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Wallerstein on early modern capitalism and global inequality: a reevaluation

Wallerstein sur le capitalisme moderne et les inégalités mondiales : une réévaluation
Friedrich Lenger
p. 49-70


Un examen critique du système moderne du monde d’Immanuel Wallerstein est bien plus qu’un devoir des sociologues et des historiens envers l’un des sociologues les plus influents des cinquante dernières années. Un réexamen est plutôt opportun et urgent pour deux raisons. D’une part, le thème qu’il a abordé le plus intensément – le capitalisme moderne précoce – est plus d’actualité que jamais au début du xxie siècle, car avec la disparition du capitalisme industriel, les similitudes structurelles entre les formes modernes du capitalisme mercantile comme le « putting » et les tentatives actuelles du capitalisme numérique ou de plateforme pour monopoliser l’accès aux marchés deviennent de plus en plus évidentes. D’autre part, la préoccupation dominante de Wallerstein à l’égard des rapports de pouvoir asymétriques entre les centres, les semi-périphéries et les périphéries peut encore servir de puissant rappel pour envisager sérieusement la dimension mondiale du développement capitaliste aujourd’hui. Cet article, bien qu’écrit du point de vue d’un historien, tente de rendre justice aux ambitions théoriques de Wallerstein. Il montre que, malgré certains points critiques, l’approche générale de Wallerstein à l’égard du capitalisme moderne n’est nullement dépassée. Même si certaines des réponses qu’il a données peuvent sembler indéfendables aujourd’hui, il ne fait aucun doute qu’il a posé des questions cruciales qui ont encore besoin de réponses aujourd’hui.

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1Immanuel Wallerstein’s fame rests above all upon the four volumes of his The Modern World-System. When the first of them appeared in 1974 its reception was largely defined by two moments: a vivid interest in the origins of underdevelopment in the then so-called third world and a still visible fascination with Marxist theory. While the latter has somewhat faded since then the former—after thirty years of intense globalization—is in pressing need of a better understanding, since the ascent of China (and others) has by no means dissolved the basically asymmetrical structure of the world economy. For a reconceptualization, this article will argue, Wallerstein’s analysis still has something to offer—despite the numerous criticisms it has provoked upon its appearance and the explosion of work on global economic history over the last two decades. But it is not only the recent phase of an immensely accelerated globalization that lends a renewed relevance to his work. At the same time the theme of the first two (and certainly the two most influential) volumes of his magnum opus—early modern capitalism—is more topical than ever. After all, the demise of industrial capitalism in the late twentieth and the early twenty-first centuries reveals ever more clearly structural similarities between early modern forms of mercantile capitalism like the putting-out system and today’s attempts of platform or digital capitalism to monopolize market access. Thus the charge levelled against him in the 1970s that Wallerstein did not apportion the central importance deserve to industrial capitalism and wage labor may today seem an advantage for attempts to understand the most recent transformation of capitalism characterized once more by an increased weight of commercial and financial capitalism. Therefore a critical reevaluation of his work is far more than just an obligation sociologists and historians owe to one of the most influential social scientists of the last fifty years.

2This article is written from the perspective of a historian but will try to do justice to some of Wallerstein’s more theoretical ambitions as well. Its structure is extremely simple. A first section will be devoted to a careful reconstruction of his main arguments including a discussion of the relationship of his work to that of close collaborators like Fernand Braudel. A second section will both introduce major critiques of the 1970s and 1980s and discuss strengths and weaknesses in the light of the more recent explosion of work on global economic history. It will be shown that although some critical points were well taken Wallerstein’s general approach to early modern capitalism is by no means completely outdated and superseded. Even if some of the answers he gave may seem indefensible today there can be no doubt that he asked crucially important questions which still are in need of answers today. And in a concluding section I will explain why certain characteristics of the mercantile capitalism of the early modern period that features so prominently in Wallerstein’s work may help us understand some of the most recent transformations of capitalism.


