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Re: unequal exchange
by g kohler
16 February 2002 13:59 UTC
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Dear Mr. Lipke - thanks for your questions on unequal exchange (below, 
appended). I am happy to learn that you are writing your master thesis in this 
area of research - which brings me to your question #3 - namely, "Is there any 
further research on your theory, any new knowledge or critique on it? (I only 
know your paper "The Structure of Global
Money and World Tables..." in: Journal of World System Research Fall 1998)"

re your Question #3 -
GK: There has been no explicit critique so far, but some encouraging signs of 
interest. (a) Prof. Arno Tausch (Innsbruck and Vienna) has used unequal 
exchange, the distortion factor (d or ERDI o 1/ERDI) and the transfer value (T) 
in his empirical research (European and global scope) and found them to be of 
explanatory value in macrosociological
research (b) Prof. Cem Somel (Ankara) and his students have applied these 
concepts in the study of the Turkish economy and found them very useful (the 
only country case study along these lines that I know of). (c) Prof. Hartmut 
Elsenhans (Leipzig) published an article of mine on unequal exchange in his 
"asien africa latein amerika" journal. An
economist who has written a book with a similar perspective (and global scope) 
is Yotopoulos (mid-1990s).  I have done some more work on unequal exchange 
along my "structure of global money" line - (a) empirical (estimates for 1965, 
time series 1965-95), (b) simulation, (c) theoretical (relationship with 
surplus value, relationship with world
income, other), see online at:
A further sign of growing awareness of these problems might be the fact that 
the most recent edition of  the World Bank's online database on growth and 
development  includes such variables as terms of trade in PPP terms and trade 
flows separated by trade with OECD versus other.

re your Question 2 -
GK: if I understand you correctly, then I agree with you on this. The T in my 
formula is a result of both "distortion" and "volume" of trade. Two extreme 
cases - (A) high distortion and no trading volume, result = no transfer value 
(Kyrgistan is close to that) - (B) no distortion and high trading volume, 
result = no transfer value (EU - USA is
close to that)

re your Question 1 -
GK: this question touches on the relationship between PPP values, commodity 
terms of trade, perhaps other terms of trade as well, unequal exchange, and 
global exploitation. This is a "can of worms", as it touches on questions of 
both measurement and theory. When you think of worsening commodity terms of 
trade (for example - how many tons of coffee
must be exported by Costa Rica in order to buy an American- or European- or 
Japanese-made truck?), then this trend should be subsumed in a worsening 
"distortion factor" (d or ERDI). [However, the exact statistical relationship 
is difficult. Yotopoulos has more detail on that.] If, on the other hand, you 
think of the theory of unequal exchange and
global exploitation, there are many more questions to be explored and answered. 
There should be much more research on these issues, theoretical, 
statistical-empirical, and political-economic. As far as I can tell, the 
earlier literature on unequal exchange and unequal development has been rather 
blind to the fact that the exchange rate system is a
major mechanism of global exploitation. (Neither Emmanuel nor Amin mention that 
- probably, because they emphasize production relations over exchange 
relations; but this should be added as one facet of global exploitation. One 
important effect of unequal exchange rates is the fact that rich countries can 
buy up factories, real estate, and labour in
poor countries for "peanuts". Thus, (monetary) exchange relations have a major 
impact on global production relations. )

Good luck with your thesis. If you like me to comment on additional points, 
feel free to send me an email.

Gernot Köhler


Jürgen Lipke wrote:

> Dear Mr. Kohler (and other WSN members),
> after I had read your paper on the structure of global money and since I 
>liked your idea of quantification of unequal exchange, I decided to write my 
>master thesis in geography on that topic.
> I am very interested in the whole sphere of the world system and I think your 
>approach very valuable and hope it will bring the issue of unequal exchange a 
>new impetus.
> But I have the following questions:
> 1)      How is the PPP related to the terms of trade? From my point of view 
>the commodity terms of trade regarding primary goods are an additional factor 
>of unequal exchange, because they are paid in dollar. For processed goods the 
>income level/ exchange rate plays a role and thus they are included in your 
>estimation of unrecorded transfer. (?)
> 2)      Isn't there a feedback of the unrecorded transfer T to the PPP? If 
>e.g. the domestic economy profits from T, its PPP will increase and thus the 
>value of T becomes too low after your formula.
> This effect will be very low and negligible for countries with small 
>distortion factors and share of exchange, especially seen that it is just an 
>estimation. But for countries with high export shares and distortion factors 
>it might have a greater impact.
> 3)      Is there any further research on your theory, any new knowledge or 
>critique on it? (I only know your paper "The Structure of Global Money and 
>World Tables..." in: Journal of World System Research Fall 1998)
> I would be very grateful for any answer and advice or hint that you could 
>give me.
> Sincerely
> Juergen Lipke
> Department of Geographical Sciences
> Free University Berlin - Germany
> --
> berlin.de - meine stadt im netz. Jetzt eigene eMail-adresse @berlin.de 
> http://www.berlin.de/home/MeineStadt/Anmeldung

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