As many people are often confused with the World System Theory and its treatment, we decided to create a quick guide with its detailed explanation. In this article, we will cover the main principles of the theory as it is. So, the World Systems Theory is in fact the part of Dependency Theory and was created in response to the criticism of the last one. It was founded and developed in 1979 by Immanuel Wallerstein who accepts the fact of ex-colonies dependency and believes that they should not be trapped forever in this state. The scientist believes that it is quite possible for these colonies to climb the economic ladder and develop, just like many of them have already done.
In addition, Wallerstein also thinks that according to the principles of global capitalism, some countries just have to remain poor to be used by more wealthy countries and people at the top. His theory has four key principles we want to underline:
- Don`t consider countries separately, they are rather one whole. According to the Dependency Theory, some countries are poor because other countries take advantage of them. But focusing on a separate country or government would be wrong when analyzing everything: today, the government loses in power to different global corporations that exceed national boundaries. It makes their control harder so in order to have a clear idea about whether the country is rich or poor, you should check the institutions and corporations and not countries;
- The scientist characterizes MWS by the so-called international labor division that is based on relations of three capitalist zones:
- The main (developed) countries that control the wages around the globe and own the manufactured goods production;
- The semi-peripheral countries (Brazil, African countries, etc) that resemble the main countries in the center but stay poor in rural areas;
- Peripheral countries (Africa in general) that provide other countries with raw materials and have only emerging markets trying to compete with the ones from the main and semi-peripheral zones in producing goods.
Some countries (like India and China) have all three zones within one territory.
- Countries can be more or less mobile in this system which is one of the main differences between the theories. Many countries have already progressed from peripheral to semi-peripheral but the majority of countries stay poor and controlled by wealthy European representatives that are unlikely to slip down the global order;
- The system is dynamic: main countries are developing all the time creating new ways of getting profit from poorer regions. It can be:
- Unfair rules of trade. One of the best examples is Agriculture which is the largest African economic sector. They could actually earn millions on export but EU and US convince consumers that these products are really expensive (while they are not);
- Tax deals. The US and EU corporations use their economic power to decrease taxes and get favorable deals when doing business with developing countries. For example, one of the mining companies signed a contract with Zambian government on the following conditions: they export $6 billion yearly but pay $50 million of taxes while the rest ($150 million) is the responsibility of Zambian government;
- Land taking. This is happening all the time in Africa where companies from Europe and the US buy thousands of hectares for a cheap price. Instead, they gain much more in profits than the Africans selling this land in the long term.
Of course, this theory (as well as Dependency Theory) can be criticized based on such factors as corruption, cultural and ethnic conflicts. Except for capitalism, there are more ways to take advantage of poor regions while there are also some areas not included into this theory (tribes in South America, for example) that remain unaffected. It means that Wallerstein`s theory is difficult to test and practice.