.
     In the new modernization model, underdeveloped countries were
portrayed merely as arrested cases of development.  They were simply
traditional societies at earlier stages of development.  As a result
of isolation or resistance to change on the part of people who clung
to traditional habits, customs, and institutions, the underdeveloped
societies had not yet started, or were only beginning to initiate the
processes of modernization pioneered earlier by the advanced
capitalist countries.  Processes associated with modernization--
secularization, industrialization, urbanization, differentiation,
diversification, specialization--make possible sustained economic
growth.  Economic growth, in turn, leads to a decrease in inequality. 
Modern, industrial growth creates so much wealth that elites can
distribute a greater relative share of the surplus while still
increasing their own absolute share.  More is available to trickle
down to the masses (Lenski, 1966).
     According to this model, a consistent pattern of structural
changes occurs in developing countries as the level of per capita
income rises.  Among these processes are increased investment in both
physical capital stocks and in human capital.  Inputs to improve human
capital include education, public health, technical assistance, and
other public services which augment human productivity (Chenery and
Syrquin, 1975:11,23).  Thus the physical quality of life and standard
of living of the general population are expected to be positively
correlated with level of economic development.
     In subsequent years, research findings indicated that there was a
curvilinear, rather than a positive, linear relationship between
economic development and inequality of income distribution.  That is,
with regard to income, inequality appeared to increase somewhat in the
early stages of development, and then to decrease as industrialization
occurred (Kuznets, 1963: Paukert, 1973).  These findings, however,
were not considered to be contradictory to development theory.  The
predominant emphasis was on the need to promote economic growth which
would lead to a higher level of development.* Economic growth required
heavy investment for the creation of a modern, industrial sector.  In
the early stages of development, then, it was deemed desirable that
the share of the national income going to the elite upper-class groups
be increased.  It was assumed that these groups would save and invest
more.  An initial concentration on savings and investments would
insure rapid economic growth, the benefits of which would in turn
trickle down to the Entire population in the form of growing per capita 
income (Hansen,1977: 61).  A growing middle class would then emerge and 
both poverty and concentration of wealth would decrease.
     It was postulated that the underdeveloped countries would follow
along the same path and through the same stages of development as the
advanced capitalist countries (Rostow, 1960).  With foreign investment
of capital, the transfer of technology, and the diffusion of
attitudes, values, and knowledge from the modern world, the transition
would be speeded up (Moore and Feldman, 1960).  Massive programs of
aid and investment were, in fact, initiated and implemented during the
three decades following the second World War.  Measures emanating from
propositions of population theorists were also incorporated into the
development projects (U.S. Agency for International Development,
1974).  Consequently, the failure of the programs to bring about the
desired results led to a questioning of the theoretical assumptions
upon which they were founded.
Dependency Theories and the World-Economy Model.
Both modernization and population models were criticized for the virtually
exclusive emphasis upon internal, national processes in their analyses
of the causes of the problems.  Dependency theories, the powerful new
challenging model which emerged in the 1960s, argued that the
underdevelopment, poverty, and inequality characteristic of the Third
World countries were a result, not of internal, national processes,
but rather of the inequitable processes of the international
capitalist system (Letelier and Moffitt, 1977; Abu-Lughod and Hay,
1977).  Dependency theories were, in general, particular versions and
modifications of the theory of capitalist imperialism.  In stark
contrast to the implications of modernization theory, foreign
investment, technology, and personnel were viewed not as benign
aspects of the diffusion process which would speed up modernization,
but rather as foreign penetration which created and perpetuated
underdevelopment (Baran, 1956; Frank, 1969; Amin, 1974).
     Dependency theorists claim that the conditions confronting
developing countries today are very different from the conditions
which promoted the economic development of the presently
industrialized countries; that therefore it is unrealistic to believe
that they can develop by the same methods.  The capital, raw
materials, labor, and land required for the industrialization of the
developed countries were obtained, in part, through the conquest,
colonization, subjugation, and exploitation of the Third World
countries (Jalee, 1968; Magdoff, 1969; Riddell, Stamos, and
Shackelford, 1979).  Even after formal political independence was
obtained, the former colonies were not able to break the strangle-hold
of economic dependence and political subjugation.
     The mechanisms which perpetuate dependence and subjugation and
which negatively affect economic development and internal income
distribution in peripheral countries are thought to include: (1)
penetration by multinational corporations and export-oriented
production which distorts the economic structure; (2) exploitation by
core powers which drains resources (by extraction of profits, interest
on debt, royalties and license fees) needed for development; (3) links
between elites in the core and the dependent periphery which act to
suppress autonomous, self-centered development; (4) alliances and
military support from strong foreign powers which enable ruling groups
to continue to take a high share of the national income, thus
maintaining high inequality (Chase-Dunn, 1975).
     The most comprehensive formulation of dependency theory as an
explanation of inter-country differences in inequality was presented
by Robinson (1976).  Utilizing Wallerstein's (1974) propositions on
the world-economy, Robinson described the mechanisms by which the
strategic position of a country in the world-economy in terms of
control over production in other nations is linked to processes of
class formation, class relations, and occupational structure which
shape the internal stratification system.  Typically in dependent
countries, an unequal class structure develops which is dominated by a
small economic elite whose predominant interests are tied to foreign
economic actors through mutual interests in the control of production
for export, primarily of raw materials required by dominant countries. 
A small, specialized export sector becomes well-developed, but not a
diversified economy.  The occupational structure is characterized by a
small wage-labor aristocracy in the export sector, and a large work
force with a low level of skills and low wages.
     Robinson's study showed that the world-economy dependency model,
while not negating the relevance of economic development, was superior
to the development model in ability to account for the variation in
inequality in income distribution for a sample of 47 capitalist
countries.  Other studies summarized by Bornschier, Chase-Dunn, and
Robinson (1978) have also produced empirical confirmation for
dependency model explanations of inequality.  In general, such studies
represent a search for universal principles underlying the
relationship between patterns of stratification and of development. 
The possibility that other systems and alternative forms of
relationships may exist is rarely explored.
     The failure of world-economy dependency theorists to  consider 
the  mode of production in socialist countries as a potentially
significant factor stems, in part, from the overwhelming force they
attribute to external factors (the world-economy system), and their
tendency to discount or downplay internal variables.  Whereas
dependency theorists criticize other models for undue focus on
internal variables; they, in turn, have been criticized for undue
focus on external variables (Delacroix, 1977; Gerstein, 1977; Riskin,
1978).  In the final analysis, however, a determination of whether or
not the laws governing the distribution of material rewards differ in
the two systems must rest upon an examination and analysis of the
empirical evidence.
The Marxist Model: Mode of Production.  
Marx's theory is a theory of the historical stages of societal development 
and the central role of the mode of production in that development. 
At the same time, it is a theory of inequality and the specific forms 
it assumes at each stage of development.  In contrast to other models, 
Marx postulated that inequality was rooted in the social organization of 
society, in the unequal relations of classes in the productive process.  
Marx identified and described a succession of stages of development, each
with its own specific mode of production, unequal class relations, and
unique form of exploitation.  In this evolutionary model, the human
population assumes a central role.  Human beings are distinguished
from animals in that they engage in purposeful productive activity--
they produce their means of subsistence, consciously and not
Thus the laws that govern the social activities of human populations
are social laws, not "natural," supernatural, biological,
technological, or physical laws. While Marx postulated the forces of
production as the moving force of history, human beings were conceived
as the essential element of the productive forces.  Productive forces
include machines, tools, natural resources, as well as the knowledge,
skills, and abilities of the human labor force.  The productive forces
are continuously changed throughout history by virtue of human
creativity and ingenuity.  In the process of developing the forces of
production, human beings simultaneously develop their own talents,
abilities. and skills.  Societal and technological developments are
inseparable from the development of human potential.  Opportunities
for human development, however, vary for different segments of the
population in accordance with its particular relation to the
productive process.  Furthermore, relations of production are
organized differently in different historical eras.
