Boundaries in World System theory

Nuno Pessoa Barradas

Instituto Tecnológico e Nuclear, E.N. 10, 2686-953 Lisboa, Portugal; nunoni@itn1.itn.pt

"Getting Somewhere with Boundaries" workshop UniS, LIS, Guildford 15-16 May 2000

World System theory views the whole world, or at least fairly large portions of it, as a single entity. I review some of its aspects, in particular the post-1500 capitalist WS. I emphasize some of the ways in which the WS creates/imposes boundaries on the world.

The five thousand year world system

Systemic cycles of accumulation of capital

Empire without Emperor

1. Introduction

There are as many world system theories as there are world system theorists. Fernand Braudel first proposed the notion of a world-system to understand the Mediterranean region in the early modern times (Braudel 1949). This concept was then taken up by Immanuel Wallerstein to encompass a much larger system, both spatially and temporally, that is, the five hundred years old capitalist world-system (Wallerstein 1974). He took it to be fundamentally different from previously existing world-systems, world-empires (politico-militarily unified) or world-economies (not unified). The main and determining difference was the mode of production, with commodification of labour and ceaseless accumulation of capital in the capitalist world-system. More recently, Andre Gunder Frank and Barry K. Gills proposed that a single world system has continually existed for about five thousand years (Frank 1993a), of which Wallerstein’s capitalist world-system is just one particular instance.

One can divide world(-)system(s) theories into ‘continuationist’, that consider a single world-system, and ‘transformationist’, that accept different ones and hence compare them and study the transitions between them. Another divide is that between the classic ‘post-1500’ theories that do not accept extension of concepts to earlier societies, and ‘pre-1500ers’ that extend analysis much farther back (Sanderson 1995b: 102-103 names some of the theorists involved).

I accept a version of the theory that is decidedly pre-1500, and involves both continuationist and transformationist aspects inasmuch as a single world system with very general constant properties is considered, but allowing for fundamental transformations within it.

The five thousand year world system

1. 1. Circumscription and the iterative model

   Chase-Dunn and Hall developed an iterative model of formation and evolution of social structures such as polities and world-systems (Chase-Dunn 1997: 45-46, 101-108; see also Bartley 1997). According to the model, population growth in a given region (e.g. in the fertile valleys of the Nile, Eufrates and Tiger) leads to increasing pressure on local resources. Emigration will follow, unless (or until) the region is circumscribed, either ecologically (e.g. in Egypt by the desert), or socially by the presence of other peoples established in the adjacent regions (e.g. in Mesopotamia with a multicentric city-state system). This will lead to competition for scarce resources, and endemic conflict and warfare.

   The impasse is solved either by a large enough death rate and consequent diminished pressure on resources, or by the formation of hierarchical structures, that is, states, to reduce the level of conflict by enforcing peace and regulating the use of resources. The formation of hierarchies will contribute to an intensification of the production processes through technological development or greater internal inequalities, and further pressure on local resources, that must be solved by expansion. "There is thus an increase in both the scale of world-systems and the scale of environmental degradation" (Bartley 1997: 374), and there is a long-term trend to increase the size of polities and decrease their number (Chase-Dunn 1995: 117-120). When societies become more complex, new paths of change become possible, and the circumscription and conflict steps can be bypassed, with pressure on resources leading directly to institutional and technological innovation.

    

   1. Hegemony/rivalry alternation

   The polities in the margins around the core states are normally in environmentally less desirable locations. Such semi-peripheries will thus reach their ecological limits faster, and will have a stronger incentive to develop new technologies and to expand militarily against the core states. Further, circumscription of the core states can be so strong (when they create constraints that are beyond their capacity to transcend), that the "old core regions then (become) ripe for the taking by less constrained semi-peripheral actors" (Chase-Dunn 1997: 234). Ekholm and Friedman (Ekholm 1993: 63) argue that the fundamental weakness of the central state is that it must control a production/resource area much larger than itself (one could add: when it is circumscribed), and is hence unstable and prone to collapse.

