THE PHOENIX CYCLE: GLOBAL
LEADERSHIP TRANSITION IN A
LONG-WAVE PERSPECTIVE
Joachim Karl Rennstich
Department of Political Science
Indiana University
Bloomington, IN 47405
jrennsti@indiana.edu
For latest draft, please check:
http://www.longtermchange.net/
Paper prepared for delivery to the 26th Political Economy of World-Systems 2002
Conference at the University of California at Riverside, Riverside, CA, May 3-4, 2002
Draft as of:
March 7, 2016
ABSTRACT
It has been argued that one of the reoccurring phenomenon of hegemonic
transitions is the inability of the existing leader to establish a similar
leadership position in a newly emerging and structurally different
commercial and organizational arrangement. This shift in the
geographical and political location of power has been explained as the
outcome of the leader’s experience of success in the current setting,
creating an entrenched institutional setting (in a broader sense) that
proves adaptive in defending its turf but less so in fostering the rise of
new leading sectors. However, the case of Britain’s continued leadership
over an extended period of time (and separate long waves) has shown
that this is not always the case. This paper introduces the concept of
internal and external global network environments in the world system
and argues that the extension of leadership from an old to a new
commercial and organizational arrangement is dependent on the systemic
nature of the world system. A shift from an external to an internal
network environment (or vice versa) allows the parallel development and
rise of new leading sectors because they pose no threat to the existing
institutional setting of the established leading sectors. The emerging new
leading sectors do profit from the relative advantages of the current
leadership position (in terms of capital, costs, etc.) without the resistance
usually encountered from the established leading sectors. The paper
develops a systematic account of the shifts from maritime commercial
(external network environment) phases, over industrial (internal network
environment) phases, to the rise of a digital commercial (external
network environment) phase. It concludes that the shift from an
industrial phase to the new digital commercial phase puts the current
systemic leader, the United States, in a position of continued leadership
over two long-waves.
INTRODUCTION
Beginning with the work of Braudel (1992b; 1992c; 1992a), Wallerstein (1974;
1980; 1984; 1989) and others (e.g., Abu-Lughod 1989; Arrighi 1994; Arrighi, Silver, and
Ahmad 1999; Buzan and Little 2000; Chase-Dunn 1989, 1995; Chase-Dunn and Hall
1997; Dark 1998; Denemark et al. 2000; Frank 1978, 1998; Frank and Gills 1993; Freeman
1983; Freeman and Louçã 2001; Gilpin 1987; Goldstein 1988; Kennedy 1988; Modelski
and Thompson 1996; Hugill 1993; Modelski 1987, 2000; Pomeranz and Topik 1999;
Pomeranz 2000; Rasler and Thompson 1989, 1994; Thompson 1999, 2001; Tilly 1992;
Tilly and Stinchcombe 1997) we have taken significant steps toward our understanding of
the governance of the world political economy in its historical development. Despite the
large variety of approaches and models (or rather as a result therefore), the dynamics of
systemic change, however, still require further attention. The purpose of this paper is to
examine the process of transition from one hegemonic leader to the next. In doing so, we
built on previous models by employing an evolutionary framework to the study of the
transition mechanism, creating a synthesis of Arrighi’s and Modelski and Thompson’s
conceptualization of the hegemonic leadership transition process.
One of the main characteristics of hegemonic1 transitions in most treatments of the
subject seems to be the inability of the existing leader to establish a similar leadership
position in a newly emerging and structurally different commercial and organizational
arrangement. This shift in the geographical and political location of power has been
explained as the outcome of the leader’s experience of success in the current setting,
creating an entrenched institutional setting (in a broader sense) that proves adaptive in
defending its turf but less so in fostering the rise of new leading sectors. However, the case
of Britain’s continued leadership over an extended period of time (and separate long
waves) has shown that this is not always the case.
This paper introduces the concept of internal and external global network
environments in the world system and argues that the extension of leadership from an old
to a new commercial and organizational arrangement is dependent on the capitalist mode
and its effect on the systemic nature of the world system. A shift from an external to an
internal network environment (or vice versa) allows the parallel development and rise of
new leading sectors because they pose no threat to the existing institutional setting of the
established leading sectors. The emerging new leading sectors do profit from the relative
advantages of the current leadership position (in terms of capital, costs, etc.) without the
resistance usually encountered from the established leading sectors.
A large literature has acknowledged the various significant changes currently
occurring in the world system, often summarized as the effects of “globalization.” Here we
1
Hegemonic leadership is a highly contested concept and definitions vary significantly (for a discussion on the various
definitions in this context, see Rapkin 1990; Goldstein 1988, especially chs. 6 and 13). For the purposes of this paper,
we use the term hegemony, hegemonic leadership, and system leader interchangeably (for reasons developed more in
depth later).
1
argue (with many of the authors noted above) that “globalization” is not a recent
development, but rather the recent stage of a systematic evolution of the world economic
and social system. To understand the current shifts then, makes it necessary to gain a better
understanding of the historical process of the evolution of this system. This paper develops
a systematic account of the shifts from maritime commercial (external network
environment) phases, over industrial (internal network environment) phases, to the rise of a
digital commercial (external network environment) phase. In contrast to some authors,
such as Wallerstein, who argue for the occurrence of a discontinuation of the
developmental process of the world system, we propose a model that allows us to view the
current changes as fully consistent with the past development of the world economic and
social system. The paper closes with a discussion of the geographic locus of the next leader
and concludes that the transition from an industrial phase to the new digital commercial
phase puts the current systemic leader, the United States, in a position of continued
leadership over two long-waves.
LEADERSHIP TRANSITIONS AND SYSTEMIC STRUCTURE
As noted earlier, a multitude of models of hegemonic leadership and its transitions
exist in the literature. We have chosen here to focus on the three conceptualizations of
Wallerstein, Arrighi, and Modelski and Thompson for several reasons. First, these models
represent broadly the main arguments and processes put forward based on the assumption
that the current world system is an outgrowth of an evolutionary process for at least five
centuries. Second, these models are not necessarily exclusionary but in fact
complementary. We are thus able to create a synthesis of these models that incorporates
their individual strengths while allowing us to overcome their respective weaknesses.
Existing Models of Hegemonic Change and Transition
Before we can go on to discuss the current process of change, it is necessary to
briefly review some of the existing models and to develop a synthesis of these seemingly
divergent but in our view compatible theorizations of systemic change and leadership
transition. By applying an evolutionary framework we are able to use components of the
existing models to create a new model of hegemonic change that takes into account not
only the hegemonic crises but also systemic crises that result from changes in the capitalist
mode of the system and lead to shift in the meta-structure of the world system.
