The Context : To paraphrase Mao Zedong: Where do ideas come from? Do they drop from the sky? No, they come from social practice, the struggle for production, the class struggle, and scientific work.¹ There is a close link between what goes on in the world—historical development—the project of classes and states, and theoretical and political debates.

What characterized the historical development of the long 1960s (1955–75) that brought forth the theory of unequal exchange? One major factor was the decolonization process in the wake of the Second World War. The two world wars were essential for the soon-to-be new hegemon after the decline of the British Empire: the United States. The decline of the British Empire and the rise of the Soviet Union as a balancing force against the rise of the United States created a window of opportunity for liberation movements in the colonies, in what became the Third World.

The postwar United States pushed for decolonization to open the former European colonies for U.S. investment and trade—the transformation from colonialism to neocolonialism. Meanwhile, the Soviet Union saw the creation of new states opposed to colonialism as possible new allies against Western capitalism.

The Asian and African countries from the first wave of decolonization participated in the Bandung Conference in Indonesia in 1955. They stressed the importance of independence from both East and West and the development of their national economies. The Bandung Conference was not a new Communist International that strived for the socialist world revolution like COMINTERN in 1919, but the expression of the national liberation struggle against colonialism, which in some instances meant communism taking the lead.

The United States, as the new global hegemon, had to make sure that the decolonization process ended in “free enterprise” for U.S. capital and not socialist-orientated states linked to the socialist bloc. Therefore, from around 1965 to 1975, the main contradiction in the world was between the United States and the different anti-imperialist liberation movement and socialist-orientated states. In this struggle, the Vietnam War became the symbol of this contradiction.

The rise of socialist-orientated projects in the Third World from China and Vietnam in the East to Cuba and Chile in the West produced new theoretical and political debates, most prominently around the Chinese interpretation of Marxism in the form of Maoism, but also from other Third World revolutionaries. These included Che Guevara and Fidel Castro in Cuba, Frantz Fanon in Algiers, Ho Chi-Minh and Nguyen Giap in Vietnam, Amílcar Cabral in Guinea-Bissau, and Eduardo Mondlane in Mozambique.

The revolutionary spirit of China, Vietnam, Cuba, and other countries had a strong impact on anti­-imperialist theory. Before the 1960s, the Marxist understanding of imperialism was almost exclusively based on V. I. Lenin’s writing from around the First World War, especially “Imperialism as the Highest Stage of Capitalism,” from 1914.² Then, things began to change. New perspectives emerged, both from Third World revolutionaries and from academics. The latter were mostly connected to the New Left and criticized both the capitalist world system and existing socialist projects.

An important representative was Paul Baran, a professor at Stanford University and a leading figure in the journal Monthly Review, founded in 1949. Baran defined monopoly capitalism as a transnational rather than a national phenomenon. This reflected the development of capitalism in the United States after the Second World War. A special feature of transnational monopoly capitalism was the underdevelopment of the Third World. In 1957, Baran’s book The Political Economy of Growth was published. In 1966, Monopoly Capital was released, written by Baran together with Monthly Review editor Paul Sweezy.

Baran did not write about unequal exchange or dependency. His main interests were monopoly capital, investment, and profit, but his underlining of underdevelopment as a consequence of global capitalism posed a serious challenge to mainstream economists, who insisted that Third World countries would develop if only they followed the example of the Western world.

Baran’s work was of importance to those theorists of imperialism who rose to prominence in the 1960s: Andre Gunder Frank, Samir Amin, Immanuel Wallerstein, and Arghiri Emmanuel. After a meeting with Baran in 1964, Frank wrote that Baran’s systematic investigation of capitalist development and underdevelopment—defining them as two sides of the same coin—had opened the door to a new understanding of world history, the present, and the future.³ Che Guevara was also an admirer of Baran. In 1960, he welcomed him to Cuba to discuss underdevelopment and related economic questions.⁴

