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Unmasking an Unequal System: On Immanuel Wallerstein’s Historical Capitalism


By Oct 31, 2017

Image Credits: Diego Rivera.

Most Marxist analyses of capitalism start from a preconceived theoretical definition of the system and then see how closely the current economic reality maps onto that theory. The issue with these logico-deductive analyses is that they can serve as apologies for capitalism, based on arguments that it has not yet achieved its true form. In Historical Capitalism with Capitalist Civilization, Immanuel Wallerstein takes a different approach. A political sociologist credited with the promulgation of “world-systems theory”, he resolves to treat capitalism as a historical system, examining how it has empirically behaved without falling back on abstruse theoretical conceptions. Arguing that the distinctive trait of capitalism is how it treats endless capital accumulation as an end, he builds a rigorous model that analyses both its economic foundation and the political struggles that it precipitates. He describes how this system allows the economic core to utterly control what he terms the periphery. Criticisms of his work for its generalizations are beside the point: the simple fact that he has created a global model illuminating the operations of such a vast system is truly remarkable.

            Wallerstein argues that capitalism has been used as the structural support and implicit justification for the exploitation of peripheral and semi-peripheral countries by those of the economic core. He claims that the commodity chains created to facilitate capitalist production processes originated in the periphery with extraction and culminated in the core with distribution, leading to more capital accumulation in the core. This strengthened the core states, which then used their power to ensure the requisite weakness of peripheral states, by forcing them to specialize in the lower-profit components of the commodity chain. Consequently, "the world's entrepreneurial classes could pretend that the economy was operating solely by considerations of supply and demand, without acknowledging how the world-economy had historically arrived at a particular point of supply and demand." (Wallerstein, 33) The core did not need to invoke its latent force to remain in control, because each transaction was already inherently unequal.

            Wallerstein refutes the myth of the independent entrepreneur at the core of capitalism, and emphasizes the interdependence between capitalists and their states. Controlling state power allows territorial jurisdiction over the rules governing movement of goods, production, taxation, and armed force. Since these can be weaponized in support of certain producers, such as through targeted tax breaks, there exists constant intra-capitalist competition to gain political sway.

The core did not need to invoke its latent force to remain in control, because each transaction was already inherently unequal.

            This competition spills over into the peripheral countries, as less profitable firms all try to capture the most profitable nexuses of production. This leads to an overconcentration in one stage of the commodity chain, leading to stagnations. The corresponding systemic reshuffles can change the geographic hierarchy of production, making some states richer and others poorer. However, this is not true “development”; levels of inequality remain the same, but are distributed differently. The reshuffles also lead to the search for new regions to incorporate into the system, since capitalism requires cheap labour. Via colonial policies of taxation and movement restriction, capitalists can ensure that workers become “semi-proletarianized.” They are forced to earn wages, but are restricted in who they can work for, limiting their bargaining power.

            The crisis of accumulation comes when the system runs out of new zones to incorporate – a stage the world is approaching. Capitalist exploitation always rested on finding an even more underprivileged group to appease the downtrodden. As society has reached a point of almost total commodification, the inherently inegalitarian flow of surpluses can no longer be concealed from the public. This will spell the end of historical capitalism – what follows remains unclear.

Systemic reshuffles can change the geographic hierarchy of production, making some states richer and others poorer. However, this is not true “development”; levels of inequality remain the same, but are distributed differently.

            Wallerstein’s most remarkable achievement is in consolidating such a wide array of disparate events and processes into a single, coherent system. Each individual point he makes can seem trite or obvious, but most prove essential to the development of his overall model. Some, however, suggest a weakness in dealing with potential counter-arguments. An instance of this occurs in the discussion as to whether capitalism has increased food security, where he argues that older agricultural methods are being revived because they “turn out to be more, not less, efficacious.” (99) This argument is both unnecessary and unconvincing. He could have simply pointed to the negative long-term consequences of modern agricultural methods, but instead tried to raise doubts about their current utility as well. His thesis does not require him to refute all advantages of capitalism, yet he sometimes treats this as his task, to his own detriment.

            Another issue is how he deals with historical evidence. As a self-described political sociologist, Wallerstein makes no claim to be a historian. Nevertheless, as an academic he has a responsibility to remain true to the evidence at hand. This burden is not always realized. He never provides sources for the facts he cites and occasionally makes unsubstantiated claims, such as his argument that 15th century elites may have deliberately created capitalism as an inegalitarian system to pre-empt harmful trends towards economic equality. This possibility is fascinating, and he notes that he is outlining it “without attempting to develop here the empirical base for such an argument,” (41) but in this context, idle speculations are insufficient. Ideas published in a book inherently gain legitimacy in the eyes of the public, so a claim this radical should not be promulgated without some evidence of this class-based intentionality.

As an academic he has a responsibility to remain true to the evidence at hand. This burden is not always realized.

            Nevertheless, the most popular criticisms of his book are misplaced. Many critics see it as failing to consider the vast cultural differences contained in the periphery. This is undeniably true, but only because homogenization is the essence of his project. Wallerstein wants to transform a system as vast and layered as global capitalism into a more understandable model so that the reader can step back and view it in its entire systemic form. This would be impossible were he to reproduce every complexity that undoubtedly exists in the system’s global implementation. The book’s pedagogical utility springs entirely from its capacity to condense these complexities into a generalizable historical model. Criticisms of this approach are tantamount to denying that such models should not exist – an argument that can be made, but one that rings hollow when one considers how imperative it is that the public understand the insidious ways in which capitalism can operate. Similarly, arguments that his approach is core-centric, while true, simply reflect the extent to which Europe has dictated (sometimes by force) the implementation of the global capitalist system. The Eurocentrism he describes underscores Europe’s cumulative destructive influence on the economies of the Global South.

            There is a place for a book that accedes to these criticisms and tracks how exactly the history of capitalism differs across the globe. However, Historical Capitalism with Capitalist Civilization is not trying to be that book. Instead, it is a highly illuminative investigation of the ways that the core states – and specifically their producer classes – manage to dictate capitalist operations across this globe, and the many inherent contradictions that will lead to its end. While Wallerstein has issues with overreach and accuracy, he handily achieves his ultimate purpose of portraying capitalism as a unique temporally and spatially bound system. His perspective is truly a much-needed update of Marx’s thought for the era of globalization.

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