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Accumulation on a world scale - Coggle Diagram

- - - - Ignores existence of nations
        
        "'This priority for internal development results from the existence of nations, which the economistic theory ignores.'" 64
      - Uneven capitalist world
        
        "'Though the capitalist system has united the world, it has done so on the basis of unevenly developed nations.'" 64
      - Prioritize internal development (autocentric)
        
        "'The socialist system is a system of socialist nations,
        and will probably long continue so. It will be superior to the capitalist system only if it approves national policies that give priority to auto centric development...'" 64
      - Premature specialization doctrine justifies inequality
        
        "'Any attempt to construct this doctrine too soon, on economistic foundations, while the problem of the inequality of nations is still with us, can only serve to justify practices similar to those followed by the "central" capitalist countries in their relations with the periphery.'" 64
      - Difficult to empirically measure advantage
        
        "'As always, it is impossible to "measure" statistically the advan tage (or disadvantage) that the underdeveloped countries derive from international exchange...'" 64
      - Too simple and general
        
        "'Faced with this series of "plain facts, we are forced to conclude that the theory of comparative costs is too simple and too general to account for reality in all its complexity.'" 69
        
        Overlooks market expansion
        
        "'This deserves to be kept in mind, since it reflects capitalism's inherent tendency-to expand the market, which the theory of comparative advantages overlooks.'" 67
        
        Leads to over-optimistic conclusions
        
        "'Now, the theory of comparative adv.antages, when applied to some of these groups of facts relating to world trade, leads to conclusions of limitless optimism.'" 69
    - - Growing disproportion (income, population, production)
        
        Income per capita ratio increased (1:4 to 1:6)
        
        "'Thirty years later this ratio is 1 to 6 (China being excluded, as no longer forming part of the world market)...'" 65
        
        Underdeveloped population increased, production share fell
        
        "'...the proportion of the world's population living in the underdeveloped countries (China still excluded) having increased from 53 to 58 percent, their proportion of world production having fallen from 20 to 18 percent.'" 65
      - Underdeveloped specialization in "basic products"
        
        No monopoly, rich countries also export
        
        "'In the first place, the underdeveloped countries have no monopoly of exports of basic products... there are rich countries which export basic products...'" 65
      - Higher import propensity (relative to marketed product)
        
        Extraverted economies
        
        "'...this greater (corrected) propensity to import reflects the commonplace fact that the commodity economy of the under developed countries is largely turned toward the outside world (extra-verted)...'" 66
      - Advanced trade mostly among themselves (80%)
        
        "'Whereas the advanced countries do about 80 percent of their trade among themselves and only 20 percent with the under developed countries...'" 67
      - Periphery trade mostly with advanced (80%)
        
        "'...the countries of .the periphery do 80 percent of their trade with the advanced countries.'" 67
      - Negative correlation (economic stature & export/production) in advanced
        
        "'For the advanced countries we clearly observe a strong negative correlation between the country's economic stature and the ratio between exports and production.'" 67
      - Increasing manufactures for manufactures trade
        
        "'The increase in exchanges between advanced countries being faster than thar in exchanges between these countries and underdeveloped ones, the proportion of world trade represented by exchanges of manufactures for manufactures is increasing.'" 67
      - Advanced dominate world trade (75%)
        
        "'The share of the advanced capitalist countries accounts for 75 percent "of world trade...'" 68 Table 6
      - Advanced exports mainly manufactures
        
        "'Now, the trade of the advanced countries mainly involves manufactured goods...'" 68 Table 7
      - Underdeveloped exports from modern sectors (mines, plantations)
        
        "'...the exports of the underdeveloped world are made up not mainly of agricultural products from the traditional agriculture of these countries, but of raw materials and agricultural products originating from modern, high-productivity sectors—mines, plantations, oil wells—whose productivity is comparable to that found in the advanced countries...'" 69 Table 7
    - - Classical theory static
        
        "'The classical theory of comparative advantages has to be looked at from a static standpoint...'" 70
        
