A World-Systems Perspective
Christopher Chase-Dunn
Yukio Kawano
Denis Nikitin
Department of Sociology
Johns Hopkins University
Baltimore, MD. 21218 USA

Using the world-systems perspective this essay examines the trajectories of several types of globalization over the last 100 years and the recent surge in public cognizance of global processes. It is found that different types of globalization have different temporal characteristics. Some are long-term upward trends while others display large cyclical oscillations. The factors that explain the recent emergence of the discourse of globalization are examined, and this discourse is analyzed in terms of the contradictory interests of powerful and less-powerful groups. We contend that there is a lag between economic and political/cultural globalization and that the latter needs to catch up if we are to convert the current world-system of "casino capitalism" into a more humane, democratic, balanced and sustainable world society.

Contributed to the Ad Hoc session on the Future of Globalization at the International Sociological Association, XIV World Congress of Sociology, July 26 - August 1, 1998, Montreal, Canada
An electronic version of this paper is posted at /archives/papers/

v. 7/15/98 (9108 words)

Reflecting on some non-rhetorical questions

The discourse on globalization has become a flood. What are the trends and processes that are alleged to constitute globalization? How do they correspond with actual recent and long-term changes in the world economy and the world polity? What are the interests of different groups in the political programs implied by the notions of globalization? And what should be the response of those peoples who are likely to be left out of the grand project of world economic deregulation and the free reign of global capital?

These questions are addressed from the world-systems perspective, an historically oriented analysis of cycles, trends and long-run structural features of the world-economy. The recent explosion of awareness of transnational, international and global processes is set in the historical perspective of the last 600 years of the emergence of a capitalist intersocietal system in Europe and its expansion to the whole globe.

International economic integration has been a long-term trend since the great chartered companies of the seventeenth century, but this trend also reveals a cycle in the rise and fall of the proportion of all economic exchange that crosses state boundaries. Political globalization also has a long history in the emergence of international organizations over the last 200 years. Most of the many versions of globalization discourse focus on a recent qualitative transformation and emphasize the unique qualities of the new stage, while the longer view sees recent changes as part of a much older process of capitalist development and expansion in which there are important continuities as well as changes.

The trends and cycles reveal important continuities and imply that future struggles for economic justice and democracy need to base themselves on an analysis of how earlier struggles changed the scale and nature of development in the world-system. While some populists have suggested that progressive movements should employ the tools of economic nationalism to counter world market forces (e.g. Moore 1995), it is here submitted that political globalization of popular movements will be required in order to create a democratic and collectively rational global system.

The World-Systems Perspective

Today the terms "world economy", "world market", and "globalization" are commonplace, appearing in the sound-bites of politicians, media commentators, and unemployed workers alike. But few know that the most important source for these phrases lies with work started by sociologists in the early Seventies. At a time when the mainstream assumption of accepted social, political, and economic science held that the "wealth of nations" reflected mainly on the cultural developments within those nations, a growing group of social scientists recognized that national "development" could be best understood as the complex outcome of local interactions with an aggressively expanding Europe-centered "world-system" (Wallerstein 1974; Frank 1978).[1] Not only did these scientists perceive the global nature of economic networks 20 years before they entered popular discourse, but they also saw that many of these networks extend back at least 600 years. Over this time, the peoples of the globe became linked into one integrated unit: the modern world-system.

Now, 20 years on, social scientists working in the area are trying to understand the history and evolution of the whole system, as well as how local, national and regional entities have been integrated into it. This current research has required broadening our perspective to include deeper temporal and larger spatial frameworks. For example, some recent research has compared the modern Europe-centered world-system of the last five hundred years with earlier, smaller intersocietal networks that have existed for millennia (Frank and Gills 1993; Chase-Dunn and Hall 1997). Other work uses the knowledge of cycles and trends that has grown out of world-systems research to anticipate likely future events with a precision impossible before the advent of the theory. This is still a new field and much remains to be done, but enough has already been achieved to provide a valuable understanding of the phenomenon of globalization.

The discourse about globalization has emerged mainly in the last decade. The term means many different things, and there are many reasons for its emergence as a popular concept. The usage of this term generally implies that a recent change (within the last decade or two) has occurred in technology and in the size of the arena of economic competition. The general idea is that information technology has created a context in which the global market, rather than separate national markets, is the relevant arena for economic competition (Hart and Kim, this volume). It then follows that economic competitiveness needs to be assessed in the global context, rather than in a national or local context. These notions have been used to justify the adoption of new practices by firms and governments all over the world and these developments have altered the political balances among states, firms, unions and other interest groups.

The first task is to put this development into historical context. The world-systems perspective has shown that intersocietal geopolitics and geoeconomics has been the relevant arena of competition for national-states, firms and classes for hundreds of years. The degree of international connectedness of economic and political/military networks was already important in the fourteenth and fifteenth centuries. The first "transnational corporations" (TNCs) were the great chartered companies of the seventeenth century. They organized both production and exchange on an intercontinental scale. The rise and fall of hegemonic core powers, which continues today with the relative decline of the United States hegemony, was already in full operation in the seventeenth century rise and fall of Dutch hegemony (see Arrighi 1994; Modelski and Thompson 1996; Taylor 1996).