   Within this model, there is naturally a cyclical alternation of hegemonic with rivalry periods. When a state innovates and intensifies production, it becomes dominant (i.e. core) in the region and experiences an economic upturn (called an ‘A’ phase, marked by high levels of infrastructural investment, exchange, and expansion of the world-economy as a whole). When it no longer can overcome circumscription, the neighbouring semi-peripheral states start to challenge it, and there is systemic conflict between competing upstart centres and the core state(s), associated with an economic downturn (called a ‘B’ phase, marked by decline, economic and political contraction, and reduced economic growth), until a new hegemony is established.

   In this pre-1500 WS, it is thus the interaction at the boundary between each regional core and its periphery that is the engine of evolution of the system.

    

   1. Interaction networks

   We now consider the types of boundaries in the pre-1500 WS, which determine the systemic interactions. Chase-Dunn and Hall argue that world-systems (and we can extend their ideas to the un-hyphenated world system) have four kinds of boundaries, that rarely coincide (Chase-Dunn 1997: 54, Hall 1996: 10). These form different types of interaction networks that interconnect different parts of the system: bulk goods network (BGN); political/military network (PMN); prestige goods network (PGN); and information network (IN). To these I add a fifth, the environmental network (EN).

   Typically, but not always, the interaction networks are nested as shown in Figure 1. It should be noted however that their boundaries are fuzzy and variable The IN, that includes a variety of elements such as ideology, religion, long distance travellers that bring information and news from distant regions, must be included as a bounding mechanism (Chase-Dunn 1997: 52, see also Melko 1995). It is sometimes a faint network, and does not often coincide with the other ones.

   The EN also must be included. For instance, global climatic change such as ice ages can induce similar pressures on otherwise unconnected regions. Localised ecological factors can also lead to widespread systemic effects, for instance, by causing local shortage of essential resources leading to migration or invasion of other regions (with possible cascade effects). Further, the environmental impact of the human activities in one region can affect far away regions (even otherwise unconnected). Gills and Frank point out that the world system has ecological origins (Gills 1993a: 82,83), and Goldstone argues that (at least in the early modern world) political and social stability (or instability) depends crucially on demographic trends, that he calls ‘ecological cycles’ (Goldstone 1991: 390-393, 459-460).

   There is strong disagreement between theorists about which interactions are required to define a system. For Amin, there is not sufficient evidence to assert whether or not there was a world system in the Iron Age (Amin 1993: 256). Chase-Dunn and Hall, amongst others, argue that exchange of bulk goods, as well as political-military interaction, must be present to form a world-system. Further, these must be regularised and two-way (see Chase-Dunn 1997: 52-55 and references therein). Ekholm and Friedman, on the other hand, consider that control of prestige goods plays a vital role in primary state formation, as "possession of extremely ‘valuable’ commodities ... makes it possible (for the ruler) to accumulate a disproportionate part of the production of the larger system", as well as "to maintain his nodal position" (Ekholm 1993: 61, 67).

   Gills and Frank go further, as they argue that the PGN is as important, and sometimes even more important, than the BGN, in defining systemic relations, because it is an inter-elite exchange that embodies the social relations of production and reproduces the division of labour and the class structure (Gills 1993a: 93-94). Further, Gills considers that "regular and significant" trade is a sufficient ground to speak of a "world economy", as it "brings in its train systemic political, social, ideological, cultural, and even religious rhythms" (Gills 1995: 145, emphasis in original). As bulk goods (wheat, fish, oil, wine) only entered world trade sometime between 825 and 375 BC (Wilkinson 1995a: 64-66), Gills is implicitly meaning trade in prestige goods before that date.

    

   1. The fall of the East and the rise of the West

   Abu-Lughod described in detail the Eurasian systemic connections in the period 1250-1350 AD, which she considers to be a world system on its own, separate from the previous or subsequent ones (Abu-Lughod 1989, 1993). Not wishing to enter into a detailed discussion, for our present purposes the most relevant point of Abu-Lughod’s work is her assertion that the fall of the East preceded the rise of the West after 1500 AD:

   The failure to begin the story early enough has resulted ... in a truncated and distorted causal explanation for the rise of the west. I hope to correct this by beginning at an earlier point when the outcome was far from determined. The time between the thirteenth and sixteenth centuries marked the transition, and geopolitical factors within the rest of the world system created an opportunity without which Europe’s rise would have been unlikely. (Janet L. Abu-Lughod 1989: 20)

