Re: World Systems

Rising labor costs and organic composition of capital, spurred by
competition in markets, are the source of the fall of the general rate of
profit. Capital migrates in search of cheap labor to raise the rate and
intensity of exploitation and in effect lower the organic composition of
capital. This can have the effect of restoring the general rate of profit.
(This is simplistic, but this is the basic argument.)

However, capital migration under these circumstances is neither a
sufficient not necessary condition for development in the periphery.
Development depends on the social structures of accumulation and the
internal organization of peripheral sites. Countries with weak states and
an underdeveloped capitalist class are organized differently that
countries with strong states and a well-coordinated bourgeoisie. Weak
states in the periphery function to secure for foreign economic agents in
their countries surpluses that are exported back to the core, hence
underdevelopment (EPZs are the classic example). Strong states that
coordinate indigenous capitalist growth tend to climb out of peripheral
status, though still maintain a significant periphery internally.

Andy Austin