Interstate System

Interstate System and Capitalist World-Economy: One Logic or Two?
Author(s): Christopher Chase-Dunn

Source: International Studies Quarterly, Vol. 25, No. 1, World System Debates (Mar., 1981),
pp. 19-42
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Interstate System and
Capitalist World-Economy
One Logic or Two?
CHRISTOPHER CHASE-DUNN
Department of Social Relations
Johns Hopkins University
This essay argues that capitalism is best conceived as a peculiar combination of economic
and political processes which operate at the level of the world economy as a whole. Thus
the interstate system is the political side of capitalism, not an analytically autonomous
system, and its survival is dependent on the operation of the institutions which are
associated with the capital-accumulation process. The argument for this approach is made
as a prelude to further discussion, theoretical clarity, and empirical research. The point of
this project is to distinguish between theories which conceptualize the modern world in
terms of economic and political subsystems and those which regard capitalism as a system
in which political and economic processes can be understood to have a single, integrated
logic.
This article attempts to clarify a number of issues arising from the

critique of Immanuel Wallerstein's (1979) world-system perspective,
which is a reinterpretation of the theory of capitalist development
inspired by dependency theory. In this perspective, capitalism as a mode
of production has always been "imperialistic" in the sense that it
constitutes a hierarchical division of labor between core areas and
peripheral areas.' Wallerstein (1974) has traced the emergence of this
capitalist world economy from European feudalism in the long
1. Core areas are those where core production is concentrated, while peripheral areas
contain mostly peripheral production. Core production is capital-intensive and uses
skilled, high-wage labor. Peripheral production is labor-intensive and utilizes low-wage
labor which is often subject to extra-economic coercion. Cotton textile production, a
leading core industry of the early nineteenth century, has become a peripheral industry in
the twentieth century relative to the much higher levels of capital intensivity and skilled
labor employed in contemporary core industries. Semi-peripheral areas are those states
which include a balance of core and peripheral types of production.
INTERNATIONAL STUDIES QUARTERLY, Vol. 25 No. 1, March 1981 19-42

? 1981 I.S.A
19
20 INTERNATIONAL STUDIES QUARTERLY
sixteenth century. Viewed as a whole, the modem world-system has

exhibited cyclical patterns and secular trends as it has expanded to
include the entire globe (Hopkins and Wallerstein, 1977, 1979; Chase-
Dunn and Rubinson, 1977, 1979; Bergesen and Schoenberg, 1980).
The elaboration of this perspective has raised anew the issue of the
relationship between economic and political processes in the capitalist
mode of production, and this has occurred in the context of a
renaissance of Marxist theories of the state. This burgeoning Marxist
literature has, as a response to the so-called "economism" of the Stalinist
Third International, emphasized the autonomy of political processes
(Anderson, 1974) and the "relative autonomy of the state" (Poulantzas,
1973). Though most of this literature has focused on the capitalist state
and its relationship to the power of social classes, this emphasis on the
autonomy of political factors has spilled over to the more recent
critiques of Wallerstein's alleged "economism". These critiques advance
claims about the relative autonomy of the interstate system and the
processes of geopolitics.2
In addition to the neo-Marxist argument (Skocpol, 1977, 1979) a
number of non-Marxist political scientists have made similar criticisms
(Modelski, 1978; Zolberg, 1979; Waltz, 1979). All these authors claim
that Wallerstein has reduced the operation of the state system (or
"international" system) to a consequence of the process of capital
accumulation. Indeed, some have contended that geopolitics and state
building are themselves the main motors of the modern world-system
(Winckler, 1979). Here I will argue that the capitalist mode of
production exhibits a single logic in which both political-military power
and the appropriation of surplus value through production and sale on
2. Marxian theory has usually disdained the seemingly artificial distinctions between
economics and politics which have become enshrined in the academic disciplines. Marx
asserted a holism of the underlying processes operating in a mode of production. But the
use of a deterministic logic to justify alleged necessity by Soviet ideologues added fuel to
the revolt against "economism" which had begun with Luxemburg, Gramsci, and Lukacs.
Poulantzas (1973) and Anderson (1974) seem to take this theoretical tendency to its most
extreme point within Marxism. Barker (1978) and von Braunmuehl (1979) and the other
German "state derivation" theorists are attempting to reintegrate the new theories of the
state by utilizing Marx's basic theoretical concepts to account for the operation of
capitalist states. Von Braunmuehl has done the most interesting work at the conceptual
level to integrate specifically the role of the larger state system with the operation of the
world market within a framework of basic Marxian concepts. McGowan and Walker
(1980) have written a useful review and synthesis of Marxian and non-Marxian
approaches to "international political economy." Rapkin (1980) has also suggested a
synthesis of "materialist and security-oriented approaches."
Chase-Dunn / INTERSTATE SYSTEM 21
the world market play an integrated role. This article will raise a number
of methodological and metatheoretical issues, argue for a redefinition of
the capitalist mode of production, and discuss evidence for the
interdependence of the interstate system and the capital accumulation
process.
The world-system perspective has not been formalized as a theory of
capitalist development, and indeed some of its proponents seem hesitant
to move in this direction. My own work (Chase-Dunn and Rubinson,
1977, 1979) has attempted to move toward formalization so that the
empirical implications of the world-system perspective can be clarified
and research on specifically theoretical issues can begin. This article
develops theoretical implications with regard to the relationship
between the interstate system and the capitalist accumulation process,
and much of what follows may appear ex cathedra to those not familiar
with world-system studies. Many questions raised by this perspective
have not been asked in quite the same way by students of international
relations. I hope to begin an interdisciplinary dialogue which can
identify the important theoretical issues and the differentiating empiri-
cal implications.
Metatheoretical and Methodological Issues
In this article, rather than argue at the philosophical level about

economics, politics, and political economy in general, I shall ground the
discussion in the particular processes which have been operating in the
capitalist world economy since the sixteenth century. However, before I
advance my arguments that the state system and the capital accumula-
tion process are part of the same interactive socioeconomic system, I
-should like to discuss briefly a number of methodological problems
raised by this issue.
Let us assume, as Marx did, that capitalism is a socioeconomic
system with a deep structure, a set of underlying causal tendencies of
development or developmental "laws." Some people disagree with this
assumption, of course-including many Marxists. Those who focus on
exclusively political relations tend to take a purely historicist position
(for example, Thompson, 1978), which amounts to assuming that there
are no deep structural laws, or if there are, they are always changing. Of
course it is true that there is always some change occurring in a
dialectical system, but Marx's historicism assumed that the uniqueness

