Agricultural disruption

Agricultural disruption

Another harmful effect on the economic growth of periphery nations is agricultural disruption. A very important economic activity of periphery nations brought into the modern world-system is export agriculture. Before the modern world-system, agriculture was for local consumption, and there was little incentive for labor-saving farming methods. As a result of these traditional methods of farming and lack of a large market for their products, food was cheaper, some land was left for peasants, and jobs were more plentiful. However, with export agriculture and labor-saving methods of farming, food is more expensive, peasants are pushed off the land so more land may be used to grow products for the world market, and more machines are doing the work, resulting in less jobs. This also causes a higher degree of urbanization as peasants lose their land and jobs and move to the city hoping to find work. Profits are made by a small group of landowners and multinational agribusinesses, with peasants losing jobs, land, and income, which prevents them from being consumers needed for an economy to naturally develop.


Class conflict

A third difficulty for periphery nations are the class conflicts within the nation. Economic and political elites in periphery nations often become more accommodating to corporate elites from core nations that have investments in their country. Of course, these elites in periphery nations receive lucrative profits because of multinational corporate investment. These elites know that the corporations are investing in the country because of low labor costs, low taxes, no unions, and other things such as lax environmental policies, that are favorable to multinational corporate interests.


For self-serving elites in periphery nations, it creates a conflict of interest between them and the people. These people, of course, want better wages and more humane working conditions, but if these things are worked on it can mean multinational corporations will leave the country. It is important to realize that the problems mentioned above, structural distortion and agricultural disruption, could be reduced. However, the local elites with the power to change these things do not do so in fear of losing the multinational investment.


For example, following the North American Free Trade Agreement (NAFTA) in 1994, thousands of U.S., Japanese, and European factories moved into Mexico for the free access to the North American market and the low wages. There were about 4,000 of these new factories by 2000. However, by 2002, the factories began moving to nations such as China where wages for factory jobs are as low as $0.25/hour, as opposed to $1.50/hour in Mexico.