Wallerstein’s Model of the Hegemonic Cycle
Wallerstein (1983) conceives of hegemony in the interstate system as the moment
in which the enduring rivalry between great-powers is so unbalanced that one of these
powers emerges as a primus inter pares. This elevated position of power is the outgrowth
of its economic supremacy and only occurring during the phase in which the hegemonic
state masters an edge in efficiency in all three major economic arenas, namely agro-
2
industrial production, commerce, and finance. As a result, this primus has the ability to
impose its rules and its wishes in the economic, political, military, diplomatic, and cultural
spheres. Wallerstein identifies three such instances – Dutch, British, and US hegemony –
as the outcome of long periods of “competitive expansion” resulting in a particular
concentration of economic and political power. Figure 1 summarizes graphically the
process of the rise and fall of hegemonic dominance in the world system.
/Figure 1 about here/
Over the course of this competitive expansion, the rising hegemon acquires first a
“decisive edge” in agro-industrial production, then also in commerce, and finally reaches a
dominant position in finance as well. This process of concentration of productive,
commercial, and financial fitness clustering in one state must be secured, however, through
victory in a thirty-year-long climatic world war2 (in Wallerstein’s count the Thirty Year’s
War from 1618 to 1648 [World War Alpha], the Napoleonic Wars from 1792 to 1815
[World War Beta], and the long Eurasian World Wars from 1914 to 1945 [World War
Gamma]), acting as a catalyst “encrusting” the greater edge of the hegemonic state and
protecting it against erosion through the creation of a postwar interstate settlement
(Wallerstein 1983, 104).
One feature of this “interstate settlement” is the element of “global liberalism.”
While enforcing the principle of the relatively free flow of goods, capital, and labor
throughout the world economy, it not only serves the purpose of intensifying the
hegemonic power’s position of strength, but also delegitimizes the efforts of other state
machineries to act against the economic superiority of the hegemonic power. At the same
time, it allows for the diffusion of technological expertise (know-how) and causes the
steady rise of labor factor costs, allowing the competing states to catch up. Eventually,
these two factors combined lead to a loss of the dominating competitive fitness of the
hegemon, allowing for a renewed competitive expansion of the system and the rise of a
new hegemonic state (Wallerstein 1983).
Arrighi (Arrighi, Silver, and Ahmad 1999, 24) points out to the obvious problem of
this model, namely that is exogenizes the source of change that ultimately drives the
system. Particular complexes of governmental and business agencies develop into an
institutional setting (in a broader sense) proving to be more fit than others in the unfolding
of the competitive expansion. This fitness, however, is derived from mere reaction to the
challenges (in the case of the declining hegemon) or opportunities (in the case of the rising
competitors) provided by the structural properties of the world capitalist system on which
these actors seem to have no impact. In the words of Arrighi “they are all product and not
at all productive” (Arrighi, Silver, and Ahmad 1999, 24). Whereas he accepts the notion
that the systemic properties act as powerful constraining and disposing forces on the
selection of the hegemonic state, he argues for the need to include the factor of
fundamental reorganization of the system by the hegemon resulting in a change of its
properties.
2
Here understood to be a “land-based war that involves (not necessarily continuously) almost all the major military
powers of the epoch in warfare that is very destructive of land and population.
3
Arrighi’s Model of Hegemonic Transition
Building on Wallerstein’s model of hegemonic cycles, but aiming to endogenize
systemic change, Arrighi extends this model by employing a Gramscian (Gramsci 1971)
notion of hegemony “as something different than domination pure and simple: it is the
additional power that accrues to a dominant group by virtue of its capacity to lead society
in a direction that not only serves the dominant group’s interest, but is also perceived by
subordinate groups as serving a more general interest” (Arrighi, Silver, and Ahmad 1999,
26; emphasis in the original). Arrighi defines world hegemony as referring specifically to
the power of a state to exercise functions of leadership and governance over a system of
sovereign states. Hegemony in this context includes not only “push” factors of (military
and economic-based) coercion and a systemic reorganization by the hegemon but also
“pull” factors that lead to a widespread imitation of the hegemonic state. Arguably the
reorganization of the system, then, is as much depended on both, push and pull factors, or
what Gramsci (1971, 57) calls “domination” and “moral leadership” (see Figure 2).
/Figure 2 about here/
Buried in the leader’s own success as both a “model” and “modeler” – leading to
“leadership against the leader’s will” (Schumpeter 1934) – lies the demise of the leader’s
dominance of the system, leading to a systemic expansion and consequently a hegemonic
crisis. Arrighi identifies three distinct, but closely related processes characterizing all
historical hegemonic crises, namely interstate rivalries and interenterprise competition of
followers and imitators, social conflicts arising out of the expansion of the “volume” and
“dynamic density” (Durkheim 1938; 1984) of the system causing the regulatory
overstretch of existing institutions, and the interstitial emergence of new configurations of
power. In addition, relying to a wide degree on Braudel’s (1992a) identification of
financial expansions, Arrighi puts a strong emphasis on what he argues to be the “most
evident manifestation of the capitalist nature of the modern world system” (Arrighi, Silver,
and Ahmad 1999, 231), namely the pattern of systemwide financial expansion. Employing
Marx’s general formula of capital
MCM
where M represents money capital (meaning liquidity, flexibility, freedom of choice), C
stands for commodity capital (or capital invested in a particular input-output combination
 expanded monetary capital (and thus greater liquidity,
in view of a profit), and M’ means
flexibility, and freedom of choice), Arrighi (1994, 6) goes on to argue that this formula can
be interpreted as depicting not just the logic of historical capitalist investments, but also a
reoccurring pattern of historical capitalism as world system. For Arrighi, then, the central
driver of the capitalist world system becomes the alternating cycle of “epochs of material
expansion” in the form of (1) phases of capital accumulations
MC
setting in motion an increasing mass of commodities and consisting of phases of
continuous change, during which the capitalist world-economy grows along a single
4
developmental path; and (2) phases of financial rebirth and expansion, formulaically noted
as
CM
with an increasing mass of money capital “setting itself free” from the its commoditized
form, consisting of phases of discontinuous change during which growth along the
established path has reached or is
attaining its limits, with the capitalist world-economy
shifting through radical restructurings and reorganizations onto another path. Taken
together, these two phases constitute a full systemic cycle of accumulation. This
reoccurring pattern of financial expansion is closely related to the pattern of inter-state
competition not just for mobile capital (as argued by Weber), but also with the formation
of political structures endowed with ever-more extensive and complex organizational
capabilities to control the social and political environment of capital accumulation on a
world scale (Arrighi 1994, 14).
