Characteristics Of World-Systems Theory

World-systems analysis argues that capitalism, as a historical system, has always integrated a variety of labor forms within a functioning division of labor (world economy).....
Countries do not have economies but are part of the world economy. Far from being separate societies or worlds, the world economy manifests a tripartite division of labor, with core, semi-peripheral and peripheral zones. In the core zones, businesses, with the support of states they operate within, monopolize the most profitable activities of the division of labor.

There are many ways to attribute a specific country to the core, semi-periphery, or periphery. Using an empirically based sharp formal definition of "domination" in a two-country relationship, Piana in 2004 defined the "core" as made up of "free countries" dominating others without being dominated, the "semi-periphery" as the countries that are dominated (usually, but not necessarily, by core countries) but at the same time dominating others (usually in the periphery) and "periphery" as the countries dominated. Based on 1998 data, the full list of countries in the three regions, together with a discussion of methodology, can be found.

The late 18th and early 19th centuries marked a great turning point in the development of capitalism in that capitalists achieved state society power in the key states, which furthered the industrial revolution marking the rise of capitalism. World-systems analysis contends that capitalism as a historical system formed earlier and that countries do not "develop" in stages, but the system does, and events have a different meaning as a phase in the development of historical capitalism, the emergence of the three ideologies of the national developmental mythology (the idea that countries can develop through stages if they pursue the right set of policies): conservatism, liberalism, and radicalism.

Proponents of world-systems analysis see the world stratification system the same way Karl Marx viewed class (ownership versus nonownership of the means of production) and Max Weber viewed class (which, in addition to ownership, stressed occupational skill level in the production process). The core nations primarily own and control the major means of production in the world and perform the higher-level production tasks. The periphery nations own very little of the world's means of production (even when they are located in periphery nations) and provide less-skilled labour. 

Like a class system with a nation, class positions in the world economy result in an unequal distribution of rewards or resources. The core nations receive the greatest share of surplus production, and periphery nations receive the smallest share. Furthermore, core nations are usually able to purchase raw materials and other goods from non-core nations at low prices and demand higher prices for their exports to non-core nations. Chirot (1986) lists the five most important benefits coming to core nations from their domination of periphery nations:

1. Access to a large quantity of raw material
2. Cheap labour
3. Enormous profits from direct capital investments
4. A market for exports
5. Skilled professional labor through migration of these people from the non-core to the core.

According to Wallerstein, the unique qualities of the modern world system include its capitalistic nature, its truly global nature, and the fact that it is a world economy that has not become politically unified into a world empire.

Core nations

• Are the most economically diversified, wealthy, and powerful (economically and militarily)
• Have strong central governments, controlling extensive bureaucracies and powerful militaries
• Have stronger and more complex state institutions that help manage economic affairs internally and externally
• Have a sufficient tax base so state institutions can provide infrastructure for a strong economy
• Highly industrialized and 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 non-core 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 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 Northwestern Europe (England, France, Netherlands) but were later in other parts of the world (such as the United States, Canada, and Australia).

Peripheral nations

• Are the least economically diversified
• Have relatively weak governments
• Have relatively weak institutions, with tax bases too small to support infrastructural development
• Tend to depend on one type of economic activity, often by extracting and exporting raw materials to core nations
• Tend to be the 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 in order to export back to core nations
• Have a small bourgeois and a large peasant classes
• Tend to have populations with high percentages of poor and uneducated people
• 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 and often forced to follow economic policies that help core nations and harm the long-term economic prospects of peripheral nations.

Historically, peripheries were found outside Europe, such as in Latin America and today in sub-Saharan Africa.

Semi-peripheral nations

Semi-peripheral nations are those that are midway between the core and periphery. Thus, they have to keep themselves from falling into the category of peripheral nations and at the same time, they 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. These 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 "peripheral-like" relations to the core. While in the sphere of influence of some cores, semi-peripheries also tend to exert their own control over some peripheries. Further, semi-peripheries act as buffers between cores and peripheries[6] and 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 from developing peripheries and declining cores.Historically, two examples of semi-peripheral nations would be Spain and Portugal, which 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 semi-peripheral status. In the 21st century, nations like Brazil, Russia, India, Israel, China, South Korea and South Africa (BRICS) are usually considered semi-peripheral.

External areas

• External areas are those that maintain socially necessary divisions of labor independent of the capitalist world economy.