Imagination is usually nothing but the search for middle run profits by those to whom short run channels are blocked.  When channels are not blocked, imagination suffers. (169)

Wallerstein's thesis is offered early and in succinct fashion:  "It will be the argument of this book that three things were essential to the establishment of such a capitalist world-economy:  an expansion of the geographical size of the world in question, the development of variegated methods of labor control for different products and different zones of the world economy, and the creation of relatively strong state machineries in what  would become the core-states of this capitalist world-economy." (38) His thesis on the formation of a modern capitalist class is persuasive in part because of the balance he strikes between theory and history:  theoretically he centers on the persistent effect of inequalities between regions; historically he features the particularities of class development in different European regions.  Also persuasive for his argument is his erudition: his apt summaries of complicated historiographical issues, and his lengthy notes, one after the other tumbling off  the page into elegant monographs .

Perhaps for some his theory of a world system with a core, a semi-periphery and a periphery is too neat, an improbably geometric model; nevertheless, I found the broad social principles upon which he built his case to be unexceptional, even all-too-familiar: most groups seek short-run profits in preference to longer-term gain; social and economic differences are likely to be perpetuated and codified into traditions and systems; political power and economic profit are rarely rationalized at the same time, or for the same purpose.  And, as above, any situation or society that contains within itself no obstacles to gain likewise contains no impetus for change.  People living in such societies are only momentarily secure, and liable to be knocked down, or out, by their hungry unequals.
Wallerstein's remark about imagination, above, is consonant with his thinking on capitalist development:  there is the ever-present difference in conditions (those who have channels; those who have not); there is desire, a non-spiritual emphasis on the securing of worldly goods;  and there is an effortful struggle for the same.  His materialist approach to imagination is also of a piece with his thinking on human motivation in general.

Wallerstein begins and ends with some useful definitions for his arguments.  What is a world-system?  Wallerstein presents social groups as internally rule-governed, but centrifugal and dynamic in interaction with other groups.  "A world-system is a social system, one that has boundaries, structures, member groups, rules of legitimation, and coherence. Its life is made up of the conflicting forces which hold it together by tension, and tear it apart as each group seeks eternally to remold it to its advantage." (347)  What is a capitalist system, and how is it different from an empire?  "Capitalism is based on the constant absorption of economic loss by political entities, while economic gain is distributed to private hands....  Capitalism as an economic mode is based on the fact that the economic factors operate within an arena larger than that which any political entity can control."  (348) An empire, in contrast to a capitalist system, contains the entire political and economic framework within its bounds. Work in a capitalist system is organized and segregated. "[T]he range of economic tasks is not evenly distributed throughout the world-system," and (349) "[t]he division of a world-economy involves a hierarchy of occupational tasks, in which tasks requiring higher levels of skill and greater capitalization are reserved for the higher-ranking areas." (350)   How does one describe the resultant organization?  Wallerstein creates the core-states, the semi-periphery, and the periphery.  So "the world-economy develops a pattern where state structures are relatively strong in the core areas and relatively weak in the periphery."  He adds: "[w]hich areas play which roles is in many ways accidental.  What is necessary is that in some areas the state machinery be far stronger than in others." (355)  The emergence of a self-conscious class is a key element in a world system.   The bourgeoisie capitalist class has organized itself in country after country to take advantage of the core-periphery differences: : "the social organization of work ... magnifies and legitimizes the ability of some groups within the system to exploit the labor of others, that is, to receive a larger share of the surplus."(349)

What are the historical building-blocks of his argument?  In his Medieval Prelude he glosses an economic cycle:  from 1150-1300 there was an expansion of geographic holdings, commerce and demography, while from 1300-1450 there was a contraction of the same.   He sees a general crisis in feudalism and a series of peasant revolts across Europe as prices rose and the population declined.  He notes, in passing, that important and long term national boundaries were established rather early, at least by the 1215.   He also adds that most world-systems, or empires, or coherent trading units, are about 60 day's journey across, no matter the period or place.

The time period for European expansion is relatively brief, but not so dependent upon one event to fix it precisely: Wallerstein offers the span 1450-1640.  Among the differences between the former feudalism and the developing capitalism, he argues, is that under feudalism, the surplus grain went to the lord of the manor,  who took it to the local market. By contrast, under capitalism the surplus went to the world market.  Trade, long distance trade, in medieval times, was for luxuries only, and bulk trade of commodities is the mark of modernism.  (I  am not sure Lionel Casson would agree). Also of relevance to the expansion are the relatively warm winters of the 1460-1550, and of course, the applied science and technology of Europe.

Who led the way?  After the plague, rent coming from land had declined, and Portuguese elites, as did other  nobles, needed land to make up for the lost rent.  Unlike other areas of Europe, Portugal was well settled, and so Portugal led the way in exploration of new territories. Wallerstein argues however, that Europeans needed and wanted food (more calories) and fuel more than they desired luxuries. (42) These exploring, gold-  and spice-seeking Portuguese established their first island conquests with farms for cereals, sugars, dyes and wines.  Wallerstein pauses to ask:  why not China?  The Chinese had the ability to sail long distances and had in fact explored past Malacca and up to Hormuz.  With no special need for outside goods, the Chinese saw exploration as a drain on the treasury. Socially, they turned inward and structurally became prebendalized (office holders) under one empire.  Europe, by contrast, had a set of relatively large cheek-by-jowl competitors.  "As of 1450, the stage was set in Europe but not elsewhere for the creation of a capitalist world economy.  This system was based on two key institutions, a "world"- wide division of labor and bureaucratic state machineries in certain areas." (63)

