WORLD SYSTEMS THEORY, LATIN AMERICA.

The term world systems analysis was coined in 1974 by Immanuel Wallerstein to refer to a broad set of ideas about the global political economy, and especially the relationship between Latin America and the dominant economies of Europe and the United States, which were then gaining currency. The phrase world system is explored in detail in Wallerstein's famous book The Modern World-System: Capitalist Agriculture and the Origins of the European World Economy in the Sixteenth Century (1976). The form of critical inquiry advanced in this legendary study was then used in varying ways around the globe by such other scholars as Samir Amin of Senegal, Giovanni Arrighi of Italy, and André Gunder Frank of Germany, all of whom collaborated with Wallerstein on a notable book published through Monthly Review Press in 1982 entitled Dynamics of Global Crisis.

Landmark theories often emerge when the concrete events of history demand a new politics, and with it a new explanatory framework. Such was the case with world systems theory, and the preceding dependency theory of the 1960s and 1970s. As anthropologist Eric Wolf would later write, these intellectual movements tried to synthesize theoretically informed history with historically informed theory in response to the pressing problem, expressed most acutely during the political upheavals of 1968, "to discover history, a history that would account for the ways in which the social system of the modern world came into being," since "only in this way could we come to comprehend the forces that impel societies and cultures here and now" (p. ix). As this statement—and Wolf's own political activism in the United States during the 1960s—makes clear, world systems theory and its antecedent movements were not merely intellectual exercises; the scholars involved in them were also activists, many of whom risked their lives and suffered political repression, imprisonment, and exile in their efforts to transform the unequal system they abhorred.

The Age of Decolonization and the Failings of Modernization Theory

The period after World War II marked the epoch when the age of colonialism finally crashed, as one national liberation movement after another in Asia and Africa won legal independence (from Asian nations such as India in 1947, China in 1949, and Vietnam in 1974 to African countries such as Egypt in 1951, Ghana in 1957, Nigeria in 1960, Guinea-Bisseau in 1974, and Angola in 1975, among many others). Above all, there was also the historic defeat of U.S.-enforced neocolonialism in Latin America by the Cuban Revolution of 1 January 1959—an event that had a tremendous impact on the entire hemisphere at a time when corporate capitalism reigned almost unchallenged in the Americas.

But as Western modernization replaced Western colonialism in former colonies, scholars and activists alike realized that the struggle was far from over, as it became increasingly apparent throughout the "Third World" (as it came to be called in the late 1950s and early 1960s) that Western modernization meant one thing to Western countries and quite another to non-Western countries. One and the same economic project, in the act of producing "modern nations" around the globe, generated unprecedented wealth for the West and abject poverty for the majority of citizens in non-Western countries.

World systems theory was developed by scholars on the left in response to the failures of modernization theory, which had predicted growing prosperity and development in the Third World, rather than the immiserization that befell so many new nations. Few could disagree on the facts about the stark inequalities that divided the former colonial powers from their former colonies, given the grim statistics on such social indicators as infant mortality, average life span, access to health care, and level of literacy. But explanations diverged sharply. Western apologists for mainstream modernization theory, such as W. W. Rostow in The Stages of Economic Growth: A Non-Communist Manifesto (1960), made a straightforward threefold argument about the "universal" superiority of capitalist modernization. First, they maintained that the main countries comprising the West had modern economies, while most other nations simply had traditional economies characterized by low levels of industrialization, a small middle class, and hardly any advanced technology. Second, they argued that Western nations had a citizenry who possessed a modern psychology and modern cultures, which together were linked to an understanding of the need for hard work, a habit of punctuality, and a commitment to save money for investment. Conversely, the citizens of non-Western nations supposedly lacked this modern attitude and worldview to varying degrees and their economies suffered accordingly. Third, the Western apologist contended that the countries in the West were governed by modern institutions, such as parliamentary democracy, a multiparty system, an independent judiciary, and excellent public education systems. On the other hand, the "traditional societies" from outside the West were governed instead by "premodern" institutions, often with dictatorial leaders or paternalistic regimes, and no real commitment to public literacy. So, the answer, the modernization theorists maintained, was simple: the rest of the world should learn to behave like the West and to adapt its system of corporate capitalism.

