Immanuel Wallerstein's World-Systems Theory

Discussion

Summary and comments of Wallerstein's theories by David Wilkinson:

Important features of the modern capitalist world-economy in Wallerstein's theory, requiring and receiving closer scrutiny, arc that it is: regionally polarized, cyclical, occasionally hegemonic, regressive, doomed and surpassable. To these features we shall turn next.

Comment. Wallerstein believes neither in the revolutionary nor in the progressive image of capitalism; but he misses the strongest argument against both. Whether we use an accumulative or ( as I prefer) a market-based propertarian definition of capitalism, it long predates the modern era, seems to have time-boundaries close or identical to those of the phenomenon of civilization itself, and therefore cannot be either as (recently) revolutionary or as progressive as is sometimes believed. The idea of "capitalism" as a reformist strategy for the survival of a landed aristocracy is remarkably stimulating. Quigley's idea of the reform of an institution of expansion seems to provide the general theoretical category of which this is a possible instance. (Quigley himself contends that capitalism, by which he means "an economic system motivated by the pursuit of profits within a price structure," could be seen either as a circumvention of feudalism or as a reform of the medieval commercial system: 1961, 233). Pre-modern and post-modern capitalist innovations may also need reinterpreting as reformist strategics, or as circumventions, e.g. of a socialist state, as in the USSR and China today. The economic continuity which Wallerstein finds between "feudal" and "modern" Europe is the easier to accept since it is paralleled by a political continuity: they arc periods in the history of a region of the same states system (vide Wilkinson, 1988, 55-57).

Wallerstein seems correct in asserting, and Quigley wrong in denying, that there today exists a single world-system' civilization, product of the global spread of what was in the fifteenth century only one of many such. It is not, however possible to accept that feudal Europe, or modern Europe (with or without Iberian America) ever constituted a world system with a largely self-contained life and endogenous dynamics. Indeed, it seems strange even in sheerly economic terms to find Spanish America (an object of predation and redistribution rather than commerce) has nonetheless gotten into the world-system, while Russia, Turkey and Persia arc external to it. I prefer the judgement that, like Quigley's Orthodox and Islamic civilizations, Wallerstein's Russian, Turkish and Persian world-empires, were not "external arenas" but part and parcel of a single system, a single process and struggle, that of Central Civilization, which a.., a whole resembled a Wallersteinian "world economy" more than did any of its parts, which were not "worlds" to themselves politically, nor, in consequence, economically. It is not clear by what definition equality is incompatible with a capitalist world-economy; definitional incompatibilities are in any case innocuous, since it is empirical incompatibilities that have practical significance. In this case the underlying question is, if every human society whatsoever displays inequality ( e.g. by age, gender, lineage) and new forms of inequality appear with every enlargement or complication of human society, whether capitalism ha.., any relationship to equality except that of being one of the forms in which it fails to occur. I believe that researchers who look for pre-modern classic, nations, households and states will find them without much difficulty.

Core and periphery.

A world economy has a geographical as well as a functional division of labor. "World-economics ... are divided into core states and peripheral area..,." Core states arc advantaged, have strong state machineries and national cultures; peripheral area.., have weak or nonexistent indigenous states (TMWSl 349). Core and periphery are features of capitalism: "world-empires had joined their 'edges' to the center by the collection of tribute, otherwise leaving relatively intact the production systems over which they had 'suzerainty,' whereas the capitalist world-economy 'peripheralized' area.., economically by incorporating them into the division of labor." (Hopkins, Wallerstein et al., 1982b, 55) a. Causation. Why is there regional polarization? Wallerstein's various answers include definitional or functional requisiteness, geoeconomic regionalism (core-likeness) and force (unequal exchange).

1. Requisiteness.

"[W]ithin a capitalist world-economy, all states cannot 'develop' simultaneously by definition, since the system functions by virtue of having unequal core and peripheral regions." (W 1975, 23)

2. Geography.

Production processes are linked in complex commodity chains (HC 16). These chains have a directionality, raw-to-finished. Commodity chains have been geographically convergent: "they have tended to move from the peripheries of the capitalist world-economy to-the centres or cores" (HC 30). The more easily monopolized processes arc concentrated in core area..,, the less skilled, more extensive manpower processes in "peripheral" area.., (PWE 4-5). What "makes a production process core-like or periphery-like is the degree to which it incorporates labor-value, is mechanized, and is highly profitable" (PWE 16). There arc core states and periphery states because there "tend to be geographical localizations of productive activities such that core -like production activities and periphery-like production activities tend each to be spatially grouped together" (PWE 15).

