World Systems Theory by Immanuel Wallerstein

Assignment

Submitted To: Sir Asif

Submitted By: Syed Ali Ijlal Hussain Shah

Roll No: 55171-S-19
MPhil Political Science (2nd Semester)

Department of Political Science, Hazara University, Mansehra

 World Systems theory by Immanuel Wallerstein

Introduction
The World Systems theory was the brain child of Immanuel Wallerstein in 1974. It saw the division
of the world into three parts; the core, the semi- periphery and the periphery. The core meaning
those countries which were economically developed such as countries of the Western Europe, the
United States of America and Japan. The semi-periphery was in between and was most of the
countries in Asia. The peripheral countries on the other hand were those who were resource rich and
highly under developed like the countries of Latin America and Africa.
The world systems theory is a more of a Marxian approach of understanding under development
especially in Latin America. It is a materialist theory as it sees the political and cultural, socio and
religious aspects of a country all determined by the economy and it is a systems analysis because all
of this is seen as one organisation. The world systems theory is a critique of capitalism and finds it
precursors in the Annales school as well as the dependency theories.
The period after World War II marked the age of decolonization in the world. Many former
colonies were now independent nations, but, they were still under developed. The strategy offered
to them to overcome this underdevelopment was to follow a path of modernization akin to the
western model. Development theorist like Rostow advocated his five stages of growth. These were
all compulsory stages by which a country has to pass through to become a developed nation starting
from the first stage which is that of being a poor nation. So Western Modernization replaced
Western Colonialism. But then scholars like the promoters of the dependency theory shunned this
approach saying in fact Western modernisation embedded in capitalism was detrimental to the state.
We shall now follow the paper through a brief note on capitalism. This will be followed by a
glimpse into the precursors of the world systems theory such as the dependency theory. A look on
what the world systems analysis is and how it affects governance and finally we shall look at the
critiques of the world system analysis.