By the late 1950s and early 1960s, however, something else was becoming clear, namely, the precise opposite of what modernization theorists had predicted was in fact occurring. Moreover, this development process often happened in ways that were devastating for the majority of the populations in every Latin American nation, whether it was more or less "modern." As Western capital modernized Latin American economies—from the copper mines of Chile, the oil fields of Venezuela, and the agribusinesses of Central America to the bauxite production of Jamaica—they became more contradictory and imbalanced on the national level to the degree that they were modernized by the West. Far from creating a large middle class, for example, corporate capitalism did exactly the opposite. Moreover, it soon became well documented that U.S. multinational corporations in fact preferred to do business with repressive military dictatorships and other premodern, as well as antidemocratic, political formations, in order to support a modernization that generated huge profits for the West, even as it led to very modest infrastructural gains for the host nation. In addition, it was not lost on the popular classes themselves that modernization theory was inaccurate on another count as well, that is, the relation of hard work and high productivity to remuneration. In Latin America, the members of the labor force who worked hardest within corporate capitalism were paid the least.

At this point, the issue simply was no longer one of explaining social injustice as a consequence of European-American–based modernization—these injustices had become patently, even painfully, clear to the Third World intelligentsia and progressive intellectuals in the West—but rather one of disclosing why and how the two phenomena, social injustice and capitalist modernization, were deeply interrelated. Were they incidentally connected through the misapplication of capitalist modernization by corrupt local leaders? Or were they linked through the coercive designs of imperial political policies emanating squarely from the West?

To an increasing number of critics, neither of these types of explanation were sufficient, since they did not begin with a structural economic analysis of what Karl Marx, almost a century earlier, had named the "uneven development" of modern capitalism. What was needed was a theory that began, not with individual examples of corruption or inefficiency, but with the inherent structural logic of corporate capitalism that, based as it is on an unequal "international division of labor," is unfairly organized by its very nature at the site of production, not just as a result of distribution. In an outpouring of intellectual energy beginning in the late 1950s, a new cohort of intellectuals, many from Third World countries themselves, began to develop such a theory.

Precursors to World Systems Theory

In developing his theory, Wallerstein built upon the nineteenth-century critiques by Marx of capitalism's structural contradictions and those by the subsequent school of dependency theory that first emerged in the 1950s and 1960s throughout the Americas about the "development of underdevelopment." The latter school of thought, devoted to analyzing the structural logic of monopoly capitalism, was put forth first by such scholars as Paul Baran, Harry Magdoff, and Paul Sweezy of Monthly Review, then developed in interrelated books throughout Latin America by Fernando Henrique Cardoso, Theotonio dos Santos, Jaime Wheelock Román, Fidel Castro, and Orlando Núñez Soto, among several others. World systems theory also owes an intellectual and political debt to the anticolonial critiques from the Caribbean of C. L. R. James or Frantz Fanon; the celebrated Annales school of material history from France exemplified by Fernand Braudel, Marc Bloch, or Georges Duby; and the radical historical analysis in England of Christopher Hill, E. P. Thompson, or E. J. Hobsbawm.

Anticolonialism.

In 1952, Frantz Fanon of the Caribbean island of Martinique launched a stirring anticolonial analysis of the ideologically charged ethnocentrism hidden behind European efforts at "modernization" in Africa, entitled Peau noire, masques blancs (Black Skin, White Masks, 1967). (This work was also very much in the tradition of C. L. R. James's sui generis anticolonial study The Black Jacobins [1939] about revolutionary movements in Haiti and the Dominican Republic.)

Development of underdevelopment.

In 1957, Paul Baran published a watershed study entitled The Political Economy of Growth, which became one of the most popular books about political economy in the history of Latin America. (A Spanish edition of this study had gone through more than twenty different editions, since being published by the National Autonomous University of Mexico.) In it, Baran demonstrated how Western development via modernization unavoidably produced underdevelopment in Latin America, and that it was necessarily based on "uneven development" owing to its peculiar structural logic. Indeed, without major structural adjustments, Western modernization would continually lead to the development of underdevelopment in Latin America and the Third World. Far from being the solution to poverty in Latin America, Western modernization was a primary cause of it. As the formative "core" of a hemispheric system, capital in the United States (and Europe) would thus continue to siphon crucial resources from "peripheral" Latin American countries through hyper-profits generated by the international division of labor.

Latin American dependency theorists.

Baran's book helped to galvanize the position of an entire generation of Latin American intellectuals. They answered the call to document his abstract claims about the deforming effects of Western modernization for the Americas through concrete studies of specific instances of the effects of corporate capitalism, with a series of studies that were extensive, provocative, and often brilliant. One particularly well-known example is Brazilian scholar Fernando Henrique Cardoso's (with Enzo Faletto) Dependencia y desarrollo en América Latina (1969). The context of its publication reveals the increasingly fierce battle between left and right that shaped twentieth-century Latin American politics: it was authored in Chile (on the eve of the Salvadore Allende years) where Cardoso was then in exile, because of a U.S.-backed military coup in Brazil during 1964. The latter opened the way to what Western capital would celebrate as an "economic miracle" (an annual growth rate of 10% for a decade). Yet, as one Brazilian leader of the period admitted: "In my country, the economy is doing fine, but the people aren't."

