Donald Clelland and Radical Interpretation of World-System Analysis

22. November 2019. Informacioni Sekretarijat Leave a comment

Introduction

Donald Clelland is an American sociologist with over 30 years of research and teaching experience, yet with a fairly small number of published works covering the subject of World-Systems Analysis. His existing works and drafts published over the last decade bring the World-Systems Analysis back to its radical roots basing itself on new research.

Clelland’s main subjects cover analysis of commodity chains with a special focus on the role of female labour. Due to this feminist perspective, he refers to commodity chains as Gendered commodity chains.

Although it has the word “chain” in its name, commodity chains are in fact networks of production consisting of a number of geographically distributed producers, each of whom produces a single component of the final product. Every producer in the network is a node, and the distribution of nodes forms a hierarchy akin to core-periphery relationship. For example, the producers of raw materials are to be found in the lowest part of the production hierarchy, just as they happen to be on the periphery of the world-system. Above them are the producers that process the raw materials, then those who produce individual components, followed by the ones that assemble the components into final product that is delivered to the company on top of the hierarchy that maintains control over the commodity chain, owns the final product and markets it. This company is typically a corporation based in a core country.

Clelland focuses on the process of creation of value in each node and its transfer to the last node in the chain. For this reason, he describes commodity chains as surplus extraction chains. This question had been posed by Wallerstein in the 70s when he first formulated the concept of commodity chains.

The key elements of his analysis are:

surplus drain,
bright value, and
dark value.

Surplus Drain

Economic Surplus

Although Marxism is one of the foundations of the World-Systems Analysis, its theorists often criticise and modify Marx’s economic model. That is also the case with Clelland who presents his theory of surplus drain through modification of Marx’s labour theory of value.

Marx’s model supposes that the source of surplus value is to be found in the difference between the value created by the worker and the value of reproduction of his labour force. The logical outcome of that assumption is that the wage covers the costs of survival of the worker and his family^[1]. Yet, this does not correspond to the existing situation in the periphery where labour is not completely proletarianised^[2].

As an alternative to Marx’s model, Clelland uses Baran’s and Sweezy’s concept of economic surplus. Baran’s definition of surplus is shortly: “The difference between what society produces and the costs of producing it.” Baran’s concept of surplus is not to be mixed up with Marx’s concept of surplus value: economic surplus is a part of the surplus value that is being accumulated, hence it does not include capitalist consumption, state expenses for administration, defence, repressive apparatus, etc. Defined in such a way, this concept is more flexible as it allows for analysis of additional cases which do not fit into the classic model that Marx devised. For example: unpaid labour, underpaid labour, ecological degradation as a source of value, etc.^[3] It would be wrong to claim that Marx did not contemplate those cases, however he did not include them into his abstract model as he considered them to be precapitalist features.

Degree of Monopoly

Second dimension of the criticism of Marx’s model refers to the supposition about the free market exchange. Much like Smith’s classic model, Marx too bases his theory on free market relations without external influences such as state intervention and monopolies.

Clelland considers that the main tendency of the capitalists is not the increase of exploitation but the increase in the degree of monopoly (deviation from the free market).

Degree of monopoly is defined as any kind of mechanism which lowers the price of production or increases the sales price in comparison to free market. Degree of monopoly is present in every node of a commodity chain, and its efficiency is directly related to the position of the node in the hierarchy of the chain. Within every node unpaid value is drained and moved upstream in the chain.

Observed from another perspective, the degree of monopoly could be understood as a capacity of an enterprise to transfer its costs to the enterprises lower down the chain.

Degree of monopoly as we have it today in commodity chains is mainly a degree of oligopsony. Oligopsony is a situation on the market characterised by a small number of buyers and a large number of sellers. This situation allows buyers to lower the price of commodities by leveraging the competition between the sellers. That is, the degree of oligopsony allows buyers to control the prices.

The Importance of Surplus Drain

Surplus drain as a concept is akin to unequal exchange, although it is used in a winder sense and it can be applied to precapitalist systems.

Surplus drain is considered to be a basis of every world-system. Hence, the core-periphery relationship is also defined as a relationship of surplus drain – the zone which creates value but is unable to retain it, is the periphery, while the zone which captures the value is the core. Semi-periphery can be understood as a proxy which drains the value from periphery, while it is itself being drained of value by the core.

Therefore, the division of world into core-periphery zones according to the World-Systems Analysis is neither geographic nor nation-bound, it is a division which reflects the flow of surplus.

In the precapitalist systems, surplus drain was effected by forceful appropriation, or what Marx called “primary accumulation”. Modern, capitalist world-system has two characteristics regarding surplus drain:

it is effected via commodity by realising production and distribution through different zones of the system, and
the system has to expand in order to sustain its growth and survival, and that is achieved by searching for new locations with lower prices. (Clelland, 2012)

Surplus drain is one of the mechanisms which reproduces the core-periphery hierarchy and the capitalist world-system itself. At the same time, surplus drain not only allows increased accumulation of profit for the capitalists, but it also makes subsidies for the consumers possible by lowering the final price of the product.

