Transforming the World Economy: Nine Critical Essays on the New International Economic Order

Transforming the 'World-Economy? . Nine Critical Essays on the New International Economic Order

edited by Herb Addo contribuiions by: Samir Amin George Aseniero Andre Gunder Frank Folker Frobel Otto Kreye Roy Preiswerk Timothy Shaw Immanuel Wallerstein

Acknowledgments

The authors and publishers are grateful to the following for permission to reproduce the essays in this book: the author for his chapter "An Historical Perspective on the Emergence of the New International Order: Economic, Political, Cultural Aspects. © 1977 by Immanuel Wallerstein; th.e author

and Heinemann Educational Books for the chapter "Rhetoric and Reality of the New International Economic Order'. © 1979 by Andre Gunder Frank; Monthly Review Press for the chapter "Self-Reliance and the New International Economic Order' by Samir Amin. Inc.

1977 by Monthly Review

British Library Cataloguing in Publicatiot;l Data.

Transforming the world-economy? -.Ji. International economic relations I. Addo, Herb HF1411 337

II. Amin, Samir

ISBN 0 340 35633 2 First published 1984

Copyright © 1984 by the United Nations University All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Represented in Nigeria and Cameroon by Nigeria Publishers Services Ltd, P .O.Box 62, Ibadan, Nigeria. Set in 11/12 pt Times by Colset Private Limited, Singapore. Printed in Great Britain for Hodder and Stoughton Educational, a division of Hodder and Stoughton Ltd, Mill Road, Dunton Green, Sevenoaks, Kent, by Richard Clay (The Chaucer Press) Ltd, Bungay, Suffolk

Contents

ix

Foreword Introduction:

Part 1

Pertinent Questions about the NIEO Herb Addo

1

The NIEO and the Mythology of Change

Chapter 1

An Historical Perspective on the Emergence of the New International Order: Economic, Political, Cultural Aspects Immanuel Wallerstein

Chapter 2

Hidden Dimensions of the International Economic Order

21 So-Called

New

Roy Preiswerk Part 2

33

The NIEO, the Crisis and Prospects in the

World-Economy Chapter 3

The Current Development of the World­ Economy: Reproduction of Labour and Accumulation of Capital on a World Scale Folker Frobel

Chapter 4

Western

Europe's

51 Economic

and

Social

Development and the Rationality and Reality of a New International Economic Order Otto Kreye Chapter· 5

The Non-Aligned Movement International Economic Order Timothy M. Shaw

and

119 the

New 138

vi

Part 3

The NIEO and the Ttansjormatiorzal Prospects

Chapter 6

7

Chapter

Chapter 8

Part 4

Rhetoric and Reality .. of the New' International Economic Order Andre Gunder Frank

165

Self-Reliance and Economic Order Samir Amin

204

the

New

International

Technology and Development: NIEO's Quest for Technology Transfer . George Aseniero

220

The NIEO as a Valid Transition

Chapter 9

Epilogue

Approaching the New Intern(;ltional Economic Order Dialectically and Transf ormationally Herb Addo

245 299

About the Contributors

Herb Addo, Institute of International Relations, University of the West Indies, St. Augustine, Trinidad, West Indies. Samir Amin, Council for the Development of Economic and Social Research in Africa (CODESRIA), Dakar, Senegal. George Aseniero, United Nations· University, Project on Goals, Processes, and Indicators of Development, Palais des Nations, 1211 Geneva 101 Switzerland. Andre Gunder Frank, Faculteit der Economische Wetenschappen, Universiteit -van Amsterdam, Netherlands. Folker Frabid, Starnberger Institut, Maximilianstrasse, 17, Starnberg D-8130, Federal Republic of Germany. ,Otto Kreye, Starnberger Institut, Maximilianstrasse, 17, Starnberg D-8130, Federal Republic of Germany. Roy Preiswerk (of late), L'Institut developpement, Geneva, Switzerland.

universitaire

d'etudes

du

Timothy Shaw, Department of Political Science, Dalhousie University, Halifax, Nova Scotia, Canada. Immanuel Wallerstein, Fernand Braudel Center, State University of New York at Binghamton, Binghamton, New York, USA.

Dedication

Dedicated to Roy P reiswerk, our friend, whose short life . was

invested in ways that will let all live humanely.

Foreword

May 1, 1984 will mark the tenth anniversary of the formal adoption of the call for a New International Economic Order (NIEO) by the United Nations General Assembly . By any reckoning , a decade is long enough to tempt us to take stock of what the NIEO was all about , and to ask whether it has come any closer to its obj ectives . However, this is not the purpose of this book . The purpose is to underscore the fact that we need to be reminded that there were some, who from the very beginning and all along, while they appreciated the need for a New International Economic Order , did not expect the NIEO, as it was proposed , to succeed much in the ,vay of transforming the world-economy. The rhetoric that accompanied the dramatic emergence of the NIEO proposals was conlbated by positions wanting to know why there was so much familiar praise and fury in the first place. These positions did not consider the NIEO proposals the historic milestone in the struggle against imperialism and exploitation of the Third World that its advocates professed it to be. Neither did they consider it to be the precursor of instability and disruptions in the global system that its (. detractors feared it to be. According to these positions , the NIEO was, and remains , a developmentalist strategy which therefore , far from challenging the constitutive and organisational logic of the world-economy, in the transformational sense, actually accepts it wholly and completely and only hopes to improve the position of the Third World countries within the existing international division of labour. As the world , once more, moves to celeberate the monumental failure of yet another grandiose dev:elopmentalist proposal, which the NIEO is , the views in this book suggest that we should recall why some considered it no more than an event. The NIEO is regarded as a historically unprecedented, b ut not unexpected , enterprise which, while promising something new , had to collapse under the weight of its own contradictions . These contradictions have their roots in the fundamental

X

TRANSFORMING THE WORLD-ECONOMY?

contradictions o f the world-eco nomy . To understand the failure o f the NIEO is , therefore , to understand , a little more , the nature of the transformational task and what it demands of us all . This book, then , is intended as a contribution to the continuing debate on the transformation of the world-economy. The idea i s to suggest what we can learn from the very failure of the NIEO aboutthe transformation of the world-economy . The strength of this book is that the chapters were written at various points during the life-time o f t he NIEO, with full attention to the ongoing debates on the transformation of the world-economy . Despite the critical tones of the chapters , however, there i s in each o f them the underlying b elief that the NIEO may yet lead t o something fundamentally new , b ut only if we recognize it for what it is and what it means in t erms of the fundamental logic of world-economy . The chapters collectively suggest that it is not possible to grasp the wholesomeness of this fundamental logic outside the emerging ' wo rld­ system approach' to the study of o ur contemporary capitalist histo ric world-system . All the authors in this book were in one way or the other connected with the United Natio ns University' s network project on Goals , Processes , and Indicators of Development (UNU-GPID) . Most o f the chapters were discussed at meetings j ointly organized b y the UNU­ GPID ' s Expansion-Exploitatio.n Sub-Group and the Max-Planck I nstitut, Starnberg (Federal Republic of Germany) , in March 1 97 8 , August 1 97 9 , and June 1 980, at Starnberg, and at the UNU-GPID Meeting i n Trinidad , January 1 98 1 . The idea for this book occurr ed at these meetings as a result of the lively discussions and i nterventions that took place . It is impossible to capture the full richness o f the exchanges . . This book represents the closest we can get to it . This b ook is i ntended to provide food for thought for political economists in particular , academics and intellectuals in general; and it contains material which should be o f great interest to the action­ oriented as well as the general publi c . As the editor, I have endeavoured to ensure that all difficult terminologies are clearly defined in the intro­ d uction as well as in the individual chapters . I must 'acknowledge the encouragement provided b y the contributors who agreed to have their published chapters reprinted here and those who revised their previously published chapters for this b ook . Special t hanks must go to the United Nations University, the Max-Planck Institut , Starnberg , and to the I nstitute of International Relations , University of the West I ndies , St Augustine , Trinidad for making this book p ossible . In particular , I thank Professor Gouda Abdel-Khalek o f Cairo University and Professor T Noguchi of the Keio University for their comments at the review stage of this book. The comments showed deep appreciation of the critical purpose of the book and helped to improve

FOREWORD

xi

its content and form . Lily Addo provided all the m uch needed secretarial assistance. For this, I lovingly thank her . Herb Addo St A ugustine, November, 1983.

Introduction: Pertinent . Questions about the NIEO Herb Addo Anthological compatibility All through the 1970s, the many works on the demands for a New Inter­ national Economic Order (NIEO) dwelt rightly on what it meant and what importance it held for the transformation of the world-economy. But the discussions in this regard were so involved, so .expansive and , at times , so confusing that they tended to obscure the critical considera­ tion of the extent to which the NIEO really could be said to be a vehicle for transporting the world-economy from its present exploitative state to one that is equalitarian, non-dependent, and , therefore, developed in the humanizing sense of the term . The valid question at the time was this: can the NIEO affect the structural-relational properties of th� world-economy in any way that is significant toward changing the world-system , as we know it? This question is even more valid now for the 1980s since, in the interim , we have gained a much better understanding of the nature of the world-economy, especially how it works, to make it possible for, among other. things , the central parts of it to continue to exploit the peripheral parts at this late post-independence phase of the capitalist world development. The intention behind this book is to add to the increasing awareness of what the NIEO reallyis and means transformationally at this point in world-history. In this regard, the following questions are pertinent: 1 Does the NIEO have the capacity to initiate the rapid transformation of the world-economy? 2 Or if the transformational processes are already in motion, can the NIEO serve as the basis for their intensification? 3 Does the NIEO go far enough in either of these two directions? 4 What are some of the aspects of, and the elements in, the NIEO that indicate the extent of the NIEO 's transformational potential? 5 And in which ways are these aspects and elements to be understood and appreciated by the different societies and states in the world­ system, especially by those of the periphery of the world-economy, if the transformational potential of the NIEO is to be fully realized in the respectable future?

2

TRANSFORMING THE WORLD-ECONOMY?

There are no set formulae for answering any of these questions : and this is why the discussions on the NIEO will remain' intellectually stimulating for a long time to come. Each of the questions' can be approached in a variety of different ways ; and some will always prefer some approaches to others , no doubt. This notwithstanding , once authors take particular positions on what the transformation o f the world-economy should mean , there appear to be particular consis­ tencies in their responses to the questions raised above. Thus one can quickly identify 'Northern ' views of the NIEO and ' Southern ' views o f it . An d within these two broadly distinct views , one can easily identify the conventional marxist , radical, and liberal readings of the extent o f the NIEO's transformational potential . I Each of the chapters in this book is distinct in its approach to the analysis of the NIEO and yet they all share certain common basic com­ patibilities . First , they all take the transformational approach to the NIEO . Second , they are all critical , in one sense or another , of the NIEO' s transitional indications within its transformational potential . The critical compatibility between the chapters alone would have been a good enough reason to publish them together; but there is even a better reason for doing so. It i sthat, third , the critical arguments and nuances constituting each chapter' s distinct and critical approach derive directly or indirectly from the world-system perspective for the study o f s ocial problems . All the authors presented here subscribe to the world-system view in one form or another . 2 In fact , some of the authors in this, book are at present among the leading proponents o f the world-system methodology for the study of the capitalist world-system as the all­ embracing , the integrative, and the primary unit for the study of all aspects of social problems in our historic capitalist world . 3 Together , the reasons supporting and indicating each author 's critical approach to the NIEO make the discussion of the NIEO , in terms of its transfor­ mational properties , come alive in this book. Given the fact that the NIEO can be viewed , and in fact is consi dered by many, as the most convenient summary of the main problems in the pOlitical economy of the capitalist world-system and given the confli ct­ ing multiplicity of positions on the subject, it should be considered opportune that this bo ok brings together a set of chapters on the subj ect " from a definite intellectual tradition. The world-system methodology has not become , over the last few years, only a definite intellectual tradition . As a method for the study of social systems , it is in many regards far superior to the classical or conventional (and some would even say vulgar) marxist, radical, and liberal traditions , which continue to envisage and interpret social reality, in the numerous forms it assumes , as if the precise identity of the world context does not exist; or t h at even if it exists , this identity is of little or no consequence. The emerging tendency among users of the world-system method is to view the identity of the world context as capitalist . This tendency

INTRODUCTION

3

itself may be contr()versial even among the users o f this approach , but that i s beside the point at the moment .4 The world-system methodology has , as its vital imperative , not only the compulsion to relate the struc­ tural-relational motions between the centre and the periphery, but also the compulsion to relate the motions in the internal structural-rela­ tionals of the periphery to those of the centre , in any attempt at explain­ ing the capitalist world , as a distinct large-scale and long-term historical system , to the whole world .

These compulsions do not amount to methodological shrines before which all world-system users must ritualistically worship before they write anything . Rather , they are constant reminders of the Eurocentric fallacy of the exaggerated importance of Europe in the conception o f the real world and the transformation o f it , a s this exaggeration derives from the presumed universal validity of the European world-view . They offer us an escape route from this epistemological fallacy . The dominance of Europe and Europe of the diaspora in the formation and the workings or the capitalist world-system is not in doubt . What the world-system methodology questions , precisely, is whether the Eurocentric fallacy does not blind us to world-transformationally crucial happenings in the periphery of the world-system ; this Eurocentric fallacy tends to ignore what is going on in the periphery on the false belief that whatever is going on in the periphery, or the south ,

of the world:..s ystem is either unimportant , in and b y itself, or worse, that whatever is going in the south i s mere developmentalist repetition of what went on in the centre , or the north , at earlier phases o f the development of the modern world - the capitalist world-system in evolution . In short , the world-system departure amounts to the insistence that the periphery o f the world-system be brought into the

wholesome study o f the evolution and the inevitable transformation o f the capitalist world-system .5 It is true that no comprehensive world-system study o f the NIEO exists . It i s true also that none of the chapters in this anthology pretends to be such a study, because it appears that none was written with that specific purpose in mind . But one o f the reasons for this anthology is that , if ever such a comprehensive work were to be written , some, if not all, o f the ideas (questions and approaches) employed in this anthology on the subject will have to be considered by that work . Such a world­ system study of the NIEO cannot be anything but a study of the trans­ formational significance of the NIEO for the capitali st world..,economy and the world-system it serves. Furthermore such a study will approach the NIEO not as something distinct to be studied apart from the real capitalist world , or something to be superimposed on a faceless world context. It will approach the NIEO as the product of capitalist world­ history , as an integral part of the workings of the contemporary phas e o f the capitalist world-economy, and a s a crucial indicator o f the evolu­ tion of the workings of the relations between the internal-periphery and i

it L

4

TRANSFORMING THE WORLD-ECONOMY?

internal-centre sources of imperialism , the related exploitation pro­ cesses and mechanisms of world capitalism. I shall proceed to make some general interpretative comments on the chapters , and , where I can and consider it appropriate, I shall attempt some editorial integration of some of the rich ideas they contain. In pro­ ceeding, it may be useful to touch base, so to speak, by asking whether the NIEO, by its nature , historical timeliness, and with respect to the world-economy, is a mere cosmetic or a genuine transformational agent.

Given the questions , what the chapters say The NI(E)O as kairos The chapter by Immanuel Wallerstein approaches the subj ect from the unavoidable perspective of the historical emergence of the subject o f change i n terms o f its economic , political, and cultural aspects . The transformationally-oriented quality of the essay is presented in the opening paragraph of the chapter . He writes : ' The "new international order" [the NIO] is at one and the same time , a programme and an analysis . It is a programme of social transfornlation; it is an analysis of why such social transformation is possible or even probable . ' The reader will notice that Wallerstein does not deal with the NIEO but with the NIO. The reason for this is clearly that the NIEO and the other international demands for ' new orders ' 6 are all aspects of the total search for the transformation of the old world order into a new world order . This opening chapter is a reminder that a world-system study o f the NIEO should never lose sight o f the other dimensions t o the new world order being sought; nor should such a study lose sight of the fact that, by a new world order , we mean no less than a new world-system with a distinctively new set of 'rules of the game' . I shall argue that since what is involved here is a transformation and not a reformation , crucial to the newness of the new order will be the extent to which the newnes s amounts t o a radical departure from the world capitalist historic theme of capital accumulation in pursuit of the world capitalist historic motives of the Bourgeois way of Life , its concomitant reproduction of the Prgletarian and Proletarianized Ways of Life, and the conflicts they engender , both at the national and the international levels : the movement from exploitative and therefore dehumanizing world-system to a non-exploitative and therefore a humanizing world-system . Wallerstein focuses on the word 'new' . He argues that premodern systems were no less changing than the modern world-system , the di fference being that in premodern times real changes were not recognized as such , while in our modern system 'whenever real change

J

INTRODUCTION

5

d oes not occur, it i s j ustified by asserting that change has in fact taken place ' . This difference should lead us to be much more subtle in our analysis of ' change ' and ' new ' in our time. The contradiction involved here is much more fundamental than the contradiction of things app earing to have changed and, yet remaining essentially the same. The real transformational contradiction of our time is the cardinal contradiction of things remaining the same and yet being justified as having changed. In this brief chapter , Wallerstein manages to relate the three basic antinomies of the capitalist world-system (the economy/policy, the supply/demand , and the capital/labour antinomies) and their changingness to the continuity of the capitalist world-economy from the sixteenth century and its persistence on the global scale in our time . He does all this in the context of the transformation of the world­ system. The most original feature in this thought-provoking chapter is the addition of a third time concept to Braudel ' s two-time concepts of the longue duree and the short term . The third is the introduction of Paul Tillich ' s time concept of kairos, 'the right time' , meaning 'the moment of choice and transition'. Based on the asympotic lin1its o f the three structural-relational antinomies , Wallerstein appears to think that the contemporary present is a kairos. But m ore importantly, the present is a kairos because of the paradoxical reasoning that, while the message of the kairos ' is always an error' , it is 'never an error' , because as a prophetic message, the kairos is always present : its power always grasps those who proclaim it before they proclaim it. This may or may not be an over-optimistic assessment of our contemporary present , but the insistence that kairos is now casts our concerns with the NIEO in their transitional.context and it invites us to look for the' NIEO ' s transition potential, to specify its probable transition path , and to identify its probable transition carriers, within the nebulous process of transformation . The questions that we must keep in mind , as we proceed , are the following : has the power of the NIEO, as a kairos, grasped those who proclaim it? ; and if so , are there any indications of such a grasp in the implications of the newness of the NIEO?

PIED and NIEO equal NIED Roy Preiswerk' s chapter deals directly with the transformational implications of this question: is the NIEO really new? He begins his chapter on a justifiably belligerent and appropriately polemical note; but he soon transcends this note to ask six most pertinent questions relating to the newness of the NIEO and its role in development . Preiswerk' s position on the subject is critical of Third World states ' formulation of the NIEO and their participation in its

6

TRANSFORMING THE WORLD-ECONOMY?

negotiation . He fears that cynics and hard-core realists may refer to the negotiation of the NIEO as an exercise in 'rhetorical 'rebellion o f the Third World ' ; and h e sees the NIEO itself a s contributing t o the 'modern mythology of change ' . To Preiswerk , the demands from the Third World states that constitute the NIEO are no more than pliant requests for the greater integration of their economies into the world-economy . He says , 'the apparent combativeness of Third World negotiators hides , more or les s consciously, the desire to create societies resembling those of the supposed enemy"':' the industrial countries' . This unoriginal impulse to imitate amounts to q. kind of ' mental self-colonization ' , the very antithesis of a developmental idea which is 'based on the principle of diversity in methods . . . and takes into consideration the cultural , economic and ecological specificity of each society' . According to Preiswer k ' s analysis , the NIEO is too much part of the modern mythology o f change for it to have anything particularly new in the transformational sense about it in the respectable future. The conclusion to be drawn from this chapter i s that , in essence, the NIEO is not really new . It is the product of familiar parentage: implicitly, it is dualistic and diffusionist in its assumptions about the development process , evolutionist in its historical perspective, rationalist-idealistic i n its conception of social change , statocratic in its conception o f the management of power in internationat relations and , finally, it is based on theoretical assumptions resulting from a merger of neo-classical and keynesian concepts . There i s only a small possibility that the NIEO will b e fully realized . But this is not really the problem for Preiswerk . For even if the NIEO were to be fully realized , he believes that it would change very little i n the real world . All this notwithstanding , the NIEO may still not b e totally worthless from the transformational point of view . Preiswerk ' s argument implies that , while the NIEO runs the risk of being a new mythology, we must also remember, in true dialectical fashion , that from mythology to mythology, tensions increase . But as tensions increase , Preiswerk fears that the world will 'flounder in the morass o f the Present International Economic Disorder [PIED] combined with the New International Economic Order , leading towards the New International Economic Disorder [NIED] ' . Preiswerk ' s chapter goes from exposing the lack o f newness in the NIEO into the difficult matter of alternative strategies for transforming the world-economy. He sees the developmental philosophy behind the NIEO as ' associative and standardizing s trategy' . The developmental philosophy he prefers is described as 'dissociative and differential strategy' , which is to be appreciated in terms of this philosophy's inner coherence and its cornerstone of 'the satisfaction of the basic needs o f the entire population o f a country' . H e defends his conception of development from anticipated charges ofit not being realistic . He states

INTRODUCTION

7

' . . . �'realism" is often nothing more than the "absence of new ideas , when it is not conscious resistence to a type of change perceived as detrimental to egoistic interests. ' In fact , he ends the chapter with-the telling observation that rather than the dissociative and differential strategies , it is the NIEO , as it was demanded by the Third World, 'that is the real utopia . . . ' .

The currents in the world-economy Folker Frobel ' s chapter on the transformational meaning of the curren ts in the contemporary expression of the world-economy derives from the protest that 'the majority of current approaches to the present development of the world capitalist economy are not particularly co nvincing . This applies especially to single-factor explanations, developed in response to superficially observable changes. ' Inspired by this protest , which few will dispute , Frobel has produced a most thorough historical chapter explaining in the most convincing way why the present currents in the world-economy have become what they are . It is in the context of these currents, as a historical product o f the world­ economy, that we are to situate the questions as to what the world­ economy is increasingly becoming for the peripheral economies and what the transformational relevance.of the NIEO appears to be in this regard . This exceptional chapter begins with the meticulous and extendable listing of twenty indicators all of which support the thesis that there has occurred 'a sharp contrast in capitalist development between the two decades leading up to the end of the 1960slbeginning of the 1970s, and the subsequent ten years, and show that the capitalist world economy has once again passed through a turning-point in its development ' . The qualitative feel of this turning-point in the capitalist world-economy is provided in the most clear quantitative detail in a twenty-table appendix to the chapter . All the twenty indicators Frobel lists and their combined meaning are important; but three are of particular interest to us in this book . They are: 1 'changes in the structure of the international division of labour ' ; 2 'rapid spread o f production facilities and production sites of a new type in many developing countries and centrally planned econo­ mies '; and 3 in many developing countries , there are 'the reorganization , intensification and extension of the capitalist exploitation and super­ exploitation of labour power ' . The first two factors mentioned above are part of the cluster of factors which indicate that one of the most significant transformations is the change in the structure of the international division of labour : a new international division of labour has arrived . The third factor

8

TRANSFORMING THE WORLD-ECONOMY?

mentioned indicates that out of this new division of labour comes the intensification of the exploitation of the periphery. I f, as Frobel shows , there are clear and strong 'tendencies which are undermining the [capitalist world-economy's] potential for further expansion!; if, 'at the same time, there is no clear indication of a transition to or a political installation o f any comparable alternative model of accumulation' ; and if, in all this , the plight of the periphery o f the world-economy is intensifying; then what are we t o make o f the trans formational content of the NIEO , in particular, what are we t o make o f the timely coincidence o f the emergence o f the demands o f the NIEO and the emergence of the new international division of labour? Frobel' s well argued verdict is that the NIEO, for a variety o f objective reasons , 'will not reduce the existing wide disparities i n the material positions of the maj ority of the population in the industrial and developing countries' . In fact , the coincidence between the emergence of the NIEO and the new international division of labour suggest strongly that the world-economy can make an adaptive use o f the NIEO t o prolong its life .