Cardoso's study, based on what he terms an "análisis global" (global analysis), provides a structural analysis of this contradictory process. In 1950 there were at least five large nations from Latin America that, according to the standards of modernization theory, were virtually guaranteed success as modern nations who would be major players on the world economic stage: Argentina, Brazil, Chile, Columbia, and Mexico. Each of them possessed the following: (1) sufficient internal markets to propel growth; (2) a formidable industrial base; (3) abundant reserves of raw materials; (4) powerful stimuli to grow nationally; and (5) satisfactory formations of domestic capital. Yet despite their enormous structural promise and hardworking labor forces, these five countries ended up being trapped by the West in a type of desarrollo dependiente (dependent development) that caused a profound depression of the living standards and welfare of the vast majority of their citizenry. The result was a disadvantageous interdependency with a Western-led modernization that did not make them modern nations by the standards of the West, even as the West itself profited handsomely from this foreign labor force and the region's raw materials.

An even more extreme case of underdevelopment as a consequence of Western modernization occurred in the seven largely rural countries of Central America, which were far less prepared to succeed in the world system than were the five Latin American nations singled out by Cardoso. Few have encapsulated better in a short aphorism than did Nicaraguan author Sergio Ramírez, how the economy of a Third World region is deformed by capitalist-based underdevelopment simply to serve the consumer patterns of the West. As Ramírez noted, people in Central America figured out fairly soon what their assigned role in the world system would be: cheap desserts for the West, such as coffee, sugar, and fruit. It was another Nicaraguan intellectual and guerrilla leader, Jaime Wheelock Román, who documented extensively and explicated deftly the historical process whereby Central America's fate would be determined by the international division of labor of corporate capitalism. The latter set of relationships rigidly presupposes the preparation of raw materials on the periphery of the world system and the production of finished industrial goods primarily in the core area. Written in the 1970s, Román's Nicaragua: Imperialismo y Dictadura was an underground classic during the insurrection against Nicaragua's de facto leader Antonio Somoza Debayle and a guiding text for revolutionary policies by the Sandinistas after their victory over Somoza in 1979.

Even more so than Cardoso, Wheelock Román's book exemplifies the increasingly high stakes in which Latin American dependency and world systems theorists worked as an underground labor leader during a period of intense political depression. Despite these dangers, he produced one of the most important books on dependency theory ever to come out of Central America. Román carefully traces how the Nicaraguan economía agroexportadora based on coffee (and to a lesser extent on bananas, sugar, and cotton) was set up to provide cheap goods for the West, and produced low prices for European-American consumers through the systematic maltreatment of underfed, underpaid, and terrorized workers denied basic human rights. Moreover, the unquestioned accompaniment to this success story of corporate capitalism and its modernization project in Nicaragua was the brutal, U.S.-backed dictatorship of the Somoza family (r. 1934–1979), two of whose members even graduated from West Point. This regime insured that labor discontent in Nicaragua would not be allowed to upset the project of modernization in Central America.

The author whose career epitomizes the mix of politics and scholarship that characterized Caribbean dependency theory is Fidel Castro, who produced a monumental tour de force of dependency theory, The World Economic and Social Crisis, together with two teams of researchers at the University of Havana. This analytical report, presented in 1983 by Cuban president Castro to the Seventh Summit Conference of Non-Aligned Countries, compiled evidence from a massive number of nonpartisan scholarly sources to document a world division of labor that is structurally enforced at every stage of development by the forces of corporate capital and the Western militaries that back them. Criticizing the claim by modernization theorists that Third World countries were gradually industrializing and could someday rise to the level of the industrialized West, Castro and his coauthors emphasized that "in spite of some affirmations to the effect that world industry is producing a so-called restructuring … the really impressive thing is that 69.2% of the world's industrial work force is found in the Third World and it generates less than 9% of the world industrial production" (p. 127).