Two Categories of Value

To explain the concept of value, Clelland uses the analogy from the world of physics which considers that 90% of the matter is invisible. According to this analogy, the biggest portion of value is not officially accounted for. It is not a terminology one would come across in World-Systems Analysis, rather a way for Clelland to illustrate the transfer of value.

Value is categorised as bright and dark depending upon it being registered or not in the accounting books. Namely, the capitalists run their accounting in conformity with the information they need for efficient business management. In this respect, they do not account for costs which are not closely related to production. In other words, they do not register externalised costs – the costs borne by someone else even though they should be borne by the capitalist. Unregistered costs are invisible, dark value.

Bright Value

The mechanisms of bright value drain are:

export of capital (FDI) which enables the repatriation of profit to the country of origin;
system of monopolies to bypass the competitive market;
monopolistic control through patents and intellectual property;
expats in the peripheral countries who send their earnings back to their home country or they buy luxury items from their country of origin, and
debt slavery – loans which, in spite of being paid over and over, keep being serviced due to accumulated interests.

Additional mechanisms include: capital flight – when comprador bourgeoisie transfer their personal wealth to the core countries; foreign exchange manipulation – devaluation of local currency which reduces the income from imports; portfolio investments – transfer of dividends from periphery to core, among others.

Dark Value

Clelland considers dark value to be present in all factors of production: capital, labour, land, natural resources, knowledge, and energy. Dark value is being realised through ownership over each component in the production chain under its price on the world market.

Dark value is hidden in the way it subsidises commodity chains:

formal labour^[4] paid under the market price;
commodity inputs to commodity chains which are paid under the market price, and they originate from the household labour in the informal market^[5];
cheap natural resources, and
ecological and human externalities which are free for the capitalist (such as unpaid labour, ecological degradation, etc.).

Characteristics of dark value are:

surplus drain is free for the capitalist, hence, as it is not a cost it is not accounted for in the official registers;
unaccounted surplus can be converted into accounted surplus (bright value) either by being transformed into profit to the benefit of the capitalists, or it can be transferred into lower prices to the benefit of the consumers;
the economic significance of dark value grows over time which is why it’s transfer has to expand with the increase of trade volume. In that case, the increase in consumption is what triggers dark value drain from the periphery.

In the context of knowledge and natural resources as a source of dark value, we can name two examples:

By the means of transnational flow of labour and brain drain from periphery to core, the costs of training and reproduction of the labour force is externalised to the periphery.
By controlling the ecosystem of the periphery, the core exercises the so called ecologically unequal exchange. The core maintains low price of the raw materials through ownership of their sources. The effects of the uncompensated ecological damage are borne by the peripheral communities via health risks, loss of access to resources for food and costs for rehabilitation of the ecosystem.

Labour as Source of Dark Value

The contribution of labour to the value of commodity consists of the total hours of work – both accounted and unaccounted (i.e. paid and unpaid)–which are realised in the production, including the work on reproduction of the labour force.

Unpaid Labour

Household labour and household resources subsidise the income of the peripheral workers allowing capitalists to pay them wages below subsistence level. The essential characteristic of semi-proletarian households is their capacity to survive via unpaid labour, which is what lowers the price of their labour force in the market.

Unpaid labour of semi-proletarian households has 4 forms:^[6]

capitalists do not bear the costs for the biological reproduction of women, nor for the upbringing of the new generation of workers;
households engage with an array of unpaid activities for survival which indirectly subsidise capitalists, i.e. collection of unpaid resources;
women and female children provide unpaid labour in form of support to the male-owned household-based business, and
women provide unpaid labour for search and use of capitalist products.

From the standpoint of the capital, households are commodity producers: they produce labour force. As such, households are the basis of capitalist production.

Informal Sector

Commodity chains include horizontal chains of small commodity production based on informal sector and non-waged labour. They provide cheap labour, services and inputs for commodity chains below market price. They are also based on semi-proletarian households.

An example of this relationship is a female worker who works in a factory but also employs a caregiver from informal sector to provide care for her child while she’s at work.

Consequences of the Surplus Drain

Consumers in the Core and Dark Value

As mentioned previously, dark value is based upon uncompensated labour or underpaid labour. If production were to be carried out in the core, the final price would be significantly higher. Consumers in the core enjoy the benefits of the exploitation of the periphery through the lower prices provided by dark value.

Social consequences are reflected in the maintenance of the high living standard in the core by the means of high consumption in spite of the decrease in social spending and salary levels. In such a manner, neoliberal reforms counter the effect of lowering real wages by providing cheap imports.

Core-Periphery and Dependence

Surplus drain is super-exploitation of peripheral labour, households and ecological resources which blocks economic growth through investments and expanded production by depriving periphery of its surplus.

On the other hand, dark value drain is also a threat to the ecological sustainability and quality of life of the workers in the periphery, especially that of women.

Surplus drain from the periphery represents a big portion of its economic wealth, but it doesn’t mean a big increase of wealth in the core because the biggest portion of trade is carried out among core countries.

