Trade

Immanuel Wallerstein developed world systems theory in the early 1970s as a new way of looking at the rapid expansion of capitalism. Wallerstein posited that in capitalism a clear geographical hierarchy of trade evolved. Europe was the core, the area where raw materials were converted into finished products. The rest of the world was the periphery, the area where raw materials were obtained and finished products consumed. Capitalism expanded rapidly because it needed raw materials to create goods and markets to consume them. Nineteenth-century colonialism was the political actualization of these capitalist needs. However, finished products always cost more than the value of the raw materials needed to make them, so the periphery, in providing raw materials and consuming finished products, was actively exploited by the core, a process world systems theorists came to refer to as "underdevelopment." World systems theory provided social scientists a means to understand why and how the "developing" world was never able to actually "develop" despite many attempts to aid them in doing so—because they were being actively "underdeveloped" by the capitalist core. World systems theory continues to be one of the primary means that anthropologists and other social scientists use to examine and understand trade relations and their effects.