Capitalism
Capitalism as understood by most is the maximisation of profit. Capitalism according to thinkers
like Weber was successful because of a spirit it embodied this spirit according to Weber was in the
Calvinist and Protestant ethic. Weber went further to say that it was in fact a Judaic ethic. This was
supported by Sombart who became a sympathizer of the Nazis and like Ford were anti-Semitic.
They were of the opinion that international finance was controlled by men of a single and peculiar
race. Wallerstein himself says that there are certain epochs of capitalism and divided his analysis of
the determining elements of the modern world into four such epochs; the formation of the European
world economy from 1450 to1960 the consolidation of this system from 1640 to 1815; the
technological transformation which was the industrial revolution between 1815 to 1917 and the
consolidation of this capitalist world economy from 1917 onwards. However in the period of the
1890s to the 1920s a French speaking-critique of work of Sombart and Weber emerged. This was
the school of Henri Pirenne. Pirenne developed a materialist theory of social and economic
causation. He claims that the Viking raids were a consequence of the displacement of the
Mediterranean trade routes to the north by the Muslim conquests. Thus in saying so he challenges
Weber and Sombart’s claim that capitalism is a spirit and a mentality but in the revival of towns and
trade routes in the eleventh and twelfth centuries. The Annales school of thought followed in
Pirenne’s footsteps to develop a materialist bottom-up approach to understand economic and social
history. While Weber and Sombart saw capitalism in its industries Pirenne saw its roots since the
medieval times though the two parties both agreed on the fact that capitalism’s main object was
profit.
This accumulation of profit as the main objective of capitalism proved to be very detrimental to the
former colonies, called the Third World. The third world was characterised by huge labour
resources, poverty, huge deposits of natural resources and raw materials as well as food grains.
Mexico, Argentina, Brazil, Chile and Columbia were in the 1950s predicted to become major
players on the world economic stage. They all possessed sufficient internal markets to propel
growth; a formidable industrial base; abundant reserves of raw materials; powerful stimuli to grow
nationally and; satisfactory formations of domestic capital. Yet in the end these five countries
became trapped in a dependent state on the developed nations.
During the days when colonial countries had paramount power the view of development effectuated
by Europeans was to exploit and draw profit from the resources of the non-European world. This
view supposes then that development of the European colonies was not to happen. However, out of
the moral and political duty that seemed to bear upon the colonists to develop their resource bases
as it represented a material and moral good for the world. There was therefore no harm in exploiting
the resources of the colonies as it seemed that the ‘white man’s burden’ to develop these
civilizations was an adequate transaction between the two parties.
Post 1945 there was a decolonizing process in the world. Countries in Asia, Africa and Latin
America were freeing themselves off the colonial yoke. There was a surge of anti-colonial
sentiments and assertiveness in these old colonies. Development at this juncture began to be defined
by the belief that there was no need for a colonial master to develop them. There was an assertion
that the colonies left to themselves could develop by their own endeavours. There was thus in India
a call for Swadeshi and the call for the rise of indigenous industries and the growth of indigenous
capital. However the assumption was faulty in the line that modernity and development was in
actuality
defined by the adoption of strategies of the global North and the technology of the North. Latin
authors called this new ideology as ‘developmentalism’. The Soviet Union called it ‘socialism’ and
the United States called it ‘economic development’. This ideology of developmentalism was
favoured by many countries of the North and they offered aid to the countries to help them out in
their objective. The Economic Commission for Latin America (CEPAL) developed a new language
of core-periphery relations used primarily to justify program “import-substitution industrialization”.
The more radical Latin American scholars called this “dependency” which needed to be fought
against so that the dependent countries could develop. Then in the 1970’s the oil turmoil in the
world took place. The villain it was said was developmentalism. Import-substitution
industrialization was perceived as corrupt protectionism. State building was deconstructed as
feeding a bloated bureaucracy. Financial aid was seen as money wasted. It was decided that loans to
states in distress, to be beneficial, needed to be hedged by requirements that these states cut out
wasteful state expenditures on items like schools and health. State institutions were proclaimed as
inefficient and should be privatized so as to be responsive to the market and therefore reach
maximum efficiency.
The Dependency school which saw capitalism as a system of exchanges. The dependency school of
thought see the poverty of the South as a result of low prices for the exports of primary products to
the North and as a result of the deteriorating terms of trade the countries of the South failed to
industrialise and remain as raw material and food suppliers to the North. For example Argentina in
the 1900s was considered to be a very important country and its rise was very anticipated. However,
due to lopsided terms of trade and unequal exchange relations with other industrialised economies
countries of the global South had become according to Andre Gunder Frank ‘underdeveloped’.
Unlike Rostow’s model of development which starts by showing that all the countries are in the
beginning poor and then shift through different trajectories of development to become developed
countries Frank said that it was only in the exchanges with the north that the economies had lost
their balance internally and hence failed to accumulate capital domestically and industrialise on
their own. In his essay on the sociology of development and underdevelopment Frank critised the
assumption that by following stages of growth poor countries could become developed by
replicating the path of the developed nations. This path was marked by the ability to exploit other
lesser developed countries.
A global structure emerges in which a metropolis or the core imposes itself on satellites in the south
through colonialism. They could force the satellite countries to produce cash crops or raw material
for the core which was essential for their industries which they resold to the countries of the south.
The World System Theory
The world systems theory speaks of a polarised world and a polarising world at the economic
reality. Wallerstein argues that the people of the South saw that there were people better off than
them and they aspired towards this. The North saw this as a tinderbox and wanted to quell the threat
by putting in intellectual discussions about development and globalisation that were respectable but
in retrospect misguided. They wanted that the rest of the world aspire to reach qualities of life
present in countries like Denmark. But at the same time there could be alternatives to this. The gap
between the core of history has grown wider not smaller as is evidenced in society, even if some
countries have improved their standing in the distribution of wealth.
The World Systems theory departs from all here in the notion that capitalism develops as a
comprehensive structural constraint at the international level. It combines a core where the social
transformations have taken place, with a periphery that is equally a part of the capitalist system. The
division of labour was the systemic constraint according to Wallerstein which is bounded in a
specific way, internally structured, regulated, centralises and subject to functional mechanisms such
as self-sustenance trough specialisation. This strategy was firstly one that wanted a political empire
where lands were connected into the long distance trading system. The second strategy was of
