Author Govert SchullerPosted on Categories Economics
Last summer I read with pleasure Dr. Stravianos’ historical narrative of the genesis of the Third World during the 400 year expansion of capitalism throughout the world.
The dean of ‘world systems analysis’ Immanuel Wallerstein [3] stated about the book:
“There is no comparable work that covers the whole Third World over a four-century period. It is readable and comprehensive . . . In short, it is excellent”.
Though it is almost 40 years old, I think the book is a classic in its field and very affordable.
Find below a very incisive review of the book and its main theses found on Good Reads [1]. The original article [2], from which the review is lifted, provides a critical overview of the field of International Political Economics (IPE) and defends a more heterodox and holistic view against the orthodox view allied with mainstream neoclassical economics.
The relevance of heterodox IPE in the vein of ‘world system analysis’ for our endeavor of monetary reform is that it is important to understand the history and genesis of the current global system in order to get a better grip on how it could and should be reformed if we want to take a truly global perspective.
[1]. www.goodreads.com/book/show/271171.Global_Rift
[2].www.academia.edu/34494374/Units_Markets_Relations_and_Flow
[3] https://en.wikipedia.org/wiki/World-systems_theory
Stavrianos’ Global Rift: The Third World Comes of Age (1980)
Global Rift presents a systematic and relational history of the First and Third Worlds, in which both are constituted by the “structure and dynamics of the whole” (23). Stavrianos stresses the unique dynamism of European capitalism as it incorporates all other regions of the world as part of its own logic, so that the wealth of Europe and poverty in most of the regions of the rest of the world are interconnected. While Stavrianos invariably explores internal political, economic, and cultural aspects of particular societies, his aim, like Wolf’s, is to highlight the neglected “indivisible whole” – the external, interactive, and systemic ways that both wealth and poverty are produced in a global political economy. Other theorists and other books, including Wolf’s, present similar accounts of the “great stream” of “social process,” but none have quite the range and depth of detail of Global Rift.
Stavrianos demarcates capitalism both temporally and spatially, according to criteria similar to Chaudhuri’s. Temporally, he locates four periods of European capitalist expansion: (1) 1400-1770, in which the European “center” or “core” is engaged in commercial capitalism and colonialism is largely confined to the Americas; (2) 1770-1870, in which the center, primarily Britain, is engaged in industrial capitalism and there is a “waning colonialism” in the periphery; (3) 1870-1914, which he describes as the era of “monopoly capitalism” and world-wide colonialism; and (4) 1914-1980 (when the book was published), in the core must actively defend monopoly capitalism in the face of “revolution and decolonization,” which when subdued produces “neocolonialism” (41). These periods correspond to spatial delineations produced by and within spreading capitalist relations: the space which initiates and sustains capitalism (the core); that which the core has incorporated into its own dynamics (the Third World); that which begins to encounter European Capitalism but is not yet integrated (the periphery); and spaces that remain external to global capitalism. In short, as capitalism develops and intensifies, more and more of the peripheral and external spaces become internalized as the Third World. It is this dynamic social process and the spatial striations and inequalities it produces that Stavrianos wishes to reveal. By identifying these broad systemic patterns, he allows readers to see how particular spaces or societies in a particular time fit into the contours of capitalism as a global phenomenon.
For example, in the initial period of the emergence of West European capitalism, he shows how the Third World originated in the incorporation of the somewhat distinctive Eastern European region into the trade, investment, and production circuits of Western Europe (Chapter 3), extended quickly into Latin America (chapter 4). Some spaces remain “peripheral” at this stage: Africa, despite the centrality of the slave trade, and the Middle East, meaning the Ottoman empire, remain not yet penetrated by European capitalism (chapters 5 and 6). Asia, primarily India and China here, largely spared capitalist penetration and remained an “external area” (chapter 7). Stavrianos performs three more tours of the world – each exploring the relation of core and periphery in successive periods of capitalist development.
The key and consistent point for Stavrianos, then, is that the First and Third Worlds are not simply products of separable and uneven internal developments. Rather, they are relationally co-constituted within an “indivisible whole,” with wealth on one side and poverty on the other. Indeed, “the phrase ‘Third World’ connotes those countries or regions that participated on unequal terms in what eventually became the global market economy” (31-2, emphasis added). For Stravrianos, the co-constituted structural inequalities central to capitalism profoundly distort human development as a whole, though the effects fall most fatally on the Third World, challenging claims of market-induced harmony. Though Stavrianos’ recognizes capitalism’s transformative role, including the expanding human productivity released by the restless pursuit of profit, he places greater ethical weight on the devastation wreaked on the economics, politics, and culture of the conquered societies (35-7). Capitalism utterly reshapes them: “This was a total and all-encompassing process, for the culture as well as the economies of those societies were profoundly distorted and remodeled in order to satisfy the demands of the global market” (37, emphasis added).
The burden of the text, and picking up the story of European expansion where Chaudhuri ends, is to show how the encounter between European capitalist expansion and the Third World imposes new relationships that incorporate the latter. Here Stavrianos relies, interestingly, on Joseph Schumpeter’s distinction between economic development and economic growth (1961, 63): Economic development “calls forth…qualitatively new phenomena” that “are not forced upon it from without but arise by its own initiative, from within,” whereas “mere economic growth” involves “processes of adaption… [of] the same kind as changes in the natural data.” Though Schumpeter’s major concern is not global dynamics but to challenge the static character of equilibrium analysis (McNulty 1968; Legrand and Hagemann 2017), Stavrianos pounces on this distinction between internally created qualitative economic changes (development) versus economic changes that follow from externally initiated and generated processes (economic growth) to organize his narrative.
