C. Chase-Dunn and B. Lerro, Social Change. Forthcoming, Allyn and Bacon

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C. Chase-Dunn and B. Lerro, Social Change. Forthcoming, Allyn and Bacon

Chaps 14, 16,18,19 and 20

v. 4-2-09

Chapter 14: The Modern World-System

v. 8-3-05, xxxx words

put stuff about world orders and world revolutions in schema as trending cycles.

Causes of glob from research proposal on glob.
Three chapters that tell the story of the modern system chronologically since the fifteenth century will follow. But the unfolding story obscures certain general patterns that can only be see by looking at the whole system over the entire period of time since the 15th century. These patterns are the subject of this chapter. The modern system shares many similarities with earlier regional world-systems, but it is also qualitatively different from them in some important ways. Obviously it is larger, becoming global (Earth-wide) with the incorporation of all the remaining separate redoubts during the nineteenth century. The key defining feature of the modern world-system is capitalism. We have already seen the long emergence of those institutions that are crucial for capitalism (private property, commodity production, money, contract law, price-setting markets, commodified labor) over the previous millennia in Afroeurasia. But it was in Europe and its colonial empires that these institutions were able to take hold most strongly and to direct the fundamental dynamics of social change to so great an extent that we can speak of the first world-system in which capitalism was the predominant logic of development.

Capitalism has many definitions and its fundamental nature is still a matter of lively debate.1 We agree with those who define capitalism as an economic process of the accumulation of profits that interacts fundamentally with a geopolitical process of state-building, competition among states and increasingly large-scale political regulation involving institutions of coercion and governance. Capitalism is not solely an economic logic.

Some theorists contend that state power and “violence-producing enterprises” were only involved in setting up the basic underlying political conditions for capitalism during an age of “primitive accumulation” and once these institutions were in place capitalism began to operate as a purely economic logic of production, distribution and profit-making – so-called “expanded reproduction.” 2 The world-systems perspective allows us to see that both economic and political institutions continue to evolve, and the central logic of capitalism is embedded in the dialectical dance of their co-evolution and expansion.

From a world-systems perspective the political body of capitalism is the interstate system rather than the single state. Single states all exist within a larger structure and set of processes that heavily influence the possibilities for social change. And the interstate system interacts with a core/periphery hierarchy in which powerful and more developed states and regions exploit and dominate less powerful and less developed regions.

States are just organizations that claim to exercise a monopoly of legitimate violence within a particular territory. They are not whole systems and they never have been. Much of contemporary social science treats national societies as if they are on the moon, with completely self-contained (endogenous) patterns of social change. That is even more a mistake for the modern world-system than it was for the more distant past.

Capitalism and capitalist states existed in earlier world-systems, but capitalism was only a sideshow within the commercializing tributary empires, while real capitalist states were confined to the semiperiphery. Capitalism became predominant in the modern system by becoming potent in the core. In the modern system the most successful states became those in which state power was used at the behest of groups who were engaged in commodity production, trade and financial services. State powers to tax and collect tributes did not disappear, but these became less important than, and largely subordinate to, more commercial forms of accumulation.

The very logic of capitalism produces economic, social and political crises in which elites jockey for position and less-favored groups try to protect themselves and/or to fundamentally change the system. Capitalism does not abolish imperialism but rather it produces new kinds of imperialism. Neither does it abolish warfare. It is not a pacific (warless) mode of accumulation as some have claimed (e.g. Schumpeter 1951). Rather the instruments of violence and the dynamics of interstate competition by means of warfare have been increasingly turned to serve the purposes of profitable commodity production and financial manipulations rather than the extraction of tribute. The growing “efficiency” of military technology produced in the capitalist world-system has made warfare much more destructive.

The core/periphery dimension is not abolished. On the contrary, the institutional mechanisms by which some societies can exploit and dominate others become more powerful and efficient and are increasingly justified by ideologies of civilization, development, foreign investment and foreign aid. “Backwardness” is reproduced and the world-system becomes even more divided between the included and the excluded than were earlier systems. The growing inequalities within and between national societies are justified by ideologies of productivity and efficiency, with underlying implications that some people are simply more fit for modernity than others. Nationalism, racism and gender hierarchies are both challenged and reproduced in a context in which the real material inequalities amongst the peoples of the world are increasing. This occurs within a context in which the values of human rights and equality have become more and more institutionalized, and so huge movements of protest and struggles over ideas and power occur. All this is characteristic, not only of the most recent period of globalization and globalization backlash, but of the whole history of the expansion of modern capitalism.