Commodity-Chain Analysis

Let us reformulate the analysis of commodity chains. Commodity chains are exploitative structural relations which occur in the arrays of unequal exchange between its nodes and across world-system zones. Powerful companies use degree of monopoly within the commodity chain to capture bright and dark value.

The cost structure of each node is as follows:

raw materials	Value added
production costs
management
overhead costs
profit	Value captured
Total: sales price

Every following node in the array takes the price of the component from the previous chain as the first item in the cost structure. Values calculated this way constitute bright value. In parallel, each node contains dark value in form of externalities. For example: by lowering the wages, the unpaid portion of the created value is captured as profit – i.e. the cost is externalised onto the worker who has to work additional hours in order to earn the wage that covers his subsistence costs.

In a purely competitive system dark value capture would quickly become universal. However, in the monopoly capitalism, the dark value can be leveraged in 3 ways:

to lower the product price in relation to the price of the competition;
to expand the accumulation by converting dark value in bright value (reinvestment), and
as a protection from competition via degree of monopoly.

Enterprises achieve the degree of monopoly via: scale, tariff and non-tariff barriers to protect access to the market, innovation, intellectual rights, marketing… and via monopsonic conditions. Monopsony allows for unequal relations between the participants in the chain. Hence, it allows for surplus drain via unequal exchange.

Clelland reached his conclusions by applying the existing theory on Apple’s commodity chain:

In the capitalist world, Apple is the prime example of an enterprise that perfected commodity chain management becoming a model for other companies. Its model is fabless (without owning a factory) which outsources the whole production process to individual component suppliers and producers which assembles them. On top of the chain, Apple designs the product, controls the production process, coordinates it, manages marketing, logistics and sales.

The way Apple carries out its degree of monopoly is via: innovation, intellectual property, oligopoly relations with the producers in the commodity chain, and externalisation of costs onto them. Apart from the products themselves, the innovation is also to be found in the control of the production process, selection of component suppliers etc. However, innovation alone is not enough. What is also required to ensure monopoly conditions is the legal protection (intellectual property and patents), strict control over the production process and quality control.

The buyer, Apple in this case, encourages competition between suppliers by hiring multiple producers of the same component. At the same time, it keeps searching for new ones who could deliver the component at a lower price. In this way the “non-competitive” suppliers are eliminated from the chain, and on the other hand, pressure is applied by the means of competition in order to prevent the increase of component prices. As a result, the suppliers are forced to drive their costs down and externalise them onto their own suppliers in the lower instances of the chain (for example, suppliers of raw materials, informal sectors, households, etc.).

Finally, Apple provides credit lines for the suppliers. The credits are conditioned by long-term obligations which provide: raw materials below market price, transfer of risk over to suppliers and long-term use of the suppliers’ labour force.

Reference:

Amin, Samir, 1974. “Accumulation on a World Scale: A Critique of the Theory of Underdevelopment”

Baran, Paul, 1957. “The Political Economy of Growth”

Baran, Paul and Sweezy, Paul, 1966. “Monopoly Capital: An Essay on the American Economic and Social Order”

Clelland, Donald, “Surplus Drain versus the Labor Theory of Value”

—, 2012.”Surplus Drain and Dark Value in the Modern World-System”

—, 2014. “Unpaid Labor as Dark Value in Global Commodity Chains”

—, 2015. “The Core of the Apple:Dark Value and Degrees of Monopoly in Global Commodity Chains”

Emmanuel, Arghiri, 1972. “Unequal Exchange: A Study of the Imperialism of Trade”

Wallerstein, immanuel, 1974. “The Modern World-System I”

This is what the reproduction of labour force refers to, i.e. it’s renewal on daily basis by covering basic material necessities, and upbringing of new generation of workers. ↑
Proleterisation refers to a process which integrates workers into the labour market making them dependent on it (i.e. selling their labour force on the labour market is their only source of income). Contrary to the full proletarisation, a class of semi-proletarian labour has to complement their income from the sales of labour force by different means typically outside of formal economy in order to subsists (for example, cultivating their own crops for personal use). ↑
Emmanuel ‘sand Amin’s formulation of the concept of unequal exchange is completely based on Marx’s classical model and does not deviate from Marx’s assumptions. ↑
Formal labour refers to the legal employment of workers with all welfare benefits. ↑
Informal employment refers to production without legally arranged work and production relations between the worker and the capitalist. This implies various types of violation of workers’ rights.↑
Examples for this cases. Families in Uganda survive first and foremost by horticulture. However, they need money for scholarisation of children and other expenses which drives them to grow coffee. Coffee cultivation is performed mostly by women, although children also take part in the harvest. The sales is carried out by men as owners. They also keep the earnings. Also, the excess of food produced in semi-proletarian households is sold on the market to the formal workers. Food produced in such a way has a price lower then the market price which lowers the price of the workers that buy it. They then sell their labour force to a supplier which takes part in a commodity chain of a big core-based corporation. ↑

Analysis, Featured

Ecologically Unequal Exchange and the Green New Deal

19. November 2019. Informacioni Sekretarijat Leave a comment

Thanks to Greta Thunberg’s media protagonism, the until recently ignored environmental pollution problem came into public focus, and all other problems are as if forgotten. Is the environmental problem really as catastrophic as Greta claims, and is the ecological question more important than all else?

