I believe Immanuel Wallerstein’s main objective in writing “The Modern World-System as A Capitalist World-Economy” was to inform readers of the economy being implemented around them. This article does not show enough bias to be considered opinion in my eyes but more to let the reader decide for or against such an economy.
Wallerstein starts his outline of the Capitalistic Economy by stating that the Capitalist model cannot work without a world economy. Capitalism, having the objective of gaining as much capital as possible, needs the widest scale in order to benefit from the capital collected. Wallerstein is also sure to point out that the market is considered the essential feature in the capitalistic economy and without it the system cannot perform. Wallerstein also provides his definition of the market in which that “a market is both a concrete local structure in which individuals or firms sell and buy goods, and a virtual institution across space where the same kind of exchange occurs.”
Wallerstein shows the reader what work in a capitalistic economy and what regulates it by saying that there is a need not for a literally free market but a virtually free one. The idea of a totally free market is just that, an idea, a myth. If the market were to be totally free then profit from the economy would be miniscule which is considered uninteresting to producers which is then considered removing basic social underpinnings of such a system. What the sellers prefer over an actually free market is a monopoly because you are free to create a relatively wide margin between the costs of production and the sales price, thus making higher profits.
To best use the monopoly part of the capitalist economy, producers set up quasi monopolies that are somewhat easy to create due to many things: Patents, protectionist measures, state subsidies, tax benefits, etc. Also the strong states can set up such monopolies by suppressing the weaker states’ counter-protectionist measures and then states acting as large scale buyers willing to pay excessive prices. Without these interferences the capitalist system could not thrive and therefore could not survive.
Other main factors of this economy mentioned by Wallerstein were the fact that there are two in built anti-monopolistic features in the capitalist world economy. In this way the quasi monopolies are self liquidating, but lasting long enough (30 yrs) to ensure considerable accumulation of capital. Once one monopoly ends, the producers then move on to the next leading product.
Firms also play a large role in Capitalism because of their fierce competitiveness. Firms’ cycle of bankruptcy makes bankruptcy the daily bread of a capitalistic economy.
The ideas displayed by Wallerstein are very true and he presents it in a way that bias isn’t present, but allow me to infer my own opinion. Wallerstein has neglected to comment on the hypocrisy that takes place in such an economy. Producers supposedly wanting free markets but really do not. Producers best option are monopolies but their exists regulations to liquidate them, which then in turn benefits them. There is a giant cycle of fad chasing which may accumulate the wanted capital but also deteriorate a set up economy. The overuse and abuse of such an economy has got to be taking a toll on the big picture of what value is itself. Wallerstein also neglects to show the reader the side effects of the measures at which producers go to to gain capital. The use of subsidies ends up inflicting upon other small economies, like the NAFTA trade agreement among North America. America can very freely use their machinery and farm techniques to overproduce crops like corn and then sell them to Mexico for less than it takes to produce them. Mexican farmers living off of their vending of corn crops find their once lived economy in utter depression giving them no other option but to find other work. Other work may mean moving legally or illegally into another country. All this is a result of the need for more capital put in place by this tyrannical economic system.
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