A theory of the operation of the world economic, social and political system, formulated by Immanuel Wallerstein (1974a; 1974b). The chief assertion of this theory is that the capitalist system has been the world economic system since the sixteenth century and that one cannot talk about economies in terms of the nation-state, nor of ‘society’ in the abstract, nor of ‘stages’ of development, because each society is affected by, indeed is a part of, the capitalist world economy.

It was only with the emergence of the modern world economy in sixteenth-century Europe that we saw the full development and economic predominance of market trade. This was the system called capitalism. Capitalism and world economy (that is, a single division of labour, but multiple polities and cultures) are obverse sides of the same coin.One does not cause the other. (Wallerstein 1974b: 391)

World system theory emerged as a refutation of modernization theory, which tended to (a) concentrate on the nation-state, (b) assume that all countries follow a similar path of growth, (c) disregard transnational structures and (d) base explanations on ahistorical ideal types. The proposition of one world capitalist system in operation since the sixteenth century radically affects how we view not only world economics but also national politics, class, ethnicity and international relations in general. For instance, the theory rejects the concept of a ‘society’ as a unit of analysis in favour of two systems of production: ‘mini-systems’ that are localized and of short duration, and the world system itself (Wallerstein 1976).

A demonstration of how this theory works can be seen in its approach to the feudal-like economies of Latin America. One traditional Marxist view of economic development sees all economies as passing through a series of stages, so it would regard these economies as existing at a pre-bourgeois, pre-industrialized stage of development. But world system theory holds that these economies are already a part of the capitalist world system.They are not an earlier stage of a transition to industrialization, but are undeveloped because they are ‘peripheral, raw-material producing’ areas, on the margins of, and exploited by, the industrialized world and hence in a state of dependency. Such societies may, or may not, develop an industrial base. But whether they do or not depends upon how well they resist dominant states and appropriate the capitalist world system (or, as Wallerstein would contend,purely as a result of structural changes in the system) rather than any inevitable process of development.Industrialization can thus be seen as, above all, a political phenomenon.

The world system is primarily a political system, rather than one determined by ‘neutral’ economic factors, and in this sense overlaps theories of neo-colonialism and decolonization. The capitalist world system emerged at the same time as the modern European imperial dominance of the world. This had two major consequences: the establishment of the world as a spatio-temporal site of imperial power, and the perpetuation of the imperial binarism between colonizing and colonized countries. Although Wallerstein does not develop the link between the capitalist world system and imperialism (since he regards individual world empires as subsidiary to the capitalist world system), it is clear that the world system is intimately tied up with European expansion and that the history of colonization has a great deal of bearing upon which countries are industrialized today, and which are maintained as resource-producing areas.

According to Wallerstein, the three structural positions in the world economy – core, periphery and semi-periphery – had become stabilized by about 1640.Northwest Europe was the core, specializing its agriculture and adding industries such as textiles, ship building and metal production; Eastern Europe and the Western hemisphere were the periphery, providing exports of grain, bullion, wood, cotton and sugar; and Mediterranean Europe was the semi-peripheral region specializing in high cost industrial products. Capitalism was from the beginning an affair of the world economy and not of nation-states.The particular geographical location of these structural positions may change, but not their basic function in the system.

Clearly, although Wallerstein sees the capitalist world system as one that overrides any other world system,such as imperialism,the imperial expansion of Europe,its cultural and political,as well as economic dominance, in short the emergence of modernity itself, are inextricable from the rise and dominance of a world economic system. Dominant core states may change, but the structure of the world system, and the dynamics of capital accumulation on which it rests,remain in place.The theory does not explain, nor is it interested in, human subjectivity, the politics of colonization, the continued dominance of certain discursive forms of imperial rhetoric, nor the particular and abiding material consequences of colonialism in individual societies. It offers no place for individual political agency, nor is it concerned with the local dynamics of cultural change, nor even with the operation of ‘societies’, all these things being subsidiary to the broad structural forces of the world system.

 Wallerstein addressed the relationship of culture to the world system, contending that culture, both as that which creates distinctions within groups (‘Culture’), and that which distinguishes between groups such as nations (‘cultures’), are actually ‘the consequence of the historical development of [the world] system and reflect its guiding logic’ (1991: 32). Both forms of culture serve to mystify people about the world system and thus keep it in place. In this scheme of things, even ‘anti-systemic’movements are a product of the world system.

Further reading: Wallerstein, I. (1974a) The Modern World System: Capitalist Agriculture and the Origin of the European World-Economy in the Sixteenth Century, New York: Academic Press.
Wallerstein, I. (1974b) ‘The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis’, Comparative Studies in Society and History (16) 3: 387–415.
Wallerstein, I. (1976) ‘A World-System Perspective on the Social Sciences’, British Journal of Sociology (27) 3: 343–352.
Wallerstein, I. (1980) The Capitalist World Economy, Cambridge: Cambridge University Press.
Wallerstein, I. (1991) Geopolitics and Geoculture: Essays on the Changing World System, Cambridge: Cambridge University Press.

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Tags: Does Capitalism Have a Future?, European Universalism: The Rhetoric of Power, Historical Capitalism with Capitalist Civilization, Immanuel Wallerstein, Literary Criticism, Literary Theory, Postcolonialism, Sociology, The Decline of American Power: The U.S. in a Chaotic World, The End of the World As We Know It: Social Science for the Twenty-First Century, The Modern World-System, The World-System and Africa, World-Systems Analysis: An Introduction