The renewal of imperialism theory in the U.S. circle around the journal Monthly Review, including theorists such as Sweezy and Harry Magdoff, continued Baran’s work and applied it to U.S. imperialism. Later, Wallerstein, who had worked in Africa studying the liberation movements, developed his world-system theory. In Latin America, several academics such as Frank and later Ruy Mauro Marini began to formulate the theory of dependency. Dependency theory described imperialism as a system with a center, the “metropolis,” consisting of North America, Western Europe, and Japan, and an exploited periphery, the Third World. Third World countries supplied the metropolis with raw materials and tropical agricultural goods produced by cheap labor, while the metropolis had all of the political and economic power and control. The development of the periphery was deemed impossible within the capitalist system. Development in Third World countries would only become possible if there was a revolution that cut off the supply chain that connected them to the metropolis.

From Africa, the Egyptian Samir Amin presented his thesis, “The Origins of Underdevelopment: Capitalist Accumulation on a World Scale” in 1957. Frank, who was living in Chile, wrote an essay in 1963 on the connection between development and underdevelopment. Having been in Congo in 1957, Emmanuel presented his theory of unequal exchange in Paris in 1963. All of these dependency theorists used the concept of unequal exchange as part of their understanding of how imperialism transfers value. The idea that unequal exchange was part of imperialism emerged at more or less the same time in different places, showing how ideas are historically determinate, rather than a product of the mind of an individual genius.

Emmanuel’s Theory of Unequal Exchange

Emmanuel’s examination of foreign trade and unequal exchange was an extension of Karl Marx’s work. Marx had plans to investigate foreign trade more closely in a fourth volume of Capital, but never got to write it.⁵ Emmanuel picked up this loose end. Like Marx, Emmanuel’s theory of international trade was based on a critique of the classical political economists, in this case, David Ricardo’s theses on comparative cost.

According to Emmanuel, the historical basis for unequal exchange was laid by colonialism between 1500 and 1800. European colonialism engulfed the planet, expanding international trade, by importing raw materials and agricultural products and exporting industrial goods, developing unequal exchange of labor value.

By the 1880s, the unequal relationship between the center and periphery had been cemented. While only subsistence wages were being paid in the latter, wages became significantly higher in the former. This was the result of two simultaneous processes: the struggle of the working classes in the center for better pay and living conditions, and the oppression and exploitation of the people in the periphery.⁶ According to the theory of unequal exchange, wages are key to assessing a country’s position in the imperialist order. Value is transferred from countries with a low wage level to countries with a high wage level. Through the international commodity and capital markets, the high-wage imperialist countries benefit from trade with the low-wage countries through unequal exchange in trade.

The colonial form of imperialism at the end of the nineteenth century gave rise both to higher wages in the developed countries and to extra profits. The working classes of the imperialist countries succeeded through parliamentary and trade union struggles to obtain a comparatively high wage level compared to that of the proletariat in the exploited countries.

Exploitation is an appropriation of other people’s labor. This is true whether it is a person’s exploitation of another person or one country’s exploitation of another. The products of human labor are commodities or services and, therefore, the appropriation of human labor is the appropriation of these commodities and services. Consequently, all exploitation between countries is ultimately based on an unequal exchange of commodities and services. This may either be reflected by a deficit in the balance of trade, which means that the imperialist country imports more commodities than it exports according to current world market prices, or by inequality in the actual price formation. As Emmanuel argues, “To simplify still further: one country can only gain something at the expense of another by taking more goods than it provides or by buying the goods it obtains too cheaply and selling those it provides at too high a price.”⁷

Emmanuel’s theory of unequal exchange has been criticized for focusing too much on the circulation of goods and disregarding production. But the theory concerns more than just trade: it points to the heart of the conflict between capital and labor, which is reflected in the global differences in wages and differing degrees of exploitation. Emmanuel knew very well that the basis for value was created in production, but it is in exchange that value is realized. Exploitation is the result of the full circle of capital accumulation, which encompasses both production and circulation. No interpretation of Marx’s theory of value can disregard the role of the market in the transfer of value. It is through the market that value is acquired and distributed, both between different capitals and between capital and labor. Emmanuel adapted the theory of value to international trade, something that most of his critics have not even tried to do.

