A fundamental tendency in human societies since the agricultural revolution has been the formation of kingdoms and empires, by means of conquest. Conquest and the formation of empires made possible great advances in commerce, science, technology, philosophy, literature, and art. These apparently opposed phenomena of conquest and civilization are intertwined, establishing a tendency in human history that may be called “the dialectic of domination and development .” Immanuel Wallerstein maintains that since the agricultural revolution there have been many social systems that transcend political and cultural boundaries, which he calls “world-systems.” They were not world-systems in the sense of encompassing the entire planet, but in the sense that they were systems that formed a world, composed of various “nations” and peoples yet defined by political and economic structures as well as ideologies. For this reason, Wallerstein uses the hyphenated world-system: “world” does not modify “system;” rather, two nouns are joined to convey the notion of a system that forms a world (Wallerstein 2004, 87–89).
There have been two types of world-systems: world-empires and world-economies. Both are characterized by a dominating center that controls peripheral regions. In a world-economy, the center transforms the economic institutions of the peripheral regions, so that they function to promote the economic interests and provide for the productive needs of the center. In contrast, the empire represents a more limited form of domination, in that the economic systems of the peripheral regions are not restructured. The center has political authority and jurisdiction over the peripheral regions and requires them to pay a tax or a tribute, but it does not seek to transform the economic activities of the periphery. The tribute from the periphery functions to maintain a bureaucracy in the center that administers the empire. As the empire expands, the center tends to absorb much of the tribute in lavish lifestyles, rather than maintaining effective administrative control. The over-weighted and gluttonous center is unable to control the peripheral regions effectively, and some of the nations in the periphery are able to assert their autonomy and break free of the empire. Thus empires have a historic tendency to expand until they become unable to control their peripheral regions, at which time they are vulnerable to conquest by other empires or to disintegration. So the rise and fall of empires is common in human history. Most of the great civilizations of the pre-modern Middle East and South Asia as well as those of pre-conquest America and pre-colonial Africa were world-empires. World-economies are much less rare and tend to be shorter in duration. The ancient Chinese civilizations, however, were long-lasting world-economies. Many of the pre-modern world-systems lasted several centuries, but all were confined to a single region of the world (Wallerstein 1974, 15–16; 2004, 89).
Reflecting on the central human tendency toward conquest, Jared Diamond has maintained that the conquering nations have been those with an advanced capacity with respect to the particular components necessary for conquest, and they should not be conceived as a superior subspecies of humans. He maintains that the societies that were able to conquer others were those that had turned earliest to food production, driven by a necessity that was provoked by population growth and/or environmental factors. This necessary conversion to a more productive system enabled them to support full-time specialists, such as soldiers, state administrators, artisans, and priests, who played important roles in wars of conquest (Diamond 1999).
This central human tendency toward conquest as the basis for development attained advanced expression in the modern era, and the modern nation-state played a pivotal role. Cuban political scientist Armando Cristóbal describes the modern nation-state as characterized by centralization of political authority and by unity established on the basis of common ethnic identification. Centralization was a significant force in Western Europe from the tenth to the fifteenth centuries, pushed by monarchs and merchants, because of their common interest in overcoming the local power of feudal lords. National ethnic identification took shape in Spain, England, and France, Cristóbal maintains, as a result of wars of conquest reinforced by natural geographical boundaries. In the case of Spain, it was a matter of re-conquest in reaction to the Moorish conquest, whereas England and France had continuous wars with each other. The common ethnic identification of the modern nation-state became a unifying force, replacing religion, which had functioned as the central unifying force in the traditional state. This ultimately gave rise to the differentiation of political leaders from religious leaders, reducing the power of the latter, although religion continued to be important for the pacification of the conquered peoples. Common ethnic identification forged the unity of peoples of diverse cultural-religious traditions in a territory governed by a single state (Cristóbal 2008).
