My major preoccupation in this blog is how the quantitate concepts of General Systems Theory (GST) can be applied to qualitative World Systems Theory (WST) in order to generate testable conjectures and hypotheses. In a prior post (here), I discussed the world-system as a unit of analysis. Since then, I have been looking for a reference that might summarize the relationship between GST and WST. A 1997 article in the Journal of Geography by Debra Straussfogel (referenced below) is excellent. In this post, I'll summarize the article and suggest a direction for future posts (for more detail, please reference the article).
WST is an interdisciplinary perspective meant to refocus artificial academic disciplines (arts and sciences) on a unified study of macro-societal systems. The Straussfogel article is written from the perspective of Human Geography rather than from the discipline of Sociology where WST was developed. In Human Geography, GST (General Systems Theory as developed by von Bertalanffy, 1971) was considered a mechanistic way "...of portraying humans as deterministic entities behaving in predictable ways, like so many molecules and chemical reactions" (p. 119). The more qualitative, humanist WST approach provided a path to Complex Systems Theory (CST) "the study of complex, hierarchically structured, nonequilibrium, and dynamic systems" (p. 119).
In the late 1970's, Wallerstein developed WST without reference to GST. He was dissatisfied with Marxist theories of development (historical materialism) and Western theories of Modernization. Wallerstein saw classes and nations as part of a larger social system. That larger system, the world-system, should be the unit of analysis for societal development as discussed in the last post.
The logic of the world-system is defined by its economic mode of production, diagrammed above from Wikispaces (here). Three modes of production are described and interrelated: (1) Core production processes involve the most advanced levels of technology that take cheaply produced raw materials and turn them into high-value consumer goods. (2) Peripheral production processes use cheap labor to extract raw materials used in core production processes. (3) Semi-peripheral production and consumption processes contain some advanced technology and also provide markets for high-profit consumer goods.
A1: The world-system is structured hierarchically into core, semi-perpheral and peripheral states.
H1: Production processes and technological processes are different in core, semi-peripheral and peripheral states. The higher in the world-system hierarchy, the more advanced the technology.
Different modes of production within the assumed (A1) world-system hierarchy (core-, semi-peripheral and peripheral) suggest a testable hypothesis (H1). Unlike neoclassical economic models which assume the same Cobb-Douglas production process throughout the world system (see my discussion here), WST predicts different production processes. The theoretical problem will be to come up with a model (other than the Cobb-Douglas model) that provides a more general description of economic modes of production that can be estimated across the world-system (one candidate model I have discussed in other posts, here, is the I=PAT model).
A2: The modern world-system is globalized and devoted the ceaseless accumulation of capital.
The modern world-system is the first truly global system dedicated to the "ceaseless accumulation of capital". Earlier "world empires" (single states) and "mini-systems" were not based on advanced technology. I have left "capital accumulation" as an assumption because, as I will discuss later, "capital" is a poorly defined term with questionable operational definitions and poor measurement.
H2: Economic production advantages lead to commercial, financial and political-military advantages.
C2: The nation with the strongest economic production advantages becomes the hegemonic leader of the world-system and uses it's cultural values to reinforce it's dominance.
Wallerstein borrowed economic determinism from Marxist theory and used it to derive hypotheses about production advantages (H2) and corollaries (C2) about hegemonic leadership within the world-system. At base, these hypotheses require a good definition of technology and economic production to be testable.
WST views economic production in terms of "commodity chains" that lead from the sites of agricultural production or natural resource extraction to consumption. Processes that can be monopolized and made more capital intensive become core processes. With global commodity chains and the world-wide division of labor, wages are lowest in the peripheral and highest in the core states, perpetuating inequality. Core-peripheral relations are thus based on "unequal exchange" and exploitation for profit of the periphery by the core.
H2a: Peripheral nation states are disadvantaged by unequal exchange with the core and semi-peripheral nation states.
Hypothesis H2a seems at first to involve a value judgement and is directly contradicted by the neoclassical economic theory of comparative advantage. However, H2a is essentially a counterfactual: what would development have been like for a peripheral country without links to core and semi-peripheral nation states? In order to test the counterfactual, we need a model that can be "experimentally" manipulated, that is, simulated under different exogenous conditions. For a number of reasons (the most important being lack of internal dynamics that I will discuss in future posts), neoclassical economic models are not particularly useful for counterfactual analysis while state-space systems models are.
Although the hierarchical structure of the world-system might seem static, there are business cycles and trends (long waves or Kondratiev cycles) as well as cycles of hegemonic succession, war, trade and control. None of these cycles can be captured by neoclassical economic models that assume continuous exponential growth. There is also, over time, "broadening and depending" of the world-system as more states become incorporated into the division of labor and more land, labor and capital are commodified and mechanized. Cycles and trends in the world-system are driven by the open nature of the system.
A3: Each state in the world-system is an open system.
H3: State variables are open to influences internal to each nation state, from other nation states in the world system and from random forces.
C3: Weak peripheral states have weak internal state dynamics and are more subject to external forces than strong core states.
Here is the point where CST enters WST. Typically, economic models (such as William Nordhaus' DICE and RICE models) are only open to trade. Each nation has the same state variables with different parameters. The models are not open to random influences, technology transfer or information transfer. The models have no internal or external cyclical dynamics. The entire neoclassical world economic system is deterministic.
CST argues that economies are dissipative systems, that is, they grow by exchanging energy and matter with their environment (not by disembodied technological progress as is assumed in neoclassical economic theory). As each economic system grows, it depletes it's environment. Changes in the environment force changes and adaptions within the system. The history of dissipative systems is not repeatable because the environment surrounding the systems has changed over time.
The implications of these assumptions, hypotheses and corollaries are many. In future posts I will look in more detail at WST, GST and CST trying to derive more testable hypotheses from the qualitative writings. In another blog (here) I will be looking at existing causal macro systems and evaluating them in terms of systems theory. In other blogs, I am statistically estimating and simulating open state-space systems models of the stock market (here) and nation states within the world system (here and here). Hopefully, in the future, this work will come together in some coherent, punishable form.
REFERENCES
Straussfogel, D. (1997) A Systems Perspective on World-Systems Theory, Journal of Geography, Volume 96, Issue 2, ops 119-126.
von Bertalanffy, L. (1971) General Systems Theory. Harmondsowrth, UK: The Penguin Press.