The capitalist world-economy has experienced cyclical processes and secular trends for hundreds of years (Chase-Dunn 1989:Chapter 2). The cyclical processes include the rise and fall of hegemons, the Kondratieff wave (a forty to sixty year business cycle)[2], a cycle of warfare among core states (Goldstein 1988), and cycles of colonization and decolonization (Bergesen and Schoenberg 1980). The world-system has also experienced several secular trends including a long-term proletarianization of the world work force, growing concentration of capital into larger and larger firms, increasing internationalization of capital investment and of trade, and accelerating internationalization of political structures.

In this perspective, globalization is a long-term upward trend of political and economic change that is affected by cyclical processes. The most recent technological changes, and the expansions of international trade and investment, are part of these long-run changes. One question is exactly how the most recent changes compare with the long-run trends? And what are the important continuities as well as the qualitative differences that accompany these changes? These are the questions that I propose to explore.

Types of Globalization

There are at least five different dimensions of globalization that need to be distinguished. There are also several misunderstandings and misinterpretations that need to be clarified. Let us evaluate five different meanings of globalization:

(1) Common ecological constraints

This aspect of globalization involves global threats due to our fragile ecosystem and the globalization of ecological risks. Anthropogenic causes of ecological degradation have long operated, and these in turn have affected human social evolution. But ecological degradation has only recently begun to operate on a global scale. This fact creates a set of systemic constraints that require global collective action.

(2) Cultural globalization

This aspect of globalization relates to the diffusion of two sets of cultural phenomena:

Whereas some of the discussions of the world polity assume that cultural components have been a central aspect of the modern world-system from the start (e.g. Meyer 1989; Mann 1986), I would emphasize the comparatively non-normative nature of the modern world-system (Chase-Dunn 1989: Chapter 5). But I would certainly acknowledge the growing salience of cultural consensus in the last 100 years. Whereas the modern world-system has always been, and is still, multicultural, the growing influence and acceptance of Western values of rationality, individualism, equality, and efficiency is an important trend of the twentieth century.

(3) Globalization of communication

Another meaning of globalization is connected with the new era of telematics. What does "technological" globalization mean? For media of communication another aspect of globalization seems relevant, one on which Anthony Giddens(1996) insists. Social space comes to acquire new qualities with telematics, albeit only in the networked parts of the social world. In terms of accessibility, cost and velocity, the hitherto known political and geographic parameters that structured social relationships are much less relevant.

One may well argue that time-space compression (Harvey 1989) by new information technologies is simply an extension and acceleration of the very long-term trend toward technological development over the last ten millenia (Chase-Dunn 1994. Yet, the rapid decrease in the cost of communications may have qualitatively altered the relationship between states and consciousness. Global communication facilities have the power to move things visible and invisible from one part of the globe to another whether any nation-state likes it or not. This does not only apply to economically relevant exchange, but also to ideas, to gather support for issues worldwide and to form lines of opposition. How, and to what extent, will this undermine the power of states to structure social relationships?

(4) Economic globalization

Economic globalization means globe-spanning economic relationships. The interrelationships of marketsófinance, goods and servicesóand the networks created by transnational corporations are the most important manifestations of this. Though the capitalist world-system has been international in essence for centuries, the extent and degree of of trade and investment globalization has increased greatly in recent decades. Economic globalization has been accelerated by what telematics has done to the movement of money. It is commonly claimed that the market's ability to shift money from one part of the globe to another by a push of a button has changed the rules of policy-making, putting economic decisions much more at the mercy of market forces than before.

(5) Political globalization

Political globalization consists of the institutionalization of international political structures. The Europe-centered world-system has been primarily constituted as an interstate system - a system of conflicting and allying states and empires. Earlier world-systems, in which accumulation was mainly accomplished by means of institutionalized coercive power, experienced an oscillation between multicentric interstate systems and core-wide world empires in which a single "universal" state conquered all or most of the core states in a region. The Europe-centered system has also experienced a cyclical alternation between political centralization and decentralization, but this has taken the form of the rise and fall of hegemonic core states that do not conquer the other core states. Hence the modern world-system has remained multicentric in the core, and this is due mainly to the shift toward a form of accumulation based more on the production and profitable sale of commodities - capitalism. The hegemons have been the most thoroughly capitalist states and they have preferred to follow a strategy of controlling trade and access to raw material imports from the periphery rather than conquering other core states to extract tribute or taxes.

Power competition in an interstate system does not require much in the way of cross-state cultural consensus to operate systemically. But since the early nineteenth century the European interstate system has been developing both an increasingly consensual international normative order and a set of international political structures that regulate all sorts of interaction. This phenomenon has been termed "global governance" by Craig Murphy (1994) and others. It refers to the growth of both specialized and general international organizations. The general organizations that have emerged are the Concert of Europe, the League of Nations and the United Nations. The sequence of these "proto-world-states" constitutes a process of institution-building, but unlike earlier "universal states" this one is slowly emerging by means of condominium among core states rather than conquest. This is the trend of political globalization. It is yet a weak, but persistent, concentration of sovereignty in international institutions. If it continues it will eventuate in a single global state that could effectively outlaw warfare and enforce its illegality.

Measuring Economic Globalization

The brief discussion above of economic globalization implies that it is a long-run upward trend. The idea is that international economic competition as well as geopolitical competition were already important in the fourteenth century and that they became increasingly important as more and more international trade and international investment occurred. In its simplest form this would posit a linear upward trend of economic globalization. An extreme alternative hypothesis about economic globalization would posit a completely unintegrated world composed of autarchic national economies until some point (perhaps in the last few decades) at which a completely global market for commodities and capital suddenly emerged.