The similarities with earlier systems are important. There is a political-military system of allying and competing polities, now taking the form of the modern international system (studied mainly by political scientists who focus on international relations.) There are still different kinds of interaction networks with different spatial scales, though in the modern system many of the formerly smaller networks have caught up with the spatial size of the largest networks. Much of the bulk goods network is now global. One of the unusual features of the modern system in comparative perspective is that the differences in spatial scale among different kinds of networks has been greatly reduced, which makes its far easier for people to comprehend the complex networks in which they are involved.

The phenomenon of rise and fall remains an important pattern, albeit with some significant differences. As with earlier state-based systems, there is a structurally important interaction between core regions and less powerful peripheral regions. There remains an important component of multiculturalism in the system as a whole, a feature that is typical of most world-systems. Semiperipheral development continues. As discussed in Chapter 13, the rise of Europe was itself an instance of the emergence to global power of a region that was previously semiperipheral. And it is semiperipheral societies within the modern system that continue to be upwardly mobile and to restructure the institutions of the system. In these respects the modern system is quite similar to most of earlier regional world-systems that contained states and hierarchies.

But the nature of the mode of accumulation is quite different and there are related other differences that are connected with the emergent predominance of capitalism. Both the pattern of rise and fall and the nature of core/periphery relations are significantly different. Since accumulation is predominantly capitalist and the most powerful core states are also the most important centers of capitalist accumulation, they do not use their military power to conquer other core states in order to extract revenues from them. In world-systems in which the tributary mode of accumulation is predominant, semiperipheral marcher states conquer adjacent core states in order to extract resources and erect “universal” empires. Similar versions of this strategy have been attempted in the modern system (e.g. the Hapsburgs in the 16th century, Napoleon at the end of 18th century, Germany in the 20th century), but they have failed. The tributary mode of production is not gone, and indeed even modern capitalist hegemons employ “accumulation by dispossession” (Harvey 2003), especially when they are in decline, but a major difference between the modern capitalist world-system and earlier tributary systems is that the balance between coercion and consensus has shifted in favor of consensus. This is an important part of what Karl Marx meant when he claimed that capitalism, though not the best of all possible worlds, is indeed progressive relative to systems in which the tributary modes of accumulation were predominant.

Another sense in which capitalism may be thought of as progressive is its effects on technological change. Technological change has been a crucial aspect of human social evolution since the emergence of speech. The rate of innovation and implementation increased slowly as societies became more complex, but capitalism shoves the rate of technological change toward the sky. This is because economic rewards are more directly linked to technological innovation and improvements in production processes. There are, to be sure, countervailing forces within real capitalism, as when large companies sit on new technologies that would threaten their existing profitable operations. But because permanent worldwide monopolies do not exist (in the absence of a world state), the efforts of the powerful to protect their profits have repeatedly come under attack by a dynamic market system and competition among states. The institutionalization of scientific research and development has also added another strong element to the development and implementation of new technologies, so that in the most developed countries rapid technological change and accompanying social changes have become acceptable to people despite their disruptive aspects. This is a major way in which the modern world-system differs from earlier systems. Social change of all kinds has speeded up.

Another major difference between the modern system and earlier state-based systems is in the way in which the cycle of rise and fall occurs. The hegemonic sequence (the rise and fall of hegemonic core states) is the modern version of the ancient oscillation between more and less centralized interstate systems. As we have seen, all hierarchical systems experience a cycle of rise and fall, from “cycling” in interchiefdom systems to the rise and fall of empires, to the modern sequence of hegemonic rise and fall. 3 In tributary world-systems this oscillation typically takes the form of semiperipheral marcher states conquering older core states to form a core-wide empire.4 (see Figure 1). Figure 1 contrasts the structure of a core-wide empire with that of a more multicentric system in which one state is the hegemon.

Figure 1: Core-Wide Empire vs. Hegemonic Core State

One important consequence of the coming to predominance of capitalist accumulation has been the conversion of the rise and fall process from semiperipheral marcher conquest to the rise and fall of capitalist hegemons that do not take over other core states. The hegemons rise to economic and political/military preeminence from the semiperiphery, but they do not construct a core-wide world state by means of conquest. Rather, the core of the modern system oscillates between unipolar hegemony and even more multicentric hegemonic rivalry.

Capitalist accumulation usually favors a multicentric interstate system because this provides greater opportunities for the maneuverability of capital than would exist in a world state. Big capitals can play states off against one another and can escape movements that try to regulate investment or redistribute profits by abandoning the states in which such movements attain political power.

