A modern world-system

(from Daniel Little Blog)

Understanding Society is an academic blog by Daniel Llittle that explores a series of topics in the philosophy of social
science and the workings of the social world. Published continuously since 2007, the blog has treated a wide range of
topics, from the nature of causal mechanisms to the idea of emergence to the political dynamics of right-wing
extremism to the causes of large-scale technological disaster. Readers should consider the blog an example of “open-
source philosophy”. It is an experiment in thinking, one idea at a time.

Immanuel Wallerstein created a huge stir in the 1970s with the publication of The Modern World-System:
Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth
Century (1974). The book is an intellectual masterpiece, synthesizing a vast range of fundamental literature
on the economic history of Europe and the world. You could look at the book as the first serious and
extended effort to theorize globalization -- a term that barely existed at the time of publication. Or you could
look at it as a general theory of colonialism -- an account of the pathways and influences through which the
metropole dominated and exploited the periphery. It is worth looking back at this work today to tease out
some of the guiding assumptions about history, sociology, and globalization it reflected.

The concept of "world system" is itself a key component of our current understanding of globalization, in
that it captures the idea of causal interconnectedness across the globe among major organizations, firms,
populations, and states. Wallerstein observes that earlier social scientists had usually centered their analysis
at the level of the political unit -- the nation-state; whereas his own approach is different: This book makes a
radically different assumption. It assumes that the unit of analysis is an economic entity, the one that is
measured by the existence of an effective division of labor, and that the relationship of such economic
boundaries to political and cultural boundaries is variable, and therefore must be determined by empirical
research for each historical case. Once we assume that the unit of analysis is such a "world-system" and not
the "state" or the "nation" or the "people", then much changes in the outcome of the analysis.

But what, more exactly, did he mean by a system? Did he imagine something analogous to a mechanical
system in which the relations among the parts were governed by a few simple laws? He seems to suggest
this possibility when he asks the question, "What do astronomers do? As I understand it, the logic of their
arguments involves two separate operations. They use the laws derived from the study of smaller physical
entities, the laws of physics, and argue that ... these laws hold by analogy for the system as a whole. Second,
they argue a posteriori. If the whole system is to have a given state at time y, it most porrobably had a
certain state at time x". Here he seems to suggest that social systems are tied together by the working of
governing laws -- a particularly unconvincing starting point.

But Wallerstein's practice as a sociologist is far more defensible than this language would suggest. He was
in fact sensitive to causal heterogeneity, contingency, and variation in the systemic relations he meant to
capture -- particularity as well as universality. So he doesn't actually treat the modern world system as if it
were analogous to a set of gravitational objects governed by fixed laws of nature.

I think the clue to an answer to his working definition of a system is found in his definition of scope in terms
of an "effective division of labor": a set of regions constitute a system in his framework if there is significant
exchange and dependence among various of the regions for products, people, knowledge, skills, and
resources from other regions. If Europe, Asia, or the Americas had been "autarkic" in 1700 -- that is, if one
or more of these continental regions had been a closed economy and society making no substantial use of
products, knowledge, resources, or people from other regions -- then there would not have been one "world
system" but rather several independent macro-regional systems. And Wallerstein explicitly affirms this point
late in the book: By saying that in the sixteenth century there was a European world-economy, we indicate
that the boundaries are less than the earth as a whole. But how much less? We cannot simply include in it
any part of the world with which "Europe" traded. In 1600 Portugal traded with the central African kingdom
of Monomotapa as well as with Japan. Yet it would be prima facie hard to argue that either Monomotapa or
Japan were part of the European world-economy at that time. And yet we argue that Brazil (or at least areas
of the coast of Brazil) and the Azores were part of the European world-economy.

So in postulating the concept of world system as a framework for analysis of the modern period (let's say
1700), Wallerstein is laying a few important cards on the table; he is indicating his judgment that there was
significant and necessary exchange among virtually all accessible places on the planet. There were
economically meaningful movements of resources, people (emigrants and slaves), crops (cotton, sugar),
finished products, and ideas throughout the system of places defining the system of transport and trade. This
in turn implies that we cannot properly understand the workings of the regional economy without taking into
account its exchange relations with other regions -- or in other words, we need to place the regional economy
into the system of international division of labor in which it is located. And in fact, historians like Ken
Pomeranz make a substantial case for the empirical accuracy of that judgment (see for example The Great
Divergence: China, Europe, and the Making of the Modern World Economy and The World That Trade
Created: Society, Culture, And the World Economy, 1400 to the Present).