Marini’s Contribution: The Dialectics of Dependency

In the late 1960s and up through the ’70s, several editions of unequal exchange emerged from different perspectives and in different geographic locations. In the following, I will see how they relate to Emmanuel’s version, beginning with the version of unequal exchange coming from Latin America. Here, unequal exchange was an essential part of the dependency theory represented by such figures as Frank and Marini.

In 1955, Marini began to study social science in Rio de Janeiro. In 1958, he went to France to study sociology for eighteen months. There, he became engulfed in the Marxist debate going on, studied Marx and Lenin, and met exiles from the French colonies. In 1960, he returned to Brazil to work in administration and as a journalist for Cuba’s newly formed press agency, Prensa Latina. In 1962, he became an associate professor at the University of Brasília. In April 1964, after the right-wing military coup in Brazil, Marini was arrested and tortured. After he was released in December 1964, he went underground for three months until he was granted asylum in Mexico. He became a professor at the University of Mexico City and was engulfed in the revolt in Mexico in 1968. In October 1968, the Mexican army opened fire on students protesting, signaling the repression of the popular left-wing movement in Mexico. Marini was forced to continue his exile to Chile in November 1969. It was there that Marini published his famous text “The Dialectics of Dependency.” In Chile, Marini joined the Revolutionary Left Movement (MIR) shortly after his arrival and became one of its intellectual drivers. MIR was a revolutionary group that became the main left opposition to Salvador Allende’s Socialist Party. After the military coup on September 11, 1973, against the Allende government, Marini was forced to fly first to Panama in October and then to Mexico in January 1974. Marini stayed in Mexico until 1984, when it was safe to return to Brazil, where he lived until he died of cancer in 1997. Marini’s life was characterized both by theoretical academic work and revolutionary praxis.

His important article (the length of a short book) “The Dialectics of Dependency” was written in 1973 and first translated into English in 2021.⁸ There is no reference to Emmanuel in Marini’s works and vice versa. However, Frank might have acted as a link of ideas between them, as he has references to both Emmanuel and Marini in his works.⁹ Frank lived in Chile at the same time as Marini, though moved to Amsterdam after the 1973 coup and met Emmanuel at academic conferences. Amin has also a reference to both Emmanuel and Manini.¹⁰ In many ways, Emmanuel’s and Marini’s ideas overlap and supplement each other.

The origins of unequal exchange are the same. In “The Dialectics of Dependency,” Marini describes how the flow of first gold and silver, then raw materials and agricultural products, from Latin America in exchange for manufactures linked its economic development to Europe at the latter’s requirements. Marini writes:

It is from this moment on that Latin America’s relations with the European capitalist centers are inserted into a defined structure: the international division of labor, which will determine the course of the region’s subsequent development. In other words, it is from then on that dependence takes shape, understood as a relationship of subordination between formally independent nations, in the framework of which the relations of production of the subordinate nations are modified or recreated to ensure the expanded reproduction of dependence.… Andre Gunder Frank’s well-known formula on the “development of underdevelopment” is impeccable, as are the political conclusions to which it leads.¹¹

The international division of labor made by colonialism created one circle of capital accumulation in Latin America and another in Europe. However, the two forms were linked together in the expanded reproduction on a world scale of the capitalist mode of production. As an exporter of raw materials and food products, the internal circle of capital accumulation in Latin America is tied to the world economy. The economies in Latin America are developed to meet the demands of capitalist circulation in industrial countries in Europe and North America.