Western Europe's reality, rationality, and the NIEO The NIEO is a set of ' demands addres sed to the industrialized countries' and , therefore , there is good reason to ask whether , even with the best of intentions and in the best of circumstances , the industrialized countries are themselves able to do much for the realization of the NIEO ; and if they will do anything at all, which of the demands will they accept , which will they rej ect , and why? This is precisely the question that Otto Kreye' s chapter addresses from the circumstances of Western Europe' s present econonlic and social conditions . The source of Kreye' s chapter is the position that since the emergence of the new international division of labour phase of world capitalism i n the mid- 1 960s , both the world-economy and Western Europe 's economic and social conditions have undergone some far-reaching structural changes . These changes hc;tve been caused by what Kreye describes as 'a new set of conditions which are themselves the outcome of capitalist development up to this point' . And critical in these conditions are the 'technological developments that have rendered the [world-wide] reservoir of cheap labour useable'_ From this position , Kreye summons an impressive blend o f credible ·statistics and authoritative statements to serve as the basis for describing the contemporary reality of Western European social and economic conditions . And it is from this reality that Kreye derives th e rationality of Western Europe' s selective responses to the NIEO , as a package of demands emanating from the periphery of the world­ economy_

INTRODUCTION

9

Given the developmental trends in Western Europe, Kreye anticipates that ' firms , trade unions and governments of Western Europe will . . . fully support those proposals which are likely to achieve a realignment of the supranational political structure and which facilitate and promote the transnational reorganization of production and the transnational mobility of the companies ' . What the Western European firms , trade unions , and governments will adamantly reject out of hand and without discussion are those proposals that pose ' a threat t o the capitalist structure o f the world-economy itself . . . ' Kreye concludes that the realization of the NIEO , as it stands, will not serve the interests of the peoples of the underdeveloped countries . The NIEO serves 'the interest of capital valorization ' , as it integrates the peripheral economies more in their unequal partnership with the central economies in the capitalist world-system . The task, therefore, still remains for those who are genuinely concerned with a truly new order to address themselves to the unavoidable matters of outlining and struggling for such an order . The NIEO and Non-Alignment

If the NIEO , because of its very nature, attracts many aspects of contemporary reality into its discussion, then there is a component of the current crisis which is very much involved in the NIEO , either as a programme or as an analysis of social transformation . This is the crisis in the Non-Aligned Movement . Timothy Shaw ' s chapter deals with the connection between the two , from the point of view of ' a critical overview of the intellectual history of the movement' . His chapter discus ses the historical realizations which made the Non-Aligned Movement, an essentially political movement concerned with decolonization and racial equality in the 1 960s , turn its attention from ' positive neutrality' to demand fundamental restructuring of the world-economy in the form of a new international economic order. In doing this , Shaw sails very closely to the declarations of the Non­ Aligned Movement, as he traces the evolution in the group-thinking of the movement . The Non-Aligned Movement is not a homogeneous grouping of states . There are wide differences in the attributes of its membership ; and yet as this group moves on and as it comes to understand the elusive idea of development more and more, it is now concerned with 'dominance , interference and exclusion ' . According to Shaw, ' . . . these current concerns tend to be expressed in a distinctive ideological format '- self-reliance rather than decolonization , NIEO rather than development . ' But the member states of the movement have been plunged into some contradictions which cannot be resolved without fundamen­ tal 'transformation within both national and international political

10

TRANSFORMING THE WORLD-ECONOMY?

economy' . He argues that in the absence of such interrelated changes, 'the NIEO beconles an ideological construct designed to s alvage residual dignity and development for a few countries and 'classes in the Third World ' . Shaw refers to the ambiguities in the ideology of Non-Alignment with respect to democracy and underdevelopment . In this reference , the prognosis , for the next twenty years Qr so, is that the historical tension between the two will be most acute in the Newly Industrializing Countries in the Non-Aligned Movement. These countries can dislike external interference as much as they want , but it is b ound to occur, 'given the contemporary conj uncture, or the paradoxical nature o f the kairos' . The NIEO as an elitist al liance

The nuances in the preceding chapters to the effect that the NIEO i s elitist and a demand for the complete integration of the Third World into the world-economy, are exactly the subj ect o f Andre Gunder Frank ' s detailed study of the NIEO ' s history, and its implications for the disinherited social classes in the periphery of the world-system. Frank's chapter gives us necessary insights into the recent origins o f the NIEO , the structure of the demands , their contents , and their overall meaning for the purpose .of transforming the world-economy. The underlying thesis in this chapter is Fran k ' s well .... known thesis that the peripheral economies will continue to be exploited by the central economies for as long as they remain integrated in dependent ways in the world-economy. 7 The only salvation from this situation is if the dependent economies create or make use of the endemic crisis in the world-economy to increase the distance between their economies and those of the centre of the world-economy. From this , one possible interpretation o f Frank' s chapter is that while a severe crisis exists.in the world-economy , the peripheral states have invented the NIEO , an instrument which will integrate them more into the world-economy; and thus reduce the tensions constituting the current manifestation of the crisis and thereby impairing any chances they may have for autonomous development . Rather than intensifying the contradictions in the system , all appearances to the contrary notwithstanding , peripheral states , by their demands in the NIEO , dampen such contradictions . This is ,the line of thought that Frank pursues with his array of references , statistics , and indepth analysis. To Frank , then , the NIEO is capitalist pure and simple. It amounts to no more than a set of demands from the Third World partners in the global capitalist exploitation enterprise addressed to their partners abroad in order 'to institutionalize their collaboration with foreign capital' , for the primary purpose of exploiting local labour in the periphery.

INTRODUCTION

11

It is for this reason that Frank does not find it particularly necessary . to elaborate what is 'ne.w ' in the NIEO . He reasons that ' it is enough to note t hat there will and can be no new international economic order between states without a new political order within these states . ' He adds that 'it becomes increasingly evident that the demand for NIEO is a political conflict between the governing classes in the Third World and the political representatives of international capital in the capitalist worl d-economy. ' We confront again the 'modern mythology of change' in Frank ' s conclusi on . His position i n this regard i s that there could b e a. temporary interregnum of sorts between the old order and the new, ' through the revolutionary destruction, here and there, o f the old one ' . Until then, the old order will continue under the guise o f a new one , . mainly because it is Frank' s view that the NIEO is Third World states' attem pt to renegotiate dependence but with hardly any bargaining power to do so . From the above, we can say that between the rhetoric and the reality, upon which the NIEO rides , is a wide credibility gap detracting imnlensely from any immediate transitional potential which the NIEO may possess .

The NIEO as the RIO project One cannot meaningfully discuss the NIEO from the transformation perspective without referring to its historical time of emergence, and without relating this particular emergence to yet another historical emergence: the historical emergence of transnational corporations in their mature form . The preceding chapters deal with this matter very well; and from these chapters we can gather that the NIEO , transformationally approached, is a very complex subj ect . Frank ' s chapter i n particular, indicates that even the immediate roots o f the NIEO are extremely complex. However , it is Samir Amin' s chapter which shows how much more complex the NIEO as a subject can be, when it is viewed from the contrasting realities of the development of central capitalism and peripheral capitalism within the historic development o f world capitalism. Amin' s arguments in this regard are at once bold and simple: it is impossible to turn peripheral capitalism into central capitalisnl; and , therefore, it is false to expect that the NIEO, even if it were to be fully fulfilled , could ever lead to autonomous capitalist development in the periphery.s To Amin , the NIEO is not much more than a rebellion by the bourgeoisies of the periphery over the unequal division of the exploited proceeds from the perihery . But it is a rebellion all the same� and through some lucky historical accidents in the periphery and the centre , this rebellion can prove transitionally useful . Amin argues that the NIEO , as it stands , can best lead to what he calls

12

\

TRANSFORMING THE WORLD-ECONOMY?

'renovated dependence'. Still , he argues that , since the themes of the NIEO involve the aspirations of the bourgeoisies in the periphery t o control their national resources and to strengthen their weak national states, imperialism, through the instrumentality of transnational corporations , will attempt 'to substitute for the new order the Rio Proj ect (Reshaping of the International Order!) ' . By referring to the changing phases of imperialism, Amin manages t o make it quite clear that the bourgeoisies o f the periphery have always clashed with their external counterparts in the world imperialist enterprise. In fact , he states that 'the crisis of [the] second phase o f imperialism was opened by the demand for a new international economic order ' . It is precisely in the context of the changing nature o f the ever-present crisis in imperialism itself that Amin situates the p olitical relevance of ' self-reliance' and 'collective self-reliance' for autononl0US development as an objective (L e . necessary) choice between socialism and capitalism : with respect to ultimate goal s , autonomous development in the periphery includes socialism and excludes capitalism . The logic which leads Amin to propose an authentic strategy for both national independence and social progress are pretty clear in this chapter. This strategy leads one to appreciate self-reliance and collective self-reliance in special senses which herald socialism through national liberation . The undisguised reality against-which Amin approaches the NIEO is 'the struggle of the Third World against the dominant-imperialis t hegemony' . The conclusion t o this chapter is that 'for many reasons this struggle is still today the main focus for the transformation o f the world ' . This may or may not be news to many, but whatever the cas e , 'this is the reality' and i t must not b e forgotten. Technocratic rationalism, technology, and the N/EO

Technology, as the means and the reflection of the efficient production of things in the capitalist world-system , has become one of the k ey components of the NIEO . This is not surprising at all , in that amo,n g other things the developing nations believe that one of the reasons why they are underdeveloped is that they do not control technology: not that they do not have technology but that they do not control the tech­ nology needed at this time and in the foreseeable future to produce . commodities efficiently for the world export market . George Aseniero ' s chapter deals with this matter . He poses the basic issue involved when he argues succinctly that 'to a great extent NIEO perceives the problem of development as a problem of means , and sees these means as being monopolized by the industrialized countries . How to acquire these means is what "technology transfer" is all about . ' The argument is that there is more

INTRODUCTION

13

thi s b asic issue than is usually acknowledged . Aseniero demon­ with reference to recent empirical research, that if the ands for technology transfer are motivated by a desire to dem :r�HE O's bridge the widening 'technology gap' between the metropolitan centres and the Third WorId, to equip the latter with the latest technologies in order to bolster industrial and agricultural productivity, and thereby to lessen Third WorId dependence on the highly industrialized countries , the overall and long-run results could paradoxically be quite the opp osite . A fuller understanding o f the role o f technology i n the developnlent process calls for an articulation of the global technological structure . and how this parallels and supports the international division of labour . It is in treating the technology problem from this perspective that Aseniero argues that 'transfer of technology, with its concomitant dependence on capital equipment , technical know-how , and tied-in purchase of intermediate goods , plays right into the hands of the centre countries . It not only means big business for the transnationals who monopolize the global technology structure, it also means a tighter integration of the economies of the peripheries into the international division of labour and the international market system . ' In a vein resonant of Preiswerk '8 position, Aseniero sees the NIEO as following the technocratic logic inherent in the developmentalist philosophy which guides the nature of the demands contained in the NIEO and which informs the manner in which these demands are pursued . This technocratic approach is premissed on technological determinism, which Third WorId technocrats and industrialists share in common in the belief that technology is the crucial variable in propelling industrialization and economic development . The process of technology transfer is conceived as involving states , specialized international organizations and transnational corporations , but the most important of these by far are the transnationals . Despite the vague rhetoric about 'appropriate technology' , it is advanced technology that NIEO technocratic elites and industrialists are really after, and this is almost completely in the hands of transnationals .9 This treatment of the subj ect , relating to NIEO' s programme of action on technology transfer to the global business ' strategies of the transnational corporations , leads Aseniero to discuss in measured detail what the transfer of technology is , ho w thi'S transfer is being done, and what costs (financial and social) are involved in the transplantation of foreign technologies . The critical edge of this chapter makes us doubt the attainability of the NIEO' s ambitions in the technological aspects of development . Notwithstanding such doubts as to the chances of implementing NIEO' s programme of action on technology transfer , this pungent chapter states that there is a more fundamental question involved : what if the technology transfer obj ectives are attained , as envisaged by the ........,.�""C',

i

14

TRANSFORMING THE WORLD-ECONOMY?

NIEO? Aseniero ' s view on this is that, among other things, a.resulting global technological monoculture will retain intact the international system of dominant relationships . The valid and the arrested transition counterparts in the NIEO as a transformation process

Herb Addo ' s chapter, which uses insights from some of the earli er chapters , claims to be a dialectical approach to the transformation of the world-economy. It sees the NIEO as a good reason for this purpose. The virtue of this approach may lie in the consideration of the NIEO as the summary o f the main transformational issues in the capitali st world-economy: the summary of the historic contradictions o f world capitalism at its contemporary phase, as it is expressed in the NIEO as the foreign policy consequence of the maturing processes in the dependency historic product of world capitalist development . The chapter may be viewed as an honest attempt to grapple with an embarrassing problem. The problem is the puzzling reality in which the periphery, having been dominated and exploited by the centre in the historic past, continues , in this late post-independence phase of world capitalist development , to be exploited by the centre. The embarrassing p art is that it is now very clear that internal-periphery sources of imperialism assist internal-centre sources of imperialism in the exploitation of the periphery. This reality is not only as embarrassing as it is puzzling, it is also as bizarre as it is immoral. It is the historical link between these two internal sources of imperialism that Addo calls the imperialist problematique. If the above gives the identity of the chapter, its purpose is express ed by the author as an 'invitation to take a few steps down the dark realms of the misconception that imperialism concerns only the inter-state relations b etween the centre and the periphery of the capitalist world­ economy ' . The invitation is deemed necessary because of 'the pressing need to move from the correct, b ut by itself unhelpful, criticism of the imperialist dialectic at its inter-state level only' . He argues that what we need at t his stage of capitalist development is the endeavour to understand the imperialist phenomenon enough ' to realize that its roots are deeply s unk in internal -periphery contradictions within the global processes , which result in capital leaks from the periphery to the centre' . In the context of the transformation politics of the world­ economy, Addo argues that this realization should point to 'the strategic primacy of internal-periphery trans/ormation over inter-state reformations in the negation processes o f the imperialist exploitation generally and the dissolution of . . . the imperialist problematique in particular' . Addo blames the failure of the earlier developmental slogans on the poverty of transformational visions of the states in the periphery. The

·

INTRODUCTION

15

poverty of vision is in turn blamed on the attempts by these states to :jmitate and institute the very exploitative nature of the world-economy, which they condemn , in their own societies . In approaching the NIEO dialectically and transformationally, Addo insists that a sharp distinction be made between regime opposites and systemic opposites: anti�regime forces may contribute to the transformation of a system, but they are not necessarily anti-systemic forces. Further in this same vein, Addo suggests that transformation is too gross , nebulous, and too fluid a concept; therefore, in order to approach the NIEO transformation ally, he conceives the totality o f the transformation process in terms of the dialectical tension between what he calls the valid transition potential and the arrested transition potential. It is from these dialectical counterparts that Addo draws out the political contexts to discuss the NIEO in terms of what he calls valid politics of transition and arrested politics of transition. Thi s chapter touches on the political nature of the peripheral state. He discusses this in terms of the quality of the peripheral state. He considers this quality strained, because the peripheral states are composed of alliances which participate in the exploitation of the masses in the peripheral societies . The conclusion of this essay deals with the strategic importance of the relationship between the contradic­ tion of the strained quality of the peripheral state and the imperialist problematique. He points to the prominent fact that , states are yet to emerge in the periphery whose very emergence will be due to the strategic actualization of the dissolution of the imperialist problematique itself. When this happens, it will signal improvement in the quality of the peripheral state . But how is this to be brought about? Addo realizes the difficulties, involved here, but he seems to think that the first step toward this end is the need for the critical examination of the Eurocentric bases of prevailing philosophies of development . 10

Conclusions Some final words , in the form o f caveats , are in order . The summary meaning of the chapters in this book cannot be considered a final proj ect , just because their authors employed the world-system methodology to critically examine the transformational significance o f the NIEO for t h e capitalist world-economy. I cannot pretend for a moment that the world-system approach to the study of our current world is a methodological panacea for the understanding of our given world reality, far from it . As superior as I personally think this approach may be to others , I recognize that there are many problems relating to the NIEO , as the summary mode of contradictions within the world-economy, that are

16

TRANSFORMING THE WORLD-ECONOMY?

yet to be fully confronted with the analytic insights of the world-system approach . We are yet , for example, to use this methodology t o understand and t o explain the presumed developmental ' progress' being made by the so-called Newly Industrialized Countries ; or t o explain, i n terms o f differentiating between, the varieties within the generalized plight o f the periphery of the world-economy in the context of its generic unicity, insightfully described by Amin as 'capitalist formation o f the Periphery' . What all methodologies and approaches must endeavour to arrive at is a new type of analysis which is capable of shedding new light on the new types of contradictions the understanding of which can help us t o see additional causes a s t o why the NIEO had t o fail . T o do this properly, we need a methodology which is capable of referring the evolving contradictions within the reproduced varieties in the periphery and the centre and the way they relate to explain the fundamental centre-periphery contradiction within the evolving world-system : how to analyze fully the complex intricacies of the internal dynamics within the centre, the periphery and , most importantly, the contradictory resultant between- them . It is for this reason that the chapters in this book deal with some relevant aspects of the world-system-effective contradictions in the centre, the periphery, and between them.

Notes 1 For a discussion of the various views, see Robert Cox, 'Ideologies and the New International Economic Order: Reflections on Some Recent Literature', International Organization , 3 3 : 2 . 1 979, 257-302. 2 There are of course differences between world-system methodology users in their conception of the world-system and its economy as capitalist . For further discussion of this matter, see my 1 98 1 mimeograph 'The Histriograph Significance of a Hyphen: World-System and World­ Economy; or World System and World Economy? ' . 3 Unquestionably these proponents include Andre Gunder Frank, Samir Amin, Immanuel Wallerstein, Otto Kreye, and Folker Frobel . 4 See note 2 above . 5 I discuss this matter at some length in 'Prologue: Eurocentric State of the Discipline' (working paper), Tokyo : United Nations University, 1 982; and in 'Beyond Eurocentricity: Transformation and Transformational Responsibility', forthcoming in Development as Social Transformation: Reflections on the Global Problematique, Tokyo: UNU. 6 The other international demands include: the International Information Order, the New International Sex Order, the New International Environmental Order, the New International Seabed Order, and the New International Population Order . 7 See his Latin A merica: Underdevelopment or Revolution . New York: Monthly Review P ress , 1969.

INTRODUCTION

17

8 For the full development of this thesis , see hi s Unequal Development: A n Essay o n the Social Formation of Peripheral Capitalism , Sussex: The Harvester Press , 1 967 and his Class and Nation, Historically and in the Current Crisis, New York: Monthly Review Press , 1 980. 9 For further elaboration on this matter see Aseniero , ' A Reflection on Developmentalism : From Development to Transformation' , in Develop­

ment as Social Transformation .

1 0 For further discussion , see the references i n note 5 above .

Part 1 Th e NIEO and the Mythology of Change

1

An Historical Perspective on ­ the Emergence o f the New International Order : Economic , P olitical , Cultural Aspects * Immanuel Wallerstein

The ' new international order' is , at . one and the same time, a programme and an analysis. It is a progranlme of social transforma­ tion : it is an analysis of why s.uch social transformation is possible or even probable. As a programme it is couched in the Aesopian language of the United Nations . Caught amidst the linguistic differences of east and west, north and south , the United Nations has invented a suitably flat expres­ sion which is unexceptionable, since the only thing on which everyone can agree is that the ' new' may be desirable. It is often said that what distinguishes so-called 'traditional' , premodern systems from the modern world is that the premodern systems were unchanging whereas the modern world-system makes (technological) change its central focus. This is in fact false . Premodern societies were constantly changing, and the modern world has been, when all is said and done , a remarkably slow-changing world . Nonetheless there is an important di fference between the two in their ideologies of change: in premodern systems, whenever there was real change it was justified by arguing that no change had occurred. In the *Editor 's note: The author was present at the UNU-GPI D/Max-Planck-Institut joint meetings , 1 97 8 - 1 980 , i n Starnberg , where this chapter served as a basic input -for

discussions on the subj ect . This chapter is a reprint from the author' s The Capitalist World-Economy, Londo n , Cambridge University Press , 1 979, chapter 17, pp . 269-282.

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TRANSFORMING THE WORLD-ECONOMY?

modern world , whenever real change does not occur , it is j ustified by asserting that change has in fact taken place . Bearing in mind then the meaninglessness of the invocation o f newness , w e will approach this subj ect sceptically. What i s ' in fact new in the international order? And in what temporality is it new? For time is not singular . Indeed there is even more than one dimension o f temporalities . There is first o f all Braudel ' s 'plurality of social time . . . indispensable to a common methodology of the social sciences ' . 1 This is his now famous distinction between the longue duree which is ' slow­ moving, sometimes practically static' ,2 the 'conj unctural ' which is the turn in a cyclical movement and is medium-term , and the episodic or short-term (evenementielle) which is 'the tempo of individuals , of our illusions and rapid judgment . . . the chronicler' s and j ournalist ' s time ' . 3 Braudel asserts that w e must explicitly recognize the multiple social times because otherwise our models have no meaning : ' . . . models are of varying duration: they have the 'same time-value as the reality they record. And for the social observer , this time aspect is of prime importance - for even more important than the profound structures of life are their breaking points and their sharp or gradual deterioration under opposing pressures . '4 For make no mistake about it . Even the ' slow-moving , sometimes practically static' longue duree changes . The long term is not the:same, for Braudel, as 'the very long­ term , sheltered from accidents, conj unctures and breakdown s ' ,5 the time o f qualitative mathematics and of Claude Levi-Strauss, about whose very reality Braudel , the historian , casts a doubtful eye : ' if it exists , [the very long-term] can only be the time-period of the sages . '6 Thu s , Braudel gives us two dimensions along which time may be divided . There is first of all the variety of social times . And then there is the division between all finite social time, however slow-moving, and the eternal time of the sages (and the qualitative mathematicians , another name for universalizing social scientists) . There is however a third dimension of time, one bequeathed to us by the Protestant theologian, Paul Tillich . It is the distinction between chronos, ' formal time ' and kairos, 'the right time ' . This distinction, found within the Greek language, was used by Tillich to assert the difference between quantitative and qualitative time: .

.

Time i s an empty form only for abstract , obj ective reflection, a form that can receive any kind of content ; but to him who is conscious o f an ongoing creative life i t i s laden with tensions , with possibilities and impossibilities , it is qualitative and full of significance . Not everything is possible at every time, not everything is true at every time , nor is everything demanded at every moment . 7 We do not have to share Tillich 's theology to recognize the importance

AN HISTORICAL PERSPECTIVE

.

23

this other dimension of time, and to ask ourselves if perhaps Tillich :.was .right in being ' convinced that today a kairos , an epochal moment {'6f history, is visi ble' . 8 . I sho uld thus like to discuss three temporalities : the longue duree of the mo dern world-system; the secular trends and cyclical rhythms of that system; and the kairos, the moment of transition in which we are li ving today . , How long is a longue duree? That too depends o n which structures we are analyzing . The structures of social geography, of the ecological .underpinnings of our social relations , are finite but nonetheless milleniaL The structures of civilizations , of the cultural forms in which we clothe our social action and even more of the cultural ' barriers we erect , are multisecular , if not millenial . The structures of the social economy, of the modes of production which deternline the constraints within which social action occur , are perhaps shorter still, albeit still 'long ' , still multisecular . . The modern world-system is a capitalist world-economy, whos e origi ns reach back to the sixteenth century in Europe. Its emergence is the result of a singular historic transformation, that from feud�lism to capitalism .9 This capitalist world-economy continues in existence today and now includes geographically the entire world , including those states ideologically committed to socialism . In order to appreciate what is new and not new in the international economic order, we must first have a clear view of what this economic order is and how it differs froln other economic orders . We must elucidate what is capitalism , in what ways it represents a change from prior systems and presumptive or possible s uccessor ones . We could of course say that ' capitalism ' has always existed and may always exist . And if we define capitalism as merely the use of stored dead labour , then this is surely true , or at least has been true for tens of thousands of years. And it is unlikely to cease to be true . But this is to ignore the fundamentally different ways in which . human groups treat their capitaL The usefulness of capitalism as a term is to designate that system in which the structures give primacy to the accumulation of capital per se, rewarding those who do it well and penalizing all others , as distinct from those systems in which the accumulation of capital is subordinated to some other obj ective, however defined. If we mean by capitalism a system oriented to capital accumula­ tion per se, capitalism has only existed in one time and place, the modern world since the sixteenth century . Earlier there had been cap­ italists . There had even been embryonic or proto-capitalist systems . But there had not yet been the kairos, 'the moment of the fulness of time' , 1 0 which permitted the emergence of a capitalist system . These previous social structures were such as to circumscribe the individual capitalists found \vithin them , quash those forces that sought to change the social economy in a capitalist direction, and in general

24

TRANSFORMING THE WOR LD-ECONOMY?

destroy the fruit of ' enterprise ' . What distinguishes capitalism as a mode of production is that its multiple structures relate one to the other in such a way that , in con ­ sequence, the push t o endless accumulation o f capital becomes and remains dominant . Production tends ahvays to be for profit rather than for use. In a capitalist system , the realization of profit is made possible by the existence of an economy-wide market , which is the measure of value even for those economic activities that do not pass through it directly . Many may seek to escape the market mechanism in a capitali st world-economy . . But the claim that one has succeeded is an idelogical stance, which any particular more disinterested observer can take for what it is worth . What provides the continuity of a capitalist world -economy through its longue duree is the continuous functioning of its three centr al antinomies : econon1y/polity; supply/demand; capital/labour. The coexistence of these three antinomies is defining of capitalism, and the way their contradictions fit into each other is the clue to the dynamics of the system as a whole. What is the nature of these three antinomies? Economy/polity : ' Economy is primarily a " world " structure but political activity takes place primarily within and through state structures whose boundaries are narrower than those of the economy . ' Supply/demand: ' World supply is primarily a function of market­ oriented "individual " production decisions . World demand is primarily a function of " socially" determined allocations of income . ' Capital/labour: ' Capital is accumulated by appropriating surplus produced by labour , but the more capital is accumulated , the less the role of labour in production . ' I I The continuity o f the capitalist world-economy from the sixteenth century to today is found in the interacting pressures generated by these three antinomies which have determined the largest part of social behaviour throughout the history of the system . Perhaps the exact percentage of social behaviour this matrix explains has varied somewhat over time, rising from the sixteenth to the late nineteenth and · early twentieth centuries , and declining slightly since, but the concept of capitalism can be used to denote a single system whose boundaries of time and space are those in which this matrix has predominated . There was a before (and an outside) ; there will be an after . What lies between and within is capitalism. The antinomy between the 'world ' -wide economy and the multiple " polities accounts for the continuing pressure towards state ' formation ' and centralization , the creation o f a world-wide state system , and the particular form of imperialism which thrives better on 'informal empire' than on direct political colonization . Unequal exchange is the principal outcome of this antimony. Unequal exchange has to do not with the initial appropriation of

AN HISTORICAL PERSPECTIVE

25

Ius value, but its redistribution , once created , from peripheral to regions. The absence of a world-empire, a single state · encompassing the whole world-economy, makes it structurally impossible for any ruling group to yield to pressures in favour of production for use-value, even were it so inclined . State structures that attempt to do so penalize their cadres and citizens in material ways , thus .creating internal (as well as external) pressures against the maintenance of such a policy. States therefore have tended to fall back into another role, as agents maximizing the division of the world surplus in favour of specific groupS (sometimes located within their borders , sometimes located outside) . Of course, not all states are equally successful in this attempt - a function of the ways in which the capital/labour and supply/demand antinomies determine their ever-changing capacities to affect the world market , as well as their ever-changing tactical . postures. States in which core activities are located have achieved the most efficacious state structures relative to other states . That is both the consequence of the nature of their economic activity and of the socio­ economic groups located within its limits , and the cause of their ability to specialize in core-like activities . States in which peripheral activities are concentrated are conversely weak , and are weakened by the very process of economic peripheralization . The semiperipheral state is precisely the arena where, because of a mix of economic activities , conscious state activity may do most to affect the future patterning of economic activity. In the twentieth century, this takes the form of bringing socialist parties to power . State nlachineries have interfered with the workings of the world market from the i nception of capitali sm. Moreover , the states have formed , developed , and militarized themselves each in relation to the others , seeking thus to channel the division of surplus value . In consequence, all state structures have grown progressively stronger over time absolutely, although the relative differences between core and peripheral areas have probably remained the same or even increased . This steady expansion of state machineries , sometimes called bureaucratization, sometimes called the rise of state capitalism, has not yet changed the nature of the contradiction between an economy whose structural forces transcend the frontiers of any state, however powerful, and thus render the world-economy still resistant to a fundamental political reordering of social pri orities of production . In short , capitalism still survives . The antinomy of supply/demand at the level of the world-economy is the necessary consequence of the economy/polity antinomy. The absence of an overarching political structure has made it virtually impossible for anyone (or any state) effectively to 'limit ' world supply. Supply is a functi on of the perceived profitability of production,