The problem of destruction of the environment, contrary to what is shown on the screen with Greta and the biggest polluters she shakes hands with, must be ripped out of national boundaries (especially the boundaries of the few most developed countries) and regarded from the perspective of economic and political relations of all the countries of the world as a whole.

Upon looking at the world organization from that angle, we may savvy what is to be done, plainly speaking, about the hierarchical division between countries, in which the countries at the bottom of the hierarchy produce raw materials for the countries in the middle of the hierarchy, who then make final products for consumption intended for those at the top.

Such an organization of the world order is a consequence of economic processes whose goal is to accumulate wealth at the top of the hierarchy, or what we call “capitalism” in its monopolistic form. Capitalism as economic world order is on the one hand maintained by global political institution such as the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO), etc.; on the other hand, it is “secured” by the military force of the wealthiest and most developed countries (NATO and its allies).

There are almost no products being produced entirely in one country (from raw materials to final product), instead the production takes place through so called global commodity chains, in which hundreds, and for certain products even thousands of individual suppliers and manufacturers spread all across the world take part. If the environmental problem is a direct consequence of the capitalist way of production, the production that includes dozens of countries per product, how do we not link the “ecological catastrophe” to all other problems that the most of the world faces, and that the handful of the most developed countries would rather cover up?

Ecologically Unequal Exchange

One of the mechanisms of accumulation of wealth in the developed countries on the top of the hierarchy is the so called unequal exchange. More precisely, if one of the countries doing the exchange has low worker’s income (in poor countries), and the other country has high worker’s income (in wealthy countries), value produced in the first country is transferred into the second.

Let us simplify why it comes to this: Marx saw that national economies produce what he called “General Rate of Profit” – when a new branch of production appears for capital inflow, the rate of profit falls, and when it falls to a low enough level, the investments stop and relocate to another, more profitable branch. During a long enough period, the relocation of capital from one branch to another makes all the branches give a similar, so called general rate of profit. This happens because of the mobility of capital – its feature to be freely invested wherever needed.

At the same time, Marx noted a similar thing happening with workers’ salaries. When there is a high demand for workforce in one branch, the workers are paid higher salaries, so they naturally gravitate to higher paying branches. This mobility of the workforce makes average salaries grow and equalize over a longer period of time.

However, we are speaking about international trade, not national. In that context, capital has the same mobility as in the national (it can relocate from one country to another), but not the workforce – its mobility is limited by state borders. Because of that effect, a general rate of profit is formed internationally, but labor wages aren’t equalizing, which makes the poor stay poor.^[1]

One way to understand unequal exchange is this: if we assume that technology all across the world is the same or similar, that productivity of the Third World is the same or similar, while the only difference is the cost of the workforce, then we may presume that the value made by a poor country worker is the same as the value made by a rich country worker. However, the produced item is being sold as if produced by the rich country worker, meaning that the source of profit for the capitalist is in the discrepancy of salaries between the worker of the rich country and the worker of the poor country.

The basis for unequal exchange of goods also applies to the theory of “ecologically unequal exchange”, more precisely as “ratio of unequal exchange between countries holding different positions in the world-system”. This theoretical perspective focuses not only on the damage being done to the environment of poor countries as a consequence of trade with wealthy countries, but also on its effects to health, safety and socio-economic occurrences. Likewise, we must accentuate the fact that this way of “exchange” is far more beneficial for wealthy countries than for the poor ones.^[2] Wealthy countries “export” pollution into poor countries, intending to make the countries of production pay the expenses of environmental protection, not the company that manages the production (from another, usually more developed country). The aforementioned global institutions are a part of maintaining the order that “expropriates ecological well-being” of poor countries by the wealthy ones.^[3]

The main motive behind the ecologically unequal exchange is first and foremost an economic one. The biggest companies tend to increase income and competitiveness of their products on the market by reducing the cost of production. Or we can put it like this: they tend to snatch the biggest possible ration of value that is produced somewhere else. The source of that value can be human labor (paid, unpaid or underpaid paid) or expenses that the possessor of capital should bear, but someone else bears them instead.^[4]

Expenses of ecological damage belong in the last category, and that’s called externalization. As an example, we can mention the American company Apple, one of the most famous examples of an efficient commodity chain. Every produced iPad takes almost 15kg of ore, almost 300l of water, as well as fossil fuel for power used in production that emits 30kg of carbon-monoxide. First generation of iPads made 47.5kg of greenhouse gas per product. If the iPad were produced in the USA, every product, for ecological expenses only, would cost 190 dollars more.^[5]

It is clear that the iPad has the same components and takes the same amount of work wherever produced, so the pollution is the same independent of the location of the factory. Production of the iPad in Asian countries means that those countries would carry the burden of pollution, but also the cost of its elimination. That’s how the aforementioned “export of pollution” functions, and there are two winners in this combo: Apple as the owner of the product on the market, but also the consumer in the wealthy countries who gets the product way bellow its value.