Another difference produced by the rise of capitalism is the way in which imperialism is organized in a capitalist world-system. The predominant form of modern imperialism has taken the form of what has been called “colonial empires.” Rather than conquering ones immediate neighbors to make an empire, the most successful form of core/periphery exploitation in the modern system has involved European core states establishing political and economic controls over distant colonies in the Americas, Asia and Africa. To be sure, the old kind of imperialism continued to exist for centuries as the Ottoman, and Russian Empires expanded and the Manchus from semiperipheral northern Asia managed to conquer China in a classic example of the semiperipheral marcher state. Even in Europe the old strategy did not disappear. We have already mentioned the Hapsburg attempt to convert the nascent capitalist world economy into a tributary empire, and the French and German efforts of much more recent centuries also bear some of the marks of the older form of empire. But the most successful form was the colonial empire, and it evolved from the early efforts by Portugal and Spain into the later Dutch, French and British Empires, and then morphed into a less obvious kind of “neo-colonialism” in the relationship between the United States and Latin America after the 1880s.5

There is another important difference between the modern core/periphery hierarchy and the earlier Afroeurasian system in the nature of core/periphery relations. The ability to extract resources from peripheral areas has long been an important component of successful accumulation in state-based world-systems and this is also true for the modern world-system. But there is an interesting and important difference -- the reversal of the location of relative intrasocietal inequalities. In state-based world-systems core societies had relatively greater internal inequalities than did peripheral societies. Typical core states were urbanized and class-stratified while peripheral societies were nomadic pastoralists or horticulturalists or less-densely concentrated peoples living in smaller towns or villages. These kinds of peripheral groups usually had less internal inequality than did the core states with which they were interacting.

In the modern world-system this situation has reversed. Core societies typically have less (relative) internal inequality than do peripheral societies. The kinds of jobs that are concentrated in the core, and the eventual development of welfare states in the core, have expanded the size of the middle classes within core societies to produce a more-or-less diamond-shaped distribution of income that bulges in the middle. Typical peripheral societies, on the other hand, have a more pyramid-shaped income distribution in which there is a small rich elite, a rather small middle class, and a very large mass of very poor people.6

This reversal in the location of relative internal inequality between cores and peripheries was mainly a consequence of the development and concentration of complex economies needing skilled labor in the core and the politics of democracy and the welfare state that have accompanied capitalist industrialization.

These processes have occurred in tandem with, and dependent upon, the development of peripheral capitalism, colonialism, and neo-colonialism in the periphery, which have produced the greater relative inequalities within peripheral societies. Core capitalism is dependent upon peripheral capitalism in part because exploitation of the periphery provides some of the resources that core capital sometimes uses to pay higher incomes to core workers. Furthermore, the reproduction of an underdeveloped periphery legitimates the national capital/labor alliances that have provided a relative harmony of class relations in the core and undercut radical challenges to capitalist power (Chase-Dunn 1998:Chap. 11). We do not claim that all core workers compose a "labor aristocracy" in the modern world-system. Obviously groups within the core working class compete against each other and some are downsized and streamlined, etc. in the competition of core capitalists with one another. But the overall effect of core/periphery relations has been to undercut challenges to capitalism within core states by paying off some core workers and groups and convincing others that they should support and identify with the “winners.”

In premodern systems core/periphery relations were also important for sustaining the social order of the core (e.g., the bread and circuses of Rome), but not to the same extent, because the system did not produce relatively more equal distributions of income and political power in the core than in the periphery. Thus the core/periphery hierarchy has become an even more important structural feature of the modern world-system than it was in earlier tributrary systems. This change in structure corresponds to the relatively greater stability of power structures in the modern world-system because of the relatively greater harmony of class interests within the core. While bread and circus dynamics operated in Rome, they were far less developed than the welfare state apparati and entertainment industries of the modern system.

Another important difference is that the Central System before 1800 contained three non-adjacent core regions (Europe/West Asia; South Asia; and East Asia), each with its "own" core/periphery hierarchy, whereas the rise of the European core produced a global system with a single integrated set of core states and a global core/periphery hierarchy. This brought about the complete unification of the formerly somewhat separate regional world histories into a single global history.

Political ecologists have argued that capitalism is fundamentally different from earlier modes of accumulation with respect to its relationship to the natural environment (O’Conner 1989, Foster 2000). There is little doubt that the expansion and deepening of the modern system global capitalism has had much larger effects on the biogeosphere than any earlier system. There are many more people using hugely increased amounts of energy and raw materials, and the global nature of the human system has global impacts on the environment. Smaller systems were able to migrate when they depleted local supplies or polluted local natural resources and this relationship with the environment has been a driving force of human social change since the Paleolithic. But is all this due only to capitalism’s greater size and intensity, or is there also something else which encourages capitalists to “externalize” the natural costs of production and distribution and produces a destructive “metabolic rift” between capitalism and nature (Foster 2000)?