Triggered by the financial expansion, the outcome of the interplay between
interstate rivalries, social conflicts, and the emergence of new configurations of power is
the eventual breakdown of the hegemonic system and its transformation in a state of
“systemic chaos” (see Figure 2). Systemic chaos, as defined by Arrighi, describes a
situation of severe and seemingly irremediable systemic and self-reinforcing
disorganization as a result of the institutional overstretch of the current regulatory regime.
The same process of financial expansion, however, also triggers the emergence of a new
complex of governmental and business agencies endowed with greater system-level
organizational capabilities (or fitness in the language of evolutionary frameworks). Thus,
the same processes that have generated systemic chaos have also generated the greater
concentration of systemic capabilities that, if paired with the “opportunity” of systemic
chaos, eventually result in the establishment of a new hegemonic cycle.
Modelski and Thompson’s Model of Leadership Transition
Modelski and Thompson (Modelski and Thompson 1988, 1996; Modelski 1987;
Thompson 2000) have developed a model of hegemonic transition that emphasize the
coevolution of the cycles of leadership – “long cycles” in the terminology of Modelski and
Thompson (Modelski 1978; 1987; 1990; Thompson 1988; Modelski and Thompson 1996)
– with the economic processes of the K-wave. Rather than employing the concept of
world-hegemony, the authors view hegemony in their model as “leadership” and hegemons
as “world powers” (from a changing pool of global major power states). In this view, each
successive long cycle consists of four phases (see Figure 3). After a selection of the world
power in the phase of global war, this power finds its high point of leadership during the
next phase of world power. Triggered by clusters of new innovations (both spatial and
temporal), new leading sector arise in the next phase of deligitimation, which in concert
with the diffusion of technological know-how leads to the rise of new configurations of
power in the following phase of deconcentration, causing the rise of one or several
challengers to the position of world power and leading eventually to another
macrodecision in a new global war phase (see Figure 3).
5
/Figure 3 about here/
The long cycle in this view is regarded, then, as the output of a political production
function whose product is global leadership, here understood as addressing solutions for
global problems (Modelski and Thompson 1996, 7-8). The input-factors going into this
production function are global reach (advantaged by insularity), a lead economy (i.e., the
location of the clusters of innovations creating the dominant leading sectors of the world
economy), an open (learning) society, and responsiveness to global demand (i.e.,
problems) through the facilitation of innovation. Some factors are more important than
others during different phases. So, during the global war phase global reach becomes
central, whereas during the world power phase the major driver becomes the leadings
sectors and their position in the world economy. During the deligitimation phase the
innovative potential (usually higher in emerging new leader) and flexible institutional
settings are at a premium, whereas the deconcentration phase highlights the advantages of
the resources of open societies (Modelski and Thompson 1996, 8).
K-waves, defined as the rise and decline of leading sectors, bear important
structural similarities with the long cycles of world powers. It is important to note that
Modelski and Thompson’s analysis of K-waves does not center simply on prices or
macroeconomic quantities, but on worldwide leading commercial and industrial sectors in
the economies originating in them. They arise from the clustering of basic innovations,
understood as new products methods of production, opening of new markets and sources
of raw materials, and the pioneering of new forms of business (or commercial)
organizations (Schumpeter 1934, 66). They do so in a four-phased industry and product
life cycle and are international phenomenon and as such more visible if viewed from the
perspective of a world economy. Thus, their similarities of unfolding (four phases), their
common processes of clusters of endogenous economic (in the case of K-waves) and
socio-political (in the case of long waves) innovations and innovative institutional settings
as responses to (partly endogenous) priority global problems, and a common evolutionary
character explains the “double helix” of K-waves and long cycles (Thompson 2000).
A Synthesis of Systemic Transition Theories
Despite the difference in terminology (for reasons of conceptually different
understandings of hegemony, see Rapkin 1990), their definition of long cycles as
“instances of structural change [and] processes that in recent centuries have periodically
rearranged the structure of global political arrangements and given rise to the phenomenon
of world powers” (Modelski and Thompson 1996, 7) provides a compatible
conceptualization of “hegemonic change and transition” with the previous two models
discussed earlier. This claim, of course, requires a brief explanation and we rely partially
on Arrighi, himself a strong critic of the notion of compatibility of K-waves and “secular
cycles” and his conceptualization of systemic cycles, to provide it.3
3
For another attempt to bridge these seemingly divergent views, see also for example Boswell (1999).
6
Arrighi (1994, 7) admits that “secular cycles” (i.e., price logistics) and K-waves (as
he identifies them in Braudel’s work) bear some “striking similarities” to his
conceptualization of systemic cycles, argues, however, that secular price cycles and
systemic cycles of accumulation are completely out of synchrony with one another,
contending that “faced with a choice between these two cycles, we have opted for systemic
cycles because they are far more valid and reliable than secular or Kondratieff cycles”
(Arrighi 1994, 7, emphasis added). This notion is based on his argument that systemic
cycles of accumulation, unlike price logistics and K-waves, are “inherently capitalist
phenomena,” pointing to a fundamental continuity in world-scale processes of capital
accumulation in modern times, also constituting fundamental breaks in the strategies and
structures that have shaped these processes over the centuries (Arrighi 1994, 8-9). This, of
course, is complementary to the conceptualization of K-waves found in Modelski and
Thompson’s model. Arrighi himself acknowledges the similarities of conceptualization of
K-waves by authors such as Mensch (1979), Gordon (1980), and Perez (1983), but
nevertheless stresses the significant difference of the two approaches on two grounds, their
conceptualization of hegemony and the dynamic evolution of the system (Arrighi 1994,
27).
Whereas it is true that Modelski and Thompson stress the “pull factors” of
leadership, it would be wrong to assert that this model does not allow for “push factors” as
well. Especially during both, the global war, and world power phases, the “push factor” of
naval force and superiority allows the leader to institutionalize its leadership to some
degree. While Modelski and Thompson stress the combination of both pull and push
factors acting in combination (as Arrighi does), they admit the limitations of this
leadership, stressing that “world powers are unable to exercise the same type and degree of
command and control often attributed to imperial centers” (Modelski and Thompson 1996,
35). This, however, does not significantly differ from Arrighi’s conceptualization of
hegemony, who’s major focus is not the degree of control in terms of military coercive
power, but rather in terms of the leaders ability to induce some form of “transformative
action,” changing the “mode of operation of the system in a fundamental way” (Arrighi
1994, 27). This transformative character of hegemonic change is present in both
conceptualizations.