26

TRANSFORMING THE WORLD-ECONOMY?

whether the producer is a household , a private firm, or a state enterprise, and whether the profit is consumed by the ' producers o r reinvested . Hence , world-wide, production is 'individual' , anarchic , and competitive. Production proceeds as long as it seems more profitable to produce than not to produce. Rising real prices will o f course stimulate production. But even declining real prices will d o the same at first , as individual producers run after absolute profit by expanding quantity to make up for low profit ratios per item. Only a true 'crash' slows the process down , thereby eliminating the weak producers and increasing the world concentration of capital . , That these 'crashes ' are systematic is the other side of the economy/polity antinomy. The states 'lock in' demand by stabilizing (within a certain range) historic expectations of allocation of income . The state-wide class struggles between capital and labour result in political compromises that generally last at least decades , if not more , and which determine approximate ranges of wage levels . While each struggle is state-wide, the role of the state in the world-economy is a major constraint on the kind of compromise reached . At any given tinle, therefore, world-wide demand is ' fixed ' - the vector of the lnultiple state-side outcomes of their internal class struggles . World supply meanwhile is steadily expanding, following the ' star of capital accumulation per se. The absence of effective interstate coordination - even today - has led historically to these ' crashes ' . When a 'crash' occurs , world supply momentarily declines . But more importantly, it enables the state-wide political compromises to be reopened, leading over time (at least in some states) to a reallocation o f income s uch that world demand once more exceeds world supply and the upward spiral of capital accumulation can safely resume its heady pace. It is the combination of the workings of the economy/polity antinomy ' and that of s upply/demand that gives the capital/labour antinomy its particular forms . For if it were simply a matter that a bourgeois obtains surplus value from the proletarian he employs , and that this were the only (or at least the ' ideal' ) form of s urplus value , extraction , we could not account for the fact that the pure bourgeois/proletarian social relation is a minority social relation throughout the whole history of the capitalist world-economy - even today , even in s o-called ' advanced capitalist states ' . I f it were true that surplus value is only created when a propertyless proletarian {eceives ' wages ' , why would it not have been the case that the capitalist system engendered nothing but this social relation? The , classical answer is that there has been 'resistance' coming from ' feudal' (semi feudal, quasi-feudal) groups , a resistance that has been ' both un- 'progressive' and irrational from the perspective of the s ocial economy as a whole . But ·when an 'irrationality' lasts centuries , and seems to be s ustained precisely by those groups who are said to b e

AN HISTORICAL PERSPECTIVE

27

- politically (the bourgeoisie, or the capitalist class es) , then we at least investigate the possibility that our analysis is askew . ' lc ont end that when a product is produced for exchange, and value is . created greater than the socially necessary amount needed to reproduce the labour that created the product , there is s urplus value, whatever the nature of the social relation at the work place . And whenever the actual prod ucer has expropriated from him - via the market , the state, or direct coercion - a part of this surplus value, we have evidence of explo itation. It will be said that something like this happens in pre­ capitalist systems . And it does , with one crucial difference: the exploitation is not maximized over time and space , because capital accumulation per se takes second place in these other systems to other socio-political considerations . The mark of a capitalist system is that it rewards accumulation per se, and tends to eliminate individuals or groups , who resist its logic. Having said this , we must now look to see what social relationship optimizes the expropriation of surplus value. It is often said that proletarian wage labour does this , because it creates a market (often speci fied as the ' honle market ') for the realization of profit . It does do this , but the direct producer as consumer of finished goods is only one part of the picture . The other part is the direct producer as participant in the division of the surplus value. This double role of the direct producer is the heart of the contradictions of the capitalist system . The bourgeois increases his potential profit as the part of the surplus value the direct producer receives approaches zero, except that the bourgeois risks not realizing his profit at all, unless world-wide demand remains high enough, a function in large part of widening the distribution of the surplus value. Hence , the bourgeoisie as a 'world' class is pushed in two opposite directions simultaneously: towards dispensing the 'biologically' minimum wage, 12 and towards partial income reallocation (that is , higher wages) . The collective response of the world bourgeoisie takes the form of a functional split . Most direct producers receive the 'biologically' minimum wage. Some receive more . Here however we come to another contradiction. The world bourgeoisie is not a unity but an alliance of competing groups whose individual interests go against those of the collective. Individually , capitalist firms tend t o maximise profits b y increasing production. Hence over time, in order for the expanding production to find appropriate markets , an increasing number of direct producers must receive more than the 'biologically' minimum wage . But if this tendency goes too fast the bourgeoisie risks losing the rate of profit that is their raison d 'etre. Since we are still talking of the continuities of capitalism, we must look at how capitalists have handled these contradictions over time. The optimal way to arrange that a direct producer receive only the ail..., •.u. ... � ........... ... ..."" •• LJ ' ....A' -

28

TRANSFORMING THE WORLD-ECONOMY?

' biological' minimum is to have him and his household produce it for their own account , while producing the 'surplus ' without 'remuneration' (or with very little) for the legal account of a borugeois , provided however that the bourgeois can adj ust the quantity o f production of surplus value to his immediate needs in terms o f the world market . The ideal arrangement for this is one of the many varieties of so-called ' quasi-feudal' relations in which the cash-crop sector or industry is controlled by an enterprise . A full-time, life-long proletarian wage labourer will always (at least over time) receive a larger part of the division of surplus value than a part-time, part-life-Iong proletarian (our so-called quasi ' serf' o r semiproletarian) . Not only can full-time proletarians organize and defend class interests more effectively, but the supervision costs are high if the bourgeois wishes to obtain a work efficiency as high as that from the semiproletarian at the latter' s rate of real income. Hence , proletarian wage labour is a pis aller from the individual capitalist ' s viewpoint . Nonetheless , collectively the bourgeoisie needs it, b oth for 'efficiency' of expanded production , and to provide an expanding market . In s hort, the capitalist system requires proletarian wage labour to exist but as little as it can get away with . Its dilemma is that the supply/demand antimony regularly forces it to expand the size of the 'world-wide wage labour proletariat . We have outlined the continuities of capitalism, in the longue .duree. Our description of these continuities points uP. their contradictions and resulting cyclical rhythms . The ways in which these contradictions are regularly resolved may be summarized as the secular trend s o f capitalism . These trends are the opposite o f continuities ; they are the conj unctures of ongoing development and transformation o f the system as a whole . I will be briefer on the secular tendencies , and outline only four o f them , each o f which involves movements towards asymptotes , and hence temporally b ounded, since one cannot expand the curves indefinitely. 1 There is the process of expansion of the world-econonlY - the pushing of outer b oundaries of the world-economy to the limits o f the earth, the conquest o f the ' subsistence redoubts ' within . The dynamic of this expansion is located in the crises caused b y the supply/demand antinomy . Each wave of expansion has revitalized demand . But the physical limits of such expansion are being approached today. 2 There is the process of proletarianization , the conversion of 'quasi­ feudal'. semi proletarians into proletarian wage labour, determined by the j oint workings of the supply/demand and capital/labour antinomies . The process of proletarianization saves short-run profits (expanded demand) at the expense of long-run profits (increased

AN HISTORICAL PERSPECTIVE

29

share of surplus-value to the direct producer) . As long as expansion continues , proletarianization does not reduce the share of surplus value to the world bourgeoisie as the expanded amount of primary accumulation is greater than the reallocated surplus value . B ut as the rate of expansion slows down , further proletarianization will cut into the global share of surplus value retained by the bourgeoisie . 3 There is the politicization which accompanies the process of proletarianization and which takes the multiple forms of parties , workers ' movements, national (and" ethnic') liberation movements, et c. The picture is complex but the global impact is double . On the one hand , it creates a vast current of anti-systemic groups , including now organizations of the semi-proletariat , which are becoming too numerous simply to repress or co-opt . There is a threshold of collective size that is being approached . On the other hand, to counter this growing trend , the upper strata must reinforce (and purchase the services of) their cadres - military, political, cultunil. 4 Thus, we come to the fourth trend , which I shall call the janissarization of the ruling classes . As the working classes grow more political, it enables the cadres of the bourgeoisie (the technicians, the professionals , the managers) themselves to impose their demands on the legal owners of economic firms . This means de facto a partial redivision of surplus value within the bourgeoisie, from the top strata to their cadres. Furthermore, since these" cadres are disproportionately located in core states , this affects the politics of these states which . become welfare-state oriented or social democratic. On the one hand , this redistribution is at the imme­ diate expense of the top strata and not of the direct producers. On the other hand, this redistribution presupposes the continued expropriation of surplus value from the direct producers , and has not thus far diminished it in any significant way. This is the phenomenon of the expanding tertiary sector of the industrial states , breeding conspicuous content and political complacency b ased on indi fference to the 'barbarians' of the periphery. The obverse of this however is a dispersion of political will on the part of the bourgeoisie, no longer able to act with deft and firm swiftness of purpose. As janissarization increases, the ability to resist or co-opt the politicized world working classes diminishes . Thus we come to our third temporality that of the kairos, the 'right time' , the moment of choice and transition . The fact is that we are already there - inside this third kind of time, which is not the time of a moment, but of an epoch . The twentieth century has seen the steady growth of anti-systemic forces throughout the world . For every step backward (via regression or co-optation) there have been two steps forward . Any plausible measurement of the strength of anti-systemic forces will yield a linear upward curve. Beginning with the Russian Revolution in 1 9 1 7 , and

30

TRANSFORMING THE WORLD-ECONOMY?

greatly accelerating after 1 945 , one state after another . has begun t o claim i t is o n the road t o socialism (or, indeed, already there) . Since the collapse of the unity of the world communist movement , it is no longer easy to find a con1monly accepted definition of what constitutes a socialist state, since many self-designated socialist regimes do not recognize the legitimacy of other self-designated ones. These so-called socialist states are in fact socialist movements in power in states that are still part of a single capitalist world­ economy - o ur familiar economy/policy antinon1Y. These 'socialist ' states find themselves pressed by the structural exigencies of the world­ economy to limit their internal social transformations . They are not therefore in fact socialist economies , though we may be willing to call them -socialist polities . They are caught in the dilemmas not only of the supply/demand antinomy but of the capital/labour one as well . Nonetheles s ; these regimes represent an important part of the anti­ systemic forces, and their existence has altered the world alignment of power . It is said that in nineteenth-century France, there were two parties : the party of order and the party of movement . These were not organizations b ut broad structural thrusts . This language is even more appropriate as a description of the contemporary world-economy. The secular trends of capitalism have accelerated the contradictions of the system . The result is that the world finds itself at the kairos. The first contradictio n is in the movements of popular sentiment . Nationalism and internationalism have served both as anti-systemic forces , and also as modes of participation in the system . The socialist party or national liberation-movement in a semiperipheral or peripheral state may in riding the crest of nationalism serve as an expression of t he party of movement; the same party or movement may aid other parties or movements in other countries in the name of international solidarity. But nationalism h as also been a primary means of denying the class struggle, and internationalism has often been a figleaf for imperialism . All this h as become increasingly clear . The examples are by now numerous . And this very clarity itself creates a pressure on the anti­ systemic regimes that works against the temptation of their cadres to j oi n the party of order . The forces that push for movement are becoming more difficult to tame, perhaps too difficult to tame, even for . revolutionaries with credentials . Thus , the party of movement is now . more than the expression of the will of its leaders ; it is the reflection of a structural thrust, itself the outcome of the successive conjunctures of the capitalist world-economy. And , on the other side of the political b attle, a second contradiction has become acute . The party of order is rent by an internal split which , far from healing, is steadily becoming wider . There are two organizational forces that have simultaneously grown stronger and more complex : the multinational corporations on the one hand , and the state machineries of the core states on the other. The relationship of

AN HISTORICAL PERSPECTIVE

31

these two forces has become an ambivalent one. On the one hand, they s upport each other constantly. On the other hand , their interests · frequently diverge . The corporations exist to make profit , and hence are ready to make alliances with whatever groups they need to deal with in order to maximize these profits over the mediunl and long run . The state machineries must however necessarily respond primarily to the needs of its own citizens , especially in the core states . Insofar as the cadres everywhere are demanding a larger share of the pie, their collective interests stand opposed to that of the multinationals, whose maj or recourse has been, will continue to be, to play one set of national cadres off against another. As long as the world-econonlY is expanding over all, this contradiction can be contained. But as we approach limits, the constraints imposed upon all economic actors may lead t o increasingly acute conflict between regimes in (at least some) core states and the multinationals . As with the party of movement , so the party of order m ay now be more than the expression of the will of its leaders . But in this case, the structural pressures are towards fission, and therefore the weakening of the ability to stand up against the party of movement . We may now return to our opening discussion on the new international order . The very discussion is part of the kairos. The language is Aesopian to cover over · the struggle between the party o f order and the party of movement . But the Aesopian language cannot last . It is an attempt to keep us all operating within the temporality of conj uncture , when an understanding of the temporality of the longue duree will make it clear that we are participating in the kairos. This attempt will not succeed . Tillich ended his essay on the kairos with a question and an answer : One question may still be raised, and we offer a brief answer to it : ' Is it possible that the message of the kairos is an error? ' The answer is not difficult to give. The message is always an error ; for it sees something immediately imminent which , considered in its ideal aspect , will never become a reality and which , considered in its reid aspect , will be fulfilled only in long periods of time . And yet the message of the kairos is never an error; for where the kairos is proclaimed as a prophetic message, it is already present ; it is impossible for it to be proclaimed in power without its having grasped those who proclaim it . n

Notes 1 Fernand Braudel , ' History and the Social Sciences' in Peter Burke (ed .), Economy and Society in Early Modern Europe (New York : Harper Torchbooks, 1 972), p. 1 3 .

32 2 3 4 5 6 7

8 9

10 11

12 13

TRANSFORMING THE WORLD-ECONOMY?

Ibid . , p. 20. Ibid . , p. 1 4 . Ibid . , p . 32. Ibid . , p. 33 . Ibid . , p . 3 5 . Paul Tillich, '�airos ' , i n The Protestant Eta (Chicago : University o f Chicago Press , 1 948) , p � 3 3 . Ibid . , p . 48 . The argument that this transition was singular and not repeated on many successive occasions in different ' societies ' or 'social formations ' is spelled out in nly 'From Feudalisnl to Capitalism: Transition or Transitions? ' , Social Forces. 5 5 : 2 (December 1 976), 273-83 , and above , ch . 8 . Tillich , ' Kairos' , p . 3 3 . These definitions are cited from 'Patterns o f Development o f the Modern W()rld-System ' , research proposal of the Fernand Braudel Center for the Study of Economies, Historical Systems , . and Civilizations , published in Review, 1 :2 (Fall 1 977) , 1 1 1 -45 . I am aware that what.seems to be 'biologically' minimum is itself a function of social definition . Yet behind this variation , there does lie a true bottom line. Tillich, ' Kairos ' , p . 5 1 .

2

Hidden Dimensions o f the So -Called New International Economic Order * Roy Preiswerk

* *

With the possible exceptions of the Bandung Conference in 1 955 and the increase in oil prices in 1 973 , no collective initiative taken by Third World countries has had such important repercussions at the interna­ tional level as the proposals to bring about a New International Economic Order (NIEO) , formulated in resolutions adopted by Special Sessions of the United Nations General Assembly on 1 May 1 974, 1 6 September 1 975 , and 1 5 September 1 980. The media seized upon it; no diplomat or minister , no expert on 'development' would dream of speaking on the present world situation without at least referring to the term . From the very beginning, some people were suspicious of it , later became tired of it , and labelled it a mere slogan and a clever mythology. Cynics and hard-core realists refer to the entire exercise as a rhetorical rebellion of the Third World . It would be callous , however , to leave it at that, for what is involved is the improvement of the standards of living of three quarters of the world' s population and, beyond this , the fair and equitable functioning o f the . world economy. Shortly before his death in 1 977, Harry Johnson said that the New International Economic Order was neither new, nor international , nor .

* EditOr 's note: Roy Preiswerk was a member o f the UNU-GPID network . His chapter was s peci fically requested by this editor for this volume . The author completed the final

version o f the chapter j u st before his death in August 1 98 2 . * * A uthor 's

note: Revised a n d expanded version of ' Is t h e N e w International Economic

Order Really New ? ' in The Caribbean Yearbook oj In ternational Relations, 1 977 . (Alphen aan den Rij n : Sijthoff and Noordh o ff, 1 980, 1 47- 1 5 9 . )

/

34

TRANSFORMING THE WORLD-:ECONOMY?

economic , nor an or:der . Our position coincides only in part with Johnson ' s and can be summed up as follows : what the promoters of the NIEO consider as new factors are not really sufficient to change the essential character of the Present International Economic Disorder (PIED) . l We plan to submit the NIEO, to the extent that it is already inscribed on paper , to critical and , on certain points , deliberately polemic scrutiny. This springs from our pro found conviction that we must publicly expose what many think privately. The reticence of some to voice frank and open criticism is partially based on the fact that the militants of the struggle against inequality and poverty in the world hesitate, for a variety o f reasons , to question the very proposals of the Third World . Nationals of the Third World itself find that it is o ften difficult .to oppose official ideas; sometimes their personal safety and professional future is at stake. Even among Third World politicians and negotiators , the anxiety to preserve the united front presented at New York takes precedence over their doubts about the course o f action taken . It is hard t o imagine that Chinese or Tanzanian leaders voted happily, and with conviction, on texts which oppose their own philosophies and methods o f development . We may now ask six questions about the NIEO: 1 What is new about it? Do the explicit declarations contain the outline of an order? 2 What type o f vision of the world is hidden behind the words? What are the implicit ideas of the NIEO? 3 Can and will the NIEO be implemented? 4 [fit becomes a reality, what would be the probable effects on interna­ tional relations? 5 How should these effects be evaluated? 6 What major dimensions of present debates on development have been left outside the realm of the NIEO?

The explicit discourse : what

has actually been said?

In the texts on the NIEO one finds ideas which have already been simmering for some time at the international level, particularly within UNCTAD , but which are making their appearance for the first time i n resolutions adopted a t the, U N b y a large majority of states . I t would b e tedious t o deal with them here i n detail a s they are very well covered in the liberature. 2 Let us j ust indicate where the promoters of the NIEO think they have introduced innovations . First of all there is a reorga­ nization of international trade by the cartelization of raw material

H IDDEN DIMENSIONS

35

kets, an increase i n the price o f raw nlaterials , indexation o f prices pri mary products on those for industrial products, as well as a full range of measures designed for the better distribution of benefits arisiri g from international trade. In addition the NIEO aims at a more equit able division of labour by a series of measures designed to encourage the industrialization of Third World countries which would ensure them 25 per cent of world production by the year 2000 (Lima . Resol ution) . Here one already wonders where the innovation lies . Perhaps it is in the magnitude of the change demanded rather than in the p rinciple itself. One could make the same remark regarding the principle of sovereignty over natural resources or the right to nation. alize foreign property. Nationalization has been recognized in interna­ tional law for a long time and the new texts do not contribute any solutio n to the still controversial problem of 'adequate compensation ' . Most surprising in what has actually been said are the number o f proposed measures which are geared towards a n intensification o f existing econonlic relations . A n entirely outward-looking concept of development is adopted : increased trade, more rapid transfers of technology, higher amounts of financial aid and better technical as sistance . All the methods of 'improvement ' put forward by the Third World for the transformation of the world economy are geared towards a greater integration of their countries into a system that looks very similar to the present .one.

The first hidden dimension : what lies behind the words ? It is fundamental t o understand what an analysis of the texts does not easily render explicit . Whether negotiators are conscious of the implicit content is not important . There is perforce a v�sion of the world underlying any proposal advanced with a view to changing an existing order. The first interesting element to note in this respect is that o f diffusion ism . The industrial world i s called upon · t o maintain the highest rate of expansion in order to increase its consumption o f Third World goods , pay better remuneration for what it consumes , and transfer a larger portion of its capital and technology. By a process of diffusion, the advancement of one would benefit the other. The same process would then be reproduced within Third World countries . From poles of development (or what Myrdal called enclaves more than twenty-five years ago) progress would radiate to the entire country and the population as a whole would have access to new factors of produc­ tion . The industrialized world is officially acknowledged as the centre which diffuses its riches towards the periphery where those in control o f

36

TRANSFORMING T H E WORLD-ECONOMY?

the poles of development decide the fate of their subperipheries . 3 In his 'Seven Fallacies about Latin America' , Rodolfo Stavenhagen rightly denounces the i,dea of diffusionism together with that o f dualism . I n dualistic societies , a s they are said t o have emerged during the colonial era, a ' modern ' , 'dynamic' and 'progressive' sector is promoting development , while a supposedly untouched 'backward ' , 'archaic' or 'traditional ' sector is in the process of being integrated through the diffusion of values , goods , capital and behaviour patterns . Stavenhagen' s main point is that the economic and social condition o f this 'backward' and poor periphery i s largely the result o f the action exerted upon it by the colonizer over the past centuries .4 As for the present , there is overwhelming evidence to the fact that the 'trickle­ down' effect of the benefits of development from the 'modern ' sector to the 'traditional' sector is by no means important enough to bring about real improvements in the standards of living among the whole population . It is generally acknowledged today that internal inequali­ ties have been growing in almost all countries of the world inspite o f development efforts pursued over the last thirty years . A second hidden element is linear evolutionism . All o f Western philosophy and science from the early 1 9th century onwards has been strongly marked by this particular conception of the development o f mankind . It implies that all societies move through the same sequence of stages to an identical ideal state. The content of the stages may vary with differing ideologies (liberalism, Marxism) but the principle is the same . Linear evolutionism is the opposite of development based o n cultural identity and relativistic pluralism, which acknowledge the existence o f different forms of social change within the existence o f different forms of social change within an unhierarchically structured variety. In an evolutionist scheme, a particular society is at any moment said to be moving from ' feudalism to capitalism ' or, having passed the ' take-off' point , going through ' self-sustained growth' to 'mass-con­ sumerism ' . In a pluralistic concept , societies are j ust different from each other and likely to move in rather unexpected directions, creating hitherto unknown models of development . In United Nations debates on development , the apparent combative­ ness of Third World negotiators hides, more or less consciously, the desire to create societies resembling those of the supposed enemy - the industrial countries . Raul Prebisch has called it imitative development . 5 The psychological background to this attitude varies according to the situation and the people involved. A person who is aware of the existing balance of power may genuinely believe that without a Realpolitik, without full industrialization, without atomic bombs, without nuclear power plants , a Third World country is nothing on the world map . Then there is the person who, faced with the model of the industrialized world , succumbs to a kind of mental self-colonization since he has already internalized the model in question and propagates it as if it were

HIDDEN · DIMENSIONS

37

pro duct of his own society. 6 There i s also the cynic, very aware o f the advantages that the upper as ;cl ses of the Third World would derive from a strengthening of ties with the industrialized world and who does not really believe in the ' beneficial effects of the NIEO for the people. Third , the NIEO is based on rationalism and idealism. There is a smell of social engineering in the air : man, due to reason, is thought to be capable of discovering the laws which should govern the social order. He will see the means of achieving his objective, and may possibly manipulate social change . He finds these solutions around conference tables and formulates them in written agreements and resolutions , adopted by large assemblies . The changes demanded provoke debates and verbal confrontations . One gets the impression that irreconciliable positions are at stake , but the confrontation takes place within an international upper-middle-class which , particularly in its implicit . vision , is rather cohesive . The divergences in positions are not , in any . case, as wide as those which exist between this priviledged class and the populations which will be manipulated on the basis of the new p rinciples adopted, wherever on the map the country may be. There is of course nothing reprehensible about attempting to solve, through logical reasoning around conference tables , s ome of the more pressing problems facing mankind .. But one must realise that not all issues will be s olved amicably. First of all , a real confrontation within the international elite is not to be excluded if resolutions adopted remain on paper . Then too, the worsening of the situation among the most disinherited populations may lead to cO.nfrontations that political rulers in the Third World will not be able to control. The ideology of functionalism of a David Mitrany, which holds that peace must be preserved by economic and social activities, has not yet shown conclusive results . Certainly the United Nations system has improved its capacity to contribute to conflict resolution as the idea is pushed further . But the problems defined in 1 945 as falling within the domain of 'functional ' activities of the United Nations are so a�utely topical today (hunger , p overty, malnutrition, health, habitat , water , energy, natural resources , environment, demography, etc . ) that one has every right to wonder if the capacity of 'rational' man to solve them without conflict is sufficient . Fourth, the NIEO is also based on a 'statocratic ' concept ofinterna­ tional relations and of the role of international organizations . The primacy of the state is reaffirmed at every opportunity. International conferences repeat with great regularity the litany found in the Charter of Economic Rights and Duties of States of 12 December 1 974 : sovereignty, non-interference in internal affairs, self-determination, territorial integrity, and the like . These principles are reaffirmed with an obstinacy that is only matched by the frequency of their violation. This is perhaps the case with all laws . But two problems should be

38

TRANSFORMING T H E WORLD-ECONOMY?

considered when a statocratic vision underlies an international negotia­ tion". First of all there is the asymmetry between stateS of unequal power . This problem is certainly not resolved by the, insertion of clauses of non-reciprocity or by the adoption of resolutions carried by an over­ whelming maj ority representing states without a great deal of military or economic power . Now the fact that Third World countries have made their presence felt on the international scene by a kind of juridico­ political insurrection , and comprise a numerical maj ority, in no way solves the problem of inequality"in negotiation . 7 One realizes then that there is a contradiction between the constant affirmation of the primacy of the state and the inability of an international system based on that very primacy to bring real benefits to those who find themselves , from the beginning, in a position of weakness . Why then do the elites of the Third World seek so much to defend a system based on the primacy o f the state? Here we must ask the most troubling question on statocracy . Do those who 'represent' the Third World in negotiations on the NIEO have an interest in reaffirming the primacy of the state because i t pf.o tects them when their behaviour with respect to their populations i s questioned? Former US President Jimmy Carter' s political acrobatics betw((en the affirmation of respect for human rights and the acceptance of the principle of non-interference in the internal affairs of states is a good example o f the dilemma wh�ch arises as soon as the supremacy of the state is no longer the only principle governing international relations . A prominent businessman once claimed that the misery and poverty of people fall under the internal jurisdiction of states and should not b e looked into b y outsiders a s long as governments do not feel concerned . (This was in the course of a discussion in which the principal concern was not to 'interfere ' in domestic affairs but to discover the connection between poverty in the Third World and the attitudes adopted by rich countries in international relations. ) It would seem that internal inequality in Third WorId countries is still almost inevitably considered 'natural ' , if not a condition of 'development ' . I n spite o f what many assert, international organizations do not in themselves represent a force which is opposed to the principle o f the primacy o f the state. Certainly they make governments face many fundamental problems which otherwise would be neglected or treated in an anarchic fashion . But states do not miss the opportunity of a single international conference to reaffirm the supremacy o f their power over any body which might take away the smallest of their prerogatives . Let us look at just one other hidden element in the NIEO : an economic theory based essentially on a merger of neD-classical and keynesian concepts, with minor nlodi fications added from a socialist perspective. This is a type of economics still linked to the 1 9th century

HIDDEN DIMENSIONS

39

idea o f natural science, largely based on the first law of thermody­ namics . The economy is perceived as a closed system within which vari ous forces· are interacting in a mechanistic way. For each dependent variable , there is an independent variable . The interaction of various forces usually results in a state of equilibrium . Thus for instance , quantities of goods produced (dependent variable) are regulated rough price adj ustments (independent variable) . This will bring . th about an equilibrium between scarcity and overproduction . Almost all NIEO proposals in the area of international trade are of the price­ adjustment type. What remains totally outside the mental horizon of the originators of NIEO is a type of economics based on the second law of ther­ modynamics - the law of entropy. 8 All economic activities result in a loss of energy. The degradation of energy is an irreversible process . When forces o f production and forces o f destruction interact , the ulti mate outcome is a state of disequilibrium and growing disorder. A society in a growing state of energy, which is already the case of indus­ trial countries, tries to exploit available energy sources in countries it is able to dominate. This has been termed the thermodynamic paradigm of unequal development. 9 The effects of such action are often to aggravate environmental des­ truction and entropy in the dominated systems . Many of the NIEO ·measures tend to increase disorder in raw-material and energy­ supplying countries and to maintain some order in consumer countries . As opposed to neo-classical and keynesian economics, these considera­ tions are integrated into institutional economics and are particularly emphasized by the eco-development school. 10

The chances of success : is the

NIEO

possible?

