The thesis of this article is that the great political upheavals of our days—from Eastern Europe and the ussr to the Middle East—originate in a radical transformation of the social structure of the world-economy combined with a persistent, indeed deepening, income inequality among the regions and political jurisdictions into which the world-economy is divided.footnote＊ The radical transformation I am referring to began shortly after the end of the Second World War. It gained momentum in the 1960s, and tapered off in the late 1970s and 1980s. As succinctly put by Eric Hobsbawm, ‘the period from 1950 to 1975. . .saw the most spectacular, rapid, far-reaching, profound, and worldwide social change in global history. . .[This] is the first period in which the peasantry became a minority, not merely in industrial developed countries, in several of which it had remained very strong, but even in Third World countries.’footnote1 The change in question has cut across the great West–East and North–South divides and has been primarily the result of purposive actions aimed at narrowing the gaps that circa 1950 separated
Individual successes notwithstanding, these actions failed in their attempt to promote a more equal distribution of wealth across the space of the capitalist world-economy. A handful of states did manage to shift some of the world’s wealth their way, and many individuals achieved the same result by moving across state boundaries. But these achievements of a few states and of many individuals did not change the overall hierarchy of wealth. On the contrary, after more than thirty years of developmental efforts of all kinds, the gaps that separate the incomes of the East and of the South from those of the West/North are today wider than ever before.
In the 1980s, states in the East and in the South thus found themselves in a situation in which they had internalized elements of the social structure of wealthier countries through ‘modernization’, but had not succeeded in internalizing their wealth. As a consequence, their governments and ruling groups lacked the means of fulfilling the expectations and accommodating the demands of the social forces that they have brought into existence through modernization. And as these forces rebel a general crisis of developmentalist practices and ideologies begins to unfold. The crisis of Communism in Eastern Europe and the ussr is but one side of the coin of this general crisis of developmentalism. The other side of the coin is the crisis of the capitalist variant of developmentalism—a crisis which is most clearly visible in the rise of Islamic fundamentalism in the Middle East and North Africa but is apparent in one form or another throughout the South.
In what follows I shall focus on the increasing inequality of the global distribution of income, because in my view this is rapidly becoming the central issue of our times. I shall take for granted that processes of urbanization and industrialization have reached deep into the South and that numerous Third World countries have been industrializing
The latter view is so ingrained that it has remained unchallenged notwithstanding the recent wave of deindustrialization among some of the wealthiest and most powerful states of the West. These states continue to be identified as ‘industrial’ or ‘industrialized’, while the corresponding rapid industrialization of comparatively poor states is taken at face value as the equivalent of ‘development’. This view obscures the fact that industrialization has been pursued not as an end in itself but as a means in the pursuit of wealth. Whether or not industrialization has represented ‘development’ depends entirely on whether or not it has been an effective means in this pursuit. As we have shown elsewhere, the effectiveness of industrialization in delivering wealth in the world-economy at large has declined with its general spread until, on average, its returns have become negative.footnote2
By focusing on the persistent and deepening inequalities in the distribution of income across the space of the capitalist world-economy, I simply want to underscore that—a few exceptions aside—the spread of industrialization has not delivered on its promises. There has been a lot of industrialization (and even more urbanization) with incalculable human and ecological costs for most of the people involved. But there has been little ‘catching up’ with the standard of wealth set by the West. Industrialization or, more generally, modernization has thus failed to deliver what it had promised, and this failure is at the root of the serious troubles currently faced by most states in the East and in the South. These serious troubles are neither local nor conjunctural. They are systemic and structural. They are troubles of the world-system to which the West/North belongs as much as the East and the South. Forecasts and projects concerning the future of socialism in the West/ North that ignore the systemic origins and consequences of these troubles are at best irrelevant and at worst dangerously misleading.
What do we mean when we say that Communism has ‘failed’ in Eastern Europe and in the ussr, or that capitalism has ‘succeeded’ in Japan and elsewhere in East Asia? Of course, different people mean different things. Yet, in the back of our minds there looms a fairly universal standard against which we assess the performance of political and economic regimes around the world. This standard is the wealth of the West/North—not of any particular region or political jurisdiction into which the West/North is divided, but of the West/North as an ensemble of differentiated units engaged in mutual cooperation and competition.