The Capitalist World System by Wallerstein

 The discussions within the Neo-Marxist research tradition have, since the 1950s, centred around the causes of underdevelopment in the Third World. Some of the theorists have identified these causes primarily within the framework of the individual society, while others have emphasized the external links and dependency relationships. 

In connection with this problematique, researchers have taken different positions regarding the character and role of capitalism. According to one school of thought, decades ago, capitalism had already penetrated both the world economy and individual peripheral economies to such an extent that this provided a solid basis for understanding the whole problem of underdevelopment. 

According to another school of thought, the capitalist mode of production has only permeated the centre economies and their international relations with the periphery. The periphery economies, on the other hand, have been characterised by complex articulations of different modes of production thus creating structural heterogeneity, which in itself has hindered national economic integration and development.

Regardless of their position in this debate, the conceptions presented in the previous sections have used as their point of departure individual societal formation and moved up from there to the international system. The character and the mode of functioning of this system have been seen as determined primarily by the centre formations and the interests of ‘their dominant social classes. 

In opposition to this view, a competing approach instead starts with the capitalist world system itself, and moves down to analyses of the individual societies and their position within the system. This world system approach has been elaborated, first and foremost, by Immanuel Wallerstein (Wallersteln, 1974, 1979, 1980), but also to a large extent been taken over by Frank and Amin in their more recent works during the 1980s and the early 1990s.

Wallerstein’s theory did not originate from the classical dependency theories. In the present context, though, it may still be appropriate to compare Wallerstein’s considerations with the main propositions of these theories, because this will facilitate an identification of some of his core notions and propositions. Wellerstein operated with a significantly longer historical perspective that the mainstream dependency theories. 

In addition, he studied not only the structures of the world economy, but also the cyclical fluctuations, the economic recessions, depressions, upswings and booms. One of his points in this connection was that major fluctuations have engrafted upon both the world economy and the international political system some specific characteristics that have been crucial for the individual nations’ development possibilities in the period concerned.

Wallerstein consistently used as his starting point the basic features of the global system. The analysis of the individual countries came second, because he assumed that their development prospects depended more on the nature of the global system than on their internal structures. The development prospects are further determined by the individual country’s position in the international economic and political system. 

In this context Wallerstein worked out a detailed ranking of the countries as well as a grouping of them into three main categories: centre, semi-peripheral, and peripheral. The individual country can change its position in the global hierarchy both upwards and downwards. But the framework for such shifts is set by the structures and the prevailing conditions in the world system.

Summarized in these few sentences it is hard to get a proper impression of Wallersterin’s quite elaborate theory. Therefore, it should be added that this theory, more thoroughly than the classical dependency theories, reflects the very complicated and constantly changing structure in the international economy. It is also Wallersterin’s credit that he has related the economic analysis to investigations of the international political system and the power relations that permeate it.

Wallerstein has been criticized for focusing exclusively on international conditions and their impact upon the individual countries’ development prospects. It is correct that his domain interest lies here, but the world preconditions and prospects for development. Wallerstein’s main point here is rather that the further down in the hierarchy a county is, the narrower are the constraints and barriers to its development established by the world system. Thus to understand stagnation and underdevelopment in the very poor and dependent countries requires particular emphasis on the global framework and conditions.

It is interesting to note that both Frank and Amin have adjusted their original theories by incorporating some of Wallersterin’s propositions, but without accepting the world system as the necessary analytical starting point for all periods in the development of capitalism. 

On the contrary, Amin has argued that the world system approach has only recently become the most feasible analytical framework, the main reason being that nor the economies of the centre countries have become significantly more integrated and dependent on the global economic system. Another reason for paying more attention to his system according to Amin, is the transformation of the previously centrally planned economies and their increased world market integration (Amin, 1992a, 1992b).

In recently published works, Amin has been particularly preoccupied with what he called the new capitalist globalization (Amin, 1992). This process is characterised by a polarization and regionalization of the world economy around three poles: the USA, Japan, and the European Union. It is further characterised by a continuous

strengthening of the semi peripheral economies such as South Korean and Taiwan — but as part of regional networks, not as independent units. Parallel to these trends, many peripheral societies have been subjected to a drastic differentiation process involving relative deprivation. This has prompted Amin to talk about a Fourth World with reference to the African countries, which have fallen further behind in relation to most of the Asian and Latin American countries.

According to Amin, capital accumulation in this new global system has in reality broken down in both the periphery and what was previously known as the Second World, and the capitalist system in its present form will not be able to resolve this accumulation crisis. The main reason is not the dominance of the centre countries and their national bourgeoisies, as claimed by the classical dependency theories. 

The explanation should rather be looked for in international financial system and the ‘wild orgy of financial speculation’, which has undermined the foundations of national production and growth-oriented policies and strategies — even in relatively strong, centre countries. Amin has sought to capture these prevailing conditions in the title of his latest book, Empire of Chaos (19922b).

While Amin may have identified unprecedented new features in the world system, it should be noted that he has not yet substantiated his recent propositions with empirical studies of the same quality as those he carried out in support of his original dependency theory.