The NIEO's programme of action is composed essentially of a list of Third World demands addressed to the industrialized countries . It is up to them to lower or eliminate import barriers without reciprocity, increase their aid , pay more dearly for raw materials. The most concrete obligation of the developing countries is to increase co-operation among themselves, particularly through technical co-operation . The reaction of the industrialized countries must be examined both by what is said and by what is actually done. In connection with texts on the NIEO (resolutions, charters, reports) it is symptomatic that on the occasion of the vote on the Charter of Economic Rights and Duties of States, six countries, among them Great Britain and the United States , voted against , while most o f Western Europe and Japan abstained . This hostility to Third World proposals is often open . However, the most widely used tactic consists in accepting the principle of a reform of

40

TRANSFORMING THE WORLD-ECONOMY?

the international system and supporting the ideas put forward by the Third World , without offering concrete concessions . The speech by the Minister of External Affairs of the Federal Republic of Germany on 2 September 1 975 , before the General Assembly of the United Nations is a case in point . 1 1 Almost all the reforms demanded bythe Third World are conscientiously listed and there are even a few promises of support , when the time shall come, in seeking methods of implementation . One can sense the diplomatic manoeuvre: Western governments must appear conciliatory before large international assemblies without for­ getting that the political and economic sectors of the countries they represent are still lagging far behind even the weakest reformist posi­ tions coming from the Third World . In addition, .the speech in question also contains scarcely veiled threats . Reference is made to the most serious recession since 1 930, sluggish world economic growth, balance­ of-payments deficits , unemployment , inflation . Conclusion : the Third World must recognize the interdependence of all countries and strive to promote the increased growth of the industrialized countries : ' Both sides can then share the benefits of expansion or together suffer stagna­ tion . Whoever does not take into account the changes of growth of the other j eopardises his own growth at the same time . Those whose policies compron1ise the others ' growtJ1 , will inevitably harm them­ selves . ' Diffusion in all its glory. But it also contains warnings : do not raise the prices of raw materials too much, know that we distrust producers ' associations , do not threaten us with boycotts and especially do not meddle with the rules of a liberal world economy, alone capable of ensuring growth . This is in open contradiction to the verbal adherence to reforms proposed in the same speech . The behaviour of the socialist countries is , in some respects , even more disappointing . Representatives of the Third World are well aware of this . These are the countries from which one expects the most in action and the least in rheto ric . And yet at ev J ry assembly we witness a . ritual which is now very familiar . The Soviet U nion avoids problems b y . reaffirming that i t does not share the responsibilities of the former colonial masters to repair the damages caused by capitalist imperialism , and also indulges in lengthy statements about how disarmament would free large revenues for development . On this latter point, the Soviets are not wrong but perhaps they could begin by applying the idea to them­ selves . China never misses the opport�nity to talk about the socio­ imperialism of a ' certain superpower' (the Soviet Union) and offers ample support to Third World positions . At that point the German Democratic Republic or some other Easteni European country feels obliged to come to the rescue of the position defended by the USSR, and Albania inevitably rallies to the Chinese viewpoint (only up to the 1 975 Special Session of the General Assembly) . Then the process o f turning around i n circles can begin again . With the exception of the Lome Convention negotiated outside UN

HIDDEN DIMENSIONS

41

bates, the industrialized countries show no clear desire t o act . Neither two sessions of UNCTAD held since 1 976, nor, in particular , the rth-South dialogue ' in Paris leads one to believe that a new world ' ' order will be established in the near future. The refusal to accept real change is dangerous . Boycotts , embargoes or other coercive measures may be substituted for an orderly trans­ formation of the status quo. Thus we could well be entering the era of the New International Economic Disorder (NIED) .

' The probable consequences : what might happen? Let us suppose for a moment that the NIEO is established . Without venturing too far into speculation , one can reasonably assume the following four possibilities : i The international division of labour would be slightly modified, not in its fundamental structure but in the percentage representing the Third World's share of world industrial production . 2 The raw rnaterial - and energy-producing countries would benefit from an increase in export revenue. Probably half of these resources (it is difficult to give a precise figure) are found in th� industrialized countries , which would then enj oy advantages comparable to those of the Third World as far as exports are concerned . 3 Inequalities between states and within states would continue to increase as in the past . Indeed the potential to achieve whatever deve­ lopment is planned varies enormously from one country to another and the necessary resources are very unequally distributed . Note that international inequality will worsen not only between North and South but also between industrialized countries (superiority of the United States and the Soviet Union) and between countries of the Third World . 4 At the same time we 'would witness the increased dependence of non-industrialized countries on industrialized countries from the viewpoint of capital, technology and know-ho·w . This dependence would be particularly serious in the case of countries which do not produce either raw materials or energy. But the producers too may fall into dependence . When we speak , sometimes too quickly , of the interdependence of producers and consumers, we forget that the dependence of the seller (Third World) on the buyer can be total , depending on the product and the state of the market . We should speak of interdependence only where there is a perfectly symmetrical relationship , a very rare situation indeed . 1 2 We realize that certain states and certain classes within states would gain advantages by the establishment of the NIEO . The maj or losers would be, as always , the most disinherited social classes in countries

42

TRANSFORMING THE WORLD-ECONOMY?

which are neither industrialized nor producers of raw materials and energy.

Appraisal : what to think of it all? The efforts expended to install the NIEO are important and should not be underestimated . It is praiseworthy that an attempt is made to expose the serious problems afflicting the poor countries at a time when the multiple failures of international co-operation for development are becoming increasingly obvious . While problems are becoming more serious , a dialogue is still taking place. The strategy of development and co-operation proposed under the designation of the NIEO is associative and standardizing. It is associa­ tive in that it seeks peaceful solutions through intetnational negotia­ tion, opts ' for outward-looking development and leads towards the complete integration of the Third World i nto the world economy. 13 It is standardizing because it suggests no concrete measures allowing for consideration of the great diversity of situations in which the countrie s of Africa, Latin America and Asia fi n d themselves . Only the occasional reference to the ' poorest countries ' opens the possibility of taking into consideration specific situations within the Third . World. As for deciding whether one should qualify an associative and standardizing strategy as a positive or negative one, this depends on one's scale o f values, economic beliefs and political choices . But i t i s advisable t o point o u t a serious dilemma which arises on examining the reactions to proposals made for a NIEO . On the one hand, strong resistance is felt in the business sectors o f market economy countries . Anything that inlplies control of market s , producers ' associations , indexing of prices o r price increases i s viewed with scepticism by the defenders of a liberal world economy. But with the Third World exerting pressure, politicians and negotiators from . countries with market economies find themselves caught between two extremes . For the moment they extricate themselves by verbal adherence to the exigencies of the majority of states , while proceeding with great reluctance to promote real structural changes . How long can this game last? The other aspect of this dilemma is the wait-and-see policy adopted by a large number of those who in actual fact identify with the Third World cause. "They believe that the NIEO will be realized and that it will provide the desired solutions . Now this position is equally dangerous for there is the risk of discovering, within only a few years , that once again the Third World has been nourished · on rhetoric while the fundamental problems continue to worsen .

HIDDEN DIMENSIONS

43

he second hidden dimension : what is omitted? heat of the debate on alternative development strategies , which in the early seventies , has not been sufficient to warm up rted sta gates at the United Nations negotiations on the NIEO . 14 And yet , dele . the fundamental differences between the proposed new strategies of develo pment and the dominant ones presently in effect were rapidly rifi ed in this debate, for instance with regard to the obj ectives o f cla . v de- elo pment , relations between man and nature o r time perspectives (see Table 2 . 1 ) . Above all , critics of the associative and standardizing strategy of the NIEO introduced the idea of a dissociative and differen­ tial strategy . Dissociative strategies are of two kinds . They are radical or absolute when they lead to a complete rupture of relations between states . This means isolation or autarchy, or a moratorium when the rupture is con­ sidered for a certain length of time only . It is difficult to imagine , in the twentieth century, for a country to choose this option . Even the Soviet Union and China did not totally cut themselves off from the rest of the world after the 1 9 1 7 and 1 949 revolutions . In other words, emphasis should be placed on selective dissociative strategies . The best kno\vn among these is sel f-reliance: the idea that a people must rely on its own forces, its powers of imagination, and its human and natural resources instead of allowing external forces to define objectives and methods of developmenL Self�reliance is a global option encompassing all aspects of the life of a community (local, national, regional) in food produc­ tion, technology, education, etc. It is only when foreign contributions in a particular field prove to be indispensable that the community should look to the outside world . 1 5 Dissociation can also be achieved by sectors . One begins by becoming independent of foreign contributions in restricted fields (education , pest control , information services , etc. ) . I f the movement spreads , a system close to that of self-reliance results . A differentiated strategy takes into account the cultural diversity of so-called ' developing ' societies . It is therefore based on the principle diversity in tpe methods of development and takes into consideration the cultural, economic and ecological specificity of each society . 1 6 The satisfaction o f the basic needs of the entire population of a country is one of the corner-stones of proposed strategies . 1 7 This idea never appears in the 1 974 and 1 975 resolutions of the General Assembly ! Today, it is so prominent that it cannot be kept outside future debates. Two comments are in order with regard to the above mentioned Table. First, it shows a relatively good vertical coherence, L e . the indi­ vidual items listed under proposed and dominant strategies respectively really fit together . For example, under 'Relation to nature' in the proposed strategies , attitudes of harmony and equilibrium are closely

t

Table 2 . 1 Proposed and dominant strategies: dissociative-differential versus associative-standardizing

Point Qf departure

Proposed Strategies

Dominant Strategies

Over- and under-developed areas and sectors in

o-j � )-

The North is · developed , the South is under­ developed.

CIl

both North and South; globally the world is mal­ developed . Level of analysis

Centres and peripheries . Human beings .

States .

Roots of underdevelop­ ment

Domineering, exploitative forces from the rich centres creating growing inequalities within and among countries .

Poor, uneducated masses . Gap between them and the sophisticated , ' modern' societies .

Objective of develop­ ment

Satisfaction of basic needs , material and non­ material, above a minimal level , but not beyond a maximal level .

Economic growth .

Main priorities

Agriculture, industry, health habitat, education

Infrastructure, education , industry,

Role of material goods

Primacy of distribution .

Primacy of production .

Relation to nature

Harmony and equilibrium .

Exploitation

and

units to outside world

Dissociative . Selective de-linking. Counting o n one 's own forces and using one's own resources .

Structural transformation to reduce internal and international inequalities . Reduction of struc­ . tural violence.

s: l-! Z Cl o-j l:

trl

�

tTl () o

domination .

a s: �

.�

Anthropo­

Associative. Increasing integration

into

existing

world

economic system. Concept of structures

��

� t'"" o

centrism. Relation of developing

Z

Respect for, or limited reform of, existing national and international structures . .

Table 2.1

-

continued Proposed Strategies

Dominant Strategies

Totality of the process of development. Inter­ vention based on system's analysis .

Fragmented and compartmentalized approach to restricted sectors of development .

Time perspective

Solidarity with future generations , mainly in use of resources and relation with environment .

Short and middle-term planning. Development decades.

Applicability in space

Respect of cultural diversity and hence of the

Uniformity. Universal model , valid for all types of societies.

Concept of process

diversity of development processes . Reference in economic theory

Institutional economics and ecodevelopment school . Concepts of entropy, irreversibility and disequilibrium.

Neo-classical school and keynesianism. Con­

tt:

cepts of mechanistic interaction, reversibility and equilibrium .

g

8

Z I::'

�ttl .� o � � v.

46

TRANSFORMING THE WORLD-ECONOMY?

related t6 the solidarity with future generations indicated under ' Time perspective' . Also, a close relationship can be observed in the dissocia­ tive strategy between the satisfaction of basic needs and the preserva­ tion of cultural identity. 1 8 Second, the Table obviously suffers from its dichotomous form of presentation. A priori, . there is no mutual horizontal exclusivenes s between the two columns , L e . elements i n one column are not neces­ sarily incompatible with elements in the other colunln. An obvious question in this regard is about the degree of growth required for the better satisfaction of basic needs . 1 9 Also , states have a significant p art to play in the implementation of dissociative strategies .

Concluding remarks We have today arrived at a turning point in the definition of develop­ ment itself. Proposed strategies are sometimes said not to be realistic . But ' realism' is often nothing more than the absence of new ideas , when it is not conscious resistance to a type of change perceived as detrimental to egoistic interests . Where is the utopia really? It is said that approximately 2000 inter­ governmental meetings on the NIEO were held during the seventies . One of the two major topics for discussion at the 1 1 th Special Session o f the United Nations General Assembly o n Economic Issues i n 1 980 was called ' Global Negotiations ' . The idea, pressed by the Third World, is that better results could be reached in a package deal comprising international trade, financial transfers , the reform of the international monetary system and energy, rather than negotiating on each of these items separately. This is really nothing more than a negotiation on the procedure of future negotiations . And even this came to a deadlock . With the decision of the Reagan Administration not to bring about a ny fundamental change in North-South relations , the prospects are high that thousands more meetings will be necessary before agreement on a NIEO becomes a reality. Tensions will increase as we go from o ne mythology to the next . Right now, it looks like realism is bringing abo ut a world which will flounder in the morass o f the Present International Economic Disorder combined with the New International Economic Order, leading towards the New International Economic Disorder (NIED) . So, faced with the serious prospect that a NIEO in the form in which it was demanded by the Third World is the real utopia, some other new international order may be sought . Call it anything, as long as it brings . about real change.

H IDDEN D IMENSIONS

2

3

4 5

6

7

8 9

47

It may appear controversial to designate in s uch a way the current world economic system. However, other authors have gone further and do not hesitate to talk about anarchy or even chaos. Where does one still find, in studies on 'development' , reassuring conclusions which allow us to talk about an international economic order? Certainly, there are international. conventions, trade agreements , GATT, OECD. But there is also, and this is a great deal more important, the incredible confusion which reigns in the monetary field with all the attendant uncertainties for investors , exporters, importers and - what a joy - speculators . Some accumulate enormous food surpluses, while perhaps half of mankind suffers from malnutrition. The over-consumption and waste of some keeps pace with the famine and scarcity suffered by others . The tremendous fluctuation in prices (as has recently been the case for sugar and coffee) has resulted in a number of countries finding themselves in the impossible position of planning their economic development for one-year periods only. Workers from Southern Europe, imported by the hundreds of thousands like cattle into Northern Europe, are repatriated at the first signs of a recession. What would they say about the international economic system if they had the means and the right to express themselves? These are only a few isolated signs but enough to point out that to designate as an order what is presently happening in international economic relations is to strip the word of all significance. Jyote S. Singh, A New International Economic Order (New York: Praeger, 1 977) . UNITAR has published an important collection of documents : A New International Economic Order, Selected Documents 1945-1975 (New York: UNITAR , 1 977) 2 vols . For a bibliography of over 30 recent studies on the NIEO, see UNITAR News, Vol. XII, No. 2, Autumn 1 980. To measure the impact of diffusionism on development thinking, see Gunnar Myrdal, Economic . Theory and . Underdeveloped Regions (Lon­ don : Duckworth, 1 95 7) . Rodolfo Stavenhagen, 'Seven Fallacies about Latin America' , New Uni­ versity Thought, 1 96 7, pp. 1 4-3 1 . In an address to the IVth UNCTAD meeting at Nairobi, 1 9 May 1 976. For more on this concept see Roy Preiswerk , ' Neocolortialisme ou auto­ colonisation: l'identite culturelle de l 'interlocuteur africain' , in Le Savoir et Ie jaire - Relations interculturelles et developpement (Geneva: Institut universitaire d'etudes du developpement, Cahier No . 2 , 1 975) pp. 6 1 -70. Roy Preiswerk, ' La reciprocite dans les negociations ent re pays it. systemes sociaux et it niveauz economiques differents' " Journal du droit interna­ tional, Paris ( 1 967) No . 1 , pp. 5-40. Nicolas Georgescu-Roegen, The Entropy Law and the Economic Process (Harvard: Harvard University Press, 1 97 1 ) . Alf Schwarz has studied the impact o f the second law o f thermodyna­ mics on African studies, in Les jaux prophetes de rAjrique ou rAjri(eu)-canisme (Quebec: Presses de l'Universite de Laval , 1 980) , in particular pp. 1 44- 1 56 . The most significant contribution on the role of the entropy law in development studies is by Jacques Grinevald in the Cahiers No . 1 and No . 5 of the Institute of Development Studies , Geneva, published by Presses universitaires de France, Paris, 1 975 , 1 97 7 .

48

TRANSFORMING THE WORLD-ECONOMY?

10 Rolf Steppacher, B . Zoog-Walz, H. Hatzfeld (eds � ) , Econom ics in Institutional Perspective (Lexington: Lexington Books , 1 977) . Ignacy Sachs Strategies de reco-developpement, (Paris : Ecpnomie et humanisme, 1 980) . Ignacy Sachs et al. , Initiation a reco-developpement (Toulouse: Privat, 1 98 1 ) . 1 1 United Nations General Assembly, Seventh Special Session, Document A/PV 2328, September 2, 1 975 , pp. 1 7-4 1 , translated from the French version distributed during the UN debate. 1 2 Joseph Ki-Zerbo, the African historian, puts it very well : ' Interdependence is a fact, but it i$ also a fact, that some are more interdependent than others . The horse, for example, in relation to its rider ' , in ' Concerning a . Borderline Case: Aid to the Least-Developed Countries' , Prospects (UNESCO) ( 1 976) . VI, No . 4, p. 606 . 1 3 A quantitative analysis of the contents of Resolution 320 1 -S-VI of the United Nations General Assembly (1 May 1 974) reveals that 1 6 associative concepts are cited 79 - times (community, co-operation , equality, law, justice, interdependence; equity, participation, assistance, harmony, etc . ) , while 1 0 dissociative o r conflictual concepts appear 1 9 times (sovereignty, rift , emancipation, self..determination, integrity, affranchisement, etc . ) . 1 4 Among the earlier important documents are : the annual speeches o f Mr McNamara, President o f the World Bank since 1 972; the 1 974 Cocoyoc Declaration UNPE/UNCTAD ; What Now? (Dag Hammarskjold Foundation) 1 97 5 ; The Planetary Bargain (Aspen Institute for Humanistic Studies), 1 97 5 ; A nother Development - Approaches and Strategies (Dag Hammarskjold Foundation), 1 977. An International Foundation of Deve­ lopment Alternatives , presided by Marc Nerfin, was created at Nyon (Switzerland) in 1 976. 15 Johan Galtung, Peter O 'Brien and Roy Preiswerk (eds . ) , Self-Reliance: A Strategy for Development (London: Bogle-L 'Ouverture, 1 980). 1 6 See 'Global Development: The End of Cultural Diversity? ' , Declaration of the International Federation of Institutes of Advanced Studies (IFIAS, Stockholm) , 1 97 5 . Annex III to the volume mentioned in the preceding note. 17 An important clarification of the many controversial points in the bas ic needs debate can be found in Katrin Lederer (ed .), Human Needs: A Con­ tribution to the Curren t Debate (Cambridge, Mass . , Oelschlager, Gunn and Hann, 1 980) . , 1 8 Roy Preiswerk, Cultural Identity, Self-Reliance and Basic Needs (Tokyo : United Nations University, 1 979) . Also published in Development (Society for International Development, Rome), 1 98 1 , No. 3/4, 83-91 . 1 9 J ohan 'Galtung has attempted to list a number of questions which should be asked about the NIEO and the basic needs approach before any definitive statements on their possible incompatibility should be made . See John Galtung, 'Grand Designs on Collision Course' , In ternational Develop­ men t Review, ( 1 978), No. 3 + 4, pp . 43-47 .

Part 2 The NIEO, the Crisis, and Prospects in the World­ Economy

3 The Current Development o f the World-Economy : Reproduction of Labour and Accumulation of Capital on a World Scale * Folker Frobel

In the two decades following the Second World War, the capitalist world-economy experienced the greatest boom in its history . This boom came to an end toward the close of the 1 960s . Since then the world­ economy has been in a phase of decelerated growth , . intensified structural change, and heightened political instability. This p aper begins by adducing some of the indicators which illustrate this development . We attempt to identify the immanent developmental tendencies which characterized the political and economic model o f accumulation of the boom decades - tendencies which are now under­ mining the model's potential for further expansion. At the same time, there is no clear indication o f a transition to or a political installation o f any comparable alternative model of accumulation. *

Translated from German b y Pete Burgess .

Editor's note: This paper was written i n February 1 980 and presented a t seminars i n Starnberg (Federal Republic of Germany) i n June 1 980 and in Port of Spain (Trinidad) in January 1 98 1 . The German text was published under the title 'Zur gegenwartigen Entwicklung der Weltwirtschaft ' in Starnberger Studien 4, 1 980, 9-8 8 . The Eng­ lish text was circulated within the United Nations University system as a working paper from the Project on Goals, Processes and Indicators of Development (HSDRGPID-36/UNUP- 1 50) .

A slightly rearranged version (omitting the original 's

appendix and tables) was published in Review, V, 4, Spring 1 982, 507-55 5 ; it is repro­ duced here adding again (and updating) the original 's' appendix and tables on world industrial production and world trade, 1 948- 1 980.

52

TRANSFORMING THE WORLD-ECONOMY?

The analysis is focused upon the general trends and tendencies o f accumulation: t h e concretization , modification, o r transcendence o f these trends and tendencies through 'local' particular circunlstances will require further research .

I 1 A large number ojindicators reveal a sharp contrast in capitalist devel­ opment between the two decades leading up to the end oj the 1960s and the beginning oj the 1970s, and the subsequent ten years, and show that the capitalist world-economy has once again passed through a turning­ point in its development . Among the principal indicators since this turning-point are : 1 Drastic fall in rates of overall economic growth in the market eco­ nomies as a whole , and especially in the industrial countries . 2 Declining or comparatively low rates of capacity utilizatio n of industrial plant in the industrial countries . 3 Drop or stagnation in i nvestment in industrial plant in the industrial countries ('investment gap' ) . 4 Rising o r comparatively high shares of replacement investment and investment for rationalization coupled with falling or compar a­ tively small shares of investment for extending capacity in the industrial countries . 5 Changes in the structure of the international division of labour: In manufacturing industry shifts of production not only from one industrial country to another (US - Western Europe) , or within industrial countries (traditional industrial centres - less developed regions) , as in the preceding phase , but to an increasing extent from industrial countries to developing count ries and centrally planned economies . In agriculture, the adoption of 'non-traditional' world market oriented production in the developing countries (e. g . , fruit, vegetables , flowers , soya beans, meat) . In the service sector, grow­ ing integration of the developing countries, for example, through ' the tourist trade . 6 Rapid spread of production facilities and production sites o f a new type in many developing countries · and centrally planned econo­ mies . World market factories for world market oriented (semi-) manufacture in free production zones , export enclaves and other sites , with a structure of production which is competitive on the world market (not merely the local protected market) , is very frag­ mented, highly susceptible to trade fluctuations , and basically parasitic on the local economy and society . 7 ' Structural crises' in industrial branches : the international competi- .

