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World-System Theory (Synopsis
Globalization is the process, completed in the twentieth century,
by which the capitalist world-system spreads across the actual globe.
Since that world-system has maintained some of its main features over
several centuries, globalization does not constitute a new phenomenon.
At the turn of the twenty-first century, the capitalist world economy
is in crisis; therefore, according to the theory's leading proponent,
the current "ideological celebration of so-called globalization is in
reality the swan song of our historical system" (I. Wallerstein, Utopistics,
The modern world-system originated around 1500. In parts of western Europe,
a long-term crisis of feudalism gave way to technological innovation and
the rise of market institutions. Advances in production and incentives
for long-distance trade stimulated Europeans to reach other parts of the
globe. Superior military strength and means of transportation enabled
them to establish economic ties with other regions that favored the accumulation
of wealth in the European core. During the "long sixteenth century," Europeans
thus established an occupational and geographic division of labor in which
capital-intensive production was reserved for core countries while peripheral
areas provided low-skill labor and raw materials. The unequal relationship
between European core and non-European periphery inevitably generated
unequal development. Some regions in the "semiperiphery" moderated this
inequality by serving as a buffer. States also played a crucial role in
maintaining the hierarchical structure, since they helped to direct profits
to monopoly producers in the core and protected the overall capitalist
economy (e.g., by enforcing property rights and guarding trade routes).
At any one time, a particular state could have hegemonic influence as
the technological and military leader, but no single state could dominate
the system: it is a world economy in which states are bound to compete.
While the Europeans started with only small advantages, they exploited
these to reshape the world in their capitalist image. The world as a whole
is now devoted to endless accumulation and profit-seeking on the basis
of exchange in a market that treats goods and labor alike as commodities.
In the twentieth century, the world-system reached its geographic limit
with the extension of capitalist markets and the state system to all regions.
It also witnessed the rise of the United States as a hegemonic power-one
that has seen its relative economic and political strength diminished
since the last years of the Cold War. Newly independent states and communist
regimes challenged core control throughout the century, and some formerly
peripheral countries improved their economic status, but none of this
shook the premises of a system that in fact was becoming more economically
polarized. The nineteenth-century ideology of reform-oriented liberalism,
which held out the hope of equal individual rights and economic advancement
for all within states, became dominant in the twentieth but lost influence
after 1968. Such twentieth-century developments set the stage for what
Wallerstein calls a period of transition. New crises of contraction can
no longer be solved by exploiting new markets; economic decline will stimulate
struggle in the core; challenges to core dominance will gather strength
in the absence of a strong hegemonic power and a globally accepted ideology;
polarization will push the system to the breaking point. While this chaotic
transition may not produce a more equal and democratic world, it does
spell the end of capitalist globalization.
Definition. A world-system is any historical social system of interdependent parts that form a
bounded structure and operate according to distinct rules, or "a unit with a single division of
labor and multiple cultural systems" (1974a: 390). Three concrete instances stand out: mini-systems, world empires, and world-economies. The modern world-system is a world-economy:
it is "larger than any juridically defined political unit" and "the basic linkage between its parts is
economic" (1974b: 15). It is a capitalist world-economy because the accumulation of private
capital, through exploitation in production and sale for profit in a market, is its driving force; it
is "a system that operates on the primacy of the endless accumulation of capital via the eventual
commodification of everything" (1998: 10).
Key feature. The capitalist world-economy has no single political center: it "has been able to
flourish precisely because [it] has had within its bounds not one but a multiplicity of political
systems," which has given capitalists "a freedom of maneuver that is structurally based" and has
"made possible the constant expansion of the world-system" (1974b: 348).
Origin. The modern world-system has its origin in the European world-economy created in the
late-fifteenth and early-sixteenth century (1974b: 15), but only consolidated in its current form
by the mid-seventeenth century (1974a: 401). The crisis of feudalism created strong motivation
to seek new markets and resources; technology gave Europeans a solid base for exploration
(1974b: 39). Parts of Western Europe exploited initially small differences, via specialization in
activities central to world commerce, to ultimately large advantage (1974b: 98).
Structure. The system consists of a single division of labor within one world market but
contains many states and cultures. Labor is divided among functionally defined and
geographically distinct parts arranged in a hierarchy of occupational tasks (1974b: 349-50).
Core states concentrate on higher-skill, capital-intensive production; they are militarily strong;
they appropriate much of the surplus of the whole world-economy (1974a: 401). Peripheral
areas focus on low-skill, labor-intensive production and extraction of raw materials; they have
weak states. Semiperipheral areas are less dependent on the core than peripheral ones; they have
more diversified economies and stronger states. In the first centuries of world-system
development, Northwest Europe constituted the core, Mediterranean Europe the semiperiphery,
and Eastern Europe and the Western hemisphere (and parts of Asia) the periphery (1974a: 400-1). By the end of the twentieth century, the core comprised the wealthy industrialized countries,
including Japan; the semiperiphery included many long-independent states outside the West;
poor, recently independent colonies mainly constituted the periphery.
