Thesis: Argues that the world is held together by a capitalist world-economy: a large geographic zone within which there is a division of labor and hence significant internal exchange of basic or essential goods as well as flows of capital and labor. Wallerstein sees many cultures, religions, languages, governments, and institutions all exist within this system. This system requires capitalism to function and capitalism requires a world-economy to function. He sees the rules as being established by the states. The main players are firms which grow based on available resources. As a firm grows administrative costs increase, but larger firms are also better able to influence the states. He sees three types of states:
Core: strongest states, that contain a disproportionate share of core-like process. Also have a large amount of the natural resources.
Semiperipheral: have a mix of production, strength, and influence. Under the most pressure, major concern is to keep from slipping and becoming a peripheral state, while trying to advance to become a core state.
Peripheral: least amount of resource, strength, and industry. Usually lack the ability to do very much to affect their situation. Largely forced to accept the lot that has been given them.
Kondratieff Cycle: fifty to sixty year long cycles, dependant on political measures taken by the state to slow/ turn around recession and depression phases. Technological changes initiate a new improvement phase with gives way to a phase of prosperity. However, eventually the new technology will reach the limits of its capabilities and a new recession phase will begin. The problem is, that by making moves that solve short-term or even middle-run problems, eventually that fix will not address the long-term problem which will drive a recession.
Applications to Strategy':'
· Identifies where the least amount of stability exists – semiperipheral state – and therefore, where most of our attention needs to be for future conflicts.
· Kondratieff Cycle shows the need to be looking beyond the short-term problems. They are important, but if solving them risks survival in the long run, perhaps there is a better option elsewhere.