Let us examine data that can tell us more about the temporal emergence of economic globalization. There are potentially a large number of different indicators of economic globalization and they may or may not exhibit similar patterns with respect to change over time. Trade globalization can be operationalized as the proportion of all world production that crosses international boundaries. Investment globalization would be the proportion of all invested capital in the world that is owned by non-nationals (i.e. "foreigners"). And we could also investigate the degree of economic integration of countries by determining the extent to which national economic growth rates are correlated across countries. [3]

It would be ideal to have these measures over several centuries, but comparable figures are not available before the nineteenth century, and indeed even these are sparse and probably unrepresentative of the whole system until well into the twentieth century. Nevertheless we can learn some important things by examining those comparable data that are available.

Figure 1 shows trade and investment globalization. Trade globalization is the ratio of estimated total world exports (the sum of the value of exports of all countries) divided by an estimate of total world product (the sum of all the national GDPs). Investment globalization is the total book value of all foreign direct investment divided by the total world product.

The trade globalization figures show the hypothesized upward trend as well as a downturn that occurred between 1929 and 1950. Note that the time scale in Figure 1 is distorted by the paucity of datum points before 1950. It is possible that important changes in trade globalization are not visible in this series because of the wide temporal gaps in the data. Figure 1 also shows that the trade indicator differs in some ways from the investment indicator. Investment globalization was higher (or as high) in 1913 as it was in 1991, while trade globalization was considerably lower in 1913 than it was in 1992. We have fewer time points for the investment data, so we cannot tell for sure about the shape of the changes that took place, but these two series imply that different indicators of economic globalization may show somewhat different trajectories.

A third indicator of economic globalization is the correlation of national GDP growth rates (Grimes 1993). This shows the extent to which periods of national economic growth and stagnation have been synchronized across countries. In a fully integrated global economy it would be expected that growth and stagnation periods would be synchronized across countries and so there would be a high correlation of national growth rates. Grimes shows that, contrary to the hypothesis of a secular upward trend toward increasing global integration, the correlation among national growth rates fluctuates cyclically over the past two centuries. In a data series from 1860 to 1988 Grimes found two periods in which national economic growth-decline sequences are highly correlated across countries: - 1913-1927; and after 1970. Before and in between these peaks are periods of very low synchronization.

Further research needs to be done to determine the temporal patterns of different sorts of economic globalization. At this point we can say that the step-function version of a sudden recent leap to globalization can be rejected. The evidence we have indicates that there are both long-term secular trends and huge cyclical oscillations. Trade globalization shows a long-term trend with a big dip during the depression of the 1930s. The investment globalization indicates a cycle with at least two peaks, one before World War I and one after 1980. Grimes's indicator of synchronous economic growth indicates a cyclical fluctuation with one peak in the 1920s and another since 1970.

These results, especially those that imply cycles, indicate that change occurs relatively quickly and that the most recent period of globalization shares important features with earlier periods of intense international economic interaction. The question of the similarities and differences between the most recent wave and earlier waves of globalization is clearly an important one.

Systemic Cycles of Accumulation

Giovanni Arrighi (1994) shows how hegemony in the modern world-system has evolved in a series of "systemic cycles of accumulation" (SCAs) in which finance capital has employed different forms of organization and different relationships with organized state power. These qualitative organizational changes have accompanied the secular increase in the power of money and markets as regulatory forces in the modern world-system. The SCAs have been occurring in the Europe-centered world-system since at least the fourteenth century.

Arrighi's model shows both the similarities and the differences in the relationships that obtain between financial capital and states within the different systemic cycles of accumulation. The British SCA and the American SCA had both similarities and important differences. The main differences that Arrighi emphasizes are the "internalization of transaction costs" (represented by the vertical integration of TNCs) and the extent to which the U.S. tried to create "organized capitalism" on a global scale. The British SCA had fewer global firms and pushed hard for international free trade. The U.S. SCA is characterized by a much heavier focus on global firms and by a more structured approach to "global governance" possibly intended to produce economic growth in other core regions, especially those that are geopolitically strategic.

Arrighi argues that President Roosevelt used the power of the hegemonic state to try to create a balanced world of capitalist growth. This sometimes meant going against the preferences of finance capital and U.S. corporations. For example, the Japanese miracle was made possible because the U.S. government prevented U.S. corporations from turning Japan (and Korea) into just one more dependent and peripheralized country. This policy of enlightened global Keynesianism was continued in a somewhat constrained form under later presidents, albeit in the guise of domestic "military Keynesianism" justified by the Soviet threat.

In this interpretation the big companies and the finance capitalists returned to power with the decline in competitiveness of the U.S. economy. The rise of the Eurodollar market forced Nixon to abandon the Bretton Woods financial structure, and this was followed by Reaganism-Thatcherism, IMF structural adjustment, streamlining, deregulation and the delegitimation of anything that constrained the desires of global capital investment. The idea that we are all subject to the forces of a global market-place, and that any constraint on the freedom to invest will result in a deficit of "competitiveness," is a powerful justification for destroying the institutions of the "Second Wave" (e.g. labor unions, welfare, agricultural subsidies, etc.). [4]

Under conditions of increased economic globalization the ability of national states to protect their citizens from world market forces decreases. This results increasing inequalities within countries, and increasing levels of dis-satisfaction compared to the relative harmony of national integration achieved under the Keynesian regimes. It is also produces political reactions, especially national-populist movements.[5] Indeed Philip McMichael (1996) attributes the anti-government movements now occurring in the U.S. West, including the bombing of the Federal Building in Oklahoma City, to the frustrations caused by the deregulation of U.S. agriculture.