With the formation of the modern nation-state in Western Europe by the sixteenth century, the stage was set for a project of Western European conquest on a global scale. From 1492 to 1914, seven European nations conquered or took control of virtually the entire world, establishing the structural foundation of the modern world-system and capitalist world-economy. The process was initiated by the Spanish conquest of America during the sixteenth century. In addition to the factors that had forged the Spanish nation-state, the conquest was aided by the lack of horses and iron in America and the limited resistance to disease among the indigenous populations, as a result of their relative geographical isolation (Diamond 1999; Wallerstein 1974). The European project of world conquest did not always involve direct control by European states. In some cases, formally autonomous empires or societies were compelled to make concessions to European powers, coerced by significant European military presence in the region. In other cases, European military-economic companies contracted by European states made alliances with local political actors whose particular interests coincided with the European agenda, enabling it to take control of the political process. And there were important exceptions: China and Japan. But in essence, during the course of four and one-quarter centuries, Europe conquered the world, enabling it to establish a world-economy and a world-system that responded to its interests.
Structures of the European-Centered Modern World-System
The modern world-system is the economic, political, and social system that extends beyond the boundaries of societies and cultures and that today encompasses the entire world. As noted, it began to emerge in the sixteenth century, with the Spanish and Portuguese “discovery” and conquest of America. During the nineteenth century, as a result of the conquest of Africa and much of Asia by England, France, and other European nations, the modern world-system became global in scope (Wallerstein 1974, 5, 7, 10–11).
The modern world-economy is the economic component of the modern world-system. It consists of all the economic activities throughout the world that are related to one another through an extensive division of labor, which developed historically in a geographical form, with particular economic activities carried out in specific geographical regions. The geographical division of labor led to the emergence of a world-economy with distinct regions: the core, the historic manufacturing center; the periphery, the supplier of raw materials on a base of forced and cheap labor; and the semiperiphery, which has some core characteristics and some peripheral characteristics. In the fulfillment of its historic function of producing raw materials (agricultural, animal, and mineral products), the periphery did not require advanced technology or complex systems of production, and as a result, peripheral regions have developed with a labor-intensive production and less sophisticated technology. In contrast, the core uses the raw materials imported from the periphery to manufacture various products. Because of the variety of economic activities involved in fulfilling this function, advanced and sophisticated technologies have emerged, with inventions in some sectors applied in others.
The structure of the world-economy thus generates a fundamental inequality between core and periphery. The economic function of each has ensured that the core will have much greater diversity in manufacturing, higher levels of technology, higher wage levels, and higher levels of consumption. The core-peripheral relation has created two different realities: the core with its culture of consumerism, materialism, and individualism; and the periphery, where the basic democratic rights of access to adequate nutrition, housing, education, and health care are denied on a massive scale, giving rise to a popular culture of social struggle and solidarity. In addition, the periphery functions as a market for the surplus manufactured goods of the core, as a consequence of the fact that the traditional manufacturing of the conquered regions was to a considerable extent destroyed. This dependency pertains to equipment and supplies necessary for raw materials production as well as to personal consumption. Consequently, the periphery provides a double benefit for the core: it functions as a supplier of cheap raw materials as well as a purchaser of surplus manufactured goods, that is, the goods that exceed the capacities of the national markets of the core.
The modern world-economy is a capitalist world-economy, organized to maximize profit and to accumulate capital for the international bourgeoisie. The bourgeoisie seeks to maximize exploitation of labor in order to maximize profit and accumulation of capital, and this exploitation of labor takes two forms. First, there is exploitation in the sense defined by Marx, where the workers are paid less than the value of what they produce. Second, there is superexploitation, defined by Wallerstein , where the workers are paid less than what they need in order to live. This dual system of exploitation and superexploitation was developed in response to a dilemma: Low wages are consistent with capitalists’ interests, but they limit the capacity of the workers to buy the products that the system produces, thus restraining its capacity to expand. A geographical division in the labor market, in which core workers function to consume as well as to produce and peripheral workers produce primarily, effectively resolves this dilemma. From the vantage point of core capitalists, consumption in the periphery is important only in relation to the purchase of the surplus goods of the core, and not with respect to the capacity of peripheral regions to provide for the basic human needs of the people.