3When publishing the first volume of The Modern World-System its author could already look back at a quite successful academic career. He had held a tenured position at Columbia University where earlier on he had written his sociological dissertation on The Road to Independence: Ghana and the Ivory Coast (cf. Ragin and Chirot, 1984: 280). As a sympathizer of the student movement of the 1960s at odds with most of his colleagues there he left for McGill University in Montreal after having written the first volume of his chief work at Stanford’s Center for Advanced Study in the Behavioral Sciences in 1970. Soon after its appearance he moved on to the State University of New York at Binghamton where the newly founded Fernand Braudel Center and its journal Review became the intellectual home for himself and his close collaborator and former Columbia colleague Terence Hopkins (ibid.: 283). In Binghamton the world-system theory was further developed and elaborated but, as the chronology shows, at that point Wallerstein had already sketched out its main outline. And to this he had brought his expertise as a sociologist focussing on Africa which made him familiar with both the literature on (post-)colonialism in general and the controversies over development in particular. With regard to the latter he clearly sided with those who like Andre Gunder Frank argued under the influence of Paul Baran and Paul Sweezy that underdevelopment was not the consequence of a lack of capitalist development but to the contrary the outcome of a specific historical development of the global capitalist system which chained the fate of satellites like Chile or Brazil to the interests of a metropolitan bourgeoisie (cf. Frank, 1967; Stephens, 2018). Like many dependency theorists dealing with Latin American developments Frank had, of course, to adress quite a number of interpretations put forth with specifically Brazilian or Chilean conditions in mind but his reference to a capitalist system operating on a global scale already anticipated Wallerstein’s world-system. And so did Frank’s assertion that its beginnings were to be found in the Spanish expeditions into the New World.

4Still, Wallerstein’s Modern World-System was a far more systematic attempt to reconstruct the historical development of a global division of labor since the late fifteenth century and one based on a thorough reading of the historical literature. Its author, however, self-consciously proclaimed that he “was not interested in writing its history” (Wallerstein, 1974: 7). Rather he intended to uncover the laws of its development and referred to an analogy with astronomy in order to confront the obvious problem that the uniqueness of a single world-system defied the usual ways of establishing causality by comparing different instances. This macrorealism has provoked sceptical responses both by historians seriously engaging sociological theory like William Sewell and by sociologists well versed in history like Wolfgang Knöbl (Sewell Jr., 2005: 85; Knöbl, 2007 : 118-122). Being mainly interested in Wallerstein’s historical account we may leave these central methodological issues aside here. And this account certainly owed much to Fernand Braudel to whom the second volume of The Modern World-System is dedicated. It would be utterly mistaken, however, to assume a one-sided influence here. When Braudel’s three volume work Civilisation matérielle, économie et capitalisme came out in 1979 the first volume of The Modern World-System had appeared long ago (Braudel, 1979). Wallerstein himself had, nevertheless, been quite familiar with Braudel’s ideas when sketching his multi-volume work and had discussed a chapter for the second volume in Paris in 1976 (cf. Aymard, 1982). Braudel on the other side had published a first version of the first volume of his trilogy as early as 1967 and more importantly this trilogy dealt with issues that were omnipresent in La Méditerranée, Braudel’s first chief work written during World War II and completely reworked for the second edition published in 1966 (Braudel, 1966; 1967).

  • 1 Wallerstein later saw little reason to revise his temporal focus: cf. Wallerstein (2009b). In my p (...)
  • 2 Who registers differences with Wallersein and notes that Braudel’s use of the German Weltwirtschaf (...)

5In his historical account Wallerstein postulated the formation of a European world-system during a very long sixteenth century (1450–1650) and argued that this world-system was also a world-economy “because the basic linkage between the parts of the system is economic” (Wallerstein, 1974: 15).1 He had borrowed the term world-economy from Fernand Braudel and like him he admitted that there were several world-economies (Braudel, 1985: 84 and 872). It was, however, the European world-economy alone which “embarked on the path of capitalist development which enabled it to outstrip these others” (Wallerstein, 1974: 17). In reconstructing this path he paid close attention to long-distance trade because for Wallerstein the dynamic of capitalism is governed by “the endless accumulation of capital” (Wallerstein, 1983: 18). And he explicitly took exception to more orthodox readings of Marx like that of Maurice Dobb putting wage labor at the center of any definition of capitalism. This enables him to integrate the manyfold ways of organizing labor (including forced labor) that historically have proven to be quite compatible with capitalism and that to this day occur as sources of extra profits when e.g. the recourse to household income in not yet commodified forms puts pressure on wages. As he asserts for the sixteenth century: “The periphery (Eastern Europe and Hispanic America) used forced labor (slavery and coerced cash-crop labor). The core […] increasingly used free labor. The semiperiphery (former core areas turning in the direction of peripheral structures) developed an in-between form, share-cropping, as a widespread alternative” (Wallerstein, 1974: 103).

