page_title: World-systems theory
section_title: Interpretation of world history
hierarchical_section_title: World-systems theory / Interpretation of world history
caption_attribution_description: English: A map of the British Empire in 1921 when it was at its height, just before the Anglo-Irish Treaty of 1921. (But 1921-1937 Ireland continued to have the same status as Canada, Newfoundland, the South African Union, Australia and New Zealand, that is to be part of the British Empire as a dominion)
context_page_description: World-systems theory is a multidisciplinary, macro-scale approach to world history and social change which emphasizes the world-system as the primary unit of social analysis.
  "World-system" refers to the inter-regional and transnational division of labor, which divides the world into core countries, semi-periphery countries, and the periphery countries. Core countries focus on higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor-intensive production and extraction of raw materials. This constantly reinforces the dominance of the core countries. Nonetheless, the system has dynamic characteristics, in part as a result of revolutions in transport technology, and individual states can gain or lose their core status over time. This structure is unified by the division of labour. It is a world-economy rooted in a capitalist economy. For a time, certain countries become the world hegemon; during the last few centuries, as the world-system has extended geographically and intensified economically, this status has passed from the Netherlands, to the United Kingdom and to the United States.
context_section_description: Before the 16th century, Europe was dominated by feudal economies. European economies grew from mid-12th to 14th century but from 14th to mid 15th century, they suffered from a major crisis. Wallerstein explains this crisis as caused by the following:
  stagnation or even decline of agricultural production, increasing the burden of peasants,
  decreased agricultural productivity caused by changing climatological conditions (Little Ice Age),
  an increase in epidemics (Black Death),
  optimum level of the feudal economy having been reached in its economic cycle; the economy moved beyond it and entered a depression period.
  As a response to the failure of the feudal system, European society embraced the capitalist system. Europeans were motivated to develop technology to explore and trade around the world, using their superior military to take control of the trade routes. Europeans exploited their initial small advantages, which led to an accelerating process of accumulation of wealth and power in Europe.
  Wallerstein notes that never before had an economic system encompassed that much of the world, with trade links crossing so many political boundaries. In the past, geographically large economic systems existed but were mostly limited to spheres of domination of large empires (such as the Roman Empire); development of capitalism enabled the world economy to extend beyond individual states. International division of labor was crucial in deciding what relationships exists between different regions, their labor conditions and political systems. For classification and comparison purposes, Wallerstein introduced the categories of core, semi-periphery, periphery, and external countries. Cores monopolized the capital-intensive production, and the rest of the world could provide only workforce and raw resources. The resulting inequality reinforced existing unequal development.
  According to Wallerstein there have only been three periods in which a core state dominated in the modern world-system, with each lasting less than one hundred years. In the initial centuries of the rise of European dominance, Northwestern Europe constituted the core, Mediterranean Europe the semiperiphery, and Eastern Europe and the Western hemisphere (and parts of Asia) the periphery. Around 1450, Spain and Portugal took the early lead when conditions became right for a capitalist world-economy. They led the way in establishing overseas colonies. However, Portugal and Spain lost their lead, primarily by becoming overextended with empire-building. It became too expensive to dominate and protect so many colonial territories around the world.
  The first state to gain clear dominance was the Netherlands in the 17th century, after its revolution led to a new financial system that many historians consider revolutionary. An impressive shipbuilding industry also contributed to their economic dominance through more exports to other countries. Eventually, other countries began to copy the financial methods and efficient production created by the Dutch. After the Dutch gained their dominant status, the standard of living rose, pushing up production costs.
  Dutch bankers began to go outside of the country seeking profitable investments, and the flow of capital moved, especially to England. By the end of the 17th century, conflict among core states increased as a result of the economic decline of the Dutch. Dutch financial investment helped England gain productivity and trade dominance, and Dutch military support helped England to defeat France, the other country competing for dominance at the time.
  In the 19th century, Britain replaced the Netherlands as the hegemon. As a result of the new British dominance, the world system became relatively stable again during the 19th century. The British began to expand globally, with many colonies in the New World, Africa, and Asia. The colonial system began to place a strain on the British military and, along with other factors, led to an economic decline. Again there was a great deal of core conflict after the British lost their clear dom
caption: Map showing the British Empire in 1921
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