Consequences of Ecologically Unequal Exchange

To reduce all ecological problems to global warming is to close our eyes to reality. Truth be told, that may be easier than it sounds, because that reality hits countries and populations somewhere far from those who focus on the emissions of carbon-monoxide. Degradation of the eco-system in peripheral countries leads to a whole chain of problems. Let us look at some examples.

In the Turkish town of Bergama, EuroGold Group was given license for the exploitation of gold. However, EuroGold used cyanide, which lead to the destruction of the soil and the revenues of local farmers. ^[6]

In the Niger Delta oil is exploited. Oil drillings are destroying the water and they are a serious threat to local communities who survive thanks to fishing. The situation is so critical that in the region there are a number of guerilla groups who attack the oil rigs.

The reach of ecological consequences is fairly evident in the case of coffee farming in Uganda. Most farmers in Uganda live on agricultural products they breed themselves. However, the need money in order to send their children to school, and the only way to acquire it is through coffee breeding. Coffee breeding is the cause of deforestation on the mountains, which increased the number of landslides over the years. Every year the number of farmers who lose their lives due to landslides gets bigger. Aside from landslides, the number of malaria cases increased because coffee needs shade and moisture, the ideal conditions for mosquitoes to breed. By expanding the areas for coffee farming, the number of mosquitoes increases and farmers often take mosquito nets off of their houses and use them to make shade, which makes them far more vulnerable and exposed to bites and malaria.^[7]

The Green New Deal

The media frenzy around Greta and the ecological catastrophe aims to make a positive public opinion about the so called Green New Deal. It is about a series of policies alike to Roosevelt’s New Deal – policies close to social democracies of the ‘70s that combined infrastructural state investments with social policies, salary increments and other, but this time the emphasis is on protecting the environment.

The originators of this initiative are the “progressive” US democrats, who are enjoying the support of the UN as of a couple of days ago. Due to the forthcoming recession, they call for an abandonment of austerity measures, but also for infrastructural state investments like ecological transport, “clean” energy and food systems, as well as investments into developing countries, with a goal to create a “greener” industry.^[8]

This is an open confession that the forces of the market and the logic of free trade lead directly into a crisis, not out of it. More accurately, they lead to the impossibility of the market and financial capital to create growth, development and prosperity. A call to an open intervention of the state to break the sacred rule of liberalism about the non-intervention in trade relations, it only means that the oligarchy is looking for a way to get out of the problem at the expense of its profits. However, that solution only means that the problems will “nationalize” (taxpayers’ money will finance the growth of private businesses without making the state a competitor for private capital), but also that the West will impose the “green solution” on the rest of the world, by any means (political, economic and through global institutions), for its own problems.

Let’s revisit the externalization and the shifting of expenses outside of the production process: just as the burden of pollution is shifted onto the peripheral states, the burden of making the industry “green” falls on the state. When it comes to most developed countries, the effect of this policy is different.

It is expected that the state will invest into a new, greener infrastructure, which can only mean a few things: 1. To use public means to create demand where it otherwise couldn’t be (another way of externalization, companies believing that the infrastructure cost of their business should fall on the state), 2. To subsidize the shift to an ecological production (the cost of shifting to a new way of production shouldn’t be paid for by the companies, and the whole operation shouldn’t severely effect the profit margin and growth), 3. To invest into the development of new, greener technologies.

This way a monopoly is created on the global market in the field of green technologies, by protecting the new technologies with intellectual rights and patents (another way of robbing other countries of their wealth), and it guaranties the owner of that technology (either of the land or a company) that they will harvest high profit just up to that technology spreading so far and wide that it becomes unprofitable. At the same time, they will be able to compel manufacturers and suppliers from poor countries to use them, and that way they will create a market for their capital green products, but also maintain the dependency of those countries in economic, and therefore political sense.

Subsidies may be looked upon as a protectionist measure. Wealthy countries are protecting their businesses by bearing a part of the expense, which brings down the price of their products on the global market. On the other hand, peripheral countries will be compelled to import the green technology, to pay for the patents and to maintain the free trade regime. That way they won’t be able to independently develop their own green technology because violating the patents would have negative economic consequence (they wouldn’t be able to find a buyer on the global market), and their green technology would be uncompetitive, it would be more costly than the imported one. Thus, while poor countries are expected to be almost religiously devoted to free trade, rich countries are openly interfering with it by protectionist measures, in order to ensure their economic hegemony.

The Green New Deal is nothing but a political maneuver to get out of the neoliberal deadlock over the backs of peripheral countries, just as it was the custom with all previous solution to a crisis. That’s the solution for a crisis in rich countries, and it means exporting it to poor countries. It is pretty clear that the main cause behind the ecological destruction is the capitalist logic, universal for the whole planet. Changing the way of accumulation doesn’t change the logic of the system, and therefore doesn’t eliminate the cause of ecological problems. The biggest share in those problems will still go to those whose share in the wealth is the smallest.

