The World-System after the Cold WarAuthor(s): Immanuel WallersteinSource: Journal of Peace Research, Vol. 30, No. 1 (Feb., 1993), pp. 1-6Published by: Sage Publications, Ltd.Stable URL: http://www.jstor.org/stable/424718 .Accessed: 28/12/2010 09:33

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? Journal of Peace Research, vol. 30, no. 1, 1993, pp. 1-6

Focus On:

The World-System After the Cold War

IMMANUEL WALLERSTEIN Fernand Braudel Center, Binghamton University

1. Introduction The certainties of the post-1945 era are now over, in particular two. (1) The United States dominated the capitalist world-economy, being the most efficient producer and the most prosperous country. This is no longer true. (2) The USA and the USSR were engaged in an all-encompassing 'Cold War', which shaped all interstate relations. The Cold War is no more. Indeed, the USSR is no more. To understand what this portends, we have three relevant pasts: the past of the US hegemonic era, 1945-90; the past of liberalism as the dominant ideology of the capitalist world-system, 1789-1989; the past of capitalism as an historical system, which started in 1450 and will perhaps be no more by 2050.

2. The Three Relevant Pasts The story of the US hegemonic era is the easiest to tell. At the end of World War II, the USA found itself in an exceptional position. Its basic economic forces had been growing steadily stronger in terms of technology, competitiveness, and quantitative share of world production for 100 years. World War II resulted in enormous physical destruction through- out the Eurasian land mass, and thus among all the potential economic rivals of the USA, both those who had been allies and those who had been foes during the war.

The USA was thus able to establish a new world order, a pax americana, after the long disorder of 1914-45. The pax americana had four pillars. The first was the reconstruction of the major industrial powers, not only its long-time allies in western Europe, but its recent foes, Germany and Japan. Tne motives were multiple. The world-economy needed the re- entry of these countries both as major producers and as major customers for US produc- tion. The USA needed a network of associates to maintain the world order. And, ideologi- cally, the USA needed to propagate the idea of a 'free world' that was prosperous as a symbol of hope and therefore of moderation for the world's lower strata.

The second pillar was an arrangement with the only other serious military power in the world, the USSR. The Soviet Union was ostensibly an ideological rival and potentially an expanding power. In fact, it was quite easy to come to an arrangement in which the Soviet Union had its reserved zone (the 'socialist bloc'). There were four conditions to the deal: there would be absolute peace in Europe; the two blocs would be territorially fixed; the two great powers would maintain internal order in their blocs; the socialist bloc would expect no help in reconstruction from the USA. There were, to be sure, many noisy quarrels, but since none of them ended in breaking the arrangement, we may assume that their purpose was largely for show.

The third pillar was US internal unity built around the acceptance of US 'responsibility' in the world-system, anti-Communism at home and abroad, and the end of racial segrega- tion. The fourth pillar was the slow political decolonization of the Third World and modest

2 Immanuel Wallerstein

efforts for its so-called economic development. The emphasis was on the adjectives 'slow' and 'modest'.

If we turn to the second past, that of 1789-1989, we start with the geocultural shock of the French Revolution and its Napoleonic aftermath. The French Revolution changed France less than we believe, but it changed the world-system fundamentally. The French Revolution changed mentalities by imposing the belief that political change was 'normal' and legitimated by 'popular sovereignty'. The attempt to deal with this new reality took the form of the creation of the three ideologies: conservatism, liberalism, and socialism. The ostensible difference was in their attitude towards such normal change: the conservatives dubious and wishing to slow it down maximally, the liberals wishing to manage it rationally, and the socialists wishing to speed it up maximally. In theory, all three ideologies looked with disfavor on the state. But, in practice, all three ideologies found that they had to strengthen the state vis-a-vis society in order to achieve their objectives. In the end, all three ideologies united around the liberal program of orderly 'reform' enacted and adminis- tered by 'experts'. The conservatives became liberal conservatives and the socialists became liberal socialists.

