Re: Shaikh and unequal exchange

Re: Shaikh and unequal exchange

The topic "Shaikh and unequal exchange" continues to interest me and I have
read the Shaikh article recently recommended by Tonak in this forum (wsn,
02Feb03), namely:

Reference:
Anwar Shaikh, "Foreign Trade and the Law of Value: Part II" , Science and
Society, Spring 1980
http://homepage.newschool.edu/~AShaikh/lawvalue2.pdf

I am writing with an inquisitive, rather than polemical, intent. I find
Shaikh's extension of the labour theory of value to the international
(world, global) level and the supporting empirical work by him and
collaborators (several articles) brilliant, as I find his earlier argument
about the humbug function. Even Sir Karl Popper should be excited about the
intellectual architecture in this branch of Shaikh's work, comprising grand
theory (from law of value down), propositions, testable hypotheses,
statistical evidence.

On the other hand, I find unequal exchange theory a la Emmanuel and Amin
also brilliant.

In light of those multiple brilliancies, I find Shaikh's rejection of
unequal exchange theory not convincing.

For example, he concludes the quoted article with the sentence:  "In fact, a
critical examination of the theories of unequal exchange shows that even the
net direction of value transfers cannot be simply established." Looking at
the world scene, how can one say that "the net direction" of value transfers
cannot be established? How about the girls in various Asian countries who
assemble sophisticated electronics for 10 US cents per hour (rate could be a
bit different) versus a janitor at a Canadian university who earns 7 US
dollars per hour (rate could be a bit different) or a professor at the same
university who earns 50 US dollars per hour (rate could be a bit different)
and buys himself/herself a computer assembled by those first-mentioned
girls, who could not afford the computer they assembled? Is there not a
value transfer from A to B?

My own tentative answer is twofold:
(a) both Shaikh and Amin, Emmanuel and Co. are right and we are facing two
strands of theory with a problematic relationship to each other - a
relationship that has not been sufficiently elaborated. (Some contradictions
may only be apparent, rather than real.)

(b) Shaikh also states in the quoted article, in the sentence before last:
" since uneven development on a world scale is a direct consequence of free
trade itself, these transfers of value and the theories of unequal exchange
which rely on them emerge as secondary phenomena, not primary causes, of
underdevelopment." The words "secondary" and "primary" give a clue. In a
way, Shaikh grants that unequal exchange is a "secondary" phenomenon (this
is better than saying "no phenomenon"). This can be interpreted as him
saying that the law of value (and related realities) is primary (the essence
of the beast) and unequal exchange is secondary (not-essence). This view
seems to be related to his bias in favour of production relations over
exchange relations. However, in the same sentence he argues that uneven
development is a "direct consequence of free trade itself". However, free
trade is an exchange relation. Thus, in the first part of his sentence, he
implies that uneven development is a direct consequence of an exchange
relation and in the second part of the sentence he implies that exchange
relations are secondary. Thus, the first half and the second half of the
sentence are logically inconsistent. In my view, Shaikh's brilliant work
would not be diminished, if he gave a little more credence to unequal
exchange theory.

From a praxeological point of view, I can live with unequal exchange being
declared as a secondary phenomenon. When someone steals my breakfast or my
car, that is a secondary phenomenon from the perspective of the law of
value, since the law of value is not affected by that theft. But for my
practical well-being that theft is extremely salient and it might motivate
me to catch the thief, expose the thievery, and get my valuables back.

Summa summarum - I still believe Shaikh *and* Emmanuel are brilliant
scholars and I am postulating that there must be a better theoretical
elaboration between the two strands of theory than we (at least, I myself)
have to date. I would be interested in comments and/or additional literature
shedding light on this matter.

Respectfully,
Gert

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G. Köhler and E.J. Chaves (eds), Globalization: Critical Perspectives. Nova
Science, USA, 2003 -  with contributions by: Amin, Wallerstein, Chase-Dunn,
Kiljunen, Tausch, Bond, Haritatos, Frank, Gantman, Ross, Ünay, Hanappi,
Hanappi-Egger, Chaves, Köhler

G. Köhler and A. Tausch, Global Keynesianism: Unequal Exchange and Global
Exploitation. Nova Science, USA, 2002.