Introduction:

World-systems theory (also known as world-systems analysis or the world-systems

perspective), a multidisciplinary, macro-scale approach to world history and social change,
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. For a time, some 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 of America.
Background
Immanuel Wallerstein has developed the best-known version of world-systems analysis,
beginning in the 1970s. Wallerstein traces the rise of the capitalist world-economy from the
"long" sixteenth century (c. 1450-1640). The rise of capitalism, in Wallerstein's view, was a
contingent (not inevitable) outcome of the protracted crisis of feudalism (c. 1290-1450). Europe
(the West) utilized its advantages and gained control over most of the world economy, presiding
over the development and spread of industrialization and capitalist economy, indirectly resulting
in unequal development.
Immanuel Wallerstein
The best-known version of the world-systems approach has been developed by Immanuel
Wallerstein.
Wallerstein notes that world-systems analysis calls for an unidisciplinary historical social
science, and contends that the modern disciplines, products of the 19th century, are deeply
flawed because they are not separate logics, as is manifest for example in the de facto overlap of
analysis among scholars of the disciplines.
Wallerstein offers several definitions of a world-system. He defined it, in 1974, briefly, as:
a system is defined as a unit with a single division of labor and multiple cultural systems.

He also offered a longer definition:

a social system, one that has boundaries, structures, member groups, rules of legitimation, and
coherence. Its life is made up of the conflicting forces which hold it together by tension and tear
it apart as each group seeks eternally to remold it to its advantage. It has the characteristics of an
organism, in that it has a life-span over which its characteristics change in some respects and
remain stable in others. One can define its structures as being at different times strong or weak in
terms of the internal logic of its functioning.
In 1987 Wallerstein defined world-system as:
... not the system of the world, but a system that is a world and which can be, most often has
been, located in an area less than the entire globe. World-systems analysis argues that the units of
social reality within which we operate, whose rules constrain us, are for the most part such
world-systems (other than the now extinct, small minisystems that once existed on the earth).
World-systems analysis argues that there have been thus far only two varieties of world-systems:
world-economies and world empires. A world-empire (examples, the Roman Empire, Han
China) are large bureaucratic structures with a single political center and an axial division of
labor, but multiple cultures. A world-economy is a large axial division of labor with multiple
political centers and multiple cultures. In English, the hyphen is essential to indicate these
concepts. "World system" without a hyphen suggests that there has been only one world-system
in the history of the world.
Wallerstein characterizes the world system as a set of mechanisms which redistributes surplus
value from the periphery to the core. In his terminology, the core is the developed, industrialized
part of the world, and the periphery is the "underdeveloped", typically raw materials-exporting,
poor part of the world; the market being the means by which the core exploits the periphery.
Wallerstein divides the capitalist world-economy into three areas:

peripheral areas.
Semi-peripheral
Core states

The peripheral areas are the least developed; they are exploited by the core for their cheap labor,
raw materials, and agricultural production. The semi-peripheral areas are somewhat intermediate,
being both exploited by the core and take some role in the exploitation of the peripheral areas. In
the recent past they have been expanding their manufacturing activities particularly in products

that core nations no longer find very profitable. The core states are in geographically advantaged
areas of the worldEurope and North America.
These core states promote capital accumulation internally through tax policy, government
purchasing, sponsorship of research and development, financing infrastructural development
(such as sewers, roads, airportsall privately constructed but publically financed), and
maintaining social order to minimize class struggle. Core states also promote capital
accumulation in the world-economy itself. These states have the political, economic, and military
power to enforce unequal rates of exchange between the core and the periphery. It is this power
that allows core states to dump unsafe goods in peripheral nations, pay lower prices for raw
materials than would be possible in a free market, exploit the periphery for cheap labor, dump in
their environment, abuse their consumers and workforce, erect trade barriers and quotas, and
establish and enforce patents. It is the economic, political, and military power of the core that
allows significant capital to be accumulated into the hands of the few, the capitalist world-system
that produces and maintains the gross economic and political inequalities within and between
nations.

As with capitalism within nation states, this unequal power between nation states is not
uncontested. It is the subject of struggle. There are internal contradictions that with the passage
of time cause political and economic instability and social unrest. Eventually, according to
Wallerstein, a world-wide economic crisis will be reached and the capitalist world-system will
collapse, opening the way for revolutionary change. The coming crisis of capitalism, as predicted
by Wallersteins world-systems theory, will be the topic of the next short-paper.