     With the advent of the capitalist mode of production, Marx
asserted that a drastic change occurred in the organization of the
relations of production.  Ownership and control of the means of
production were separated from the producers and concentrated in the
hands of a small segment of the population, the new capitalist class. 
The fundamental characteristic of the new capitalist system was that
the production of commodities was organized for sale in the market for
the purpose of obtaining maximum profit for the owners.
     In this stage, human labor power becomes an input, one of the
factors of production, a commodity to be bought and sold in accordance
with the laws of supply and demand.  In pursuing the goal of maximum
profitability, labor power is bought, like other commodities, at the
lowest possible cost.  Human beings become a means to an end, a means
to increase output and surplus value.  In the search for efficiency,
increased output, and maximum profits, the forms of inequality
proliferate.  Hierarchy, competition, extreme specialization,
maintenance of a surplus population of unemployed are methods of
dividing and separating the labor force, of reducing labor costs, and
increasing profits.  Communities are split into mental workers and
manual workers, into town people and rural people, into employed and
unemployed.  They are divided into dominant and subordinate classes,
specialized and sorted, thrown into selfish competition with one
another (Gurley, 1976).
     Henceforth, the processes of population--its growth, movement,
employment, and income--are governed, not by the needs of the
population, but in accordance with the requirements of capitalist
accumulation.  Increasing deprivation and inequality are inherent and
inevitable in such a mode of production.  Marx describes the apparent
paradox, the dialectical process whereby greater wealth and greater
poverty are simultaneously produced by the law of capitalist
"...Accumulation of wealth at one pole is, therefore, at the same time
accumulation of misery, agony of toil, slavery, ignorance, brutality,
mental degradation, at the opposite pole, i.e., on the side of the
class that produces its own product in the form of capital"(Marx,
1867, 1967:644-645).
     Despite such grim accounts, Marx's vision of the future was
optimistic.  He predicted that capitalists, pushed by competitive
forces and pulled by profit forces, would continuously revolutionize
and advance the means of production, ushering in an era of abundance. 
Then, the irrationality and the absurdity of poverty in an era of
abundance and great productive potential, the contradictions and
crises inherent in the capitalist mode of-production would bring about
its demise.  A new socialist mode of production would be created in
which the means of production would become collective property.  Once
the imperative to produce for private profit was eliminated,
production could be planned to meet the needs of the new owning class-
-the entire population.  The fulfillment of basic human needs would
not be left to the vagaries of the marketplace, but would be planned.
     A socialist mode of production, Marx (1875) believed, could lay
the foundation for the elimination of classes, of domination and
exploitation, of social inequality.  It could lay the foundation for
the construction of a communist society which would serve the needs of
the people, in which the people would be ends in themselves, not means
to an end.  It could lay the foundation for a higher stage of societal
development in which "the full and free development of every
individual forms the ruling principle" (Marx, 1848).  That was Marx's
theory and his vision.
     According to the Marxist premise, the laws governing population
growth, as well as those governing patterns of stratification, would
change in accordance with the new form of organization.  This view is
in direct conflict with Malthus.  The Marxist assumption is that rapid
population growth in poor underdeveloped countries is governed by the
law of capitalist accumulation (Gimenez, 1977; Valentey, 1978).  The
conditions of poverty, extreme economic insecurity, low life
expectancy, and high infant mortality tend to produce high birth
rates.  Under such conditions, it is necessary to give birth to many
children in order to replace infants who do not survive, to increase
the number of income earners in the family, and to have offspring to
support the parents in old age (Mamdani, 1972).  The traditional
household role, low education, and low employment opportunities for
women also operate to maintain high birth rates (Valentey).  The high
birth rates, in turn, provide a large surplus labor force which
permits the payment of mere subsistence wages.
     Theoretically, then, if socialist societies were to improve the
material conditions of life, provide economic security for the entire
population, and equal employment opportunities for women as
hypothesized, a reduction in birth rates and in population growth
should follow.  While such changes are predicted for socialist
countries in contrast to poor, underdeveloped capitalist countries,
the expectation with regard to the developed capitalist countries
remains ambiguous and requires clarification.
     Despite unemployment, economic insecurity, and poverty for
portions of the population, the standard of living for the bulk of the
population in the developed capitalist countries is high relative to
the rest of the globe.  Population growth did, in fact, decline in all
of the industrial countries in response to a pattern of changes
similar, but not identical, to those predicted above for the socialist
     If the general standard of living for the majority of the
population in developed capitalist countries improved, does that,
then, constitute a refutation of Marx's prediction that capital
accumulation would be accompanied by a corresponding increase in
impoverishment? This controversial  issue  is pertinent to the
hypotheses tested in the present study and requires examination.
     The rise in the general standard of living in the developed
capitalist countries, most notably in the United States after World
War II, led many scholars to claim that Marx's analysis was false.
other scholars, however, insisted that an adequate test of Marx must
take into consideration the operation of the entire world capitalist
system.  An understanding of the conditions in the few wealthy
capitalist nations was necessary, but was only part of the task.
     A number of factors were suggested to explain the general rise in
living standards in developed-capitalist countries.  First and
foremost, the gains made by the working class in the industrial
countries were primarily a result of their own struggles and the rise
of effective industrial unions.  But, in addition, there were also
reasons why concessions to the working class might be advantageous to
the capitalist class.  Lenin (1917) argued long ago that capitalists
of the imperialist countries could and do use a part of their "booty"
to bribe and win over to their side an aristocracy of labor.  Such
tactics could be extended to include a majority of the workers in the
industrialized countries (Sweezy, 1967).  The allegiance of the
population in the core countries was necessary to ensure maintenance
of a home base.  The high financial returns secured from investments
in underdeveloped countries allowed a greater amount to be trickled
down to masses in the core countries.  Furthermore, there were other
advantages and reasons for spreading greater benefits to a larger
portion of the population at home.  A more highly educated labor force
was required in advanced technological societies.  Better health and
nourishment provided a more productive labor force.  In other words,
higher investment in human capital for certain portions of the world
labor force was not disadvantageous or contrary to the law of
capitalist accumulation.  It was characteristic of a hierarchical
     Having provided an explanation for the conditions existing in the
small number of wealthy capitalist countries, it was then argued that
the accuracy of Marx's proposition of growing polarization should be
evaluated by inequality data for the world capitalist system as a
whole.  Such data will be presented in this study.
The Sample of Countries.  A large part of the data analyzed in this
study is new data (1976) provided by a recent World Bank report.  Most
World Bank publications, including their most comprehensive and
widely-used source of international statistical data, WORLD TABLES
1976, contain little data on the socialist countries, particularly
social, demographic, health, or educational data.* THE WORLD
DEVELOPMENT REPORT 1978, which is not as well-known or widely-
distributed, does include more than the usual amount of data for
socialist countries.  The latter report includes data for 125
*WORLD TABLES 1976 contains selected economic data for the centrally
planned economies, but does not include them in the section on social
indicators: demographic, population, employment and income, health and
nutrition, education, housing and consumption.  THE WORLD DEVELOPMENT
REPORT 1978 includes infant mortality rates and literacy rates for
market economies but not for the centrally planned economies.
omitting countries with populations of less than one million.  With
the exception of five countries, the World Bank sample is the sample
of countries included in the present study.  Essential data were
missing for the five countries which were deleted: Bhutan, Madagascar,
Cambodia, Laos, and Vietnam.  Additionally, the latter three nations
were capitalist countries until 1975 and are now considered to be
socialist countries.  Therefore, they would not properly fit into
either category at the present time.  All the other countries which
are classified by the United Nations as centrally planned economies*
are included in the study.  All have been socialist countries for at
least 20 years.  A list of the countries is included in the appendix. 