In the 19th century, in Europe, liberalism promoted two great reforms: the extension of the suffrage and the creation of the social welfare state. By 1914 both reforms were in place or in process, and widely accepted as legitimate throughout western Europe and North America. The object of the reforms was the integration of the working classes in a way that would tame their anger but not threaten the continuing functioning of the capitalist world- economy. This program was superbly successful, for two reasons. The governments could mobilize their working classes around a double nationalism: an intra-European nationalism and the nationalist superiority of the 'Europeans' to the 'backward' peoples of the world. And, second, the costs of the social welfare state could be borne without too much disrup- tion because of the expanded exploitation of the periphery.

World War I marked the beginning of a long intra-'European' struggle between Germany and the USA as the successor hegemonic power to Great Britain. It would end with US victory and world hegemony in 1945. World War I also marked, however, the moment when the peoples of the periphery began to try to reassert themselves against the European domination of the world-system. The North-South struggle we know today took shape then. The ideological response of the North to this new political reality was Wilsonianism, or the liberal program applied on a world scale. Wilsonianism offered the world equivalent of suffrage, the self-determination of nations. And 25 years later Roosevelt added the world equivalent of the social welfare state, the program of the economic development of the Third World, assisted by Western 'aid'. Leninism, which posed itself as the radical oppo- nent of Wilsonianism, was in fact its avatar. Anti-imperialism was self-determination clothed in more radical verbiage. The construction of socialism was economic development of the Third World clothed in more radical verbiage. One of the reasons 'Yalta' was possible was that there was less difference in the programs of Wilson and Lenin than official rhetoric maintained.

In the heyday of US hegemony after 1945, this world liberalism also seemed superbly successful. The decolonization of Asia and Africa was rapid and, for the most part, rela- tively painless. The 'national liberation movements' were full of hope for the future. The United Nations proclaimed the 1970s the 'Development Decade'. But something essential was lacking in the attempt to repeat in the 20th century at the world level what had been the 19th-century success of liberalism within Europe. There was no Third World for the Third

The World-System After the Cold War 3

World. One could neither mobilize the 'patriotism' of the Third World against a 'Third World' nor count on the income from exploiting a periphery to pay for their social welfare state. The taming of the working classes, so successful within Europe, was a chimera at the world level.

If we now turn to the third past, that between 1450 and today, we see a third 'success story', that of capitalism as an historical system. The raison d'etre of capitalism is the endless accumulation of capital. The historical system that has been built, slowly and steadily, has been remarkable in its accomplishments. It has sustained a constant expansion of technology permitting an incredible growth in world production and world population. The capitalist world-economy was able to expand from its initial European base to incor- porate the entire world and eliminate all other historical systems from the globe. It has developed a political framework of 'sovereign' nation-states within an ever more codified interstate system which has developed the right proportion of state power vis-a-vis the market so as to permit the maximal accumulation of capital. It has developed a complex system of the remuneration of labor, combining wage and non-wage forms, thereby keeping world labor costs down but offering incentives for efficiency. It has institutionalized both sexism and racism, enabling the construction of a hierarchical labor force which is self- sustaining politically.

Capitalism has been a dynamic system. It has been based not on a stable equilibrium but on a pattern of cyclical swings wherein the 'animal spirits' of the entrepreneurial classes, in pursuing their own interests, regularly and inevitably create mini-crises of overproduction which lead to downturns or stagnations in the world-economy. This is in fact very functional for the system, weeding out the weak producers and creating constraints on the ability of the working classes to pursue their incessant claims for greater reward.

There are, however, some basic contradictions in this historical system, as in all historical systems. The dynamic of the system requires constant spatial expansion; this has reached its limits. The dynamic of the system requires constant externalization of costs by individual producers; this may be coming close to reaching its limits. The dynamic of the system requires the constant, if slow, proletarianization of the working classes of the world; but proletarianization is a negative process from the point of view of the capitalists, in that it increases labor costs and creates political risks. Liberalism as an ideology was a very effective means of containing unrest and 'democratization', but over time it inevitably has put enormous strains on state budgets and created a public debt pyramid which threatens the stable functioning of the system.