It would also be useful to investigate the temporal patterns of the other types of globalization: cultural, [6] political, technological and ecological. Of interest too are the relationships between these and economic globalization. Much empirical work needs to be done to operationalize these concepts and to assemble the relevant information. here. Here, for now, I will hypothesize that all these types exhibit both long-run secular and cyclical features. I will also surmise that cultural and political globalization are lagged behind the secular upward trend of economic globalization.

The Politics of Globalization

This last hypothesis bears on the question of adjustments of political and social institutions to increases in economic and technological globalization. I would submit that the current period of economic globalization has occurred in part due to technological changes that are linked to Kondratieff waves, and in part because of the profit squeezes and declining hegemony of the U.S. economy in the larger world market. [7]

The financial aspects of the current period of economic globalization began when President Nixon canceled the Bretton Woods agreement in response to pressures on the value of the U.S. dollar coming from the rapidly growing Eurodollar market (Harvey 1995). This occurred in 1967, and this date is used by many to mark the beginning of a K-wave downturn.

The saturation of the world market demand for the products of the post-World War II upswing, the constraints on capital accumulation posed by business unionism and the political entitlements of the welfare states in core countries caused a profit squeeze that motivated large firms and investors and their political helpers to try to break out of these constraints. The possibilities for global investment opened up by new communications and information technology created new maneuverability for capital. The demise of the Soviet Union [8] added legitimacy to the revitalized ideology of the free market and this ideology swept the Earth. Not only Reagan and Thatcher, but Eurocommunists and labor governments in both the core and the periphery, adopted the ideology of the "lean state," deregulation, privatization and the notion that everything must be evaluated in terms of global efficiency and competitiveness.

Cultural globalization has been a very long-term upward trend since the emergence of the world religions in which any person could become a member of the moral community by confessing faith in the "universal" god. But moral and political cosmography has usually encompassed a smaller realm than the real dimensions of the objective trade and political/military networks in which people have been involved. What has occurred at the end of the twentieth century is a near-convergence between subjective cosmography and objective networks. The main cause of this is probably the practical limitation of human habitation to the planet Earth. But the long-run declining costs of transportation and communications are also an important element. Whatever the causes, the emergent reality is one in which consciousness embraces (or goes beyond) the real systemic networks of interaction. This geographical feature of the global system is one of its uniquenesses, and it makes possible for the future a level of normative order that has not existed since human societies were very small and egalitarian (Chase-Dunn and Hall 1997).

The ideology of globalization has undercut the support and the rationale behind all sorts of so-called Second Wave institutions - labor unions, socialist parties, welfare programs, and communist states. While these institutions have not been destroyed everywhere, the politicians of the right (e.g. Newt Gingrich in the U.S.) have explicitly argued for their elimination.

At the same time, the very technologies that made capitalist economic globalization possible also have the potential to allow those who do not benefit from the free reign of capital to organize new forms of resistance, or to revitalize old forms. It is now widely agreed by many, even in the financial community, that the honeymoon of neo-liberalism will eventually end and that the rough edges of global capitalism will need to be buffed. Patrick Buchanan, a conservative candidate for the U.S. presidency in 1996, tried to capitalize on popular resentment of corporate downsizing. The Wall Street Journal has reported that stock analysts worry about the "lean and mean" philosophy becoming a fad that has the potential to delegitimate the business system and to create political backlashes. This was expressed in the context of a discussion of the announcement of huge bonuses for AT&T executives following another round of downsizing.

I already mentioned the difficulties that states are having in controlling communications on the Internet. I do not believe the warnings of those who predict a massive disruption of civilization by hordes of sociopaths waging "cyberwar".[9] But I do think that the new communications technologies provide new opportunities for the less powerful to organize themselves to respond should global capitalism run them over or leave them out.

The important question is what are the most useful organizational forms for resistance? What we already see are all sorts of nutty localisms, nationalisms and a proliferation of identity politics (See Riggs, this volume). The militias of the U.S. West are ordering large amounts of fertilizer with which to resist the coming of the "Blue Helmets" - a fantasized world state that is going to take away their pistols and deer rifles. [10]

Localisms and specialized identities are the postmodern political forms that are supposedly produced by infomatics, flexible specialization, and global capitalism (Harvey 1989). I think that at least some of this trend is a result of desperation and the demise of plausible alternatives in the face of the ideological hegemony of neoliberalism and the much-touted triumph of efficiency over justice. Be that as it may, a historical perspective on the latest phase of globalization allows us to see the long-run patterns of interaction between capitalist expansion and the movements of opposition that have tried to protect people from the negative aspects of market forces and exploitation. And this perspective has implications for going beyond the impasse of the present to build a more cooperative and humane global system (Boswell and Chase-Dunn, forthcoming).

The Spiral of Capitalism and Socialism

The interaction between expansive commodification and resistance movements can be denoted as "the spiral of capitalism and socialism." The world-systems perspective provides a view of the long-term interaction between the expansion and deepening of capitalism and the efforts of people to protect themselves from exploitation and domination. The historical development of the communist states is explained as part of a long-run spiraling interaction between expanding capitalism and socialist counter-responses. The history and developmental trajectory of the communist states can be explained as socialist movements in the semiperiphery that attempted to transform the basic logic of capitalism, but which ended up using socialist ideology to mobilize industrialization for the purpose of catching up with core capitalism.