 Core nations

The most economically diversified, wealthy, and powerful (economically and militarily)
Have strong central governments, controlling extensive bureaucracies and powerful
militaries
Have more complex and stronger state institutions that help manage economic affairs
internally and externally
Have a sufficient tax base so these state institutions can provide infrastructure for a strong
economy
Highly industrialized; produce manufactured goods rather than raw materials for export
Increasingly tend to specialize in information, finance and service industries
More often in the forefront of new technologies and new industries. Examples today
include high-technology electronic and biotechnology industries. Another example would
be assembly-line auto production in the early 20th century.
Has strong bourgeois and working classes
Have significant means of influence over noncore nations
Relatively independent of outside control

Throughout the history of the modern world-system there has been a group of core nations
competing with one another for access to the world's resources, economic dominance, and
hegemony over periphery nations. Occasionally, there has been one core nation with clear
dominance over others. According to Immanuel Wallerstein, a core nation is dominant over all
the others when it has a lead in three forms of economic dominance over a period of time:
1. Productivity dominance allows a country to produce products of greater quality at a
cheaper price compared to other countries.
2. Productivity dominance may lead to trade dominance. Now, there is a favorable balance
of trade for the dominant nation since more countries are buying the products of the
dominant country than it is buying from them.
3. Trade dominance may lead to financial dominance. Now, more money is coming into
the country than going out. Bankers of the dominant nation tend to receive more control
of the world's financial resources.
Military dominance is also likely after a nation reaches these three rankings. However, it has
been posited that throughout the modern world-system, no nation has been able to use its military
to gain economic dominance. Each of the past dominant nations became dominant with fairly
small levels of military spending, and began to lose economic dominance with military
expansion later on.
Historically, cores were found in the north-west Europe (England, France, Netherlands),
although later in other parts of the world (ex. the United States).
Peripheral nations

Least economically diversified

Have relatively weak governments

Have relatively weak institutions with tax bases too small to support infrastructure
development
Tend to depend on one type of economic activity, often on extracting and exporting raw
materials to core nations
Tend to be least industrialized
Are often targets for investments from multinational (or transnational) corporations from
core nations that come into the country to exploit cheap unskilled labor for export back to
core nations
Have small bourgeois and large peasant classes
Tend to have populations with high percentages of the poor and uneducated
Tend to have very high social inequality because of small upper classes that own most of
the land and have profitable ties to multinational corporations
Tend to be extensively influenced by core nations and their multinational corporations.
Many times they are forced to follow economic policies that favor core nations and harm
the long-term economic prospects of peripheral nations.

Historically, peripheries were found outside Europe, for example in Latin America and today in
Sub-Saharan Africa.
Semiperipheral nations
Semiperipheral nations are those that are midway between the core and periphery. Because of
this, they have to keep themselves from falling to the category of peripheral nations and at the
same time strive to join the category of core nations. Therefore, they tend to apply protectionist
policies most aggressively among the three categories of nations. They tend to be countries
moving towards industrialization and more diversified economies. Those regions often have
relatively developed and diversified economies, but are not dominant in international trade. They
tend to export more to peripheral nations and import more from core nations in trade. According
to some scholars, such as Chirot, they are not as subject to outside manipulation as peripheral
societies; but according to others (Barfield) they have "periperial-like" relations to the core.
While in the sphere of influence of some cores, semiperipheries also tend to exert their own
control over some peripheries. Further, semi-peripheries act as buffers between cores and
peripheries, thus "partially deflect the political pressures which groups primarily located in
peripheral areas might otherwise direct against core-states" and stabilize the world-system.
Semi-peripheries can come into existence both from developing peripheries, and from declining
cores.
Historically, two examples of semiperipheral nations would be Spain and Portugal, who fell from
their early core positions but still managed to retain influence in Latin America. Those countries
imported silver and gold from their American colonies, but then had to use it to pay for
manufactured goods from core countries such as England and France. In the 20th century,
nations like the "settler colonies" of Australia, Canada and New Zealand had a semiperipheral
status. In the 21st century, nations like Brazil, Russia, India, Israel, China, South Korea and
South Africa (BRICS) are usually considered semiperipheral.