Session 16: The fall of Capitalism.

 ‘The Rise and the Future Demise of the World Capitalist System’ by Immanuel Wallerstein, successfully traces the foundation of capitalism, its rise and popularity among the international order and the current challenges to the growth of capitalism. The piece further goes on to criticize the concept as being highly contradictory and the readers are introduced to the concept of the ‘World Systems Theory’, where the integration of all which divides states into three categories: the core, the semi-periphery and the periphery. These divisions highlight the capitalistic nature of the international order, where states are separated by the level of development and extent of wealth they can amass.

USA plays a dominant role in the order as being a ‘core’ country, as its capital-intensive techniques and highly skilled labor, paired with its ability to provide high quality finished goods, have highlighted the USA as one of the most successful developed nations in the world. Countries that are still not developed, but are highly prospective in achieving the ‘developed’ status are characterized by Wallerstein as being ‘semi-periphery’ countries. This division usually seems to include the BRICS nations (Brazil, Russia, India, China and South Africa), which meet the criteria for being semi-periphery, as they adopt not only labor-intensive techniques, but also capitalist intensive ones, which combined with cheap raw material costs, place them at a higher level of functioning then their ‘periphery’ underparts. Bangladesh, Pakistan and Egypt are a few examples of countries with low levels of development, labor-intensive techniques and many agro-based industries, making these ‘periphery’ countries easy targets for exploitation by ‘core’ countries such as USA, France and the UK.

The division of these countries on the levels of development already highlights the highly contradictory structure of the international system. Balance of power usually rests in the hands of the core countries, whose development prospects aid in the consolidation of their power, as they establish themselves as the ‘exploiters’ of both periphery and semi-periphery states. Being of high relevance in the field of International Relations, this world systems theory can be studied from the lens of other such sciences, provided to us by fields such as Anthropology and Sociology. The advent of ‘colonialism’ is one way of analyzing the world’s system theory. Colonialism played an important role in dividing the structure of the international system between the colonizers and the colonized. In relation to Wallerstein’s theory, the colonizers would be the ‘core’ countries and the colonized would be the periphery and semi-periphery ones. Also, economic theory has aided in introducing a division of less developed nations as being ‘Third world countries’, which meet the criteria of the less developed, exploited periphery nations such as Bangladesh and Pakistan.

Capitalism’s rise was seen as one of economic prosperity and trade between nations, but, the inherent contradictions in capitalism itself have caused such an unequal distribution of resources, that periphery countries find it difficult, if not impossible, to climb out of their developmental inferiority. The use of terms such as ‘core’, ‘third world’ and ‘colonized’ have created a mindset in society that the tag a nation gets will decide its fate in the international system. From a realist perspective, the core states would exploit the periphery states to maintain their own economic dominance and stay secure. From a liberal perspective, institutions such as the United Nations are proof of the contradictory nature of capitalism, as the permanent members of the UN Security Council (China, France, USA, UK, and Russia) are all core and semi periphery nations themselves. From a social constructivist perspective, terms such as under-developed and developed have created a divide, which provides developed countries with free will to exploit under-developed ones. From the most dominant lenses of International Relations, we see unequal distribution of not only resources, but also of power.

Even though Wallerstein’s rejects the idea of states being ‘Third world’ and claims that the system is run on economic exchange between countries, this capitalistic division of core-semi periphery-periphery have formalized the use of the terms in relation to the economic and power holding stature of states. This could be the reason why Wallenstein predicted that even though capitalism acted as a liberator of economic interdependence between states, its conflicting nature will be the source of its own self destruction.