The spiraling interaction between capitalist development and socialist movements can be seen in the history of labor movements, socialist parties and communist states over the last 200 years. This long-run comparative perspective enables one to see recent events in China, Russia and Eastern Europe in a framework that has implications for the future of social democracy. The metaphor of the spiral means this: both capitalism and socialism affect one another's growth and organizational forms. Capitalism spurs socialist responses by exploiting and dominating peoples, and socialism spurs capitalism to expand its scale of production and market integration and to revolutionize technology.

Defined broadly, socialist movements are those political and organizational means by which people try to protect themselves from market forces, exploitation and domination, and to build more cooperative institutions. The sequence of industrial revolutions, by which capitalism has restructured production and taken control of labor, have stimulated a series of political organizations and institutions created by workers to protect their livelihoods. This happened differently under different political and economic conditions in different parts of the world-system. Skilled workers created guilds and craft unions. Less skilled workers created industrial unions. Sometimes these coalesced into labor parties that played important roles in supporting the development of political democracies, mass education and welfare states (Rueschemeyer, Stephens and Stephens 1992). In other regions workers were less politically successful, but managed at least to protect access to rural areas or subsistence plots for a fall-back or hedge against the insecurities of employment in capitalist enterprises. To some extent the burgeoning contemporary "informal sector" in both core and peripheral societies provides such a fall-back.

The mixed success of workers' organizations also had an impact on the further development of capitalism. In some areas workers or communities were successful at raising the wage bill or protecting the environment in ways that raised the costs of production for capital. When this happened capitalists either displaced workers by automating them out of jobs or capital migrated to where fewer constraints allowed cheaper production. The process of capital flight is not a new feature of the world-system. It has been an important force behind the uneven development of capitalism and the spreading scale of market integration for centuries. Labor unions and socialist parties were able to obtain some power in certain states, but capitalism became yet more international. Firm size increased. International markets became more and more important to successful capitalist competition. Fordism, the employment of large numbers of easily-organizable workers in centralized production locations, has been supplanted by "flexible accumulation" (small firms producing small customized products) and global sourcing (the use of substitutable components from broadly dispersed competing producers), are all production strategies that make traditional labor organizing approaches much less viable.

Communist States in the World­system

Socialists were able to gain state power in certain semiperipheral states and use this power to create political mechanisms of protection against competition with core capital. This was not a wholly new phenomenon. As discussed below, capitalist semiperipheral states had done and were doing similar things. But, the communist states claimed a fundamentally oppositional ideology in which socialism was allegedly a superior system that would eventually replace capitalism. Ideological opposition is a phenomenon which the capitalist world-economy has seen before. The geopolitical and economic battles of the Thirty Years War were fought in the name of Protestantism against Catholicism. The content of the ideology may make some difference for the internal organization of states and parties, but every contender must be able to legitimate itself in the eyes and hearts of its cadre. The claim to represent a qualitatively different and superior socio-economic system is not evidence that the communist states were indeed structurally autonomous from world capitalism.

The communist states severely restricted the access of core capitalist firms to their internal markets and raw materials, and this constraint on the mobility of capital was an important force behind the post-World War II upsurge in the spatial scale of market integration and a new revolution of technology. In certain areas capitalism was driven to further revolutionize technology or to improve living conditions for workers and peasants because of the demonstration effect of propinquity to a communist state. U.S. support for state-led industrialization of Japan and Korea (in contrast to U.S. policy in Latin America) is only understandable as a geopolitical response to the Chinese revolution. The existence of "two superpowers" -- one capitalist and one communist -- in the period since World War II provided a fertile context for the success of international liberalism within the "capitalist" bloc. This was the political/military basis of the rapid growth of transnational corporations and the latest revolutionary "time-space compression" (Harvey 1989). This technological revolution has once again restructured the international division of labor and created a new regime of labor regulation called "flexible accumulation." The process by which the communist states have become reintegrated into the capitalist world-system has been long, as described below. But, the final phase of reintegration was provoked by the inability to be competitive with the new form of capitalist regulation. Thus, capitalism spurs socialism, which spurs capitalism, which spurs socialism again in a wheel that turns and turns while getting larger.

The economic reincorporation of the communist states into the capitalist world-economy did not occur recently and suddenly. It began with the mobilization toward autarchic industrialization using socialist ideology, an effort that was quite successful in terms of standard measures of economic development. Most of the communist states were increasing their percentage of world product and energy consumption up until the 1980s.

The economic reincorporation of the communist states moved to a new stage of integration with the world market and foreign firms in the 1970s. Andre Gunder Frank (1980:chapter 4) documented a trend toward reintegration in which the communist states increased their exports for sale on the world market, increased imports from the avowedly capitalist countries, and made deals with transnational firms for investments within their borders. The economic crisis in Eastern Europe and the Soviet Union was not much worse than the economic crisis in the rest of the world during the global economic downturn that began in the late 1960s (see Boswell and Peters 1990, Table 1). Data presented by World Bank analysts indicates that GDP growth rates were positive in most of the "historically planned economies" in Europe until 1989 or 1990 (Marer et al, 1991: Table 7a).

Put simply, the big transformations that occurred in the Soviet Union and China after 1989 were part of a process that had long been underway since the 1970s. The big socio-political changes were a matter of the superstructure catching up with the economic base. The democratization of these societies is, of course, a welcome trend, but democratic political forms do not automatically lead to a society without exploitation or domination. The outcomes of current political struggles are rather uncertain in most of the ex-communist countries. New types of authoritarian regimes seem at least as likely as real democratization.

