John Isbister views imperialism as the forceful appropriation of territories and peoples incorporating them into the global economy. Thus, as Christopher Clapham writes, there is a third world because there is a first world. The third world is the creation of imperialism.

Imperialism has many facets. In its economic form, it was based on mercantilism (the notion that countries became rich according to the amount of gold and silver the accumlated). Mercantilism meant monopoly trade with colonies. Socially, imperialism destroyed indigenous cultures. It created national boundaries that threw disparate people together into what later became artificial nations. This was especially true in Africa. It prevented the development of the colonized peoples.

Imperialism was based on superior technology and military strength. This means that it was ultimately based on force. Isbister rejects the notion that imperialism is the last stage of capitalism with the observation that the whole of human history is the story of the conquest of weaker people's by stronger groups with superior military technology.

Spanish colonialism lasted for nearly 400 years in what is now called Latin America. The Portuguese colonized what is now Brazil. Spansih colonialism was based on severe exploitation of Indian labor through the institutions of the encomienda under which whole groups of Indians were made wards of Spanish colonizers for the purpose of exploiting their labor in the silver and gold mines as well as in agriculture. Spanish mercantilism limited the development of an indigenous capitalist class in what was to be Latin America, limited domestic markets, and created a hierarchic pattern of rule with very little experience in self-government. There was no tradition of separation of church and state.

British colonialism was based in indirect rule (governing through indigenous elites). In Africa, this institutionalized what is often called "tribalism." The French in Africa sought to assimilate Africans under the notion of the superiority of the French language and culture. In reality, the African elites who learned French were the ones who gained the most from this at the expense of their being divorced from the French masses.

In places like China, treaty ports were established where European law prevailed over Chinese law. The British forced the opium trade onto China in return for Indian tea. In India, the British destroyed the native textile industry to force consumption of British textiles.

Colonial rule was poor preparation for stable independent rule. Few indigenous peoples were educated beyond the primary grades and those with administrative experience were limited to the most menial clerical posts within colonial administration. Colonialism strengthened particularism (divisions based on ethnicity, language, religion, etc.) by throwing disperate peoples together by forming "new" countries with artificial boundaries the often divided peoples into separate countries. Colonialism contributed to clientelism and patrimonail rule as the indigenous elites continued to administer the colonial state in the post-colonial era in ways that resembled the old colonial rule. They have followed the politics of extraction operating through the state as a source of personal enrichment. Extractive politics, high rates of corruption, hierarchic government, the lack of a technical class, and dependent/peripheral economies are the legacies of imperialism in the third world.