U of U ECON 7004 - HISTORICAL POSSIBILITIES OF THE TWENTY-FIRST CENTURY

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CHPATER VIIBETWEEN THE REALM OF NECESSITY AND THE REALM OF FREEDOM:HISTORICAL POSSIBILITIES OF THE TWENTY-FIRST CENTURY179There comes a point when the contradictions become so acute that they lead tolarger and larger fluctuations. In the language of the new science, this meansthe onset of chaos … which in turn leads to bifurcations … After thebifurcation, after say 2050 or 2075, we can thus be sure of only a few things.We shall no longer be living in a capitalist world-economy. We shall be livinginstead in some new order or orders, some new historical system or systems.And therefore we shall probably know once again relative peace, stability, andlegitimacy. But will it be a better peace, stability, and legitimacy than we havehitherto known, or a worse one? That is both unknown and up to us(Wallerstein 2000:435-453).Chapter 1 argues that all social systems are historical. The existence and operation of a socialsystem depend upon a set of historical conditions. However, the underlying historical conditions inevitably tend to change (partly as a result of the normal operation of the prevailing social system). Sooner or later, the underlying historical conditions will have beenso much transformed that they are no longer compatible with the prevailing social system. The prevailing social system thus becomes no longer historically viable and has to be replaced by a different social system.Capitalism or the capitalist world-economy, as a social system, is not an exception. Capitalism is an exploitative and oppressive social system where the society’s surplus productis appropriated and controlled by a minority exploiter class. But capitalism distinguishes from all other exploitative systems in that under capitalism, a substantial portion of the surplus product is used for the expansion of material production or accumulation of capital. Capitalism is the unique historical system which is based on the endless pursuit of profit and capital accumulation.For capital accumulation to take place on a sustained basis and on increasingly larger scales, the profit must be sufficiently large and the profit rate must be sufficiently high to motivate the capitalists (which may be individuals, corporations, or states) to regularly 180engage in capital accumulation. The profit is the difference between the value of output and wage, taxation, and environmental costs. Thus, for capitalism to operate and expand, the wage cost, taxation cost, and environmental cost need to be sufficiently low.A necessary political condition for these costs to be sufficiently low is a world-systemthat consists of multiple, competing political structures. Thus, capitalism must be an inter-state system or the capitalist world-economy. The states in the capitalist world-economy have been organized in a three-layered structure: the core, periphery, and semi-periphery. The layer of semi-peripheral states is necessary as it divides up the exploited majority in the world into two separate geopolitical blocs, preventing them from organizing a unified rebellion against the exploitative core.Unregulated and uncontrolled inter-state competition will soon lead to the disintegration of the world-system. Thus, inter-state competition must be balanced against the periodic rise of a hegemonic power, which is powerful enough to regulate inter-state competition and take care of the long-term, common interest of the system. On the other hand, the hegemonic power must not be so powerful that its power represses inter-state competition. In that case, the capitalist world-economy will degenerate into a world-empire and will no longer be governed by the pursuit of the endless accumulation of capital.The capitalist world-economy emerged in the sixteenth century and has since then expanded to encompass the entire globe. The rise of the capitalist world-economy led to the decline and disintegration of the Chinese empire. China was one of the last large geographical areas that were incorporated into the modern world-system in the nineteenth century. Since then, the economic interactions between China and the rest of the capitalist world-economy have been relatively limited and China has in fact served as a “strategic reserve” of the existing world-system.With the triumph of the Chinese Revolution, China emerged as a fully sovereign, continent-sized state with the potential to enter the future bid for the hegemonic power status.Class struggle within China and in the world-system as a whole then paved way for the establishment of the capitalist relations of production in China. The crisis of accumulation in 181the 1960s and 1970s marked the beginning of the structural crisis of the existing world-system. The system’s remaining “strategic reserves” (China, India, and the earth’s remaining resources and ecological space) were called upon to revive the system-wide accumulation. By doing so, however, the system has exhausted its remaining space for self-regulation and restructuring.As the capitalist world-economy develops, a growing proportion of the world’s labor force has been transformed into proletarianized working classes. The development of capitalism has in turn prepared favorable social and material conditions for the working classes to organize for economic and political struggles. In the long run, the growing organizational capacity of the working classes has led to rising wage and taxation costs, undermining the capitalist profitability. In the past, the capitalist world-economy has been able to prevent or slow down the rise of wage and taxation costs through successive geographical expansions which incorporated new supplies of cheap labor force. However, now the world-wide proletarianization has reached the advanced stage and the potential proletarianization in China and India could fundamentally transform the global balance of power between the global capitalist classes and the working classes, driving up the global wage and taxation costs to levels incompatible with further pursuit of profit and accumulation.With the “rise of China” and the “rise of India,” the semi-periphery will become a geopolitical bloc that includes the world’s majority population as well as the bulk of the world economic output. The rise of the semi-periphery, by undermining the traditional three-layered structure, is likely to prove to be fundamentally


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U of U ECON 7004 - HISTORICAL POSSIBILITIES OF THE TWENTY-FIRST CENTURY

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