Non-linear: World System

Theory, Neo Marxist Theory

Yashasvika Yadav
 Non-linear: World System Theory
• Modernization theory claimed that once developing societies came into contact with western
European and North American societies, they would be modernized and, eventually, would
achieve the economic, political, and social features characteristic of the nations of western
Europe and the United States.
• However, by the 1960s it was apparent that the Third World was not passing through a stage of
underdevelopment, as envisioned by modernization theory, but remaining underdeveloped.
• Thus, a counterclaim was advanced—that developing countries today are structurally different
from the advanced countries and so will have to develop along different lines. This claim became
the core of the structuralist thesis developed by intellectuals from Chile, Argentina, Brazil, and
Peru brought together by the United Nations Economic Commission for Latin America (ECLA)
 Non-linear: World System Theory
• These scholars from Latin America claimed that they were structurally different
from industrialized countries and needed different model to develop. The core
countries motivated periphery countries to produce raw materials, cash crops
and food stuff at a low price to core countries and later they were manufactured
the finished products at the higher rates in the core countries. It was argued that
international trade and market relations were structured to create uneven
relations and benefit the developed countries. For example: ZARA products are
made in India and then sold at such a high price
•
 Non-linear: World System Theory

• This perspective formed the basis of what came to be known as

dependency theory. It rejects the limited national focus on modernization
rather emphasize on importance of developing indigenous model of
development and the impact of imperialism in shaping the country. It
focuses on the fact that periphery of the international economy is being
exploited by the center. They suggest that colonialism is not actually over
and is being re established through trade
 Non-linear: World System Theory
• World system theory which suggests that some countries benefit while some are exploited
• The world system theory are established on three level hierarchy: core, periphery and semi
periphery
• Core countries dominate and exploit peripheral countries for labor and raw material
• Peripheral countries are dependent upon core countries for capital
• Semi peripheral has both the features of core and peripheral
• This theory emphasizes the inequalities in the world economic system
• Core countries are dominant capitalist countries, strong military power and not dependent on
any one country
 Non-linear: World System Theory, Neo
Marxist Theory
• 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" 16th century. Europe (the West)
used its advantages and gained control over most of the world economy
and presided over the development and spread of industrialization and
capitalist economy, indirectly resulting in unequal development.
• World systems theory is a response to the criticisms of Dependency
Theory.
 Non-linear: World System Theory, Neo
Marxist Theory
• 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 capitalism 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 the following 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 have 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.
 Non-linear: World System Theory, Neo
Marxist Theory
• Countries can be upwardly or downwardly mobile in the world system. This is one of the key differences
between 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 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: 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 subsidising their
farmers so imported African products seem more expensive
 Non-linear: World System Theory, Neo
Marxist Theory
• Western Corporations sometimes use their economic power to negotiate
favourable 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.
 Non-linear: World System Theory
• 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 biofule crops for
export back to western markets. In such cases the 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.
 Neo Marxist Theory
• Marxism is an economic and social system based upon the political and
economic theories of Karl Marx and Friedrich Engels.
• Marxism is summed up as “a theory in which class struggle is a central element
in the analysis of social change in Western societies.” Marxism is the antithesis
of capitalism which is defined by Encarta as “an economic system based on the
private ownership of the means of production and distribution of goods,
characterized by a free competitive market and motivation by profit.” Marxism
is the system of socialism of which the dominant feature is public ownership of
the means of production, distribution, and exchange.
 Neo Marxist Theory
• Under capitalism, the working class or “the people,” own only their capacity to work; they
have the ability only to sell their own labor. According to Marx a class is defined by the
relations of its members to the means of production. He proclaimed that history is the
chronology of class struggles, wars, and uprisings. Under capitalism, Marx continues, the
workers, in order to support their families are paid a bare minimum wage or salary. The
worker is alienated because he has no control over the labor or product which he produces.
The capitalists sell the products produced by the workers at a proportional value as related to
the labor involved. Surplus value is the difference between what the worker is paid and the
price for which the product is sold. As per Marxism an uprising where the people will
overthrow the rulers and there will be a classless society
 Neo Marxist Theory
• What were the Marxist views of religion? Because the worker under the
capitalist regimes was miserable and alienated, religious beliefs were
sustained. Religion, according to Marx was the response to the pain of being
alive, the response to earthly suffering. In Towards a Critique of Hegel’s
Philosophy of Right (1844), Marx wrote, “Religion is the sigh of the
oppressed creature, the feeling of a heartless world, and the soul of soulless
circumstances.” Marx indicated in this writing that the working class, the
proletariat was a true revolutionary class, universal in character and
acquainted with universal suffering. This provided the need for religion.
 Neo Marxist Theory
• In the sixties and seventies of the last century the scholars of the Western world showed
renewed interest on Marx’s political ideas, specially his concept of state and this resulted
in a reformulation of his theory of state. The background factor of this regenerated
interest in many of the writings of Marx and Engels were brought into light by new and
enthusiastic scholars and researchers.
• These scholars further observe that during the last century capitalism—and specifically
the capitalist structure of economy— have undergone changes. Also have changed the
mode or technique of exploitation, manner of bargaining between the workers and
capitalists, nature and functioning of free market economy. In spite of all these changes
the class relations have not changed spectacularly.
 Neo Marxist Theory
• The starting point of the neo-Marxist theory of the state is Marx’s analysis of
class relations and the forms of exploitation found in history. Neo-Marxist
theories of the state are built directly upon the class view of society. The state is
not an impartial umpire balancing the demands of various groups in society but
the vehicle by which one class maintains its rule over another
• In recent years (particularly after the Second World War) the free market
economy is being encouraged as a way of the development of individual’s
freedom and acceleration of economic growth. The fall of Soviet regime in 1991
was an additional arm added to the body of capitalism and free market economy.