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

8

9 10 11

12 13

14 15 16

17 18

53

tiveness of manufacture at traditional sites is threatened by lower­ cost manufacture at new sites (increasingly located in the develop­ ing countries and centrally planned economies) . Examples can be found in synthetic fibres, textiles and garments, leather and footwear , steel-making, ship-building, watchmaking , optical industry, and sections of the mechanical and electrical engineering industries . Growing international synchronization of business cycles - the i 974-75 recession was the first general recession since the end of the Second World War - impairing the possibility of effective national anti-cyclical policies based on the internationally unsynchronized nature of national business cycles: the as-yet less successful attempts to co-ordinate economic policies on a world scale, taking - into account changed world economic circumstances ('world eco­ nomic summits' ) , have not been able to revive the shaken neo-Key­ nesian optimism in the possibility of economic policies to prevent capitalist economic crises . Increase in average rates of inflation . Breakdown of the Bretton Woods Agreement , symbol of the erosion of the world economic hegemony of the US . Radical redistribution of world incomes following the so-called oil­ crisis , discernible, for example , in the changed structure of world trade and increased balance of payments problems for many devel­ oping countries . I ncreasing number of officially tolerated or encouraged cartels which have arisen through the economic crisis . Public subsidy of 'ailing ' branches or firms , together with protec­ tionist tendencies in the industrialized countries aimed at slowing down the pace and minimizing the social effects of 'necessary struc­ tural adj ustments ' . Rising or stagnating unemployment at a relatively high level in the industrial countries . Growing disparity between the skill structure of those seeking work and vacancies , with a consequent growth in the share of 'structural' or ' frictional' unemployment . Instead of improving and extending the coverage of the social services in the industrial countries, existing services are being 'consolidated' : i . e their coverage is restricted and overall provisions reduced. Increase in the intensity of conflict between employers and workers over the maintenance of real incomes, j obs, and conditions in the industrial countries . In many developing countries , the reorganization , intensification and extension of the capitalist exploitation and super-exploitation of labour-power . Strengthening of the state apparatuses for legitimation,

54

TRANSFORMING THE WORLD-ECONOMY?

manipulation, and repression, either preventively or in step with the anti-capirevival and growth of ethnic, national, anti-imperial ist, ' talist, feminist and ecological movement s . This list of indicators could be further extended; all confirm the exis­ tence of a turning-point in the development of the capitalist world­ economy at the end of the 1 960s and the beginning of the 1 970s . 1 What is important here is not the meaning of any individual indicator, but the fact that all the indicators agree on this central point . In particular, the most general world aggregate variables show the existence of such a turning-point: this particularly important point is expounded in an Appendix to this paper . Since the empirical proof of the validity o f many of the other indicators is not i n doubt, and , further, because more detailed studies of certain indicators are given elsewhere2 (structural change in the textile and garment industries , relocation of production of Federal German manufacturing industry, free production zones and world market factories) we do not offer additional proof here. 2 When we turn to the question of how to characterize this turning-point in general economic terms , L e . at a higher level than that of individual indicators, the varied and comprehensive nature of the evidence cited shows that , in contrast to the views of a number of authors , the turning­ ' point indicates more than such relatively marginal or contingent pheno­ mena as the structural transformation of individual branches (garment industry, sections of the electrical engineering industry) , or the catching-up of the internationalization of the industry of an individual country (such as Federal Germany), or the effects of increases in t he price of oil . In fact, the indicators listed above refer to nothing less than the end of the post-war boom (the biggest boom in the history of capitalism) and the beginning of a phase of noticeably reduced world economic gro wth with the simultaneous transformation ofa number ofstructural features of the capitalist world-economy which had remained stablefor many years. One o f the most significant of these transformations is the change in the structure of the international division of labour. For example" in marked contrast to previous decades , especiafly those of the boom, it has been possible recently to observe a rapid advance in the production of manufactured goods in the developing countries , which are competi­ tive on the world market . 3 The last ten years have seen the increasing use of s ections of the immense potential labour-force in the developing countries in situ for world market oriented capitalist production in manufacturing industry - and no longer merely in the limited produc­ tion of agricultural and mineral raw materials for export or occasionally for modest 'import-substituting' manufacturing which hitherto

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

55

direct employment i n local capitalist productio n . 4 A long in which capitalist production was concentrated in a few tradicentres in a s mall number of industrial countries , with a growing h omogeneity of social conditio ns for both the material production and th e rep roduction of labour (labour legislation , investment law, policy " on the family, s ocial welfare , etc . ) , is thus being replaced by a m ovement in which capitalist production is being decentralized to what were ,,,-",,,,... �. .......

. •.

.I. •., ... ... .�L

perip heral regions beyond the borders of the traditional industria.l co untries . This process i s accompanied by a growing heterogeneity in the social conditions of material production and the reproquctio n o f labour-power, that i s , by international decentralization and social .

diversification of material production and reproduction .

We stress this particular aspect o f the current development of the capitalist world-economy, first , because it should be o bvious to even the most superficial observer , and, second , because such a pattern o f geographical decentralization and social diversification i n phases o f decelerated capitalist growth h a s some notable parallels i n the h istory . of capitalism . In particular, we refer to the installation o f a specific type of rural,.;,industrial commodity production in parts of Europe prior t o the Industrial Revolution (aimed at interregi onal and even world markets ) , and the demotion of England from its position of ' workshop of the world ' through the industrial-capitalist development of some western European countries and the US in the last quarter o f the nine­ teenth century . Naturally, any explanatory model of present-day . capitalist development which selects this particular .aspect as its starting-point must als o be able to account for and explain the other characteristic features o f contemporary development .

3 The majority o f current approaches to the present development o f the capitalist world-economy are not particularly convincing . This' applies especially to single-factor explanations, developed in response to super­ ficially observable changes. For example: references to the breakdown of the Bretton Woods Agreement and the switch to free-floating

parities , to the erosion o f the world economic dominance and political hegemony of the US, to alleged ' excessive ' increases in labour-costs in the industrial countries , to the shortfall in investment , with the bulk o f investment directed at rationalization rather than expansion , t o an alleged lack o f so-called basic technical innovations - all these quite accurately highlight s ome symptoms of .change . Ho wever, they share the common feature of lacking any fundamental explanatory power . Other attempts seek to restrict the globally observable deceleration in accumulation since the end o f the 1 960s and the beginning of the 1 970s to the recession years of 1 974-75 , and base their explanations on the 1973- 74 'oil crisis ' and its immediate aftermath (regional-sectoral shift

56

TRANSFORMING THE WORLD-ECONOMY?

and temporary fall in world effective demand , temporary difficulties i n adjusting production structures to changed price and demand . struc­ tures , etc.) . In view of the actual chronology of the events and changes revealed in our indicators , in particular changes in rates of growth , such attempts at explanation are clearly unsatisfactory. Although the ' oil/energy crisis' (in itself a result of two decades of unprecedented capitalist growth fuelled by cheap oil) undoubtedly magnified a number of difficulties in a phase in which world accunlulation had begun to slow down anyway for other, independent reasons , it also made a not unwelcome contribution to improving valorization in the energy economy as a whole (possibly at the expense of other sectors) , and in "" many countries may have facilitated a redistribution of income t o capital under the guise of energy policy. Other studies have set themselves the aim of empirically determining the crelocation potential ' of industrial branches. For example, correla­ tions are established between the physical capital and amount invested in training per employee, and the international competitiveness of industrial countries in selected branches (an approach pursued by the Institut fur Weltwirtschaft , Kiel) . Alternatively, survey techniques applied to firms are used to weight the relevance of a number of pre-selected motives for undertaking the relocation of production (e.g. Ifo-Institut, Munich) . Although such stuc;lies are a first step toward describing the phenomena in question, they suffer from the limited number of factors admitted or considered as possible causal determinants , neglecting , for example, the central role played by the decomposition of manufacturing processes into a set of sub­ operations . Political factors ('the climate of investment' ) are either ignored as much as is feasible, or made unrecognizable by being cast into pseudo-obj ective formulations . Motives for relocation are pre­ sented as independent variables instead of being analyzed as the combined result of the imperatives of capital accumulation .

4 In contrast to these inadequate, partial analyses (which nonetheless do acknowledge the existence of some structural changes in the world­ economy requiring explanation) , attempts at explanation within the framework of traditional theories ofdevelopment (e. g . stages theory of economic growth , modernization theory, dependency theory) offer a more comprehensive explanatory perspective. However , it is no longer a matter for dispute that stages theories and theories of modernization have been shown to have failed in their analysis of the earlier phases of capitalist development . Their funda­ mental conception of an unambiguous path of development which all societies or nations necessarily follow at different stages , or will follow, on their way to becoming a modern industrial society, and thence to

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'post-industrial society' , automatically excludes any c�nsideration o f . the ess ential difference i n the development of the so-called 'developing countries � ('underdevelopment ') as a function of the subordinate inte­ gration of these countries into the metropolitan or global process o f accumulation. N o alternative paths o f development are envisaged, and the only explanation offered for changes in the structure of the interna­ tional division of labour and the initiation of 'modernization' is that o f th e effects o f nlerely contingent or exogenous factors . Dependency theories arose out of a critique of stages and moderniza­ tion theories , and, correctly, both stress and demonstrate the polar unit y of 'development and underdevelopment ' as fundamental ele­ ments within capitalism . In addition, however , dependency theories also embrace the politically significant conception that the unity of 'development and underdevelopment' relates primarily to the comple­ mentary development of industrial and developing countries, and further propose as an absolute tenet that this duality constitutes an inescapable fate which is constantly reproduced in the course of the global development of capitalism, albeit 'at an ever-higher level ' : the global division of labour as determined by capitalism constantly (re-) produces the subordination of dependent underdeveloped countries which, first, experience a systematic transfer of resources to the benefit of the centre (migration, 'brain drain' , unequal exchange of quantities of labour , energy, protein, pollution, etc .), and, second, and more important , a systematic distortion of what Play have been autonomous development . In fact , it is even suggested that once any country has been assigned this peripheral status it will retain it as long as it remains integrated into the capitalist world-system . The conclusion that the developing countries are doomed to inesca­ pable and permanent marginalization (within the framework of world capitalism) can be questioned both theoretically and empirically. As we will s how, the likelihood that certain foreseeable tendencies within the capitalist world-system could transform some present developing coun­ tries into industrial-capitalist societies, with a corresponding model of accumulation, can no longer be merely dismissed out of hand. 5 We cannot claim to offer a full exposition of current theories ai'med at interpreting and explaining the present development of the capitalist world-economy here , nor claim to provide a fully adequate basis to undertake a critique of them . Our basically negative stance toward them is intended primarily to encourage the skeptical reader to acknow­ ledge the need for a theory of accumulation on a world scale (more pre­ cisely: a theory of the long-term uneven and unequal development of the accumulation of capital on a world scale), even though such a theory still has to be synthesized from a number of dispersed fragments .

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World history over the last five hundred years is dominated by the struggle for or against the imperatives of capital accumulation. on a world scale. This struggle is not only about the appropriation of a surplus-product which has already been produced , but centres j ust as . much on the question of the size of the surplus-product and conditions for production and reproduction in general . Whilst the totalizing ten­ dency of capital-accumulation and its agents constantly seeks to sub ­ ordinate and transform the historically inherited complex o f forms of life and work to the purposes of productive activity (Le . activity which creates surplus-value and maximum profit) , there is at the same time a struggle to extricate traditional forms from the grasp of capital or t o steer social development along paths other than those directed b y capital (such a s efficient production of exchange-values, rather than use-values; separation of mental and manual labour; control of the whole of life , including ' leisure' and reproductive behaviour) . Taking this perspective of the struggle around accumulation as the motor of capitalist development, it is possible to identify a number of crucial moments within the historical development of capitalism - listed below - without any full historical or logical exposition: 1 The development of a specific global division of labour as a fundamental instrument for the production and appropriation of surplus-value - i . e . depending on the capacity or willingness of the producing classes to resist or collaborate, a combination of forms of exploitation of different types of labour for different constituents of the global capitalist process in different regions . In this process industrial-capitalist wage-labour with its seemingly superior poten­ tialfor increases in labour productivity, for political containment of the working class, and, at times, for increases in mass consumption plays a dominant role. 2 The capacity or willingness of groups, strata, or classes to resist the dictates of capital or collaborate with them . Examples are: the resis ­ tance of non-capitalist strata t o the destruction of their traditional economic and social order, or conversely, their willingness to adapt; the tendency of the organized ' old ' work-force in the centres of capi­ talist production to conclude a ' social pact' with their 'social partners ' , instead of waging a political struggle against the bases of the capitalist system; the self-organization of the ' new·' wage-labour classes and other ' socially marginal groups ' to achieve a form of reproduction as independent as possible from capital, whether this be in the phase of the origins of industrial capitalism, or later in the case of groups suffering discrimination (ethnic minorities , youth, women, etc . ) . 3 The competition for valorization between branches and competition between firms in the same branch , fought out either in the form o f (wage) competition for the best workers and/or in the form o f increases in productivity with results such as : centralization and

.

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THE CURRENT DEVELOPMENT

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THE WORLD-ECONOMY

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concentration of capital; growth of huge transnational concerns , which in some cases monopolize whole branches and dominate entire countries; the only seemingly inexplicable resistance by agricultural and industrial family enterprises in some sectors of commodity production . 4 The rise and fall of various forms of the capitalist · state which in different ways create and maintain the pre-conditionsfor accumula­ tion (both the general conditions, such as guaranteeing private pro­ perty and obstructing the self-organization of the working class, the institutionalization of a model o f accumulation which may vary from time to time, and the corresponding necessary provision o f specific services for private-capitalist production, and the reproduc­ tion of labour-power). This process culminates on one hand in the liberal-bourgeois state, and o n the other in forms of colonial administration. Or, on one hand , the social-democratic welfare state (with high degree of commercialization of the sphere of reproduction high wages) , and , on the other, the repressive dictatorships of developing countries (non-capitalist subsidy for the reproduction o f labour-power low wages), depending o n the functions 'which dif­ ferent territories can or must exercise in a specific phase of capitalist development for the global process of accumulation, and the power­ relations within local or national class conflict . 5 Conflicts, including inter-imperialist war, between economically advanced countries for hegemony in the capitalist world-system, which permit a country to impose a model of world-wide capital accumulation, including its corresponding global division of labour - the optimal one for the interests of its ruling class, and maybe also apparently acceptable for sections of its working class (Holland, England, US) . 6 The resistance of dependent countries and their populations against their subordination to the exigencies of a process of accumulation, dominated by a few ' countries, and its local representatives and beneficiaries. 7 As the product and conjunction ofsuch moments, short-, medium-, and long-term cycles, fluctuations and trends of accumulation, including crises. To show how all of these moments are specifically linked together as different expressions of the struggle around accumulation is the tas k of a theory of accumulation on a world scale which is now b eginning to crystallize in a rudimentary form , and which we seek to present here in a slightly more consistent form . =

=

_

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TRANSFORMING THE WORLD-ECONOMY?

II 6 The accumulation of capital occurs within a variety of forms of material production and their corresponding forms for the reproduc­ tion of labour-power. Initially, capital usually uses these varying forms as it first finds them , only later adapting them as fully as possible t o match its specific requirements, given the limits set b y the resistance o r collaboration of those populations concerned . We indicate three such typical forms below , together with the use which capital has made o f them : l'

The subsistence economy of primitive ' tribes or clans, lacking both obligations to pay tribute and links to markets. Such structures are usually self-sufficient units of production and reproduction . Any surpluses over and above what is required for subsistence are 'unproductively consumed ' in festivals or holidays , or alternatively, if-the productivity of the land permits it, translated into population growth and thus denied the control o f any potential ruling class . Apart from constituting the target of a progres sive critique ( 'the idiocy of rural life ' , 'general mediocrity' , etc. ) such ' primitive' self-sufficient economies are also forced to accept the inexorable verdict of both the old and modern fanatical advocates o f surplus-production . As far a s capital i s concerned , their self-suffi­ ciency renders them totally useless; however , eventually the day o f their 'civilization ' or ' modernization' arrives . They are destroyed o r dispersed s o that accumulation can proceed unhindered or , better still, restructured to make a positive contribution to accumulation . Extermination or enslavement , expropriation of land, exaction o f tribute, 'and forced or peaceful integration into the patterns o f com­ modity-producing market societies by missionaries , traders , devel­ opment proj ects , or migratory labour (often forced through the need to pay money taxes) are but some o f the methods of civilization e mployed by capital .

2 The family-economy (such as the peasant economy) within a larger community, with obligations to pay tribute and links to markets. Families (households) are not self-contained units of production and reproduction and are compelled to produce and surrender a surplus­ product on a regular basis . In addition , they frequently constitute a flexible reservoir of labour-power for the larger social unit , either as sites for the production and supply of additional fresh workers , or as sites for the absorption and care of workers who are tem­ porarily surplus to requirements or no longer able to work . A large number of variants can be distinguished . For example , in feudal or

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tribute-paying modes o f production the means o f subsistence (pri­ marily land) are put at the disposal of personally dependent peasant families , subj ect to revocation, in return for the payment of a tribute, in labour or kind or money, to the ruling class or state. The surplus-product can enter the circuit of capital via trade; rising external demand in conjunction with the appropriate powers of enforcement by the feudal lords or state can lead to a 'second serfdom ' in which families are left with a piece of land barely able to provide subsistence in return for a high labour-rent . Another variant is non-capitalist commodity production through formally indepen­ dent agricultural or industrial family enterprises owning their own means o f production ; such enterprises can often only survive by adopting a long working-day, a high intensity of labour, the inclu­ sion of all members of the family in labour, a very low remuneration to employees who are not family members (in some instances) , and, finally , the abandonment o f any concept of commercial profit. The more they are forced to buy machinery and artificial fertilizers or introduce greater specialization to boost production and produc­ tivity (for example, to pay off money-obligations which arise through bourgeois agrarian reform , to compensate for a fall in the price of their products caused by the intervention of parasitic merchants or competition from the industrial-capitalist sector, or to be able to retain potential migrant workers by offering incentives) , the more those mechanisms which deprive families of their surplus­ product intensify and multiply , and the greater the danger that higher costs will not be covered by higher output or yields . Although in many cases such enterprises were already in reality subj ect to the terms dictated by the outside world of capital, the loss of the families ' means of production (principallyJand) signals the final and formal surrender of their autonomy . 3 Industrial-capitalist wage-labour in material produ.ction, with the reproduction of labour-po wer in the proletarian nuclear familyIn contrast to the two forms noted above, the system of 'wage slavery' , like the slave-economy proper, is characterized by the extensive separation of the spheres of production and reproduction (however, the wage-relation is much the more efficient as far as the needs of contemporary accumulation are concerned) . In its most extreme form , the family merely exercises the mininlunl of the labour of reproduction (bringing up children , physical regeneration of labour-power) . Whether this takes place is determined primarily by the requirements of capitalist accumulation, and secondarily by o ffi­ cial policy on the family (L e. population and 'manpower ' policy); the burden of such labour falls overwhelmingly on women . Again, in its most extreme form , material production, including the produc­ tion of those goods and services required for the reproduction o f

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labour�power (food , consumer durables , clothing, ho.using, trans­ port, education , nurseries , hospitals , old-peoples ' homes , commodi­ ties produced by the leisure industry) , is removed as much as possible from the sphere of non-capitalist self-production (e.g. in the family) and either directly or indirectly (via the state) placed under indus­ trial-capitalist controL In general, however , the division of labour between industrial-capitalist wage-labour and the proletarian nuclear family is a flexible one and not restricted to this most extreme form. As historical experience has shown , out of the many forms of pro­ duction and reproduction adapted and combined by capital, the latter (3) has, in the long-term, played the most dynamic and dominantrole in the global process of accumulation, even though it may not have been quantitatively the most widespread. Why is this so? As far as the valorization of capital is concerned , there is a high social premium within capitalism on the development of the productive forces as a means (a) of exploiting non-capitalist modes of life and work , and , if necessary, displacing them; (b) of plundering nature; and (c) o f making profits and super-profits i n inter-capitalist competition. I t will be clear that one factor in the development of the productive forces is the availability of an easily controlled, regionally mobile , occupa­ tionally flexible and industrious work-force - a condition apparently most effectively fulfilled so far through the association between indus ­ trial-capitalist wage-labour and the proletarian nuclear family : eco­ nomic necessity, hierarchical authority-structures , and (sometimes) material incentives mean that free wage-labourers are forced or induced to expand their labour-power to an almost unlimited extent , especially where labour is in excess supply and trade unions are weak . In addition , under certain circumstances , privileged sections of the working class can develop a form of truncated class consciousness ('reformism ' ) in which the lack of a recognition of fundamental class antagonisms ('the class interests of capitalists arid workers may differ but are not neces­ sarily opposed ') leads to a systematic interest in the perpetuation of the system ; at the s ame time, such a constellation of forces also produces an increase in the surplus-product (the cake, the growth of which is meant to guarantee larger slices for the working class) . Furthermore, in indus­ trial capitalism, the concentration of the means of production facil­ itates the introduction of machinery and the factory-system , the systematic application of science and technology of ' western ' origin , and so-called ' scientific management' - all means of depriving workers of control over the production process once they have been divested o f ownership o f the means o f production o r instruments o f labour , and forcing them into a higher intensity and productivity of labour . By contrast, in other modes of production, surplus-labour is usually a function of extra-economic coercion, only sustainable in the face of the

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p as sive resistance of the direct producers at a high , and often prohibi­ , dve , cost . Furthermore, capital can exploit the need Jor human warmth, together with the family's continuation as a bulwark of patri­ archal dominanc�, to produce a mechanism within which children can be raised, the desired ideological values and discipline inculcated ('civil­ ization ') and labour-power psychically and em otionally restored , which is , as yet, unrivalled for cheapness and efficiency. In addition, the family also serves as a reservoir of labour-power and as a buffer between factory-labour and open unemployment (discernible in the large medium-term fluctuations in the participation rate of married women) : The link between industrial-capitalist wage-labour and the ,prole­ tarian nuclear family also possesses a number of advantageous features as far as the realization of surplus-value is concerned . When necessary, the means for the reproduction of labour-power , and under certain cir­ cumstances the means for satisfying needs which go beyond this, can b� extensively transformed i'nto commodities and multiplied almost without limit; this allows capital to extend massively its internal market without totally impairing the possibility o f switching back again to an increasing share of unpaid house-work if overall conditions of accumu­ lation require it (this is in marked contrast with families in the form of loose associations of j uridically and. economically equal partners) . 7 Capitalist development over the last five hundred years has been the history of the changing forms of the division of labour between the specifically industrial-capitalist and other forms of production and reproduction which are available for the accumulation process of capital. Thesefortns of the division of labour are themselves marked by the struggle over accumulation . In particular , the basis for the history of the international division of labour, as one important moment in the process of accumulation on a world scale, is the characteristic, region­ ally differentiated development of the social contexts within which labour-power of each type originates . Apart from the fact that since the October Revolution one-third of humanity has been removed from the direct sphere of the rule of capital, probably the most obvious product of the preceding history of the international division of labour is the divergence between the industrial countries and the developing coun­ tries, which is the product of the optimal combination and adaptation of the various forms of production and reproduction by capital, within the limits of resistance and collaboration set by those affected . It is, in fact , the product of the precarious symbiosis with, naked despoliation of, and imperial management of these various forms (including the pro­ ductive forces of nature) . The central differences between the industrial countries and the developing countries are to be found in the model of

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accumulation which is specific to each within global accumulation , and, related to that , in the specific nlanner in which they recruit and reproduce labour-power . The first reasonably clearly delineable form of a world division o f labour which points toward and/or can be attributed to capitalism was the result of attempts by the agents of decentralized western European feudal society to overcome crises , which, although · differing from region to region, could be traced back to the tendency for ground rents and productivity to fall with periodIc overpopulation. Faced with regionally varying resistance, and in mutual competition, these agents sought to expand and extend commodity production geographically in ways which were still essentially feudal . However , the almost inevitable consequence was the release of elements capable of establishing the foundations for a world-wide process of capitalist development . The key moments in this process include: geographical expansion , the estab­ lishment of the ' old ' colonial system based mainly on plunder and ' monopoly, the unfolding of commercial and finance capital within the pores of late-feudal society on the basis of long-distance trade in luxury goo ds and some raw materials together with the organization of large­ scale credit, the beginnings of the economic decline of the Mediterra­ nean countries and large parts of central Europe, the complementary rise of the Netherlands and England, and export-oriented grain produc­ 'lion based on the 'second serfdom' in eastern Europe . However , the factors which were to prove the most decisive for later developments were the commercialization of agriculture, the transformation of land into negotiable private property, and the associated first steps in the proletarianization of the rural population in some areas of western Europe. The destruction of the bases of independent agricultural subsistence production through primitive and primary accumulation/exploitaiton and the commercialization of the land constituted the prelude to the centuries-long preparatory phase of industrial capitalism in western Europe, characterized by capital ' s attempts to subsume to itself reluc­ tant and recalcitrant labour-power . Initially tied to feudal relations o f dependence i n the small-peasant family-economy and i n the guilds , and subj ect to varying degrees of uncertainty of existence, these pro­ ducers were however also protected from the direct incursions o f capital . Capital, in the form o f commercial capital and finance capital at the limits of the possibilities of its development within late-feudal society ('crisis of the seventeenth century ' ) , was forced to adopt the institutional innovation of a development of. trade and production in mass consumer goods for the inter-regional and indeed world-market , which alone had sufficient capacity to absorb such an output . In order to break the resistance of the guilds, the traditional institutional context for industrial conlmodity production, to their subordination to the imperatives of capitalist production , capital had to resort to the

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integration and devel()pment of dispersed rural industry. As the pro­ letarianization of the rural population developed , this increasingly becanle the material basis for rural existence and probably also brought about a change in the pattern of fertility . By its very nature, dispersed rural industry did not allow any decisive increases in labour productivity; as a consequence , increases in production could only be achieved by extending the area of those regions engaged in domestic industrial production ('extensive accumulation ' ) . This also corresponded with the transition from the ' old' to the 'new' colonial systenl marked by the . switch to the production of agricultural and mineral raw materials in conjunction . with a conscious management of labour-power (for example , the sugar plantation economy of the West Indies based on the importation of African slaves one link in the Atlantic triangular trade) and by the suppression of autonomous commercial or industrial development in the colonies , either through direct force, or through the forces of the market . This period also coincided with the gradual replacement of Holland by England as the hegemonial power in the emerging capitalist world-system . The victory, or consolidation , of the English Revolution meant that the possibility of world capitalist development became politically ratified and irreversibly secured . . A sufficiently advanced degree of proletarianization of the direct producers and commercialization of material production leading to the creation of a growing internal market , the vast increase in the possibili­ ties for selling goods on the world market , and a state prepared to give virtually unconditional support to the promotion of capitalist produc­ tion facilitated a · further institutional innovation in the shape of England' s Industrial Revolution; this created the preconditions on which capital could now finally undertake the real subsunlption of labour-power . With the arrival of the characteristic relation of domina­ tion over industrial-capitalist free labour-power in the factory system , metho ds for raising productivity became the characteristic means for the valorization of capital and the expansion of production - without other (extensive) forms of commodity production ceasing to function as a necessary complement to industrial-capitalist production (' inten­ sive accumulation'). Capital 's realization that an excessively long working day made output decline , together with the increasing pressure of an organized working class, led to some effective legal restrictions on the production of absolute surplus-value . This in turn spurred on the development of the productive forces in order to produce relative surplus-value, a development usually linked with a higher intensity of work and increased control of labour by capital . Among the consequences of the phase of the so-called Great Depres­ sion (1 873-96) in Europe were the rise of new industrial-capitalist socie­ ties in Europe and elsewhere , the termination of England' s period of indisputable hegemony, the rapid expansion of capital export abroad , the extension of a global network of shipping and rail connections (with

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their associated infra-structure) , and, finally, a wave of transatlantic emigration of the millions made 'superfluous ' by accumulation in Europe . The development of the 'white' settler colonies , which served to absorb the emigrants, presupposed an 'open frontier ' - i . e . the 'pacification' and virtual elimination of the indigenous population. Increasing imports of agricultural produce to western Europe lowered the value of labour-power, at the cost of a serious crisis in western European agriculture, whilst at the same time' real wages slowly began to rise. In Japan , which shared a feudal past with Europe, the resolute adoption of certain key elements from capitalism set the nature of the policy of survival in the face of the capitalist threat . The process of the degradation of the developing countries to the status of complementary instruments for metropolitan accumulation was finally accomplished . All industrial countries experienced the comprehensive development of the specifically capitalist mode of production to a relatively high degree, and , with it, the wage-labour/capital relation together with the organizations of the working class. This implied and was accompanied by the large-scale and progressive destruction of other modes of pro­ duction, although under certain circumstances it also led to the reten­ tion, transformation, or transformed revival of those modes . For example, some modes may have proved particularly resilient in the face of the rising capitalist mode, or they may have been consciously main­ tained to secure political stability (such as peasant or artisanal family enterprises); alternatively, they may have been granted a stay of execu­ tion if their attempts to maintain their particular patterns of living and working complemented the valorization of capital - until they finally fell victim to the increasing efficiency of industrial-capitalist pro­ duction (for example , rural industry in many places , the handloom weavers, sweat shops, etc.) . Workers . themselves were predominantly brought up in the proleta:dan nuclear family and held ready for use by capital , with women taking on the dual role of unpaid house­ wives/mothers in the family, and highly exploited wage-workers in capitalist production outside the home. 8 Without abandoning the occasional necessity of absorbing cheap labour-power released by the disintegration of non-capitalist modes of production in the industrial and the developing countries , capital acquired the capacity to regulate the basis of its supply of labour-power to an extensively autononlOUS extent ; any exhaustion of the reserve army through the industrial cycle, or any undue growth in the degree of control exercised by workers over capital ' s power to preside over an atomized work-force, could be met by measures such as mechanization and ' rationalization' intended to reduce the numbers of workers needed and to lower the costs of employing them.