Capitalism, in addition to being about market exchange and commodification, is also fundamentally about a certain kind of property – private property in the major means of production. Within modern capitalism there has been an oscillating debate about the virtues of public and private property, with the shift since the 1980s toward the desirability of “privatization” being only the most recent round of a struggle that has gone on since the enclosures of the commons in Europe.

The ongoing debate about the idea of the “commons” –collective property-- is germane to understanding the relationship between capitalism and nature. The powerful claims about the commons being a “tragedy” because no one cares enough to take care of and invest in public property carries a powerful baggage that supports the notion that private ownership is superior. Private owners are supposed to have an interest in the future value of the property, and so they will keep it up, and possibly invest in it. But whether or not this is better than a more public or communal form of ownership depends entirely on how these more collective forms of property are themselves organized.

Capitalism seems to contain a powerful incentive to externalize the natural costs of production and other economic activities, and individual capitalists are loathe to pay for the actual environmental costs of their activities as long as their competitors are getting a free ride. This is a political issue in which core countries in the modern capitalist system have been far more successful at building institutions for protecting the national environment than non-core countries. And, indeed, there is convincing evidence that core countries export pollution and environmental degradation to the non-core (Jorgenson 2004).

Certainly modern capitalism has been more destructive of the natural environment than any earlier system. But it is important to know whether or not this is completely due to its effects on technology and the rapidity of economic growth, or whether or not there is an additional element that is connected to the specific institutions and contradictions of capitalism. Technological development, demographic expansion and economic growth cause problems for the environment. But are there better alternatives? And is capitalism more destructive of the environment than earlier modes of accumulation net of its demographic and technological effects?

Undoubtedly the human species can and must do better at inventing institutions that protect the biogeosphere. Regarding earlier modes of accumulation, certainly some cultures did better than others at protecting the environment. The institutions of law, the state and property evolved, in part, as a response to environmental degradation (recall our “iteration model” in Chapter 2). It is not obvious that contemporary capitalist institutions are worse than earlier ones in this regard. The main problem is that the scale and scope of environmental degradation has increased so greatly that very powerful institutions and social movements will be required to bring about a sustainable human civilization. Capitalism may not be capable of doing this, and so those theoretical perspectives that point to the need for a major overhaul may be closer to the point than those that contend that capitalism itself can be reformed to become sustainable.

The Schema of Constants, Cycles, Trends and Cyclical Trends

Most histories of the modern world tell a story, and we shall do the same in the following chapters. But here we will begin with a model, as if the modern world-system were a great machine or a superorganism. The systemic analogy will be stressed at this point so that we can see whether, and in what ways, the basic system has changed in the chapters that follow. One way to help us think about the modern world-system as a whole is to describe its structures and processes in terms of patterns that are more or less constant, those that are cyclical, and those that are upward (or downward) trends. And some important characteristics of the whole system, like globalization, are both cycles and trends. This means that there are waves of globalization in the sense of larger and more intense interactions, and that these waves also go up over time – an upward trend. Patterns of this kind are called trending cycles. Figure 2 illustrates what we mean by constants, cycles, trends and trending cycles.

Figure 2: Constants, Cycles, Trends and Trending Cycles

The structural constants are:

1. Capitalism -- the accumulation of resources by means of the production and sale of commodities for profit under conditions in a which a significant proportion of the major means of production are privately held;

2. An interstate system -- a system of unequally powerful sovereign states that compete for resources by supporting profitable commodity production and by engaging in geopolitical and military competition;

3. A core/periphery hierarchy -- in which core regions have strong states and specialize in high-technology, high-wage production while peripheral regions have weak states and specialize in labor-intensive and low-wage production.

These structural features of the modern system are continuous and reproduced, and they also have evolved. They are interlinked and interdependent with one another such that any major change in one would necessarily alter the others in fundamental ways (Chase-Dunn, 1998).

In addition to these structural constants, there are several other structural features that are systemic continuities even though they involve patterned change. These are the systemic cycles, the systemic trends and the trending cycles. The basic systemic cycles are:

1.The Kondratieff Wave (K-wave) -- a worldwide economic cycle with a period of from forty to sixty years in which the relative rate of economic activity increases (during "A-phase" upswings) and then decreases (during "B-phase" periods of slower growth or stagnation).

