Understanding Global Economics: Center-Periphery Model and Semiperipheries
The center-periphery model is a fundamental idea in global economics that helps us understand how different regions and countries interact. This model is considered to be the skim of capitalism, and its development starts with colonialism, neo-colonialism, and imperialism.
The center-periphery model represents a pivotal paradigm in comprehending global economics. It underlines the asymmetric relationship between the center and periphery, asserting that the development of one influences the other, but equality does not prevail. The center embodies self-centered capitalism, driven by its own interests, while the periphery signifies an extraverted form imposed through colonialization. Specialization in low-value-added industries further delineates the differences between them. An essential aspect of this model is articulation, where the center demonstrates its capacity to match supply with demand, in contrast to the disarticulation characterizing the periphery.
Dependency forms the core of the center-periphery model. The periphery’s reliance on the center for economic sustenance results in the production of surplus goods that the periphery does not need, often sold to the center at lower prices. This relationship leads to socioeconomic underdevelopment in the periphery, while the center experiences socioeconomic development due to foreign expansion through colonialization, neocolonialization, and imperialism.
Raul Prebisch, an Argentine economist, significantly contributed to the center-periphery model. He emphasized the role of trade in perpetuating dependency, noting how colonial economies were structured to provide low-value-added goods to their colonial masters. After gaining independence, these nations realized that their economies primarily served the interests of their former colonizers. They specialized in sectors with little to no value added, resulting in economic underdevelopment.
Samir Amin, a neo-Marxist thinker, built on Prebisch’s ideas, shifting the focus from trade to production. Amin’s perspective highlighted labor rights and labor movements as essential factors. In the center, strong unions led to higher wages and product prices. In the periphery, weak labor rights meant that all profits went to capitalists, resulting in low prices.
The Prebisch-Singer Hypothesis underscored the impact of productivity on product prices. In the center, increasing productivity resulted in the partial redistribution of profits to workers through higher wages, leading to increased product prices. This indicated articulation. In the periphery, where strong unions were lacking, workers could not demand higher wages, leading to 100% of the salaries going to capitalists and disarticulation. This difference between center and periphery was further reinforced by the fact that workers in the center were also consumers, while in the periphery, they were primarily producers.
As the “Beyond core and periphery: the role of the semi-periphery in global communication” article by Gemma Cairó-i-Céspedes and Juan Carlos Palacios explains, Immanuel Wallerstein’s World-Systems Theory expanded the center-periphery model by introducing the concept of