Another stone in dependentism’s grave

Not only we already clarified that the export sector in a peripheral country profits from devaluation in the same way as a metropolitan or central bourgeoisie, creating a relationship of mutual profiting. We can extend this criticism to exploitation rates and profit rates: since organic composition is lower in the peripheries, and since they enjoy bigger exploitation rates, is not only the multinationals who profit from this, but also the local bourgeoisie. And now, a recent paperby Babic, García-Bernardo and Heemskerk demonstrates that the state itself, all over the world and even in so called “Third World” regions, are extracting profits and returns from all over the world. The same can be said of the richest people in Central America: if they don’t own multinationals properly speaking, they still receive profits from franchisesfrom different countries, so the “Third World” bourgeoisie enjoys the same plundering and repatriation of profits that central or metropolitan countries enjoy.

We already said that Emmanuels’ theory is Ricardian, and doesn’t allow for surplus value to behave in the way relative surplus value functions according to Marx: in Emmanuels theory there’s unequal exchange and a transfer of value from underdeveloped to developed countries, just by comparing imports and exports, and supposedly labor-hours. But according to Emmanuel if an underdeveloped economy uses more hours to produce the same product which in a core economy employs less hours, then I’m transferring more surplus value from one region to the other. This is the opposite of relative surplus value in Marx’s sense: if you produce the same product in more hours, then you’re extracting less surplus value, due to productivity of labor, not more. An increase or a decrease in labor hours is not the same as an increase or decrease in their value, just like increasing or decreasing import or export prices are not identical to increasing or decreasing value appropriation.

This is slowly changing, as we can read in Husson, and as we have explained before: the roles are being inverted in the pattern of expanded reproduction. How come multinationals didn’t appear earlier, if peripheral countries had bigger exploitation rates and bigger profit rates? Shouldn’t they have centered their production in the “Third World” instead of their own inter-imperialist investment or instead of their own economies? This means rates of exploitation and rates of profit are bigger in peripheral countries, in relative or proportional percentage terms, but at the same time, their productivity is backwards and slower. The core central countries have a much bigger accumulation rate, which offsets the growth in organic composition, and the mass of profits is so big that acts as a countertendency to the fall in the profit rate (this following the Law of Capitalist Accumulation from Vol. I). So the profit rate in the central countries is smaller, due to a more advanced organic composition, compared to the backwards and cheap constant capital in peripheral countries, but they have at their disposal a multinational market which allows them to create a bigger mass of accumulation, and so augment their surplus value.

This was changed by the fall in the profit rate: the profit rate got closer to the accumulation rate, diminishing it’s space of maneuver for expanded reproduction. In peripheral countries, instead, since organic composition was lower and profit rates bigger, then there was more chance of expanded reproduction. What we now see comparing Husson’s data with the historical divergence between exploitation rates, is that bigger exploitation rates and bigger productivity of labor, both are getting concentrated in emergent economies, while the Triad or central countries have to scale back their reproduction, diminish productivity, and basing their profits almost exclusively on higher rates of exploitation (although still comparatively smaller than peripheral rates of exploitation). Although we shouldn’t compare the central and peripheral countries accumulation as if they were the same: if peripheral countries have a bigger maneuver, is because their accumulation is more backwards, and if they have an upsurge in productivity of labor, they’re enjoying those traits from a more backwards position than central or metropolitan countries. That’s why as we can see in the papers and links posted above, even if all states or rich businessman plunder each others economies, peripheral countries still don’t exploit other countries at the same mass of accumulation level than central or metropolitan countries. So rich countries have a lower productivity, but from a more advanced position: so their investment in innovation, which raises organic composition, at the same time, offsets organic composition because of the absolute mass of profits which can mobilize throughout the world.

So if there’s an inversion, it is still framed within the same patterns of an uneven world market. Concentration and centralization points are multiplying in the world market, but that’s not changing the exploitation of the most powerful economies against the weaker, just like in classical imperialism. And at the same time, it’s a new form of the same classical framework: we can see that the difference between industrial and agrarian countries wasn’t the key to neocolonial domination; central countries had no problem in industrializing or semi-industrializing the Third World, precisely because it turned out to be more profitable to invest in the Third World than in the Triad itself. If the Third World enjoys bigger profits in terms of GDP than the Triad, that’s still in the Triad’s benefit, since they have a bigger multinational muscle than this new multinational entering of emergent economies (whether through the state, as in the paper we have shown to you here, or through proper multinational companies from the South). This reiterates our point: we can’t conclude that bigger exploitation rates and profit rates in peripheral countries, are benefitial only for peripheral countries; just like owning dollars and their repreciation don’t benefit central or core countries exclusively, but also the local peripheral bourgeoisie. This creates a mixture of inter-imperialist, superimperialist and ultraimperialist traits, just like in Claudio Katz’ and James Petras positions. Just like in the mutual profiting through dollar owning exports sectors, this multinationalization of the state and of emergent economies doesn’t mean they’re not smaller partners, but they’re getting integrated with the international and multinational bourgoisies, even if they’re smaller.

The only part of dependentism which survives this scenario, is Baran’s repatriation of profits, basically. Bigger profit rates and exploitation rates are being enjoyed by multinational companies from the Triad since a bigger period of time than the new emergent multinationals, so this gives them an advantage. This is, truly, a correlative increase and decrease of profits and value in the Triad and in peripheral countries respectively. But this capacity is getting socialized through the whole world market, including the poorest countries in the world.