of a mode of production constituted a certain stability in the long-run
evolutionary process of human social development.3
If this is true, we can make simplifying assumptions about the deep
structure of capitalism which should help us distinguish its logic from
the logics of other modes of production. This is the problem of logical
boundaries, and it is not simply an academic exercise. Our conceptions
of the structural nature of capitalism (or feudalism, or socialism) enable
us to distinguish fundamental social change from more epiphenomenal
occurrences in history.
If we can agree with Marx's metatheoretical directive to tease out
what is unique about the underlying logic of each historical socioeco-
nomic system, and if we can reach some agreement on what the basic
developmental tendencies are, then we can approach the question of
subsystems. Thus the contention about the relationship between
economic and political processes in a capitalist system can be approached
in terms of their interdependence and potential integration into a single
structural theory. In order to know whether it is more elegant to
conceive of capitalism as a singular process which incorporates both
economic and political dynamics, or if it is more powerful to emphasize
the autonomy of these processes, we should be able to specify the laws of
a unified theory versus a theory composed of subsystems. We are far
from clarity in this task, although some of the work has begun. Ideally,
these two ways of theorizing should have different implications for
concrete social change and for our understanding of the dialectical
transformation of capitalism into a qualitatively different system. My
argument here does not proceed at this level of theoretical clarity.
Rather, I simply try to make a case for the superiority of a holistic
theory. However, it is important to cast this argument in the context of
the attempt to develop the world-system perspective into a formalized
theory of capitalist development.
Why have many theorists who focus on politics tended to adopt a
narrowly historicist approach to capitalist development? Marx made a
broad distinction between the growth of the forces of production
(technology), which occurs in the capital accumulation process, and the
reorganization of social relations of production (class relations, forms
3. This can be contrasted to completely ahistorical social systems theory such as that
formulated by Parsons (1966). It may be possible to state certain universal tendencies of
social systems, but these will not be helpful in understanding the transformation of
historical systems (modes of production). Marx is thus a generalist vis-a-vis the narrow
historicists and a particularist vis-a-vis Parsons.
of property, and other institutions which structure exploitation and the

accumulation process). Amin (1980) has applied this broad distinction
to the world-system. The widening of the world market and the
deepening of commodity production to more and more spheres of life
have occurred in a series of semiperiodic waves which Kondratieff
(1979) called "long waves." These and other economic phenomena seem
to be associated with "noneconomic" political events such as wars,
revolutions, and so on. This has caused some economists (Adelman,
1965) to argue that long waves are not really economic cycles at all, but
are set off by "exogenous" political events.
The causality and interrelationship among wars, revolutions, and
long business cycles is not precisely understood, but Amin (following
Marx) has made the insightful argument that the accumulation process
expands within a certain political framework to the point where that
framework is no longer adequate to the scale of world commodity
production and distribution. Thus world wars and the rise and fall of
hegemonic core powers (Netherlands, Britain, and the United States)
can be understood as the violent reorganization of production relations
on a world scale, which allows the accumulation process to adjust to its
own contradictions and to begin again on a new scale. Political relations
among core powers and the colonial empires which are the formal
political structure of core-periphery relations are reorganized in a way
which allows the increasing internationalization of capitalist production.
Wallerstein's observation that capitalism has always been "international"
(and transnational) does not contradict the existence of a long-run in-
crease in the proportion of all production decisions and commodity
chains which cross state boundaries.
The above discussion does not establish causal priority between
accumulation and political reorganization, but it indicates that these are
truly interdependent processes. The tendency toward narrow his-
toricism by those who focus on political events may be due to the greater
irregularity of politics and the apparently more direct involvement of
human collective rationality in political movements. On the other hand,
the overemphasis on determinism and mechanical models of develop-
ment by those who focus exclusively on "economic" processes may be
due to the greater regularity of these phenomena and their lawlike
market aggregation of many individual wills uncontrolled by rational
collective action. Politics seems less systematic and predictable because
human freedom is involved, while economic patterns seem more
systematic and determined by forces beyond human will.
These perceptions are correct to a considerable extent precisely

because capitalism as a system mystifies the social nature of investment
decisions by separating the calculation of profit to the enterprise from
the calculation of more general social needs. Anticapitalist movements
have tried to reintegrate economics and politics in practice, but up to
now the scale of the commodity economy has evaded them. Even the
"6socialist" states have not succeeded in creating a collectively rational
and democratic mode of production (Chase-Dunn, 1980). The interstate
system itself is the fundamental basis of the competitive commodity
economy at the system level. Thus the interaction of world market and
state system is fundamental to an understanding of capitalist develop-
ment and its potential transformation into a more collectively rational
system. Neither mechanical determinism nor narrow historicism is use-
ful in this project.
Capitalism as a Mode of Production
The critiques of Wallerstein contain implicit assumptions about the

nature of capitalism which tend to conceptualize it as an exclusively
"6economic" process. Skocpol (1979: 22) formulates the issue by arguing
that Wallersteinians "assume that individual nation-states are instru-
ments used by economically dominant groups to pursue world-market
oriented development at home and international economic advantages
abroad." She continues, explaining her own position:
But a different perspective is adopted here, one which holds that nation-
states are, more fundamentally, organizations geared to maintain control
of home territories and populations and to undertake actual or potential
military competition with other states in the international system. The
international states system as a transnational structure of military
competition was not originally created by capitalism. Throughout
modern world history, it represents an analytically autonomous level of
transnational reality-interdependent in its structure and dynamics with
world capitalism, but not reducible to it.
Modelski (1978) and Zolberg (1979) argue even more strongly for the
autonomy of the state system in opposition to what they see as
Wallerstein's economic reductionism. These authors raise the important
question about the extent to which it is theoretically valuable to
conceptualize economic and political processes as independent sub-
systems, but in so doing they oversimplify Wallerstein's perspective.
Wallerstein's work suggests a reconceptualization of the capitalist