   In the thirteenth century, feudal Europe was a marginal participant in the world system. Hegemony was firmly in Asia, with China foremost amongst the regions of expansion (Gills 1993b: 176-178), mostly because it linked the northern overland trade routes with the Indian Ocean sea trade area (that connected to the Mediterranean via the Nile-Red Sea corridor and the Syria Mesopotamia-Persian Gulf corridor) (Abu-Lughod 1989: 347, Gills 1993a: 88). The northern Italy city states (Venice, Florence, Milan and Genoa) were at one end of the major trade routes, over which they had no control, and through which they had (some) access to the riches of the core. Europe imported manufactured Chinese goods (silk and porcelain) in exchange for bullion (Chase-Dunn 1997: 191).

   With the fourteenth/early fifteenth world systemic crisis, the East was temporarily in disarray (including a "power vacuum" in the Indian Ocean) (Abu-Lughod 1989: 340-348, 361). It is in this context that Portugal, a small emerging power within Europe, could open the alternative transoceanic spice route and fill in the vacuum in the pre-existing system in the Indian Ocean.

   In this context, the shift from East to West is a rather typical transition in the world system, in which a semi-peripheral region emerges and challenges the core. Once again, the crucial development happened at a margin of the core. "It must be recognized, however, that the ‘takeover’ of that system was certainly not according to the old rules" (Abu-Lughod 1989: 361). The next section is dedicated to the restructured (capitalist) WS. We begin with a brief description of the dynamics of capitalism according to WS, which we will then rejoin with the theory so far explained.

    

2. Systemic cycles of accumulation of capital

Systemic cycles of accumulation ... are ... inherently capitalist phenomena. They point to a fundamental continuity in world-scale processes of capital accumulation in modern times. But they also constitute fundamental breaks in the strategies and structures that have shaped these processes over the centuries. ... [They] highlight the alternation of phases of continuous change with phases of discontinuous change. (Giovanni Arrighi 1994: 8-9)

1. The MCM’ economic cycle

Assume the existence, in a given region, of surplus capital. Within Arrighi’s framework (Arrighi 1994), such a starting point of a systemic cycle of accumulation of capital (SCA) can be located in the northern Italy city-states of the second half of the fourteenth century. This capital is then available to be invested in a material expansion: MC in Marx’s general formula (Marx 1995 (1867): 93), where M is money capital (liquidity), and C is commodity capital (industry and commerce). The group of capitalists, better positioned than the others for some reason, that is able to lead this expansion and govern the rules of its developmental path, attains a predominant position in the world system (hegemony).

However, such expansions have historically had built-in limits: the same features that make a group of capitalists prevail over others also create the conditions for their eventual decline and supersession. Moreover, ‘endless’ expansion of production and trade leads to increased demand for the required inputs, increasing their price, and, since it draws on a limited pool of available labour, increases its cost as well, with an ensuing decrease of the rate of return of invested capital. At a given point, the profit that can be obtained from investing in commodities is surpassed by the return obtained from investing in the financial market. This bifurcation point marks the signal crisis of the current system of capital accumulation, and leads to the transfer of capital from commodities to liquidity according to CM’, where M’ means expanded liquidity:

The switch is the expression of a "crisis" in the sense that it marks a "turning point," ... when the leading agency of systemic processes of capital accumulation reveals, through the switch, a negative judgement on the possibility of continuing to profit from the reinvestment of surplus capital in the material expansion of the world-economy, as well as a positive judgement on the possibility of prolonging in time and space its leadership/dominance through a greater specialization in high finance. This crisis is a "signal" of a deeper underlying systemic crisis, which the switch to high finance none the less forestalls for the time being. (Giovanni Arrighi 1994: 215)

A new model or regime of accumulation starts to emerge, growing in the interstices of the old one, thriving on its inefficiencies and reinforcing them, competing with the old regime and exacerbating its problems (Arrighi 1994: 329). This is a period of systemic chaos: two discontinuous regimes of capital accumulation coexist, and conflict escalates until the new regime supersedes the old in a terminal crisis.