As trends in the last two decades have shown, austerity regimes, deregulation and marketization within nearly all of the communist states occurred during the same period as similar phenomena in non-communist states. The synchronicity and broad similarities between Reagan/Thatcher deregulation and attacks on the welfare state, austerity socialism in most of the rest of the world, and increasing pressures for marketization in the Soviet Union and China are all related to the B-phase downturn of the Kondratieff wave, as are the current moves toward austerity and privatization in many semiperipheral and peripheral states. The trend toward privatization, deregulation and market-based solutions among parties of the Left in almost every country is thoroughly documented by Lipset (1991). Nearly all socialists with access to political power have abandoned the idea of doing more than buffing off the rough edges of capitalism. The way in which the pressures of a stagnating world economy impact upon national policies certainly varies from country to country, but the ability of any single national society to construct collective rationality is limited by its interaction within the larger system. The most recent expansion of capitalist integration, termed "globalization of the economy," has made autarchic national economic planning seem anachronistic. Yet, a political reaction against economic globalization is now under way in the form of revived ex-communist parties, economic nationalism (e.g., Pat Buchanan, the Brazilian military) and a coalition of oppositional forces who are critiquing the ideological hegemony of neo-liberalism (e.g., Ralph Nader, environmentalists, populists of the right, etc.).

Political Implications of the World-System Perspective

The age of U.S. hegemonic decline and the rise of post-modernist philosophy have cast the liberal ideology of the European Enlightenment (science, progress, rationality, liberty, democracy and equality) into the dustbin of totalizing universalisms. It is alleged that these values have been the basis of imperialism, domination and exploitation and, thus, they should be cast out in favor of each group asserting its own set of values. Note that self-determination and a considerable dose of multiculturalism (especially regarding religion) were already central elements in Enlightenment liberalism.

The structuralist and historical materialist world-systems approach poses this problem of values in a different way. The problem with the capitalist world-system has not been with its values. The philosophy of liberalism is fine. It has quite often been an embarrassment to the pragmatics of imperial power and has frequently provided justifications for resistance to domination and exploitation. The philosophy of the enlightenment has never been a major cause of exploitation and domination. Rather, it was the military and economic power generated by capitalism that made European hegemony possible.

To humanize the world-system we may need to construct a new philosophy of democratic and egalitarian liberation. Of course, many of the principle ideals that have been the core of the Left's critique of capitalism are shared by non-European philosophies. Democracy in the sense of popular control over collective decision-making was not invented in Greece. It was a characteristic of all non-hierarchical human societies on every continent before the emergence of complex chiefdoms and states. My point is that a new egalitarian universalism can usefully incorporate quite a lot from the old universalisms. It is not liberal ideology that caused so much exploitation and domination. It was the failure of real capitalism to live up to its own ideals (liberty and equality) in most of the world. That is the problem that progressives must solve.

A central question for any strategy of transformation is the question of agency. Who are the actors who will most vigorously and effectively resist capitalism and construct democratic socialism? Where is the most favorable terrain, the weak link, where concerted action could bear the most fruit? Samir Amin (1990,1992) contends that the agents of socialism have been most heavily concentrated in the periphery. It is there that the capitalist world­system is most oppressive, and thus peripheral workers and peasants, the vast majority of the world proletariat, have the most to win and the least to lose.

On the other hand, Marx and many contemporary Marxists have argued that socialism will be most effectively built by the action of core proletarians. Since core areas have already attained a high level of technological development, the establishment of socialized production and distribution should be easiest in the core. And, organized core workers have had the longest experience with industrial capitalism and the most opportunity to create socialist social relations.

I submit that both "workerist" and "Third Worldist" positions have important elements of truth, but there is another alternative which is suggested by the structural theory of the world­system: the semiperiphery as the weak link.

Core workers may have experience and opportunity, but a sizable segment of the core working classes lack motivation because they have benefited from a non­confrontational relationship with core capital. The existence of a labor aristocracy has divided the working class in the core and, in combination with a large middle strata, has undermined political challenges to capitalism. Also, the "long experience" in which business unionism and social democracy have been the outcome of a series of struggles between radical workers and the labor aristocracy has created a residue of trade union practices, party structures, legal and governmental institutions, and ideological heritages which act as barriers to new socialist challenges. These conditions have changed to some extent during the last two decades as hyper-mobile capital has attacked organized labor, dismantled welfare states and down-sized middle class work forces. These create new possibilities for popular movements within the core, and we can expect more confrontational popular movements to emerge as workers devise new forms of organization (or revitalize old forms). Economic globalization makes labor internationalism a necessity, and so we can expect to see the old idea take new forms and become more organizationally real. Even small victories in the core have important effects on peripheral and semiperipheral areas because of demonstration effects and the power of core states.

The main problem with "Third Worldism" is not motivation, but opportunity. Democratic socialist movements that take state power in the periphery are soon beset by powerful external forces which either overthrow them or force them to abandon most of their socialist program. Popular movements in the periphery are most usually anti­imperialist class alliances which succeed in establishing at least the trappings of national sovereignty, but not socialism. The low level of the development of the productive forces also makes it harder to establish socialist forms of accumulation, although this is not impossible in principle. It is simply harder to share power and wealth when there are very little of either. But, the emergence of democratic regimes in the periphery will facilitate new forms of mutual aid, cooperative development and popular movements once the current ideological hegemony of neoliberalism has broken down.