In the dependent accumulation, the two fundamental moments of the cycle of capital—production and consumption of merchandise—are separated geographically into two spheres. Productions take place in the dependent country; consumption takes place in the imperialist center. Being export-orientated, Latin American capital circulation does not depend on the domestic capacity for consumption. The contradiction between capital’s need for, on the one hand, expanded production and, on the other hand, the need for consumption to complete the circle of accumulation and thereby realize profit, is solved by European and North American consumption. This contradiction is also expressed in the relation between capital and the worker, as a seller of labor power and buyer of merchandise. As Marx noted, “Contradiction in the capitalist mode of production: the labourers as buyers of commodities are important for the market. But as sellers of their own commodity—labour-power—capitalist society tends to keep them down to the minimum price.”¹²

The capitalist needs to keep wages as low as possible to make the biggest profits possible. But wages make up a significant part of the purchasing power that is required to sell the products and thereby realize the profit. In other words, the capitalist form of accumulation has a tendency to destroy its own market. If capitalists increase wages, their profits decrease; if they decrease wages, their markets decrease. In both cases, capitalists become hesitant to invest, not because they cannot produce, but because they do not know if what they produce can be sold.¹³

Marini put it this way: “The individual consumption of the workers thus represents a decisive element in the creation of demand for the commodities produced, being one of the conditions for the flow of production to be adequately resolved in the flow of circulation.”¹⁴

This is not just an abstract contradiction in capitalism, these structural problems came to the surface in England during the first half of the nineteenth century. Capitalists could not meet workers’ demands for higher wages if they wanted to keep their profit rates intact; it would have threatened capitalism’s entire existence at the time. It is why Marx opened The Communist Manifesto in 1848 with: “A spectre is haunting Europe—the spectre of communism.”¹⁵

Due to the industrial revolution in the first decades of the nineteenth century, the productive forces underwent a revolution with the introduction of spinning and weaving machines, the steam engine, and railways. Productivity increased multifold. This, however, did not bring better conditions for the working class. On the contrary, the 1840s became known as the “hungry forties,” as millions suffered from starvation all across Europe. During the Great Famine in Ireland, which lasted from 1845 to 1852, roughly one million people died of hunger and related diseases. During the famine, Ireland was exporting enough corn, wheat, barley, and oats to England, feeding an estimated two million people there. It is simply that Ireland was a food-producing colony, like India and the sugar islands of the Caribbean and Latin America, and its population had to suffer the consequences.¹⁶

The misery was not limited to the colonies. In his 1845 book The Condition of the Working Class in England, Frederick Engels described the terrible conditions in industrial towns.¹⁷ Many English proletarians emigrated to North America, Australia, New Zealand, or one of the other English colonies. As did the proletarians of Ireland—over one million left during the Great Famine alone. The same scenario was played out in Sweden.

In the first half of the nineteenth century, workers’ wages in England, as in Latin America, covered the bare essentials necessary for survival.¹⁸ This weakened the domestic market, and the recurring problem of stagnant consumption vis-à-vis ever-expanding production caused the profit rates of English industrialists to fall.

One of the ways in which a capitalist country can solve the problem of overproduction is to sell as much as possible on the world market. As Marx argued, “The more capitalistic production develops, the more it is forced to produce on a scale which has nothing to do with the immediate demand but depends on the constant expansion of the world market.”¹⁹

A positive trade balance is crucial for a healthy national economy, since the export surplus provides the purchasing power needed to keep domestic supply and demand in balance. English capital set out to find new markets and possibilities for foreign investment. In The Communist Manifesto, Marx describes this early tendency toward globalization:

The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.… The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.²⁰

Marx saw capitalism’s development as a centrifugal process. The lower the possibilities became for profitable investment in the most developed capitalist countries, the more important profitable investments in the colonies and the less developed capitalist countries became. Marx predicted that capitalism would spread quickly across the globe. According to this view, the opening of new markets in Africa and Asia, and the export of capital to the Americas, promised to temporarily postpone capitalism’s imminent collapse, but not to solve the problem. Capitalism was wracked by regular crises in the middle of the nineteenth century. At the same time, the strength and resistance of the proletariat grew. The “spectre of communism” materialized with the Paris Commune in 1871. The bourgeoisie was terribly afraid of widespread revolution. What Marx and Engels did not foresee was that the proletariat’s struggle for better living conditions would initiate new forms of imperialist accumulation that would in turn revitalize global capitalism. Colonialism was not just a centrifugal phenomenon, it was also a polarizing one. The division of the world into rich and poor countries, into center and periphery, lay the basis for capitalism’s growth and extended longevity.

