 I'm Salvatore Bobonis, and today's lecture is the World System Core. The core of the world system consists of the rich countries of the world, most of which have been the rich countries of the world for the last 500 years. Only one major country has ever joined the core of the world system, and that's Japan. Core countries can sometimes seem problem free, but in fact they sit at the pinnacle of a system that generates most of the world's global social problems. As a reminder, the core of the world system consists of the Western European heritage countries of the world, plus Japan. That means Western Europe, Germany, France, Italy, United Kingdom, Scandinavia, North America, United States and Canada, Australia, New Zealand, Japan, and sometimes we include Taiwan and Korea in that list. The core countries include most of the richest countries in the world, but these are not just rich countries. These countries are the control centers of the global economy. Most of the world's foreign investment originates in core countries. Most of the world's investment banks are in those countries. Most of the world's largest privately owned companies are in core countries. There are some very large companies in semi-proferal countries, but they tend to all be state owned companies, not part of the private economy. Most of the world's high technology research and development occurs in core countries, and of course most of the world's top universities are in core countries. Most of the rich countries of the world that are not of European heritage lack these broader characteristics of centrality in the global economy. So for example, whenever the price of oil is high, there are a number of countries in the Persian Gulf or Brunei in Asia that appear to be very rich, but in fact they're only rich in nominal terms. They generate a lot of money from their oil sales, but they don't have economies that are diversified command and control centers of the world economy. Similarly, Caribbean tax havens like the Cayman Islands and the British Virgin Islands may be very rich in nominal terms. They even have large financial industries in nominal terms, but these are not places where decisions are being made that affect the rest of the world. There are also some historical examples of places that temporarily were rich due to high prices of resources, even for example, Nauru in the Pacific Ocean, which was once one of the richest jurisdictions in the world until it ran out of the guano that it was selling. The countries like this are situations like Nauru and the guano boom or Argentina and the wheat boom of the early 20th century. These don't indicate that countries are at the center of the world economy. They merely indicate temporary riches due to some kind of temporary boom. Only one large non-western country has ever become a core country, and that's Japan. And I think it's important to realize that Japan didn't do it on its own. Japan had achieved semi-peripheral middle-income levels by the 1930s, but many countries have achieved middle-income levels, including today China. What distinguishes Japan is that after World War II, it was occupied by the United States, and the United States imposed a whole series of policies on Japan that were characteristic of the economic policies of core countries. Universal education, high wages, workers' rights and unionization, land reform, the creation of family farmers to replace the big estates that used to dominate Japan, and perhaps most importantly, a very high marginal income tax rate of 70% on high incomes. That high marginal income tax rate financed the construction of Japan's infrastructure. Japan is known today as the most amazingly infrastructureed country in the world, with bullet trains and fantastic electrical systems and utility systems. All of that came about because Japan had imposed on it western-style tax rates. No other middle-income country has ever imposed those kind of tax rates on itself. In my own view, Japan was created as a core country under the United States occupation after World War II. Japan grew in the 1960s and 70s and 80s to become a new part of the core of the world economy, but it only really became a full member of the core in the 1980s and 1990s when it developed its own peripheries, especially in China. It's really amazing how much of the Chinese economy is run from Japan by big Japanese companies that do all of their production in mainland China. Of course, the ultimate core of the core of the world system is the United States, which is either the hegemonic state of the modern world economy or perhaps something much more. Conventional sociological and international relations theory characterizes the United States as the hegemonic state of today's world system. A hegemonic state is one that is powerful enough to set the rules of the world system. Other participants in the system merely accept the rules set by the hegemonic state. For example, for 35 years the United States isolated Iran from the world economy by imposing sanctions on the Iranian economy. Now, the United States didn't just refuse to trade with Iran itself, but the United States insisted that other countries should not trade with Iran. It made the punishments for companies doing business with Iran so strong that even in countries that had no restrictions themselves on trade with Iran, their own companies and their own citizens avoided doing business with Iran in order to prevent falling into the net of U.S. sanctions themselves. Now, in my own writing I have recently been arguing that the United States has progressed from being a hegemonic state, coordinating the world system, to constituting an entire world system of its own. I'll leave that statement there, but anyone who's interested in hearing more about that can email me to see some of my working papers on United States power in the world today. The lopsided concentration of wealth in the world economy is reflected in a lopsided distribution of carbon emissions as just one example of a global social problem created by the concentration of wealth in the global core. So as these two pie charts illustrate, North America and Europe account for relatively small proportions of the world's population, but enormous proportions of the world's carbon dioxide emissions. The difference is most striking for North America, with 5% of the world's population, but 22% of global CO2 emissions. Europe has a slightly larger percentage of the world's population and about the same percentage of the world's CO2 emissions and does a little better on this. But even Europe has twice the carbon emissions as it should have according to its percentage of the world's