3. The Transitional Present The late 1960s was a turning-point in many ways. It marked the beginning of the downturn ending the incredible post-1945 Kondratieff A-phase expansion. The basic economic reason was obvious. The remarkable economic recovery of western Europe and Japan plus the economic development of the Third World led to such a great increase in the production capacities of the previously most profitable industries (steel, automobiles, electronics, etc.) as to create a profit crunch. We have been living in this Kondratieff B-phase ever since. What has happened is what always happens in B-phases: acute competition among the core powers in a situation of contraction, each trying to maximize its profit margins and minimize its unemployment at the expense of the others; a shift of capital from seeking profits in production to seeking profits in financial manipulations; a squeeze on governmental balance

4 Immanuel Wallerstein

of payments, resulting in debt crises (of the Third World, the ex-socialist bloc, and the United States). There has been a relocation of production at the world level. There has been an intensive search for new product innovations which can be the basis of future quasi- monopolies. As in all B-phases, the effects of the downturn have not been felt evenly; some do better than others. In this d; wnturn, the relative success story has been that of Japan and the East Asian 'dragons', which are linked.

At the same time, in 1968, there began a world revolution which, it is now clear, was a revolution against liberalism as the dominant ideology of the world-system. At the time, the social unrest, which occurred throughout the world - France and Germany, the USA and Japan, Czechoslovakia, and China, India and Mexico - seemed to have two common themes everywhere: opposition to US hegemony in the world-system and Soviet collusion; denunciation of the so-called Old Left (Communist and social-democratic parties, national liberation movements) for their complicity with the dominant forces. This revolt of 1968 in fact culminated with the overthrow in 1989-91 of the Communist governments in eastern Europe and the USSR. It is today clearer than it was in 1968 that the two themes - opposition to US hegemony and opposition to the Old Left - are in fact but a single theme, the opposition to reformist liberalism as a justification of the workings of the world-system.

The two principal changes in the geopolitics of the world-system in the 1970s and 1980s have been the decline of the relative power of the USA and the great disillusionment with developmentalism in the Third World. The first is a normal cyclical occurrence. The economic strengths of the European Community and Japan have been steadily rising since the mid-1960s, and the USA has not been able to keep pace. This has of course political and cultural implications. The world policy of the USA has for the past 20 years been centered around ways to slow down this loss of hegemony by exerting pressure on its allies. The second is not a cyclical occurrence at all. It marks the breakdown of the Wilsonian liberal enticement to the working classes of the periphery. The collapse of 'statism' in both the Third World and the ex-socialist bloc is the collapse of liberal reformism, and hence the undermining of a crucial pillar in the stability of the capitalist world-economy.

The collapse of the Communist bloc is thus a double setback for the world-system. For the USA, it is a geopolitical catastrophe, as it eliminates the only ideological weapon the USA had to restrain the EC and Japan from pursuing their self-defined objectives. For the capitalist world-economy as an historical system, it marks the onset of an acute crisis, since it lifts the Leninist justification of the status quo without replacing it with any viable substitute.

4. The Uncertain Future We have now entered into the post-American era, but also the post-liberal era. This promises to be a time of great world disorder, greater probably than the world disorder between 1914 and 1945, and far more significant in terms of maintaining the world-system as a viable structure. What may we expect?

On the one hand, we may expect the capitalist world-economy to continue to operate in the short run in the way it has been operating for 500 years, but operating in this way will only exacerbate the crisis. Once this current Kondratieff B-phase is finally over (which will only be after one last downward swing), we shall as previously enter into a new A-phase, in which Japan, the USA, and the EC will struggle to obtain quasi-monopolistic control over the new leading industries. Japan stands a good chance of coming out on top, and it is

The World-System After the Cold War 5

probable that it will make a world economic alliance with the USA as junior partner to ensure this. In this new era of prosperity, the new main areas of economic expansion will be China for the Japan-US grouping and Russia for the EC. The rest of the periphery will be largely excluded from any benefits, and the polarization of world wealth will grow markedly more acute, as will the polarization of population growth.

A further problem is that the collapse of Wilsonian liberalism has led worldwide to a collapse in the faith in the 'state' as the central locus of social change and progress. It has also meant the collapse of long-term optimism, which has long been a key stabilizing political factor in the operation of the system. Polarized wealth without hope leads to generalized fear and the search for structures of security. These are being sought in identity politics, whose meaning is ambiguous but whose force is quite apparent.

There are three obvious sources of major instability in the world-system over the next 50 years. One is the growth of what I shall call the Khomeini option. This is the assertion by states in the periphery of total otherness and rejection of the rules of the interstate system as well as the geocultural norms governing the world-system. This particular option has been largely contained for the moment in Iran, but it is quite likely that other states will resort to it (and not only Islamic states), and it will be much more difficult to contain it if several states try it simultaneously.

The second source of instability is what I shall call the Saddam Hussein option. This is the attempt to challenge militarily the dominance of the North in the world-system. While Saddam Hussein's attempt was stopped cold, it took an extraordinary mobilization by the USA to do it. It is not at all clear that, as the decades go by, this can be repeated, especially if there are several such attempts simultaneously. US military strength will decline because the USA cannot sustain it either financially or politically. The states of the North are looking for a long-term substitute, but there is no clear one in sight. And acute economic and political competition among the core powers during the next upturn of the world- economy may not render such military collaboration too likely.

The third source of instability will be an unstoppable mass movement of people from South to North, including to Japan. The growing polarization of wealth and population makes this an option which no amount of border guards can successfully police. The result will be internal political instability in the North, coming doubly from right-wing anti- immigrant forces and from the immigrants themselves demanding political (and hence economic) rights; and all this in a context where all groups will have lost faith in the state as a means of solving social inequities.

This is a picture of world turmoil, but it is not necessarily a pessimistic one. Obviously, such world disorder cannot go on indefinitely. New solutions will have to be found. This will undoubtedly mean creating a new historical system to replace the one that has been so efficacious for 500 years, but which is now crumbling because of its very success. We come therefore to the historical choices before us: what kind of new historical system to build, and how? There is no way to predict the outcome. We shall find ourselves in what scientists today are calling a bifurcation far from equilibrium, whose resolution is intrinsically unpre- dictable, but in which every intervention has great impact. We are thus in a situation of 'free will'. The world of 2050 will be the world we create. We have a considerable say about that creation. The politics of the next 50 years will be the politics of this restructuring of our world-system.

6 Immanuel Wallerstein

REFERENCES My views in this article are stated more elaborately in several places:

Arrighi, Giovanni; Terence K. Hopkins & Immanuel Wallerstein, 1989. Antisystemic Movements. London: Verso. Wallerstein, Immanuel, 1991. Geopolitics and Geoculture. Essays on the Changing World-System. Cambridge:

Cambridge University Press. Wallerstein, Immanuel, 1992. 'The Concept of National Development, 1917-1989: Elegy and Requiem', pp. 79-

88 in Gary Marks and Larry Diamond, eds, Reexamining Democracy: Essays in Honor of Seymour Martin Lipset. Newbury Park, CA: Sage.

Wallerstein, Immanuel, 1992. 'The Collapse of Liberalism', pp. 96-110 in Ralph Miliband and Leo Panitch, eds, Socialist Register 1992: New World Order? London: Merlin.

IMMANUEL WALLERSTEIN, b. 1930, PhD in Sociology (Columbia University, 1959); Dis- tinguished Professor of Sociology at Binghamton University (1976- ) and Director of the Fernand Braudel Center for the Study of Economies, Historical Systems, and Civilizations. The first three volumes of his Modern World-System appeared in 1974, 1980, and 1989, respectively. His most recent book is Unthinking Social Science. The Limits of Nineteenth-Century Paradigms (1991).