6The focus on long-distance trade alone is not yet a sufficient justification for tying the emergence of a European world-economy to the long sixteenth century, however. After all, Braudel lets his equally trade-centered narrative begin in late-medieval Italy. Wallerstein therefore introduces the partial transformation of long-distance trade “into bulk trade which would, in turn, feed the process of expanded production” as a further indication of a basic change defined largely by three elements: “an expansion of the geographical size of the world in question, the development of variegated methods of labor control for different products and different zones of the world-economy, and the creation of relatively strong state machineries in what would become the core-states of this capitalist world-economy” (Wallerstein, 1974: 21–38). While the context of the conquest of the New World is obvious enough the distinction between luxury and bulk trade remains problematic as Wallerstein himself admits in volume 3 (1989): “It is difficult to decide that any particular products—spices or tea or furs or indeed slaves—are or are not, in a given context, luxury exports, not to speak of the special case of bullion. I say luxury export, because in an economic sense there is little meaning to the idea of luxury import. If an item is bought on a market, it is because someone feels subjectively a ‘need’ for that item” (Wallerstein, 2011a: 131). But even conceding that on an empirical level distinctions like these will seldom be clear-cut, one may be irritated by the evaluation of the export of precious metals “as being, from the point of view of the European world-economy, the outflow of a dispensable surplus (hence a ‘luxury’ export) during the European world-economy’s long contraction of the seventeenth century” (ibid.: 137). Be that as it may the concept of luxury trade carries even more weight than that because it is intimately linked to the distinction between regions not yet incorporated into the world-system and others: “While parts of the external arena engaged in trade and other forms of interaction with the capitalist world-economy, the trade […] was largely in ‘luxury’ goods and was therefore not essential to either party. As a result, the trade was relatively equal in the sense that each side was exchanging items that it considered of low value for items it considered of high value. We might call this a win-win situation” (ibid.: XV—2011 prologue). Needless to add that such win-win situations were highly unlikely in the exchange between the core and the periphery of the capitalist world-economy itself.

7The distinction thus translates into one between the periphery of the European world-economy that during the long sixteenth century supplied mainly precious metals from Latin America and grain from Eastern Europe and those world regions not yet incorporated. The economic structures of the latter remained largely unaffected as the direct effects of the Portuguese spice trade on the Indian Ocean economy or that of the China Sea were negligible. Wallerstein’s history of the modern world-system thus is basically that of a long-drawn process of incorporating the world into a global division of labor dominated by the European core, a process finally completed around 1900. But what got the process started? Wallerstein’s answer is—as so often—a functionalist one. There was simply no other way out of the crisis of European feudalism but the expansion of “the economic pie to be shared, a solution which required, given the technology of the time, an expansion of the land area and population base to exploit” (Wallerstein, 1974: 24). This idea of an expansion induced by crisis returns in volume 3 which analyses the incorporation of the Indian subcontinent, the Ottoman Empire, the Russian Empire and West Africa from the mid-eighteenth century onwards. It bears witness of Wallerstein’s heavy reliance on Kondratieff cycles of mostly fifty to sixty years which itself is intimately linked to his understanding of profit. And as he stresses himself this is quite distinct from orthodox Marxism: “Marx had one major fault. He was a little too Smithian (competition is the norm of capitalism, monopoly a distortion) and a little too Schumpeterian (the entrepreneur is the bearer of progress)” (Wallerstein, 1974: 51). For Wallerstein as for Braudel, with whom e shares both the distinction between equal and unequal exchange and the belief in the efficacy of cycles, profit is linked to monopoly instead. A monopolistic position is gained during the expansive A-phase of a Kondratieff cycle and lost in the stagnant B-phase thus bringing with it the functional need for the creation of a new monopoly position. The latter, however, results not so much from entrepreneurial i.nnovation but is mainly the product of power politics by nation states—a perspective with some plausibility especially for historical epochs in which the incorporation of new regions into the capitalist world-economy was the result of military force rather than comparative advantage in trade.

8Processes of state formation and conflicts within the international state system thus have a far more central place in Wallerstein’s theoretical frame than in Fernand Braudel’s historical account which informs it. It is, however, not an autonomous place. Compared to Charles Tilly’s influential analysis—cristallized in the sentence: “War made the state, and the state made war”—Wallerstein sees states acting far more clearly on behalf of capitalist interests, albeit under geopolitically circumscribed conditions (Tilly, 1975: 42; cf. id., 1990). “The critical difference between France, on the one hand, and England and the United Provinces, on the other, was that in the latter cases, to be sea-oriented and to wish to construct a strong polity and national economy were compatible options, whereas for France, because of its geography, these options were somewhat contradictory” (Wallerstein, 1974: 266). While it is not necessary to recapitulate here how the European core states struggled for a hegemonic position amongst these core states it is important to note how Wallerstein defines hegemony as a situation “wherein the products of a given core state are produced so efficiently that they are by and large competitive even in other core states, and therefore the given core state will be the primary beneficiary of a maximally free world market” (Wallerstein, 1980: 38).