Arrighi in addition mistakenly ascribes a non-evolutionary, static notion to
Modelski and Thompson’s leadership long cycle conceptualization. Both works build to
some degree on Wallerstein’s model of hegemonic cycles but aim to overcome his
limitation of exogenizing systemic change, by making the endogenous factors of the
systemic change explicit in the model. Thus, Modelski and Thompson stress that both, Kwaves and long cycles, are driven by endogenous basic innovations, both economic and
socio-political in nature, and highly evolutionary in nature (especially Modelski and
Thompson 1996).
In sum, despite some degree of difference, the greater number of similarities than
differences in both approaches allows to form a synthesis of both models that takes into
account the strengths of each respective model but introduces a new conceptualization. We
believe it is worthwhile to construct such a synthesis in order to get a better theoretical
understanding of the process of hegemonic transition, especially in regard to its future
7
development. We might even make the – certainly controversial – argument that the
historical account of hegemonic/leadership shifts is not as dramatically different as it
seems. Whereas Arrighi argues, that to this point three hegemonic transitions – Genoa to
Dutch; Dutch to Britain; Britain to US – occurred (with structural shifts from capitalist to
capitalist/territorial to a combined territorial/capitalist system), Modelski and Thompson
argue for a longer period of shifts of leadership (Northern Sung, Southern Sung, Genoa,
Venice, Portugal, Dutch, Britain I, Britain II, US I). It is beyond the scope of this paper to
discuss the possibility of Arrighi’s model to account for the same list of leadership
transition; here we shall limit ourselves to the historical development of the transition as it
unfolds in the European theater.
Two Types of Systemic Chaos
We agree with Arrighi (1994, 33), that “inter-state and inter-enterprise competition
can take different forms, and the form they take has important consequences for the way in
which the modern world system – as a mode of rule and as a mode of accumulation –
functions or does not function.” Arrighi (1994, 44-5) broadly differentiates between
“capitalist” and “territorial” systems, arguing that only with the emergence of the Dutch
reorganization of political space in the interest of capital accumulation of capital the
modern inter-state system came into being. Arrighi however also describes the important
roots of the Dutch system emerging out of the Venetian and Genoese systems (or
“complex”), using the metaphor of the development of the modern world system not along
a single “track” but rather through several switches to new tracks laid by specific
complexes of governmental and business agencies and with the Venetian, Genoese (in the
fifteenth century), Dutch (in the seventeenth century), British (in the nineteenth), and for
that matter also the US (in the twentieth century) acting as “tracklaying vehicles” for the
emerging new systems (Arrighi, Silver, and Ahmad 1999, 22). Modelski and Thompson’s
version of the development of the modern world system differs on several counts to that of
Arrighi’s. As noted earlier, they argue for an evolution of the system with its beginnings in
the rise of Northern Sung and Southern Sung China, Genoa, and Venice during the
Chinese/Italian Renaissance (from 930 to the early fifteenth century), the west European
development with Portugal, the Dutch Republic and Britain acting as leaders and
transformers of the system (from the fifteenth century to the early nineteenth, and the shift
towards a post-European system arising out the leadership of the U.S. emerging in the mid
nineteenth century.
The notion of “chaos” as the result of the disintegration of the systemic system put
into place by the hegemonic leader as an outcome of its waning power is present in both,
Arrighi’s (from whom we have adopted the term) and Modelski and Thompson’s model
(using the term “deconcentration”) and both agree on the importance of the unraveling of
the old for the creation of the new system. Both models differ, however in the account as to
what causes the unraveling to start and to end. Modelski and Thomson view the emergence
of new leading sectors, triggered by clusters of innovation and new capabilities together
with the starting technological diffusion (also present in Wallerstein’s model) as the trigger
for the hegemonic crisis and as an outcome interstate rivalries and interenterprise
competition, whereas Arrighi argues that this competition is the cause of the crisis. Also,
8
Modelski and Thompson, again similar to Wallerstein in this respect, have argued for the
importance of the forceful challenge of the leader/hegemon during the global
war/macrodecision phase acting as the final catalyst for the new leader to emerge and
unfold its new leadership system (in Modelski and Thompson’s view) or hegemony (in
Wallerstein’s and Arrighi’s terminology). In other words, and to use Arrighi’s metaphor, in
this view the old leader has to be beaten with new tricks out of the tracks before the new
train can be set into motion.
/Figure 4 about here/
We believe that these differences are not impossible to bridge (see also Boswell
1999). Figure 4 graphically summarizes the model of hegemonic transition proposed in this
paper. In our synthesis we combine Modelski and Thompson’s notion of hegemonic crisis
and global war as a catalyst for the transition to the new system with Arrighi’s concept of
systemic transition and chaos (see Figure 4). Systemic expansion, in this view, allows the
development of new clusters of innovations that lead to the emergence of new leading
sectors and result in the emergence of new configurations of power in the form of
alternative political and economic institutions. These developments cause the rise of a new
center of systemic capabilities and an increased inter-state and inter-enterprise competition,
ultimately laying the foundation for a new commercial and organizational arrangement and
also the rise of challengers to the existing leader, who’s domination of the system starts to
decline. Two types of challengers have to be differentiated: catch-up challengers that aim
to challenge the existing leader in the same “tracks” – staying with Arrighi’s metaphor –
but with highly improved machinery aiming to overtake the leader on its own tracks. A
second kind of challenger, however, aims to overtake the old leader on an all-together new
“set of tracks” as a result of its innovative new means, both in technological and
organizational terms and aiming to tackle global problems in a new commercial and
arrangement.4 After the breakdown of the old arrangement results in a systemic chaos
(equivalent to Modelski and Thompson’ deligitimation phase), the process of global
warfare provides the macrodecision that triggers the rise of a new leader, so far always of
the second “track-changing” kind, who reinforces the transformation of the world system
through its institutional manifestation (push factor) of the new “technological style” (Perez
1983) and experiences further reinforcement through the emulation of leader by other
states during this phase (pull factor).
