International Relations. A self-Study Guide to Theory

Self-study (1)
In order to deepen your knowledge, please now read chapter 2 of Waller-
stein 2004 (The modern world system as a capitalist world-economy: pro-
duction, surplus-value, and polarization). 
3.2.2. Political structures and processes: states, the inter-state system 
and hegemonic cycles 
A defining feature of a world-economy is that it is not bounded by a unitary 
political structure (in contrast to a world-empire). There are many political 
units within a world-economy.
The political units of the modern world-system are the states. These polit-
ical units combine to form the inter-state system. The state of the modern 
world-system is the sovereign (nation) state within an inter-state system of 
sovereign states. In 1648, the inter-state system was institutionalized as a sys-
tem of sovereign states in the Peace of Westphalia. Wallerstein emphasizes 
that “sovereignty” as a concept is a development of the modern world-
system. The steady increase in state power is considered to be a secular trend 
of the modern world-system: from its beginning in the 16
th
century through 
the 1970s (Wallerstein 2004: 43). 
The state and the inter-state system as political structures of the modern 
world-system have specific functions. According to the capitalist logic of the 
system, the “market” guides decision-making, but it is never fully and freely 

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functional. In fact, the totally free market only functions in an ideological 
sense. For the world-economy as a whole, a totally free market would make 
the endless accumulation of capital impossible. A partially free market is the 
prerequisite for the capitalist system and only the political structures guaran-
tee a partially free market. It is by the authority of the sovereign state that 
property rights are protected, rules for cross-border transactions of goods, 
capital, and labor are defined, employment is regulated, taxation set and state 
subsidies given. States provide transportation infrastructures such as bridges, 
railway networks and airports. Powerful states put pressure on weak states to 
maintain open boundaries for the flow of production factors that are of use to 
their firms.
In short, not only does capitalism require a large market, it also requires 
political structures, i.e. the states and the states system. In fact, the relation-
ship between states and productive firms is central for understanding how the 
capitalist world-economy functions (Wallerstein 2004: 46).
Looking at the system as a whole, at first glance inter-state relations ap-
pear paradoxical, as states are rivals in the competitive system of the world-
economy, yet have a common interest in stabilizing and preserving the inter-
state system and maintaining the world-economy as a whole (Wallerstein 
2004: 56). Wallerstein holds that this seeming paradox explains a state’s sim-
ultaneous interest in both an anarchical interstate system AND an order of 
the interstate system (Wallerstein 2004: 56). This tension gives rise to “struc-
tures that are normally in between the two types” (Wallerstein 2004: 56). 
The political structure of the modern world-system as a multiplicity of 
states within an inter-state system corresponds with the needs of a capitalist 
system. This would not be true for a world-empire: Capitalism (logic) and 
world-empire (form) are not compatible. A world-empire gives priority to po-
litical structures and not to the endless accumulation of capital. 
Please bear in mind that the defining feature of a world-empire is a struc-
ture with a single political authority for the whole world-system. According 
to Wallerstein, all attempts by dominant states to transform the modern 
world-economy into a world-empire in the modern world-system have failed 
(Charles V in the 16
th
century, Napoleon, Hitler) (Wallerstein 2004: 57).
This also holds true for all attempts to attain long-lasting hegemony, but 
for a different reason: the rise and fall of hegemons plays a special role in 
the functioning of the system. The inter-state structure of the modern 
world-system is governed by key cyclical processes known as hegemonic 
cycles. A hegemonic cycle is the rise and fall of a hegemonic power in the 
modern world-system. Hegemony means that the world-system as a whole 
has only one power at a particular time. Hegemonic cycles are longer than 

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the 50-60-year Kondratieff-cycle and are important for capital accumula-
tion processes.
From the historical perspective, hegemonies have existed at different times 
in the modern world-system: the Netherlands in the mid-17
th
century, the Unit-
ed Kingdom in the mid-19
th
century and the United States in the mid-20
th
cen-
tury. Hegemonies are based on the superiority of productive efficiency. The 
hegemonic status is the result of market transactions and state power that are 
used to secure advantages for the hegemonic power in the world-economy. He-
gemony is a structurally privileged position (Wallerstein 1996: 99). Hegemonic 
states dominate the world economy by exerting powerful economic and politi-
cal influence with minimum military force, as well as with a hegemonic “cul-
tural language”. However, hegemons only define the rules of the interstate sys-
tem for a certain period of time (Wallerstein 2004: 58). Hegemony can only be 
maintained as long as the hegemonic power is able to impose constraints on the 
free world market (such as forcing other markets to open to the products of the 
hegemonic power, protectionism of own producers, the imposition of a curren-
cy for world transactions, being involved in all decisions in the world-system) 
and maintain a military force strong enough to be used as a threat. The actual 
policies of the hegemonic power are in fact the eventual cause of their decline: 
power in hegemonies is self-destructive owing to the cost of its political and 
military role. Other states gain sufficient economic strength to challenge the 
hegemonic power. At this point, the hegemonic power uses military force (the 
source of further decline), thereby further undermining its power both econom-
ically and politically (Wallerstein 2004: 59). The productive efficiency of the 
hegemon declines and rival states with superior productive efficiency gain 
strength (Wallerstein 1996: 101). This decline goes hand in hand with attempts 
by other states to replace the hegemonic power (which takes a long time). Ac-
cording to Wallerstein, the final phase in the struggle for hegemony is usually a 
“thirty years war” involving all the major military powers and resulting in mas-
sive physical destruction, including the destruction of production facilities 
(Wallerstein mentions the Thirty Years War of 1618-1648, the Revolutionary 
and Napoleonic wars between 1792-1815, the first/second World Wars be-
tween 1914-45). For Wallerstein, the result is quite clear. In all “thirty years 
wars”, the winner has always been the power committed to maintaining the 
structure of the capitalist world-economy while the power aiming to transform 
the system into a world-empire has been defeated (Wallerstein 1996: 99-100). 
The end of each “thirty years war” has always constituted a break in the con-
struction of the interstate system: the Treaty of Westphalia (1648), the Concert 
of Europe (1815), and the founding of the United Nations (1945) (Wallerstein 
1996: 100). 

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Hegemony therefore occurs following a breakdown of world order. It cre-
ates the period of stability needed by capitalist firms, especially in leading 
states (Wallerstein 20054 58). Hegemony is therefore a systemic condition. 
As a result, “…hegemony is crucial, repeated, and always relatively brief. 
The capitalist world-economy needs the states, needs the interstate system, 
and needs the periodic appearances of hegemonic powers.” (Wallerstein 
2004: 59). In other words, capitalism and the modern states-system are not 
separate “historical inventions” (or conceptions), but rather developed simul-
taneously as parts of a whole. 
In sum: the functioning of the modern world-system depends on a world 
production system with Kondratieff cycles and a stable inter-state system 
with hegemonic cycles.