  • 3 A book that does not analyse the global division of labor as it developed in the partly industrial (...)

9And while such a hegemonic position described in detail for the Netherlands and later England presupposes major advances in the productivity of both the agrarian and the industrial sector it ultimately rests on the exploitation of the periphery. “This meant essentially at that time,” Wallerstein comments the already mentioned incorporations of the eighteenth century, “the exchange of peripheral raw materials against core manufactures. In order that the four zones concentrate on raw materials exports, there had to be changes in their productive processes in two directions: in the creation or significant expansion of cash crop agriculture […] destined for sale on the market of the capitalist world-economy; and in the reduction or elimination of local manufacturing activities” (Wallerstein, 2011a: 138). The destruction of the Indian cotton industry—once the largest in the world—is certainly the most striking example here (cf. Riello and Roy, 2009). But while it is certainly opportune to highlight critically the global preconditions of English industrialization it is unconvincing to belittle this process “as the reurbanization and reconcentration of the leading industries alongside an effort to increase scale” (Wallerstein, 2011a: 78). Again there is a close parallel to Braudel but this time it seems to be a shared weakness, namely the belief: “Mais, mutatis mutandis, je doute que la nature du capitalisme ait changé de fond en comble” (Braudel, 1985: 115). And while it is certainly forgivable for an early modernist to stick to the pre-1800 period it is a more serious limitation for the theoretician and the historian of the modern world-system not to have engaged the world of industrial capitalism more seriously (Wallerstein, 2011b3).


10With these remarks we are already in the middle of a critical discussion of Wallerstein’s magnum opus which, of course, has to be highly selective. Such a discussion may be organized around three points of varying generality and importance and will leave out—next to many other things—the numerous attempts to develop his approach into a general social theory (cf. e.g. Chase-Dunn and Hall, 1997).


11It is hard to overlook how quickly Wallerstein’s style of reasoning fell out of favor. With the appearance of the second volume of The Modern World-System in 1980 at the latest three partly interrelated developments stood in the way of a positive reception of this work. First of all the macrorealism already mentioned met ever more resolute opposition. Secondly the functionalist explanations so typically of Wallerstein’s system building were no longer easily accepted as explanations. Why should something have happened because it could be interpreted as the solution to a crisis? And then the primacy attributed to economic factors seemed hardly self evident any more. Culture was prime in the humanities as well as the social sciences and historical studies appealed above all if they reconstructed the microworld of historical actors in loving detail. This background made an outright rejection of a presumably outdated grand récit more likely than a careful sorting out of strength and weaknesses. And weaknesses there were. The distinction between core, semiperiphery and periphery appeared far too static and too homogenizing to many observers: “there are peripheries in the core and cores in the periphery”, Barry Buzan and George Lawson recently argued (Buzan and Lawson, 2015: 9). And similar demands for a more differentiated and nuanced picture were implicit in many a critique of historical detail: Was it really justified to treat South, East and Southeast Asia as external arenas of the capitalist world economy for the sixteenth and seventeenth centuries although the silver flowing there functioned like a global currency (cf. Zwart and Zanden, 2018: passim)? There is no point in producing an extended list of such detailed questions of historical judgement.

  • 4 Cf. as an early classic Mintz (1985) and as a survey Pomeranz and Topik (2013).

12Other criticisms seem to carry more systematic weight. Thus Eric Wolf noted early on that Wallerstein’s volumes paid little attention to the changes at the periphery initiated by incorporation (cf. Wolf, 2010). What were e.g. the internal consequences for African societies when integrated into the transatlantic slave trade he asked? And such a point easily links with the more general concern over the agency of people at the periphery or in regions characterized as semiperipheries. There is a clear consensus by now that they were by no means puppets dancing to the music produced in the core states. And it may well be that at the beginning of the third decade of the twenty-first century historians are more likely to pay insufficient attention to structural dependencies than to underestimate the agency of local merchants or coerced laborers in external areas or peripheries. But while finding the exact balance between agency and structural limitation will remain a challenge for historians and social scientists alike it seems fair to say that in Wallerstein’s work it is rarely asked how assumed systemic interests translate precisely into the intentions of concrete historical actors and how these are negotiated with those of others. And this impression seems confirmed by the virtual absence of unintended consequences of action in his account. This gives his narrative occasionally the character of a conspiracy. A possible alternative could be found e.g. in Jeffrey G. Williamson’s analysis of Trade and Poverty which tells the nineteenth century story of a widening distance between an industrial West and a poor periphery as one of actors in the periphery skillfully exploiting the chances provided by advantageous terms of trade for primary products in the world market, ultimately ending in poverty, nevertheless, due to deindustrialization, increasing internal social inequality and the vulnerability resulting from the price volatility characteristic for primary products (cf. Williamson, 2015). The last points may explain why in recent years a sideline opened up by Wallerstein and his longtime collaborator Terence Hopkins in 1977 thrived better than world-system analysis itself (cf. Bair, 2009: 7). While also attentive to global connections and to power differentials between core and periphery commodity chain research has largely managed to avoid the pitfalls of functionalist short cuts and systemic abstraction. And this may be partly due to the fact that it remains much closer to concrete historical actors.4 Wallerstein himself, however, saw its rather limited virtue in “measuring indirectly and imperfectly a total phenomenon that we cannot see directly no matter what we do” (Wallerstein, 2009a: 89).


