“The key to hiding this central mechanism lay in the very structure of the capitalist world-economy, the seeming separation in the capitalist world-system of the economic arena (a world-wide social division of labour with integrated production processes all operating for the endless accumulation of capital) and the political arena (consisting ostensibly of separate sovereign states, each with autonomous responsibility for political decisions within its jurisdiction, and each disposing of armed forces to sustain its authority). In the real world of historical capitalism, almost all commodity chains of any importance have traversed these state frontiers. This is not a recent innovation. It has been true from the very beginning of historical capitalism. Moreover, the transnationality of commodify chains is as descriptively true of the sixteenth-century capitalist world as of the twentieth-century.
How did this unequal exchange work? Starting with any real differential in the market, occurring because of either the (temporary) scarcity of a complex production process, or artificial scarcities created manu militan, commodities moved between zones in such a way that the area with the less ‘scarce
item ‘sold’ its items to the other area at a price that incarnated more real input (cost) than an equally-priced item moving in the opposite direction. What really happened is that there was a transfer of part of the total profit (or surplus) being produced from one zone to another. Such a relationship is that of coreness-peripherality. By extension, we can call the losing zone, a ‘periphery’ and the gaining zone a ‘core’. These names in fact reflect the geographical structure of the economic flows.
We findunmediately several mechanisms that historically have increased the disparity. Whenever a ‘vertical integrationof any two links on a commodity chain occurred, it was possible to shift an even larger segment of the total surplus towards the core than had previously been possible. Also, the shift of surplus towards the core concentrated capital there and made available disproportionate funds for further mechanization, both allowing producers in core zones to gain additional competitive advantages in existing products and permitting them to create ever new rare products with which to renew theprocess. The concentration of capital in core zones created both the fiscal base and the political motivation to create relatively strong state-machineries, among whose many capacities was that of ensuring that the state machineries of peripheral zones became or remained relatively weaker. They could therebypressure these state-structures to accept, even promote, greater specialization in their jurisdiction in tasks lower down the.,hlrerarchy ,of commodity chains, utilizing lower-paid work-forces and creating (reinforcing) the relevant houTehoİd structures to permit such work-forces to survive. Thus did
historical capitalism actually create the so-called historical level of wages which have become so dramatically divergent in different zones of the world-system.”
Historical Capitalism, Immanuel Wallerstein, pg. 31-32, 2011, Verso.