The conditions in which such data are collected require considerable
caution in interpretation, however the rough outline of differences
are revealed in such data.
Independent Variables.  The measures which were used in this study as
indicators of the independent variables postulated by the four
theoretical models as determinants of inequality are shown in List 1.
While GNP/C is the measure most commonly used as the indicator of
level of economic development, other measures of economic development
which have been found to be significant in studies of cross-country
inequality (Chenery and Syrquin, 1975; Ahluwalia, 1976) were also
included.  The additional measures are per capita energy consumption,
percent of population in urban areas, and percent of labor force in
agriculture.  Economic growth is indicated by GNP/C average annual
growth rate during 1960-76.
     Measures of population growth used were birth rates, death rates,
and population growth rates.  In addition, size of total national
population, agricultural density, and total land density were also
     Measures used as indicators of dependency and position in the
world economic system are primary commodities as percent of exports
and external public debt as percent of GNP.  Primary commodity percent
of exports is considered to be an important indicator of a nation's
role in the international division of labor.  The measure has also
been found to be of significance in studies on cross-country
inequality (Chenery and Syrquin, 1975; Gorin, 1978).  External- public
debt is an obvious indicator of economic dependence.  The WORLD
DEVELOPMENT REPORT 1978 provides data on external public debt only for
the developing market economies.
     Designation of the mode of production for each country was based
on the United Nations classification of countries as market economies
or as centrally planned economies.*
*The terms "centrally planned economies" and "socialist countries" are
used interchangeably in this paper.
Dependent Variables.  List 2 itemizes the dependent variables, the
year, and the data source for each of the variables.  Two types of
variables were included.  The first are the physical quality of life
variables (PQLV) which were used to measure inequality in the
fulfillment of basic human needs.  The Physical Quality of Life Index
(PQLI) and its three components (life expectancy, infant mortality and
literacy rates) are shown separately and also as a single score.1 In
addition to the PQLI measures, other variables which are commonly used
as indicators of the PQL were also included.  Population per
physician, calorie supply per capita as percent of requirements,

LIST 1.  
     Level of Economic Development and Growth
     GNP/c: 1976a 1974b 1970c
     GNP/c average annual growth rate 1960-76a
     Energy: per capita. consumption (kilogram of coal equiv.) 1975a
     Percent of population in urban areas 1960, 1975a
     Percent of labor force in agriculture 1960, 1970a
     Measures of Population
     Population (millions) mid-1976a
     Crude birth rate/1000 (1975)a
     Crude death rate/1000 (1975)a                            
     Average annual population growth rate (%) 1960-70, 1970-75a
     Percent change in crude birth rate 1960-75a
     Population density per sq. km. of total land 1970d,e
     Population density per sq. km. of agricultural aread
     Position in World-economy: Dependence
     Primary commodities: percent share of merchandise exports 1960, 1975a
      External public debt as percent of GNP 1970, 1976a (for
	     developing market economies only)
     Mode of Productionf
     Market economy (capitalist)
     Centrally planned economy (socialist)

     aWORLD DEVELOPMENT REPORT 1978 (Washington, D.C.: World Bank, Aug.1978)
     bJohn W. Sewell and the Staff of the Overseas Development Council, THE  
     cYearbook of National Account Statistics 1974, Vol.III 
      dWORLD TABLES 1976 (Washington, D.C.: World Bank, 1976)
     eUnited Nations Demographic Yearbook 1971
     fUnited Nations' classification

I.   Physical Quality of Life Variables Used to Measure Inequality
     in Fulfillment of Basic Human Needs
     PQLI score for country (mid-1970s)a,c
     Health and Nutrition
     Life expectancy at birth (mid-1970s)a
     Infant mortality rate (mid-1970$)a
     Population per physician (1974) D-5c
     Nutrition: Calorie supply per capita as percent of requirementsc
     Percent literate (mid-1970s)a,c
     Numbers enrolled in secondary school as percent of age group
     Numbers enrolled in higher education as percent of age
     group (1975)b
     Position of Women, Employment, and Price Stability
     Female labor force as a percent of the total labor forced
     Percent unemployed (1970) - (market economies only) (N=65)d
     Average annual rate of inflation (%) 1970-76 L),e
	Percent of national income received by lowest 20% of population
	Percent of national income received by highest 5% of
	     population (N=72)d,f 
	Gini Index of Inequality (N=61)d
     aJohn Sewell and the Staff of the Overseas Development Council,
	     Praeger, 1977)
     bWORLD DEVELOPMENT REPORT 1978 (Washington, D.C.: World Bank, Aug.
     dWORLD TABLES 1976 (Washington, D,C.: World Bank, 1976)
     eUnited Nations Statistical Yearbook 1973 
	     (Washington, D.C.: World Bank, 1974)
enrollment in secondary school and in higher education were included
as additional indicators of health care, nutrition, and education. 
Female labor force as a percent of total labor force, percent
unemployed and average rate of inflation were included as indicators
of position of women, employment situation, and price stability.  It
was assumed that unemployment and inflation add to the survival
problems of the poorest segments of the population.
     The second type of dependent variable included in the study were
the variables used to measure inequality in income distribution:
percent of national income received by the lowest 20 percent of the
population, percent of national income received by the highest 5
percent of the population, and the Gini index of overall inequality
(for the entire income distribution).  The income distribution data
were taken from the World Bank compilation (Jain, May 1975; WORLD
TABLES 1976), which is the most extensive data bank of cross-country
income distribution available.
     As an indicator of distributional characteristics within
countries, the PQLI is much more adequate than the GNP/C, for
instance, which tells us nothing about distribution, but the PQLI is
less adequate than measures of income distribution.  Since the PQLI
data used in this study are unitary scores and average rates for the
entire population of countries, they obscure the great differences in
PQL conditions which exist for different economic strata of the
population.  They may grossly understate the deprivation of the
poorest segments.  On the other hand, in a limited sense, the PQLI
does give some indication of inequality within countries.  We can
assume that the lower the score for a country, the less the proportion
of the population which is experiencing benefits in these vital
aspects of life.
     Internationally, the great differences that exist among nations
today simply in terms of probability of survival beyond birth, mean
that such gross measures of inequality at a basic level are still
revealing and meaningful.  The PQLI represents data on inequality at
the most fundamental level-the life or death level--what Gimenez
(1977:20) refers to as "death inequality."
Classification of Countries.  One of the most crucial methodological
problems was to devise an adequate classification system in order to
test the research hypotheses.  The classification system utilized by
the Overseas Development Council (ODC) in analyzing cross-country
differences in PQLI exemplifies the most typical mode of
categorization.  All countries are ranked from high to low on per
capita income.  The rank order list of countries is then divided into
four categories of countries: high-income, upper-middle income, lower-
middle income, and low-income.  Countries in the same income category
are then compared with regard to performance in fulfilling basic human
needs.  Individual countries may be analyzed in terms of deviation
from the average score of the countries in their category. Since the
fulfillment of basic human needs entails financial expenditures for
the provision of education, health care, and other services, it is
assumed that poor countries should not be expected to perform as well
as wealthy countries.