  • 5 As an interesting exception, cf. Anievas and Nisancioglu (2015).
  • 6 Cf. his contribution to Wallerstein et al. (2013).
  • 7 Even Braudel’s opposition between a fair market economy and capitalism as the counter zone of tran (...)

13While the issues raised in the last section continue to be pertinent in discussions of capitalist development and early modern economic history the critique most often cited in discussions of The Modern World-System is of mainly historical interest today.5 When Robert Brenner published his lengthy Critique of Neo-Smithian Marxism in New Left Review in 1977 the journal’s editors deemed it “certain to relaunch controversy on a new scale over the origins of capitalism” (Brenner, 1977). At the time their expectations did not really seem to be overdrawn. After all Brenner did situate his attack against Wallerstein clearly in the context of the famous Dobb-Sweezy debate and he had just sparked off what came to be known as the Brenner debate (cf. Sweezy et al., 1976; Aston and Philpin, 1985). And the charge of neo-Smithianism directed against The Modern World-System was understandable enough from the standpoint of orthodox Marxism. In Wallerstein’s account the global division of labor originally triggered by the crisis of feudalism was indeed propelled by (armed) trade and the expansion of markets rather than by changes in the productive forces or class struggle. Nor was Brenner wrong in pointing out that “the logical antidote to capitalist underdevelopment is not socialism, but autarky,” a consequence Fernand Braudel was soon to spell out explicitly in Civilisation matérielle (Brenner, 1977: 91). Since the late 1970s the excitement over a correct reading of Marx has subsided, however, and hopes are invested in a socialist future less easily although Wallerstein himself continued to hold fast to them.6 In recent years, heterodox voices within Marxism like Jairus Banaji have made the more interesting contributions accepting e.g. Wallerstein’s loosening of the link between capitalism and wage labor (cf. Banaji, 2011). And it is thus unsurprising that the latter is still put into the Marxist camp by some commentators.7 Philippe Beaujard, Laurent Berger and Philippe Norel e.g. distinguish three groups of authors offering theoretical guidance for understanding the emergence and global scale of capitalism. Besides neo-institutionalists they list Marx and world-system theorists together while preferring a third group “le plus original quoique le plus éclectique, (qui) prend appui sur les idées de Smith” (Beaujard, Berger, and Norel, 2009: 13; cf. also Norel, 2009). Thus at least in their reading Wallerstein is put into the Marxist camp while the neo-Smithianism he had been accused of by Brenner is now considered to be the most stimulating of all approaches on offer. This is, of course, no more than an irony further enhanced by the observation that Wallerstein had credited Braudel with “un cadre théorique en totale contradiction avec les deux thèses majeures […] le libéralisme et le marxisme” (Wallerstein, 1999: 150).

14Far more important than such contradictory classifications are the uses to which Smithian ideas have been put after the first volumes of The Modern World-System had been published. The first author coming to mind here is Giovanni Arrighi perhaps the outstanding representative of world-system theory who after fifteen years of teaching at the State University of New York at Binghamton had published an original and rigorous attempt to come to terms with the nineteenth and twentieth centuries as dominated by industrial capitalism (cf. Arrighi, 2010). While important for introducing the idea of a cyclical lack of lucrative investment opportunities preceding the often violent change in the hegemonic position the book owed little to Adam Smith. That was different in Arrighi's last book which portrayed “Smithian growth, Industrious Revolution, and non-capitalist market based development” as the superior Chinese alternative to Western industrialism (Arrighi, 2007: 41). While he credited Marx and Schumpeter with equally fruitful insights as Smith they appear as the representatives of a growth path relying on capital- rather than labor-intensive production and proving ultimately to be ecologically devastating. While his optimism invested in the People’s Republic of China often seems naive he helped pave the way for the fundamental insight: “L’exploitation de l’environnement fait partie des relations centre/périphérie” (Beaujard, Berger, and Norel, 2009: 51).