This global division of labor was the main target of Castro's critique: his book calls for a rejection of the effort to "divide the world into an industrialized area with advanced technology and a primary-commodity-producing area" (p. 67). As examples, he pointed to mining, where "the underdeveloped countries contribute 25.6% of the mining of metals, they produce only 4.1% of the metal manufacture in the world" (p. 123), and textiles, where the manufacture of yarn—"high-labor and low capital intensive" in the Third World increased from "19% in 1950 to almost 40%," while weaving "which is more capital-intensive and require high automation and concentration, is still controlled by developed countries, and based there" (p. 67). Textiles were then returned back to the Third World to be made into garments, because this industry still demands a high degree of hand labor. But critically, the most important phase of all—the manufacturing and sale of textile machinery—"requires advanced technology and a complex design, on which the future of the entire sector largely reveals the power relationship in the textile sector." Third World industries produced less than 5 percent of such machinery, and saw few possibilities for increasing their share. It is from this control of the making of machinery, according to Castro and other dependency theorists, that the so-called captive trade system arises, turning international trade into a caricature of itself (pp. 67–68).

It is this control of the machines that make all other machines, that is, the export of machines, but not the technology that reproduces these machines, that is the guiding thread of all Western modernization policy. This is a key locus of power and a primary way of maintaining Western hegemony in the world system.

Wallerstein and World Systems Theory

Inspired by dependency theorists, Wallerstein developed the concept of world systems analysis in the 1970s as a response to the methodological impasse, or Methodenstreit, within the social sciences over how to explain the existence of stark inequities among three different worlds within the modern global economic order: those of societies in the core (the West and Japan), those on the semiperiphery (Eastern Europe and much of Asia), and those on the periphery (most of Africa, Latin America, along with the Middle East, except for Israel, plus some parts of Asia). Wallerstein opposed, on the one hand, what he deemed the "universalizers" in mainstream economics, sociology, and political science, who defend Western modernization theory as an international standard, and, on the other, the "particularizers" in anthropology, history, art history, and other disciplines in the humanities, for whom all economic developments are merely relative to the peculiar regions in which they occur. The latter assertion amounts to a fetishism, or universalization, of relative difference. According to Wallerstein,

Both groups … tend to share one premise in common: the unit of analysis was politico-cultural structure … whether the term they used for this unit was the state, or the people, or the nation.… This book makes a radically different assumption. It assumes that the unit of analysis is an economic entity, the one that is measured by the existence of an effective division of labor, and that the relationship of such economic boundaries to political and cultural boundaries is variable.… Once we assume that the unit of analysis is such a "world-system" and not the "state" or the "nation" or the "people," then much changes in the outcome of the analysis. Most specifically we shift from concern with the attributive characteristics of states to concern with the relational characteristics of states. We shift from seeing classes (and status-groups) as groups within a state to seeing them as groups within a world-economy. (pp. xi–xii)

A critical example of this approach, with its emphasis on underlying economic causes for political and cultural events, was his analysis of the advent of modern society, a process that for Wallerstein begins with the novel emergence of mercantile capitalism in late fifteenth-century Europe, which ultimately produced for the first time an entire world system. Wallerstein divided his analysis of the "determining elements" of the modern world system into four major epochs: the formation of the European world economy from 1450 to 1640; the consolidation of the system between 1640 and 1815; the technological transformation of industrialization from 1815 to 1917; and the "consolidation of this capitalist world-economy from 1917 to the present, and the particular revolutionary tensions this consolidation has provoked" (pp. 10–11).

The breadth of vision and sense of political urgency that underlay this new theoretical approach is evident in the introduction to Dynamics of Global Crisis, a manifesto on behalf of world systems theory that included a joint statement by coauthors Wallerstein, Amin, Gunder Frank, and Arrighi in which the following shared premises were declared:

1. We believe that there is a social whole that may be called a capitalist world economy … [that emerged] in the sixteenth century, and that is expanded historically from its European origins.…
2. We believe that we cannot make an intelligent analysis of the various states taken separately without placing their so-called internal life in the context of the world division of labor, located in the world-economy.…
3. We believe that, throughout the history of this capitalist world-economy, there has been increasing organization of oppressed groups within the world-system and increasing opposition to its continuance.…
4. After World War II, the United States was the hegemonic power, having commanding power in the economic, political, and military arenas, and able to impose relative order on the world system—a fact which correlated with the world's unprecedented economic system.…
5. We do not believe that the struggle between capitalist and socialist forces can be reduced to, or even symbolized by, a struggle between the United States and the USSR, however much the propaganda machines of both assert otherwise.…

These premises laid out, it remains only to indicate our prejudices and our visions. We are all on the left. That is, we all believe in the desirability and possibility of a world that is politically democratic and socially and economically egalitarian. We do not think the capitalist world-economy has done very well on any of these accounts. We believe that capitalism, as a historical system, will come to an end. (pp. 9–10)

Developments and Critiques of World Systems Theory since 1980

World systems theory was enormously influential throughout the world for several decades, although its influence was more profound in Third World regions such as Latin America, and in Europe, than in the United States. Even in the United States, however, major works such as Eric Wolf's study of Peasant Wars of the Twentieth Century (1969) or Sidney Mintz's magisterial study of the relationship between slavery and capitalism, Europe, and the Caribbean, Sweetness and Power: The Place of Sugar in Modern History (1985), took their inspiration directly from world systems theory.