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Each of the initial years of the boom phases in the world-economy . al so signify points at which capital has succeeded in politically neutral­ izing the working class in the centres of capitalist production , following a prec eding phase of depression and subsequent restructuring; this has either taken the form of outright defeat through 'class struggle from above ' , or , under more developed conditions , through the negotiation o f a ' social pact' between capital and the working class. in which the funda mentals of the capitalist economic and social system are put beyond discussion : 1 793 Conservative reaction i n England saw workers in both factory and domestic industry temporarily ' deafened by the din of pro­ duction' ; in France , setbacks to the working class included the collapse of the demand for a guaranteed minimum living standard, legislation against the right of workers to combine (loi Le Chapelier) , abolition of feudal obligation to the benefit o f peasants , and hence the removal from the political struggle o f the workers' most important potential allies . 1848 The defeat of the democratic revolutions accomplished the exorcism of the ' spirit of communism' which circulated through Europe prior to 1 848 and which threatened to abolish capitalism before it had scarcely put down roots. 1896 Concentration and centralization had reduced competition between individual capitals and hence removed a certain degree of protection from the working class ; the slow rise in real wages led some sections of the working class in western Europe to begin orienting themselves toward an accommodation with the capita­ list system . 1948 Early phases of industrial-capitalist development were charac­ terized by the almost unlimited drive , not only of individual capital , but also of aggregate capital, to keep labour costs as low as possible in the interest of maximum profit . The consequence of this policy was a realization-crisis based on the inadequate pur­ chasing power of the mass of the population; in the 1 920s and 1 930s such a crisis even threatened the existence of the capitalist system itself. Once this most serious economic and political crisis in the history of capitalism had been terminated by the war­ economy, high unemployment , world economic crisis , obstruc­ tion of 'economic democracy' , ' moderation' and 'trade union responsibility' (at the expense of the mass of the population) , a new model of social partnership in the industrial countries was developed with the intention of avoiding the previous threatening defects in the system through planned increases in mass consump­ tion . In addition, ideological competition with the socialist countries was to be waged through the economic satisfaction and political integration of the organized core of the ' old' working class .

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9 The m odel of accum ulation which sustained the unprecedented post­ war boom in the years after 1 948 was a product of US hegemony. After an initial period , the industrial countries pursued a policy of wage increases linked to increases in productivity which ensured that the aggregate share of wages in national income did not 'become too high or too low' (Giovanni Arrighi) , thus avoiding both the Scylla of crises of valorization and, in particular, the Charybdis of crises of realiza­ tion. s Moreover , wage increases also meant 'payment by results ' , con­ serving or widening wage differentials in order to foster the politically desired ' aspirant ' mentality , The raising of· mass-consumption based on a �social pacr between Isocial partners ' - i . e . the extension of the circle of needs , all of which however can only be satisfied in commodity-form (which corresponded to the overall demands of the system and increasingly also to the demands of the trade unions) - led to the creation of an internal market capable of apparently unlimited expansion (including the fast-growing 'leisure market ' , as shaped and cultivated in the interests of valoriza­ tion by its own branch of industry) . This in turn constituted an essential precondition for an enduring and , by some accounts, even self-perpe­ tuating process of capitalist industrialization . Of course, such an exten­ sion of mass-consumption should not be taken to imply that a growing 'wage basket ' in the traditional industrial countries contains, on average, more than is necessary for the reproduction of labour-power under the 'given ' circumstances (including unpaid housework by women) . Under current circumstances in the industrial countries , expenditures on an ample diet , expensive rented housing or owner­ occupation, consumer durables , cars , lengthy education, long holi­ days , social insurance, etc . , on the one hand the result of the ' social contract ' and hence in theory associated with rising productivity rather than the necessary costs of reproduction, are in fact to a large extent a part of these necessary costs for a work-force which is expected to be highly qualified and regionally mobile , and subject to intense and psy­ chically stressful work . As far as individual workers are concerned , it becomes more and more difficult to avoid meeting these expenses in money-form as the opportunities for satisfying these needs in non­ commodity form contract both materially and psychically, It might appear then as if the specific link between the specifically capitalist mode of production and other forms of production and reproduction, in particular domestic labour, in conjunction. with commensurate state activities after the Second World War , has enabled a process of autonomous 'immanent ' extended reproduction of capital and labour-power to take place, in both technical and economic terms . This type of reproduction is not systematically reliant on periodic or permanent transfers from the Third World (understood here in its narrow geographical sense) , although such transfers , including migrant

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workers (Gastarbeiter), may in fact continue. Increasing mass incomes (even if they were very much simply a neces­ s ary consequence of the growing capitalization of the sphere of repro­ ductio n and the increased marketing of leisure time) , a tendency toward full -employment , and an extension of the 'welfare state ' made this model attractive , especially to the hard trade-unionized core of the 'old' working class . ' This is our state! We won't destroy it ! ' The political . expression o f this was the hegemony of reformist workers' parties in the industrial countries (social-democratic welfare states) ; the fact that external control and pressure for greater efficiency at work, in both factory and office, in the family, in school, and during leisure percep. tibly increased (compare the increase in premature retirement, drug dependency illnesses , etc.) was accepted in return for the promise of the possibility of further advance in reform policies or in return for greater monetary reward. However, unlike the organized working class, capital could in prin­ ciple discard this model should changed circumstances require it. The long period of accelerated and increasingly ' autocentric' accumulation which began . at the end o f the 1 940s led, around the mid- 1 960s , to a perceptible reduction in the size of the industrial reserve army in most capitalist industrial countries (euphemistically known as ' full-employment' ) . The point at which this state was reached was modified , onthe one hand , by the dissolution of small-scale agriculture and an increase in the participation rate of women, together with the forced addition of labour-power from abroad up to their 'natural ' or political limits , and , on the other hand , by the extension of the tertiary sector, reductions in working time, and other similar measures . In such a situation, not untypical in the history of capitalism, a temporary reduction in investment (consider the 'investment gap' since 1 970! ) together with an increase in the share o f investment devoted to rationa­ lization was the tried and classic (and, as it seemed, the only) method . for bringing the supply of available labour-po wer, and the terms on which it was supplied, to a level andform acceptable to the demands of valorization. This time, ho wever, capital was not completely confined to this method o f temporarily reducing domestic investment and increasing the share devoted to rationalization - fortunately, so to speak, since the creation of mass unemployment as an instrument for directing and disciplining the working class in the interests of accumulation requires greater ideological camouflage in a ' welfare state' . This time capital could rely on Cobjective ' causes (supposedly or even effectively lying outside capitars and the state 's control or influence) to enforce partial relocation ofproduction to the Third World. It is at this point that we have to recall the developing countries ' history in order to explain why partial relocation was not only desirable or even urgent but at the same time possible as well .

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10 The social structures which today's developing countries had · histor­ ically inherited proved either defenseless or eventually outnlatched when pitched against the built-in expansionary aggression of western European late feudalism/early capitalism. The antithesis between almost stagnant productive forces (sometimes at a high level) and the , stimulation of rapid development in strategically crucial and rewarding areas s uch as 'guns and sails ' (gunnery and seasmanship) played an important, if not decisive role. The developing countries lay open to their assigned role as desirable or necessary complements for the main­ tenance of feudalism or the development o f capitalism: L e . as reservoir s o f cheap labour (ranging from slaves t o modern immigrant workers) , a s markets for industrial products (local producers were eliminated a s competitors either by open force, or - more civilized - through the hidden forces of the market) , as suppliers of (in the short-term) non­ substitutable or very cheap raw materials, and as sites for polluting industries . This subordinate subsumption of the developing countries to the changing demands of the metropoles and accumulation on a world scale is the basic determinant of the development of the specijical/y capitalist mode of production in the Third World, in particular the snairs pace at which this ,development proceeds - the result of both local conditions and the mechanisms of global accumulation. These local conditions include , i n particular, the economic, social, and cultural resistance of non-capitalist ' sectors ' and their members to the destruction of their traditional ways of life and forms of labour; in the long term this resistance is aided by the economic tenacity of these ' sectors' , based on the intense exploitation of their workers, including where necessary ' self-exploitation' by the owners of the means of pro­ duction (who as landowners , petit-bourgeois , or at another level benefi­ ciaries of patriarchal relations , have the greatest interest in such resistance) . On the other hand , the gain which has been repeatedly derived, and is still drawn , from the adaptive use, rather than destruc- . tion , of these ' sectors' under suitable circumstances by both the local ruling class and capital is large enough to explain the raison d'etre of these ' sectors' in the global process of accumulation and the conscious efforts directed at their conservation. Capital makes use of the labour-power of the developing countries in three basic forms . First , capital uses direct wage-:labour in industria/­ capitalist production . Secondly, capital uses labour in non-capitalist commodity production , principally in the family-economy. Both the duration and extent of this form of production are deternlined by the requirements of valorization as an alternative to the use of commodities produced in the industrial-capitalist sector as inputs for capitalist pro ­ duction (examples are ground-nut production by small-peasant farms ,

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71

which is marketed by agribusiness and sewing and embroidery by _home-workers or in 's weat-shops on contract for exporting firms or , foreign retailers) . Finally, capital exploits the 'labour of reproduction , i .;e . the labour of raising and looking after workers who will later be us ed by capital, either directly in industrial-capitalist production or indirectly in the non-capitalist commodity-production of elements of variable and constant capital. This latter point requires expansion. The 'wages which wage-workers receive in developing countries are often only sufficient to cover the monetary costs of the daily restoration of labour-power during the ·period of actual employment, but not those: expenses required for bringing up a new generation or for care in ' old age' and invalidity, once workers have been thoroughly drained by labour in the capitalist sector . These have to be borne by the so-called 'backward ' (traditional, informal , etc. ) sectors . And even those monetary costs required for the , day-to-day restoration o f labour-power during actual employment by capital are reduced by the use of non-capitalist sectors to a degree far exceeding that found in the industrialized countries - either in the form of unpaid services which the wage-worker's extended family provides, or has to provide, from the small surplus produced in non-capitalist production , or in the form of the cheapening of means of subsistence through having them produced in simple (non-capitalist) commodity­ production. For 'capital , what is important is that the reproduction of labour-po wer is subsidized externally to a much greater extent when it is located in a predominantly non-capitalist environment than is usual in the industrial countries (although it is still significant there), which con­ sequently allows the super-exploitation of labour-power . It is the pre­ sence o f such subsidies , and not the high rate of unemployment ana the 'law of supply and demand ' , which make low wages economically and socially possible in developing countries . Because of these low wages and because, up until the present , the specifically capitalist sector has only accounted for a narrow sector upon a broader base of non-capitalist modes of production, adapted and used by capital, the working-class in waged employment has by and large represented a cost-factor (valorization) and not, as in the industrial countries , at the same time a demand-factor (realization) in industrial-capitalist production . As a result one of the key precondi­ tions for an enduring or maybe even self-perpetuating process of the capitalist industrialization of the developing countries is absent , or at least appears to be so.

11 Taking the above outline of the present state achieved b y the differing social contexts within which labour-power originates in industrial and iIi developing countries , we can sort out some structural conditions for

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the current valorization of capital. These conditions represent on one hand the theoretically predictable and empirically verifiable outcome of the preceding unequal development of the capitalist world-system , and , on the other, those factors which in combination are likely to induce sonle nlovement in the international division of labour, as deter­ mined by capital . 1 On the world scale an almost inexhaustible reservoir of potential labour-power has come into existence, consisting of several hundred million people (compared with a labour-force of 300 million or so in agriculture, industry, and services of the industrial-capitalist coun­ tries) . The bulk of this reservoir lives in the developing countries (the result of the gradual, but by no means complete, disintegration and destruction of non-capitalist modes of production) and represents a mass of labour-power available for use by capital when required as a supplement either to the supply of labour-power in the traditional industrial countries , or to the additional potential located in the cen­ trally planned economies which it already taps through international sub-contracting. Despite the concrete differences which exist between developing countries , this reservoir has certain common features which determine how it is , or may be, used in the capitalist valorization process . The wages paid by capital in the industrial-capitalist sector (i) amount to around 1 0 010 to 20010 of those in the traditional indus­ trial countries (around the year 1 970 and later) . This may be even lower where capital contracts out to non-capitalist commodity producers and pays labour costs indirectly (as in modern domestic industry, cash crop farming, etc . ) . As stressed above, t�e possibility of such low wages is bound up with the existence of non-capitalist 'backward' sectors which function as breeding-grounds for fresh labour-power, as producers of cheap foo d-stuffs , and as ' refuges for the supernumerairies' . (ii) In the industrial-capitalist sector the working day (working week or year) is noticeably longer for the individual employee, and very substantially longer for the 'collective worker' than is the case in the traditional industrial countries , where collective agreements and labour legislation limit working hours . In the developing countries extensive shift working, night and holiday work , and very small amounts of time lost through sickness , holidays , maternity, lateness and absenteeism, and for training allow the working day to be greatly extended and permit highly profitable rates of capacity utilization . It may well be that th e same applies , and perhaps even more so, in the so-called ' backward ' sectors whenever they are directly used by capital or forced to compete with the industrial-capitalist sector . (iii) In view of the immense number of j ob-seekers , employers have enormous freedom to hire andfire (assisted by suitably flexibl e

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labour-legislation) . In particular , this allows a higher intensity of labour, since workers can be ' drained' more rapidly and then replaced by fresh workers . · (iv) I n many cases , the size o f available reservoir o f potential labour-power allows a selection of workers which is opti11Jalfor valorization, L e. according to age, sex, state of health, skill, discipline, etc. Favoured groups are women aged 1 5-22, at most 25 ('girls ' in management terminology) , who are paid even lower wage rates than male workers . (In many instances , despite its low remuneration, wage-labour may be welconled by these 'girls ' as an alternative to and a means of temporary escape from patriarchal forms of exploitation .) (v) Measured by the capitalist standards of the traditional indus­ trial countries , the level of occupationally specific training is usually very low (attributable in part to the 'brain drain' from the developing countries) . Among the exceptions are seam­ stresses , who at many locations constitute a group of workers which capital, or domestic commodity production, can turn to . fo r 'traditional' s kills . Requirements such as punctuality, sense of responsibility, cleanliness , and submissiveness are inculcated through both economic and extra-economic disciplinary mechanisms , such as instant dismissal on the slightest pretext, and the proscription o f effective trade union activity . In the long term , a suitably organized education system together with " the 'civilizing' effects o f wage-labour under conditions o f high unemployment will no doubt be able to adapt the skills and dis­ cipline o f the work-force to the imperatives of capital to an even greater extent than has already been achieved . Productivity in the world market oriented, industrial-capitalist (vi) sector , expressed as output per employee per hour (the result of the combination of work-organization, discipline, .capital equipment , etc . ) , compares very closely with levels in the traditional industrial countries for similar processes , and in some cases exceeds it . This comparison is based on processes which have actually been transferred to world market factories and are in operation; it would be impermissible to conclude from this that the same would apply without qualification to the ' old' import-substitution manufacturing industry (for the local protected market) . However, it is probable that comparable levels of productivity could be attained eventually in aU those processes requiring rapidly trained , semi-skilled workers . 2 The technologies and the organization of the labour-process for the purposes of decomposing complex production processes into elementary parts have been refined to a degree (or could .be so per­ fected) such that rapidly trained, s emi-skilled workers could carry out most of the fragmented routines which make up one entire

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production process. As the ' factory' or 'technical ' division of labour , this form appears to be conceptually distinct from the terri­ torial or international division of labour , or the division of labour between different modes of production . I n practice they are inse­ parable within the actual process of valorization. Apart fro m the fact that such a decomposition often represents a first step toward or is the precondition for mechanizatio n or automation , this form o f the division of labour h as three significant aspects . First , it permits an increase in the intensity and productivity o f labour (Adam Smith) � . Second, it cheapens production by allowing each fragmentary opera­ tion to be allocated to workers possessing the minimum level of skill necessary for each routine , meaning, as a rule , workers whose labo ur-power -is abu ndant and therefore easily available and very cheap (Charles B abbage) . And , third , it facilitates tighter control o f workers b y making once-necessary skilled workers n o longer indis­ pens able , thus placing a weapon in the hands of capital against 'tem­ peramental ' skilled workers , whose skills endow them with a degree of monopoly; moreover , this weapon is not blunted by the fact that other skilled workers may be temporarily needed elsewhere (Andrew Ure) . Considered in terms o f what is abstractly possible technically and organizationally, the fragnlentation of the production process can now b e taken s o far, if required, that the training period for indivi­ dual operations in processes which as a whole are very complex can , in many instances , be cut to a few days , a few weeks , or perhaps a few months (even in the running-in phase for a new product) . The -more the utilization of labour-power within the immediate process of pro­ duction in the developing countries appears as possible (and neces ­ sary) under the concrete imperatives o f capital accumulation , the more the generally low level of occupationally specific skill possessed by workers in these countries \yill operate as one factor, among others , for the realization of these abstract possibilities and will in fact force technology and techniques of work organization in this direction. For example, the so-called electronic revolution may well enable great ' progres s ' to be made in the direction of increased auto­ mation at the same time reducing the level o f skill demanded of those : workers still employed in the industry . 6 These determinants o f the development and application of technology, which follow from the imperatives of capital accumulation , will no doubt be gladly over­ looked by those analysts who blithely extrapolate those tendencies which once , or allegedly once , characterized technical development in the traditional industrial countries and who now regard the trend

toward automation as the inevitable ' reply of the industrial countries ' , intended to counter or even reverse the trend toward relocation . 3 Techniques of transport, communication and data processing allow ,

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industrial 'production to be located and managed to an increasing , extent irrespective of geographical distance (containers , roll-on/roll­ off, air-freight , telex and other electronic equipment , etc . ) . Produc­ tivity has increased faster than average in these branches , the result of a quite correct assessment of the improved conditions for valori­ zation opened up by a geographical redistribution of capitalist production in other branches , a redistribution initially within and between the traditional industrial countries , and now (as an unintended consequence?) world-wide. 12 The three main points above emphasize those elements and changes in the contemporary structural conditions for the valorization of capital which, although not individually, in conjunction could bring about change in the international division of labour . On the assumption (dis­ cussed below) that what we have identified as essentially qualitative changes have now reached sufficient quantitative proportions , we can expect to see either the development of entirely new relations of interna­ tional competitiveness , or the significant broadening and intensifica­ tion of existing relations . Two factors are of central importance. First , a world-wide industrial reserve army has been created , along with a world marketfor labour-po wer. Although capitalism has always been characterized by enforced or voluntary migrations of workers, workers have usually been obliged for economic , social, and political reaso"n s to find jobs which match their skills in the vicinity of a fixed location . In contrast, capitalism is able to create j obs with specific skill-requirements either ' here or there' depending on the prevailing conditions for valorization. The changed constellation of structural conditions in the world-economy means that workers in the traditional industrial countries now have to compete for their j obs to an unprece­ dented extent not only with workers from other industrial countries, but also with workers from the developing countries, all of whom can be played off against each other by capital . Second, a world market for production sites is developing , in which the traditional industrial countries and the develop I ng countries are forced to compete against each other to retain or attract world market oriented manufacturing industry. Although capital uses and needs the state to fulfill a variety of functions, this does not necessarily mean it has to be reliant on one particular state. These changes in the structural conditions for valorization mean that in order to remain competitive, firms must take systematic account of the option of relocating production to sites with cheap , disciplined labor, not merely in other industrial countries or less developed regions: in their own countries , but to an increasing extent in developing countries ; firms must include such possibilities as a complement or

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alternative to other policies in making investment decisions . Rationa­ lization at traditional sites has been. and still is an indispensable instru­ ment in the valorization of capital ; what is now clear is that the policy of relocating parts of the production process to developing countries , as a complement to rationalization or integrated with it , will grow in importance . What is novel about such a world-wide reorganization of capitalist production is not that production processes are split into fragments so that the fragments can be distributed to sites and assigned to a specific type of labour-power in a way that the combination of a specific division o f production in part-operations , a specific distribution o f these operations t o particular sites , and their specific allocation to a certain type of labour-power ensures the optimal valorization of capital under the prevailing economic and political conditions . 7 What is new is that in contrast to preceding decades , if not centuries, o f capitalist development , the spectrum of alternative sites which can now be used i s expanding rapidly and at the same time being changed qualitatively. This spectrum now embraces not only sites in different industrial countries or different regions within one industrial country (in the final analysis with the subdivisions of the labour-force by age, sex, race, nationality, etc. ) , but to an increasing extent sites in a large number o f developing countries. This has meant an extreme process of diversifica­ tion in the social context within which labour-power for industrial-capi­ talist production is recruited. Without a detailed knowledge of the material on which corporate calculations are based, and without a glimpse into a company' s books , it is of course impossible to say precisely which product-innovation, o r which particular complex o f innovations of site, process , and type o f labour-force is the one dictated for any individual firm ; nor is it possible to specify the ways in which labour-power will be utilized at new sites , or at which new sites ; these options range from buying-in from domestic industry to the construction of a world market factory at a free production zone . Nevertheless , the information which is avail­ able is adequate, both qualitatively and sometimes in quite precise financial detail, to allow such calculations to be simulated. s The extra profits promised b y a world ..wide reorganization of capita­ list production in accordance with these new conditions for individual firms , and the universalization of this reorganization through the mechanism of competition, are sufficient to explain the possibility and reality of such a reorganization in a qualitative sense . For example, this perspective provides a plausible explanation for many of the indicators listed in the. introduction which showed the existence of a distinct turning-point in capitalist development especially changes in the international division of labour, at least as far as the general trend is concerned . Consider, for example, the doubling in the share of the developing countries in world exports of manufactured goods between . . _

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and 1 978 , an expression of the rapid growth in the competi­ .';"'T�'np�s of sites in the developing countries for world nlarket oriented manufacturing .9

However, the foregoing factors (explained in sections 1 0 to 1 2) are not in themselves sufficient to explain the timing of the phenomenon , L e . the specific and quite abrupt point in time at which the world- wide reorganization of capitalist production began, i. e. the end of the 1960s and the beginning of the 1970s. It is only in combination with our former analysis (sections 8 and 9) o f the developmental tendencies inherent in the post-war model of accumulation that an explanation o f th e timing o f the phenomenon i s possible . By the mid- 1 960s , two decades of unprecedented economic growth had led to a perceptible reduction in the size of the industrial reserve army in most capitalist industrial countries and to a perceptible strengthening in the bargaining position of the. trade unions . It is very doubtful whether in such a situation a tempora�y reduction in domestic investment, together with an increase in the share of investment devoted to rationalization, in isolation would have been a politically feasible means for bringing the supply of available labour-power, and the terms on which it was supplied , to a level and form acceptable to the demands of valorization . But the working of the post-war model o f accumulation with its two decades of productivity-linked wage increases in the industrial countries had also led to such a large gro wth in the differential between average industrial wages in the industrial coun tries and average industrial wages in the developing countries that, in conj unction with all the other structural conditions for the valodza­ tion of capital which had not changed so rapidly, a relocation of parts of the manufacturing and other activities o f the industrial countries to the developing countries became clearly economically feasible . For an increasing number of processes by the end of the 1 960s and the begin­ ning of the 1 970s the cost-advantages of industrial countries (infra­ structure, education and training of workers , political stability, proximity to suppliers and consumers, etc .) were no longer sufficient to compensate for the other types of cost advantages encountered in the developing countries (low wages, other working conditions favorable to valorization, adequate labour productivity, numerous government subsidies , etc . ) . I n other words: the model of social partnership based o n wage increases linked to productivity increases is n ot tenable over a long period of time as a model of (increasingly autocen tric) accumulation in the industrial countries, since what appear to be merely residual rela­ tions oj the industrial countries to their social en vironment, principally the developing countries, sooner or later serve, via the mechanisms of

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rationalization and relocation, to deprive this model of the central pre­ condition of its functioning, its self-sufficiency. Rationalization combined with relocation, which constitute the response to the new structural conditions for the valorization of capital, are now bringing abbut a falling trend in employment in the industrial countries through the world-wide reorganization of production . Because o f the relative decline i n the competitiveness o f capitalist production in the industrial countries and because ' what has been taken by the oil-sheikhs cannot be redistributed once more' , the social partners have tacitly agreed that in future the growth in wagesfor those still employed in the industrial countries will no longer be linked to pro­ ductivity but will be less, to an extent determined by what is �economi­ cally feasible ' . . Workers are assured that restructuring will contribute to making . those remaining j obs in the industrial countries ' more secure' ; reloca­ tion of production to low-wage countries allows firms to achieve an 'optimal mix' and hence secure that production renlaining in the indus­ trial country . ' Defensive rationalization' and ' economically feasible' wage increases in high-wage countries lower the share of wage costs in total production costs and hence lead to a reestablishment o f competi­ tiveness and profitability - 'today's profits are tomorrow' s invest­ ments and the day after tomorrow' s j obs ' (an extremely misleading piece of propaganda as long as profits continue to be invested in rationalization and/or relocation) . Finally, the energy crisis , t he product of two decades of incomparable economic growth fuelled by a flood of (excessively) cheap oil , is necessitating a fundamental restruc­ t uring of the economy and opening up new fields for investment . These expectations remain , however, as yet unfulfilled . The outcome of the various restructurings to date has been a reduction in the growth of effective demand in the industrial countries and world-wide - the ' slackened growth in mass incomes in the industrial countries has not yet been balanced by a corresponding increase in the developing countries . (including OPEC), or in any other way. This is the �central' cause of the ' falling trend in rates of growth in domestic product, industrial output, , and (with a lag) foreign trade observable in the industrial countries and to a lesser extent in the developing countries (�central' because it is the direct product of the conditions of the functioning of the post-war model of accumulation) .