The distinguishing feature of Third World status besides low incomes, Stavrianos insists, is “growth determined by foreign capital and foreign markets rather than by local needs” (4).
Externally determined growth fosters “vertical economic linkages” that tie raw material extraction and agricultural production in the Third World to demands in the “metropolitan centers.” By contrast, “horizontal economic linkages” more fully integrate local production and local needs and support local employment and incomes (39-40; emphasis added). Though the development of the “indivisible whole” of global capitalism may foster some “trickle down” for the First World working classes (267, 270, 439, 794), the dependence of Third World economies on growth via vertical economic ties means that incomes and wealth tend to “trickle up” (794):
The people of the Third World experienced no corresponding improvement in living standards. For them the impact of the West was a wrenching experience, in which everything was turned upside down and inside out. This was inevitable, for all Third World societies, by definition, were integrated into the world market economy, with unavoidable disruptions and distortion of their traditional institutions. (267)
Thus, Stavrianos arrives at an elegant relational definition of the Third World: “the Third World is not a set of countries or a set of statistical criteria but rather a set of relationships—unequal relationships between controlling metropolitan centers and dependent peripheral regions, whether colonies as in the past or neocolonial “independent” states as today” (40).
In all of this, Stavrianos asserts, the “interests of the colonies were automatically subordinated to those of the mother country” (55). After all, “the purpose of the colonies was to provide markets for manufactures, to supply raw materials that could not be produced at home, to support a merchant marine that would be valuable in wartime and to engender a large colonial population with manpower” (55-6). Colonial underdevelopment appears a natural and automatic corollary of the expansion of capitalism.
But can we be so certain that this subordination is natural and automatic? Why do the capitalism’s systemic inequalities map largely, if not always neatly, onto a European and North American Core and a Latin American, African and Asian Third World. Creating and sustaining vertical ties with the colony follows an economic logic, certainly, but that seems insufficient. Stavrianos’ explanation seems to rely on the additional factors of political competition/chauvinism and practices informed by doctrines of white supremacy. Western Europeans did not imagine their colonies as part of the home nation, territory, or culture. Nor did they consider the peoples of these areas as necessarily equally human. In either case, the peoples of Africa, Asia, and the Americas are thought of as something apart and, thereby unworthy of full ethical or legal consideration. Stavrianos’s narrative makes explicit the role of multiple logics – the logic of capitalism but also that of the Westphalian state-system and perhaps that of white supremacy – near the end of the book where he highlights the limits of worker internationalism. It is not true that “working men have no country;” “Far from a world dividing along class lines, it is state frontiers that are decisive and meaningful” (631). Indeed, the “evolving world system is dominated not by class interests but by nationalist considerations” (631). Thus, changing our world is not merely a matter of restructuring the global economy. It requires “a comparable restructuring of national units” (812).
This last comment hints at an important narrative shift: Stavrianos, more so than Wolf, begins to show that European capitalism’s expansive dynamism is met head-on by Third World resistance and rebellion. Though initial rebellions and wars of resistance against European invasions and colonization across the Third World were largely unsuccessful, appearing only as a “gestation phase” of “uncoordinated resistance” (432), these events were not isolated. They all reacted to the same cause – capitalism’s logic of incorporating each space into its own logic and dynamics (424). And yet, these events were separated from each other and the failure, apart from Japan (chapter 17), to resist “imperialist onslaught” resulted directly from lack of “any international mutual support,” while “the imperialist powers aided each other all over the globe.” The Twentieth Century brought a change, where, slowly but surely, these movements overcame their isolation as mutually supportive struggles for national independence and liberation. These struggles’ efforts to “break with” a “trauma” created by 500 years of history became the “center of global revolutionary initiative” (431-2).
Of course, capitalist counter-revolutionary forces were not idle. They responded with mobilizations of their own political, economic, cultural counterrevolutionary strategies, as Stavrianos labels them (pp. 433-483). He announces that the future of our world depends on the “nature, strength, and interaction of global revolutionary and counterrevolutionary forces” (432) and his less hopeful prognosis has been vindicated by events already unfolding as he writes the final sections of Global Rift. Skyrocketing oil prices, Third world debt, stagflation in the core, and draconian monetary policy combined with assassinations, support of dictators tied to the interests of capital, and intensified counter-insurgency to weaken and fracture the Third World movement and its demands for an international order serving and reflecting national needs, ideals, and goals. As reactionary forces gained the geopolitical-economic upper hand, theories diagnosing and protesting global inequality were gradually marginalized in respectable academic discussion in the US (Blaney and Inayatullah 2008), just as neoclassical economics reasserted its predominance, erasing nearly any other voice. It is at this moment that liberal institutionalist IPE assumed a dominant position in the academy of the US imperial core, obscuring attention to the “indivisible whole” with its privileging of unit-level explanations. Yet, the struggle continues because, according to Stavrianos and as theorized by others (Escobar 1995; Santos 2007), the “problem of how to attain autonomous economic development remains unresolved, both in theory and practice” (796).