Around 1850, the living conditions of the English proletariat slowly began to improve. For the first time, capitalists were paying wages above the subsistence level. This was not yet a result of the proletarian struggle. The workers’ movement was still weak, not least due to fragmentation and corruption. Instead, the rise in wages was due to contradictions within the ruling class itself. English landowners had great influence in the British parliament. In 1804, they passed a prohibition against the import of grains and other agricultural products into England. This explains why prices for foodstuffs remained high throughout the first half of the nineteenth century, which impacted the subsistence wages the industrialists had to pay. In essence, the landowners took a significant chunk out of the extra profits made by the monopolies of the English industry. In the 1840s, the industrialists campaigned to lift the import prohibition. Supported by the working class, they succeeded in 1846. By 1872, wheat imports had doubled and those of meat had increased eightfold, and the same was true for sugar and other agricultural products from Latin America. Food became significantly cheaper.

As the prices for foodstuffs, and therefore the subsistence level, were falling in England, the industrialists wanted to decrease wages. Now, however, this was prevented by the fledgling workers’ movement, also helped by the decrease in the reserve army of labor, due to the emigration of around 70 million people from Europe in the late nineteenth century. The consequence was an increase in real wages.

The class struggle provided the economic laws with a concrete historical framework. The forms which these frameworks take are determined by the structural possibilities and limitations created by history. Class struggle in Europe during the second half of the nineteenth century—colonialism’s heyday—provided capitalism with a new framework. The global market was expanding. Cheap import of raw materials and food made high-profit rates and secured ongoing accumulation. None of this was the result of any master plan but of the struggle between those trying to maximize profits and those trying to receive the highest possible wages.

In the periphery of the capitalist world system, the contradiction between production and consumption found a quite different solution. As Marini explained:

In the Latin American export economy, things are different. Since circulation is separated from production and takes place basically in the sphere of the external market, the individual consumption of the worker does not interfere in the realization of the product, although it does determine the share of surplus value. Consequently, the natural tendency of the system will be to exploit to the maximum the labor force of the worker, without worrying about creating the conditions for him to replace it, as long as he can be replaced by incorporating new arms to the productive process.²¹

The existence of a reserve army of labor allowed for a constant increase in the mass of workers, compressing the individual consumption of the worker by increasing the profit rate. This develops a certain form of capitalism in the periphery:

The export economy is, then, something more than the product of an international economy founded on productive specialization: it is a social formation based on the capitalist mode of production, which accentuates to the limit the contradictions inherent to it. In doing so, it configures in a specific way the relations of exploitation on which it is based, and creates a cycle of capital that tends to reproduce on an enlarged scale the dependence in which it finds itself vis-à-vis the international economy.²²

Worker consumption is depressed to raise profit in the export industry, and the capitalist consumption of luxury products is fulfilled by import from the center.²³

Thus, the sacrifice of workers’ individual consumption for the sake of exporting to the world market depresses the levels of domestic demand and makes the world market the only outlet for production. At the same time, the resulting increase in profits puts the capitalist in a position to develop consumption expectations without a counterpart in domestic production (oriented towards the world market), expectations that have to be satisfied through imports. The separation between individual consumption based on wages and individual consumption generated by unaccumulated surplus value thus gives rise to a stratification of the internal market, which is also a differentiation of spheres of circulation: while the “low” sphere, in which workers participate—which the system strives to restrict—is based on internal production, the “high” sphere of circulation, proper to non-workers—which is what the system tends to widen—is linked to external production, through the import trade.²⁴

The relationship between production and consumption develops differently from the imperialist core, where there is a correspondence between the growth of production and the expansion of the home market. The possibility for the industrial capitalist to obtain abroad the food necessary for the worker at a low price did not entail a fall in wage level but made space for the consumption of other manufactured goods by the working class. In the imperialist core countries, industrial production became centered on goods for popular consumption. As the wage level increased, capital was oriented toward increasing the productivity of labor by introducing new technology and effective organization of the labor process. The way to increase profit was to produce more goods with less labor.