mode of production itself, such that references to capitalism do not
point simply to market-oriented strategies for accumulating surplus
value. According to Wallerstein, the capitalist mode of production is a
system in which groups pursue both political-military and profitable
strategies, and the winners are those who effectively combine the two.
Thus the state system, state building, and geopolitics are the political
side of the capitalist mode of production (von Braunmuehl, 1979).
This mode of production is a feature of the whole world-system, not
its parts. Wallerstein distinguishes between world empires and world
economies. A world empire is a socioeconomic system in which the
economic division of labor is incorporated within a single overarching
state apparatus. A world economy is an economic division of labor
which is overlaid by a multicentric system of states. Barker (1978)
makes the important point that the political system of capitalism is not
the state, but the larger competitive state system. Particular states
exhibit more or fewer tendencies toward politicomilitary aggrandize-
ment or free market accumulation depending on their position in the
larger system, and the system as a whole goes through periods in which
state power is more generally employed versus periods in which a
relatively free world market of commodity exchange comes to the fore
(Krasner, 1976).
Hegemonic core states with a clear competitive advantage in
production advocate free trade. Similarly, peripheral states in the
control of peripheral capitalist producers of low-wage goods for export
to the core support the "open economy" of free international exchange.
Also as Krasner points out, smaller core states heavily dependent on
international trade tend to support a liberal economic order. Semi-
peripheral states and core states contending for hegemony utilize
protectionism and mercantilist monopoly to protect and expand their
access to world surplus value. Periods of rapid worldwide economic
growth are characterized by a relatively unobstructed world market of
commodity exchange as the interests of consumers in low prices come to
outweigh the interests of producers in protection. In periods of
stagnation, political power is more frequently utilized to protect shares
of a diminishing pie.
How does this conceptualization of the capitalist mode of production
differ from that of Marx? Marx's (1967) model of capital accumulation
assumed an institutional basis in which the state played no direct role in
production, but maintained the class relations necessary for private
accumulation to proceed. His abstract model, explicated in Volume I of
Capital, assumed this "caretaker" state, and also a class structure

composed of only two classes, capitalists and proletarians. The world-
system perspective, in attempting to come to grips with the realities of
capitalist development which have become apparent since Marx's time,
seeks to integrate the state and class relations into the accumulation
model. Class structures and states are not now seen as merely
"historical" forms, the product of impossibly complex processes, but as
related in a systematic way to the process of accumulation.
The world-system perspective revises Marx's definition of the
capitalist mode of production as follows. The mode of production is
thought to be a characteristic of the whole effective division of labor,
that is, the world economy (Wallerstein, 1979). Therefore, the capitalist
mode of production includes commodity producers employing wage
labor in the core areas and coerced labor in the peripheral areas.
Peripheral areas are not seen as "precapitalist" but rather as integrated,
exploited, and essential parts of the larger system. Capitalist production
relations, in this view, are not limited to wage labor (which is
nevertheless understood to be very important to the expanded repro-
duction of the core areas), but rather are composed of the combination
of wage labor with coerced labor in the periphery.4 This combination is
accomplished, not only by the world market exchange of commodities,
but also by the forms of political coercion which the core powers often
exercise over peripheral areas. The state, and the system of competing
states which compose the world polity, constitute the basic structural
support for capitalist production relations. Marx saw that the state
stood behind the opaque capital/ wage-labor relationship in nineteenth-
century England. The more direct involvement of the state in the
extraction of surplus product with slave labor or serf labor is but a more
obvious example of the way in which the state stands behind production
relations.
4. This definition of the capitalist mode of production as including both core and
peripheral forms of labor control is, without doubt, a major revision of Marx's theory. It
has been opposed most forcefully by LeClau (1977), who characterizes peripheral areas as
participating in the world capitalist economy but not subject to the fully developed
capitalist mode of production. Wallerstein's approach implies that the core-periphery
relationship is much more than a transitional stage by which areas are reorganized into
core-type capitalism His argument implies that the reproduction of specifically peripheral
types of capitalism is a necessity for containing class struggle within the core. Exploitation
of the periphery enables core capitalists to reward core workers with income and political
rights, which creates a relative harmony of class relations in the core (see also Galtung,
1971). This is not a static situation, however, as the business cycles and uneven
development which characterize capitalist accumulation constantly shift the terms of class
and international regimes.
If the state is often directly involved in extraction of surplus product,

what is the difference between capitalist production relations and labor
extraction in precapitalist agrarian empires? The difference is that the
capitalist world economy has no overarching single state which
encompasses the entire arena of economic competition. Rather than a
world state, there is the "international system" of competing states
operating within the world market. Thus state power is used to extract
labor power (more directly in the periphery than in the core) but the
competitive nature of the state system prevents any single state from
maintaining a systemwide monopoly and subjects producers to the
necessity of increasing productivity in order to maintain or increase
their shares of the world product.
The state system enforces the capital/ wage-labor relationship in the
core, the coerced labor extraction in the periphery, and the shifting
forms of extraction between the core and the periphery, and constitutes
the basis of production relations for the capitalist system. States are
organizations within the arena of competition which are often utilized
by the classes that control them to expropriate shares of the world
surplus product.5 Market forces are either supported or distorted
depending on the world market position of the classes controlling a
particular state. Thus hegemonic core states and peripheral states
(controlled by classes producing raw materials for export to the core)
implement, and try to influence others to implement, free trade policies.
States in which producers are seeking to protect home markets against
cheap foreign goods erect tariff barriers and other political controls on
the world market forces. Thus both political organization and economic
5. This includes state managers. I am not a vulgar instrumentalist. The extent to
which business interests directly control a state apparatus versus situations in which state
managers successfully achieve a certain autonomy by balancing different economic
interests is an important variable. Rubinson (1978) has made the point that state
managers are capable of effectively pursuing a policy of national development and upward
mobility in the world-system only when there is a convergence of political interests among
the dominant economic groups within a nation. This clarifies an issue which is posed by
the "relative autonomy" theorists in terms of the state representing the "general interests"
of capital. As Barker (1978) reminds us, the capitalist class is a world class, and a very
competitive one at that. No single world capitalist state represents the interests of capital
as a whole, so the various national states represent the interests of fractions of capital. The
extent to which they do this effectively depends on how the interests of these fractions
converge or diverge as a consequence of their market position and options within the
larger world economy. Block (1978) reminds us that state managers also are allowed to
expand the scope of the state in response to the demands of workers and peasants, and thus
states not only come to institutionalize the interests of capitalists, but also, especially in the
core, take on redistributive functions which benefit workers. Krasner (1978) notes the
similarities between the structural marxist "relative autonomy" theory and his own state-
centric approach to international political economy
producers are subjected to a long-run "competing down" process,

