World Systems Theory View on Power and Inequality in the Contemporary Global Economy

WORLD SYSTEMS THEORY VIEW ON POWER AND INEQUALITY IN THE CONTEMPORARY GLOBAL ECONOMY
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1.0 Introduction
World systems theory is a framework for understanding the dynamics of economic and political power in the global economy (Wallerstein 2005). Wallerstein (1979) argues that the modern world is divided into a core of industrialized, capitalist countries that dominate the periphery of less developed countries. This core-periphery relationship is maintained through a system of unequal exchange in which peripheral countries are exploited for their resources and labour, while core countries profit from their dominance (Wallerstein 2005). This theory helps us understand how power and inequality are built into the structure of the global economy, and how they are perpetuated over time. Additionally, it helps us to understand how the global economy is not an even playing field, but rather that there are centre nations that have more power and resources than peripheral nations.
2.0 Building Blocks
2.1 The Annales School
World-systems theory, developed by Immanuel Wallerstein, is heavily influenced by the historical approach of the Annales School, particularly by the work of Fernand Braudel (Wallerstein 1991). The Annales School, which emerged in the early 20th century, sought to understand history through a long-term, structural perspective, rather than focusing on individual events or actors (Wallerstein 1991). Braudel argued that economic and social structures have a profound impact on historical change and that these structures operate on different levels of time and space (Wallerstein 1991). He identified three distinct levels of analysis: the "longue durée," which refers to slow-moving structural changes that occur over centuries or millennia; the "moyenne durée," which refers to medium-term changes that occur over decades or generations; and the "short term" or "event," which refers to individual events or actions. Wallerstein (1974) draws heavily on Braudel's concept of the longue durée and the moyenne durée, arguing that the global economy has been shaped by structural forces that have operated over centuries. He contends that the modern world system has existed for at least five centuries and that it is a single unit with the division of labour.
2.2 Marx
Karl Marx's theory of historical materialism provides the building blocks for Wallerstein's world-system theory. Marx (2000) argues that the economic base of society, or the mode of production, determines the nature of the superstructure, which includes the political, legal, and ideological institutions that shape society. He contends that the mode of production is the foundation of society and that it is driven by the struggle between different social classes, which have different interests and different relations to the means of production (Marx, 2000). Wallerstein (1979; 2005) draws heavily on Marx's theory of historical materialism in his development of world-systems theory. He argues that the global economy is divided into a core of industrialized, capitalist countries that dominate the periphery of less developed countries. Furthermore, Wallerstein (1979) also argues that th...