  • 8 For different and contradictory recent appraisals, cf. the contributions to part 1 of Roy and Riel (...)

15In contrast to Arrighi, Kenneth Pomeranz and Roy Bin Wong are no defenders of world-system theory. These highly respected experts on Chinese social and economic history are important in our context, however, because they have forcefully argued that way into the eighteenth century China and Europe were part of “a world of surprising resemblances” to use Pomeranz’ memorable phrase (Pomeranz, 2000: 29). The implication of this thesis—which is hotly debated to this day—is twofold.8 On the one hand, divergence between Europe and China was negligible before the Industrial Revolution and thus owed little to the early modern emergence of a capitalist world-economy. The Industrial Revolution in parts of Europe, on the other hand, contrasted with the continued Chinese pursuance of a Smithian growth path from which European colonialism and mercantilism had deviated exploiting armed trade with Asia and esp. the plantation economy based on slave labor in the New World. The imports of precious metals from Latin America belong into this context as well because without them there would have been no stimulus for an increased economic integration of Eurasia (cf. Pomeranz, 2000; Bin Wong, 2002).


16The obsession with China—understandable enough in the light of recent developments—builds a bridge to a third group of critiques directed at The Modern World-System which accuse it of Eurocentrism. The most radical version of it has been put forward by Wallerstein’s erstwhile collaborator Andre Gunder Frank to whose memory Giovanni Arrighi dedicated his last book. In Frank’s ReOrient (1998) he linked the assertion of the return of the East with the demand for a complete reorientation of social theory (Frank, 1998). He diagnosed millenia of Chinese superiority and dominance, a consoling continuity that had only be interrupted from the mid-eighteenth to the mid-twentieth centuries. Accordingly he treated those two centuries as an aberration rather than something to be carefully explained. The metaphor offered makes that quite clear: Europe climbs on the back of China and is thus able to stand on its shoulders. It comes as no surprise that critical readers have seen “little point replacing unsatisfactory Eurocentric approaches with equally unsatisfying Sino-centric […] explanations” (Buzan and Lawson, 2015: 7). This does not yet settle the charge of Eurocentrism directed against Wallerstein, however. After all, his work can indeed be read as the confirmation of Adam Smith’s doubtlessly Eurocentric statement: “The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind” (Smith, 1999: book IV, chapter 7, vol. 2, 209). And against this background it was highly welcome that Janet Abu-Lughod as early as 1989 postulated the existence of a world system around 1300 (cf. Abu-Lughod, 1989). As she demonstrated well it was clearly centered around the Indian Ocean and linked to Europe via the Arabian world. China as the producer of raw silk, paper, and porcelan, and India as the exporter of spices, pearls, gems, and cotton fabrics were not only geographically at the center but also in the lead both technologically and economically as underlined e.g. by the famous expeditions of the Ming marine to the East Coast of India, in the Red Sea and the Persian Gulf as well as to the African East Coast.

  • 9 Zwart and Zanden (2018) go precisely in that direction and refer to Wallerstein both critically an (...)

17Europe, on the other hand, appears at this point as little more than an appendix of the Indian Ocean economy. It could be disputed, however, whether therefore it belonged to the periphery in a Wallersteinian sense. After all, it would be difficult to show that the European economy was restructured according to the needs of an East and South Asian core although the connections provided by long-distance trade certainly deserve our attention. This attentiveness should, I would argue, be combined with Pomeranz’ insistence on reciprocal comparisons. By this he means that we have to correct and complement the Weberian perspective that always asks why the rest of the world did not take the occidental path and also reflect upon the question why e.g. England did not follow the Chinese route of development. This is, of course, beyond the conceptual frame laid out by Immanuel Wallerstein more than forty years ago. And while this will require a new combination of comparative analysis with one of interconnections it should still be informed by his insistence that these connections are structured by mostly asymmetrical power relations both political and economic.9 That the results of close to half a century of historical research demand a far more differentiated and nuanced picture of early modern capitalism than Wallerstein was able to provide around 1970 is to be expected. And some of the theoretical and methodological weaknesses of his general approach simply have to be admitted. Quite a few of his explanations are just too functionalist and too ignorant of historical actors and their motives to be accepted today. And the systemic quality of many of his observations may well be questioned. But it remains his lasting merit to have put global inequality on the top of the agenda and to have anchored its causes firmly in capitalist development. While his historical account somehow peters out when the narrative reaches the nineteenth century the way he framed the lead questions should still be helpful to those who are willing to take up the challenge to work out a comparable account of the last two hundred years. The Modern World-System will not equip them with a toolbox but it will certainly provide inspiration!