functional specialisation in which each state seeks to adapt its actions to the functional requirements
of its place in the system. The strategy of functional specialisation included minimising overhead
costs by abandoning territorial imperial ambitions and fiscal policies and to adopt instead
mercantilist or protective policies. This resulted in accumulation of capital at the core and
consistently reinforces the position of the state in the division of labour. The periphery which also
has specialised functions even though they are the production of raw material and food grains
however unlike in the core the labour relation is mostly of a bonded nature. The semi – periphery
assumes the tasks of both the core and the periphery.
The basic strength of capitalism has been two fold (Wallerstein, 1984); on the one hand it has been
able to accumulate capital at all costs and on the other it has put into place political structures to
guarantee this accumulation of capital. It happens that workers demand for higher renummeration
and the factory gives in because it goes into paying this additional money would not affect it too
much. However, when the same workers press for more renummeration the factory relocates or is a
runaway factory. The existence of a large pool of rural labour for whom urban waged employment
at whatever level of renumeration. So as Wallerstein argues that as wage rates goes up in one part of
the world it is followed by another section in the world willing to work at a much lower wage.
However, this new urban wage labourer historically then becomes less urbanely disoriented and
asks for more benefits, here again the factory shifts to another zone. Wallerstein then argues that
there has been a decrease in the number of zones to which the factory can flee to and this is called
deruralization of the world.
The costs of input is dependent on the percentage what the owner wants to pay as inputs and he
does so by avoiding all these input costs and shifting it to others. This is called the externalization
of costs. The three principles of externalisation are detoxification, renewal of primary resources and
infrastructure. Detoxification is easily understood by taking the example of dumping sites. Garbage
is dumped in a new site and the costs of this dumping activity is slow to show itself. E-Waste
dumping in China may be taken as an example where the electronic waste from all over the globe is
collected and dumped in China. However, sites to dump all this new waste is running out. To
remedy this, projects are taken up either by the governments or individuals to clean up the mess.
Now there is more knowledge as well about the cost and damages that this dumping is causing on
the environment. Who then pays for this cleaning up? One argument is that you internalise the cost
and you make the
producer of the waste pay for it. The other example is of the carbon market where developed
countries are buying the carbon credits of developing and underdeveloped nations so that their
industries are free to emit polluting articles into the environment. Atul Kohli says that
industrialisation is a major component of development of a country; even then it is not the only
factor. He says that industrialization involves a procedure of societal change. Industrialization is
therefore possible in a situation of political stability, the availability of experienced entrepreneurs
and of a capable urban work force. This was found in countries like England and hence capitalism
was easier to come out there.
Berand argues that trade has developed by leaps and bounds because of better transport and
communication facilities. The post-war GATT brought about the end of protectionism, economic
warfare and hostility. There was also a spurt of new companies which were multinational in
character and had easy capital flows in different countries. Like Wallerstein argued, there was a lack
of new spaces for the core countries from whence to get resources from. Berend adds that the new
division of labour has led to many of the core countries to transport their raw material extraction
activities to the peripheral countries. These activities which are labour intensive and highly
polluting are shifted to peripheral countries for the cheaper labour cost and less restrictive
environmental regulations. As a consequence of the shift there was a huge amount of
deindustrialisation in the advanced countries. However the industries that shifted to the South were
those which were not highly advanced and more labour intensive, the more important sectors like
research and development and fine chemical industries.
There is persistent exploitation in the periphery by the core and the semi – periphery. Therefore,
according to Wallerstein the state managers should not blindly continue to increase production in
the sectors that define them as part of the periphery. Wallerstein argues that peripheral states should
not try to produce any more raw materials but should try to emancipate themselves from their
structural peripheral positions by changing their productive contribution to the division of labour.
There is an understanding that the concept of state and society exist in the same juridical diameter.
According to Wallerstein these two organisations are operated by the same individuals. Thus this
fits into the idea of the ‘nation’ which refers to a ‘society’ that has a state to itself, or has the moral
right to have a state to itself; the right to self – determination. Wallerstein says that in saying this
there is a difficulty of defining the boundaries of a nation. Therefore he uses the measure of
interdependent productive activities, or the effective social division of labour, or an economy. He
says that in modern history the dominant effective boundaries of the capitalist world economy has
expanded from its stand in the sixteenth century to encompass the entire world. This new world
economy is constituted by cross-cutting network of productive processes so that there are a number
of backward or forward linkages on which these processes are dependent on. There is also state
pressure that affects the labourer. It governs the relationship as Wallerstein says between the
bourgeois and the proletariat. Then it governs the relationship among the bourgeois.
Wallerstein says that the states are constantly changing in form, strength and boundaries through the
interplay of the interstate system. The commodity chains also become longer and more intertwined
in the machinery and therefore there has been a constant pressure by the strong against the weak.
The pressure has become more concentrated in the chains that are the easiest to monopolize in a few
areas – “core” processes in “core” areas – and more and more of the processes that require less
skilled and more extensive manpower that is easiest to keep at a low income level in other areas –
“peripheral” areas. Wallerstein says that parallel to the economic polarization there is also the
political polarization between the stronger states in the core areas and weaker states in peripheral
areas.
A strong state is not one that is authoritarian but one which can maximize the conditions for profit
making by its enterprises within the world economy. This may mean the creation of quasi
monopoly situations or restraining others from doing the same to its disadvantage. The strength of a
stronger state according to Wallerstein is measured by its ability to minimize all quasi monopolies
or to enforce the doctrine of free trade.
There are also the states that sit in between the core and the periphery called semi peripheral states.
They are usually attached to a core state for benefits. These states at times of difficulty of capital
accumulation take advantage of the situation and become freer of the control of the core states.
They are freer to play among their rivals and create new quasi monopolistic constraints. However if
they are too weak they return back to the imperialistic fold.
Wallerstein says that in an interstate system, state are actors, but, at the same time they are
organisations. The world economy, as different from international economy is a complex of
language, religion, ideologies. There exists a Weltanschauung of imperium. The major social
institutions of the capitalist world economy – the states, the classes the peoples are all shaped by the
ongoing workings of the world economy.