The new leading agencies of capital accumulation that emerge at the end of one MCM’ cycle start a trade expansion that results in demand for different inputs and consumption of new outputs. Further, the increase of scale of the new regime both opens up new markets and increases the pool of available labour, and hence the rate of return of invested capital is restored to high levels.

While the MC phase is one of continuous change, with growth proceeding along a single developmental path for all capitalist agencies, that follow the hegemon’s lead, the CM’ phase is one of discontinuous change (Arrighi 1994: 9).

1. Systemic cycles of accumulation as ‘long centuries’

Each of these systemic cycles of accumulation of capital is encompassed by what Arrighi, following Braudel, calls a ‘long century’, during which the rise, full expansion, and eventual supersession of the leading agency of accumulation happens (Arrighi 1994: 214-216). All the long centuries so far have had the same basic underlying structure. Their dating and main instants are made explicit in Table I and in Figure2.

Each long century starts with a period of financial expansion (S_n-1 to T_n-1) during which the new regime of accumulation coexists with and develops within the previous one, being part and parcel of its contradictions. S_n-1 is the signal crisis of the old regime, whose ensuing financial expansion often leads to a ‘golden age’ or ‘revival’ (R_n-1), which is however a ‘sign of autumn’ and is followed by an event or series of events (often war) that mark the final supersession of the old regime of accumulation of capital - its terminal crisis (T_n-1).

The new hegemon then leads the second phase of its long century, of material expansion (T_n-1 to S_n), which it promotes, monitors, and from which it is the main beneficiary. It does so through a set of related elements: It controls a strategic commodity that becomes the bedrock of its economic power, it innovates in some crucial way the economic process, it enlarges the geographic foundations of the capitalist world-system, and, not least, it provides a political stabilising framework for the whole system, often by developing further the state system, and by exercising intellectual and moral leadership, normally embedded in some ‘universal’ idea.

The full development of the new regime of accumulation, however, carries with it its own internal contradictions that in the fullness of time lead to its demise and supersession. The third and final phase of a long century is a second period of financial expansion (S_n to R_n to T_n), during which these contradictions are deepened by increased economic and inter-statal competition and by the emergence of alternative regimes, one of which will eventually become hegemonic. The increased competition normally fuels the financial expansion as demand for capital increases in order to finance armies and war.

Successive long centuries are then intimately related to each other. They partially overlap in time, as the final CM’ expansion of one is at the beginning of the next. Further, in these periods of systemic chaos when the two regimes of accumulation coexist, the finance capital at the disposal of the previous group of capitalists, who cannot invest it profitably in their own regime, is invested in large amounts in the material structures being created by the emerging regime. This results in a transfer of capital from one (decaying) region to the next (rising) one, leading to ‘ceaseless accumulation of capital’, which according to Wallerstein is the main distinction between the capitalist world-system and the previous world-systems (Wallerstein 1993: 293).

Another connection is that, after long centuries based on a massive expansion of the system, come long centuries based on the exploitation to the full of the possibilities opened during the previous one. Each two SCAs can hence be seen as being related and forming a single structure. This widening/deepening cycle is reflected in the political system by an alternation between empire-based hegemonies, well-suited to lead an expansion towards control of other territories, and more pluralist ones, better-suited for trade, particularly if they adopt a monopolistic form of capitalism, hence gaining control of accumulation primarily through trade without the need for direct control of other areas.

We will now briefly describe the main characteristics of the systemic cycles of accumulation so far, which are also summarised in Table I.

1. The core-periphery structure and antisystemic movements

We mentioned in section III.1 that the increase of scale that each new hegemony entails both opens up new markets and increases the pool of available labour. This required the creation of a strong (although fluid, as countries and regions can be promoted and demoted) boundary system in the WS, with export of exploitation from Europe to the rest of the world, creating a core-periphery world-system (Wallerstein 1995: 30-40, Frank 1966). This is a world-wide social division of labour, with a geographic hierarchisation of the structure of production processes. Demotion of some production operations in the commodity chain, from being high- to low-added value leads to their geographic relocation into the periphery. Unequal exchange of commodities is established, with a transfer of total surplus generated in one geographic zone - the periphery - to another - the core.