whereas in the ancient empires the monopoly of violence held by a single
center minimized both market and political competition among
different organizational forms.
In the capitalist world economy, state structures themselves are
submitted to a political version of the "competing down" process which
occurs in the realm of the market. Inefficient state structures, ones that
tax their producers too heavily or do not spend their revenues in ways
which facilitate politicoeconomic competition in the world economy,
lose the struggle for domination. In Marxist theoretical terms, the state
system produces an equalization of surplus profits, the profits which
return because political coercion enforces monopolies. There are no
complete long-run monopolies. Even the largest organizations (both
states and firms) are subjected to the pressures of politicoeconomic
competition.
It has been pointed out by Zolberg (1979) that not all precapitalist
modes of production were world empires. Indeed, Anderson (1974) and
many others have emphasized that it was European feudalism's
"parcellization of sovereignty" which allowed the capitalist mode of
production to become dominant. The possibilities for political competi-
tion and the space for new departures in social relations which such a
decentralized political structure allowed were a fertile context for the
emergence of capitalism. Classical European feudalism, although
somewhat integrated culturally, and sharing a common political matrix,
did not have more than a rudimentary division of labor across the
manors and towns. The growth of commodity production, merchant
capital and "industrial" capital producing manufactures for the emer-
ging local and long-distance markets transformed the "stateless"
classical feudalism into the capitalist world economy and interstate
system of the sixteenth century. The dynamic of mercantile competition
between both public and private enterprises in the long sixteenth
century, together with the emergence of a core-periphery hierarchy, led
Wallerstein to argue that the capitalist system was then born.
Anderson (1974) insists that absolutism was primarily an expression
of feudal reorganization in the face of the crisis of feudalism in Western
Europe and a response to the formation of a militarily threatening
international state system in Eastern Europe. His emphasis downplays
the role which the growth of commodity production and the emergent
core-periphery division of labor between East and West played in the
formation and extension of the European state system. He subsumes
mercantilist international policy and state-sponsored development of

crucial sectors of production into his complex definition of "abso-
lutism." From my point of view, these are variants of state capitalism
appropriate to the first epoch of the expansion of the capitalist world
economy.
Most social theorists have correctly identified the differentiation
between economic and political institutions as a key feature of
capitalism, but, since Adam Smith, this separation has been primarily
identified with the separation between private and public spheres within
nation-states. The contemporary growth of state capitalism, and
Wallerstein's reinterpretation of seventeenth- and eighteenth-century
mercantilism, imply that the main locus of the differentiation between
economic and political institutions is at the level of the world economy
as a whole-that is, the distinction between the state system and the
world division of labor. The public-private separation was an important
political issue for the triumph of industrial capital over the state-
institutionalized interests of older agrarian capital in the eighteenth and
nineteenth centuries, especially in the core states. But the more direct
role of the state in fostering national economic development in most of
the world economy belies the exclusive identification of capitalism with
private ownership.
In the competitive state system it has been impossible for any single
state to monopolize the entire world market, and to maintain hegemony
indefinitely. Hegemonic core powers, such as Britain and the United
States, have, in the long run, lost their relative domination to more
efficient producers. This means that, unlike the agrarian empires,
success in the capitalist world-system is based on a combination of
effective state power and competitive advantage in production. The
extraction of surplus product is based on two legs: the ability to use
political power for the appropriation of surplus product; and the ability
to produce efficiently for the competitive world market. This is not the
state-centric system which some analysts describe, because states cannot
escape, for long, the competitive forces of the world economy. States
that attempt to cut themselves off or who overtax their domestic
producers condemn themselves to marginality. On the other hand, the
system is not simply a free world market of competing producers. The
interaction between political power and competitive advantage is a
delicate balance.
Skocpol (1977) has argued that Wallerstein is wrong in contending
that core states are strong states. She correctly points out that the most
successful core states have been those that combined a relatively strong
world-economy-oriented bourgeoisie with a relatively decentralized
state. Tardanico (1978) has argued that the extent to which a state is
supported during a military emergency by the class fractions6 which
form its "center coalition" ("power bloc" in Poulantzas's terms) should
be considered a dimension of state strength. This problem can best be
handled by observing that there is a certain differentiation among core
states in the type of development path followed. Some rely more on
geopolitical military advantage and centralized and effective fiscal
structures, while others-the more successful ones-rely on low over-
head decentralized states which act efficiently to protect and extend the
vital business interests of their national capitalists. Lane's (1979)
concept of "protection rent" is relevant here. Some states provide
effective protection at or near "cost" and allow the profitable operation
of the businesses under their protection. Others are less efficient and less
effective even though they may be better able to extract taxes from their
own citizens.
Thus, core states are strong relative to peripheral states, but some are
stronger vis-a-vis their own internal capitalist class fractions than
others. The most successful core nations have achieved their hegemony
by having strong and convergent business class interests which unified
state policy behind a drive for successful commodity production and
trade with the world market. Second-runners have often achieved some
centrality in the world economy by relying on a more state-organized
attempt to catch up with the "caretaker" states in terms of political and
economic hegemony. Skocpol's (1977) emphasis on the less autocratic
form of development in the most successful states does not lend support
to the contention that geopolitics and capital accumulation are
autonomous from one another, although success is perhaps not the best
criterion for determining the nature of capitalism as a system. For this
we need to focus on the dynamics and relationships operating in the
system as a whole, not in its parts, the national societies.
It may be argued that the existence of states which successfully follow
an exclusively political-military development path is evidence in favor
of the thesis that geopolitical and economic processes operate indepen-
dently. The existence of such a development path is unquestionable (for
example, Prussia, Sweden, Japan, U.S.S.R.), but the upward mobility
of these states was certainly conditioned by their context, a world
6. Class fractions are defined by Poulantzas (1973) as interest groups within classes.
economy in which commodity production and capitalist accumulation

