Wallerstein and World System (II)

The Core, The Periphery, and The External

In the chapter 5, Wallerstein set out to discuss his main idea of economy world system. In this context, understanding what was going on in England is very important because here was in England we find the most prominent form of industrial transformation depicting the second 16th century onwards — the industrial transformation that, in its turn, become the very pillar of the new world economy existing nowadays.

What happened in England, then, that make her so important? While heavy industry in other parts of Western Europe drastically declined, in England there was an expansion of heavy industry and, consequently, of her output — for which there had been no precedent. While many consider England backwater of the continent, in the last part of 16th and the outset of 17th centuries, the position had been reversed.

There was a major shift in the composition of England’s export trade. From 14th, cereal play important role, but by the 16th century it was cloth the major export of the country. The English textile had two important features very important for the emergent world economy. First, it was rural industry, meaning that it only required underpaid worker and cheaper cost of production (particularly in the water factor). Second, it naturally was expanded industry with abroad-market oriented when purchasing-power of the market was declining because of the declining industry in the continent.

That textile-based trade was also supported by the fact that taxation in England is lower than that of other centers of commerce (such as Flanders and northern Italy)

In the political context, England internally was unified from early period. On the one hand, the form of medieval social structure has lent itself to the development of strong monarchy. On the other hand, natural geography of insular England posed fewer obstacles to the centralizing thrust the country than others on the continent.

Combined advantaged of economic and politics provided strong base for England to depart in 16th century, particularly with its Henrician or Tudor Administrative Revolution which included a new mode managing finance, the centralization of administration under the principal secretary, the organization of privy council, and the realization of the king’s household.

The result is very striking: England was able to develop strong capital as a cultural and economic unifying force. While the continent was trapped on war, England was success in creating peace in her land. This internal peace and no standing army also meant a lower need for taxation and of a bureaucracy swollen beyond its efficient size by the sale of offices. However it is also important to note that there is a problem in managing the land: the dilemma of king’s double roles: as a king and as a landowner. As a king, he sought to maximize his income from the landowners and as a landowner he needed to maximize his income from the land. There was not solution fro this and it end with the internal instability.

This internal instability and internal peace seems problematic, but this was indeed the secret of England relative’s success.

Another thing happened in England at that time was increasing number of her population. There are two ways to handle the problem of surplus population within a country: remove them from the city or remove them from the country altogether. And in Tudor-England, the both were tried. On the one hand, they pushed the poor to the rural areas. On the other hand, it is just at this time that England begins to think overseas colonialization — from Ireland to North America and the West Indies.

The expansion abroad permitted the local bourgeoisie to obtain control over international commerce and extract capital surpluses from this trade for their own benefit. As the rural population expanded, the small but increasing number of landless wage earners provided labor for farms and manufacturing activities. The switch from feudal obligations to money rents in the aftermath of the feudal crisis encouraged the rise of independent or yeoman farmers but squeezed out many other peasants off the land. These impoverished peasants often moved to the cities, providing cheap labor essential for the growth in urban manufacturing. Agricultural productivity increased with the growing predominance of the commercially-oriented independent farmer, the rise of pastoralism, and improved farm technology.

Another important core state was France. While England has begun to position their status as a core state since the second half of 16th century, France were still in his internal problem: she was faced with one major problem in seeking to reorient herself to new European world after Cateau-Cambrésis. It was neither empire nor a nation-state. It was geared half to land transport, half to sea transport. Its state machinery was at once too strong and too weak. His economic is behind England and almost similar to Spain. Unfortunately, I find that Wallerstein didn’t pay so much attention to France. He only present her as comparative of England.

Periphery versus External

While it is easy to define political boundaries, it is indeed difficult to define the boundary of world economy. Hence, Wallerstein make this definition to distinguish between two criteria: The periphery of world economy as the geographical sector of it wherein production is primarily of lower-ranking goods (that is goods whose labor is less rewarded) but which is integral part of the overall system of the division of labor, because the commodities involved are essential for daily use. The external arena of a world economy consists of those other world-systems with which a given world economy has some kind of trade relationship, based on the exchange of preciosities.

Wallerstein points out three differences between periphery and external areas:
(1) a difference in the nature of the trade,
(2) a difference in the strength and role of the state machinery;
(3) a difference in the strength and role of the indigenous bourgeoisie.

These external areas maintained their own economic systems and, for the most part, managed to remain outside the modern world economy. Russia fits this case well. Unlike Poland, Russia's wheat served primarily to supply its internal market. It traded with Asia as well as Europe; internal commerce remained more important than trade with outside regions. Also, the considerable power of the Russian state helped regulate the economy and limited foreign commercial influence.

But, my problem is, when he discussed Asia, especially South and Southeast Asia, he said that it was an external arena where “trade” is the way the relation between core state and external state. In this context what is the meaning of British and Dutch Colonialization of those areas?