If we begin with this assumption -- the idea of the substantial interdependence of continental regions in the
early modern period -- then we are naturally drawn to the question, what were the terms of trade? Was
exchange among regions mutually beneficial, as trade theory would have it? Or was it extractive and
exploitative, as the theory of colonialism would have it? This is where Wallerstein makes substantial use of
the core-periphery framework in his analysis.

The periphery of a world-economy is that geographical sector of it wherein production is primarily of lower-
ranking goods ... but which is an integral part of the overall system of the division of labor, because the
commodies involved are essential for daily use. The external arena of a world-economy consists of those
other world-systems with which a given world-economy has some kind of trade relationship ... what was
sometimes called the "rich trades." (199-200)
Wallerstein was particularly interested in interconnections between places that were the expression of power
and commerce. Core and periphery are linked by relations of subordination -- military and economic
domination, leading to the persistent disadvantage of the latter in favor of the former. These features define
the "general attributes of a colonial situation".

This analysis lays a theoretical and historical foundation for a theory of globalization. Wallerstein writes late
in the book:
One of the persisting themes of the history of the modern world is the seesaw between "nationalism" and
"internationalism." I do not refer to the ideological seesaw ... but to the organizational one. At some points
in time the major economic and political institutions are geared to operating in the international arena and
feel that local interests are tied in some immediate way to developments elsewhere in the world. At other
points of time, the social actors tend to engage their efforts locally, tend to see the reinforcement of state
boundaries as primary, and move toward a relative indifference about events beyond them.
Where has the effort to theorize globalization gone in the thirty-five years since Wallerstein's book appeared?
A particularly important contemporary voice on this subject is that of Saskia Sassen. Her recent A Sociology
of Globalization (2007) represents a current cutting-edge effort to provide a vocabulary and set of theoretical
premises in terms of which to understand the global interconnectedness that characterizes the contemporary
world. And she wants to provide a sociology of these processes -- that is, she wants to provide a theoretical
vocabulary and a set of hypotheses about the causal mechanisms that are involved that are adequate to the
problem of describing and explaining the workings of this system. One thing this means is providing a
framework within which the empirical details and structures of global networks can be investigated. Another
key point in her approach is her attention to differentiation across institutions and mechanisms.

A deeply important part of her analysis is her effort to overturn the assumption of "linearity" and hierarchy
among levels of analysis -- the line of thought that assumes that neighbourhoods are encompassed by cities,
which fall within regions, which fall within states, which fall within international relations. She argues
repeatedly and effectively that this linear scheme doesn't work for today's global relationships. The local
neighbourhood may be implicated in extra-national relations of immigration, crime, and trade that make it a
global place. More importantly, what she calls "global cities" have crucial relationships at many levels in
these supposed hierarchies -- local, national, and supra-national. So the question of scale cannot be defined
within a simple hierarchy of relationships of locality, nationality, and globality. (Significantly, Wallerstein
opens his treatment of the modern world system by wrestling with this issue -- a discussion that he frames in
terms of the idea of the appropriate unit of analysis in considering colonialism.)

Sassen is particularly interested in the networks of communication, finance, and service organizations that
constitute the fabric joining what she calls "global cities" (link; see also an earlier posting on regional
interdependence). But in this book Sassen broadens considerably the angle of view in order to consider social
networks at many levels of scale, including sub-national as well as supra-national.

Sassen makes an important point about international economic power that has a Wallerstein-like feel to it but
that would probably not have been true in 1700 or 1970. This is her view that there has been an important
process of "de-nationalization" that has removed traditional powers of the state and placed them in the scope
of international economic and finance institutions that are significantly controlled by large economic actors
and firms. We sometimes refer to this process as one of "liberalization"; Sassen makes the point that the
construction of the new supra-national regulatory regimes is an extended historical process that can be
studied in detail. She refers to the result of this process as the global corporate economy. One of
Wallerstein's key arguments is that nations in the periphery were dominated and controlled by an economic
system run by European nations. Sassen argues for the reality of a world system of regulatory arrangements
that subordinates the sovereignty of even previously hegemonic nations to a non-democratic set of
institutions and rules that implicitly favor one set of economic actors over others. But Sassen's inference
from this fact about international economic power is less about north-south exploitation and more about the
rising likelihood of global exploitation of all ordinary citizens by powerful extra-national economic forces
that are beyond the reach of democratic processes (what she refers to as the "democratic deficit").

Sassen's book warrants a close reading. It proposes a significantly different way of conceptualizing the
meaning of globalization, and one that will suggest many new research agendas.