Theperipheryis the opposite zone, corresponding roughly with the
Third World, and includes countries that were under Western European
domination but did not receive many permanent settlers: sub-Saharan
Africa (other than South Africa), India and Pakistan, parts of Latin
America, most of East and Southeast Asia, and Oceania. These countries
are low income, largely agricultural, and often manipulated by core coun-
tries for their economic advantage. Goods, services, and people tend to
flowaway fromthe periphery.
Finally, the semiperipheryis an intermediate zone between the core
and the periphery. This includes the former Soviet Union, Eastern Europe,
countries that were under Western European domination only briefly (the
Middle East, parts of East Asia), or countries that received a substantial
number of immigrants but not as many as the core (parts of Latin America). These
are semi-industrialized, middle-income countries that often form their own local core-
periphery systems. For example, goods and services flow intoRussia from its own
periphery states in Eastern Europe, the Baltic, and Central Asia, but they also flow
fromRussia into Western Europe and the United States. The semiperiphery functions
much as the middle class does in any country: It both is a buffer zone between rich
and poor and exhibits elements of both rich and poor, depending on the position of
the other country it is dealing with.
World system theory emphasizes global commodity chains—worldwide networks
of labor and production processes, consisting of all pivotal production activities, that
form a tightly interlocked “chain” from raw materials to finished product to retail out-
let to consumer (Gereffi and Korzeniewicz, 1993; Hopkins and Wallerstein, 1996). The
most profitable activities in the commodity chain (engineering, design, advertising) are
likely to be done in core countries, while the least profitable activities (mining or grow-
ing the raw materials, factory production) are likely to be done in peripheral countries.
Some low-profit factories (or “sweatshops”) are appearing in core countries, often
underground to avoid minimum wage laws, but paradoxically, they tend to employ
mostly immigrants from peripheral countries, who are willing to settle for the poor pay
(still better than they would get at home), minimal or nonexistent benefits, and terri-
ble working conditions.
How does the world economy make peripheral countries dependent on the core
countries? There are three major factors:■Narrow, export-oriented economies. A huge percentage of the peripheral state’s
economy is based on a few products or even just one product (palm oil in
Malaysia, hardwoods in the Philippines) for export to the core states. If the core
states decrease their demand by only a little, the economy is ruined.
■ Lack of industrial capacity. Peripheral states lack major in-
dustries, so they sell their raw materials inexpensively to the core
states. Then they are forced to buy expensive manufactured
goods back from them.
■ Foreign debt. Unequal trade patterns keep peripheral states
constantly in debt to core states. For instance, Gabon (periphery)
has a federal reserve of $268 million and an external foreign debt
of $3.8 billion. Burma (periphery) has a federal reserve of $590
million and an external foreign debt of $6.7 billion. France (core)
has a federal reserve of $70.7 billion and no foreign debt (Walton
and Ragin, 1990).The world system theory has been criticized for depicting the
process as only one way, with goods and services flowing from236 CHAPTER 7STRATIFICATION AND SOCIAL CLASSPolitically and culturally, the United States
and Mexico are separate countries, but
economically, they are so intimately linked
that Mexico might as well be a colonial
possession. Of its exports, 87.6 percent go
to the United States, and 61.8 percent of
its imports come from the United States.Didyouknow
?Globalization has increased
the economic, political, and
social interconnectedness of
the world. It has also in-
creased some staggering in-
equalities between the world's
rich and its poor. n