What systems did laborers live under, and how did the conditions of labor change?  Labors slowly and gradually lost buying power during the European expansion. Through a long discussion of bullion and its effect, Wallerstein argues that it permitted the decline of the interest rate, and a larger supply of cheaper money allowed for the growth of capital accumulation and investments for landlords.  Slaves, of whom there were a limited supply, were placed in those areas that were relegated to low-skilled work and cost-efficient supervision in agriculture.   Another way of controlling labor was the second serfdom that occurred across Poland and Eastern Europe.  Now the fruits of their labor went now to the world market.  In a sense, in supplying raw materials, Eastern Europe functioned as a colony of the West.   Western Europe contained more densely populated towns with more intense agriculture, more middle-sized pastoral estates and a greater emphasis on skilled labor.  England, for instance, had a judicial system less able to be diverted to local ends, but allowed the landlord more "flexiliblity" in requesting money tenancy and wage labor.  This, Wallerstein believes, eventually became a telling difference.  Finally, Western Europe had a great number of displaced agricultural laborers who could be used as soldiers or workers.

In the midst of social unrest, kings, according to Wallerstein, used four major mechanisms to stabilize their power:  bureaucratization, monopolization of force, creation of legitimacy, and homogenization of the subject population. (136)  Having bought "servants of the crown," rulers then needed  a system to keep them paid.  Not every state succeeded at extracting sufficient taxes to cover the venality of office, but such a system was developed.  Likewise, the states began to purchase the services of entrepreneurs who contracted to supply soldiers.  Foreign merchants were either excluded or brought within the system.  In different countries the nobility were fragmented differently; hence it is difficult to speak about one response among the elites to the new capitalist structures.  Each situation must be examined for its own particularities.  However, in general, political activity within the core states was the most centralized.  The landowning class was replaced from underneath with new members, but the structure as a whole stood. "It was the absolutism of the monarch which created the stability which permitted this large-scale shift of personnel and occupation without at the same time, at least in this point in time, undoing the basic hierarchical division of status and reward." (161)

Although Portugal led the way, Spain with its new wealth, had dominance in the first 100 years of European expansion.  The Spanish-French Hapsburg -Valois rivalry served as background and impetus to the state structures that came into being.  Courts relied on cities for loans, and cities in turn relied on bankers such as the Fuggers.  Antwerp became the supreme money market in Europe because it offered short-term credit, which was in demand due to the policies of Charles V. (175)  "Thus Charles V, Castile, Antwerp, the Fuggers were all imbricated in a huge creation of credit laid upon credit, cards built upon cards, the lure of profits based on hope and optimism." (176)

After the free ride that bullion had provided was ended, the Spanish system was hopelessly top-heavy, with tax farmers and sheep pasturage aplenty, but without the manufacturing or industrial base to support the expensive empire they had founded.  Others moved in. Amsterdam was Protestant, crowded, well-organized, and had funds ready to lend.  Being freed from Spain, Amsterdam was able to use its money market expertise to center world trade through her port.  In the "second" sixteenth century, as Wallerstein terms 1550-1560, economic power swung northward to England.  England was unified, had been insulated against exhausting wars, and had a unique layer of mid-level yeoman/gentry-class who had already moved to a money-economy, were cautiously entrepreneurial and were likely to invest in industry. "In England it paid the landed classes to move to a system of fully alienable land just as it paid the landed classes in Poland...to restrain moves in this direction." (247)  English enclosures were simply part of the move away from agriculture as subsistence and towards agriculture as a business.  Marginal farmers became laborers.  France, as an illustrative contrast, was unable to avoid war, did not restrain the elite land-owners, and was consequently without a powerful but loosely controlled class of mid-level entrepreneurs.

Wallerstein turns to the periphery and semi-periphery and pauses to redefine his terms. "The periphery of a world-economy is that geographical sector of it wherein production is primarily of lower-ranking goods (that is, goods whose labor is less well rewarded) but which is an integral part of the overall system of the division of labor, because the commodities involved are essential for daily use." Upon this basis India, China and the East Indies are excluded from the world-market:  although the Portuguese traded there, the goods they brought back  were not essential for daily use, and labor was not organized to produce for world markets.  (Pepper seems to be the exception:  see his arguments about African pepper p. 334).  Russia, imperially run, but weakly organized, exported grain.  Its chief movements were internal:  the slow growth of towns, and the colonization of its vast areas.

Because the whole model seems plausible, and because his social analysis seems shrewd, to know whether or not Wallerstein is right about reasons for the development of the capitalist world-system, one would have to take up the historical facts point by point for each area in question.   No doubt this has been done, and I will encounter these arguments in future.  However, there is one point in his thesis I would question.  Self-described as "uneasy with a great deal of theorizing about values, "(4) Wallerstein mostly sets aside belief systems  as causal factors.  For instance, he agrees that Protestantism lends itself better to mindset, or the class-consciousness of the bourgeoisie, but he argues generally that the Protestant core and the Catholic semi-periphery are historically happenstance.  I suggest that this stance is a weakness in his overall work -- he may, and probably does, overlook important non-economic causes for capitalism.   However, his reasons for this materialist approach are cheerfully optimistic, even attractively upright in an old-fashioned way.  Referencing his experiences in pre- and post colonial Africa, Wallerstein suggests that local belief systems sometimes clouded the actions of legal and political framework which governed the basic conditions of life. Hence, his setting aside of principles as causes is itself a principled stance:  inequalities cannot be addressed or redressed if they are not properly seen or understood.  His theoretical approach to social science is quite deliberate -- social good is to be created through the exposition of developmental principles.