18Last but not least, Wallerstein’s work directs attention to recent transformation of the capitalist world economy, transformations he could not foresee in the 1970s. Thus, while not dealing adequately with industrial capitalism is certainly a weakness of Wallerstein’s world system theory his focus on the mercantile world of the early modern period is quite pertinent for an understanding of recent transformations of capitalism. And in this respect the relevance of the economic relationships analysed in the first two volumes of The Modern World-System is not limited to the insistence on the continued weight of trade and finance—crucially important though it is. P. J. Cain and A. G. Hopkins have introduced the notion of gentlemanly capitalism in order “to direct attention to the non-industrial forms of capitalism that […] has been greatly underestimated by historians of modern Britain” (Cain and Hopkins, 2016: 5). While the gentlemanly character of capitalism is located in the elitist sociocultural formation of both landed and mercantile strata of wealth its center is clearly the City of London and Cain and Hopkins demonstrate quite successfully that from the late seventeenth century onwards it is the City that brings together and negotiates the interests of agrarian, merchant and financial capitalism informing the course of British imperialism far more than industrial ones. Given the dominance of both the British Empire and the City of London as a financial center for much of the last 350 years, it is obviously problematic to generalize from their findings. But three utterly diverse observations may suffice as first evidence for the enormous importance trade and finance have in the twenty-first century: When Saskia Sassen analysed global cities she found “the increased importance of such cities as New York, London, and Tokyo as centers of finance and as centers for global servicing and management” (Sassen, 2001: 330). A similar connection between the globalizing process of recent decades and a strengthening of the FIRE sector (finance, insurance, real estate) is to be expected for other cities as Paris or Frankfurt as well. But we do not have to stick to the glittering metropolitan centers of twenty-first century capitalism. Take Bentonville, Arkansas, home of Wal-Mart, in 2003 “the largest profit-making enterprise in the world” and at the same time the largest employer in Mexico, Canada and the United States. Importing “more goods from China than either the United Kingdom or Russia,” the company is clearly a major global player and in addition one that is dictating the prices of its suppliers thus forcing down wages in Asia and elsewhere (Lichtenstein, 2006: 3). If, moreover, its sales of over 300 billion dollars a year are supposed to exceed the revenue of Switzerland this is not due to any Swiss reluctance to engage in and profit from global trade. Quite the contrary: Between a fifth and a quarter of the worldwide trade in raw materials is wound up there, without, of course, any goods ever passing through the country. Again, the dimensions are truely impressive: even the smallest of five larger Swiss traders in crude oil needs a creditline of over fifty billion dollars (Haller, 2019 : 7 and 24).

  • 10 Cf. as somewhat arbitrarily chosen representatives, Zuboff (2019); Elder-Vass (2016), and Srnicek (...)

19But as argued before it is not so much the importance of trade and finance before, during and beyond industrial capitalism which is of interest here although it seems obvious that the intensified globalization of recent decades has benefited trade and finance enormously. But far more decisive than the relative weight of trade, industry, and finance are certain structural affinities between the mercantile capitalism of the early modern period and the most recent transformations of the capitalist system. The latter are discussed under a variety of headings: surveillance—digital—and platform capitalism probably being the most common ones.10 While it would be ludicrous to deny the centrality of digitization for recent capitalist developments and while the aspect of surveillance must be a constant political concern the term platform capitalism seems most apposite in our context. Following Nick Srnicek one can define platforms as “digital infrastructures that enable two or more groups to interact,” which is not only an abstract way of defining a market of the twenty-first century but also a precise description of what these platforms are, i.e. markets or more precisely counter markets in the Braudelian sense (Srnicek, 2017: 43). Braudel introduced the term counter market because to him early modern long-distance trade broke with the traditional pattern of true markets where consumers were able to inspect and compare what different traders put on offer with prices attached that might be negotiated. Confronted with e.g. importers of spices from South Asia consumers fell prey to the informational superiority of merchants who alone commanded the knowledge of prices in foreign countries and the demand situation in Europe. In extreme cases a company like the Dutch East India Company might be both the sole buyer of nutmeg in Southeast Asia and the sole provider of it in Europe, but such a situation of monopolizing supply and controlling demand was not a necessary prerequisite of counter markets for Braudel. It is rather obvious that the owner of a platform enjoys a comparable degree of informational superiority although in his or her case the unrivalled knowledge concerns the demand side rather than supply.

  • 11 Quotes taken from Tooze (2019: 461).