III 14 It is not particularly difficult to predict that the world-wide reorgan . tion and decentralization oj capitalist production, accompanied

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tively lo w rat�s oj growth, will continue over the next Jew , as there is no sign yet that the structural conditions for the valori­ zatio n of cap�tal which underlie this development are likely to change in th . e foreseeable future. There is , for example, no discernible political force which is b oth willing and able to impose a drastic reduction in the international freedom of movement of commodities and capital, and which could therefore restore that self-sufficiency which is required as a precondi­ tion for a renewed policy of wage increases tied to productivity in the .industrial countries . The resistance of the organized working class in the industrial countries means that it is difficult to imagine a drastic deterioration taking place in wages and working conditions which would constitute the decisive element of a policy of austerity, although this resistance is being paid for in the form of relatively high and rising unemployment . On the other hand, the level of subsidy from the quan­ titativelSr still significant non-capitalist modes of production and the competition between developing countries on the world market for pro­ duction sites mean that a noticeable improvement in wages and working conditions in the developing countries is virtually impossible (always o n the assumption that the current social and economic structure remains essentially as it is) . Only a drastic deterioration in the industrial coun­ tries and/or a noticeable improvement in the developing countries would be sufficient to affect the balance of cost advantages between respective sites such that the advance of the world-wide reorganization and decentralization of capitalist production might be placed in doub t . Thus the principal factors which might necessitate a reappraisal of our original prognosis are not likely to be operating in the foreseeable future. Secondary factors might influence the speed , but not the fact or direction of this process . A number oj such secondary Jactors do act to Javor and accelerate reorganization: international organizations such as the World Bank, the IMF or UNIDO exercise a not inconsiderable role as . representatives of the general i nterests of world capital in the encouragement of this reorganization . The members of the bourgeoisie in the developing countries attempt to secure their local hegemony as brokers of capitalist world market oriented sub-industrialization through the creation of the preconditions for the exploitation of the human and natural resources of their countries (as much as this is possible in the face of internal resis­ tance) . (The reqUired means are removed from alternative uses which favour the interests of the maj ority; foreign credits are usually accom­ panied by strict conditions for use in the interests of world-wide capital accumulation rather than for programmes to increase local welfare; the resultant economic and social structure then represents a heavy mortgage for any future reform policies) . Governments and interest­ groups in those industrial countries, in particular the Federal Republic of Germany, whose position as technological leaders in conj unction

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with a corresponding structural change in their own economies appear to offer favourable conditions for the maintenance of their inter­ national competitiveness ('Modell Deutschland' , Le. monopoly rent through the supply of turnkey plant , export of blue-prints , etc . The corresponding appropriate economic policy finds a mass basis in those white and blue collar workers who see the chance for upward mobility and promotion and consequently advocate trade union 'moderation' in order to participate in the monetary gratifications of the system in the future , even though these might be less than previously, and possibly, of necessity, at the expense of their co-workers who may be rendered ' superfluous ' by structural change, rationalization, and relocation and/or who may not possess the . requisite amount of regional or occupational mobility) . Finally, even the state bureaucracies of the centrally planned economies have surreptitiously accomnlodated themselves to the world-wide reorganization of capital in the hope of stabilizing the status quo in their own countries and , where possible, of deriving some benefit from their position of relative strength (compared with the developing countries) through a selective 'and modest involvement in this development (see, for example, proj ects propounded through 'tripartite co-operation ' or industrial co-opera­ tion agreements involving transfers of technology and know-how) . Other secondary factors constrain and slo w down reorganization , such as the difficulty in creating the broad range of preconditions for capitalist production in developing countries outside of a few privileged sites (such as free production zones) as it were in the twinkling of an eye - preconditions such as labour discipline and skill, infrastructure , efficient administration, etc . and , in particular , a ' favourable climate of investment ' and ' political stability' . The resistance of organized workers in the industrial countries is expressed, for example, in protec­ tionist measures aimed at the excessive social disruptions following from unregulated structural change; mass unemployment on a scale comparable to that of the inter-war period is not politically practicable in the industrial countries . A deep feeling of insecurity has arisen in a number of camps about the way ahead , since it has beconle evident that capitalist growth can no longer be regarded as an attainable social stra­ tegy for the future .

15 What effects can be expected given that the general tendency toward world-wide reorganization and decentralization of capitalist produc­ tion makes further advances in the foreseeable future? As far as the developing countries are concerned , one thing is imme­ diately clear : measured in ternlS of the nunlbers of j obs created in the last ten to fifteen years in world market oriented production in the ' developing countries , this process simply does not possess the potent ·

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reduce unemployment or underemployment in the developing coun­ in whole or part, whatever the prevailing wages and conditions. "' ..... ''' a't''' c a . ..u , the unemployment created in this combined process of ratio nalization and relocation in the industrial countries is , in quantita­ tive t erms, by no nleans negligible when set against total employment in the industrial countries . A 'New International Economic Order' in . which this process plays a key role will not reduce the existing wide disparities in the material positions of the maj ority of the population in the industrial and developing countries . H owever , it is highly improbable that the relocation potential o f manufacturing industry (and in other ways of agribusiness , tourism, etc.) will be realized by all the developing countries in equal measure . 'Local ' , historically explicable peculiarities on the one hand , and cost­ advantages based on the regional concentration of relocated produc­ tion on the other, have led to the fact that at present a large proportion of world market oriented industry is concentrated in a small n umber of developing coun tries (the so-called threshold or newly industrializing countries , such as H ong Kong, Singapore, Taiwan, South Korea, Brazil, Mexico) . Compared with the standard of reference provi ded by the, industrial countries (or alternatively its converse in the maj ority of the developing countries) the possibilities for the massive subsidization of the valorization of capital by non-capitalist modes of production and reproduction has either ceased or will soon do so in these 'threshold ' countries . Industrial wages will of necessity have t o increase (or already have increased) in line with this development in order to guarantee the reproduction of labour-power on an aggregate social scale, with due regard for the contribution made by domestic labour and external labour-reserves (compare Singapore' s Malaysian hinterland) . It is therefore possible to conceive of two alternative paths of development for the developing countries within the framework of the capitalist world-system . Either the ensemble of relevant structural conditions for the valoriza­ tion of capital (in which wage-levels figure as only one, if important, element) will develop in such a way that industrial production remains competitive despite rising and possibly relatively high wages (compare Hong Kong and Singapore in relation to the Philippi n es) . These coun­ tries would then have the opportunity to undertake a progressive extension of their production since - in contrast to the case of import­ substitution industry where (with the possible exception of the most populous developing and OPEC countries) the limits to industrial expansion are swiftly encountered because of the limited local demand in peripheral capitalist countries - they will be faced with a relatively large market, namely the industrial countries in whose trade they can possibly secure a growing share. A progressive capitalization and industrialization of these 'threshold' countries will therefore be pos­ sible if they can succeed in compensating for the increasing costs of

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reproduction of labour-power and for other costs by increasing the pro­ ductivity of labour, improving infrastructure and training, mobilizing inter-industry links , raising the quality of output with suitable speciali­ sation, and shifting to new areas of production at the right times . This is all dependent on the crucial assumption that access to markets remains unhindered and on the condition that early-capitalist living and working conditions continue to dominate the bulk of the population. Or, alternatively (and this applies to all developing countries and not merely the ' threshold' countries), increasing costs of reproduction of labour-power and wages (not to mention political instability, etc .) will worsen the conditions for the valorization of capital because of the absence of compensatory mechanisms and p olicies. In such a situation, once a critical threshold has been reached industrial capital will migrate to another site or at least cease expanding at that particular site. This' form of industrial vagabondage which extends across the entire globe, and in particular between the developing countries , can be compared to shifting cultivation: as soon as the (social) soil is exhausted by the valorization of capital and the despoliation of natural resources , it is left fallow for regeneration through the vegetative powers of non-capi­ talist or even socialist modes of production - possibly to reassume the role of victim in the future - in the desperate hope that the last extrac­ tion of the system 's vital forces will not have irreversibly damaged the future recovery of the non-capitalist modes of production and , if neces­ sary, accompanied by the cynical acceptance of famine, in accordance with the maxim: ' Let nature take its course! ' In addition to these two alternatives, which at most allow the poten­ tial for industrialization on capitalist terms for a small number of 'threshold ' - countries , the growth of 7Jolitical instability ' in the Third World should not be forgotten . This carries with it the promise of a better future, even if initially it·is only expressed in the form of tempo­ rary anti-imperialist class alliances or revolts lacking an explicit poli­ tica1 direction . The revolutions i n China, Cuba, and elsewhere have shown that there are ways of overcoming the material poverty of the population of a developing country in less than a generation. Clearly, for the develop­ ing countries the mere destruction of peripheral-capitalist relations of production and domination , together with the partial and temporary withdrawal from the capitalist world-market, constitute significant productive forces in themselves . Only the future can say whether these � o� alist transitional societies (given that they have passed through the '. InItIal phase of mass mobilizatio n) can effect a long-term defens e agains t or escape from the economic and military threat and ideological : challenge originati(lg within the capitalist world-system , with its as yet se�mingly �nbroken potential for raising (capitalist) productivity; wIthout havIng to make increas ing use of capitalist principles of s . organization and ideologies .

�

"

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

83

As far as the traditional industrial countries are concerned , capital push ahead with a restructuring of the economy in the next few years on two main fronts . The first is the development of energy saving techno logies, which (po ssibly after a period of forced use of nuclear .. power intended to diversify and allow a reexpansion of energy produc­ tion) will replace the profligate technologies of the 1 950s and 1 960s . The second is the progress of the combinedprocesses of rationalization . and relocation , above all under the rubric of the ' electronic revolution ' and 'subcontracting' of all kinds , with the main aim being the retention 0/as large a percentage of the work-force aspossible outside the expen­ sive structure of the �welfare state ', regardless of any shifts of produc­ tion back to the traditional centers of industrial capitalism . The rate at which labour is discharged will remain high in the industrial countries . The difficulties of keeping frictional unemployment in check because of the large divergences between the skills of those rendered unem­ ployed and the requirements of new vacancies will be considerable and will inevitably mean serious additional physical andpsychical stress on those affected. At least three differing resp onses can be detected from th ose most affected by these developments. The trade-union organized hard core of the work-force in the technologically most advanced industrial coun­ tries (typically the male , mobile, aspirant, social-democratic voting, middle-aged skilled worker) adv.ocates a continuation of the policies which characterized the boom (L e . the free enterprise system with free trade externally and productivity-linked wage increases internally) in the expectation that the additional revenue provided by unequal exchange accruing to a country situated at the top of the international hierarchy can be appropriated to secure and increase the material­ monetary well-being of at least their own social strata ('Modell Deutschland' ) . Those organized in trade unions in the other industrial countries and in those branches most severely affected by structural change in the technologically leading countries will demand protec­ tionist measures in the industrial countries and social improvements in the world market oriented industry of the developing countries in order to minimize the pressures of relocation and rationalization in their own countries . The so-called unorganized workers, principally women , youth, temporary immigrant workers , and so-called 'marginal �roups ' of all kinds will seek to develop as much autonomy as possible from capital and create ways of living and working which run counter to the process of total commodification. This may have a political and econo­ mic stabilizing effect in periods of depression, but in the long term could present a danger , not only to the thesis that the capital-relation is indispensable , but to the relation itself. Within the context of the precarious options open to them , states will attempt to plan structural change to meet the necessities imposed by the system which the market itself cannot fulfill because of the temporary

84

TRANSFORMING THE WORLD-ECONOMY?

absence of individual profitability. These will be principally measures to increase the international competitiveness oj their respective national sites, and to reduce the reproduction costs oj labour;'p ower, e.g. standardization of mass consumption and of services (mass transit) , ' flexible' labour-market policies and policy on the family and social questions , and subsidies for · technological development . Als o central i s the attempt to convince the bulk o f the population not only o f the ' necessity o f structural change' but also o f the alleged necessity t o d o without ' no longer affordable' soci al services and other social reforms . lO In this context , the alleged malice of the sheikhs in unleash­ ing the oil crisis provides a welcome alibi for the structural deficiencies of the capitalist system. A recent report expressed this in the following terms : The energy crisis will emerge more prominently as the central problem of the 1 980' s . The absolute necessity to establish new struc­ tures in the energy sector could in fact confirm prognoses of a new industrial revolution, an intensification of investment and enterprise and hence growth . The time for utopian discussion is finally, and irrevocably, past . It is action which is now required . However , this also means that after many years of consumer oriented policies we must reset the points of economic and financial policy so that the necessary massive finances needed for the structural reshaping using free enterprise methods are made available . We have lived long enough beyond our means . 1 1 As yet i t i s not politically decided i n the individual industrial coun­ tries whether this change takes the form of a return to antediluvian models oj accumulation based on the drastic cutting-back oj mass consumption (with increased susceptibility to crises) or a modified revival oj the model oj accumulation based on an expansion oj mass consumption of the post-war period (with a possible increased share of social consumption mediated through the state and financed by taxing receipts from relocations of production). 12 It may be either ; but should the capitalist world-system succeed in reconstituting itself, it is to be hoped that , for the sake of other , alternative perspectives , the interna­ tional tensions which arise in a period of (quasi-) stagnation and struc­ tural change d o not , against previous precedent, discharge themselves explosively.

Notes l One indicator often referred to is that the average rate of pro fits has f in a number of large industrial countries since the beginning of the 1 970s However we do not give this aspect any particular consideration he

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

85

because of the notorious di fficulties encountered in trying to obtain a reliable measure of these rates, and the national differences in the timing of changes in rates and levels of profits. Moreover, as will be shown later, the key factor in determining the international reorganization of capital is not so much the absolute level of profit and its change over time, but the diver­ gence between the profits obtainable in the industrialized countries and those in the developing countries . (Of course, it should also be noted that a fall in the average rate of profit is not incompatible with a constant or even increasing rate of profit for the majority o f large companies) . 2 See Frobel , Heinrichs and Kreye, 1 977. 3 Of co urse this process does n o t mean that capital no longer exploits the possible benefits o f production in countries whose local market is protected by import-controls , import-levies , strictly controlled imposition of 'local content ' provisions, high transport cost s , and other factors . Whatis new i s that at present more and more nationalfactories (production mostly for the local market taking advantage of, and often only viable because o f, the cost-advantages of protection) are also at the same time world market

factories

(production for the world market , including the local market , without protection) . A typical example: Volkswagen produces in Mexico . A part o f its output i s sold o n the protected local domestic market , making use 'o f the cost-advantages of protection (, national factory'). However,

production is not o nly based on the cost-advantages of protection ; another part of the firm ' s output is exported (VW Beetles to Europe, engines to the US subsidiary of Volkswagen, etc. ) , proof of the fact that VW' s produc­ tion i n Mexico can compete o n the world market without the benefits o f protection (i . e . the world market factory, instead of the classic import-sub­ stitution industry) . In the final analysis , Volkswagen ' s Mexico productio n facilities are j ust one element in the company 's world-wide integrated production complex (Federal Republic of Germany, Brazil , US , Mexico , Nigeria , etc .) with important international intra-firm flows of compo­ nent s , and in the near future, with additional inter-company co-production arrangements (Renault , Nissan) . See in this connections the plans for a 'world car ' . See Lall,

1 980.

4 Relocation o f production from industrial countries to developing countries through and within companies from the industrial countries is the most well-known , but by no means the only form which this process takes . 5 See Amin ( 1 972, 1 977), Andreff (1 976) , Arrighi ( 1 978 , 1 979), Boyer ( 1 979) ,

( 1 979), Frank ( 1 978, 1 980) , Hobsbawm ( 1 976, 1 979) , ( 1 973), Le Monde diplomatique ( 1 979). Elsenhans

6

Hymer

A current instance: the firm of Kochs Adler AG, Bielefeld (Federal Repub­ lic o f Germany), recently announced the development of an automatic sewing machine (, classical sleeve vents - sewing and folding performed in one single automated operation ' ) . Third in the list of the ten points which characterized the machine was ' very short time required for training of

7

unskilled operator' . See Textile Asia

( 1 979, 1 25) .

However, process , site , and labour-force innovations are not carried out

for their own sake in isolation and optimized independently; the object of the optimization technique is rather the undivided complex of process, site, and labour-power innovations . Consequently, the o ften encountered, and politically motivated , view with separates rationalization and relocation

86

TRANSFORMING THE WORLD-ECONOMY?

and which advances the position that sufficient forced rationalization i n the industrial countries could eventually make relocation t o low-wage countries superfluous is misleading . 8 For example, Frobel, Heinrichs and Kreye ( 1 977; 1 74f , 57 1 ff) or Frobel, Heinrichs and Kreye ( 1 980; 1 52 , 3 8 1 ff) ; Textil-Wirtschaft ( 1 977) ; author ' s conversations with Federal German industrialists and purchasing agents of the garment trade during a business trip to Southeast Asia for ' site inspec­ tion on spot ' (Fall 1 978). 9 Studies on some aspects of the process of reorganization in manufacturing can be found in Frobel, Heinrichs and Kreye ( 1 977) or Frobel, Heinrichs and Kreye ( 1 980) ; van Klaveren ( 1 976) ; studies from the research project ' Industrial Readjustnlent and the International Division of Labor' at the University of Tilburg/Netherlands (including work by Ben Evers , Gerard de Groot, Willy Wagenmans) ; Pacific Research ( 1 978) ; AMPO ( 1 977) ; Edwards ( 1 979) . For studies on agribusiness , see the books and articles by.

Ernest Feder . 1 0 In the Federal Republic of Germany cuts in social services are marketed with the formula ' SUirkung der Eigenverantwortung' . No doubt other industrial-capitalist countries will know equivalent formulas . 1 1 Siiddeutsche Zeitung ( 1 980); see also the quite different analyses in Le Monde diplomatique ( 1 979) . 1 2 See Frobel, Heinrichs and Kreye ( 1 982) .

References Altvater , Elmar , Hoffmann , Jiirgen and Semmler , Willi , Vom Wirt­ schaftswunder zur Wirtschaftskrise (Berlin: Olle Wolter , 1 979) . Amin , Samir , L 'accumulation a rechelle mondiale (Paris : Editions Anthropos, 1 970) . Amin, Samir, ' Le modele theorique d 'accumulation et de developpe­ ment dans Ie monde contemporain ' , Revue Tiers-Monde, No . 52, 1 972, 703 -726 . Amin, Samir, Le developpement inegal (Paris : Les Editions de Minuit, 1 973) . Amin , Samir, ' La structure de classe du systeme imperialiste contem­ porain ' , L 'homme et la SOCiete, Nos . 45-46, 1 977a, 69-8 7 . Anlin , Samir , ' Self-reliance and the New International Economic Order ' , Mon thly Review, XXIX, 3 , 1 977b , 1 -2 1 . AMPO , Special Volume, ' Free Trade Zones and Industrialization of Asia' , AMPO VII I , 4 & IX, 1 -2 , 1 977 ( Series Nos . 30-3 1 ) . Anderson, Perry, Passages from A ntiquity to Feudalism (London : New Left Books, 1 974) . Anderson, Perry, Lineages of the A bsolutist State (London : New Le Books, 1 974) . Andreff, Wladimir, Profits et structures du capitalisme mondial (Pari s : Calmann-Levy, 1 976) . =

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eitsgruppe Bielefelder Entwicklungssoziologen (eds . ) , Subsistenz­ produktion undA kklfmulation (Saarbriicken: Breitenbach, 1 979) . A . rrighi , Giovanni, 'Towards a Theory of Capitalist Crisis ' , New Left Review, No. 1 1 1 , 1 978 , 3-24 . Arrighi , Giovanni , 'The Class Struggle in Twentieth-Century Europe' , . unpubl. , 1 979 . . Arrighi , Giovanni , ' Hypotheses on the Current Global Crisis � , unpubl. , 1 980. B anaj i , Jairus, ' Modes of Production in a Materialist Conception of History ' , Capital and Class, No . 3 , 1 977, 1 -44 B ois , Guy, Crise du feodalisme (Paris: Presses de la Fondation Nationale. des Sciences Politiques , 1 976) . , Bois Guy, 'Against the Neo-Malthusian Orthodoxy' , Past and Present, No . 79; 1 97 8 , 60-69. Boyer , Robert , ' La crise actuelle: une mise en perspective historique' , Critiques de reconomie politique. Nouvelle serie, Nos . 7-8 , 1 979, )-1 1 3 . Braudel, Fernand, Civilisation materielle, economie et capitalisme, XV-XVIII siecle (Paris : Armand Colin, 1 979) , 3 vols . Brenner, Robert , 'Agrarian Class Structure and Economic Develop­ ment in Pre-industrial Europe' , Past and Present, No . 70, 1 976 , 30-75 . Edwards , Anthony, The New Industrial Coun tries and their Impact on Western Manufacturing (London : The Economist Intelligence Unit, 1 979) . Elsenhans , Hartmut, ' Grundlagen der Entwicklung der kapitali­ stischen Weltwirtschaft ' in Senghaas , Dieter (ed. ) , Kapitalistische Weltokonomie (Frankfurt : Suhrkamp , 1 979) , 1 03 - 1 48 . Elwert , Georg , 'Uberleben i n Krisen, kapitalistische Entwicklung und traditionelle SolidariHit . Zur Okonomie und Sozialstruktur eines westafrikanischen B auerndorfes ' , Zeitschrift far · Sozio logie , IX, 4, 1 980, 343-365. Esser , Josef, Fach, Wolfgang & Simonis, Georg , ' Perspektiven des "Modells Deutschland ' ' ' , links, No . 1 22 , 1 980, 6- 1 0. Esser , Josef, Fach, Wolfgang, Schlupp, Frieder & Simonis , Georg, 'Alternative Wirtschaftspolitik? ' , links, No. 1 24, 1 980, 9- 1 2. Faure, Claude, ' L 'inU�gration de l 'agriculture dans la societe indus­ trielle ' , L 'homme et fa societe, Nos . 55-5 8 , 1 980, 3 9-60 . Foster, John , Class Struggle and the Industrial Revolution (London : Weidenfeld & Nicolson, 1 974) . Fraginals , Manuel Moreno, El Ingenio (La Habana : Editorial de Ciencias Sociales , 1 978), 3 vols . Frank , Andre Gunder , World Accumulation, 1492- 1 789 (New York: Monthly Review Press , 1 978a) . Frank, Andre Gunder , Dependent A ccumulation and Underdevelop­ ment (London : Macmillan, 1 978b) .

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TRANSFORMING · THE WORLD-ECONOMY?