2. The hegemonic sequence -- the rise and fall of hegemonic core powers in which military power and economic comparative advantage are concentrated into a single hegemonic core state during some periods and these are followed by periods in which wealth and power are more evenly distributed among core states. Examples of hegemons are the United Provinces of the Netherlands in the seventeenth century, the United Kingdom of Great Britain in the nineteenth century and the United States of America in the twentieth century.

3. The cycle of core war severity -- the severity (battle deaths per year) of wars among core states (world wars) displays a cyclical pattern that has closely tracked the K-wave since the sixteenth century (Goldstein, 1988).

The systemic trends that are normal operating procedure in the modern system are:

1. Expansion and deepening of commodity relations -- land, labor and wealth have been increasingly mediated by market-like institutions in both the core and the periphery.

2. State-formation -- the power of states over their populations has increased everywhere, though this trend is sometimes slowed down by efforts to deregulate. State regulation has grown secularly while political battles rage over the nature and objects of regulation.

3. Increased size of economic enterprises -- while a large competitive sector of small firms is reproduced, the largest firms (those occupying what is called the monopoly sector) have continuously grown in size. This remains true even in the most recent period despite its characterization by some analysts as a new "accumulation regime" of "flexible specialization" in which small firms compete for shares of the global market.

4. Increasing capital-intensity of production and mechanization -- several industrial revolutions since the sixteenth century have increased the productivity of labor in agriculture, industry and services.

5. Proletarianization -- the world work force has increasingly depended on labor markets for meeting its basic needs. This long-term trend may be temporarily slowed or even reversed in some areas during periods of economic stagnation, but the secular shift away from subsistence production has a long history that continues in the most recent period. The expansion of the informal sector is part of this trend despite its functional similarities with earlier rural subsistence redoubts.

6. The growing gap -- despite exceptional cases of successful upward mobility in the core/periphery hierarchy (e.g. the United States, Japan, Korea, Taiwan) the relative gap in incomes between core and peripheral regions has continued to increase, and this trend has existed since at least the nineteenth century, and probably before.

And there have been three trending cycles that oscillate up and down with intermittent peaks that are higher than all those before.

  1. International economic integration (economic globalization) - the periodic and long-term growth of trade interconnectedness and the transnationalization of capital. Capital has crossed state boundaries since the sixteenth century but the proportion of all production that is due to the operation of transnational firms has increased in every epoch. 7 Trending waves of trade and investment globalization have been quantitatively measured since the early 19th century (Chase-Dunn, Kawano and Brewer 2000).

  2. International political integration (political globalization) - the emergence of stronger international institutions for regulating economic and political interactions. This is a trend since the rise of the Concert of Europe after the defeat of Napoleon. The League of Nations, the United Nations and such international financial institutions as the World Bank and the International Monetary Fund show an upward trend toward increasing global governance.

  1. Global culture formation (cultural globalization or geoculture) – the emergence over the tops of the civilizational and national cultures of a global culture-in-formation in which assumptions about what exists (ontology) and what is good (ethics and values) are coming to be shared across the whole Earth. This process procedes as the constitution of a series of world orders and their contestation by world revolutions that challenge the old hegemonic assumptions and produce new versions. The Protestant Reformation was the first of these world revolutions and the waves of decolonization discussed below were parts of later world revolutions.8

The above basic model of the modern system is not posited to deny that the system has evolved, but rather to make it possible to see clearly the new organizational features that have emerged over the past 600 years and to enable us to correctly compare new developments with the relevant features of the past. The schema above suggests a system that is experiencing expanding cycles of growth and confronting contradictions that require new organizational solutions, but this is not to suggest a purely functionalist process of adaptation and learning. Struggle over the very nature of social change has been present all along and remains entirely relevant for comprehending the emerging situation of the 21st century.

The trends in the shares of world population shown in Figure 3 (below) confirm observations that were discussed in Chapter 13. Figure 3 shows shares of the total global population since the beginning of the Common Era two thousand years ago according to Maddison’s (2001) estimates.  The time scale on the horizontal axis of Figure 3 is misleading because the intervals are not equal. Keeping this in mind we can see that the countries that became hegemonic in recent centuries did not change much in terms of their shares of world population. The countries with the big shares, India and China, still have huge shares, though India declined quite a lot until 1950 and then began again to rise. China peaked in 1820 and has mainly been declining since then. The United States rose above 5% of world population in 1913 and dropped below that level in about 1985. East Asia and South Asia have long been the demographic centers of the Earth, but have become somewhat less so over the past two millennia.

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