Thus, in both core and periphery, the international bourgeoisie seeks to minimize labor costs, but it does so in accordance with different rules in the two regions. In the core, the workers have organized unions, organizations, associations, and political parties that promote the interests of workers, which played a central role in political processes in core nations prior to 1980. As a result of the historic workers’ struggles through such organizations, core workers have attained basic political and civil rights, and a majority have been able to obtain sufficient wages to acquire the basic necessities of life. The capitalist class made these concessions because of pressure applied by workers’ action, and especially important was the weapon of the strike. Inasmuch as such concessions had the effect of expanding domestic markets in the core, they were consistent with systemic needs in the long term. So as a result of these historic dynamics, most core workers are exploited in the sense defined by Marx, in that they receive in wages less than the value of what they produce. But they are not superexploited, in that, for the majority of core workers, wages are sufficient to sustain a life with adequate nutrition, housing, clothing, and access to education and health care.
For the workers in the periphery, however, there is a different reality. In the peripheral regions historically, slavery and other mechanisms of brute force were used to obtain labor for the exportation of raw materials to the core. As the system evolved, and as more and more land was used for plantations and mines, the majority of people had no option but to work in the plantations and mines, and coercion became more economic than physical. Sharecropping, tenant farming, and low-wage labor on plantations and mines became the norm, which continues to the present day. Most agricultural and industrial workers are superexploited; their wages for full-time work are insufficient to acquire the basic necessities of life. Basic political and civil rights, such as the right to organize unions and political parties, were not recognized until well into the twentieth century, and they were often nullified by the political repression of military dictatorships and weakened during the post-1980 neoliberal stage. The people survive through a variety of strategies: working two or three jobs; using several workers from the same household, including children; cultivating food on subsistence plots; and constructing simple huts or shacks with their own hands. And they do without. A majority is malnourished. Many do not have electricity or piped water. The great majority has very limited access to education or health care. They die at birth more frequently than in the core, and they do not live as long. In desperation, many have fled to the core, creating a problem of uncontrolled international migration.
The unequal wage level between core and periphery establishes unequal exchange, in which the amount of products that a core worker receives for a given quantity of labor is many times greater than the amount of products that a peripheral worker receives in exchange for an equal quantity of labor (Wallerstein 1979, 71). So labor is performed throughout the core and peripheral regions to make the products marketed in the world-economy, but the sale and consumption of these products are concentrated in the core.
Since 1980, the capitalist class has been more aggressive in the pursuit of its interests in relation to core workers, as a consequence of the profound and systemic crisis in which the system has entered, which we will discuss in Chap. 6. This breaking of the social contract between management and labor in the core is shortsighted, because the relatively high wages of core workers have functioned to provide political stability to the world-system. The shortsighted response of the capitalist class to the crisis is one of the signs of the depth of the crisis and of the incapacity of the system to resolve it. The breaking of the social contract has led to erosion in the standard of living of core workers, thus undermining the legitimacy of core governments and creating a degree of social instability. Nevertheless, by global standards, the wages of core workers remain relatively high, and the majority of workers in the core have the basic necessities of life.
The Origin of the Modern World-Economy
The sixteenth-century Spanish and Portuguese conquest of the region of the Americas today known as Latin America was made possible by: the superior military technology of the Spaniards and Portuguese (particularly their horses, steel swords, and steel armor); the centralized political structure of the conquering nations; the decentralized political structure of many of the indigenous societies; and the rapid spread of diseases brought by the Europeans and against which the indigenous population had limited immunity. In many of the conquered regions, the indigenous population was reduced 90% as a result of the conquest, the spread of disease, and the brutality of the forced labor imposed in the aftermath of the conquest.
Using gold and silver acquired from America through systems of forced labor, the Spanish and Portuguese purchased manufactured goods from Northwestern Europe, particularly the Netherlands, England, and France. This stimulated commercial expansion in Northwestern Europe, which began at this time to import grains from Eastern Europe. Thus the Spanish military conquest of America played a central role in the emergence of a European world-economy that encompassed Western Europe and Eastern Europe as well as those areas of America under the control of Spain and Portugal. The European world-economy came into being during the period 1492–1640.
There was a geographical division of labor in the emerging modern world-economy. Eastern Europe and Hispanic America were the regions in which raw materials were obtained using three forms of forced labor. (1) The encom...