In the end we should answer the questions posed at the beginning of the text. The ecological problem is critical and it leads to a catastrophe. Equally, it is a part of a chain of other problems, and a direct consequence of political and economic world order. The problem of climate change cannot be regarded, and let alone solved, as if it were in a vacuum; it can be completely solved only by transitioning to a sustainable way of production, incompatible with the accumulation of capital.

https://www.princip.info/2017/12/21/arghiri-emmanuel-marksisti-nejednaka-razmena/https://anti-imperialist.net/2019/05/31/arghiri-emmanuel-unequal-exchange-revisited/ ↑
Paul K. Gellert, R. Scott Frey, Harry F. Dahms, “Introduction to Ecologically Unequal Exchange in Comparative Perspective”, JOURNAL OF WORLD-SYSTEMS RESEARCH, Vol. 23 Issue 2 ↑
David Ciplet, “Splintering South: Ecologically Unequal Exchange Theory in a Fragmented Global Climate”, JOURNAL OF WORLD-SYSTEMS RESEARCH, Vol. 23 Issue 2 ↑
Donald Clelland, “Unpaid Labor as Dark Value in Global Commodity Chains”, https://sites.google.com/site/surplusdrain/ ↑
Donald Clelland, “The Core of the Apple: Dark Value and Degrees of Monopoly in Global Commodity Chains”, JOURNAL OF WORLD-SYSTEMS RESEARCH ↑
https://newsolution17.wordpress.com/2017/06/01/bergama-against-eurogold/ ↑
Kelly F. Austin, “Brewing Unequal Exchanges in Coffee:<br /> A Qualitative Investigation into the Consequences of the Java Trade in Rural Uganda”, JOURNAL OF WORLD-SYSTEMS RESEARCH, Vol. 23 Issue 2 ↑
https://www.france24.com/en/20190925-un-calls-for-global-green-new-deal-to-boost-world-economy ↑

World

Kim Il Sung – South-South cooperation and the establishment of a new international economic order

12. August 2019. marshall Leave a comment

South-South cooperation is a noble way for the developing countries to strengthen their economic independence and achieve complete economic freedom through close economic and technical cooperation. Only when they are economically independent can the developing countries free their peoples from backwardness and poverty, starvation and disease, the consequences of imperialist colonial rule, and consolidate the political independence which they have already won. A nation which is dependent on another country economically is bound to be politically subordinate. Economic dependence inevitably leads to political dependence and economic subordination results in political subordination.

The struggle for economic independence is a second liberation struggle to remove economic backwardness and poverty and achieve complete national sovereignty. The peoples of the developing countries have to take it upon themselves to attain economic independence. The imperialists never present developing countries with economic independence. The non-aligned and developing countries must pave the way for survival by effecting South-South cooperation under the banner of collective self-reliance and build their independent national economies. Today the international economic situation is changing to the disadvantage of developing countries. In these circumstances it is all the more urgent to effect South-South cooperation. When their people are faced with the threat of ever-worsening hunger and disease, the developing countries ought to pool their efforts and support and cooperate with each other. At the moment the leaders of many non-aligned and developing countries are calling for close cooperation among these nations, insisting that they should shape their destiny independently and on their own responsibility. This is quite natural.

If they realize South-South cooperation, the developing countries will be able to build up sufficient strength to countervail and negotiate with the developed countries, and begin a period favourable to establishing a new international economic order. There are many real situations and opportunities for South-South cooperation. The nonaligned and developing countries have vast territories rich in raw materials and have acquired valuable experience and expertise in the course of creating a new life. If they mobilize their manpower and material resources to the full and build up economic cooperation and exchange on the principle of providing for each other’s needs, the developing countries will find solutions to the difficult and complex problems that arise in building a new life without asking for the help of the developed countries. Historical experience shows that even poor and backward countries can achieve great things if they combine efforts. The non-aligned and developing countries must start in those areas where cooperation and exchange are feasible and urgent and extend cooperation and exchange in every way so as to free their peoples from backwardness and poverty, hunger and disease and achieve economic independence.

First, South-South cooperation must be expanded and developed in the sphere of food and agriculture. Solving the problem of food and agriculture is of tremendous significance in pressing ahead with the building of a new society and promoting the people’s welfare. Cooperation and exchange in agriculture must be centered on laying on one’s own production foundations soundly with a view to attaining self-sufficiency in food in a short time. It is a good and necessary thing that the UN and other international organizations are now taking steps to help some famine-stricken nations. If the developing countries are to find a fundamental solution to the food problem, every country must increase grain production substantially by growing good crops. Today many of the non-aligned and developing countries are unable to rid themselves of the hunger and poverty that are a result of imperialist colonial rule. This is not because farm lands are inadequate, but because they cannot raise good crops on account of lack of irrigation and machinery and technology.

We believe that firstly we must increase cooperation in the field of irrigation construction. For the developing countries to prevent damage from drought and ensure a good and regular harvest, it is necessary to establish an irrigation system. Most of the non-aligned and developing countries, including the African countries, have vast water resources and the future for irrigation construction is promising. It will be reasonable to work out together a “ten-year plan for irrigation construction in the developing countries” and a “ten-year plan for irrigation construction in Africa”, to establish an organization which coordinates cooperation in irrigation construction, and also set up irrigation enterprises jointly so as to put cooperation into effect in this field.