Semiperipheral Democratic Socialism

In the semiperiphery both motivation and opportunity exist. Semiperipheral areas, especially those in which the territorial state is large, have sufficient resources to be able to stave off core attempts at overthrow and to provide some protection to socialist institutions if the political conditions for their emergence should arise. Semiperipheral regions (e.g., Russia and China) have experienced more militant class­based socialist revolutions and movements because of their intermediate position in the core/periphery hierarchy. While core exploitation of the periphery creates and sustains alliances among classes in both the core and the periphery, in the semiperiphery an intermediate world­system position undermines class alliances and provides a fruitful terrain for strong challenges to capitalism. Semiperipheral revolutions and movements are not always socialist in character, as we have seen in Iran. But, when socialist intentions are strong there are greater possibilities for real transformation than in the core or the periphery. Thus, the semiperiphery is the weak link in the capitalist world­system. It is the terrain upon which the strongest efforts to establish socialism have been made, and this is likely to be true of the future as well.

On the other hand, the results of the efforts so far, while they have undoubtedly been important experiments with the logic of socialism, have left much to be desired. The tendency for authoritarian regimes to emerge in the communist states betrayed Marx's idea of a freely constituted association of direct producers. And, the imperial control of Eastern Europe by the Russians was an insult to the idea of proletarian internationalism. Democracy within and between nations must be a constituent element of true socialism.

It does not follow that efforts to build socialism in the semiperiphery will always be so constrained and thwarted. The revolutions in the Soviet Union and the Peoples' Republic of China have increased our collective knowledge about how to build socialism despite their only partial successes and their obvious failures. It is important for all of us who want to build a more humane and peaceful world­system to understand the lessons of socialist movements in the semiperiphery, and the potential for future, more successful, forms of socialism there.

Once again the core has developed new lead industries -- computers and biotechnology -- and much of large scale heavy industry, the classical terrain of strong labor movements and socialist parties, has been moved to the semiperiphery . This means that new socialist bids for state power in the semiperiphery (e.g., South Africa, Brazil, Mexico, perhaps Korea) will be much more based on an urbanized and organized proletariat in large scale industry than the earlier semiperipheral socialist revolutions were. This should have happy consequences for the nature of new socialist states in the semiperiphery because the relationship between the city and the countryside within these countries should be less antagonistic. Less internal conflict will make more democratic socialist regimes possible, and will lessen the likelihood of core interference. The global expansion of communications has increased the salience of events in the semiperiphery for audiences in the core and this may serve to dampen core state intervention into the affairs of democratic socialist semiperipheral states.

Some critics of the world­system perspective have argued that emphasis on the structural importance of global relations leads to political do­nothingism while we wait for socialism to emerge at the world level. The world­system perspective does indeed encourage us to examine global level constraints (and opportunities), and to allocate our political energies in ways which will be most productive when these structural constraints are taken into account. It does not follow that building socialism at the local or national level is futile, but we must expend resources on transorganizational, transnational and international socialist relations. The environmental and feminist movements are now in the lead and labor needs to follow their example.

A simple domino theory of transformation to democratic socialism is misleading and inadequate. Suppose that all firms or all nation­states adopted socialist relations internally but continued to relate to one another through competitive commodity production and political/military conflict. Such a hypothetical world­system would still be dominated by the logic of capitalism, and that logic would be likely to repenetrate the "socialist" firms and states. This cautionary tale advises us to invest political resources in the construction of multilevel (transorganizational, transnational and international) socialist relations lest we simply repeat the process of driving capitalism to once again perform an end run by operating on a yet larger scale.

A Democratic Socialist World­system

These considerations lead us to a discussion of socialist relations at the level of the whole world­system. The emergence of democratic collective rationality (socialism) at the world­system level is likely to be a slow process. What might such a world­system look like and how might it emerge? It is obvious that such a system would require a democratically-controlled world federation that can effectively adjudicate disputes among nation­states and eliminate warfare (Goldstein 1988). This is a bare minimum. There are many other problems that badly need to be coordinated at the global level: ecologically sustainable development, a more balanced and egalitarian approach to economic growth, and the lowering of population growth rates.

The idea of global democracy is important for this struggle. The movement needs to push toward a kind of popular democracy that goes beyond the election of representatives to include popular participation in decision-making at every level. Global democracy can only be real if it is composed of civil societies and national states that are themselves truly democratic (Robinson 1996). And global democracy is probably the best way to lower the probability of another way among core states. For that reason it is in everyone's interest.

How might such a global social democracy come into existence? The process of the growth of international organizations which has been going on for at least 200 years will eventually result in a world state if we are not blown up first. Even international capitalists have some uses for global regulation, as is attested by the International Monetary Fund and the World Bank. Capitalists do not want the massive economic and political upheavals that would likely accompany collapse of the world monetary system, and so they support efforts to regulate "ruinous" competition and beggar­thy­neighborism. Some of these same capitalists also fear nuclear holocaust, and so they may support a strengthened global government which can effectively adjudicate conflicts among nation­states.

