RE: unequal exchange

I happen to agree with Kohler with respect the import of surplus value and especially his comment that even "before "market forces" kick in" the global remuneration process (or rather the value of labor) is screwed up.  More precisely in my view, the value of labor is underpriced within interstate markets.  But that is just a starting point for analysis.

 

Most world-systems analysts, Wallerstein above all, conflate "value" "surplus" "surplus product" "surplus" etc., as if peasant production creates "surplus value" --- it doesn't.   This problem is rooted in analyses which reduce the historical specificity of the social forms of production (which, like slavery, rise and demise, or like peasant production, evolve and change location) to just three forms: free wage-labor in the core, a mix in the sp, and "coerced" labor in the periphery.  Moreover, there is no concern for the conditions of their global interrelation as parts of an evolving division of labor.

 

In so far as the historical specificity of the *interrelation* of forms is not accounted for (e.g. the historical relationship between US slavery and industrial manufacture in England), then the discrepancy between value and price remains or becomes something of a mystery, and we're stuck with the neoliberal phenomenal form of inequality.  While there may be something to Kohler's measurements of differential PPP, the question as to *why* labor is undervalued (and how to substantiate this rather than substantiating the *price differential* between core and peripheral labor -- which is really based on neoliberal economics), is left unexplained. 

 

We have general explanations, such as with Wallerstein: the core maintains a monopoly on the most profitability activities, whatever those are, or with Emmanuel and his predecessors, like Grossman and Kholmey, who underline productivity differences.   And there are general non-market mechanisms to be raised -- race, gender, ethnicity, etc.  (And insofar as these are relevant, even as a grand approximations of the "variables" to be considered, "unequal exchange" is not "exchange" and it is not "trade."   Indeed, the whole terms of the analysis is plagued from the beginning with the idea of "trade."  Unequal exchange is actually the development of underdevelopment, as Frank said long ago.)

 

Further, I find the lack of historical specificity in such an approach to be sorely wanting; to be an answer that explanations everything and nothing.   For starters, there are basic differences among the epochs of modern capitalism.  The monopolistic core conditions in the long 16th century created, only in part, by virtue of controlling trade and finance networks are quite different from the monopolistic control of super productive activities in the core during the core industrial era that created infundibular interstate market structures by integrating various social forms of production within axial interstate circuits.  The post-colonial era under US hegemony was another change as well.  The interstate system and world money forms during these epochs are a key factor aspect of the mechanisms of unequal development (see McMichael's recent and very suggestive article in JWSR), and they have likewise evolved.

 

In short, I don't believe there can be an overarching "theory" of so-called unequal exchange that is anything better than a general approximation, a starting point.  To be sure, I do agree that there are value transfers to the core which are caused by the underpricing of value in world markets.  Market forces affect prices, but, in part, because competitive markets for sellers are created precisely by their location in infundibular divisions of labor (at least during the core manufacturing era) that give oligopolistic purchase power to buyers.  But so does the very strength of the core currency, as well as the social conditions that effect the forms of production, such as patriarchy (which lowers the price, but not the socially necessary time it takes to make, for example, NIKE shoes).

 

I'm still trying to work through many of these issues myself, but the more I read about unequal exchange theory, the more I feel that we need to also examine the historical forms of value creation, and their impact on the formation of actual market conditions which mediate those very social relations within specific historical contexts.

 

Elson

Historical Sociology

-----Original Message-----
From: wsn-owner@csf.colorado.edu [mailto:wsn-owner@csf.colorado.edu]On Behalf Of g kohler
Sent: Friday, March 02, 2001 11:38 AM
To: wsn@csf.colorado.edu
Subject: Re: unequal exchange

The discussion whether the Zimdollar is overvalued or undervalued takes place in the context of really existing global capitalism. Such a discussion is as tricky as a discussion on whether women's labour is overvalued or undervalued in a context of sexism, or a discussion on whether wages are overvalued or undervalued in a context of capitalism. This is, in my opinion, not just a problem of doing proper econometrics, but a problem for value theory as well.

 

The question must be raised: What is the criterion (standard) by which "overvaluation" or "undervaluation" are determined? Such a criterion is necessarily a value criterion (and not just an empirical fact).

 

From the viewpoint of an employer, a wage tends to be "too high" (overvalued), no matter how low, because wage paid = profit not made.

From the viewpoint of global investors, a currency exchange rate tends to be "too high" (overvalued), no matter how low, because an even lower exchange rate would mean that the global investor could buy the land or the factory or the coffee in that other country for an even lower price.

The economic thinking (doctrines, theories, ideology) of global neoliberalism is biased toward employers and global investors. Thus, mainstream economists tend to come up with the conclusion that Third World exchange rates (or those of Eastern European countries) are "overvalued".

 

But are the evaluation criteria the right ones? That is a question for value theory. For example, is the wage paid to a worker the right wage? Here you get into theory of surplus value. Similarly, you could ask: Is the exchange rate of a Third World country "right"or "fair" from the viewpoint of the Third World worker? Here you get into alternative views of (international) value, which Prebisch tried to get at with his "unequal terms of trade", Emmanuel with his "unequal exchange", Amin with his "superexploitation".

 

Regarding your concrete question regarding the Zimdollar, there seem to be two completely different sets of answers, depending on whether you use global neoliberal (capitalist) standards of evaluation (biased toward pleasing global investors, IMF, etc.) or alternative standards of evaluation (trying to be fair to the working people of the Third World). In my opinion, the global wage structure (and the global structure of prices)(and consequently exchange rates between core and periphery countries) are fundamentally screwed up, in the sense of being racist (or quasi-colonialist) already before "market forces" kick in. It would be nice if one could prove this thesis somehow. [Unfortunately, many leftists are, in effect, siding with neoliberals on this issue - i.e., by accepting international market forces.]