population. And the true situation is even more lopsided, because most of that pollution being created in Asia is actually being generated to meet demand in core countries. So when you see pollution like this in China, in Beijing, you have to think who is actually consuming the products that are generating all that pollution. By far the majority of that consumption is occurring in the core countries of the world system. Another global social problem generated by the lopsidedness in the global income distribution is the flow of people across borders and the irregular flow of people across borders. So we can see in this graphic from Human Rights Watch the two main flows of people into Europe that are occurring right now in 2014 through 2016. The incentives for getting into Europe are so enormous because wages in Europe, especially in Western Europe, are incredibly higher than wages in the countries of origin for the people who are arriving as refugees in Europe. This means that if someone is a genuine refugee fleeing the civil war in Syria or fleeing conflict in Afghanistan or in East Africa, that refugee has a choice to go to a country like Jordan or Turkey where they would live in a refugee camp and have a relatively low income in a middle income country, or make it to Europe where they and more importantly their children have the potential to join the global elite. Well the incentives are so strong that many people risk their own and their children's lives to get into the promised land of Western Europe, to get somewhere where they're not only safe but also have the opportunity for an entirely different kind of life than they would have if they were refugees in Turkey or Jordan or Egypt. And it's not just refugee flows that are created by this massive imbalance in income in the world. A longer term global social problem is brain drain from poor countries to rich countries. Brain drain is manifested in many different ways. There are several standard patterns in the world. One is that African doctors tend to go to work in Europe, this despite the fact that Africa as a continent is just critically short of trained medical personnel, especially doctors. Yet African doctors can have much better lives and make much more money treating people in Europe of not particularly serious diseases than they can get by treating people in Africa of life threatening diseases. So they go to Europe. Similarly, Chinese engineers and scientists would much rather work or many of them would much rather work in the United States than in China, despite the fact that China desperately needs their skills to develop its economy into more of a knowledge based economy. And the fundamental pattern here is that capable and highly trained people from all of the peripheries of the world often take jobs at lesser skill levels but higher incomes in core countries. And the kind of paradigmatic case of this that we've all heard of is the doctor or physicist from Russia or Syria who goes to work in Australia as a taxi driver. The person may be able to get a visa to come to a country like Australia on the basis of the high training but that person may in fact have difficulty getting a job at the highly skilled level in the destination country. And so it's very common for people of very high training to let their skills be wasted just so that they can build a better life for their children in a rich country, in a rich destination country like Australia, Western Europe or the United States. A new kind of human resource strain is developing called demographic borrowing by rich countries. Rich countries borrow workers from poor countries during their years of highest productivity and lowest cost. Now some of these programs are official like guest worker programs. Some are unofficial like illegal immigration that's tolerated but then as people get older or make demands on the system people are sent back to their home countries. Guest worker programs are more common in Western Europe and the informal tolerance of illegal immigration is very common in the United States. But then there are also programs like working holiday visas that in Australia and New Zealand bring thousands of young people who have very low risk of actually needing state services of any kind. They're usually ineligible for state provided medical care or unemployment insurance and they work and they pay taxes in the destination country without actually costing the host to government anything in return. We can even think of Germany's current refugee policy of accepting refugees from Syria as an example of this demographic borrowing. Most of the refugees are young people with high skills. They will be accepted in Germany as refugees which means that once the civil war in Syria is over potentially Germany has the right to insist that they return back to Syria before they get old enough to start becoming a drain on German resources. The general pattern here is that these workers are net contributors to the economies of the rich borrowing countries and then they're sent home before they can become costly senior citizens relying on health and retirement services. In all of these cases core countries either intentionally or unintentionally create incentive structures that govern the entire world for good or for bad. Core countries typically do not force peripheral countries to adopt bad policies but core countries create systems of incentives in which peripheral countries and the people of peripheral countries have to live. Does that make core countries responsible for the results or responsible for the outcomes of these systems? Well that's a good question that people have to decide on a moral basis that's not really a scientific question. I myself suspect that ultimately the United States is becoming responsible for governing its world which is to say that the more the world becomes governed by American governance principles the more the United States becomes responsible for governing that world or setting those principles in a responsible manner. Key takeaways. First the core of the world system consists of countries that are not only rich but are also control centers of the global economy. Second a hegemonic state is one that is powerful enough to set the rules that govern the world system and clearly the only hegemonic state today is the United States. Third core countries generate problems like brain drain and demographic borrowing that can severely impact other countries even if those core countries don't explicitly tell other countries what to do. Thanks for listening. You can find out more about me at salvatrobobonus.com where you can also read my popular writing on the contemporary world system.