In contrast to Arrighi’s argument that the emergence of a capitalist mode (based on
the old one, but qualitatively different and novel) – identified in Figure 4 as “systemic
change” – falls together with the rise of a new hegemonic leader, we argue here that the
emergence of a new capitalist mode enables the existing leader to develop dual and
alternative (but to some degree complimentary) centers of systemic capabilities, causing
4
A necessary and more thorough discussion of the challenger process is unfortunately beyond the scope of this paper.
We refer for the closest discussion of our understanding of the challenger process to the treatment of this issue in
Thompson (2000, ch. 8). Similar to Arrighi, Thompson views the divide between territorially-based and maritimecommercial powers as a crucial divide, and identifies three major challenging strategies, the capture-the-center
strategy, an attack on the global network and/or the creation of an alternative network, and carving-out-a-subsystem
strategy. In his challenger model of global leadership he thus emphasizes the factors of maritime-commercial
orientation, proximity, similarity, and innovativeness of the challenger in comparison with the challenged leader.
9
the development of a different form of “chaos” and allowing for the generation of a
“Phoenix cycle” of renewed leadership out of the ashes of its former status (for reasons
laid out below). This is reflected in the model as laid out in Figure 4.
We differ between three major types of capitalist modes (during the time under
study here, starting with the Genoan hegemony): commercial maritime, industrial, and
digital commercial (on the effect of these types on rivalries between great powers, see
Rennstich 2002a).5 Commercial maritime capitalism is in large part characterized by its
emphasis on external networks of production and other value-adding processes (including
division of labor) and the importance of flows within the world economic system. The
leading sectors in this phase are predominately service- or flow-oriented. In Modelski and
Thompson’s (Modelski and Thompson 1996) account this includes the Champagne fairs
and Genoan Atlantic trade and trade in the Black Sea during long cycle three (under
Genoan leadership), Romanian and Levantine galley fleets during long cycle four
(Venice), the control over Guinean gold and Indian pepper (Portugal), Baltic, Atlantic, and
later Asian trade control of the Dutch, and Amerasian trade control of the British during
long cycles five, six, and seven respectively. Industrial capitalism, by contrast, has its main
center located in internal production networks. The leading sectors in this capitalist mode
are commonly associated with our understanding of “industrialization” – Britain’s
dominance of cotton and iron production, and later railroads and steam during the eighth
long cycle, followed by the leadership in steel, chemicals, electric power, motor vehicles,
aviation, and electronics of the United States during the ninth long wave in Modelski and
Thompson’s count. We are currently witnessing the rise of a new capitalistic mode, here
referred to as digital commercial capitalism for its strong resemblance of the earlier
maritime commercial mode, especially in terms of its strong emphasis on external
networks in the world economy. This system, however, denotes a new, unique capitalistic
mode as a result of its inclusion of digital information as a new commodity and its much
more sophisticated integration of production-networks.
Internal/External Networks vs. Capitalism/Territorialism
Both, Arrighi and Modelski and Thompson emphasize the critical division between
territorially driven and (commercial) capitalist power structures. Whereas Modelski and
Thompson argue for the continuation of this divide, Arrighi argues that Britain was able to
fuse both structures, while during the following U.S. leadership a slight diffusion back
towards a more capitalist orientation took place. Here we argue that while useful and
important, the two perspectives can be combined by shifting the focus on the structure of
networks and the division between capitalist modes dominated by internal or external
networks rather than the focus on capitalism and territorialism.
The difference between the leading sectors in the maritime commercial (or digital
commercial) and the industrial systems is, as Sen (1984, 7) points out, the dual strategic
significance for military self-sufficiency and national economic independence held to
5
For a similar account, see Cantwell (1989), who distinguishes between “merchant capitalism” (pre-1770s), “industrial
capitalism” (1770s-1940s), and “global capitalism” (post-1940s).
10
provide the rationale for the desire to acquire this group of industries. Great powers in this
system try to establish internal rather than external networks, in order to, as Rosecrance
puts it, “excel in all economic functions, from mining and agriculture to production and
distribution” (Rosecrance 1999, 6). This emphasis on self-sufficiency and national
economic independence characterizing the industrial environment stands in stark contrast
to the necessities of an external network- and service-based environment as found in the
maritime commercial and the digital commercial systems. Of course, this does not imply
that trade dies away or renders unimportant. Far from it, trade remains an important factor
in rivalries amongst nation states. It is not, however, the central basis of the leading sectors
as in the maritime trade network system.
Arrighi (paraphrasing Marx general formula of capitalist production) argues for two
logics of power: TMT’ (territorialism) versus MTM’ (capitalism), where M = economic
command or money and T = territory, or
TMT MTM
Following Arrighi’s argument further, Britain’s synthesis of both logics of power,
territorial (T) and economic command (M) can be noted as

MT TM MT 
   
where economic command multiplied by its territorial control (MT) breeds further
territorial gains multiplied by its economic command (TM), resulting in an enlarged

economic command and territorial
control (MT)’. For Arrighi, the following U.S.
leadership, however, while building on Britain’s system, marks the return to an increased
emphasis of economic command over territorial factors, since the British system of
combining its economic strategy with an imperial strategy is no longer successfully
executable in an increasingly complex world system. This has significant implications for
the current transition (if indeed occurring at all). For Arrighi (1999, 80), the difference
between the current systemic transition in contrast to previous ones is “that the scale and
complexity of the modern world system have already become so large as to leave no little
room for further increases”. Taking into account Arrighi’s discussion of “space-of-places”
and “space-of-flows,” the newly emerging system can thus be formulated as MtM’, where
T = space of places/territory, and t = space of flows/digital space. Using Arrighi’s
conceptualization the evolutionary development of the modern world system can be noted
as follows:
TMTchaos

MTMchaos

MT TM MT  chaos

MTMchaos

MtM
Employing the same use of Marx’s general formula of capitalism, with the aim of a more
general and simpler formula than the one above, we propose the following generalization
 of the evolutionary development of the modern world system. Also built on two logics of
power but instead of focusing on the divide between territorialism and (commercial)
capitalism as Arrighi and Modelski and Thompson do, we propose instead to focus on the
divide between systems of internal and external networks
11
CNC NCN
where N = network capital (flexibility, freedom of choice) and C = commodity capital
(capital invested in particular input-output combinations), paraphrasing Marx’s general
 identify the two divergent cycles of CNC’ (internal
formula MCM’. Thus, we can
6
networks) and NCN’ (external networks) that describe the systematic development of
each hegemonic (or leadership) cycle. Both, the commercial maritime as well as the digital
commercial systemic phase would thus be characterized by a NCN’ cycle, whereas the
phases dominated by an industrial capitalist mode follow a CNC’ cycle. Again, we believe
this distinction is compatible with both, Modelski and Thompson’s and Arrighi’s model,
especially in regard to Arrighi’s discussion of the newly emerging systemic mode.
