World systems theory is a multidisciplinary, macro-scale approach to world history and social change that emphasizes the world-system (and not nation-states) as the primary (but not exclusive) unit of social analysis. World-system refers to the inter-regional and transnational division of labor, which divides the world into core countries, semi-periphery countries, and the periphery countries. Core countries focus on higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor-intensive production, and extraction of raw materials. This constantly reinforces the dominance of the core countries.
Nonetheless, the system has dynamic characteristics, in part as a result of revolutions in transport technology, and individual states can gain or lose their core (semi-periphery, periphery) status over time. This structure is unified by the division of labor. It is a world-economy rooted in a capitalist economy. For a time, certain countries become the world hegemon; during the last few centuries, as the world-system has extended geographically and intensified economically, this status has passed from the Netherlands to the United Kingdom and (most recently) to the United States.
World Systems Theory
World-systems theory is a macro-scale approach to analyzing the world history of mankind and social changes in different countries. The definition of the theory refers to the division of labor, be it inter-regionally or transnationally. Currently, the theory divides the world into the core, semi-periphery, and periphery countries.
Core nations appear to be powerful, wealthy and highly independent of outside control. They are able to deal with bureaucracies effectively; they have powerful militaries and can boast with strong economies. Due to resources that are available to them (mainly intellectual), they are able to be at the forefront of technological progress and have a significant influence on less developed non-core nations.
Semi Peripheral Nations
These regions have a less developed economy and are not dominant in international trade. In terms of their influence on the world economies, they end up midway between the core and periphery countries. However, they strive to get into a dominant position of the core nation, and it was proved historically that it is possible to gain major influence in the world and become a core country.
These are the nations that are the least economically developed. One of the main reasons for their peripheral status is the high percentage of uneducated people who can mainly provide cheap unskilled labor to the core nations. There is a very high level of social inequality, together with a relatively weak government that is unable to control the country’s economic activity and the extensive influence of the core nations.
Wallerstein’s World Systems Theory
World-systems theory is a response to the criticisms of Dependency Theory (and for the purposes of the exam can still be treated as part of Dependency Theory). World Systems Theory was developed by Immanuel Wallerstein (1979). Wallerstein accepts the fact ex-colonies are not doomed to be forever trapped in a state of dependency; it is possible for them to climb the economic ladder of development, as many of them have done. However, he also believes that the global capitalist system still requires some countries, or at least regions within countries to be poor so they can be exploited by the wealthy at the top. Wallerstein’s theory has four underlying principles
- One must look at the world system as a whole, rather than just at individual countries. Dependency Theory tended to argue that countries are poor because they used to be exploited by other countries. However focusing on countries (or governments/ nation-states) is the wrong level of analysis government today has declined in power, whereas Corporations are more powerful than ever. Global Corporations, and global capital, transcend national boundaries, and nation-states (even wealthy ones) are relatively powerless to control them, thus in order to understand why countries are rich or poor, we should be looking at global economic institutions and corporations rather than countries. Global Economic Institutions form what Wallerstein calls a Modern World System, and all countries, rich and poor alike are caught up in it.
- Wallerstein believes that the MWS is characterized by an international division of labor consisting of a structured set of relations between three types of the capitalist zone. The core or developed countries control world wages and monopolize the production of manufactured goods. The semi-peripheral zone includes countries like South Africa or Brazil which resemble the core in terms of their urban centers but also have areas of rural poverty that resemble the peripheral countries. The core contracts work out to these countries. Finally, there are the peripheral countries at the bottom, mainly in Africa, which provide raw materials such as cash crops to the core and semi-periphery. These are also the emerging markets in which the core attempts to market their manufactured goods. NB ‘countries’ are used to illustrate the three different zones above, but technically you could have all three zones within one country China and India contain regions that fit the descriptors for each of the three zones.
- Countries can be upwardly or downwardly mobile in the world system. This is one of the key differences between the World System’s Theory and Frank’s Dependency Theory. Many countries, such as the BRIC nations have moved up from being peripheral countries to semi-peripheral countries. However, most countries do not move up and stay peripheral, and the ex-colonial powers (the wealthy European countries) are very unlikely to slip down the global order.
- The Modern World-System is dynamic core countries that are constantly evolving new ways of extracting profit from poorer countries and regions. Three examples of new ways of extracting profit from poor countries include:
Unfair Trade Rules (we come back to this in the next topic) World trade is not a level playing field The best example of this is in Agriculture Agriculture is Africa’s biggest economic sector. It has the capacity to produce a lot more food and export to Europe and America but it can’t because the EU and America spend billions every year subsidizing their farmers so imported African products seem more expensive
Western Corporations sometimes use their economic power to negotiate favorable tax deals in the developing world. A good case in point here is the mining Company Glencore in Zambia The company recently arranged a long term contract to mine copper with the Zambian government it exports $6 billion a year in copper from Zambia, but pays only $50m in tax, while as part of the deal the Zambian government is contractually obliged to pay for all the electricity costs of mining a total of $150m a year.
Land Grabs These are currently happening all over Africa – Where a western government or company buys up thousands of hectares of land in Africa with the intention of planting it with food or biofuel crops for export back to western markets. In such cases, western companies take advantage of the cheap land and gain much more than the African nations selling the land in the long term. In some case studies of land grabs, thousands of indigenous peoples are displaced.
Evaluating World Systems Theory
Wallerstein can also be criticized in the same way Dependency Theorists can be criticized there are more causes of underdevelopment than just Capitalism Such as cultural factors, corruption, and ethnic conflict. Wallerstein puts too much emphasis on economics and the dominance of Capitalism There are other ways people can be exploited and oppressed such as tyrannical religious regimes for example. Also, there are some areas are still not included in the World System some tribal peoples in South America and Bhutan, for example, remain relatively unaffected by global capitalism.
Finally, Wallerstein’s concepts of Core, Semi-Periphery, and Periphery are vague and this means his theory is difficult to test in practice.
World-Systems Theory Definition
The world-systems theory, developed by sociologist Immanuel Wallerstein, is an approach to world history and social change that suggests there is a world economic system in which some countries benefit while others are exploited. Just like we cannot understand an individual’s behavior without reference to their surroundings, experiences, and culture, a nation’s economic system cannot be understood without reference to the world system of which they are apart.
The main characteristics of this theory, which will be discussed in more detail throughout the lesson, are
- The world-systems theory is established on a three-level hierarchy consisting of core, periphery, and semi-periphery areas.
- The core countries dominate and exploit the peripheral countries for labor and raw materials.
- The peripheral countries are dependent on core countries for capital.
- The semi-peripheral countries share characteristics of both core and peripheral countries.
- This theory emphasizes the social structure of global inequality.