Circulation and Production 

To take the exchange on the market—circulation—as the starting point for the analysis of capitalism instead of production, has been one of the critical points against the theory of unequal exchange. However, this approach actually corresponds to Marx’s presentation in Capital. The title of the first book in Capital is “The Process of Production of Capital.” The production of capital includes both the production of the goods and the sale. The first two sections of Capital are devoted to explaining the characteristics of commodities by analyzing problems in the sphere of circulation. It is only after more than a hundred pages, in the third section, that the study of the production of goods begins. This makes the theoretical examination of a problem coincide with its historical development, as it accounts for the transformation of simple mercantile production into capitalist mercantile production.²⁵

To take the circulation sphere as a starting point makes all the more sense when we study the imperialism of unequal exchange, as it has to do with the exchange on the world market, between the dynamic accumulation circle in the core and the dysfunctional national accumulation circle in the periphery. The dependent economy is subordinated to the accumulation in the industrial countries. Its function is to secure the profit rate and the overall accumulation of global capitalism.

The focus on consumption power as the driver of development—the emphasis on the problems of the realization of production—is, however, not done at the expense of analyzing what takes place in the sphere of the production of goods. The divorce that exists between the location of production and the location of consumption in the dependent economy generates peculiar conditions for the exploitation of labor in the production sphere, which Marini calls “super-exploitation.” This super-exploitation aggravates the split between national production and domestic consumption, from the heart of the production sphere.²⁶

Surplus Value and Development 

To explain the difference in the form of exploitation in the core and periphery of the imperialist world system, we must take a detour into the theory of surplus value.

There are basically three ways that capital can increase the rate of surplus value and thereby the potential volume of profit:

1. Increase the absolute surplus value by an extension of working time and/or the intensification of work, in relation to the required working hours to reproduce the “basket of goods” that forms the value of labor power.
2. Increase the relative surplus value by an increase in productivity, as a result of new technology or more effective management form, which reduces the “necessary working hours” share of total working hours.
3. Extract super surplus value by lowering the actual level of reproductive costs and thus the “necessary working time” share of total working hours.

Marini defines super-exploitation as “the intensification of work, the extension of the working day and the expropriation of part of the necessary labour for the labourer to replace his labour power.”²⁷ The “intensification and extension of the working day” equals Marx’s absolute surplus value. However, it is the last-mentioned form that is of special interest here. By the “expropriation of part of the necessary labour for the labourer to replace his labour power,” Marini is referring to a wage depression in the colonial arrears under the value of labor power. As he concludes, “In capitalist terms, these mechanisms…signify that the labour (power) is paid under its value, and they correspond, therefore, to a super-exploitation of labour.”²⁸

Marini draws the conclusion that the super-exploitation of labor power in the periphery has an impact on the pattern of extraction of surplus value in the core of the imperialist system, from being dependent on absolute surplus value (longer and more intensified labor) to relative surplus value (greater productivity) due to the dynamic development of industrial capitalism in the second half of nineteenth century.

The value transfer by unequal exchange from the periphery, in the form of cheap food and raw materials, creates the economic basis for the successful class struggle of the working class in the imperialist center for a higher wage. This in turn solves the problem of lack of consumption inherent in capitalism and gives rise to an accelerated accumulation. The increase in wage level is also an incitement to increase the relative surplus value—that is, to raise the productivity by new technology and management system, to produce more goods with less labor. This then means the cheapening of the commodities that make up the worker’s individual consumption.