There were always critics on the right, of course, and over time other criticisms arose, and intellectual trends that began as part of world systems theory gradually moved away from it. Conservative development theory gained new ground among politicians and development experts in the 1980s with the popularity of neoliberal reforms; within academic circles, postmodernism has both been influenced by world systems theory, and profoundly suspicious of it. The current emphasis on transnationalism clearly looks back to Wallerstein's insistence that in the face of a global economy, nation-states and local cultures cannot be analyzed in isolation from one another; at the same time, however, a distaste for "master narratives" marked the death knell for the mono-causal insistence on looking for a single underlying structure with vast explanatory reach. Yet, as postcolonial theorists have shown, a multicausal conception of master narrative, such as colonialism, avoids the problem of any single overarching explanation that homogenizes history.

Thus by 1996, statements such as those made by York Bradshaw and Michael Wallace, two sociologists from the United States, in their book Global Inequalities, that despite its historical importance "world-systems analysis" is simply "out of touch with current realities," have become commonplace. Two of their criticisms are especially revealing. First, they say that "just as modernization theory places too much blame on poor countries for their own underdevelopment, [so] world-system theory errs in the other extreme: It places almost total blame for Third World poverty on core countries" (p. 51). This point has been taken up by many activists in Third World countries, who see their own leaders and educated elites using criticism of the First World to evade responsibility for their own failures. Political positions, such as cultural policies, and artistic production are all marked by a "relative autonomy" from the world system that must be acknowledged before much needed local self-criticism is possible and democratic accountability can occur.

Second, Bradshaw and Wallace observe that sometimes "world-system theory had exaggerated the harmful effects" of multinational corporations. They and others point to the relative success story of China and the four "Little Dragons" in Asia (South Korea, Taiwan, Singapore, and Hong Kong) on the advanced semiperiphery of the world system as an instance of how "underdevelopment" is less in evidence as a result of Western-style modernization. This point is related to one made by intellectuals from within the world systems tradition, who in the late 1980s and 1990s began to move from a simple view of world history in which European domination was the single, central fact to a more complex vision of history. New studies of the past looked at the emergence of previous core-and-periphery systems, before the rise of Europe, in which the core might be found in Asian empires, or in the Middle East. In a similar vein, studies of the contemporary world have emphasized a multicentric vision, in which Japanese capitalist expansion in Southeast Asia, Australian neocolonial influence in the Pacific, and the rise of India's technology centers create multiple centers of economic power, while still perpetuating an underlying capitalist system in which the drive for profit overrides all other motives, and drastic inequality is continually reproduced and exacerbated.

Indeed, critics who dismiss world systems theory as irrelevant may be both losing sight of its most critical insights and overlooking current political trends. The much-vaunted neo-liberal reforms of the 1990s, modernization theory's successors, seem to have produced a series of economic crises; overall, most Latin Americans lost considerable economic ground during that dismal decade. Enlarging the definition of the core to include the bourgeosie of Third World nations, and the periphery to include the disenfranchised poor of First World nations such as Britain or the United States, is entirely in keeping with the original vision of unequal development; nor has the brunt of poverty and political repression ceased to fall on the world's nonwhite population, whether they live in Paris, London, or the Caribbean. Furthermore, presidents elected in some Latin American nations in the early 2000s, including Lula da Silva of Brazil and Hugo Chávez of Venezuela, as well as the rise of powerful new popular movements such as the indigenous movements of Ecuador and Bolivia, or the landless movement of Brazil, and the international antiglobalization movement, may indicate a new wave of political activism on behalf of the poor, which in turn may produce a new intellectual movement that will take off where world systems theory left off.

The underlying global inequalities that motivated world systems theory are still evident: in the early twenty-first century 5 percent of the population (the percentage of the population that resides in the United States) continues to control more than half of the world's resources. Unlike modernization theory, world systems theory not only highlights this grave situation, but also gives compelling reasons for how the world could be more justly organized otherwise.

See also Anticolonialism: Latin America ; International Order ; Marxism: Latin America ; Third World .

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David Craven