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Immanuel Wallerstein. Structural Crisis in the World- System excerpts. Global Economic System: Cyclical upturns and down turns and fluctuating Gets back regularly to equilibrium – moving equilibrium  Trends of change slowly push the curve up . 2. Financial crisis leads to chaos

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immanuel wallerstein


Structural Crisis in the World-System excerpts


Global Economic System:

Cyclical upturns and down turns and fluctuating

Gets back regularly to equilibrium – moving equilibrium

 Trends of change slowly push the curve up 


2.Financial crisis leads to chaos

  • System fluctuates wildly
  • That leads to a bifurcation
  • Two alternative possible outcomes will be collectively “chosen.”

Capitalist system requires endlessaccumulation of capital

Appropriation of surplus value

Monopoly of global production with global linkages

Support of various states


3. Monopolies are eventually self-liquidating

Core has monopolized productivity and periphery gets the trickle down of these activities competitive productivity

The expansion of the world-economy and its growth lets the trickle-down benefits to large sectors of the world-system’s populations.


Countries where MNC industries relocate are not advancing in “development,” but are only recipients of cast-off, old core-like operations.

The entire cycle lasts an average of fifty to sixty years

System constantly slowly shifting to the economically most favored areas


4. A second major cyclical rhythm

All states within the world-system are theoretically sovereign but actually highly constrained by the processes of the interstate system.

Some states … have greater control over internal fragmentation and outside intrusion.

No state, nonetheless, is wholly sovereign.


To be a hegemonic power is to achieve a quasi-monopoly of geopolitical power

The state is able to impose its rules, its order, on the system as a whole

This favorsthe maximization of accumulation of capital to enterprises within its borders.


Hegemony has lasted, on average, only twenty-five years.

Any monopoly including a geopolitical power’s, is


When other states economically and politically improve do not accept the “leadership” of the former hegemonic power.

Hegemonic powers in 500 yrs of the modern world-system

Dutch Republic (United Provinces) in the mid 17th C

United Kingdom in the mid 19th C

United States in the mid 20th C


5. modern world-system from 1945 to 2010

  • Two periods: 1945 -1970 and 1970-2010
  • 1945-1970: great economic expansion in the world-economy
  • 1970-2010: shift from production to financial
  • The world-system faces
  • Continuous series of speculative bubbles
  • Greatest level of multiple levels of indebtedness

1945 -1970 wasfull U.S. hegemony in the world-system

US started declining in hegemony

There were world revolutionary changes- 1966-1970

in all three major geopolitical zones of the world-system of the time: the “West”), the Socialist bloc, and the third world


In 25 years after 1968:

The conservative right, led by the Reagan Republicans and the Thatcher Conservatives, transformed world discourse and political priorities.


“Globalization” replaced the earlier buzzword “development

  • Washington Consensus emerged: LAP DoG
  • Austerity: Reduction of state expenditures
  • Deregulation: Uncontrolled entry of commodities and capital
  • Trade Liberalization: Production for export
  • Conservatives tried to reduce all costsof production
  • Reduce and eliminate the welfare state
  • Slow down the US hegemony from declining in the World System

Mrs. Thatcher coined the slogan, “There is no alternative” or TINA.

International Monetary Fund, backed by the U.S. Treasury, made neoliberalism as a condition of all financial assistance to countries with budgetary crises


WC worked for about twenty years

Followed the primacy of the market


mid-1990s popular resistance to the Washington Consensus

  • 1. Neo-Zapatista uprising in Chiapas on January 1, 1994;
  • 2. demonstrations at the Seattle meeting of the World Trade Organization:
    • This stopped the attempt to enact worldwide constraints on intellectual property rights;
  • 3. founding of the World Social Forum in Porto Alegre(Brazil) in 2001.

Events that shocked the system:

  • Asian debt crisis in 1997
  • Collapse of the U.S. housing bubble in 2008
  • Another set of bubbles in the series of debt crises since 1970s.

6. World System in a structural crisis:

  • Continued from the 1970s
  • Will continue until probably circa 2050
  • Chaos is not totally random - includes the world-economy, the interstate system, cultural-ideological issues, the availability of life resources, climatic conditions, and pandemics.

It is a vicious circle of the following elements:

  • Reduced production means reduced employment
  • Rapid shifts in currency exchange rates.
  • Speculation, a game of pure chance
  • Big winners and mainly big losers.
  • Emergence of protectionism
  • National and world political situations toward gridlock

Increase in the living standards of BRIC countries (Brazil, Russia, India, China, and others)

  • Capital accumulation for capitalists has now to be shared
  • Spreading out the surplus-value and will reducing the amounts available for the thin upper crust of the world’s populations.
  • Strain on existing world resources Threatens maintaining economic growth of the last decade or two.

“the spirit of Davos” “non-capitalist” but still retains three essential features of the present system: hierarchy, exploitation, and polarization

“the spirit of Porto Alegre: democratic and relatively egalitarian

Spirit of Davos wish to co-opt the proponents of transformation by fake signs of progress (such as “green capitalism” or “poverty reduction”).


Six transformations are expected out of this crisis:

  • I. Porto Alegreadvocates a reconstructed world:
    • Horizontal and decentralized in its organization
    • Rights of groups as well as of individuals as a permanent feature of a future world-system.

II. Decommodification

  • Reject the goal of economic growth and replace it with the goal of maximum decommodification
  • Resisting commodification of the last thirty years: of education, of health structures, of the body, of water and air
  • Decommodifyingas well agricultural and industrial production

Effort to create local and regional self-sufficiencies, especially in the basic elements of life such as food and shelter.

  • Not a single totally integrated division of labor but an “alterglobalization” of multiple autonomies that interconnect

IV. Importance of the autonomies and end the existence of foreign military bases,

V. Affirm local autonomies and end the fundamental social inequalities of gender, race, ethnicity, religion, sexualities

VI. Avoid irrevocable climate change, vast pandemics, and nuclear war.