There is no necessarily built-in relationship between a rise in productivity and an increase in wages, and thereby living standards. However, the working class in the center managed to get its share of gains from the increased productivity through the trade union struggle for a higher wage.

The supply of cheap agricultural products from Latin America in the second half of the nineteenth century made it possible for English capitalism to reduce the value of labor power (reduce the cost of reproduction of labor power) and thus increase surplus value (profit) and, at the same time, increase wages (the price of labor power). In turn, this favored a mode of capital reproduction in the imperialist center, which was depending on the consumption power of the working class.

By contrast, super-exploitation—the remuneration of labor below its value (reproduction cost)—became the model used by capital in Latin America in the export sector supplying raw materials and food for the imperialist center. Latin American capitalism was not dependent on the consumption of a domestic market as long as Britain and the United States demanded their production, hence super-exploitation became the most prominent way of increasing profits in the reproduction of capitalism in Latin America.

Super-exploitation is the basis of unequal exchange from the Latin American side, as it became the key mechanism for periphery capital to increase its profit. However, this form of exploitation curbs the development of the productive forces, as it prefers absolute surplus value to relative surplus value. The capacity to compete in the world market rest on the low wage level. The super-exploited workers are necessary producers but are irrelevant as consumers.

Marini’s concept of super-exploitation in the colonies and Emmanuel’s explanation of the wage rise in the imperialist center as the driver of unequal exchange between center and periphery supplement each other nicely. Both Marini and Emmanuel see the deviation of the wage from the value of labor power as the generator of unequal exchange.

Marini also deals with the significance of adequate consumption power for a dynamic capitalist development, as Emmanuel does in the book “Profit and Crises.” The difference in wage levels between the center and periphery creates not only a value transfer in the form of unequal exchange, but the difference in consumption power also creates two types of interlinked forms of capitalist accumulation. This difference polarized the capitalist world system up through the twentieth century. Development and underdevelopment are two sides of the same process. It is by considering the unity of the different forms capitalism takes that it becomes possible to understand and explain the dependent capitalism in the Third World and the welfare capitalism in Northwestern Europe and parts of North America as part of the same system.

According to Marini, capitalist exploitation in the dependent country was based on absolute surplus value (long working time with high intensity—blood sweat, and tears). With the change in the international division of labor, created by the neoliberal industrialization of the Global South in the last quarter of the twentieth century, the relative surplus value (new technology and organization of work) was added to methods of exploitation. However, absolute surplus value continued to play a significant role, as industrialization was based on exports to the imperialist center. As the consumption power, which is needed to realize profit, was located in the Global North, there was no need for the development of a domestic market to secure capital accumulation. The low wage was the driver of outsourcing industrial production to the Global South.

However, after the financial crisis of 2007, China was able to shift the cycle of capital accumulation from being focused on the world market to being dependent on domestic circulation. By tripling the wage level and massive state programs for internal investment that have pulled millions out of poverty, China has reduced unequal exchange and broken the polarizing tendency that has ruled capitalism for more than 150 years.

Super-exploitation in the periphery and the rise of in wage levels in the center are not only the basis of unequal exchange—a value transfer—but also responsible for two different forms of local capital accumulation in the periphery and center, linked together in a process of global capitalist accumulation. In the periphery, capital accumulation was primarily based on export to the center. In the center, capital accumulation was based on national/regional consumption power. In the periphery, low wages encouraged the use of absolute surplus value (longer and more intense labor) in pursuit of higher profits. In the center, capital primarily used the relative surplus to raise profits. This difference in the form of surplus value drove a faster development of the productive forces in the center. The difference in wages and hence consumption power had another similar consequence. The higher consumption power in the center (made possible by the value transfer from the periphery) solved the inherent problem of overproduction/underconsumption in the capitalist mode of production and therefore a dynamic development of capitalism in the center. The low consumption power in the periphery gave no basis for the national development of capitalism.

courtesy: 26 April 2023, Monthly Review.

