Value and Unequal Exchange in International Trade: The Geography of Global Capitalist Exploitation (Routledge Frontiers of Political Economy)

Contrary to the claims made by neoliberal governments and mainstream academics, this book argues that the huge increase in trade in recent decades has not made the world a fairer place: instead, the age of globalization has become a time of mass migration caused by increasing global inequality. The theory of unequal exchange challenges the free trade doctrine, claiming that transfers of value from poorer to richer countries are hidden behind apparently equivalent market transactions. Following a critical review of the existing approaches, the book proposes a general theory of unequal exchange in the light of an innovative reconstruction of Marx’s international law of value, in which money and exchange rates play a crucial role in decoupling value captured from value produced by different countries, even in perfectly competitive world markets. On this theoretical basis, the book provides an empirical analysis of the international transfers of value in both traditional trade and Global Value Chains. The resulting world mapping of unequal exchange shows the geographical hierarchy of capital global exploitation by revealing a world divided into two quite separate camps of donor and receiving countries, the former being the poorer countries and the latter the richer countries. This book is addressed to scholars and students of economics and social sciences, as well as activists of the North and the South, interested in a better understanding of the asymmetric power relations implied in global trade. It makes a significant contribution to the literature on political economy, trade, Marxism, international relations, and economic geography. Contrary to the claims made by neoliberal governments and mainstream academics, this book argues that the huge increase in trade in recent decades has not made the world a fairer place. Cover 1 Half Title 2 Series Page 3 Title Page 4 Copyright Page 5 Table of Contents 6 List of figures 9 List of tables 11 List of abbreviations of Marx’s works cited in the text 12 Preface 14 Chapter 1 Introduction: Theoretical foundations and measurement of unequal exchange 16 1.1 The cultural hegemony of free trade neoliberalism 16 1.2 The “practical circumstances” of unequal exchange in heterodox and Marxist economics 18 1.3 The theoretical foundations of unequal exchange 22 1.4 Mapping unequal exchange in the actual global economy 28 Chapter 2 The heresy of unequal exchange 31 2.1 The antecedent: The dispute between mercantilism and free trade 31 2.1.1 Mercantilism 31 2.1.2 The dogma of free trade and neo-mercantilist exceptions 34 2.2 Structuralist unequal exchange 38 2.2.1 Lewis’s dualistic model 40 2.2.2 The “Prebisch–Singer thesis” 42 2.3 Marxist unequal exchange 45 2.3.1 Non-equivalent exchange 48 2.3.2 Unequal exchange and monopoly capitalism 52 2.4 Arghiri Emmanuel’s theory of unequal exchange 54 2.5 A taxonomy of the forms of unequal exchange 59 Notes 60 Bibliography 63 Chapter 3 The social algorithm of value 68 3.1 The Marxist debate on abstract labour 68 3.2 Social labour in general 73 3.3 The social algorithm of value 77 3.3.1 The notion of algorithm in Marx’s Mathematical Manuscripts31 88 3.4 The dual nature of substance and form of value 92 3.4.1 The dual nature of abstract labour 93 3.4.2 The dual nature of exchange value 96 Notes 99 Bibliography 102 Chapter 4 The dual measure of value: Money and labour time 105 4.1 “Money as general commodity”1 105 4.1.1 The simplifying assumption of gold money in Marx’s Capital 106 4.1.2 Commodity in general and specific social forms of commodity 109 4.2 The functions of money 112 4.2.1 Money as the medium of circulation 112 4.2.2 Money as the measure of values 115 4.3 The fundamental equivalence of value 124 4.3.1 The measurement of exchange value: Labour time and money 124 4.3.2 The monetary expression of labour time 126 4.4 The law of value and unequal exchange 136 4.4.1 Value transfers and the law of value 136 4.4.2 The world market and unequal exchange 139 Notes 143 Bibliography 147 Chapter 5 The international law of value and money: A general model of unequal exchange 151 5.1 Why are prices higher in richer countries? 151 5.1.1 The “Penn puzzle” in standard trade theory 154 5.1.2 The “Penn puzzle” in non-standard trade theory 156 5.2 Universal labour and international value in Marx’s theory 157 5.3 The value of money and unequal exchange 165 5.3.1 Intensity and productivity of labour and the value of commodities 165 5.3.2 The essential modification of the international law of value 168 5.3.3 The international value of money and unequal exchange 172 5.3.4 Trade and unequal development in regional and international capitalist space 176 5.4 A general model of unequal exchange 180 5.4.1 A Marxian model of exchange rate determination 180 5.4.2 A disaggregated general model of unequal exchange51 186 Notes 191 Bibliography 194 Chapter 6 The geography of global exploitation: Measuring unequal exchange over the last 30 years 200 6.1 Global value chains and the new international division of labour 200 6.2 An aggregate model of unequal exchange in value added trade with GVCs 204 6.3 International value transfers from 1990 to 2019 211 6.3.1 The total size of value transfers in the global economy 213 6.3.2 The receivers: Inflow value transfers in Centre regions 215 6.3.3 The donors: Outflow value transfers in the Emerging Periphery 218 6.3.4 The donors: Outflow value transfers in the Poor Periphery 226 6.4 The relevance of unequal exchange in the actual global economy 228 Notes 234 Bibliography 235 Appendix 6.1 Country classification in geographical regions 236 Index 238 Unequal,Exchange;,International,Trade;,increase,in,trade;,globalization;,global,inequality;,free,trade,doctrine;,transfers,of,value;,Global,Value,Chains;,Marx's,international,law,of,value;,international,transfers,of,value;,capital,global,exploitation Unequal Exchange,International Trade,increase in trade,globalization,global inequality,free trade doctrine,transfers of value,Global Value Chains,Marx's international law of value,international transfers of value,capital global exploitation "Contrary to the claims made by neoliberal governments and mainstream academics, this book argues that the huge increase in trade in recent decades has not made the world a fairer place: instead, the age of globalization has become a time of mass migration caused by increasing global inequality. The theory of unequal exchange challenges the free trade doctrine, claiming that transfers of value from poorer to richer countries are hidden behind apparently equivalent market transactions. Following a critical review of the existing approaches, the book proposes a general theory of unequal exchange in the light of an innovative interpretation of Marx's international law of value, in which money and exchange rates play a crucial role in decoupling value captured from value produced by different countries even in perfectly competitive world markets. On this theoretical basis, the book provides an empirical analysis of the international transfers of value in both traditional trade and Global Value Chains. The resulting world mapping of unequal exchange shows the geographical hierarchy of capital global exploitation, by revealing a world divided in two quite separate camps of donor and receiving countries, the former being the poorer and the latter the richer ones. This book is addressed to scholars and students of economics and social sciences, as well as activists of the North and the South, interested in a better understanding of the asymmetric power relations implied in global trade. It makes a significant contribution to the literature on political economy, trade, Marxism, international relations and economic geography"-- Provided by publisher