     This uni-dimensional classification system does not, however,
enable one to compare capitalist and socialist countries.  The
socialist countries are intermingled among the 160 countries included
in ODC's study.  Since the major interest is in testing Marx's
propositions concerning expected differences between countries with a
capitalist as opposed to a socialist mode of production, the first
requirement was to divide the two into two separate categories of
countries.  Our data analysis will provide comparisons of the two
categories of countries.  However, a comparison of the two categories
without regard to income level is open to justifiable criticism.  The
task, then, was to find the most appropriate comparison groups by 
controlling level of income.  The method devised was to divide the
capitalist countries into 3 groups; low-income, middle-income, and
high-income.  The lower and upper cut-off points for the middle-income
capitalist category were selected so as to match the GNP/C of the
lowest and the highest socialist countries.2 Thus, the middle-income
capitalist category and the category of socialist countries are almost
identical in per capita income range.  Table 1 shows the
classification system: the per capita income range for each of the
four categories, and the number of countries in each category.

GNP/c (1976)                            
LOW INCOME =  $100-390                  
MIDDLE INCOME = $410-4,250              
HIGH-INCOME = $4,480-$15,480            
     The socialist countries will be compared to the other
categories also however, it will become evident that comparison of
the two middle-income groups represents the fairest type of
comparison.  It also provides a test of the development theory
proposition that level of development, as indicated by GNP/C, is
the main determinant of inequality.  Data supporting this proposition 
would show that the two groups of countries at the same
economic level should manifest approximately the same degree of
Prior Conditions and Level of Development.  A second problem
involved in comparing the capitalist and socialist countries
pertains to the level of development of the socialist countries
prior to the time that they became centrally planned economies. 
Information showing that the level of development of the two
comparison categories was approximately similar would serve to
rule out initial level of development as the source of any
difference which might be found to exist at the present time. 
Historical data on the variables studied here are poor in quality
and are available for only a limited number of countries. 
Nevertheless, we present what data we were able to obtain.
     Before World War II the world was almost entirely dominated
by capitalism.  There were only two socialist countries in the
world, the Soviet Union and the tiny population of Mongolia.  The
Soviet Union had been a socialist country for only two decades,
since 1917.3 Mongolia, a feudal society with a population of less
than a million, became  a socialist country in 1921.  All of the
other countries changed to socialist systems after World War II;
ten countries between 1944 and 1949, and Cuba in 1959.  Thus 1938,
the last prewar year, is perhaps the most appropriate year for
examining prior level of development of the centrally planned
     The nations of the world can be classified into high-income,
middle income, and low-income categories based on their per capita
incomes in 1938 (Woytinsky, 1953).  Fourteen wealthy countries had
per capita incomes above $250.  Some forty or so countries ranged
between $50 and $186, and the rest were poverty-stricken countries
with per capita incomes estimated to be below $50.  Nine of the 13
countries that would become socialist were distributed across the
middle-income range, with Czechoslovakia at the top and Cuba close
to the bottom.  The three Asian countries, China, Korea, and
Mongolia, were among the low-income, impoverished countries of the
world in 1938.  Woytinsky (1953:389-391) lists China as close to
the bottom with a per capita income of $17.  Only Germany, with a
per capita income of $335, was among the high-income countries. 
However, that part of Germany which became socialist was the
agricultural region of the country, not the industrialized region. 
Per capita income in the industrialized section of Germany was
about 43 percent higher than in the agricultural section
     None of the countries that would become socialist were among
the 14 countries which Chenery and Syrquin (World Bank, 1975:10)
list as the developed countries in 1950.  Therefore, in terms of
income level and economic development, three socialist countries
were in the lowest category, ten were in the middle, and none were
among the top category that contained the 14 wealthy, developed
countries in 1938.  With regard to other conditions, Table 2
presents the historical data which could be found in United
Nations Yearbooks on two PQLI measures and on death rates. 
Although data are available for only a limited number of
countries, United Nations estimates of average rates for
geographic regions tend to support the statistics in Table 2.4 The
statistics give some indication of comparative conditions forty
years ago for our four categories of countries.  Analysis of
variance statistical tests indicate that the 3 income categories
differed significantly on all 3 measures.  On the other hand, life
expectancy, infant mortality rates, and death rates were very
similar, almost identical, for the countries which are now
socialist and the capitalist countries presently in the same
income range.  Such data provide some basis for assuming that
differences that may exist at the present time between the two
equivalent income groups may be attributed to differences in
economic system.
Analysis of Data and Findings.  Analysis of variance statistical
procedures were used to analyze the differences between the three
groups of capitalist countries on each variable.  'F' ratios and
probability levels are reported to show whether the mean scores of
the 3 groups differ significantly from each other.  Eta2
statistics are given to show the total amount of variance (both
linear and non-linear) among capitalist countries that is
explained by income group.
     Three comparisons were made between socialist and capitalist
countries on each variable.  The socialist group is compared with
the middle-income capitalist group, with the high-income
capitalist group, and with all capitalist countries as a single
group.  T-tests were computed to determine whether the mean scores
of socialist and capitalist groups differ significantly from each
other.  The level of statistical significance was determined for
each comparison.* A matrix of zero-order correlation coefficients
for the
*All tabular data are available in the
larger version of the paper 
In Brief, Socialist Countries had lower INFANT MORTALITY RATES,
lower DEATH RATES and longer LIFE EXPECTANCY than did comparable
capitalist societies.
107 market economies, indicating the strength of the relationships
between each variable and every other variable was constructed.
     An analysis of the data is made separately for each of the
four theoretical models.  The hypotheses implied in each model are
illustrated in Figure 1. Since the hypotheses of the first 3
models pertain only to capitalist economies, the data for the 3
capitalist economy, groups will be discussed separately before
turning to the data for the centrally planned economies.  With
regard to the 3 capitalist groups, the most striking feature
displayed by the data repeatedly is the steeply-graded,
hierarchical character of the world capitalist system.  Low-
income, middle-income, and high-income market economy groups are
significantly differentiated in the expected direction on almost
every variable.  Presented in this manner, the data reveal the
inequality and enormous magnitude of the development gap within
the world capitalist system.
Development Model Hypotheses.  The first hypothesis predicts that
economic development and growth will be positively associated with
fulfillment of basic human needs; that is, the higher the economic
development, the better the PQLV scores.  This hypothesis is
supported by the data.  Low-income, middle-income, and high-income
market economies are significantly differentiated on each of the
PQL variables.  The differences between the three income levels in
life expectancy, infant mortality, supply of physicians,
*All tabular data are available in the
larger version of the paper 
In Brief:
MODERNIZATION/DEVELOPMENT THEORY predicts that Advanced Capitalist
DEPENDENCY THEORIES predict that countries independent of Core Countries
MARXIST THEORY says that socialist countries with INDEPENDENT Governance 
nutrition, literacy, and school enrollment are very great.  At
each succeeding level, a much higher proportion of the population
enjoy benefits in these crucial areas of life.  Income category
explains a relatively large amount of the variation between groups
on the PQLI (.550) and on the other PQL measures.
     The correlation coefficients support and strengthen the
analysis given above.  Each of the measures of level of economic
development are strongly and significantly correlated with each of
the 8 PQL variables.  Economic growth is also significantly
correlated with the PQL variables, but the relationship is not as
     The second development hypothesis predicts a curvilinear
relationship between economic development and income inequality. 
Inequality is expected to increase in the early stages of
development, and then to decrease with industrialization. 
Therefore, income inequality is expected to be highest for the
middle-income category and lowest for the high-income category. 
This hypothesis receives some limited, weak support, but the
evidence is mixed.  There is a wide-spread of scores within each
of the 3 income groups.  Income distribution is highly unequal in
all market economy groups.  Group means indicate the share of the
national income received by the top 5 percent of the population
ranges from 14 to 24 times as much proportionately as the share
received by those in the bottom 20 percent of the population.  The
3 groups of countries do not differ in the share of national
income given to the poorest 20 percent.  On the average, the
poorest fifth of the population gets only between 4.6 and 5.6
percent in the 3 groups of countries.  They get a half to one
percent more in the low-income group of countries.  They should
get less according to the theory.
