World-System Theory

by

Christopher Chase-Dunn, Marilyn Grell-Brisk

• LAST REVIEWED: 26 November 2019
• LAST MODIFIED: 26 November 2019
• DOI: 10.1093/obo/9780199743292-0272

Introduction

The world-system perspective emerged during the world revolution of 1968 when social scientists contemplated the meaning of Latin American dependency theory for Africa. Immanuel Wallerstein, Terence Hopkins, Samir Amin, Andre Gunder Frank, and Giovanni Arrighi developed slightly different versions of the world-system perspective in interaction with each other. The big idea was that the global system had a stratified structure on inequality based on institutionalized exploitation. This implied that the whole system was the proper unit of analysis, not national societies, and that development and underdevelopment had been structured by global power relations for centuries. The modern world-system is a self-contained entity based on a geographically differentiated division of labor and bound together by a world market. In Wallerstein’s version capitalism had become predominant in Europe and its peripheries in the long 16th century and had expanded and deepened in waves. The core states were able to concentrate the most profitable economic activities and they exploited the semi-peripheral and peripheral regions by means of colonialism and the emergent international division of labor, which relies on unequal exchange. The world-system analysts all focused on global inequalities, but their terminologies were somewhat different. Amin and Frank talked about center and periphery. Wallerstein proposed a three-tiered structure with an intermediate semiperiphery between the core and the periphery, and he used the term core to suggest a multicentric region containing a group of states rather than the term center, which implies a hierarchy with a single peak. When the world-system perspective emerged, the focus on the non-core (periphery and semiperiphery) was called Third Worldism. Current terminology refers to the Global North (the core) and the Global South (periphery and semiperiphery).

Precursors

Karl Marx’s theory of the contradictions of capitalist development (Marx 1967) was expanded by the world-system theorists to a global scale. While Marx focused mainly on capitalist industrialization and class relations within core European states, the world-system perspective developed in Wallerstein 1974 sees the core/periphery hierarchy as a central structure for capitalism. What had occurred in the non-core was peripheral capitalism and it was necessary for the reproduction and deepening of capitalism. Marx had defined capitalism commodity production based on wage labor. The world-system theorists have argued that modern slavery and serfdom constituted forms of peripheral capitalism. The Marxist view of modern societies in constant tension between the owners of the means of production (capitalists) and labor (workers/proletariat) resulting in class conflict is expanded to the whole system, except that labor relations in the non-core involve a greater degree of coercion. World-system analysis constitutes a significant modification of traditional Marxist principles that includes the non-core as a systemic aspect of capitalism. Lenin’ s theory of imperialism as a stage of capitalism was rewritten to emphasize the importance of imperialism as a systemic feature of capitalist development since the emergence of the modern core/periphery hierarchy in the 16th century (Lenin 1939, originally published in 1916). Bukharin’s discourse on imperialism on capitalism and world-economy marked an important precursor that focused on flows of value from peripheral/colonial countries to the core capitalist countries (Bukharin 1972, originally published in 1929). While Lenin saw this relationship of extreme exploitation (imperialism) by the core of the non-core in the capitalist system as the “highest stage” of capitalism, world-systems analysts view imperialism as a central feature of capitalism’s constant, though evolving structure of inequality particularly through Arghiri’s theory of unequal exchange (Arghiri 1972). Although cycles in production have always existed, for world-system analysts, economic cycles are endemic to the modern capitalist system. The world-economy cycles through periods of growth and expansion (A-phase) and periods of stagnation (B-phase), which is primarily explained through the work of Nikolai D. Kondratieff (Kondratieff 1935), Joseph Schumpeter (Schumpeter 2006, originally published in 1939), and, later, Ernest Mandel (Mandel 1975). The Kondratieff long waves or K-waves, which last from forty to sixty years, are driven by the appearance of new technologies, leading to economic expansion and their exhaustion leading to periods of slow growth. Karl Polanyi’s depiction of cycles of marketization followed by periods of reregulation was also an important influence on world-system theorists (Polanyi 1944). Fernand Braudel’s focus on the long-term structures of historical development and the importance of cities, agriculture, and climate in the interaction networks of the Mediterranean Sea constitutes another major influence of the emergence of the world-system perspective (Braudel 1972).

• Arghiri, Emmanuel. Unequal Exchange: A Study of the Imperialism of Trade. New York: Monthly Review Press, 1972.

  This book is an examination of unequal exchange, namely the maintenance of core position through wage suppression in the periphery, that is a key aspect of world-system structure.

• Braudel, Fernand. The Mediterranean and the Mediterranean World in the Age of Philip II. 2 vols. New York: Harper and Row, 1972.

  This text is a major influence on the world-systems perspective given its focus on long-term structures of historial development.

• Bukharin, Nikolai. Imperialism and World Economy. New York: Monthly Review Press, 1972.

  Originally published in 1929. An important precursor to the world-systems perspective, this is a study of the internationalization of capital and examines the flow of value from the colonies and peripheral countries to the core states.

• Kondratieff, Nikolai D. “The Long Waves in Economic Life.” Review of Economic Statistics 17.6 (1935): 105–115.

  DOI: 10.2307/1928486

  This artice explains economic cycles of growth, expansion, and stagnation endemic in the world-system.

• Lenin, Vladimir I. Imperialism, the Highest Stage of Capitalism. New York: International Publishers, 1939.

  Originally published in 1916. A precursor to world-systems analysis, this book discusses imperialism as the highest stage in capitalism, particularly because of the level of exploitation of peripheral/colonial countries by the core.

• Mandel, Ernest. Late Capitalism. London: New Left, 1975.

  This book serves as a history of capitalism and its expansion through unequal exchange.

• Marx, Karl. Capital I. New York: International Publishers, 1967.

  Originally published in 1867. An essential text to understanding class relations.

• Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. New York: Rinehart, 1944.

  This book presents the development of the modern market society, with cycles of expansion, followed by periods of reregulation.

• Schumpeter, Joseph A. Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process. Mansfield Centre, CT: Martino, 2006.

  Originally published in 1939. In this book of economic history analyzes the critical role of innovation with regards to economic cycles and transformation.

• Wallerstein, Immanuel. The Modern World System. Vol. 1, Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century. New York: Academic Press, 1974.

  This is the seminal work on the world-systems perspective.