Of course, capitalists know as well as others that effective adjudication means the establishment of a global monopoly of legitimate violence. The process of state formation has a long history, and the king's army needs to be bigger than any combination of private armies which might be brought against him. While the idea of a world state may be a frightening specter to some, I am optimistic about it for several reasons. First, a world state is probably the most direct and stable way to prevent nuclear holocaust, a desideratum which must be at the top of everyone's list. Secondly, the creation of a global state which can peacefully adjudicate disputes among nations will transform the existing interstate system. The interstate system is the political structure which stands behind the maneuverability of capital and its ability to escape organized workers and other social constraints on profitable accumulation. While a world state may at first be dominated by capitalists, the very existence of such a state will provide a single focus for struggles to socially regulate investment decisions and to create a more balanced, egalitarian and ecologically sound form of production and distribution.

The progressive response to neoliberalism needs to be organized at national, international and global levels if it is to succeed. Democratic socialists should be wary of strategies that focus only on economic nationalism and national autarchy as a response to economic globalization. Socialism in one country has never worked in the past and it certainly will not work in a world that is more interlinked than ever before. The old forms of progressive internationalism were somewhat premature, but internationalism has finally become not only desirable but necessary. This does not mean that local, regional and national-level struggles are irrelevant. They are just as relevant as they always have been. But, they need to also have a global strategy and global-level cooperation lest they be isolated and defeated. Communications technology can certainly be an important tool for the kinds of long-distance interactions that will be required for truly international cooperation and coordination among popular movements. It would be a mistake to pit global strategies against national or local ones. All fronts should be the focus of a coordinated effort.

W. Warren Wagar (1996) has proposed the formation of a "World Party" as an instrument of "mundialization" -- the creation of a global socialist commonwealth. His proposal has been critiqued from many angles -- as a throw-back to the Third International, and etc. I suggest that Wagar's idea is a good one, and that a party of the sort he is advocating will indeed emerge and that it will contribute a great deal toward bringing about a more humane world-system. Self-doubt and post-modern reticence may make such a direct approach appear Kantian or Napoleonic. It is certainly necessary to learn from past mistakes, but this should not prevent us debating the pros and cons of positive action.

The international segment of the world capitalist class is indeed moving slowly toward global state formation. The World Trade Organization is only the latest element in this process. Rather than simply oppose this move with a return to nationalism, progressives should make every effort to organize social and political globalization, and to democratize the emerging global state. We need to prevent the normal operation of the interstate system and future hegemonic rivalry from causing another war among core powers (e.g, Wagar 1992; see also Chase-Dunn and Bornschier 1998). And, we need to shape the emerging world society into a global democratic commonwealth based on collective rationality, liberty and equality. This possibility is present in existing and evolving structures. The agents are all those who are tired of wars and hatred and who desire a humane, sustainable and fair world-system. This is certainly a majority of the people of the Earth.

1. For a useful introduction see Shannon (1996).
2. It has become conventional to refer to the expansion phase of the K-wave as the "A-phase", while the contraction or stagnation 
period is called the "B-phase."
3. We could also examine changes in the degree of multilateralization of trade by looking at the average of degree of export partner 
concentration across all the nation-states (and over time). Export partner concentration is the ratio of the value of the exports to the
 largest trade partner to the total exports of a country. A related indicator of the degree of average national specialization could be 
measured by using commodity concentration, the proportion of national exports that are composed of the single largest export. 
At present I do not have access to these numbers.
4. The "Second wave" means industrialism in Alvin Toffler's terminology, now adopted by newt Gingrich.
5.  A recent debate on WSN, the world-system network, focused on nationalist vs. internationalist  popular responses to globalization 
and downsizing. See "gopher://csf.Colorado.EDU:70/00/wsystems/praxis/globprax".
6. One long-run indicator of cultural globalization would be linguistic diversity, a distributional measure of the proportions of the 
world's population that speak the various languages. It is obvious that linguistic diversity has decreased greatly over the past centuries,
 but it would be interesting to see the temporal shape of this trend. Have recent movements to revitalize and legitimate indigenous 
cultures slowed  the long-term decrease in linguistic diversity?
7. For evidence of relative U.S. economic decline see Chase-Dunn 1989:p.266, Table 12.3. This shows that U.S. proportion of world 
GNP declined from 32.1% in 1960 to 26.9% in 1980. See also Bergesen and Fernandez (1998).
8.The world-systems literature on the reintegration of state communism in the capitalist world-economy is substantial. 
See Chase-Dunn (1980), Boswell and Peters (1989) and Frank (1980).
9.Barbara Belejack says, "Another concern to activists and NGOs is the growing body of 'cyberwar' and 'netwar' literature pioneered 
by Rand Corporation analyst David Ronfeldt, who along with David Arquilla of the U.S. Naval Postgraduate School in Monterey,
 California, coined the terms in a 1993 article 'CyberWar is Coming!' In 1993, Ronfeldt was thinking along the lines of a potential
 threat from an updated version of the Mongol hordes that would upset the established hierarchy of institutions. He predicted that 
communication would be increasing organizing 'into cross-border networks and coalitions, identifying more with the development 
of civil society (even global civil society) than with nation-states, and using advanced information and communictions technologies 
to strengthen their activities.' By 1995 Ronfeldt was characterizing the Zapatista activists as highly successful in limiting the 
government's maneuverability, and warning that 'the country that produced the prototype social revolution of the 20th century may
 now be giving rise to the prototype social netwar of the 21st century.'" From "Cyberculture Comes to the Americas" by Barbara 
Belejack (102334.201@CompuServe.COM) available at
10. The same solid citizens of the West who were quite willing to grant the experts back in Washington the benefit of the doubt on 
Vietnam are, twenty-five years later, doubting the moral and ethical foundations of the U.S. federal government.

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