International Relations. A self-Study Guide to Theory

particular processes the systems have gone through (Waller-
stein 1987/2000: 127). It thus becomes possible to distinguish between long-
lasting structures and momentary expressions of reality. Epistemologically, 
world-systems analysis claims to explain two things: that the world has en-
during structures and that it is constantly changing.
The first task of analysis is to locate the structures that govern the longue 
durée, i.e. the regularities, and therefore the relevant structures that constrain 
individual and collective action. The analysis describes the concept and se-
quence of the system’s cyclical rhythms, as well as the patterns of internal 
transformation (Wallerstein 1987/2000: 136).
“(I)t is only when we have mastered the structures, yes have invented ‘master nar-
ratives’ that are plausible, relevant, and provisionally valid, that we can begin to 
exercise the kind of judgement that is implied by the concept of agency. Other-
wise, our so-called agency is blind, and if blind it is manipulated…” (Wallerstein 
1997/2000: 202).
Please note the particular approach to structure/agency taken here. We will 
come back to it in our discussions at the end of the unit. 
The next chapter will focus on one particular world-system: the capitalist 
world-economy.

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Step 3: 
The modern world-system
3.1. The modern world-system: a capitalist world-economy 
Most of Wallerstein’s work is devoted to the study of our contemporary 
world-system: the modern world-system. According to the definitions dis-
cussed in Step 2, our contemporary historical system is a world-system. This 
world-system is a capitalist (logic) world-economy (form). According to Wal-
lerstein, the present system is not the first world-economy, but the first one 
that has lasted for any length of time. It originated in the 16
th
century, when it 
covered only part of the globe (Europe and the Americas), and then expanded 
throughout the entire world. The modern world-system is the result of the 
transition from feudalism to capitalism. The “zone” or unit considered to be 
capitalist is not “the state”, but a larger unit: a world-economy (hence the unit 
of analysis).
According to Wallerstein, a world-economy is “a large geographic zone 
within which there is a division of labor and hence significant internal ex-
change of basic or essential goods as well as flows of capital and labor” 
(Wallerstein 2004: 23). The defining feature and core principle of a capitalist 
world-economy is the priority of the endless accumulation of capital: the 
capitalist logic of accumulated and unequally distributed surplus. For this 
reason, only the modern world-system was a capitalist system (Wallerstein 
2004: 24). For his definition of capitalism, Wallerstein draws on 19
th
century 
liberal and Marxist thought. 
Historically, all three forms of historical systems have coexisted. Whereas 
mini-systems were predominant in the pre-agricultural era, between 8000 BC 
and 1500 there were multiple historical systems of all three types. However, 
the world-empire was the predominant form, and this destroyed and absorbed 
the contemporary mini-systems and world-economies. For this reason, the 
history of that period is typically a history of world-empires. Wallerstein’s 
historical argument is therefore that, sometime around the year 1500, one 
world-economy “survived” and became what he calls the “modern world-
system”. On the basis of its inner capitalist logic (absorbing mini-systems and 
world-empires), this modern world-system was able to develop fully and ex-
pand to cover the entire globe. Wallerstein posits that, during this longue du-
rée from the 16
th
century on, a number of crucial events led to the modern 
world-economy becoming a long-lasting one. He points to the industrial 
revolution in England and the French Revolution, over the course of which 
state interference in the economy was reduced and the pre-capitalist ancien 

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185 
régime transformed into a capitalist state (Wallerstein 1987/2000: 144). Dur-
ing another important time period at the end of the 18
th
and the beginning of 
19
th
centuries, capitalists achieved state-societal power in key states (Waller-
stein 1987/2000: 141). By the late 19
th
century, for the first time, only one 
global historical system was in existence: the modern world-system as a capi-
talist world-economy (Wallerstein 2004: 8). 
The defining features of the modern world-system as a capitalist world-
economy are a single division of labor, multiple state structures within an in-
terstate system – and therefore the lack of a unifying political structure -, and 
multiple cultures within a “geo-culture” (Wallerstein 2004: 58). A capitalist 
world-economy is an “interconnected web of structures” (Wallerstein 1996: 
103): a system of interrelated institutions and processes. The basic institu-
tions of the world-system are markets, productive firms that compete in the 
markets, multiple states within an interstate system, households, classes, and 
identity-/status-groups. They are all created and re-created within the frame-
work of the capitalist world-economy. These institutions form a “matrix” that 
permits the system to operate. At the same time, the “matrix” stimulates con-
flicts and contradictions (Wallerstein 2004: 24).
The defining features of the modern world-system in terms of structures 
and processes will now be discussed in more detail. 
3.2. Structures and processes of the capitalist world-economy 
3.2.1. Core-periphery and cyclical rhythms 
The capitalist world-economy is a historical system that is based on an inte-
grated axial division of labor. Drawing on Raul Prebisch, Wallerstein de-
scribes this axial division of labor with the concept of core-periphery as a re-
lational concept: a capitalist world-economy has a division of labor between 
core-like production processes and peripheral production processes: 
“A core-periphery relation is the relation between the more monopolized sectors 
of production on the one hand and the more competitive on the other, and there-
fore the relation between high-profit (and generally high-wage) and low-profit 
(low wage) production activities” (Wallerstein 1996: 88).
The result is an unequal exchange that benefits the core. There is a constant 
flow of surplus value from the producers of peripheral products to the pro-
ducers of core-like products. The capitalist world-economy therefore pos-
sesses both a core and a peripheral “zone”. The geographical consequence of 
core-periphery relationships is the concentration of core-like processes in a 

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few states and peripheral processes in many states. Over time, core-like pro-
cesses become peripheral processes by downgrading products and shifting 
production to semi-peripheral zones (with strong exports to peripheral coun-
tries, but imports of more advanced products from the core, such as South 
Korea, Brazil and India today), and then to peripheral zones. It is important to 
note that it is the production processes that are core-like and peripheral, NOT 
the states.
For world-systems analysts, all historical systems function cyclically. The 
key cyclical rhythm of the modern world production system is the Kon-
dratieff-cycle of expansion and contraction in the world-economy: an up and 
down curve of A-phases (expansion) and B-phases (stagnation) (Wallerstein 
2004: 30-31). A Kondratieff-cycle is about 50-60 years in length. Any 
measures taken to leave the B-phase and enter a new A-phase will change the 
parameters of the world-system (Wallerstein 2004: 31).