How it works.
- Strong states in core areas-i.e., those that are militarily strong relative to others and also
not dependent on any one group within the state (1974b: 355)-serve the interests of
economically powerful classes, absorb economic losses, and help to maintain the
dependence of peripheral areas.
- Semiperipheral areas are a "necessary structural element" in the system because "they
partially deflect the political pressures which groups primarily located in peripheral areas
might otherwise direct against core-states" (1974b: 349-50), thus preventing unified
- Shared ideology solidifies the commitment of ruling groups to the system; they must
believe the system's "myths" and feel that "their own well-being is wrapped up in the
survival of the system as such" (1974a: 404). Lower strata need not feel any particular
loyalty; however, they tend to become incorporated into the nationally unified cultures
created by ruling groups, starting in core states (1974b: 349). An ideology for the system
as a whole only developed later: "The ideology of liberalism has been the global
geoculture since the mid-nineteenth century" (1998: 47).
- Different forms of labor and labor control suit different types of production, distributed
across the three main zones; historically, they included wage labor, tenant farming,
servitude, and slavery, (1974b: 86-7). Status and rewards match the hierarchy of tasks:
"crudely, those who breed manpower sustain those who grow food who sustain those
who grow other raw materials who sustain those involved in industrial production"
How it changes.
- Expansion on the basis of European advantage and structural features of the system. In
the period 1733-1817, the European world-economy "began to incorporate vast new
zones into the effective division of labor it encompassed" (1989: 129)-namely, the Indian
subcontinent, the Ottoman empire, the Russian empire, and West Africa. "The modern
world-system became geographically global only in the latter half of the nineteenth
century, and it has only been in the second half of the twentieth century that the inner
corners and more remote regions of the globe have all been effectively integrated" (1998:
9). As a result, most goods are market commodities and most labor is wage labor
- Cyclical crises that occur when, after periods of innovation and expansion, reduced profit
rates and exhaustion of markets lead to recession and stagnation, to be followed by a new
period of accumulation. These are reflected in multi-decade "waves" of increasing or
declining growth rates.
- Shifts in dominance from one power to another due to advances in productivity, the
fragility of monopoly, and success in war (cf. 1995: 26-7). The Netherlands was a
"hegemon" in the mid-seventeenth century, the UK in the mid-nineteenth, the US in the
mid-twentieth (1995: 25). Periods of clear leadership alternate with struggle in the core.
- Resistance by antisystemic movements that can lead to regime change, ideological shifts,
and alternatives to the system. The most notable antisystemic force of the last two
centuries was socialism, which forced core states to redistribute wealth and supported the
formation of states challenging the capitalist world-economy.
- Transition from one type of system to another due to contradictions that cannot be
contained. The capitalist world-economy is a historical configuration and therefore
bound to be superseded. More intense crises in a now fully global system that is less able
to meet those crises with traditional means will lead to transformation.
- "We have entered into the crisis of this system . . . . an historic transition" (1998: 32-3).
But the direction of the system is not clear: "We are face to face with uncertainty"
(2000: 6). The main reason is that the world economy is in a phase of recession and
stagnation, increasingly reflected in social unrest (1995: 19, 29). "[S]tructural limitations
to the process of endless accumulation of capital that governs our existing world . . . . are
coming to the fore currently as a brake on the functioning of the system . . . . [They] are
creating a structurally chaotic situation . . . [A] new order will emerge out of this chaos
over a period of fifty years" (1998: 89-90).
- US hegemony has been in decline since about 1970 (1995: 15ff.), increasing the
likelihood of struggle in the core.
- The old antisystemic forces are exhausted, but so is liberalism. In fact, "[t]he true
meaning of the collapse of the Communisms is the final collapse of liberalism as
hegemonic ideology. Without some belief in its promise, there can be no durable
legitimacy to the capitalist world-system" (1995: 242). But no current struggle against
the inequities of capitalism poses a "fundamental ideological challenge" (1995: 245).
I. Wallerstein. 1974a. "The Rise and Future Demise of the of the World-Capitalist System: Concepts for Comparative Analysis." Comparative Studies in Society and History 16:
--. 1974b. The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century. New York: Academic Press.
__. 1989. The Modern World-System III: The Second Era of Great Expansion of the Capitalist World-Economy, 1730-1840s. New York: Academic Press.
__. 1995. After Liberalism. New York: The New Press.
__. 1998. Utopistics: Or, Historical Choices of the Twenty-First Century. New York: The New Press.
__. 2000. "The Twentieth Century: Darkness at Noon?" Keynote address, PEWS conference, Boston.
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