Notes

1. ↩ Mao Tse-tung, “Where Do Correct Ideas Come From?” in Mao: Four Essays on Philosophy (Peking: Foreign Languages Press, 1963), 134.
2. ↩ V. I. Lenin, Imperialism as the Highest Stage of Capitalism, in Lenin: Selected Works, vol. 1 (Moscow: Progress Publishers, 1963).
3. ↩ Paul Sweezy and Leo Huberman, eds., Paul Alexander Baran (1910–1964): A Collective Portrait (New York: Monthly Review Press, 1965), 99.
4. ↩ Sweezy and Huberman, eds., Paul Alexander Baran (1910–1964), 107–8.
5. ↩ In the Introduction to A Contribution to the Critique of Political Economy, Marx wrote: “I examine the system of bourgeois economy in the following order: capital, landed property, wage-labor; the State, foreign trade, world market.” Karl Marx, Introduction to A Contribution to the Critique of Political Economy (Moscow: Progress Publishers, 1977).
6. ↩ Arghiri Emmanuel, Unequal Exchange: A Study of the Imperialism of Trade (New York: Monthly Review Press, 1972); Christopher Chase-Dunn, Global Formation: Structures of the Global Economy (Cambridge: Basil Blackwell, 1989), 59.
7. ↩ Arghiri Emmanuel, “Unequal Exchange Revisited,” Institute of Development Studies, University of Sussex, Discussion Paper No. 77, August 1975, 56.
8. ↩ Jorge M., “Dialectics of Dependency by Ruy Mauro Marini,” Cosmonaut, December 4, 2021. Another translation was published as a book by Monthly Review Press: Ruy Mauro Marini, The Dialectics of Dependency, ed. Amanda Latimer and Jaime Osorio (New York: Monthly Review Press, 2022).
9. ↩ See, for example, Andre Gunder Frank, Dependent Accumulation and Underdevelopment (London: MacMillan, 1978).
10. ↩ Samir Amin, “The End of a Debate,” in Imperialism and Unequal Development: Essays by Samir Amin (New York: Monthly Review Press, 1977).
11. ↩ Marini, The Dialectics of Dependency, 117.
12. ↩ Karl Marx, chap. 16, note 32, in Capital, vol. 2; (London: Penguin Books, 1978), 391.
13. ↩ Arghiri Emmanuel, Profit and Crisis (London: Heinemann, 1984), 217–18.
14. ↩ Marini, The Dialectics of Dependency, 138.
15. ↩ Karl Marx, ch. 4, “Position of the Communists in Relation to the Various Existing Opposition Parties,” in The Communist Manifesto, in Marx/Engels Selected Works, vol. 1 (Moscow: Progress Publishers, 1969), 98.
16. ↩ James Vernon, chap. 1–3, in Hunger: A Modern History (Cambridge: Belknap Press, 2007).
17. ↩ Frederick Engels, The Condition of the Working Class in England (Panther Books, 1969).
18. ↩ Eric J. Hobsbawm, “The British Standard of Living 1790–1850,” Economic History Review 10, no. 1: 76–78.
19. ↩ Karl Marx, Economic Manuscripts, 1861–63: Theories of Surplus Value, in Karl Marx & Frederick Engels: Collected Works, vol. 32 (Moscow: Progress Publishers, 1975), 101.
20. ↩ Karl Marx, ch. 4, “Position of the Communists in Relation to the Various Existing Opposition Parties,” 12–13.
21. ↩ Marini, The Dialects of Dependency, 139.
22. ↩ Marini, The Dialects of Dependency, 139.
23. ↩ Marini, The Dialects of Dependency, 139–40.
24. ↩ Marini, The Dialects of Dependency.
25. ↩ Marini, The Dialects of Dependency, 156.
26. ↩ Marini, The Dialects of Dependency, 157.
27. ↩ Marini, The Dialects of Dependency, 131.
28. ↩ Marini, The Dialects of Dependency, 132.