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World System Theory

Immanuel Wallenstein proposed one of the explanations of how global stratification came about. According to world system theory, industrialization led to four groups of nations. The first group consists of the core nations, the countries that industrialized first (Britain, France, Holland, and Germany), which grew rich and powerful. The second group is the semi periphery.

The economies of these nations, located around the Mediterranean, stagnated because they grew dependent on trade with the core nations. The economies of the third group, the periphery, or fringe nations, developed even less.

These are the eastern European countries, which sold cash crops to the core nations. The fourth group of nations includes most of Africa and Asia. Called the external area, these nations were left out of the development of capitalism altogether. The current expansion of capitalism has changed the relationships among these groups.