Unequal exchange.

"The exchange of product.., containing unequal amounts of social labor we may call the core/periphery relationship" (PWE 15). There is a parallel political polarization between strong core states and weaker peripheral states, "the 'political' process of 'imperialism' being what makes possible the 'economic' process of 'unequal exchange'." (PWE 5) Unequal exchange "means, ultimately, the transfer of some of the surplus of one area to a receiver of surplus in another" a.., "consequence of the fact that more labor power ha.., gone into producing the value exchanged in on e area than in the other." (WSA 94) Unequal exchange exists when commodities moving one way incarnate more "real input ( cost)" than equally-priced commodities moving the other way (HC 31 ). Unequal exchange existed in pre-capitalism when one party to a market transaction used force to improve his price (HC 30-31 ). Core zones arc those which gain profit or surplus by unequal exchange transactions (HC 31-32). In capitalism, unequal exchange ha.., been concealed by the fact that commodity chains cross state frontiers (HC 31 ). Strong core state-machines keep peripheral state -structures weaker, their economics lower on the commodity chain, their wage-rates lower (HC 32). This is done by force --wars and colonization--when there arc significant political challenges to existing inequalities, otherwise by market supply-and-demand with an enormous apparatus of force latent (HC 32-33). b. Change. Cores move over time (PWE 103, TMWSl 350, CWE 33). New technologies render different commodities "high-profit, high-wage" at different moments: "At first, wheat was exchanged against textiles; later textiles against steel; today steel against computers and wheat" (PWE 103).

c. Intermediate zones.

"There always exist semiperipheral zones" (PWE 15). Semiperipheral states "function as loci of mixed kind.:; of production activities" (PWE 15), have enterprises engaged in both "core-like" and "peripheral" processes. In moments of expansion of the world-economy, these states "serve to some extent a.:; economic transmission belts and political agents" of some imperial core power. In periods of stagnation and crisis, core powers' hold on these states may be weakened; one or two, which arc strong enough, may play among the rivals, erect new quasi-monopolies, displace some falling core powers and impose thc1rnclvcs a.:; new core powers (PWE 7). Semiperipheral area-; "arc in between the core and the periphery on a series of dimensions, such a.:; the complexity of economic activities, strength of the state machinery, cultural integrity, etc. Some of these area-; had been core area-; of earlier versions of a given world-economy. Some had been peripheral area-; that were later promoted, so to speak, a.:; a result of the changing geopolitics of an expanding world-economy." (TMWSl 349) "The semiperiphery is a necessary structural clement in a world-economy. These area-; play a role parallel to that played, mutatis mutandis, by middle trading groups in an empire .... These middle area-; (like middle groups in an empire) partially deflect the political pressures which groups primarily located in peripheral area-; might otherwise direct against core states and the groups which operate within and through their state machineries." (TMWSl 349-350) The middle strata in world-economics consist of the semiperipheral states. (CWE 23) "The three structural positions in a world economy--core, periphery, and semiperiphery -- had become stabilized by about 1640." (CWE 18)

Quigley seems right to treat cores and peripheries as features of all civilizations, not simply of states-system periods or capitalist instruments of expansion, and right again to treat them in the first instance as rooted in the fact that expansion necessarily means that some regions will enter a civilization later than others. Wallerstein seems right to assert that cores move in space over time; this can be seen as a different way of perceiving, what Quigley is sharper in asserting, that at least some semiperipheral and peripheral states have usually in the long run been advantaged in imperialist war and universal-empire- building. An interesting question, not fully explored, is that of the balance of advantage in economic expansion. Quigley secs it as lying with the latecomers (because of geographic circumvention, developmental short -cuts, and preferential diffusion of material culture); Wallerstein as clearly sees it lying with the core states (greater force, stronger state-machines, unequal exchange). The differences might be reconciled: since cores do move, but slowly, Quigley's cited forces may operate at longer timescales than Wallerstein's, and in the opposite direction.

Quigley's causal mechanism (geographic expansion over time) seems sufficient to account for the origin of core-periphery distinctions. The enormously uneven distribution of particular natural resources ( ores, soils, climates, water, etc.) across the globe and each of its regions may combine with the inequality of the distribution of human populations and the self-interested power of the core states to account for the perpetuation of such regionalization (in all world-systems), technological change (Wallerstein), at lca-;t if surprising or uncontrolled, and, more effectively and inescapably, core wars (Quigley), may help to account for core declines and/or movements and their direction.