The non-aligned and developing countries must also cooperate closely with each other in their efforts to improve the farming method. The most important way to increase grain production in the developing countries is to improve the farming method and grow crops scientifically and technologically. Improving the farming method alone will mean a great increase in agricultural production even though a large investment is not required. The developing countries must create a new farming method that suits the topographical and climatic conditions of every zone and country and must make the good experience gained in this improvement widely known. The non-aligned and developing countries must establish wide cooperation and exchange with each other in the field of seed selection and production. Those countries whose technology and experience are good in this field must supply the technology on seed selection and production to other developing countries and provide progenitors where needed. In order to increase grain production, it is necessary to intensify joint study and mutual cooperation in the field of agricultural science.

The non-aligned and developing countries must start a joint venture in agriculture. A joint venture in agriculture is one reasonable way for the developing countries, including the African countries, to solve the food problem. If they undertake an extensive agricultural joint venture the developing countries will not only be able to save the people from starvation by a rapid increase in agricultural production but also strengthen the foundations of agricultural production. In this venture, it is important to organize and operate farms under joint management. These farms can be run in such a way that those countries which are backward in agricultural technology provide land and labour and those whose agricultural technology is developed supply farm machinery and fertilizers, agricultural chemicals and other farming implements and technical knowledge. It will be an effective measure for the non-aligned and developing countries to organize joint enterprises for the production of farm machinery and materials in order to satisfy their needs for farm machinery, irrigation facilities, fertilizers and agricultural chemicals. For the time being, it will be worthwhile for those developing countries which are relatively backward in expertise to build farm machinery factories with the help of the more experienced countries, to increase the production of cattle-drawn farm machines as well as other medium and small farm machines and implements and then use them.

We will intensify cooperation with the non-aligned and developing countries and the African countries in particular, directing the main effort to ensuring that these countries lay solid foundations for agricultural production and attain self-sufficiency in food.

Secondly, cooperation and exchange must be promoted widely in the field of public health. South-South cooperation in this field must be concentrated on solving the most urgent problems arising in providing health care for the people of every developing country until the year 2000. The one problem which must be solved above all else in saving the peoples of non-aligned and developing countries from disease is to eliminate epidemics and helminthiases. The non-aligned and developing countries must draw on the valuable experience gained so far in health care, at the same time as cooperating actively to find more effective ways and means in this sphere. In the first place, it is essential to develop medical science through a good combination of modern and traditional medicine, of modern treatment and folk remedy and thus strengthen cooperation in this field.

If South-South cooperation in health care is to be substantial, efforts must be channeled into solving the problem of a shortage of medicines. The non-aligned and developing countries must increase cooperation to develop the production of preventive medicines and also improve cooperation for the production of basic medicines. Cooperation to build up medicine-producing bases in particular must be intensified. The establishment of joint venture pharmaceutical enterprises is an important way of cooperating effectively in this matter. If joint venture pharmaceutical enterprises are to be built and developed, it will be advisable to sign agreements on specializing in the production of medicines on a worldwide scale, in consideration of raw material resources, production capacity and the demand for medical supplies in each country. The running of joint venture hospitals will also be an effective means of cooperation in the sphere of public health.

Thirdly, it is necessary to take practical action to expand and develop cooperation and exchange among the non-aligned and developing countries according to the program for economic cooperation which has already been worked out. First of all, in order to settle the problem of finance, a stumbling block in South-South cooperation, and to encourage mutual accommodation, it is necessary to build the Bank of the South and adopt whatever measures are needed to promote trade and cooperation in the field of finance and currency. Establishing a Global System of Trade Preferences between developing countries is of great importance in the improvement of trade among these countries. The non-aligned and developing countries must make joint efforts to introduce this system as early as possible.

It is absolutely necessary to increase political support for South-South cooperation in order to implement the action program for economic cooperation. The non-aligned and developing countries must discuss the matter of South-South cooperation at high-level talks and develop relevant conditions so that practical measures can be adopted. The non-aligned countries must pay due attention to coordinating the economic cooperation program of the non-aligned movement and the economic cooperation program of the Group of 77 and also to adjusting the cooperation items on the economic cooperation program of the non-aligned movement in a rational way. The non-aligned and developing countries must ceaselessly explore and develop positive ways and means of widening South-South cooperation and increasing its effectiveness in line with the demands that arise in practice. They must overcome any difficulties in developing economic and technical cooperation by displaying the spirit of mutual cooperation and solidarity to the highest degree.

***

One of the important tasks confronting the non-aligned and developing countries today is to do away with the old international economic order and to establish a new fair one based on the principles of independence, equality and mutual benefit. In the past these countries mapped out a joint strategy for the establishment of a new international economic order and have fought to put it into effect. As a result of the energetic efforts made by these countries, many international conferences including a special session of the UN General Assembly have adopted a declaration, and programs of action, for establishing a new international economic order, taken the relevant steps and formed various international organizations. However, owing to the unfair standpoint and attitude of the developed capitalist countries in maintaining the old international economic order, the struggle of the developing countries to establish the new international economic order has not made any real progress.