20There is no need to analyse parallels and differences between early modern practices and most recent developments in more detail. The key commonality is the aim of companies to be or to become markets. While in early modern times monopolies typically were established through privileges granted by the state, today they are the outcome of market processes usually tolerated by states despite of antitrust legislation. Entrepreneurs are no longer shy about advocating them: “Competition is for losers,” Paypal founder Peter Thiel confessed openly: “Creating value isn’t enough—you also need to capture some of the value you create.”11 And capture and extraction of value there is. That it takes different forms depending on the type of platform you consider is a foregone conclusion. But they all constitute rents derived from the ownership of markets (cf. Staab, 2019: 30, 34, 170, and 220). Since our interest here is in elective affinities between early modern and platform capitalism there is no need to deal with them systematically. It may be instructive to point to three more possible commonalities, instead. First of all in both epochs, merchant and financial capitalism presupposes the easy availability of a considerable stock of capital. This characteristic is even more pronounced today since it takes a colossal amount of venture capital to establish something like a monopoly position in markets. The many years it took before a giant like Amazon reached the break even point may be taken as a particularly striking example for that. Secondly, some platform companies like Uber or Airbnb resemble ealy modern merchant houses in that they make use of the means of production of their workers—often: formally partners—for the services they provide. Thus like e.g. the exporters of Silesian linen cloth produced for the New World plantations within the so-called putting-out system they control markets without having to invest in costly factories, a fleet of cars or apartment buildings. A rather modest number of employees and limited investment in fixed capital seem typical for other platform companies as well. And thirdly, I will at least quote Philipp Staab’s proposal to summarize the recent developments as “privatized mercantilism”—a term that, of course, strongly underlines the parallels drawn here between early modern and most recent structural formations. When it is referred to here a bit hesitatingly this is only because mercantilism is a term with many meanings (cf. Magnusson, 2014). The way Staab characterizes its motto captures the core of my conclusion well, however: “Rule trade in order to enable control over production and consumption” (Staab, 2019: 260 and 263). And while—as far as I can see—Wallerstein did not analyse the structural affinities alluded to here the quote from Staab’s book certainly has a Wallersteinian ring!

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1 Wallerstein later saw little reason to revise his temporal focus: cf. Wallerstein (2009b). In my presentation of Wallerstein’s account I make use of an earlier article of mine (Lenger, 2018: 15-21).

2 Who registers differences with Wallersein and notes that Braudel’s use of the German Weltwirtschaft and the French économie-monde as well as économie mondiale introduces nuances not well captured by the English translation.

3 A book that does not analyse the global division of labor as it developed in the partly industrial nineteenth century but rather deals with the liberal state as the dominant political order of the core states of the modern world-system in this period.

4 Cf. as an early classic Mintz (1985) and as a survey Pomeranz and Topik (2013).

5 As an interesting exception, cf. Anievas and Nisancioglu (2015).

6 Cf. his contribution to Wallerstein et al. (2013).

7 Even Braudel’s opposition between a fair market economy and capitalism as the counter zone of transparent markets has recently been taken up again; cf. Bavel (2016: esp. chapter 6), as well as the earlier and quite convincing critique by Alain Caillé (1988: 93–132).

8 For different and contradictory recent appraisals, cf. the contributions to part 1 of Roy and Riello (2019); Pomeranz (2018), and Broadberry (2016).

9 Zwart and Zanden (2018) go precisely in that direction and refer to Wallerstein both critically and respectfully time and again.

10 Cf. as somewhat arbitrarily chosen representatives, Zuboff (2019); Elder-Vass (2016), and Srnicek (2017).

11 Quotes taken from Tooze (2019: 461).

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Friedrich Lenger

Friedrich Lenger est titulaire de la chaire d’histoire médiévale et moderne à l’université de Giessen. Après des études d’histoire, de sociologie, de sciences politiques et d’anthropologie culturelle à l’université du Michigan à Ann Arbor (MA 1979), à l’université de Bielefeld et à l’université de Düsseldorf (Dr. phil. 1985), il a enseigné à l’université de Tübingen et à l’université d’Erlangen avant de déménager à Giessen. Il a été professeur invité au St Antony’s College (Oxford) et à la Georgetown University (Washington, DC). Parmi ses livres : Werner Sombart (1863-1941). Eine Biographie (Verlag C.H. Beck, 3e éd., 2012), Metropolen der Moderne. Eine europäische Stadtgeschichte seit 1850 (Verlag C.H. Beck, 2e éd., 2014) et, plus récemment, Globalen Kapitalismus denken (Mohr Siebeck, 2018). Il achève actuellement un livre sur les dynamiques capitalistes et les inégalités mondiales depuis le xve siècle, qui paraîtra en 2022.

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