were becoming general. If all states had followed such a path, the modern
world-system would be a very different kind of entity. It is argued below
that the reproduction and expansion of the kind of interstate system
which emerged in Europe requires the institutional forms and dynamic
processes which are associated with commodity production and capi-
talist accumulation. First, though, let us discuss the ways in which the
interstate system helps to preserve the dynamics of the capitalist process
of accumulation.
The Reproduction of Capitalist Accumulation
The competitive state system serves several functions which allow the
capitalist accumulation process to overcome temporarily the contra-
dictions it creates, and to expand. The balance of power in the interstate
system prevents any single state from controlling the world economy,
and from imposing a political monopoly over accumulation. This
means that "factors of production" cannot be constrained to the degree
that they could be if there were an overarching world state. Capital is
subjected to controls by states, but it can still flow from areas where
profits are low to areas where profits are higher. This allows capital to
escape the political claims which exploited classes attempt to impose on
it. If workers are successful in creating organizations which enable them
to demand higher wages, or if communities demand that corporations
spend more money on pollution controls, capital can usually escape
these demands by moving to areas where there is less opposition. This
process can also be seen to operate within federal nation-states. Class
struggles are most often oriented toward and constrained within
particular territorial state structures.
Thus the state system provides the political underpinning of the
mobility of capital, and also the institutional basis for the continuing
expansion of capitalist development. States which successfully prevent
capital from migrating do not necessarily solve this problem, because
capital from other sources may take advantage of the less costly
production opportunities outside the national boundaries, and push the
domestic products out of the world market.
This implies that capitalism is not possible in the context of a single
world state, or rather that such a system would eventually develop a
political regulation of resource allocation which would more regularly
and fully include social desiderata in the calculation of investment

decisions. The dynamic of the present system, in which profit criteria
and national power are the main controllers of resource use, would be
transformed into a system which balances development according to a
calculation of the individual and collective use values of human society.
This system, which we can call socialism, would not constitute a utopia
in which the problem of production has been completely solved, but
the political struggles for resources, which would be oriented toward a
single overarching world government, would exhibit a very different
long-run dynamic of political change and economic development than
that which has characterized the capitalist world economy.
Reproduction of the Interstate System
Thus I am arguing that the interstate system is important for the

continued viability of the capital accumulation process. But is the
accumulation process equally as important for the generation and
reproduction of the interstate system? First, what do I mean by
reproduction of the interstate system? I am not making fine distinctions
between types of interstate systems such as those introduced by
Chatterjee (1975). By an interstate system, I mean a system of unequally
powerful and competing states in which no single state is capable of
imposing control on all others. These states are in interaction with one
another in a set of shifting alliances and wars, and changes in the relative
power of states upsets any temporary set of alliances, leading to a
restructuring of the balance of power. If such a system disintegrates due
to the dissolution of the states, or due to the complete elimination of
economic exchanges between the national territories, or as a result of the
imposition of domination by a single overarching state, the system can
be said to have fundamentally changed (that is, to be transformed, not
reproduced). In this definition, the stages of classical, imperial, bipolar,
and "contemporary" interstate systems identified by Chatterjee are
subsumed into a single broad type which is nevertheless quite different
from the precapitalist agrarian empires or the economically self-
subsistent and "stateless" system which existed in feudal Europe.
Skocpol (1979) contends that the state system predates the emergence
of capitalism and implies that this is evidence of its relative autonomy.7
7. On the prior origins of the state system Zolberg (1979) is ambiguous. At one point
he argues that the formation of the world economy contributed to the crystallization of the
It is clearly the case that multistate systems exhibiting some of the

tendencies of the European balance of power existed prior to the
emergence of the capitalist mode of production. These state systems
were unstable, however, and tended either to become world empires or
to disintegrate. The multicentric "international system" which devel-
oped among the Italian city-states and their trade partners in the East
and West invented many of the institutions of diplomacy and shifting
alliance which were later adopted by the European states. As Lane
(1973: 241) says of the sixteenth century, "The Italian state system was
being expanded into a European state system." While this constitutes
prior development, it may not prove the relative autonomy thesis.
Many of the capitalistic financial and legal institutions later elabo-
rated in the European capitalist world economy were invented in the
Italian city-states. Wallerstein contends that the Christian Mediter-
ranean constituted a kind of interstitial proto-capitalist world economy.
Analogous to Marx's analysis of merchant capitalism, the Mediter-
ranean world economy-though developing the seeds of capitalist
production with labor as a commodity-was primarily based on the
exchange of preciosities among social systems which were not inte-
grated into a single-commodity economy.8 Nevertheless this proto-
capitalist world economy succeeded in developing several institutional
state system, while at other points he refers to the prior existence of states and the logic of
military expansion. He is lumping together considerations of the balance of power
mechanism with the clearly more ancient state-building strategies of military conquest.
Skocpol waffles on the issue of the autonomy of the state system. In her text (quoted
above) she seems to assert that the state system and the logic of geopolitical domination
are substantially autonomous from the capital accumulation process, but in a footnote
(1979: 299) she approvingly quotes Otto Hintze, "the affairs of the state and of capitalism
are inextricably interrelated, . . . they are only two sides, or aspects, of one and the same
historical development." This is orthodox Wallersteinism.
8. The exchange of preciosities involves exchanging goods which have little labor
value to their producers but great value to their consumers. Mandel (quoted in Ftank,
1979) refers to this as an exchange of "unequals" which occurs before social systems
interact substantially such that their divisions of labor come to be integrated sufficiently to
produce what Marx (1967) referred to as "abstract labor"-the equivalence of qualita-
tively different types of labor in terms of a single system of value. Of course, the formation
of abstract labor and the equivalence of labor values is a slow process which is never
complete, even within an integrated commodity economy. However, in a single interactive
commodity economy there is a tendency to the exchange of equal values which subjects the
division of labor itself to periodic reorganization. The exchange of preciosities tends to
become the exchange of labor value equivalents as merchant capital "acts as a solvent on
precapitalist relations of production" (Marx, 1967). This process occurs, not automati-
cally, but with the vicissitudes of the exercise of political coercion by which areas become
integrated into the capitalist world economy and subjected to the process through which
they are made peripheral.
features which were only later fully articulated in the capitalist mode of
production that emerged in Europe and Latin America in the sixteenth
century. One of these was the state system, which as Zolberg (1979)
agrees, only became stabilized after its emergence in Europe.
Does the continuity of the Italian state system, its failure to develop
into a world empire, constitute a case for the independence of the state
system? No-its incorporation into the emerging capitalist world
economy allowed the Italian system to evade this fate.
Skocpol's contention about the prior emergence of the interstate
system also receives support from Anderson's (1974) interpretation of
the rise of absolutist states in Western and Eastern Europe, but this
contention rides on one's definition of capitalism. Anderson holds to the
school which sees the "fully formed capitalist mode of production" as
becoming dominant only in the eighteenth century. Wallerstein's
interpretation emphasizes the extent to which "agrarian" capitalism
became dominant in the long sixteenth century with the formation of a
hierarchical division of labor between the core, Northwest Europe, and
the peripheral areas of Eastern Europe and Latin America. Anderson's
interpretation of the absolutist states in formation downplays the
importance of capitalist production in the growing cities of feudal
Europe and the emergence of agricultural production for the market in
rural areas. Wallerstein's interpretation implies that the capitalist mode
of production became the most important stimulus for change well
before the bourgeois revolutions in which explicitly capitalist interests
came to state power. Anderson's account does not deny the importance,
especially in the West, of the emergence of bourgeois sources of power
and financial support, but he chooses to call the glass half empty instead
of half full. His discussion of state formation in Eastern Europe
correctly identifies the extent to which it was reactive to the competitive
and aggressive interstate system which emerged first in the West. He
ignores, however, the importance of the developing core-periphery
division of labor for the shifts in class structure which influenced state
formation in the East.
Skocpol's contention that nation-states predated the dominance of
capitalism is clearly correct. Medieval states were present in precapi-
talist England and France. However, the emergence of the interstate
system is another matter. The balance-of-power system defined above
emerged first among the Italian city-states and later in the Europe of the
long sixteenth century, contemporaneous with the emerging dominance
of capitalism as a world economy.
One clue to the dependence or independence of the state system is its

