Wallerstein (2011) Structural Crisis in the World-System:A system is defined as a unit with a single division of labor and multiple cultural systems

Thesis:

The history of the world system is skewed in favour of development that has created a capitalist trend that increases economic and social disparities between centre and peripheries of the world economy rather than provided prosperity for all.

How: Global hegemonies: Dutch, UK, USA

Why: structural crisis : Chaos and seeking for an equilibrium and stability

Systemic economic and political upturns and downturns – comes back to moving equilibrium

Out of chaos in the system, two quite divergent possibilities: 1. Recreating order out of chaos, OR2. Achieve a new stable system

Capitalists objective is endless accumulation of capital

• Accumulation is based on how much surplus value is extracted• Need monopoly and dominance over production in the world economy • Extractive power relation of monopolized over competitive production is a system of core-periphery relationship.• Quasi-monopoly increases growth and expansion of the world-economy. It also lets benefits to trickle-down to large sectors of the world-system’s populations.

•When monopoly declines ( i.e., downturn in the economic system) , the quasi-monopoly is exhausted ending in a system-wide stagnation .

•Industries relocate from the core in search of surplus value

•Countries where the industries move to regard this as their chance for “development,”

•However, the relocation countries do not ‘develop’ as the core still is in control, imposing their processes that they have cast off in the core.

1945: • End of the Second World War

• End of an intense 30-year-long struggle between the United States and Germany begun in the 1870s

• It was a conflict to succeed Great Britain as the hegemonic power of the world-system.

1945-1967/73 : Conservatives systematically started to change the world-system ‘s characteristics and its direction

1970s on: Unleashed neo liberalism•Dismantled all advances in social welfare and public ‘s share of the wealth •Reduced real wages worldwide•Restrained the forces that would have pressured producers to internalize the costs of combating damage to the world's ecology•Conservatives reduced the welfare state or eliminated its benefits. This program was called

• 1945-1970 was one of great economic expansion based on production in the world-economy

• Since the 1970s, shift from production to financial capitalism.

•The world-system then entered the most extensive continuous series of speculative bubbles in the history of the modern world-system, resulting in heavy sovereign and individual debts.

•Rise of neo-conservative governments: 1979: Margaret Thatcher 1980: Election of Ronald Reagan in 1980,

•In the U.S., the neo-cons wanted to get back their grip on the sliding hegemonic dominance through ‘unilateral macho militarism’ .

•Pressured their Western European allies to adhere to US policies

“Globalization” replaced the previous buzzword “development… Washington Consensus…

Conservatives in the world move to reduce all the major costs of production

International Monetary Fund, backed by the U.S. Treasury, imposed adherence to neoliberal conditions as a condition of all financial assistance to countries with budgetary crises.

By the mid-1990s, a significant popular resistance to the Washington Consensus arose

A hegemonic power is a quasi-monopoly of geopolitical power

The hegemon (e.g., U.S. in 20th C) , is able to impose its system of order and rules world wide This favors the maximization of accumulation of capital to enterprises located within its borders.

In 500 years of world history, three hegemons arose and fell:

Mid 17th C : (Dutch Republic) i.e., United Provinces Mid 19th C: the United KingdomMid 20th C United States

Hegemonies have lasted, on average, only twenty-five years.

Quasi-monopolies of geopolitical power are self-liquidating

•Increases in the living standards of segments of the populations in BRIC countries due to their share of the surplus value in the global economy,

• This spreading of profits diluted the regular profits going to the Core’s capitalists. • Also strained the existing world resources

Rise of new clubs of the Core vis-à-vis the peripheries:• Club of Davos wish to co-opt the proponents of transformation by fake signs of progress (such as “green capitalism” or “poverty reduction”).

Club of Porto Alegre: a reconstructed world that is horizontal and decentralized in its organization, and insist on the rights of groups as well as of individuals

Wallerstein’s solutions to the financial and economic crises:

•Reject economic growth goals •Pursue decommodification•Reverse the last 30 years of commodification of public resources— education, health, water and air•Increase decommodification by including other productions: agriculture and industries•Establish self-sufficient local and regional groups of activities serving the basic needs life, e.g., food and shelter•“Alterglobalization” of multiple autonomies that interconnect