     The high-income group of countries is significantly less
unequal than low or middle-income groups on the other 2 measures,
income of the top 5 percent and the Gini Index.  The latter
reflects the greater strength of the middle classes in the
industrial countries.  The middle classes receive a higher share
of the national income in the industrial countries than in the
developing countries.  While the top 5 percent in the high-income
capitalist countries receive a significantly lower share of the
national income than in the 2 lower-income groups of countries, we
must remember that the former 5 percent own a large proportion of
the wealth of the world.
     The middle-income group of countries has the most unequal
income distribution, but the mean scores are not much worse than
those of the low-income group, and there is a wide range in both
groups.  Eta,- shows that income category explains only .161 and
.181 of the total variance of the 2 income measures.
     Turning to the correlation analysis, we find that income
share of the poorest 20 percent of the population is not
significantly associated with any of the economic development
variables.  This strengthens the previous findings that income
share of the poor does not differ in the 3 income groups of
countries.  On the other hand, income for the top 5 percent and
the Gini Index are significantly and negatively related to all
measures of level of economic development.  Therefore, despite the
fact that the mean scores of the middle-income group of countries
are slightly more unequal than the low-income group, over the
entire range of capitalist countries, income distribution tends to
be less unequal with higher level of economic development.
     Rate of economic growth is not significantly correlated with
the measures of income distribution.  The finding that inequality
of income distribution is significantly related to level of
economic development but not to economic growth rate has important
implications.  Most studies of inequality are cross-sectional
studies which do not include historical data or growth rates.  The
assumption is made that countries at different levels of
development at the present time can be considered equivalent to
countries which were at different stages historically.  It is
further assumed that all countries will pass through the same
stages--stages which the industrial countries traversed.  Given
these assumptions, it is then expected that after a period of time
and growth, the developing countries will duplicate the patterns
of income distribution and other characteristics of the developed
capitalist countries.  Such assumptions are questionable on both
methodological and theoretical grounds.  The validity of drawing
historical inferences from cross-sectional data has been
criticized (Hanneman, 1978).  And as discussed earlier in the
paper, dependency theorists question the assumption that the
developing countries can be expected, with very different
circumstances, to follow in the footsteps of the developed
countries.  World-economy theorists claim that a stratified system
of dominant/subordinate relationships precludes all nations from
attaining the same characteristics and patterns of stratification. 
The empirical finding on lack of association between rate of
economic growth and income equality casts further doubts on the
assumptions discussed above.
     In summary then, the data confirm the importance of economic
development and growth as a determinant of the fulfillment of
basic human needs.  The basic human needs of larger proportions of
the population are met at higher levels of economic development
and growth.  The evidence is more ambiguous with regard to income
distribution.  In general, income inequality tends to decrease at
higher levels of economic development; however, on the average,
the middle-income group of countries is slightly more unequal than
the lower income group.  Economic development does not seem to
affect the income share of the poorest segment of the population. 
They get an equally low share in each of the 3 market economy
groups.  And finally, economic growth rate is not significantly
related to equality of income distribution.
Population Model Hypotheses.  Since historical data for the
dependent variables are not available for most low-income
countries, we cannot make any statements here concerning direction
of causality between dependent and independent variables.  The
following analysis is made solely in terms of the association
between variables.  In such terms, analysis of the data shows that
the variables identified by the population model are of major
importance in the study of inequality.
     Birth rates are significantly, strongly, and negatively
correlated with economic development, PQL conditions, and income
inequality.  PQLI has a stronger association with birth rates (-
.90) than with any other variables in the study.  Low, middle, and
high-income capitalist countries are significantly differentiated
on birth rates in the expected direction.
     Population growth is also significantly and negatively
correlated with most economic and dependent variables, but to a
lesser degree.  Because the mean death rate is significantly
higher for low-income countries than for middle-income countries,
the rate of population growth is actually a fraction of a percent
lower for the low-income countries, even though their birth rates
are significantly higher.  Therefore, birth rate, but not
population growth rate, differentiates low-income and middle-
income market economies.  Population growth is significantly and
negatively correlated with female proportion of the labor force;
with a higher proportion of women in the labor force, population
growth is lower.  Income inequality (the Gini Index and share of
the top 5 percent) is more highly correlated with birth rates and
population growth than with any other variables in the study.
     The decrease in birth rates from 1960 to 1975 is
significantly and positively correlated with all economic
variables and most dependent variables.  Low, middle, and high-
income groups are significantly differentiated, with higher
decreases in birth rates in higher income groups of countries.
     On the other hand, population size of country is not
significantly related to other variables.  The two measures of
population density have mixed results.  In those cases where
density is significantly related to the other variables, the
direction is opposite to implications of the population model. 
For example, density is positively related to economic growth,
PQLI, and income equality, although the relationship is not as
strong as in the case of other population variables.
Dependency Model hypotheses.  Dependency theory postulates that
position in the world-economy is the major determinant of
inequality.  It is expected that dependent, subordinate countries
will have a lower level of economic development and growth, lower
PQL conditions, and higher income inequality than less dependent
countries o; independent countries.  Two variables were utilized
as indicators of dependence in this study: primary commodities as
percent of merchandize exports and external public debt as percent
of GNP.  Primary commodity exports, in particular, and external
public debt to a lesser degree, are related to other variables in
the manner hypothesized by dependency theory.  Middle-income and
low-income countries are significantly differentiated by both
variables in the expected direction.  Countries whose role in the
world capitalist division of labor is that of producers and
exporters of primary commodities have a significantly lower level
of economic development, a lower rate of economic growth, lower
PQL conditions, and greater income inequality.  They also have a
higher rate of population growth.
     The external public debt (which does not include debts to
external private banks and lenders) increased from 1970 to 1976 to
29 and 20 percent of the GNP of low-income and middle-income
countries respectively.  External debt in 1976 shows a significant
negative association with GNP/C, rate of economic growth, PQLI,
and nutrition.  It shows a significant positive association with
birth rate, death rate, and unemployment.  The relationships,
however, as measured by the correlation coefficients, are weaker
than those indicated for primary commodity exports.
Marxist Model Hypotheses 
Economic Development and Dependent Variables.
We turn now to the Marxist model and its propositions concerning
the effects of different modes of production.  The general
hypotheses to be tested here are that there will be greater
fulfillment of basic human needs and less income inequality in
socialist than in capitalist countries.  However, tile data will
also be analyzed by income category in order to evaluate
development model hypotheses.  First, we analyzed the data on the
dependent variables and the economic development variables for the
socialist countries and the capitalist countries at the same
income range.  Examination of the category means and t-test
statistics indicates that as the model predicts, the socialist
countries have better scores on each of the 12 dependent
variables.  All of the differences are statistically significant
except that for enrollment in higher education.  The socialist
countries are significantly higher in fulfilling basic human needs
and in income equality despite the fact that, as a group, they
match the middle-income market economies very closely on all
measures of economic development with the exception of energy
consumption.  Socialist countries are significantly higher on
energy consumption, reflecting perhaps more widely-spread economic
development in contrast to economic development concentrated in
the export sector in developing market economies.
    If we compare the socialist countries with the high-income
capitalist countries, we find the opposite kind of pattern.  The
two groups of countries differ on economic variables, but are
similar on the dependent variables.  Taken as a group, the
socialist countries are far below the wealthy capitalist countries
on mean GNP/C ($1888 vs. $7233) and are also significantly lower
on the other indicators of economic development (energy
consumption, urban population, and non-agricultural labor force)
with the exception of rate of economic growth.  The two groups are
approximately the same on rate of economic growth (GNPIC)
according to the data provided by the World Bank.6
     The wealthy capitalist countries have better mean scores on
six dependent variables than socialist countries but none of the
differences are statistically significant.  PQLI scores are almost
identical (88 - 89).  On the other hand, the socialist countries
have higher mean scores on the other 6 dependent variables, and 5
of the differences are significantly better, the differences on
the 3 income distribution measures, on women employed, and on
price stability.