The developed capitalist countries are reluctant to give up meekly their monopolistic position in international economic relations, nor do they accept the proposal of the developing countries for negotiations to establish a new international economic order. Relying as ever on the old international economic order, the imperialists are plundering the developing countries of their natural resources and paying only a pittance for the results of the peoples’ labour and obstructing the economic development of these countries. Protective trade and the high-interest policy pursued by the developed countries along with the continually worsening terms of trade and the massive increase in foreign debts of the developing countries are having a serious effect on the social and economic development of the non-aligned and developing countries. Because of the unfair international economic order, the economies of the developing countries are growing weaker and becoming stagnant. The economic situation in the African countries in particular is worsening.

The long-drawn-out world economic crisis and the difficult economic situation in the developing countries for which the unjust economic order is responsible are making the world situation more unstable and threatening justice and peace. In reality, without abolishing the old economic order, the product of the colonial system and the lever of imperialist exploitation and plunder, it will be impossible for the non-aligned and developing countries to free themselves from international exploitation and plunder and then develop. It is only when they reorganize the wide range of unfair and unreasonable economic relations in all branches of trade, finance, currency and so on that the developing countries can eliminate the source of international exploitation and create favourable conditions for their economic development.

The non-aligned and developing countries must fight to establish a new international economic order in accordance with their joint strategy.

First, they must continue to make patient efforts to promote negotiations for the establishment of a new international economic order. An important factor in implementing their strategy for negotiations is for the non-aligned and developing countries to take concerted action. The non-aligned and developing countries must together lay down the strategy for negotiations to suit the international economic situation, explore procedures and ways for negotiations and effectively coordinate the policy and stand of negotiations so as to enhance the position of negotiations still higher. For this purpose, it would be a realistic idea to set up a standing Ministerial Committee of the non-aligned and other developing countries as recommended by the Foreign Ministers’ Conference of the Coordinating Bureau held in New Delhi. The establishment of a new international economic order will be beneficial for the developed countries as well. The developed countries should accept the just proposal of the non-aligned and developing countries for holding negotiations on a worldwide scale to establish a new international economic order.

Secondly, efforts should be directed to establishing a fair and stable international system of finance and currency. The economic difficulties of the developing countries and the world economic crisis have much to do with the unfair international system of finance and currency. This system must be reorganized to meet the needs of today and in favour of economic progress for the developing countries. A new international system of finance and currency must be a fair one capable of facilitating economic cooperation on a worldwide scale and of revitalizing the world economy by eliminating the privileges and arbitrariness of the developed capitalist countries and by guaranteeing the stability of monetary circulation and the financial conditions for international trade. To this end, international financial agencies should adopt such resolutions as to guarantee equality between developing and developed countries, establish a stable and realistic exchange rate system, create international liquidity according to demand and distribute it fairly between the developing and the developed countries.

The foreign debt problem of the developing countries, too, must be solved fairly and completely, thereby ensuring their social and economic development and stability. The non-aligned and developing countries should, at an early date, hold an international conference on finance and currency for development to provide an occasion for setting up a new international system of finance and currency.

Thirdly, an active effort must be made to establish a new system of trade. At present a non-equivalent exchange is being made as ever in trade between the developing countries and the developed countries. The developing countries sell raw materials at low prices and buy manufactured goods at exorbitant prices, and the share that manufactured goods make up in the exports of these countries is decreasing continually. The result is that the trade deficit of the developing countries is increasing all the time and their economic difficulties are becoming more serious. The non-aligned and developing countries should prevent the fluctuations in price of primary products and increase their earnings from exports by remodeling the unfair price system in trade and establishing a fair and profitable price system for primary products. What is important here is to strengthen the existing producers’ associations, while at the same time forming new associations and enhancing their role. The setting up of a common fund for the general plan of primary products will be an important step for the developing countries to stabilize prices and income through exporting primary products. In order to ensure that the common fund is inaugurated as early as possible, the developing countries will have to hasten their approval of an agreement for establishing this common fund.

The developed countries must give up their protectionist policy and make the markets more open to the developing countries. They should also remove the tariff and non-tariff barriers for major products of the developing countries, take measures to stabilize export incomes for these countries and allow them to increase their share of the processing, sale, distribution and transportation of raw materials and products. The preferential treatment that is given to the products of the developing countries must be further improved, and international efforts be made to establish fair trade principles and regulations. The developing countries should not allow the developed countries to use the system of general preferences as a means of putting pressure on them, but fight against any act of encroachment upon their permanent sovereignty over natural resources.

If the non-aligned and developing countries wage a vigorous struggle together to establish a new fair international economic order, the developed countries will have to comply, in the long run, with the demands of the developing countries whether they like it or not.

Kim Il Sung, June 20, 1986.
Selected Works, Vol. 40, pp. 117-144 Foreign Languages Publishing House, 1995.

Revolutionary People's Party–Front

Yearly Archives: 2019