As a result, we can identify four distinct phases in the evolution of the modern
world system: a territorial phase (China), a maritime commercial phase (Genoa, Venice,
Portugal, Dutch, England I), and industrial phase (England II, US I), and the emerging
digital commercial phase (US II). All four phases can be divided into two meta-systems (as
a result of leading sectors and the different capitalist modes). Hegemonies are either
characterized by the dominance of internal (territorial; industrial) or their external
(maritime commercial; digital commercial) network structure. As laid out in Figure 4, the
impact of the transition from an internal to an external network structure (or vice versa) is
important not only in terms of the change in the general structure of the new commercial
and organizational arrangement but also for the location of the new global leadership. So
far, we have witnessed one occurrence of hegemonic and systemic transition (as
understood in our model), where the existing leader (Britain) was aiming to maintain and
strengthen its leadership and are currently experiencing a similar transition.7 It is this cooccurrence of hegemonic and systemic transition that allows for the development of what
we term the “Phoenix cycle” of renewed leadership of the old hegemon.
THE PHOENIX CYCLE
The process leading to the development of a systemic chaos as depicted in Figure 4
is normally driven by the clustering of innovations outside the leaders realm (both in a
geographical and technological sense), paired with the technological diffusion from core
leading sectors technologies (again in a broader sense) and the emergence of new leading
sectors, triggering the centralization of new systemic capabilities in one or two newly
emerging new centers, and eventually causing the rise of challengers to the existing leader.
Given a change in the general capitalistic mode dominating the world system– in divergent
but broadly compatible forms acknowledged by both, Arrighi (1994, ch. 1), and Modelski
and Thompson (Modelski and Thompson 1996, 71-2) – historically we have witnessed a
phenomenon here referred to as the “Phoenix cycle.” In instances (so far only one, namely
6
To some degree, we can identify this notion of internal networks in Arrighi’s conceptualization of “internalization” of
costs, security, etc.
7
The discussion, as to why China (or rather Chinese leaders) decided against the expansion of their lead during the first
occurrence of the co-occurrence of a hegemonic- and systemic crisis is beyond the realm of this paper but increasingly
receives more attention in the literature.
12
Britain’s ability to defend her leadership position during the eighteenth and nineteenth
century) where the systemic chaos is not only driven by the “normal” process of
hegemonic crisis and breakdown, but also coincides with a systemic crisis (and eventual
breakdown) triggered by a change in the major capitalist mode of the system (leading to a
system meta-structure shift), the existing leader can defend its leadership position in the
transforming world system if it is able to allow the parallel development of a new cluster
of innovations and the rise of new leading sectors within its domain (see Figure 4).
As shown by a number of authors from various research traditions (such as
Christensen 1997; Gilpin 1996; Freeman and Louçã 2001; Freeman and Soete 1997;
Freeman and Perez 1988; Porter 1990; Nelson and Winter 1982), past success often entails
the very ingredients for future demise. Whereas continuous innovation still takes place
within the existing leader, adaptation to a newly emerging, changed environment (as a
result of the rise of new leading sectors elsewhere) proves very hard for a society that can
(and usually does) become locked in into economic practices and institutions that in the
past proved so successful. Powerful vested interests resist change, especially in
circumstances were a nation is so powerful as to institutionalize its commercial and
organizational arrangement on a global level, a change dire needed however to maintain its
leadership. Gilpin (1996, 413) thus concludes that “a national system of political economy
that most ‘fit’ and efficient in one era of technology and market demand is very likely to be
‘unfit’ in a succeeding age of new technologies and new demands.”
The cyclical emergence of new commercial and organizational arrangements as
shown by Modelski and Thompson, Freeman, and others entails such an environmental
change. Thus, hegemonic transitions usually entail the shift from one leader to another due
to what Boswell (1999, 265) calls the “advantage of backwardness.” If we view the
emergence of new commercial and organizational arrangements as a largely endogenous
process, its emergence also causes an environmental shift that can be understood as an
exogenous factor as well. However, the response of the existing leader to this change is
largely driven by endogenous factors again. The same can be said for the change from one
capitalist mode to another, setting off the transition from an internal network structure
system to an external network-structured one (and vice versa). It is the set of leading
sectors (an endogenous process) that causes – over time – the change of the systemic
structure and thus a change of the meaning of “fitness” in the evolutionary selection
process. The shift from one capitalist mode to another, then, is also both an endogenous
but to some degree also an exogenous process.
As pointed out earlier, we have witnessed in the past that under certain
circumstances the old hegemonic leader is capable of maintaining its leadership position.
Instead of withering away, these leaders are able to renew themselves, like a phoenix
arising from the ashes of its declining old leadership position. Several reasons account for
this phenomenon.
13
Unhindered Rise of Second Center of Systemic Capability
One of the main obstacles for the existing hegemon, as discussed earlier, is the
entrenchment of its own success. The institutionalization of its successful strategies creates
powerful incentives to “remain on course.” These institutions prove not only to be “sticky”
(in the sense that they outlast their original intent and aim to preserve the existing rather
than adapt to change) but also defensive. New ways of doing things are thus less likely to
emerge where such entrenched resistance exists, a phenomenon we can observe both on the
micro- (individuals and firms) and macro-level (states). A crucial factor we have to take
into account is the kind of global problems (as identified by Modelski and Thomson) the
actors are trying to address. In a systemic environment that is driven by the same
capitalistic mode, these problematiques will be more closely connected than in a situation
in which the power strategy is based on two different capitalistic modes. It is important to
keep in mind that the two network systems – internal or external – are reflective of
different power strategies. The rise of a new commercial and organizational arrangement
reflective of a different network environment provides less of a threat to the existing
entrenched order and thus will be met with less resistance.
We know that the emergence of new leading sectors is a path-dependent process.