World Systems Theory and Governance

According to some interpretations of Wallerstein works, he is more in favour of looking at the
macro. He says that the world is more than just a limited to a certain space therefore it is the entire
processes in the globe which brings about this relationship between the core and the peripheral
areas. According to the dependency theorist it is not so much the state that is now responsible for
the shifts in the international affairs but it is the dynamic of economic forces. The achievement of
the modern world in technology has made it possible for the flow of surplus from the lower to the
upper strata; from periphery to the core by eliminating the political superstructure.
The world systems theory sees the correlation between the economic position occupied by owners-
producers in the world market economy and the state. The state strengths is determined by five
independent measures of political strength. These include the extent to which state policy can
compete in the world market economy (mercantilism); the extent to which states can affect the
capacity of other states to compete (in military power); the ability of states to mobilize resources to
perform these competitive and military tasks at the cost that they do not eat into the profits o their
owner-producers; the capacity of states to create administration that permits the swift carrying out
of tactical decisions (or an effective bureaucracy); and the degree to which the political rules reflect
a balance of interest among owners-producers such that a working hegemonic bloc forms the stable
underpinnings of such a state. Wallerstein believes that the decline in the state power has actually
increased the freedom of action of capitalistic enterprises which have now become multinational
corporations (MNCs). Wallerstein minimises the role of the state
According to Tony Smith, to such an extent that he says that there are no socialist systems nor are
there feudal systems because there is only one world system. The state no longer fights the socio-
economic battles but it is the classes. These five factors are the political and economic factors of
state strength and reciprocally linked because economic efficiency adds to the strength of the state.
In the core states where there is more economic efficiency states have less need to intervene in the
world market economy. To Wallerstien the state is most active in states with moderate strength.
Thus from this argument it follows that in the core the presence of a centralized and powerful state
institutional political structure is thus an indication of weakness rather than strength. This is so
because the presence of a strong bourgeoisie class would agree to the collective arrangements that
require a strong king to impose. In the semi-periphery the weakness of the owner-producers
requires direct state involvement in the extraction of surplus strong state institutions as an indication
of strength. Those state in the periphery were seen as the weakest as they have very weak
institutional power structures.
Wallerstein also uses the dominant class structures to explain the movement of states within the
capitalist world economy residing outside the core. He takes for example the case of Sweden and
Prussia. He says that the institutional political structures present in the states enabled the states to
extract economic surplus. In the case of Sweden the autonomy of its peasantry and corresponding
weakness of the it’s landowning aristocracy4 made it possible. While in Prussia the ability to use
military force under the inspiration and support of the Junker class which helped it to gather this
surplus through wars and territorial expansion. The state too will intervene only up to the point of
its effectiveness in consolidating its power in the face of dominant class relation. Therefore state
intervention presupposes a specific societal actor in the core and the periphery; the actor in the core
is the dominant class’s hegemonic bloc and in the semi-periphery is the centralized state. What has
emerged in Kohli’s argument is the neo-patrimonial state with the inability to distinguish between
the public and the private sphere and the administration using its power and influence to gather
benefits for its own self-aggrandisement. The neopatrimonial state is a state wherein the centralised
and cohesive nature actually do not lead to its industrialisation. The neo-patrimonial state which is
weak in domestic capital invites other stronger capitalist groups to fill in the vacuum, to take up
economic activities directly. Nigeria for example offered its oil in exchange for a ready source of
income on demand. However, these commodity booms do not last very long because the political
incapacity of the neo-patrimonial state.
In Kohli’s argument a developmental state has an almost defined public and private sphere. They
are opposite to neo-patrimonial states and are characterized by cohesive politics, that is by
centralized and goal oriented authority that penetrate deep into society. To reach these goals the
developmental state attaches itself closely to a more developed state or group and in this political
arrangement there is a tight control over labour. South Korea under Park Chung Hee and Brazil
under Estado Novo are examples of such state, though they resemble fascist’s states of interwar
Europe and Japan. Then there are states which attempt to pursue several goals simultaneously.
Industrialisation, agriculture, redistribution welfare is at times politicised either because of intraelite
conflicts or because state authority does not penetrate deep enough in society to touch and control
the lower class. India and Brazil in several periods exemplify this type of state.
Wallerstein says that the relation between state strength and autonomy is very close as determined
by the strength of its dominant class and the role played by its owner-producers in the capitalist
economy division of labour. While the British state was less autonomous than the absolute
monarchy of France its mercantilist class of Britain, the element of strength made the British
mercantilist to take on a tailor made rather than a readymade character. Within this core the
dominant class force limits the autonomy of the state and the state strength. Outside the core there is
a highly centralized state to provide extra market assistance to increase efficiency. State autonomy
is neither presupposed nor seen as something that explains state action. As Poulantzas presupposes
the existence of relative state autonomy and invokes it as a functional explanation of how capitalist
social formations come to be in close contact. Wallerstein on the other hand, treats relative state
autonomy as something that varies with the sources of a state’s power that are related to the
structure of its dominant class and integration into the capitalist economy. State autonomy is related
to state strengths in different contexts according to particular world contexts and can be functional
or dysfunctional. It serves as a descriptive concept whose content varies across conjunctures.

