2 min read•july 25, 2024
World-systems theory explains global inequality through a framework of , , and nations. It highlights how wealthy countries exploit less developed ones, creating a global division of labor and interconnected economic relationships.
The theory traces inequality to European colonialism and the Industrial Revolution. It examines how unequal trade, debt cycles, and multinational corporations perpetuate disparities. While insightful, critics argue it oversimplifies complex global dynamics and underemphasizes internal factors in national development.
Core nations industrialized and wealthy exploit periphery and semi-periphery nations control global economic processes (United States, Western European countries, Japan)
Periphery nations less developed provide raw materials and cheap labor depend on core nations for manufactured goods and technology (Many African, Latin American, and Southeast Asian countries)
Semi-periphery nations occupy intermediate position mix industrialization and resource extraction act as buffer between core and periphery (Brazil, Mexico, China, India)
World-system global division of labor interconnects economic and political relationships forms capitalist world economy
Historical origins rooted in European colonialism and Industrial Revolution established unequal trade relationships
Perpetuation mechanisms include dependency theory unequal exchange technology transfer limitations debt cycles and multinational corporations' influence
Global commodity chains span production processes across multiple countries extract value favoring core nations
Labor exploitation maintains low wages in periphery countries through outsourcing and offshoring practices
Political influence exerted by international organizations (IMF, World Bank) shapes trade agreements favoring core nations
Strengths: holistic approach to global inequality provides historical perspective on development explains persistent disparities between nations highlights interconnectedness of global economy
Limitations: oversimplifies complex global relationships struggles to account for rapid economic changes (Asian Tigers) underemphasizes internal factors in national development faces challenges categorizing emerging economies
Contemporary applications analyze effects rise of transnational corporations shifting global power dynamics (China's ascent)
Critiques: maintains state-centric focus in networked world neglects non-economic factors (culture, institutions) presents deterministic view of development trajectories
Alternative perspectives include modernization theory neoliberal approaches post-development theories offering different frameworks for understanding global dynamics