The geographic expansion of capitalism is then characterised by incorporation of cheap labour and cheap raw materials (see e.g. Brockway 1992). This has been done by the seemingly triumphant export of the European concept of ‘state’ to what thus became the Third World (see Burns 1992 for a case study): to ensure an efficient extraction of resources, local ruling classes, mostly (but not always - see e.g. Anderson 1991: 140) of European ancestry, are created in peripheral regions. These local ruling classes in turn extract surplus from their own satellites, in a fractal self-similar reproduction of core-periphery relations (Gibbs 1986: 212-217).

The benefits of the core-periphery structure of the world system remain solidly in core zones (Europe, USA, and Japan, i.e. the Triad, during US hegemony), as well as with the local rulers of the periphery. The fraction of people benefiting (to some extent) from the capitalist system has remained approximately constant at around 15%, from fourteenth century Florence (Arrighi 1994: 101-102) until today, while the remainder has suffered relative, if not absolute, immiseration (Wallerstein 1995: 98-101).

The expansion of the world economy during the UK and US SCAs required a strengthening of the borders between core and periphery, because full allegiance and support of the population were required in the core zones, initially to fight the terminal crisis war of the UK SCA, and later to take part in the production of high value-added goods in the expansion phase of the US cycle. Thus twentieth century capitalism had to assign the nation-state a (limited) redistributive role in the core, which was achieved by the establishment of universal franchise and of the Keynesian welfare state, mainly by the reformist Social Democrat antisystemic movements (Arrighi 1989: 30-33, Butler 1997: 42-50).

Silver and Slater (Silver 1999: 151-216) discuss at length the social origins of hegemony. During periods of material expansion, new social groups and classes, excluded from the benefits of hegemony, grow in size and disruptive power. Their struggle to expand their rights accompanies the inter-state and inter-enterprise competition associated with the following CM’ phases. The emerging hegemon is then able to form social compacts between dominant and subordinate groups, thus eliminating or weakening borders that were internal to the core and leading to social peace in the next SCA:

The cooptation of rising groups was pivotal - the settler bourgeoisies of the Americas and the propertied middle classes of Europe in the transition from Dutch to British hegemony, and the Westernized elites of the non-Western world and the working classes of the Western world in the transition from British to US hegemony. But in both transitions, the widening of the social foundations of the hegemonic block was accompanied by, indeed, premised on a de jure or de facto exclusion of the majority of the world’s population from access to the same rights and privileges. (Beverly J. Silver and Eric Slater in Silver 1999: 152)

That is, incorporation of the emerging ‘middle classes’ (taken to include the upper echelon of the proletariat, e.g. artisans as opposed to the ‘rabble’) strengthens the social and political stability of the core countries, while further isolating the bottom tier of labour. In the UK SCA, this was done mostly through the invention of "the white race" and of racism (Allen 1994), as well as sexism (stronger e.g. in Japan, which is ethnically rather homogeneous). Later, in the US SCA, all (or almost) the population of the core countries was incorporated and enjoyed some benefits, as mentioned above.

1. The rise of the West and the fall of the East

The gist of this section has been the description of successive western hegemonies of the capitalist world since 1350, and of the transitions between them, mostly ignoring the assertion of section II that hegemony was located in Asia until at least 1450. Indeed, since Roman times Europe had bought high value-added goods from Asia (e.g. porcelain and silk fabric, both manufactured industrial products, and spices), paying them with bullion (Wolf 1982: 125), in what constitutes a typical exchange between a peripheral region and the more advanced centre.

Paul Bairoch reviewed several estimates of the GDP per capita in 1750 of regions corresponding to what are now the first and third worlds (Bairoch 1995: 124-154), concluding that their ratio was between 1:1 to 1:2. The spread started to increase rapidly only in the beginning of the nineteenth century (i.e. in the MC phase of the British SCA). The importance of foreign trade in China was scant until the nineteenth century, and European (British) domination of the Indian landmass was only established in the second half of the eighteenth century (Braudel 1966: 238-240, 272-277). Another indication is that East Asian cities were preponderant in the world system until about 1600, rivalled European ones until about 1800, and only in the 19th century did Western cities rise to prominence (Bosworth 1995: 223).

