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Theorizing the 21st Century Millennial World-System

The modern world-system is dead.  If the final crisis of capitalism started in 1968, it ended in 2008.  Over that 40-year period, the world-economy went global — for the first time.  Previous peaks of world trade represented mainly the exchange of finished goods facilitated by the exploitation of labor (whether slave or “free”) by capital (whether transnational or “local”).  Today’s globally integrated world-economy is dominated by trade in intermediate goods bound up in transnational value chains in which the lion’s share of the value comes from the exploitation of consumers, not workers.  The exploitation of workers remains severe, but it is no longer where the money is.  If Marx were alive today, he would be focusing on the economics of app stores, not factory floors.

World-systems analysis was born out of the struggle to connect the modernization of the long 16th century to the modernity of the 1960s, and it succeeded.  But the modern economic processes studied by the first generation of world-systems analysts are no longer at the heart of global value creation and appropriation.  Just as pre-modern economic relationships survived into modernity, modern ones have survived into postmodernity, but they are increasingly marginalized.  It is time to start using world-systems analysis to help us understand the structure and operation of the postmodern economy — and the postmodern world-society (note the hyphen!) it supports.

The emerging postmodern world-society is not so much “global” as “Pacific.”  Everyone agrees that “the West” is no longer the motor of history (though we may disagree about whether it ever was), but world-society has not quite “re-oriented” all the way to the East.  The postmodern future is being made to the west of the old West, not in the East but in the Pacific.  It is a virtual world-society that spans Silicon Valley, Hollywood, Seoul, and Shenzhen.  The old Atlantic core of the modern world-system is still very rich, but it is greying into a comfortable rentier retirement, as the pre-modern Italian core of what was once the European world-system did five centuries earlier.  Chinese entrepreneurs don’t look to Europe for new business models.  They look to California.

Between 1968 and 2008, international trade expressed as a percent of global GDP jumped from 25% to 60%.  Post-crisis, it has stabilized in the mid-50s.  Flows of foreign direct investment as a percent of global GDP are more volatile, but they too seem to have risen (5-fold!) and stabilized.  In the 2010s, the world-economy has settled into a “new normal” mode of operation, integrated but no longer rapidly integrating.  We have yet to fully describe this new normal, never mind understand it.  What we need is a bout of intellectual renewal.  It’s time to put aside the preconceptions we have inherited from decades of studying the modern world-system and develop new tools for studying the postmodern millennial world-system.

Deep world-historical analysis has taught us that many prior world-systems have been born, developed, and passed away.  A century or more of critical theory has further taught us to understand the internal contradictions of capitalism.  A capitalist world-system has just died before our very eyes, at a time when most of our leading intellectuals were loudly proclaiming the final crisis of capitalism.  We have now come out the other side of the crisis, and there is much work to be done.  The modern world-system is dead.  Long live the millennial world-system!

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Sydney-based globalization expert Salvatore Babones is available to speak on the Chinese economy (demographics, growth, technology), the Belt & Road Initiative, global trade networks, and Australia-China relations. Contact: