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Before the 1970s, social scientists tended to discuss the world’s societies in terms of First, Second and Third worlds, based on their levels of capitalist enterprise, industrialization and urbanization. The solution to Third World ‘underdevelopment’ was therefore thought to be more capitalism, more industry and more urbanization. Wallerstein rejected this dominant way of categorizing societies, arguing instead that there is one world economy and that all the societies within it are connected by capitalist economic relationships. He described this complex intertwining of economies as the ‘modern world-system’, which was a pioneer of today’s globalization theories. His main arguments about how the world-system emerged were outlined in a three-volume work, The Modern World-System (1974, 1980, 1989), which set out his macrosociological perspective.

The origins of the modern world-system lie in sixteenth- and seventeenth-century Europe, where colonialism enabled countries such as Britain, Holland and France to exploit the resources of the countries they colonized. This allowed them to accumulate capital, which was ploughed back into their economy, driving forward production and development. This global division of labour created a group of rich countries but impoverished many others, thus stunting their development. Wallerstein argues that the process produced a world-system made up of a core, a periphery and a semi-periphery (see figure 4.3). And although it is clearly possible for individual countries to move ‘up’ into the core or to drop ‘down’ into the semi-periphery and periphery, the basic structure of the modern world-system remains constant.

Wallerstein’s theory tries to explain why developing countries have found it so difficult to improve their position, but it also extends Marx’s class-based conflict theory to a global level. In global terms, the world’s periphery becomes ‘the working class’, while the core forms the exploitative ‘capitalist class’. In Marxist theory, this means that any future socialist revolution is now likely to occur in the developing countries rather than in the wealthy core, as originally forecast by Marx. This is one reason why Wallerstein’s ideas have been well received by political activists in the anti-capitalist and anti-globalization movements.

Figure 4.3 The modern world-system

See chapter 20, ‘Politics, Government and Social Movements’, for more on anti-globalization and anti-capitalist movements.