        Specialization supposed to benefit all from technical progress
        
        "'But this theory claims to prove more than that. It claims to show that specialization enables all countries to benefit from the technical progress realized elsewhere in the world.'" 70
        
        Should improve for agricultural with industrial progress (if prices at cost)
        
        "'Let us suppose that prices are fixed at the level of production costs, and that technical progress then takes place in the industrial countties. The production costs—and thus the prices—of manufactured goods fall relatively to the prices of agricultural products. The terms of trade improve for the agricultural countries.'" 70
        
        But they don't: Consumption/production of industrial goods refutes optimism
        
        "'The crude facts mentioned above (the marked correlation between consumption and production of industrial products) refute the ideo logical optimism of this theory.'" 71
      - Worsened for underdeveloped over last century
        
        Reduced purchasing power
        
        "'In 1939 the underdeveloped countries were able to purchase, with the same quantity of primary products, only 60 percept of "the manufac tured goods they had bought in 1870-1880.'" 71
        
        Greater fall in export prices
        
        "'This shows the worsening in the terms of trade for the under developed countries, since the gold price of their exports had fallen by ,45 percent, while that of the exports of the industrial countries had fallen by only 21 percent.'" 71 Table 8
        
        "the value of the trade in basic products in 1936-1938 was 2.2 times as great as in 1876-1880, whereas that of manufactures was 2.3 times as great. Parallel with this, the volume of trade in basic products had quadrupled, while the corresponding figure for manufactures had multiplied by only 2.5 or 3."
      - GB terms of trade fluctuated
        
        "'A fuller series of figures Ts available, those for Great Britain's terms of trade given by Imlah (with 1880 taken as 100):'" 71 Figures at top of 72
      - US industrial/agricultural price ratio fell (1850-1910)
        
        "'It is also established that the ratio between the index of industrial prices and that of agricultural prices fell steadily in the United States between 1850 and 1910.'" 72
      - Further worsening post WWII/Korean War
        
        "'But the period of great prosperity that the contemporary advanced world entered upon after that time has been marked by a severe worsening of the terms of trade...'" 72
        
        Estimates of worsening in mid-20th century
        
        "'Synthesizing the available information, Bairoch has put forward, for the period 1953-54 to 1962... an estimate of the worsening of the terms of trade at about 10 percent for the underdeveloped countries as a whole...'" 72
        
        Worsening specific to underdeveloped exports
        
        "'First of all, the worsening with which we are concerned does not relate to basic products in general but to products exported by underdeveloped countries, for prices of basic products exported by advanced countries have not declined.'" 73
        
        Not characteristic before 1880
        
        "'Imlah's series shows that the world as a whole did indeed benefit from the progress made by Britain between 1800 and 1880. It is only from that date onward that the movement whereby this industrial country's terms of trade were worsening has been reversed.'" 73
      - Technical Progress and its Measurement
        
        Compare progress in export branches
        
        "'From all these observations of the century-long development of technical progress, can we deduce some indications regarding comparative progress in the export branches of the advanced and the under developed countries?'" 77
        
        Production per capita as progress measure
        
        "'For the economy as a whole, production per capita is the sole criterion of progress... The increase in net production per capita... simply means that by allocating the total population in a different way.." By shifting labor power from the production of exports to the production of the means of production China's rise in a sentence "...a larger overall quantity of consumer goods is obtained.'" 73-74
        
        Historically "capital-using"
        
        "'Examples could be multiplied and methods of observation and measurement refined... and the same conclusion would be reached: technical progress is (or, more precisely, has been until very recendy) "capital-using."'" 75
        
        Faster in industry than agriculture (advanced)
        
        "'Progress in all countries has been faster in industry—the most rapid progress in agriculture, in Australia, being about half the rate of industrial progress there.'" 76
        
        Faster capital accumulation in "other activities"
        
        "'Accordingly, when we move from the first group to the fourth, we find that the capital invested in agriculture has multiplied from 3 to 5 times, while the capital invested in industry, trade, building and railways, taken together, has multiplied from 7 to 11 times.'" 76 Table 12
        