Conclusion
Wallerstein’s theory is at times historically inconsistent. As Tony Smith, however says that
Wallerstein is wrong in his discussion of state power. As Theda Skocpol points out, the strong
states in the sixteenth century were not at the core; in England and Holland but on the periphery; in
Spain and Sweden. Alexander Gerschenkron according to Smith6 has demonstrated that the “late
industrialisers” were successful because of exceptionally strong state structures that were
determined to modernise. The peripheral countries like Russia, Japan and Germany could not have
developed without the vigorous leadership of the state. The major flaw of Wallerstein’s Volume I
treatment of state formation and structures, according to Skocpol and Brenner are drawn from his
insistence that productive hierarchies facilitates the operation of unequal exchange enforced on
weak states by the stronger states. However the counter argument is that countries like England and
Holland which had the strongest economies failed to develop absolute states like Sweden or Prussia
which were in the periphery and the semi periphery.
The world systems theory has often been criticised for its overarching focus on economics.
Economic growth is important to the development of the state, but it is not the only underlying
factor of development for a country. There are other such measures like socio-political
development, redistribution of resources and other things.

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References
 Berend, Ivan T – Globalization and its Impact on Core – Periphery Relations, UCLA Center
for European and Eurasian Studies Conference Papers, Paper 1, Los Angeles, 2004
 Garst, Daniel – Wallerstein and His Critics in Theory and Society, Vol 14, No. 4, July 1985
 Kohli, A – State – Directed Development: Politics, Power and Industrialisation in the Global
Periphery, Cambridge, CUP, 2004 pp 1 -26 New Dictionary of the History of Ideas.
 Smith, Tony – The Underdevelopment of Development Literature: The Case of the
Dependency Theory; World Politics, Vol. 31, No. 2. (Jan., 1979), pp. 247-288.