ability to reproduce itself, or to weather crises without either becoming
transformed into a world empire, or experiencing disintegration of its
division of labor and network of economic exchange. Wallerstein's
analysis of the Habsburg failure to transform the still shaky sixteenth
century capitalist world economy into a world empire ( 1974: 164-221) is
asserted to demonstrate the strength of capitalism in reproducing the
state system. I will discuss the later points at which such challenges to the
state system were mounted (Louis XIV's, the Napoleonic wars, and the
twentieth-century world wars) and the causes of continuity of the state
system, but first I want to criticize an argument made by Zolberg (1979).
Zolberg argues that the state system occasionally incorporated
powers that were outside the capitalist world economy into alliances
which affected the outcome of politicomilitary struggle. His main
example is the alliance between France and the Ottoman Empire against
the house of Habsburg. He argues that this alliance, which was
important in France's ability to resist the Habsburgs' move to incor-
porate the emerging world economy into a single overarching state,
proves the autonomy of the state system and the inability of the nascent
world market to survive independent of the state system. It is true that
this alliance, and other less important ones between European states and
states located in areas outside the capitalist division of labor, affected
the course of development of the modern world-system. It may even be
true that without this outside alliance, the emergence of capitalism in
Europe would have been long postponed. But, again, this argues that the
state system is important to the capitalist world economy-on this
everyone agrees. But what would have happened to the European
interstate system if the capitalist world economy had not survived?
Probably, it would have become a world empire. Thus this involvement
of outside powers does not constitute evidence of the autonomy of the
state system.
Another reason Zolberg argues for the existence of an autonomous
logic of the state system is his confusion over the difference between
colonial empires and a world empire. It is perfectly correct that core
states engage in imperialism in the sense of using military power to
dominate parts of the periphery. This is a cyclical tendency of the world
economy (Bergesen and Schoenberg, 1980). However, the existence of
this phenomenon is very different from the imposition of a single state
on the whole system. In addition, some theorists tend to confuse the
logic of conscious strategies pursued by actors with the deep structural
logic of the system itself. Neither the rational form of profitable

investment decisions, nor the strategies of geopolitical aggrandizement
in the minds of statesmen reveal the underlying tendencies of the
capitalist system. This underlying logic is a set of developmental
tendencies in which the competitive accumulation process, state build-
ing, and geopolitics play integrated parts.
The European world-system became the global capitalist system in a
series of expanding waves which eventually incorporated all the
territories and peoples of the earth. Although political-military alliances
with states external to the system occurred after the sixteenth century,
they were never again so crucial to the survival and development of the
system. But the system continued to face challenges of survival based on
its internal contradictions. Uneven economic development and the vast
expansion of productive forces outstripped the structures of political
power, causing violent reorganizations of the state system (hegemonic
wars) to accommodate new levels of economic development. This
process can be seen in the cycles of core competition, the rise and fall of
hegemonic core states, which have accompanied the expansion and
deepening of the capitalist mode of production (Chase-Dunn, 1978;
Bousquet, 1980).
After the failure of the Habsburgs there have been three other
attempts to impose a world empire on the capitalist world economy:
those of France under Louis XIV and Napoleon, and that of Germany
and its allies in the twentieth-century world wars (Toynbee, 1967; Dehio,
1962).9 Each of these came in a period when the hegemonic core power
was weak. Louis XIV attempted to expand his monarchy over the whole
of the core powers during the decline of Dutch hegemony. Napoleon's
attempt came while Britain was still emerging as the hegemonic power.
The German attempts came after Britain's decline and before the full
9. It may be argued that one or another of these did not really constitute an attempt
at imperium. There has been much dispute about German intentions in World War I (see
Fischer, 1967, and his critics), but the real issue is not intentions but the structural
consequences of a German victory for the interstate system. If the balance-of-power
system, and thus the multicentric nature of the core, could have survived such a victory,
then these events do not represent real threats to the interstate system as such but merely a
challenge to the extant balance of power. If none of the events discussed presented a real
possibility of imperium or of the formation of a core state large enough to end the
operation of the balance-of-power system, we must ask why there have been no challenges
to the interstate system over its 500-year history. Again, I would contend that the
dynamics of uneven capitalist development have directly and indirectly contributed most
to this structural stability.
emergence of the United States. In these three instances we may see a