        Changing in advanced countries (not "capital-using")
        
        "''Progress is no longer "capital-using"'" 76
        
        "The reversal of the century-old evolution of this ratio reflects the beginning of the scientific revolution and present-day technique. The latter, based on automation, is now causing the "residual factor" (science) to' appear as the factor tending to become' the essential one in technical progress'" 77 Table 13
        
        Capital-output ratio down (advanced), up (underdeveloped)
        
        "'It explains, among other things, why in the underdeveloped countries, where an industrial accumulation of the "classical" type is still taking place, the capital-output ratio tends to get heavier, whereas in the advanced countries it is getting lighter...'" 77
        
        Faster progress in advanced export activities
        
        "'We are therefore fully justified in con cluding that progress in the export activities of the advanced countries has in general been faster than in those of the underdeveloped ones.'" 79
    - - Subjectivist View (Demand-Based)
        
        Declining demand for "primary" goods
        
        "'They claim to establish theoretically, and to show in reality, that the demand—and therefore the price—of "primary" products has undergone a systematic decline.'" 79
        
        Expansion of tertiary sector/luxury demand
        
        "'...economic development always entails a relative expansion of the "tertiary" sector, because development is expressed in intensified inequality of income, and the demand associated with the tertiary sector (education, leisure, etc.) increases with inequality.'" 80
        
        Critique: weak for raw materials, income elasticity, overreached law of supply/demand
        
        "'The argument, which might be acceptable where foodstuffs are concerned, is certainly not acceptable in relation to the other primary products, raw materials for industry... the demand for which is bound up with that for manufactures. Moreover, the income elasticities of these exports are.very high.'" 80
      - Comparative Evolution of Wages (Prebisch/Emmanuel)
        
        Faster technical progress in advanced manufacturing
        
        "'[Prebisch] regards as correct 'the assumption that technical progress has been more rapid in the manufacturing industry of the advanced countries than in the primary production of the underdeveloped ones.'" 81
        
        Wage increases in advanced, labor surplus in underdeveloped
        
        "'In Europe, during each period of prosperity, wage-earners have obtained increases in wages, made possible by the increase in productivity. The inflexibility of the nominal wage has prevented these incomes from falling during phases of depression. In the primary-producing countries the constant surplus of labor supply has prevented these incomes from sharing in the general prosperity.'" 83
        
        Labor surplus from rural reserve disintegration
        
        "'It seems to me that it is enough to show the nature of the socio economic formations of peripheral capitalism to see that this perma nent surplus of labor supply is a commonplace phenomenon there. These formations are distinguished by the importance of their rural reserves in process -of disintegration...'" 83
        
        19th century price decline in advanced, contradicting part of thesis
        
        "'Throughout the nineteenth century prices declined at the center of the world system.' Progress was thus reflected in Europe in falling prices for a whole century, contrary to Prebisch's thesis.'" 83
        
        Monopoly, "aristocracy of labor" from 1880 linked to worsening terms
        
        "'This is the reason why, all through the nineteenth century, technical progress was translated into a steady decline in prices, whereas after 1880-1890 we find a steady rise in prices, and an even faster rise in incomes (wages and profits together), as the reflection of progress. It was monopoly that made possible the rise in wages, competition being henceforth manifested otherwise than through reductions in prices. This is why. the worsening in the terms of trade for the underdeveloped countries began with the rise of monopolies, imperialism and the "aristocracy of labor."'" 84
      - Nature of Socioeconomic Formations
        
        Profit (central), Rent (peripheral)
        
        "'In the formations of "central" capitalism the predominant income is .capitalist profit, whereas in those of peripheral capitalis;n it is often the rent drawn by the landowners...'" 84
        
        Rent not reinvested, exacerbates labor surplus
        
        "'The rents of land owners, which rise in a period of prosperity, are not invested but are spent (to a very large extent on imported goods). Progress in agri cultural productivity is not compensated, even partially, by an in creasing demand for labor power for the making of capital goods. The latter, which are imported, are paid for by part of the additional ex ports they make possible. The excess su{5ply of labor power is therefore relatively greater.'" 85
    - - Precapitalist Exchange
        