The ‘discovering’ double cycle (Genoese+Dutch SCAs) can then be seen as a single period, of gradual transition of hegemony from one major part of the world (Asia) to another one (Western Europe) (Frank 1993b: 47). It marks a fundamental transition in the way the world system works: It is a period of meta-systemic chaos during which the declining pre-modern non-capitalist hegemony coexisted with the rising modern capitalist hegemony. In this respect, Genoa and Holland, which led the western rising hegemony, were not world system hegemons as such; they were instead the agency of world systemic hegemonic transition from the East to the West.

This meta-systemic transition also marked a shift in the characteristics of hegemony and in the organisation of international relations, namely with the development of the inter-state system. This can be seen as a meta-systemic transition in the nature of boundaries. These were previously embodied by the interaction networks shown in Figure 1, and did not coincide with each other. They now became embodied by the state, which conflated all the interaction networks (except the ecological network) within itself.

This transition was completed at the beginning of the British SCA. The ‘conquering’ double cycle (British+US SCAs) can then be seen as a single period, of undisputed western world systemic hegemony. The next section is dedicated to a posited new SCA that is on the first stages of a material expansion.

1. Empire without Emperor

1. The fifth (stateless) SCA

The main characteristics of the new systemic cycle of accumulation are summarised in Table I. We will now describe them briefly.

The world that was ‘discovered’ by Imperial Iberia and ‘conquered’ by Imperial UK is now being ‘permeated’. This is the third dramatic widening of the capitalist world system. This widening, however, is not geographic in the strict sense of the word, indeed, practically the whole world has been incorporated into the capitalist world system during the US SCA. This means that traditional geographic widening a la Arrighi is no longer possible. It is a widening in the sense that the many interstices ignored or repressed by the US-led world system are being filled. From a complementary point of view, we can say that (almost) the whole economic space is being made marginal. Well-defined loci of production and trade are abandoned and replaced by delocalised, diffuse ones. Large corporations are subdivided into networks of small units (at the extreme, individuals). Out-sourcing means that core units where most added value is generated are fewer and smaller, while the bulk of the production units have to compete in the massively inflated marginal spaces between them.

So, enterprises in the US SCA were geared towards mass production of one same product (or a different few models) that had to cater for the needs of large segments of the population. This left much demand either unmet or met only partially. Enterprises in the new SCA are geared towards customised production for satisfaction of individually expressed needs.

The main innovation of the new SCA is related to these developments, and is externalisation of state costs allied to internalisation of the benefits of the core-periphery system. Personal retirement plans, private health care, private security systems are some of the functions of the Keynesian welfare state that are being externalised by the capitalist agencies, that is, no longer paid for with taxation of enterprises or of rich individuals. This goes hand in hand with the reintroduction of the Third World within the First, that is, the exclusion from the benefits of the core of large segments of its population. That is, the periphery is being brought back into the core, creating a non-geographic core-periphery network structure, superimposed to the old geographic one. It is in this sense that the economic (and social) space is being made marginal.

All these developments are made possible by information and communications technology (ICT), which is the strategic commodity of the new SCA. Not only does it enable and enhance the potential of many other technologies (besides generating itself immense profits), it is ICT that weakens geographically based processes, and makes possible the rise of delocalised and decentralised ones. That is, ICT is the foundation stone on which the reorganisation of the economic space is proceeding, and the cells of the network structure of the new SCA are connected to each other through computers and telecommunications.

Ceaseless accumulation of capital is ensured through the world-wide financial market, whereby the surplus capital accumulated during the US SCA can be allocated to enterprises anywhere in the world. Another mechanism is that vertically integrated TNCs are re-engineering themselves towards the new flexible forms of organisation, directly guaranteeing investment of capital in the new processes of accumulation.

In the US SCA, the political system was geared towards formation of large groups (the USA, the EU, the ‘Free World’, or even the nation-state) in which one same political ‘product’ catered for the whole population. Now it accommodates much more easily small-country nationalisms, regionalisms and even non governmental organisations. One of the reasons for that is the political stabilising framework of the new SCA, which is based on institutions of international (world) government such as the UN and the International Court of Justice. With human rights becoming a justification for intervention in a country’s internal affairs, the new fragmented political units can be closely controlled. Further, international relations have been partially integrated within the scope of TNCs as some TNCs are economically larger than some nation-states and are able to negotiate (or even dictate) conditions of interaction with states.

The ‘universal’ idea associated to this is the www itself, ‘the information superhighway’, that is presented as as important (or more) an event as the Industrial Revolution, that will revolutionise the way each individual lives. Individualism, and even personal ‘rebel’ attitudes, are not only tolerated (where before they were feared), they are positively encouraged. In the new universalism, diversity is central. The defining ‘ordinary’ art of the new SCA can then be taken to be television commercials, with their appeal to individualism and with the very short attention span they require. It is important to note that the www is not, nor could it be, associated with any given state, and personal participation in it is relatively easy (certainly if compared with direct participation in the ‘universal’ idea of the US SCA, the ‘Space Age’).

The fundamental difference between this SCA and the previous ones is that no single hegemonic capitalist agency can be identified. The new hegemonic structure is hegemonless. Capital accumulation based on ICT is fundamentally stateless, because it cannot be controlled or contained within artificially constructed geographic borders. To be sure, the new capitalist agencies occupy places, however they are not defined by the places they occupy. They are still concentrated in the old core regions, but they are not attached to them. What is good for General Motors is now good, not for America, but for its management and shareholders, who can be located anywhere in the world.

The structures of the new SCA can be seen as being of imperial character, and we will refer to the new SCA as Empire without Emperor (EwE). This imperial character manifests itself in the coexistence of overlapping institutional structures and jurisdictions that complement each other and compete with each other, with frontiers that do not separate spaces and sovereignties but constitute fuzzy margins. This multitude of jurisdictions is reflected in a multitude of memberships and loyalties, of which each individual holds a unique set. The new universal constructs cannot thus be based on a formal universal polity or economic system. Instead, they are based on harmonised standards and regulations that define the interactions between different components. This allows, and indeed encourages, diversity, as long as it conforms to the framework of rules agreed upon.

Previous imperial hegemonies, the Iberian and the British, had their imperial character defined by direct control over the sources and routes of wealth. This also meant a direct control of the periphery. We argue that the same is valid for the new imperial hegemony, the EwE. Firstly, it should be noted that traditional (imperial) territorial control ceases to be crucial in the age of networks and delocalised production. Instead, each high-value added production or trade unit (for instance, a local business unit of a TNC) controls, through out-sourcing and sub-contracting, a whole network of other business units which carry out lower-value added processes, thus skimming a large part of the surplus generated. There is normally no direct control over any single company in the network, the control is instead over the network as a whole, which is the relevant structure. Finally, many of the workers of (often small, occasionally self-owned) units in the network belong to the new non-geographic periphery, and are directly or indirectly dependent on the (non-geographic core) high-value added unit. We can then finally say that the organisational mode of the new SCA is cosmopolitan capitalism allied to non-territorial imperialism.

1. A new meta-systemic transition

We can see the Empire without Emperor ‘permeating’ cycle as marking another meta-systemic transition from a world system based on territorial hegemonies where the basic unit is the nation-state, to a world system based on a non-territorial hegemony where the basic units are world-wide, regional and local networks. This was accompanied by a change in the nature of polities, with the transfer of some of the powers and competencies nation-states had in the Westphalian inter-state system towards both higher (trans-national entities) and lower (regions within or across states) levels.

This meta-systemic transition implies a change in the nature of boundaries, which were previously defined by the nation-state, and now become defined by the fuzzy borders of high-density clusters in the global network

I speculate that we are now in the first part, which we have named Empire without Emperor, of a third double cycle, that we characterise as ‘permeating’. Only at the end of this double cycle would the meta-systemic transition now taking place be completed, meanwhile the structures of the Westphalian system - nation-states - will coexist with the structures of the Empire without Emperor - local networks embedded in a global world.

References