threat to the state system and to the existence of the capitalist world
economy.
One striking thing about these events is that they were not perpe-
trated by the hegemonic core powers themselves, but by emerging
second runners among the competing core states. This raises the
question of why hegemonic core powers do not try to impose imperium
when it becomes obvious that their competitive advantage in production
is waning. Similarly we may ask, as Zolberg did of the sixteenth century,
why opposing forces were able to prevent the conversion of the system
into a single empire. To both of these questions I would answer that the
transnational structures associated with the capitalist commodity
economy operated to tip the balance in favor of preserving the state
system.
Hegemonic core states often use state power to enforce the interests
of their "own" producers, although typically they do not rely on it as
heavily as other competing core states. However, a hegemonic core
power begins to lose its competitive edge in production with the spread
of production techniques and the equalization of labor costs which
accompany the growth of new core production in other areas. The profit
rate differentials change such that capital is exported from the
hegemonic core state to areas where profit rates are higher. This reduces
the level at which the capitalists of the hegemonic core state will support
the "economic nationalism" of their home state. Their interests come to
be spread across the core.10 In other words, hegemonic core states
develop fractions of their capitalist dasses having different interests.
There evolves a fraction of "international capitalists" who support peace
and supranational federation, and "national" capitalists who seek
protection and politicomilitary expansion. This explains the ambivalent
10. Many authors have praised the lack of patriotism which capitalists evince
(Schumpeter, 1955) as proof that capitalism itself is a peace-loving system, and only
atavistic survivals of the precapitalist era grip the world and lead to destruction on a
massive scale. Here we are not confusing capitalism as a system with the motives of those
who make investment decisions. The diffusion of interest across the core which results
from the export of capital is an important reason hegemonic core states do not try to
impose imperium. It also explains some of the reticence to engage in defensive war against
the imperial ambitions of competing core states. The businessmen of Amsterdam not only
invested in the British East India Company, but actually sold arms to the British during the
Anglo-Dutch wars. This story is only topped by the successful suit which General Motors
brought against the U.S. Government for destruction of property by the bombing of GM
plants in Germany during World War II.
and contradictory policies of hegemonic core powers during the periods

of their decline (Goldfrank, 1977; Chase-Dunn, forthcoming).
Why have the second-running core powers who seek to impose
imperium on the world economy failed? Most theorists of the state
system have not addressed this question as such. The balance-of-power
idea explains why, in a multicentric system, alliances between the most
powerful actors weaken. Coalitions in a triad, for example, balance the
two weakest actors against the strongest. However, this alliance falls
apart when the stronger of the partners gains enough to become the
strongest single actor, because the ally can gain more by allying with the
declining former power than by sticking to the original alliance. This
simple game theory is extended to the state system by the theorists of
equilibrium, but it does not answer our question substantively. Again, it
is not the most powerful actor that tries to impose imperium, but
upwardly mobile second runners with less than their "fair" share of
political influence over weaker areas of the globe. Organski's (1968)
theory explains why these second runners try, but not why they fail.'II
Of course, we are not considering strictly historical explanations
which make use of uniquely historical factors: such a theoretical
maneuver (or rather an atheoretical maneuver) is easy to accomplish
when one is explaining only four "events." Here we seek an explanation
of what seems to be aregularity of the system from our-understanding of
the logic of the system itself.
Morganthau (1973) invokes the notion of a normatively organized
liberal world culture which successfully mobilizes counterforce against
the threat to the balance-of-power system. This conceptualization of the
world-system as a normatively integrated system is shared by more
recent authors who seek to extend modernization theory to the world-
system (Inkeles, 1975; Thomas et al., 1979). Wallerstein's perspective
emphasizes that the capitalist world economy is not primarily a
normatively integrated system. In Wallerstein's broad typology of
social systems, which follows closely that of Polanyi (1944), social
11. Modelski's explanation of the rise of hegemonic core powers in terms of a "desire
to create a global order . . . an expression of the will to power, the urge to control and to
dominate, to imprint a pattern on events," (1978: 224) also seems an unlikely candidate for
explaining much of the variance. He does not explain clearly why this desire emerges in
1500 or how it is differentially distributed to explain which nation-states came to dominate
the world economy. Modelski's (1980) more recent paper acknowledges, in principle, the
interdependence of political and economic processes, but his account continues to proceed
in terms of a "great power" theory of history which ignores the division of labor between
the core and the periphery.
systems based on normatively regulated reciprocal exchange (termed

"mini-systems" by Wallerstein) no longer exist except in vestigial form
in the family and as symbolic subsystems of the present world economy,
which are not determinant of its developmental tendencies. While
Wallerstein does not deny that some normative patterns are generalized
across the system, he focuses on the fact that culture tends to follow state
boundaries so that the system remains primarily multicultural.
The linguistic boundaries of the world culture are formed and
reformed primarily by the process of nation building and associated
state formation. These processes are somewhat similar across the
system, and the national cultures which come to exist have an
isomorphic character. These facts do not contradict the main point that
normative integration at the system level remains weak, although
growing. From this perspective it is farfetched to explain the failure of
empire in terms of commitment to shared norms. The ideologies
employed by the second runners undoubtedly played some part in their
inability to mobilize support, but this is unlikely to have been the most
important factor.'2
I argue that both the attempts and the failures of imperium can be
understood as responses to the pressures of uneven development in the
world economy, albeit somewhat reactive responses. We have already
noted that the attempts were fomented, not by the most powerful states
in the system, but by emerging second-running core powers contending
for hegemony. One striking aspect of all four cases is their appearance,
in retrospect, of wild irrationality in terms of their attempt to use
military power to conquer areas much too vast to subdue, let alone to
exploit effectively. In this we may see the weakness of the strategy of
politicomilitary domination unaccompanied by a strategy of competi-
tive production for sale on the market.13 The countries that adopted the
12. It has also been suggested that the reason hegemonic core powers do not try to
impose imperium on the whole system is their enlightened view that the multistate system
is necessary for the survival of capitalism. Disraeli is suggested as an example. I would tend
to argue that this type of consciousness can be understood as a response to the actual
dispersion of investment capital which accompanies the apex of hegemony of the leading
core state. Liberal economic and political ideology is not randomly distributed.
13. 1 would argue, in agreement with Modelski (1978) and Thompson (1980), that the
predominantly land-oriented continental expansionism of the French monarchy was not a
strategy which could lead to hegemony in the capitalist world economy. It is notable that
the overhead costs of purely geopolitical expansionism (Cox's "Florentine model" of
domination, 1959) cannot effectively compete with the low overhead strategy of allowing
a more decentralized political system to bear the costs of administration while surplus
extraction is accomplished by trade. The "Venetian model" is the one followed by the
strategy of aggrandizement reached far beyond their own capacities and

