WORLD SYSTEMS OR DEPENDENCY THEORY – WALLERSTEIN

 

Practice Question – Comment on the critics charge that Immanuel Wallerstein’s Dependency theory is simplistic and wrong. (UPSC 2009)

Approach – Introduction. Elaborate on Dependency theory. Write about criticism of the theory by thinkers. Give contemporary examples for discussing the relevance or nonrelevance of the theory. Establish both its simplicity and complexity through substantial reasons. Conclusion.

 

INTRODUCTION

World-system theory is in many ways an adaptation of dependency theory. Wallerstein draws heavily from dependency theory, a neo-Marxist explanation of development processes, popular in the developing world. Dependency theory focuses on understanding the “periphery” by looking at core-periphery relations, and it has flourished in peripheral regions like Latin America. It is from a dependency theory perspective that many contemporary critiques to global capitalism come from.

 

WORLD SYSTEM THEORY

World Systems Theory, like  dependency theory , suggests that wealthy countries benefit from other countries and exploit those countries’ citizens. In contrast to  dependency theory, however, this model recognizes the minimal benefits that are enjoyed by low status countries in the world system. The theory originated with sociologist Immanuel Wallerstein, who suggests that the way a country is integrated into the capitalist world system determines how economic development takes place in that country. According to Wallerstein, the world economic system is divided into a hierarchy of three types of countries: core, semiperipheral, and peripheral. Core countries (e.g., U.S., Japan, Germany) are dominant, capitalist countries characterized by high levels of industrialization and  urbanization

Core countries are capital intensive, have high wages and high technology production patterns and lower amounts of labor exploitation and coercion. Peripheral countries (e.g., most African countries and low income countries in South America) are dependent on core countries for capital and are less industrialized and urbanized. Peripheral countries are usually agrarian, have low literacy rates and lack consistent Internet access. Semi-peripheral countries (e.g., South Korea, Taiwan, Mexico, Brazil, India, Nigeria, South Africa) are less developed than core nations but more developed than peripheral nations. They are the buffer between core and peripheral countries.

Core countries own most of the world’s capital and technology and have great control over world trade and economic agreements. They are also the cultural centers which attract artists and intellectuals. Peripheral countries generally provide labor and materials to core countries. Semiperipheral countries exploit peripheral countries, just as core countries exploit both semiperipheral and peripheral countries. Core countries extract raw materials with little cost. They can also set the prices for the agricultural products that peripheral countries export regardless of market prices, forcing small farmers to abandon their fields because they can’t afford to pay for labor and fertilizer. The wealthy in peripheral countries benefit from the labor of poor workers and from their own economic relations with core country capitalists.

 

BASIC TERMS

  • peripheral: Peripheral countries are dependent on core countries for capital and have underdeveloped industry.
  • core: Describes dominant capitalist countries which exploit the peripheral countries for labor and raw materials.
  • semi-peripheral: Countries that share characteristics of both core and periphery countries.

 

DEPENDENCY THEORY

Dependency theory is a mixture of various theories, including world systems theory, historical structure theory, and neo-Marxist theory. Collectively, these theories contrast modernization theory, an earlier theory of state development that ceded much of its explanatory ground during the 1960s and even the 1970s following U.S. interventionist challenges overseas, as well as problems associated with race relations, economic inflation, and the decline of the U.S. dollar.
Dependency theory can be seen as a critique based on the following question or problem: Why do some countries become rich while others remain poor? This question is posed against the previously held conception that economic development was beneficial to every country within the international system. Economic prosperity in particular countries, however, often resulted in deep problems in terms of underdevelopment. Dependency theory holds expected outcomes for peripheral countries: (a) Economically, the outcome of development is continued underdevelopment; (b) socially, the outcome is inequality and conflict; and (c) politically, the outcome is the reinforcement of authoritarian government.

Dependency theory is the result of an extensive search to find a theoretical framework to sufficiently analyze and explain both development and underdevelopment within the international system. It does so by allowing scholars and practitioners to look to external matters, such as politics, economics, and culture, and attempt to come to an understanding of how these issues influence development policies. Three main characteristics of dependency theory are salient. First, the international system is seen as the sum of two sets of states: dominant and dependent. Second, dependency theory holds that external forces are critical in terms of economic activity of dependent states. Third, relationships, based on strongly historical patterns and dynamics (i.e., internationalization of capitalism), between dominant and dependent states are a vibrant process, with exchanges taking place between the states playing a considerable role in the reinforcement of patterns of inequality.

 

HAVES AND HAVE-NOTS

A great deal of debate within the literature on dependency theory leads to numerous and often competing perspectives and discourse. Dependency theory is, on one hand, about the relationship between developed and underdeveloped countries. On the other hand, the relationship is about countries that have emerged and those that are emerging. Alternatively, dependency theory describes the world in terms of a capitalist or imperialist core (also known as the wealthy states) and an exploited (also exploitative) periphery. The subjective nature of debates found within dependency theory means there are many different and often productive ways of examining the world. These different points of views can lead to intensive but
informative debates. Countries at the core of the international system are referred to as the “haves,” whereas those found within the periphery are called the “have-nots.” Industries, government, social elites, financial power, and systems of education are key characteristics of the core countries. By contrast, periphery countries possess mining, forestry, agriculture, less power, poor systems of education, and low wages that are incapable of sustaining affluent lifestyles. These factors are central components composing the relationship between the core and the periphery.

 

CRITICISM

Some economists like Peter Bauer and Martin Wolf write primarily against the path of dependency theorists. Autonomous path of periphery countries lead to higher corruption, domestic opportunity costs ,lack of competition and sustainability  in these countries. The countries on the periphery of development are not destined to stagnation. So dependency theory is an incomplete and inaccurate description of the socio-economic conditions of low developing countries. There are many dependent countries on the periphery. They do change their economic structure. According to Warren, they have achieved very rapid economic growth.  This theory does not highlight how the countries that follow a dependent development pattern suffer from a variety of economic ills such as regressive income distribution, an emphasis on luxury goods, under utilization and exploitation of human resources, over reliance on foreign firms for capital intensive technology and the perennial problems of poverty and unemployment. This theory has no relevance to many nations that are neither in the periphery, nor in the Centre. They are called semi periphery countries.

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