IR2501THEORIES OF

INTERNATIONAL RELATIONS

Lecture 14

DEPENDENCY & WORLD SYSTEMS THEORY

BACKGROUND

• Crisis of capitalism: volatility, uncertainty, inequality

• Deeper structure of international relations (global capitalist system)

Lenin’s Theory of Imperialism

• Three key features: (1) all politics, international and domestic, takes place within the framework of a capitalist world-economy. (2) States are not the only important actors in world politics, rather social classes are also very significant. (3) It is the location of these states and classes within the structure of the capitalist world-economy that constrains their behaviour and determines patterns of interaction and domination between them.

Five Features of Imperialism (Or the Highest Stage of Capitalism)

• (1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;

• (2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy;

• (3) the export of capital as distinguished from the export of commodities acquires exceptional importance;

Features(Continued)

• (4) the formation of international monopolist capitalist associations which share the world among themselves, and

• (5) the territorial division of the whole world among the biggest capitalist powers is completed.

Summary

• Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.

Global Inequality

• One-fifth of the world’s population are living in extreme poverty

• Average incomes in the richest 20 countries are 37 times higher than in the poorest 20—the ratio has doubled in the last 20 years.

• In the developed world subsidies to agricultural producers are six times higher than overseas development aid.

Global Inequality(Continued)

• 70 per cent of the world’s poor and two-thirds of the world’s illiterates are women.

• More than 30,000 children die every day from easily preventable diseases.

• One billion people lack access to clean water.

• (Source: Cited in Baylis & Smith, p. 228).

Global Inequality(Continued)

• The total wealth of the world’s 358 billionaires is equal to the combined incomes of the poorest 45 per cent of the world’s population.

• Marx: ‘Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality at the opposite pole’.

Historical Origins of Inequality

• Mainstream explanation: Underdevelopment as a natural state.

• Poor countries are traditional (non-modern) societies

• External contact key to development

Dependency Theory(dependencia)

• Earliest formulation: dependencia challenged the central modernisation hypothesis that the secret to development lay in enhancing external linkages through trade, aid and investment.

• The failure of the policy of import substitution

Later Formulation

• Social reality as an integrated whole. Political and economic processes in society fuse into each other and form a single web of structural relations

• Dependency scholars reject the notion of closed national economy

• Reject notion of a ‘dual’ economy

• Importance of colonial history: underdevelopment is the outcome of historical processes peculiar to colonialism.

Definition

• Dependence is a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others. A relationship of interdependence between two or more economies or between such economies and the world trading system becomes a dependent relationship when some countries can expand through self-impulsion while others, being in a dependent situation, can only expand as a reflection of the dominant countries, which may have positive or negative effects on their immediate development.

Wallerstein’s World-System Theory

• Two types of world-systems: world-empires and world-economies.

• Distinction is based on how decisions about resource distribution are made.

• World-empire: A centralized political system uses it power to redistribute resources from peripheral areas to the central core area.

• (Example: Roman empire: tribute)

World-Economy

• Multiple centres of political authority.

• Resources distributed through the mechanism of the market.

• Modern world-system is an example of the world-economy.

Origins of MWS

• Turn of the 16th Century in Europe.

• Expansion to the entire globe.

• Driving force: capitalism

CapitalismWallerstein’s Definition

• A system of production for sale in a market for profit and appropriation of this profit on the basis of individual or collective ownership.

Terms

• CORE

• Democratic governments

• High wages

• Import: raw materials

• Export: manufactures

• High investment

• Welfare services

Terms

• Periphery

• Non-democratic governments

• Export: raw materials

• Import: Manufactures

• Below subsistence wages

• No welfare services

Semi-Periphery

• Authoritarian governments

• Export: ‘mature’ manufactures; raw materials

• Import: manufactures; raw materials

• Low wages

• Low welfare services

Two Dimensions

• Spatial: differing economic roles played by different regions within the world economy.

• Core-Periphery distinction (later Wallerstein added a semi-peripheral zone).

• WST: Three zones are linked together in an exploitative relationship in which wealth is drained away from the periphery to the centre.

Dimensions (continued)

• Temporal: Cyclical rhythms, secular trends, contradictions, and crisis.

• Cyclical rhythms: capitalist world-economy goes through recurrent periods of expansion and subsequent contraction.

• Secular trends: long-term growth or contraction of the world-economy.

Temporal Dimension(Continued)

• Contradictions: These arise because of ‘constraints imposed by systemic structures which make one set of behavior optimal for actors in the short run and a different, even opposite, set of behavior optimal for the same actors in the middle run’

• Major problem: under-consumption (lower wages impact consumption)

Crisis

• System is unable to reproduce itself.

• New possibilities (less determinisitic)

• Decline of US power