failed to generate sufficient support from allied countries. This second
condition bears further examination. Why did the French and German
imperiums not receive more support? Potential allies, in part, doubted
the extent to which their interests would be protected under the new
imperium, and the path of capitalist growth in the context of the
multicentric system appeared preferable to the emerging bourgeoisies of
potential allied states.
If I am correct, the interstate system is dependent on the institutions
and opportunities presented by the world market for its survival. There
are two main characteristics of the interstate system which need to be
sustained: the division of sovereignty in the core (interimperial rivalry)
and the maintenance of a network of exchange among the states. The
nature of the world economy assures that states will continue to
exchange due to natural and socially created comparative advantages in
production. Withdrawal from the world market can be accomplished
for short periods of time, but it is costly and unstable. Even the
"socialist" states which have tried to establish a separate mode of
production have eventually returned to production for, and exchange
with, larger commodity markets.
The maintenance of interimperial rivalry is facilitated by a number of
institutional processes. At any point in time national sentiments,
language, and cultural differences make supranational integration
difficult, as is well illustrated by the EEC. These "historical" factors may
be traced back to the long-run processes of state formation and nation
building, and these processes have themselves been conditioned by the
emergence of the commodity economy over the past 500 years.
The main institutional feature of the world economy which maintains
interimperial rivalry is the uneven nature of capitalist economic
development. As discussed above, hegemonic core powers lose their
competitive advantage in production to other areas. This causes the
export of capital, which restrains the hegemonic power from attempting
to impose political imperium. Second-running challengers, who do try
to impose imperium, cannot gain sufficient support from other core
allies to win, or at least, historically, they have not been able to do so.
This is in part because the potential for further expansion and deepening
states which became hegemonic core powers (Netherlands, Britain, and the United States),
while the land-oriented political centralizers have been reduced to the role of second-
runners among the core states.
of the commodity economy, and growth and development in the c

of a decentralized interstate system, appears greater to potential
than the potential for political and economic power within the pro
imperium. It is the very success of capitalist development in the past
which preserves the interstate system. Success stories in the uneven
development history of the world economy are frequent enough to
prevent imperium.
Despite the contentions of many Marxists that the increased size of
firms has led to a new stage of "monopoly" capitalism, the conception of
capitalism proposed here-which incorporates state capitalism and
political control of home markets as normal instances of capitalist
competition for shares of the world market-implies that the basic
tendencies of the accumulation of capital have been with us since the
sixteenth century. This does not deny the increased political density of
controls on accumulation which has accompanied the secular increase
in the power of states over the process of production. However, this
increased density of political control, including the resistance of
peripheral states to unbridled exploitation by the core, has not altered
the basic nature of the larger system.
The transformation of capitalism cannot be accomplished by the
emergence of state control as long as the interstate system remains
unregulated by a world government. Proponents of the relative
autonomy thesis might point to the bickering and bloody competition
among the "socialist" states as evidence of the independence of the
interstate system from the capitalist mode of production. My position is
that these states remain part of the larger capitalist world-system
(Chase-Dunn, 1980). This does not mean that the institutional experi-
ments in the "socialist" states have no meaning for the transformation of
capitalism, but that they, themselves, do not constitute that transforma-
tion.
The current return to mercantilist international economic policy and
the rising nationalism and conflict among states can be understood
primarily in terms of the repetition of earlier cyclical phases of the
world-system. The capitalist mode of production with its logic, in-
cluding the logic of the interstate system, remains very much the
dominant source of developmental tendencies in the contemporary
world-system.
The conclusion I wish to reach here is by no means definitive. The
usefulness of theorizing about the modern world-system in terms of a
single logic versus political and economic subsystems can be decided
only when competing theories have been formulated with enough clarity
to allow them to be systematically subjected to evidence. My goal has
been to present an alternative way of conceptualizing capitalist
development in order to stimulate further discussion and research. The
attempt to create a reintegrated interdisciplinary science of political
economy is a necessary step in the project to understand (and influence)
the directions and potentialities of our present collective history.

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Interstate System and Capitalist World-Economy: One Logic or Two?

Author(s): Christopher Chase-Dunn

This article attempts to clarify a number of issues arising from the

INTERNATIONAL STUDIES QUARTERLY, Vol. 25 No. 1, March 1981 19-42

sixteenth century. Viewed as a whole, the modem world-system has

Metatheoretical and Methodological Issues

In this article, rather than argue at the philosophical level about

dialectical system, but Marx's historicism assumed that the uniqueness

of property, and other institutions which structure exploitation and the

These perceptions are correct to a considerable extent precisely

Capitalism as a Mode of Production

The critiques of Wallerstein contain implicit assumptions about the

Wallerstein's work suggests a reconceptualization of the capitalist

Capital, assumed this "caretaker" state, and also a class structure

If the state is often directly involved in extraction of surplus product,

producers are subjected to a long-run "competing down" process,

mercantilist international policy and state-sponsored development of

economy in which commodity production and capitalist accumulation

The Reproduction of Capitalist Accumulation

and fully include social desiderata in the calculation of investment

Reproduction of the Interstate System

Thus I am arguing that the interstate system is important for the

It is clearly the case that multistate systems exhibiting some of the

One clue to the dependence or independence of the state system is its

logic of the system itself. Neither the rational form of profitable

emergence of the United States. In these three instances we may see a

and contradictory policies of hegemonic core powers during the periods

systems based on normatively regulated reciprocal exchange (termed

strategy of aggrandizement reached far beyond their own capacities and

of the commodity economy, and growth and development in the c

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