Socialist vs.Capitalist Levels of Development.
We can also compare the mean scores for all socialist countries as 
opposed to all capitalist countries.  On mean per capita income, the two 
are almost identical.  Socialist countries are higher on all other
measures of economic development, but significantly higher only on
energy consumption.  Socialist countries are better on every PQL
variable, and significantly higher on all except enrollment in
higher education and rate of inflation.  With regard to income
distribution, the data on income distribution provided by the
World Bank for 6 socialist countries places 5 of them above all
other countries in the world bon income equality.  The exception
is Yugoslavia which retains more capitalist features than any
other centrally planned economy.  With regard to income share of
the poorest 20 percent of the population, socialist mode of
production appears to be the only factor that significantly
improves the share they receive.  Income share of the poorest 20
percent was not significantly related to any variable in the
correlation matrix for the capitalist world system except the Gini
     The data confirms the Marxist hypotheses that income
inequality will be lower in socialist than in capitalist
countries, and that fulfillment of basic human needs will be
higher in socialist than in capitalist countries.  Both the
Marxist model and the developmental model predict the importance
of level of economic development; however, the development model
cannot explain why the socialist countries have much greater
income equality and much better PQL conditions than capitalist
countries at the same level of economic development.  Such
findings appear to be in opposition to the major proposition of
the development model.  Furthermore, only the Marxist model
predicts the striking findings enumerated above concerning the
effect of mod& of production.
Population Variables in Socialist Countries and Capitalist
Societies.  When we examine the effect of mode of production on
population variables,,we find that the socialist countries have
the lowest rate of population growth and the lowest death rate of
the four groups of countries.  The socialist countries are
significantly different from the middle-income capitalist
economies, but very similar to the high-income market economies on
population variables.  The socialist group of countries is the
only group which has joined the high-income market group in the
third stage of the demographic transition, which is defined as
having low birth rates and low death rates, as illustrated in
Table 3. Both the low and middle-income market groups still have
high mean birth rates.  The low-income group still has a high mean
death rate.


*All tabular data are available in the
larger version of the paper 
In Brief, DEMOGRAPHY TRANSITION THEORY works for Market Economies:
Low Income Market economies have HIGH BIRTH RATES AND HIGH DEATH RATES:
High Income Market Economies have Low Birth Rates and Low Death Rates.
Socialist Economies go directly to Stage 3: Low Birth Rates and 
Low Death Rates. There is no Transition Pattern in the Data.
     In the earlier analysis of the data for the capitalist
countries, we showed the type of data and analysis that could be
used to support population model hypotheses.  On the surface, it
might appear that the hypotheses of the population model are
confirmed even for the socialist countries.  Population theorists
would claim that the low birth rates and low population growth
rates of the socialist countries explain their better performance
in meeting basic human needs and in income equality.  However, the
population model cannot explain why capitalist and socialist
countries at the same level of economic development have such
different rates of population growth.  Of the four categories, the
socialist countries have the lowest rate of population growth
while the middle-income capitalist countries have the highest rate
of population growth (albeit only a fraction of a percent higher
than the low income countries).  It is also relevant to note here
that for female participation in the labor force and income
equality, both significantly related to population growth, the
socialist countries have the highest scores while the market
economy countries at the same income level have the lowest scores
of the four groups.
     The Marxist explanation for the significant differences in
birth rates and population growth rates for the two middle-income
groups of countries is that the material conditions of life for
most of the population are very different.  The mere fact that the
GNP of the 2 groups,when divided mathematically by the total
number of people, happens to be equivalent tells us nothing about
the actual division or allocation of the GNP.  In capitalist
countries, foreign and domestic owners of the means of production
may appropriate a large portion of the GNP and leave very little,
relatively, for other segments of the population, especially for
the bottom segment.  Such a hypothesis is supported by the data on
income distribution.  On each of the 3 measures, the scores for
the capitalist middle-income group of countries are at least two
times more unequal than the socialist group -- and population
growth rate is twice as high.  Perhaps even more important than
income distribution is the fact that the PQLV (health, nutrition,
education, position of women, price stability) scores for the
socialist group are significantly better.  Although we do not have
adequate comparative historical data, the historical data that was
presented in Table 2 suggests that 40 years ago, conditions were
roughly similar for the 2 middle-income categories.
     The population model cannot explain why the decrease in birth
rates (19601975) was greater for the socialist countries than for
low-income or middle income capitalist countries.  The fact that
the highest decreases in birth rates occurred in countries with
the lowest income inequality and with fulfillment of basic human
needs for higher proportions of the population conforms to
expectations derived from the Marxist theoretical model.
Dependency Variables.  The world-economy dependency model
hypothesis, already examined, is that position in the world-
economy determines degree of internal inequality; that dominant,
independent countries which have the greatest control over world
production and trade will have the least inequality, and that
dependent, subordinate countries will have the most inequality. 
The Marxist model accepts this hypothesis for the capitalist world
system, but considers the socialist countries to represent a
different mode of production subject to different laws and
     We have data on only one of the two dependency measures for
the socialist countries since the World Bank data on debt do not
include the centrally planned economies.  The one measure, primary
commodity exports, however, appears to play a very different role
for socialist countries than for capitalist countries as indicated
by the correlation coefficients for the two groups.
     Whereas for capitalist countries, a high level of primary
exports (higher dependency) is significantly associated with lower
urban population, higher agricultural labor force, lower PQLI,
fewer physicians, higher death rates, lower school enrollment,
greater income inequality, and a smaller decrease in birth rates,
only one of the above correlations is significant for the
socialist countries, and that one is in the opposite direction.7
Higher primary commodity exports are significantly related to
lower death rates for socialist countries.  It is also related,
although not significantly, to.a higher decrease in birth rates, a
higher supply of physicians, and to greater income equality.
     In summary, for developing capitalist countries, a higher
proportion of primary commodities in exports (higher dependency)
is significantly associated with lower economic development, lower
PQL conditions, and higher income inequality.  In contrast, for
socialist countries the same measure is not associated with any of
the negative characteristics assumed to be results of dependency
and subordinate position.  We interpret this finding as partial
evidence that socialist countries are not subject to the same
system of dominance-subordination relationships and consequences
as the capitalist countries.
     The most important evidence with regard to the socialist
countries, however, is indirect.  The evidence that the socialist
countries have the lowest income inequality in the world is in
opposition to the world-economy hypothesis that the countries
which have the greatest control over world production and trade
will have the lowest inequality.  The evidence that the scores of
the socialist countries on PQL variables and population variables
are very different from those of capitalist countries at the same
income level, and are very similar to the small group of wealthy,
independent, capitalist countries suggests that the socialist
countries are also independent.  It suggests that they are
independent of the laws of the world capitalist system, and that
that independence has enabled them to carry out a program of
autocentric development, development for the benefit of their own
The Inequality Gap.  The gap between the rich and the poor nations
in the world capitalist system is enormous and growing larger.  In
contrast, the Marxist model assumes that the gap between the
socialist countries has narrowed, and that it will continue to do
so.  What do the data show on this question? Pre-World War II data
on national income are not available for most low-income
countries, therefore we cannot calculate precise before-after
ratios for the two economic systems.  However, we can look at
several pieces of evidence.  First, prior to the time that they
became centrally planned economies, the socialist countries were
distributed in income range from the top to the bottom of the
underdeveloped world (the world with the exception of the 14
developed countries).  Three countries were in the lowest income
group.  Today none of the socialist countries are in the bottom
category.  All are in the middle-income range.  Forty-one
countries (34 percent of the population of the world) have lower
per capita incomes than the poorest socialist country.  The ratio
between the per capita income of Germany and China in 1938 was
20:1; between the German Democratic Republic and China today, it
is 10:1.  The ratio between Czechoslovakia (the second wealthiest
socialist country) and China was 11:1; today it is 9.3:1. In
contrast, the ratio between the richest and poorest market economy
in 1938 was 33:1; today (by-passing Kuwait, the wealthiest
country) the ratio between Switzerland, the second wealthiest
country, and the poorest market economy is 89:].
