Ch. 6 Notes: The Modern World-System as a Capitalist World-Economy
Modern world had origins in 16 century.
World-economy: A large geographic zone within which there is a division of labor and hence a
significant internal exchange of basic or essential goods as well as flows of labor and capital.
• Not bounded by unitary political structure
Capitalism: The endless accumulation of capital
• People and firms accumulate capital only to accumulate more capital
Capitalism and a World-Economy depend on each other and are held together by the efficacy of
the division of labor
• Capitalism needs a balance of power between economic producers and holders of
powers; they need the large market
• Basic institutions of market (all formed in capitalism) : the markets, the firms, the states,
the households, the classes, and the status-groups.
o MARKET: Where consumers buy and sell goods and a virtual market which relies