Leading sectors of a new network environment are products of a different path than that of
the existing commercial and organizational arrangement (despite their co-existence and
often to some degree parallel historical trajectories). Originating in different power-logics,
they can be quite complimentary in their development as for example Nef (1934) has
demonstrated so eloquently. For Nef (1934, 22)
the commercial revolution … had a continuous influence reaching back to the Reformation
upon industrial technology and the scale of mining and manufacturing. But so, in turn, the
progress of industry had continuously stimulated in a variety of ways the progress of
commerce. The former was quite as ‘revolutionary’ as the latter, and quite as directly
responsible for the ‘Industrial Revolution.’ (Nef 1934, 22)
This “compatibility” or even “complimentary character” is to a large degree the
result of not only the difference in power strategies but also the difference in commercial
strategies. External network arrangements tend to be service-oriented (in today’s economic
language) whereas internal network systems tend to be production-focused (see also earlier
discussion on the difference between internal and network systems above). Thus, in the
same manner as the commercial supremacy of Britain helped her to build up her industrial
strength, the U.S. informational technologies and digital networking capabilities are based
upon the strength of her earlier strengths in an internal network environment (i.e.,
microelectronics, mass production, aerospace technologies, and semiconductor
production). As a result, the parallel development of two centers of systemic capabilities –
one rooted in the external network power logic, the other in the internal network power – is
not only possible but also complimentary and self-reinforcing.
14
Investment Flows Remain Internal
Another argument regularly put forward for the likely rise of a new hegemon is the
notion of capital “searching” – once liquidized in the M’ phase – for new and better
opportunities (i.e., higher returns as a result of new monopoly rents). For reasons laid out
above, these opportunities tend to arise outside of the institutionalized setting of the
existing leader. This process usually leads to the flow of capital from the existing leader to
the rising new one. However, in the case of a systemic network structure shift and thus the
possible development of dual centers within the same “containers of power” (Giddens
1987), these capital flows can (as in the case of Britain during its transition from a external
network to an internal network power logic) remain internal and simply shift from one
center to another but within the realms of the existing leader. We are witnessing a similar
process currently in the case of the United States where not only internal flows are
switching from an internal network power logic to opportunities arising in the emerging
external network power logic driven enterprises but also external flows are significant for
the rise of this new commercial and organizational arrangement. This does not only take
place in the form of “venture-capital” financing, but also to a much larger degree in a shift
from established institutions of capital distribution to newer forms. Put differently, in the
case of a combined hegemonic and systemic breakdown, the old hegemonic leader reemerges out of the ashes of its crumbling old commercial and organizational arrangement
fed by the internal flows of its monetary capital (as well as that from others) and as a result
is able to develop dual centers of systemic capability. The current co-development of dual
financial centers within the United States may serve as example of the continuation of this
process.
We currently witness the parallel importance of the declining old capitalist mode
(industrial  internal network structure) financial center, the New York Stock Exchange
(NYSE), with its roots in the “space-of-place” power logic, but at the same time the rise
and development of new capitalist mode (digital commercial  external network)
financial network center, characterized by its roots in a “space-of-flows” power logic,
namely the Nasdaq. Although its origins can be traced back to May 17, 1792, when
Twenty-four brokers subscribed to the “original brokers’ agreement,” forming the first
organized stock market in New York, the NYSE was institutionalized in 1817 under the
name “New York Stock & Exchange Board” which was changed in 1863 to its current-day
name “New York Stock Exchange.” Replacing London as the world’s largest financial
center, New York and its NYSE have become by far the world’s largest equity market, two
and a half times the size of the next market in Japan (followed closely by London). The
members (i.e., owners) of the NYSE are closely connected to the rise of the commercial
and organizational arrangement that lead to the rise of the U.S. leadership in the world
system. And the NYSE remains a highly influential capital market for U.S. (and
increasingly international) enterprises.
At the same time, however, with the rise of electronic networks, the NYSE has
experienced strong competition on a worldwide scale from increasingly electronically
based equity marketplaces. New York, however, has also witnessed the parallel
development of the world’s dominating electronic marketplace in the form of Nasdaq.
Owned by the same set of owners (initially), Nasdaq started its trading life – in 1971 – at
15
the moment, when most authors date the start of the hegemonic crisis of the U.S. and has
since firmly established its dominance of the capital-side of the emerging digital network
system. As the world’s largest electronic stock market, Nasdaq is not limited to one central
trading location. Rather, trading is executed through Nasdaq’s sophisticated computer and
telecommunications network, which transmits real-time quote and trade data to more than
1.3 million users in 83 countries. Nasdaq’s “open architecture” market structure allows a
virtually unlimited number of participants to trade in a company’s stock and is the result of
an actively pursued spread of its hubs in other established markets. In 1994, Nasdaq
surpassed the NYSE in annual share volume and despite the decline in trade and volume
after the dot-com bubble burst in 2001 remains a powerful market with the potential to
make floor-based markets such as the NYSE obsolete in the not too distant future.
Advantage of Old Leadership Position
Thus, instead of a disadvantage, the declining leader can use its existing
institutional setting and resource not only to defend its predominance of the current
commercial and organizational arrangement but at the same time facilitate these resources
to its advantage by channeling the increasingly liquid capital flows not outside, but rather
to the parallel developing new center of systemic capability. The ashes of its hegemonic
decline prove to be fruitful in nurturing the rising new center. This does not prevent the
rise of challengers. And it does not preclude the further unraveling of the existing order
leading to a hegemonic breakdown. The unique circumstances of a combined systemic and
hegemonic transition, however, provide the old leader with a significant head start in the
development of its capabilities in the newly emerging system for reasons laid out above.
ENTER: THE AGE OF CHAOS OR EVOLUTION OF THE SYSTEM?
A CONCLUSION
The current view in the literature on the future of world hegemony in the modern
world system can be roughly divided into two groups. One group, most prominent among
them Wallerstein (1994), argues for the end of the current system and the beginning of a
prolonged, unresolved systemic “chaos” with a multi- or bipolar hegemonic structure or
other varieties of a dissolution of the current system (e.g., Arrighi, Silver, and Ahmad
1999; Goldfrank 1999; Bornschier 1999). A second group allows for the evolution of the
system but argues for a continuation of the basic mechanisms (e.g., Modelski and
Thompson 1996; Chase-Dunn and Hall 1997; Thompson 2000; Rennstich 2002b; to some
degree also Boswell 1999; note also Arrighi 1994, 74-84).