It is not clear that the concept of "unequal" exchange is viable as a description--it seems to entail some variant of the problematic labor theory of value--or as an explanation--it seems to conflate force, which would plausibly explain involuntary transfers of surplus, with technological inequality, which would plausibly explain voluntary exchanges of high-labor-input for low-input commodities. The degree to which goods transports arc characterized by either vs. both of those mechanisms would seem to be an intriguing but empirical question. If cores move, there is no reason to create a triple core-semiperiphery-periphery distinction within civilizations, and we can reserve "periphery" to designate those areas outside a civilization (Wallerstein's "external arenas") into which it may, or may not, expand at some future time. The structural necessity of an intermediate zone within a world-economy at best remains to be demonstrated.

9. Cyclicity.

The growth of the capitalist world-economy "has not been constant, but has occurred in wavelike spurts of expansion and contraction" caused by production exceeding effective demand (PWE 6). In periods of expansion, "Production is expanding overall and in most places. Employment is extensive. Population is growing. Prosperity is the sign of the time." Real wages "for large numbers of people may be declining" but nominal prices steadily inflate. "There is considerable social ferment," optimism, daring, apparent individual mobility, apparently providential progress. (TMWS2 129) Periods of downturn "arc much more visibly uneven." The "regression, stagnation, withdrawal, bad times" arc "not bad for everyone." Reduced production and employment are more likely in the peripheral areas. "The strong not only survive; they frequently thrive." (TMWS2 178)

Market forces in the capitalist world-economy have produced an alternating cycle of regular and significant expansions and stagnations in the system as a whole (HC 34). What forces account for cyclicity in capitalism? Perhaps an underlying cycle of enterprise aging: every fifty years or so commodity chains have been restructured, resources more efficiently reallocated, some production processes demoted and relocated toward the periphery, some entrepreneurs and workers eliminated (HC 34-35). Eliminated producers tend to be the less efficient; these tend to be the "older" enterprises ( and the states in which they arc located) because of costs of amortizing "older" capital investment and "rising labor costs resulting from the growing strength of workers' organization" (PWE 6-7). Perhaps a demand cycle: it is suggested that "'expansion occurs when the totality of world production is less than world effective demand, as permitted by the existing distribution of world purchasing power, and that 'contraction' occurs when total world production exceeds world effective demand. These arc cycles of 7 5 - l 00 years length in my view and the downward cycle is only resolved by a political reallocation of world income that effectively expands world demand." (Wallerstein 1975, 24) Perhaps a political cycle: periods of stagnation reduce overall production, lead to class struggles in core countries which force redistribution of income to their lower strata and raise workers' standards of living. Upper strata compensate for this by incorporating new zones, new lower strata, new ultralow-income-receiving direct producers (PWE 6). In any case, there is a longer-term, asymptotic and limited trend as well: "The mechanism by which the capitalist system ultimately resolves its recurrent cyclical downturns is expansion: outward spatially, and internally in terms of the 'freeing' of the market...via the steady proletarianization of semiproletarian labor and the steady commercialization of semi-market oriented land." The geographic limits arc largely reached; the freeing of the factors of production is perhaps halfway completed. (CWE 162) This implies that at some point a stagnation will become irresolvable. [

Comment. Cycles in civilizations/world systems have been observed since Vico, or even Ibn Khaldun. The best recent kinematic account seems to have been Toynbee's revised Helleno-Sinic model (Toynbee, 1961, 197-209, 304; Wilkinson, 1986). The Toynbian cycles seem to be as political as economic, not necessarily economically determined. Among economically driven cyclical theories, however, Quigley's institutionalization theory seems more satisfactory than Wallerstein's because it is more general ( cross-civilizational and cross-polity) in its application. The mechanisms Wallerstein cites probably do work locally, within markets, and within the scope of the larger Quigleyan process, whose fluctuations have a much greater wavelength than Wallerstein's. In a system with several modes of production/instrument.., of expansion, of course, there can be more than one underlying (or regional) Quigleyan cycle at work. Quigley's supply-side emphasis on waves of ( open-ended) technological innovation is as notable as Wallerstein's demand-side concentration on purchasing power and his emphasis on (asymptotically limited) geographically and structurally-based expansion. Supply-side and demand-side factors may very well work on different timescales; the possibilities of technological innovation still seem so large as to be able to outweigh, for the next centuries at least, the effects of reaching the other limits to growth; here again I would choose to follow Quigley. 10.

More information

More of this text here: Hegemony.