World-Systems Theory

World-systems theory is a framework for analyzing the global economy developed by the sociologist Immanuel Wallerstein, set out most fully in his 1974 book The Modern World-System. Wallerstein argued that since roughly the sixteenth century, capitalism has operated not as a set of separate national economies but as a single interconnected world system, and that this system divides countries into three structural positions: a core of wealthy, industrially advanced nations, a periphery of less developed nations that primarily supply raw materials and labor, and a semi-periphery of nations occupying an intermediate position between the two. The theory holds that wealth and resources tend to flow from the periphery toward the core through unequal terms of trade and exchange, so that global inequality between nations is best explained as a structural feature of the world economic system as a whole rather than as a result of any single country's internal characteristics alone. World-systems theory built directly on the earlier dependency theory associated with Latin American economists such as Raul Prebisch, extending its core insight about unequal exchange between wealthier and poorer regions into a single, historically grounded account of the entire capitalist world economy. The framework remains a widely taught alternative to explanations of global inequality that focus only on the internal features of individual nations.