        Low intensity internal, long-distance (exotic goods)
        
        "'What is typical of precapitalist societies is the low intensity of internal ex change... But none (or hardly any) of these societies is unfamiliar with long-distance trade. The latter brings them exotic products which are in the full sense of the word unknown to the*'" 85
        
        Subjective value theory more relevant
        
        "'Paradoxically, it is for this type of trade that the subjective theory of value, which is nonsensical in relation to present-day exchange of the products of capitalist societies, does make some sense.'" 86
      - Worldwide Capitalism (Marxist value)
        
        "'International exchange alters its character when capitalism becomes a. worldwide system... one can really speak of international specialization, that is, of the exchange of products the value of which, in the Marxist sense, is known;'" 86
      - Age of Mercantile Capital (16th-18/19th centuries)
        
        Periphery provides movable wealth (plunder, plantations, slaves)
        
        "'America provided, through brutal pillage, treasuries of gold and silver... plantations were developed in America, and these necessitated the slave trade, whose role in capitalist development was vital.'" 87
      - Between Industrial Revolution & Conquest (1880-1900)
        
        "Pause", seemingly "equal" exchange, low center wages
        
        "'Between the Industrial Revolution and the complete conquest of the world (in 1880-1900), a century elapsed that was in the nature of a pause: the old forms... gradually faded away; the new forms... took shape only slowly. ... The trade that- continued during this period seems to have been "equal"... the rewards of labor at the center were very low, tending to be kept down to "subsistence" level...'" 87
      - Imperialism (from 1880)
        
        Unequal exchange, unequal rewards
        
        "'The mechanism of primitive accumulation, in contrast to normal expanded reproduction, is unequal exchange, that is, the exchange of products of unequal value... This means that from this time onward the reward will become unequal, and it does indeed become unequal.'" 88
        
        1880-1945: Economic de traite, capital in mining/tertiary, center manufactures
        
        Impoverishing, "blocking"
        
        "'Down to World War II the colonial system imposed "classical" forms of the economic de traite... European capital was invested in mining and in the "tertiary" sectors linked with this colonial development... the advanced centers supplied manufactured consumer goods. That such a system had a particularly impoverishing effect on the periphery and was bound to lead to a primary type of "blocking" seems easy to prove.'" 88
        
        Post-1945: Import-substitution (periphery), center capital goods
        
        "Blocking" based on primary exports
        
        "'Outside of Europe, more or less systematic establishment of groups of light industries was characteristic of this period: this was the policy of "taking the place of imports"... henceforth the center supplies capital goods... Here, too, a "blocking" of growth, which was ultimately based on exports of agricultural and mineral products from the periphery to the center, was inevitable.'" 88
        
        Future: Eastern Europe integration, periphery "classical" industry (unskilled), center ultramodern (skilled)
        
        "'The second possible direction is the speciahzing of the Third World in "classical" industrial production (including that of capital goods), while the center reserves for itself the ultramodern branches of activity (automation, electronics, the conquest of space, atomic power)... The underdeveloped countries would then specialize in classical lines of production that require only, or mainly, unskilled labor, including such classical heavy-industrial lines as iron and steel, chemicals, etc.'" 89
      - Perpetuates underdevelopment (diverging rewards, internal contradictions)
        
        "'It is this mechanism that, finding expression in an increasing divergence in the rewards of labor, perpetuates and accen tuates the underdevelopment of the periphery. At the same time, this "development of underdevelopment"®^ finds expression in aggravation of the internal contradictions characteristic of the peripheral forma tions: an increasing divergence between sectoral productivities within the economies of the periphery...'" 89-90
    - - Not solely explained by comparative advantages
      - Conflicts with capital movement
      - "Comparative advantages" are outward appearance
      - Contradiction (production vs. consumption) is essential
        
        Drives market expansion and capital movement
      - Exchange due to internal dynamics, price differences insufficient alone