World system theory and keynesian macroeconomics: towards an alternative explanation of the rise and fall of the capitalist world system

Abstract

A mechanistic and sometimes dogmatic interpretation of capitalism has kept world systems theory from attaining practical relevance for social movements which try to combine the democratic management of society with efficiency, including the market. By using Keynesian macroeconomics as a basis and integrating it into a long-term Annales type historical perspective, the latter inspired by the work of Karl Marx, major aspects of these theoretical shortcomings can be addressed. Profit depends on rising mass incomes in contrast to rent which does not. Capitalism is, therefore, the unintended consequence of the success of the lower strata. Capitalism as a type of happy accident is expansive, but can be transferred to other societies only if the empowerment of labour is successful. In the current process of globalisation there remain various risks whereby labour becomes disempowered, both in developing and developed capitalist economies. In addition, underdevelopment hits back and disempowers labour in the most technically developed countries. As such, a global strategy of labour is required which may, nonetheless, be implemented locally, as exchange rate adjustments protect the socially successful cases from destruction through a race to the bottom. The necessity of such a strategy is based on policies currently being implemented in an attempt to relaunch growth and overcome crises which are characterised by a narrow and empirically unfounded dogmatism. Such a mobilisation will not, however, threaten the income and employment position of workers in the North, via the demands and higher competitiveness of workers from the South, as differences in labour costs are mediated through the exchange rate.

Keywords : Capitalist world system, grouwth, less developped countries, development