The ratio of mean GNP/C of the high-income to low-income market
economies is 34.3:1. The middle-income to low-income market
economy ratio is 6.5:1. In contrast, the ratio of the mean GNP/C
of the 6 high to the 7 low centrally planned economies is 3.4:1.
     In terms of GNP/C annual rate of economic growth (1960-76),
the all rate for the low-income market group was 1.41 percent
compared to 3.98 percent for the high-income market group.  In
contrast, the mean growth rate for the 7 lower-income centrally-
planned economies was 3.97 percent as compared with 3.55 percent
for the 6 higher-income centrally planned economies.  The
correlation coefficient of GNP/C with GNP/C growth rate for the
centrally planned economies is -.036 (significance level = .906)
in contrast to .192 (significance level= .051) for market economy
countries.  The coefficients indicate that there is a significant
positive relationship for the capitalist countries, that wealth is
correlated with faster economic growth rate.  Whereas, the
relationship is insignificant and slightly negative for socialist
countries.  For socialist countries which belong to the Council
for Mutual Economic Assistance (CMEA), this represents a
deliberate policy of planning to narrow the gap (Shishkov, 1974;
Szymanski, 1977-78; Marquit, 1978).  For socialist countries in
general, however, whether or not they are members of CMEA, the
data support the claim that there are no systematic, exploitative,
economic mechanisms operating among socialist countries designed
to maintain positions of economic dominance and subordination.*
     In terms of meeting basic human needs and income inequality
which are primary concerns of the paper, the data are even more
striking.  While we do not have adequate historical data to
compare the changes that have occurred over a period of time, we
can compare the gap within the world capitalist system with the
gap among the socialist countries at the present time.  Table 4
presents the range on the Gini Index, the PQLI, and its 3
components.  The dispersion on the Gini Index of income inequality
between capitalist countries is almost 21-2 times as great as the
difference in range between socialist countries.  PQLI scores
within the world capitalist system range from 14 to 100, whereas
for the socialist countries the range is quite small, from 76 to
96.  The disparity within the world capitalist system on each of
the PQLI components is enormous.  The range of scores for the
socialist countries, by comparison, is quite small.  We can assume
that, 30 years ago, the PQLI measures of countries such as China,
Korea, Mongolia, and to a lesser degree, Cuba, were as low as
those of the countries at the bottom of the capitalist range.  The
data entered earlier in Table 2 showed very high infant mortality
rates in 1938 for nine of the countries which are now socialist.**
However, at the present time, life expectancy, literacy, and
infant mortality rates of all socialist countries are
substantially better than the mean scores of the capitalist
countries.  The remarkably small gap that still exists between the
socialist countries in PQLI can be almost entirely explained by
initial level of development, that four of the six countries with
PQLIs below 90 were impoverished, semi-colonial, Third World
countries not long ago.***

*Three of the 6 East European CMEA countries have higher GNP/C and
higher economic growth rates than the Soviet Union.
**Data for China, Mongolia, USSR, and Yugoslavia are not
available.  Data for these countries would have made the group
infant mortality rate even higher than the rate shown.
***The six socialist countries with PQLIs below 90 are:  China,
Korea, Mongolia, Cuba, Albania, and Yugoslavia.

Table 4. Comparison of the Gap Among Capitalist Countries and
Among Socialist Countries in Income Inequality and in Meeting
Basic Human Needs (Range in Scores)

*All tabular data are available in the
larger version of the paper 
In Brief: Socialist Countries do better than MARKET ECONOMIES on PQLI, 
     It should be noted that the mean scores for the socialist
countries have already surpassed the goals which the Tinbergen
(1976) Group set for each country for the year 2000.  Of the
capitalist groups, only the high-income group has surpassed the
Tinbergen goals.
     In this paper we examined the 3 most prominent sociological
explanations of inequality and deprivation of basic human needs,
as well as a fourth theory, a Marxist model of socialist
development which has hardly been tested in the West.  We also
examined the types of data which are presented to verify the
theories.  Statistical data for 120 countries (97 percent of the
global population) were analyzed to test the propositions of each
of the 4 theoretical models.  The data analysis corroborated past
research findings that the 3 prominent Western models each
identify variables which are significant in the study of
inequality.  They each predict important relationships which are
confirmed by the empirical evidence' Taken together, the 3 models
predict the hierarchical picture of the capitalist world system
that emerges from the data: at one pole, poor countries
characterized by low economic development and growth, high
dependency, high birth and death rates, shockingly low physical
quality of life conditions, and high income inequality; at the
other pole, a small group of wealthy countries exhibiting the
opposite characteristics.  While the development and population
models predict various aspects of the empirical relationships, the
world-economy dependency model is More adequate.  It gives a more
satisfactory explanation for the existence of such a steeply-
graded system and for the present position of various countries in
the hierarchical order.  It explains the logic and operations of
the capitalist world system.  Such high-powered intellectual
models supported by massive empirical evidence and statistical
data explain and make acceptable the anomaly of poverty amidst
plenty.  It no longer appears as a contradiction that
impoverishment increases at the same time that the global product
and wealth of the world doubles, triples, and sextuples.
     None of the 3 models includes propositions concerning
socialist countries.  Research on cross-country inequality, in
general, does not include socialist countries.  If individual
socialist countries are included, they are incorporated into a
single world system instead of being treated as a separate system
to be compared with the capitalist system.  Thus, one of the two
major existing modes of development with one-third of the
population of the world is, strangely, missing from the research
on inequality.  The leading theories do not have to confront or be
tested against the explanation of the foremost oppositional
theory.  If no alternatives exist, then the contradictions of the
capitalist system can be more easily accepted as the unfortunate
but inevitable workings of the natural order.  Nothing is put
forth to challenge such assumptions.
     On the other hand, if the socialist countries are included as
a separate mode of production to be compared with the capitalist
mode, as was done in this study, the assumptions and propositions
of the major models are challenged.  The findings for the
socialist countries do not conform to the propositions put forth
by the 3 models.  The development model does not predict or
explain why the socialist countries are higher in fulfillment of
basic human needs and income equality than capitalist countries at
the same level of economic development and theory.  Such data
contradicts the major proposition of development theory.  The
population model cannot explain why birth rates and population
growth vary so greatly.  It cannot explain why the Capitalist and
socialist countries at the same level of economic development have
the highest and lowest rates of population growth, respectively,
of the 4 categories of countries.  It cannot explain why the
socialist countries have a higher decrease in birth rates than the
low-income and middle-income capitalist countries.  The world-
economy dependency model does not predict or explain why the
socialist countries have the least income inequality in the world. 
Such data is in opposition to its fundamental proposition that
countries which have the greatest control over world production
and trade will have the least income inequality.  None of the 3
models predicts or explain 9 why inequality is decreasing within
and between the socialist countries, while it is increasing in the
capitalist world system.  None of the 3 models explains why the
socialist countries, which were part of the underdeveloped
capitalist world not long ago, are the only group of the formerly
underdeveloped countries which has joined the high-income
capitalist countries in the third stage of the demographic
transition and in surpassing all of the Tinbergen goals for basic
human needs.  In sum, none of the 3 models predicts any of the
striking differences between socialist and capitalist countries
displayed in the data because none use the concept "mode of
production" as a comparative, explanatory concept.
In contrast, the findings appear to be more adequately explained 
by the Marxist proposition that each mode of production has its
own set of laws.  The law of capitalist accumulation, with its
priority on private profit maximization, leads to uneven
development, to growing concentration of wealth at one end of the
pole and poverty at the other end.  The different material
conditions of life then, in turn, produce different rates of
population growth.  In a socialist mode of production, with the
means of production collectively owned, with the imperative of
private profit maximization eliminated, theoretically production
could be planned to meet the basic human needs of the entire
population, the new owning class.  With an improvement in economic
conditions, in security, in public health and educational
services, in opportunities for employment of women, population
growth would decrease.  These assumptions and propositions appear
to be supported by the data examined in this study.
     The deficiencies and limitations of a statistical study of
120 countries are great indeed.  Generalizations about large
categories of countries give little insight or understanding of
any particular country.  Adequate understanding of any nation
requires an in-depth historical study of the concrete conditions
in that society.  There are many other problems associated with
large-scale statistical studies, with the data, measurement, and
assumptions.  Nevertheless, the data are adequate to discern
patterns and trends.
     The main value of this study and the major implications stem
from the findings which support Marx's proposition that social
relationships are shaped by laws which are distinctive and
specific to each mode of production.  Research which studies only
capitalist societies or which combine socialist countries
intermingled with capitalist nations contributes to the belief
that the relationships found in these many studies are universal
and inevitable processes.  It contributes to the belief that gross
inequality is natural and inevitable, or that countries must
necessarily pass through periods of increasing relative inequality
in order to promote economic development.  The data in this study
contradict such assumptions.  The evidence demonstrates that
countries with a socialist mode of production, with planning
geared toward meeting the basic human needs of the entire
population and toward decreasing inequality can make great strides
toward such goals in a relatively short period of time even though
they start at a very low, backward stage of economic development.
     In this study we did not have the occasion to discuss the
many deficiencies, shortcomings, and problems that exist in each
of the socialist countries in this early stage of socialism. 
There is, however, an overwhelming abundance of information (and
misinformation) available regarding the negative aspects of
socialist countries.  In contrast, the findings about socialist
countries presented in this study are known to few people, even in
Marxist circles, in the United States.  It seems that the
information presented is sorely needed at this time to balance the
empirical studies that totally ignore the socialist third of
humanity and those non-empirical studies which present one-sided,
grossly distorted images of the socialist countries.

1.    PQLI data consists of  four  measures  for  each  of  the 
120  countries in the sample (=480).  All  of  the  PQLI  data 
AGENDA  1977  (Sewall  et  al.) with the exception of five scores. 
Infant mortality rates for Mongolia and the Korean People's
Democratic Republic were listed as not available (n.a.), but were
obtained from a subsequent ODC study.  Literacy rates for Korea,
Cuba, and China were taken from WORLD MILITARY AND SOCIAL
EXPENDITURES 1977, which is listed by ODC as one of its sources of
data.  The literacy rate for Korea was listed as not available
(n.a.) in Agenda 1977.  The literacy rates for China (25%) and for
Cuba were obviously in error.  The rate given for Cuba was its
1953 pre-revolution  literacy  rate  (see  UNESCO  STATISTICAL 
YEARBOOK  1965).  Sivard's literacy rates for Korea and Cuba,
which are used in this study, are conservative.  Other official
sources suggest higher rates.   PQLI scores for the four countries
(Mongolia, Korea, Cuba, and China) were recomputed using a formula
obtained from ODC.
      The AREA HANDBOOK  FOR  NORTH  KOREA  (1976),  prepared  by 
Foreign Aid Studies of the American University for the U.S.
military, states the following  in  the  Country  Summary  for 
North  Korea:  "Literacy  rate nearly 100 percent by 1975." (p.
ix).  Nevertheless, in this study we used the literacy rate of 85
given by Sivard.
      Virtually all official Western sources are in agreement
concerning PQLI data for the nine other centrally planned
socialist economies.  Despite the agreement, however, it is
obvious that the rates for Albania, which were used in  this 
study,  are  very  old,  outdated  statistics.  The literacy rate
given is the same rate listed for Albania in 1955 (UNESCO
STATISTICAL YEARBOOK 1965), and the infant mortality rate is
higher than the rate listed for it in 1938 (1951 UNITED NATIONS
DEMOGRAPHIC YEARBOOK).  The  high  infant  mortality  rate 
(IMR=87)  seems highly improbable since Albania's death rate has
decreased from 17.7/1000 in 1938 (1951 U.N. DEMOGRAPHIC YEARBOOK)
to 7/1000 (WORLD DEVELOPMENT REPORT 1978).  But apparently, up-to-
date statistics for Albania are not available from official
Western sources.
It is important to note that the PQLI data were taken from AGENDA,
1977. The new AGENDA 1979 uses a different formula for the PQLI, making
scores for all countries lower in order to allow room for higher scores
in future years.
2.    Neither ODC nor the World Bank give the rationale for their
cut-off points.  If ODC's lower and upper middle-income groups are
combined, the following are the cut-off,points for the 3 studies for the
middle-income group:
                             ODC: $300 - 2000
                             WDR: $260 - 3920
                        Cereseto: $410 - 4250
3.  In 1921, following six years of war (World War I, revolution,
    civil war, and invasion by the leading foreign powers),
    industrial production in Soviet Russia had fallen to about 20
    percent of its 1913 level.  Soviet Russia was economically
    devastated.  The economic recovery that followed was soon to
    be shattered again by the Nazi invasion and four years of
    warfare on Soviet soil.
4.  United Nations estimates of life expectancy for different
    geographical regions for the 1935-39 period: Asia-30, Africa-
    30, Latin America-40, temperate South America-51; South and
    East Europe-53; North America, North and West Europe-62,
    Australia and New Zealand-66 (World Bank Staff Report,
    As noted by Grant (1978:23) adequate data on literacy
    generally are available only for developed nations.
5.  The statistical means for categories of countries presented
    in the tables are unweighted means.  The decision to use
    unweighted means was based on a desire to retain, to a
    greater extent, the effect of characteristics of each of the
    120 countries in the sample rather than obtaining information
    based on the actual proportion of the global population
    represented by each country.  Otherwise, a country such as
    China with more than 800 million people, would completely
    overwhelm and erase the effect of all other countries within
    its category.  Data on the low income countries would
    overwhelmingly reflect the conditions in India.  The effects
    of conditions in Brazil for the middle-income category, and
    of the United States for the high-income category, would
    greatly color all of the statistics computed.  The five
    largest countries in the world make up more than half the
    population (51.6%) of the sample.  Thus it seems that the
    weighting procedure would destroy much of the value of
    studying 120 countries.
6.  However, WORLD DEVELOPMENT REPORT 1978 Table 23 (p. 27) for
    average annual gross domestic product (at 1975 prices) shows
    much higher growth rates for centrally planned economies than
    for the market industrialized countries: for 1960-70
    CPEs=6.8% and market countries=4.9%; for 1970-75 CPEs=6.4%
    and market=2.8%.
7.  The relationships discussed have very different correlation
    coefficients for the capitalist countries than for the
    socialist countries.  Those with similar coefficients, but
    different levels of significance due . simply to the great
    difference in number of countries in the two groups, were not
    included in the discussion.
8.  While we did not give evidence regarding the decrease within
    socialist countries in inequality, it is presumably conceded
    that the socialist countries are less unequal than they were
    in the past when they had czars, monarchs, emperors,
    nobility, and peasants.  Inequality was a major cause of the
    revolutions in all socialist countries.

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