This paper has aimed to provide a model bridging existing models on systemic and
hegemonic transition and by doing so, allowing to put not only past historical hegemonic
transitions into a new perspective but also to further our understanding of the current
transitions and their implications for the future of the global world system. We believe that
by introducing a new understanding of “systemic transformation” through the introduction
of a systemic meta-structure differentiated between internal and external network
structures we can not only provide a missing theoretical understanding of past transitions
16
but maybe even more important make more sense of the current “chaos.” What unites most
of the more recent accounts of the demise of the world system is the puzzling combination
of the simultaneous military strength of the U.S. and its relative decline in economic and
political terms. It seems rather peculiar, in this perspective, to witness the economic rise of
the triad (and with it a shift of the center of the system further westwards and back into the
Asian fold in many accounts) without the demise of the existing leader’s military
capability or at least the rise of a serious challenger or challengers in the short-and even
medium-term. Taken together with the high complexity of the system, the perceived need
for international cooperation not only in economic and socio-political, but increasingly
also ecological terms, and its truly global proportions that renders dominance of the world
system nearly impossible, the notion of a breakdown of the system and a uncertain future
structure seems rather obvious. However, taking our model and the lessons of a prior
occurrence of a “Phoenix cycle” with Britain’s second leadership of the world system into
account, we can not only theoretically explain the current “chaos” but in fact would expect
it to unfold in the manner it currently does. Thus, ours is not an attempt to “twist” existing
long-wave explanations to fit current developments, but rather a theoretical extension and
clarification based on existing (as pursuit by Modelski and Thompson 1996; Arrighi 1994;
Rennstich 2002b) empirical analysis of the historical evolution of the world system.
The rise of Japan, thus, becomes more closely aligned with the rise of France as a
challenger to British hegemony during the eighteenth century and resulting in Britain’s
defeat of the French challenge during the French Revolutionary and Napoleonic Wars and
consequently Britain’s establishment of her second hegemonic period. This is not to argue
for a future war between the U.S. and Japan, nor that Japan is the most likely candidate for
the challenge of America’s claim for leadership of the world system. Our model does,
however, provide some answers several authors, including Wallerstein, raise in order to
explain the phenomenon of Japan’s economic and especially financial importance in the
current world system but its apparent “non-challenging” behavior in terms of political
power. Viewed as a challenge based in the same internal-network structure system, Japan’s
capabilities seem far greater than if viewed as a challenge to America’s lead and rising
dominance of the newly emerging external network structure-based new commercial and
organizational arrangement.
A number of authors note the similarity between the Dutch systemic structure and
the currently evolving system (e.g., Arrighi 1994; Boswell 1999; Rennstich 2002a),
something perfectly consistent with our theoretical model here. The currently emerging
new commercial and organizational structure, in so many ways characterized by its
emphasis on external networks, resembles in many ways the earlier maritime commercial
setting (also based on external network structures) in existence prior to the industrialized
phase (largely dominated by an internal network structure). It does not, however, mark the
simple “return” to an old setting. Ours is an evolutionary model and prior complexities do
not simply dissolve. Thus, elements of the prior industrial system have become integral
parts of the new digital commercial system. But just as in prior cycles, what once was the
foundation of leading sectors and the basis of monopoly rents has become a necessary but
commoditized element of the value-adding process. The newly emerging leading sectors
are not based on the internal network structure of the prior industrial system anymore but
rather both producing and products of the external network structure. This transition from
17
an internal network to an external network structure allows for the development of a
Phoenix cycle of renewed leadership, out of the ashes of its old hegemonic demise. As was
the case in the prior transition from Britain’s dominance of the commercial external
network structure to an industrial internal one, we cannot expect this transition to progress
unchallenged, albeit we would certainly wish for the containment of a future global war
and a different form of “macro-decision.” However, as the most recent events in the
international interaction of states have reminded us so brutally, human political action and
reaction remain the most static element in the evolution of the world system. We can only
hope that our work can help to bring more insights as to the processes and outcomes of an
increasingly “interdependent” and external network-based world system.
18
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23
Figure 1: Dynamics of Hegemonic Cycle, Wallerstein Model
Rivalry
Hegemony
Concentration of
productive, commercial,
and financial competitive
fitness in a particular
state (hegemony)
Economic
and political
consolidation
of hegemony
Competitive
Expansion
(variation)
Rivalry
Technology
diffusion
Global
liberalism
Climatic
world war
(selection)
Loss of
competitive
fitness
Rise of
employment
costs in
hegemonic state
Source: Wallerstein (1984), graphical conceptualization based on Arrighi, and Silver (1999, 25).
Competitive
expansion
(variation)
Figure 2: Dynamics of Hegemonic Transitions, Arrighi and Silver Model
Hegemony
Systemic
reorganization
by hegemonic
state
(diffusion,
imitation, and
reinforcement)
Emulation of
the hegemonic
state
(innovation)
Systemic
expansion
(variation)
Hegemonic Transition
Hegemonic Crisis
Hegemonic Breakdown
Interstate rivalries
and interenterprise
competition
Systemic chaos
Social conflicts
Emergence of new
configurations
of power
Source: Based on Arrighi, and Silver (1999, 29).
New Hegemony
Systemic reorganization by
new hegemonic state
(evolution)
Centralization of
systemic capabilities
Emulation of the new
hegemonic state
Figure 3: Leadership Transition Dynamics, Modelski and Thompson Model
Hegemony
World Power
Hegemonic Transition
Delegitimation
Deconcentration
Naval
capability
share/concentration
Innovation
Source: Modelski and Thompson (1996).
Macrodecision
Technological
diffusion
Emergence of
new
configurations
of power
Leading sector
share/concentration
Naval
capability
share/concentration
Interstate rivalries
and interenterprise
competition
Rise of new
leading sectors
Economic and
political
consolidation
of leadership
Global War
New Hegemony
World Power
Global
warfare
Rise of
challenger(s)
Leading sector
share/concentration
Figure 4: Dynamics of Hegemonic Transitions, Rennstich Model
Hegemony
Systemic
reorganization
by hegemonic
state
(diffusion,
imitation, and
reinforcement)
Hegemonic Transition
Hegemonic
Hegemonic
Crisis
Breakdown
Innovation
Rise of new
leading sectors
Systemic
expansion
(innovation)
Emulation of
the hegemonic
state
Change in
capitalist
mode
Centralization of
systemic
capabilities
Systemic Transition
New Hegemony
Global War
Rise
of
challengers(s)
selection
Global
warfare
Systemic
reorganization
by new
hegemonic state
Technological
diffusion
Systemic
chaos
Emergence of
new
configurations
of power
(variation)
Emulation
of the
hegemonic
state
Global
warfare
Emergence of
new system
configurations
System
meta
structure
shift
Systemic
Crisis
Systemic
Breakdown
Dual
centers
of systemic
capabilities
metaselection
Systemic
reorganization
by old
hegemonic state
Phoenix Cycle