7.7.2: World System Theory
The second explanation of how global stratification came about was proposed by Immanuel Wallerstein (1979, 1990, 2011). According to world system theory, industrialization led to four groups of nations.
The first group consists of the core nations, the countries that industrialized first (Britain, France, Holland, and, later, Germany), which grew rich and powerful.
The second group is the semiperiphery. The economies of these nations, located around the Mediterranean, stagnated because they grew dependent on trade with the core nations.
The economies of the third group, the periphery, or fringe nations, developed even less.
These are the eastern European countries, which sold cash crops to the core nations.
The fourth group of nations includes most of Africa and Asia.
Called the external area, these nations were left out of the development of capitalism altogether.
The current expansion of capitalism has changed the relationships among these groups.
Most notably, eastern Europe and Asia are no longer left out of capitalism.
The globalization of capitalism—the adoption of capitalism around the world—has created extensive ties among the world’s nations. Production and trade are now so interconnected that events around the globe affect us all.
Sometimes this is immediate, as happens when a civil war disrupts the flow of oil, or—perish the thought—as would be the case if terrorists managed to get their hands on nuclear or biological weapons.
At other times, the effects are like a slow ripple, as when a government adopts some policy that gradually impedes its ability to compete in world markets.
All of today’s societies, then, no matter where they are located, are part of a world system.
The interconnections are most evident among nations that do extensive trading with one another. The following Thinking Critically about Social Life explores implications of Mexico’s maquiladoras.
Thinking Critically about Social Life When Globalization Comes Home:
Maquiladoras South of the Border Two hundred thousand Mexicans rush to Juarez each year, fleeing the hopelessness of the rural areas in pursuit of a better life.
They have no running water or plumbing, but they didn’t have any in the country either, and here they have the possibility of a job, a weekly check to buy food for the kids.
The average pay for manufacturing jobs in Mexico is $2.40 an hour, about $115 for a 48-hour work week (Montes 2019).
This may not sound like much, but it is more than three times Mexico’s minimum wage of $5.30 a day.
A maquiladora worker in Ciudad Juarez, Chihuahua, Mexico.
She assembles dashboard harnesses for GM cars.
Credit: Keith Dannemiller/ZUMAPRESS/Newscom This may not sound like much, but it is more than twice the minimum daily wage in Mexico. Assembly-for-export plants, known as maquiladoras, dot the Mexican border.
The North American Free Trade Agreement (NAFTA) allows U.S. companies to import materials to Mexico without paying tax and then to export the finished products into the United States, again without tax.
It’s a sweet deal: few taxes and $20 a day for workers starved for jobs. That these workers live in shacks, with no running water or sewage disposal, is not the employers’ concern. Nor is the pollution. The stinking air doesn’t stay on the Mexican side of the border. Neither does the garbage. Heavy rains wash torrents of untreated sewage and industrial wastes into the Rio Grande (Casey and Watkins 2014). There is also the loss of jobs for U.S. workers. Some of the poorest cities in the United States are located along the sewage-infested Rio Grande.
NAFTA didn’t bring poverty to these cities. They were poor before this treaty, but transferring jobs across the border hasn't helped any.
Why don't the maquilas (maquiladora workers) organize and demand better pay?
They tried, and they succeeded. The $2.40 an hour is an improvement in their wages.
Holding them back is a global condition.
Just as manufacturing jobs have been transferred from high-wage United States to Mexico, to the south of the maquiladoras, even cheaper labor beckons.
Workers in Guatemala and Honduras, even more desperate than those in Mexico, will gladly take these jobs.
China also wants them, but workers in Vietnam and Thailand competing for China’s jobs are willing to work for even lower wages (Chu et al. 2016).
Inside the home of a maquiladora worker in Nuevo Laredo, Mexico. Credit: David Bacon/The Image Works Many Mexican politicians would say that this presentation is one-sided.
“Sure there are problems,” they would say, “but this is how it always is when a country industrializes.
Don’t you realize that the maquiladoras bring jobs to people who have no work?
They also bring roads and electricity to undeveloped areas.”
And, as Vicente Fox, a past president of Mexico, pointed out, workers at the maquiladoras make more than the average salary in Mexico.
For Your Consideration
Let’s apply our three theoretical perspectives.
→ Some conflict theorists analyze how capitalists try to weaken the bargaining power of workers by exploiting divisions among them.
In what is known as the split labor market, capitalists pit one group of workers against another to lower the cost of labor.
How do you think maquiladoras fit this conflict perspective?
→ When functionalists analyze a situation, they identify its functions and dysfunctions.
What functions and dysfunctions of maquiladoras do you see?
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