CAPITALISMdeveloped societies have already achieved. This
theoretical orientation has been especially impor-
tant in shaping development policies directed at
the ‘‘third world’’ by many Western governments,
the World Bank, and even the United Nations
(Giddens 1987).
Sociology’s other basic approach to the emer-
gence of a world-scale capitalist economy involves
a more critical interpretation. This view tends to
see capitalist expansion as having actually caused
underdevelopment. The underdevelopment ap-
proach sees the lack of development in less-devel-
oped societies (periphery) as a consequence of
systematic exploitation of their people and re-
sources by the advanced societies (core). This
process of underdevelopment is generally viewed
as having occurred in three stages. The first stage,
that of merchant capitalism, persisted from the
sixteenth century to the late nineteenth century.
Merchant capitalism, supported by military force,
transferred vast amounts of wealth from the pe-
riphery to the European nations to help finance
initial industrial development in what are now the
advanced capitalist societies. The second stage,
colonialism, persisted until about ten to fifteen
years after World War II, when many colonial
nations were granted formal independence. In the
colonial stage, the developed societies organized
economic and political institutions in the less-
developed nations to serve the needs of industrial
capitalism in the advanced nations. In the postcolonial
period, formal political independence has been
granted, but the persistent economic inequalities
between developed and underdeveloped nations
strongly favor the more-developed capitalist socie-
ties. Even when raw materials and finished prod-
ucts remain in the lesser-developed nation, the
profits derived from such production are taken
from the periphery and returned to the advanced
core societies. Thus, the pattern of underdevelopment
continues in the face of formal independence.
Traditionally, much of sociology’s attention to
international capitalist expansion has focused on
relations between nations. Increasingly, sociology
is examining these matters with greater attention
to relations between classes. This shift of empha-
sis reflects the increasing importance of the
transnational corporation in recent times. The
transnational corporation’s greater capacity to use
several international sites for component produc-
tion and the shift of much industrial production to
underdeveloped regions are generating a proc-
ess of deindustrialization in the advanced capital-
ist societies. While capitalism has long been a
world system, many sociologists contend that the
transnational, or ‘‘stateless,’’ corporation has sig-
nificantly less commitment or loyalty to any specif-
ic nation. Capital flows ever more rapidly through-
out the world, seeking the cheapest source of
labor. Modern computer technology has facilitat-
ed this trend. Asian, European, and North Ameri-
can capital markets are increasingly interdepen-
dent. Sociology’s shift of emphasis reflects this
tendency for the U.S. capitalist to have more in
common, sociologically, with the Japanese or Ger-
man capitalist than the U.S. investor has in com-
mon with the American worker. Sociology’s new
attention to the internationalization of capital may
present a need for rethinking the usefulness of the
nation as the typical boundary of a society. The
emergence of the ‘‘new Europe’’ and the demise of
state socialism in Eastern Europe and the USSR
may also lead to a more flexible notion of what
constitutes a society.The preceding discussion has focused on capi-
talism as a specific form of economy that is defined
by the expansion of a labor market in which
propertyless workers sell their labor power for
money. Capitalist societies are, of course, far more
complex than this. There are a number of distinct
economic forms that coexist with capitalism in
both complementary and conflictual relations. The
capitalist economy itself may be broken down into
two basic sectors, one representing big business
and one representing small business. Sociologists
usually refer to these as the monopoly sector and
the competitive sector. This dual economy is re-
flected in a segmented, or dual, labor market.
Monopoly sector workers are more likely to be
male, unionized, receive better wages and bene-
fits, have greater job security, and work in a more
clearly defined hierarchy of authority based on
credentials. Competitive sector workers are less
likely to possess strong credentials, more likely to
be female, receive lower pay, work under more
dangerous conditions, and work without union
protection, benefits, or job security.Noncapitalist economic forms also exist along-
side this dual capitalist economy. The self-em-
ployed reflect a form distinct from modern capital-
ism that sociologists commonly refer to as simple