Frank , Andre Gunder ,

Weltwirtschaft in der Krise (Reinbek bei

Hamburg : Rowohlt, 1 978c) . Frank , Andre Gunder, Crisis: In the World Economy (London: Heine­ mann, 1 980) . Friedmann , Harriet , ' World Market, State and Family Farm : Social Bases of Household Production in the Era of Wage Labo ur ' ,

Comparative Studies in Society and History , XX, 4 ,

1 978 ,

545-5 86 . Fro bel , Folker , Heinrichs , Jiirgen, Kreye , Otto & Sunkel , O svaldo , ' Internationalisierung von Kapital und Arbeitskraft ' , Leviathan , IV, 1 97 3 , 429-454 . Frobel , Folker , Heinrichs , Jiirgen & Kreye, Otto , Die neue interna­ tionale Arbeits(eilung (Reinbek bei Hamburg : Rowohlt , 1 97 7) . Frobel , Folker , Heinrichs , Jiirgen & Kreye, Otto , The New In terna­ tional Division of Labour (Cambridge : Cambridge University Press , 1 980) ( shortened English translation of Frobel , Heinrichs & Kreye ( 1 977) ) . Frobel , Folker , Heinrichs , Jiirgen & Kreye , Otto (eds . ) , Krisen in der kapitalistischen Weltokonomie (Reinbek bei Hamburg : Rowohlt , 1 98 1 ) . Frobel , Folker , Heinrich s , Jiirgen & Kreye , Otto , ' Wege aus der Wirt­ schaftskrise? ' in Meyer-Abich , Klaus Michael (ed . ) , Physik,

Philosophie und Politik. Festschrift far Carl Friedrich von Weizsacker zum 70. Geburtstag (Munich : Hanser , 1 982) , 1 45 - 1 67 . Geertz, Clifford , Agricultural In volution (Berkeley : University o f Cali­ fornia Pres s , 1 96 3 ) . Heinsohn , Gunnar , Knieper , Rolf and Steiger , Otto, Menschenpro­ duktion (Frankfurt : Suhrkamp , 1 979) . Hengstenberg, Johannes and Fay, Margaret, ' Unequal Exchange' , unpub! . , 1 97 8/79 . Hill , Christopher , Reformation to Industrial Revolution (Harmonds­ worth : Penguin , 1 969) . Hilton, Rodney (ed . ) , The Transition from Feudalism to Capitalism (London : New Left Books , 1 976) . Hobsbawm , Eric J . , The Age of Revolution (London : Weidenfeld . & Nicolson , 1 962) . Hobsbawm , Eric J . , 'The Crisis of the Seventeenth Century' in Aston, Trevor (ed . ) , Crisis in Europe, 1560-1660 (London : Routledge & Kegan P aul, 1 965) , 5 - 5 8 . Hobsbawm, Eric J . , Industry and Empire (Harmondsworth : P enguin , 1 969) . Hobsbawm , Eric J . , The Age of Capital (London : Weidenfeld & Nicolson , 1 975) . Hobsbawm , Eric J . , ' The Crisis of Capitalism in Historical Perspec-: tive' , Socialist Revolution , No . 30, 1 976, 77-96 . Hobsbawnl , Eric J . , ' Capitalisme et - agriculture : Les reformateurs

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

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ecossais au XVI IIe siecle' , A nnales ESC, XXXII I , 3 , 1 978 , 5 80-60 l . bsb awm, Eric J . , 'The development o f the world economy (review­ ing W.W. Rostow, The World Economy: History and Prospect) ' , Cambridge Journal 0/ Economics, I I I , 4 , 1 979, 305-3 1 8 . Huxle y, Aldous , Brave New World (London: Chatto & Windus , 1 932) . Hymer , Stephen, ' International Politics and International Economics : A Radical Approach' in Hymer, Stephen , The Multinational Cor­ poration: A Radical Approach (Cambridge: Cambridge Univer­ sity Press , 1 978) , 25 6-272. Jacobi , Carola and Niess , Thomas , Haus/rauen, Bauern, Margina­ lisierte: Oberlebensproduktion in 'Dritter ' und 'Erster ' Welt (Saarbrucken : Breitenbach , 1 980) . Kriedte , Peter , Medick , Hans and Schlumbohm, Jurgen, Industrialisie­ rung vor der Industrialisierung (Gottingen : Vandenhoeck & Ruprecht, 1 977) . Krogbaumker , Beate , 'Subsistenzproduktion und geschlechtliche Arbeitsteilung' , Peripherie, No . 3 , 1 980, 1 4-30 . Kuchenbuch, Ludolf and Michael, Bernd (eds . ) , Feudalismus (Frank­ furt : Ullstein , 1 977) LalI , Sanj aya, 'The International Automotive Industry and the Devel­ oping World' , World Development, VII I , 10, o1 980, 789-8 1 2 . Le Bris, Emile, Rey, Pierre-Philippe and Samuel , Michel , Capitalisme negrier (Paris: Maspero , 1 976) . Le Monde diplomatique, No . 309, Dec . 1 979 (with articles b y Marc Anvers , Nicolas Baby, Claude Courlet and Pierre Judet, Joyce Kolko , Jean Roussel) and subsequent issues . Lenz, lIse, 'Oberlegungen zum Verhaltnis von Staat , Subsistenzpro­ duktion und Sozialbewegungen ' , Peripherie, No . 3 , 1 980, 5- 1 3 . Mandel, Ernest, The Second Slump (London: New Left Book s , 1 9718) . Marx , Karl, Das Kapital. Erster Band (Hamburg : Meissner, 1 867 , 1 873) . Marx , Karl, Grundrisse (Berlin : Dietz, 1 974) . Meillassoux, Claude, Femmes, greniers et capitaux (Paris: Maspero, 1 975) . Menahem , George , ' Les mutations de la famille et les modes de repro­ duction de la force de travail ' , L 'homme et la societe, Nos . 5 1 -54 , 1 979 , 63 - 1 0 1 . O' Connor, James , 'Accumulation Crisis' , unpubl. , 1 978 . Olle, Werner, ' Internationalisierung der Produktion und Gewerk­ schaftspolitik ' , unpubl . , 1 980. Pacific Research , Special Volume, ' Philippines : Workers in the Export Industry ' , Pacific Research, IX , 3 & 4, 1 978 . Polanyi, Karl , The Great Trans/ormation ( 1 944) (Boston : Beacon Press , 1 957) . Poni , Carlo , 'Archeologie de la fabrique' , A nnales ESC, XXVII , 6 ,

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Weber , Max, Wirtschaft und Gesellschaft (Tiibingen : Mohr (Siebeck) , 1 972) . Wolf, Eric , Peasants (Englewood Cliffs, N. J . : Prentice-Hall, 1 966) .

Appendix : World industrial production and world tr ade, 1 948- 1 980 Figures for world industrial production and world trade are drawn mainly from data published b y the UN, and converted into table form . The only conclusions presented here are those which relate to the turning-point in the capitalist world-economy at the end of the 1 960s/ beginning of the 1 970s . It is up to the reader to formulate conclusions which may relate to other aspects . The units in which the data are presented are countries and groupings of countries , as most available data relates to these units . However , the analysis often demands that these national categories be supplemented by other units more appropriate to the key aspects of capitalist develop­ ment (for example , firms , households , states , or modes of ·production and reproduction) . 1 Table 3 . 1 shows the average annual rates of growth in domestic product per capita, industrial production and exports of manufactured products for the traditional industrial countries and the developi ng countries for 5-year periods between 1 948 and 1 978 in ' real ' percentage terms . Short-term economic fluctuations have been ironed out where possible to reveal medium-term trends . The data in Table 3 . 1 shows that average 'real ' rates of growth of domestic product per capita, industrial value-added and exports of manufactured products for the industrial countries rose from the mid-1950s to a historically unique high point in the mid-1960s, and subsequently fell back. The same qualitative pictur� applies to the developing countries: the only difference is that the turning-point in growth-rates was not reached until the early 1970s, and the decline is less pronounced. It is difficult to give these 'real ' figures an unambiguous, economi­ cally graspable interpretation as volumes - doubly di fficult in periods of rapid depreciation in the US Dollar and marked increases in the price of the most important traded good (oil) (problem of deflating prices) . As a consequence the conclusions drawn from Table 3 . 1 should be confined to the stated structural features of figures which in themselves are somewhat problematic in character . This diachronic comparison of ' real ' magnitudes will be supplemented in later tables by a synchronic analysis of nominal figures of less problematic significap.ce for a number of sample years . Of course, both here and later , the numerical accuracy of such isolated data should not be overestimated (problem of

92

TRANSFORMING THE WORLD-ECONOMY?

data collection) . Consequently, we take only the main trends which can be immediately s een from the tables as the b asis for the further expo si­ tion of our argument . The fact that these global trends almost without exception fit into the overall picture, to which can be added many other indicators , is the b est proo f that one has not been deceived by statistical illusions . The following specific conclusions can be formulated on the basis of the tables : 1 During the entire period under consideration, the rates of growth of exports of manufactured product s from the industrial countries exceed those o f domestic product and industrial production . The same applies since the beginning of the 1 960s for the production and export o f manufactured goods o f the developing countries (Table 3 . 1 ) . This suggests that world economic interdependency has increased in the sphere of manufacturing industry, particularly s ince the beginning of the 1 960s . This opinion is substantially confirmed by the development of export ratios (exports as a percentage of domestic product) (Tables 3 . 1 9 and 3 . 20) . A similarly high degree of interdependency has prob ably existed only once before - in the years immediately before the First World \Var . This high degree of \vorld economic interdependency i s accentuated b y the fact that a signifi­ cant and probably growing percentage of world trade is traffic between the various estab lishments o f one and the same company in di fferent countries . 2 The increase in export ratios was especially pro­

n ounced in theperiod 1968- 1975

-

an expression of the forced trans­

national reorganisation of capitalist production in the initial years o f the depression . 2 The rates o f growth of domestic product and industrial production are clearly higher since the beginning of the 1 970s in the developing countries than in the industrialized countries . Correspondingly ,

since the beginning of the 1970s the share of domestic product and industrial value-added in the market economies accountedfor by the developing countries begins to increase slightly, after two decades in which it had slightly fallen (see Tables 3 . 3 and 3 . 5) . 3 3 The developing countries ' share of world exports, which fell after 1948, began to rise again after the early 1970s. The same appliesfor the sub-group of developing countries without OPEC - although the increase in their share of world exports is less pronounced . Com­ plementary figures apply for the industrial countries (see Table 3 . 6) .

4 The developing coun tries ' share of world exports ofprimary goods

excluding fuels, which had fallen from the end of the Second World War until- the early 1970s, is beginning to increase slightly once more, whereas their share of world exports of fuels has virtually increased continuously (see Tables 3 . 7 and 3 . 1 0) . 5 Since t h e b eginning of the 1 970s the rate of growth of exp orts of manufactured products in the developing countries has been clearly

THE CURRENT DEVELOPMENT OF THE WORLD-ECO NOMY

93

greater than in the industrial countries . As a result , the share of the developing countries in the world exports of manufactured products has, after a long period of stagflation, doubled since the end of the .1960sfrom 4 per cent to around 9 per cent (Tables 3 . 8 and 3 . 1 0) . 4 A breakdown of exports by commodity groups shows that the develop­ ing countries ' share in world exports began to increase slowly but steadily towards the end of the 1 960s in nearly all the maj or commo­ dity groups . This growth and/or share of world exports is parti­ cularly noticeable in textiles and garments .s Other commodity classes with high rates of increase are office machinery and telecommunica­ tions equipment (including electronic components) and household goods (including consumer electronics, photographic equipment and watches) (Tables 3 . 1 0) . In contrast to a commonly held view, the share of textiles and garments in the export of manufactured products from developing countries has not increased over the last twenty years but has in fact fallen from around 40 per cent ( 1 955) to around 25 per cent by the end of the 1 970s : marked increases have occurred in this period in the share accounted for by mechanical engineering and electrical engineering (from around 1 0 per cent to around 30 per cent) . In terms of the variety of commodity classes involved , exports from developing countries have become noticeably more diversified (Table 3 . 1 4) . It should not however be forgotten that such exports often (but not always) consist of goods which have already been imported in semi-manufactured form in order to proceed through a few simple steps of further manufacturing such as sewing , soldering, assembly, testing and packing. Exports are con­ centrated on a relatively small number of countries . In the 1 970s around two-thirds of all the exports of manufactured goods were accounted for by a mere seven countries and half of South Korea, Taiwan and Hong Kong (Table 3 . 9) . 6 In the period under consideration manufactured products have gained in significance compared with primary products in the devel­ oping countries ' exports ; even the leap in receipts from exports of mineral oil in 1 974 did not change this fact significantly . Whereas in 1 955 primary products (excluding fuels and including non-ferrous metals) accounted for 67 per cent of exports and manufactured products for 8 per cent, by 1 979 the shares were around 23 per cent and 2 1 per cent respectively. If fuels are left out of account this means that the developing countries have shiftedfrom being almost exclusively pure primary product exporters in the 1950s to a position where manufactured products are of almost equal significance in their export trade (Tables 3 . 1 2 and 3 . 1 3 ) . 7 At first glance the regional structure o f world trade has changed little in its basic outline over the past thirty years. For example, almost three quarters of the exports of the developing countries still go to the industrial countries : just as before, around a hal f of world trade

94

TRANSFORMING THE WORLD-ECONOMY?

comprises trade "between the industrial countries , and trade between the members of the European Community on its own accounts for one fifth of world trade. On closer examination it can be seen that exports between industrial countries as a percentage of world exports rose between 1948 until the beginning of the 1970s (41 per cent to around 55per cent), and then fell back again (48 per cent in 1978) . In part this development reflects on one hand the increased earnings of the OPEC countries for oil and the corresponding rise in the export of manufactured products to the OPEC countries , and on the other, the increase in exports of manufactures from other developing coun­ tries (Tables 3 . 1 5 to 3 . 1 8) . 8 The volume of employment in manufacturing industry expanded faster in the " developing countries than in the industrial countries since the beginning of the 1950s; since the end of the 1960s this diffe­ rence has increased enormously. The average annual rates of growth of employment in manufacturing industry in the developing coun­ tries over the last thirty years have been. between + 3 per cent and + 5 per cent; in the industrial countries between + 2 per cent and - 1 per cent, with a tendency to fall (Table 3 . 1 ) Summary

The most general world aggregates show quite unmistakeably that a turning-point was reached in the capitalist world-economy at the end of the 1 960s/beginning of the 1 970s (L e . before the ' oil crisis ' ) . The most notable items of proof for this thesis have been cited above. What are fundamental are not so much the absolute levels of percentage shares with their slight changes , b ut rather the reversal or substantial accelera­ tion o f certain trends . Of central importance is the doubling in the share of world manufactured exports accounted for by the developing coun­ tries" in the last decade.

Notes 1

Since our main concern here is with the capitalist world-economy, the tables are concentrated on the market economies (industrial and develop­ ing), and for the most part exclude the centrally planned economies which comparable data is anyway o ften lacking . The penetration of free market elements into the centrally planned economies and the partial re­

integration of these economies into the capitalist world division of labour are important, but not as yet of great quantitative significance in relation to world aggregates .

The data for the industrial and developing countries cover up large diffe­ rences between individual countries within the overall groupings . Any analysis of the (unequal) development of capitalism must naturally con-

THE CURRENT DEVELOPMENT OF THE WORLD-ECONOMY

4

95

sider such differences : in an attempt to take a first step in this direction some of the tables are dis aggregated into- less all-embracing country group­ ings and data is also provided for some individual countries . Cf. UN, Transnational Corporations in World Development: A Re-exami­ nation (New York : UN, 1 978) , p . 43 and Tables 3 , 111- 1 6 , 111- 1 7 . Especially i n the developing countries high rates of growth are primarily expression of the accelerated inclusion of 'traditional' activities into the market . They indicate a more rapid growth of commodity production , not necessarily (or at least not to the same extent) production per see The data from the UN and GATT on which this is based only reveal the lower limit of the developing countries ' share as they do not completely record exports from free production zones: ' In Mexico , for instance , such unreported exports amounted in recent years to some one-and-a-half billion dollars, i . e . nearly 5 per cent of manufactured goods exported by all developing countries . Assessment of this trade is particularly difficult and 110 attempt was made to include it . ' (GATT, Networks oj World Trade by A reas and Commodity Classes, 1955�1976 (Geneva: GATT, 1 978) , p . 6 f.) For example , in 1 977 Mexico ' s exports were given as US$ 4 1 88 millio n , o f which 3 4 5 9 went t o O E C D countries , 2808 of this being to t h e US : in the same year the OECD countries alone reported imports from Mexico of US$5 840 million (US - 4689) . I n 1 977 Mexico ' s reported exports of manu­ factured goods were US$ 1 452 million: OECD reported imports were 26 1 0 (US - 2 1 93) . (UN , Yearbook oj International Trade Statistics, 1979 (New York : UN, 1 980); OECD , Statistics oj Foreign Trade, Series C, 1977 (Paris : OECD , 1 979) . )

5

Among the major commodity groups of manu factured product s , garments constituted the most important import from the developing countries as far as share of value in the domestic market in the industrialized countries (EEC, US , Canada, Japan) was concerned - garments comprises SITC 6 1 , 83-5 . In 1 974/5 this share was 7 . 2 per cent compared with 1 . 9 per cent in 1 96 8 ; the corresponding shares from imports from other industrial coun­ tries were, 1 974/5 2 . 6 per cent , 1 968 0 . 7 per cent ; from centrally planned economies , 1 974/5 1 . 1 per cent , 1 968 0 . 2 per cent; thus as a whole the share of 'external ' imports rose from around 2 . 9 per cent in 1 968 to 1 1 . 0 per cent in 1 974/5 , whilst ' external ' exports rose from 2 . 8 per centin 1 968 to 4 . 1 per cent in 1 974/5 (foreign trade between the named industrial countries is excluded). (UNCTAD, Handbook oj International Trade and Develop­

ment Statistics, 1979 (New York : UN, 1 979), Table 7 . 1 . ) The correspon­

ding drastic fall in employment in the garment industry in the named industrial countries has produced progressively stricter import restrictions which first succeeded in putting a brake on the rising imports of garments from developing countries in 1 977 , and particularly redistributed their points of origin . For manufactured goods as a whole , the developing coun­ tries ' share in the imports of the industrialized countries amounted to around 9 per cent in 1 978 ; this represented 3 per cent o f the total sales of manufactured products in industrialized countries . (GATT, International

Trade, 197819 (Geneva; GATT, 1 979) , p. 8).

96

TRANSFORMING THE WORLD-ECONOMY?

Tables : World industrial production and world . trade,

1 948- 1 980

Notes Explanation for the tables is kept to the minimum necessary_ Addi­ tional details can be found in the sources . The country groupings usually follow the UN practice , i . e : Industrial countries Europe excluding Eastern Europe � Canada, USA, Japan , Australia, New Zealand" Israel, South Africa; Centrally planned economies Eastern Europe, China , Mongolia , North Korea, Vietnam ; Developing countries all other countries ISIC International Standard Industrial Classification of All Eco­ nomic Activities , Rev. 2 ( 1 968) Standard International Trade Classification, Rev. 1 ( 1 96 1 ) SITC =

=

=

�?':: ' Table 3 . 1

A verage annual rates of growth of gross domestic product per capita, value-added by manufacturing industry, employment in manufacturing industry and exports of manufactured products of the industrial and developing countries: 1948/53, 1953/58,

1958/63, 1963/68, 1968/73, 1973/78 in 1948/ 1953

1953 / 1958

1958/ 1963

1963/ 1968

1968/ 1973

3 .51 7 . 02 2.7 1 9.61 • 3

2.5 3 .7 1 .9 6.7

3.3 5.3 2.2 7.2

4.0 6.3 1 .7 1 0.2

3 .0 3.8 0.4 9.8

2.2 1 5 . 52 1 .94 0.55

2.3 6.8 4.86 5 .0

2.3 6. 1 3 .9 8.2

2.9 6.9 3.3 10.6

3.9 8.4 5 .0 13.1

1973/ 1978

Industrial countries Gross domestic product per capita Value-added by manufacturing industry (lSIC 3) Employment i n manufacturing industry (ISIC 3) Exports of manufactured products (SITC 5-8)a

2 . 37 2:8 - 0.47 6.3

Developing countries Gross domestic product per capita Value-added by manufacturing industry (lSIC 3) Employment i n manufacturing industry (ISIC 3 ) Exports of manufactured products (SITC 5-8)b

3 .67 5.9 5 .08 1 1 . 79 , 1 0

Sources: UN, The Growth of World Industry: International A nalyses and Tables, various years; UN, Yearbook of National A ccounts Sta­ tistics, various years; UN, Statistical Yearbook, various years; UN, Yearbook ofIndustrial Statistics, various years; UN, Yearbook of International Trade Statistics, various years; UNCTAD, Handbook of International Trade and Development Statistics, various years ; UN, Mon thly Bulletin of Statistics, various years; author's calculations .

100 Growth rates are calculated on the basis of the annual volume (quantum) index for each variable (excluding employment, base years 1 958 for 1 948/5 3 , 1 963 1 00 for 1 953/58 and 1 95 8/63 , 1 970 1 00 for 1 963/68 and 1 968/7 3 , 1 975 1 00 for 1 973/78). For any year n, instead of taking the volume index for year n the above takes the geometric mean of the volume indices for years n - 2, n - 1 , n , n + 1 , n + 2 . Growth rates are calculated from these mean-values using the compound interest formula. (For example, the 1 958/63 column gives growth rates for 1 956- 1 960/ 1 96 1 - 1 965 .) Some indices have been obtained by changing bases . a 1 948- 1 973: Exports of EEC(6) , UK,. Sweden, Switzerland, Japan, USA , Canada; also India in the initial years . b Exports to market economies . 3 B ase year 1 95 3 5 1 950/1 95 1 - 1 95 5. 1 1 948, 1 950/ 1 95 1 - 1 955 2 1 948- 1 950/ 1 95 1 -1 955 1 00 4 1948/ 1 953 10 B ase year 1 970 6 195 3 , 1 955/1 95 6- 1960 8 1 97 1 - 1 975/ 1 976, 1 977 9 1 91 1 - 1 975/1 976- 1 979 7 1 97 1 - 1 975/1 976-1 97 8 100 =

=

=

=

� ::r: tr.I (j c: � � tr.I Z � o tTl -< tr.I i;-4 o

'"0

�

tr.I

� o "Tj

� ::r: tTl

��

r

o m

8 z

o �

>
=

=

\0 ......)

Table 3.2

Share of selected countries and country groupings in world population, gross domestic product, exports and exports of manufactured products: 1977 i n per cent

World M arket economies Centrally planned economies Market economies Industrial countries Developing countries (excl. OPEC) OPEC Industrial countries USA EEC (Nine) (incl. W. Germany) Japan Other Developing countries (excl. OPEC) Brazil India South Korea Other Centrally planned economies Centrally planned economies, Europe Centrally planned economies, Asia

Population

GDP

Exports SITC O-9

1 00

1 00

1 00

1 00

68 32

80 20

90 10

91 9

18 42

65 11 5

65 12 13

83

24 21

11 33 ( 1 0) 7 14

12 45 ( 1 6) 12 14

7

5 6 1) 3 4

(

7)

9 11

Exports SITC 5-8

7 o

3 15 1 23

2 1

o

o 7

1 1 1 10

9 24

15 5

9 1

8 1

1 1 5

Sources: UNCTAD, Handbook of International Trade and Development Statistics, Supplement 1980; UN, Yearbook ofInternational Trade Statistics, 1979; author1s calculations . Estimates of GDP for centrally planned economies have a wide margin of error mainly because of problems in deriving the GNP IGDP from net material product, and in converting GNP estimates into US dollarS .

\0 00

...,

� Z

CIl

6� �

�

I-]

::t:

trJ

��

t'""

9

trJ ()

o

a

�

...:>

•

Table 3 . 3

Share o/selected countries and country groupings in the gross domestic product o/ the market economies: 1948, 1953, 1958, 1963, 1968, 1973, 1978 in per cent

Market economies

1948

1953

1958

1963

1968

1973

1978

1 00

1 00

1 00

1 00

1 00

1 00

1 00

82

83

} 18

} 17

83 14 3

84 14 2

85 13 2

85 12 3

81 10

47 24 ( 5) 2 10

47· 24 ( 5) 3

43 25 ( 7) 5 11

42 24 ( 7) 7 12

34 27

29 27

9

46 22 ( 5) 3 n

1 4 0

1 3 0

1 3 0

2 3

1 2 0

...,

:t: tI1 () c:: � �

tI1 Z

...,

Industrial countries Developing countries (excl. OPEC) OPEC Industrial countries USA EEC (Nine) (incl . W. Germany) Japan Other Developing countries (excl. OPEC) Brazil India South Korea Other

9

0

9

9

(

9)

9

(

9)

' 11 13

13 12

2 2 0 8

3 2 1

Sources: UN , The Growth 0/ World Industry, 1938-1961: International A nalyses and Tables; UN , Yearbook 0/National A ccounts Statistics, various years; author's calculations.

0 tI1
5 'i:1 � tI1 Z

...,

0

"l:j ...,

:t: tI1 � 0

� t"'"

0 tI1 I

() 0

Z 0 �

�

\0 \0

I-"

0 0 ..oj � :> z CI.l

Table 3.4

Share of selected industries in the value-added by manufacturing industry of the industrial and dt;veloping countries: 1938, 1948, 1953, 1958, 1963, 1970, 1975 cent in 1938

Manufacturing industry (lSIC 3) Food, beverages! tobacco industries (lSIC 3 1) Textiles (l SIC 32 1 ) Wearing apparel, leather and footwear (ISIC 322-324) Chemicals , petroleum, coal and rubber products (lSIC 35) Metal products (lSIC 38) Other

Industrial countries 1948 1953 1958 1963

1970

1975

1 00

1 00

1 00

1 00

1 00

1 00

100

18 8

14 8

13 6

13 5

12 6

11 5

12 4

6

7

5

5

5

4

10 27 30

9 32 30

10 36 30

11 36 31

14 37 27

14 40 26

1 1938 1 1 00

Developing countries 1948 1953 1958 1963

d � �

Z

0

..oj � 1970

1975

1 00

1 00

1 00

1 00

1 00

100

27 17

28 18

27 16

25 13

27 14

23 12

20 10

4

7

7

6

6

6

6

5

15 39 26

9 11 29

10 10 27

12 12 27

13 15 28

16 15 22

20 18 21

22 22 21

tI1

� 0 � � 0

tI1

()

0 Z 0 � �

Sources: U N , The Growth of World Industry 1938- 1961: International A nalyses and Tables;. UN, Monthly Bulletin of . Statistics, various years; author's calculations.

•

..j

''' ' pri

i-J

::r:: trJ

Table 3.5

Share of developing countries in the value-added by selected industries of the manufacturing industry of the market economies: 1938, 1948, 1953, 1958, 1963, 1970, 1975 cent in

Manufacturing industry (ISIC 3) Food, beverages, tobacco industries (ISIC 3 1 ) Textiles (ISIC 3 2 1 ) Wearing apparel, leather and footwear (ISIC 322-324) Chemicals, petroleum, coal and rubber products (ISIC 35) Metal products (ISIC 38) Other

1938

1948

1953

19581

19582

10 14 19 12 9 4 10

9 17 18 9 10 3 8

8 15 18 9 10 3 7

9 16 22 11 11 4 8

10 17 23 12 12 4 -9

1963

9 19 20 11 10 ' 4 8

1970

1975

10 19 23 14 14 5 8

13 20 26 16 18 8 11

Sources: UN , The Growth of World Industry 1938-1961: International Analyses and Tables ( 1 ); UN, Statistical Yearbook, various years (2); author's calculations .

(j c:: ::0 ::0 trJ

�

o trJ <: trJ � o '"t:l

�

trJ

Z

i-J

o

"!1 i-J

::r:: trJ

�::0

� o tn (j o z o �

to<: -

o

-

.-

0 N t-3 Table 3.6

�

Share of selected countries and country groupings in world exports: 1938, 1948, 1953, 1958, 1963, 1968, 1973, 1978-1981

in

World Industrial countries Developing countries (excl. OPEC) OPEC Centrally planned economies Industries countries USA EEC (Nine) (incl . W . Germany) Japan Other Developing countries (excl . OPEC) Brazil India South Korea Other

Z

cent

1938

1948

1953

1958

1963

1968

1973

1978

1979

1980

1981

1 00

1 00

100

1 00

1 00

1 00

1 00

100

1 00

1 00

1 00

67 22 4 7

64 24 5 6

65 20 5 10

66 16 7 11

67 14 6 12

70 12 6 11

71 12 7 10

67 12 11 10

66 12 13 9

64 12 15 9

63 14 14 9

Vi

":1:1 0

� s: """' Z a t-3 ::t: tl'l �

0

� � t;l I

13 32

16

22 24 ( 1) 0 18

19 28 ( 6) 2 16

16 32 ( 8) 3 ·1 5

1 3 1 17

2 2 0 20

2 1 0 17

1 1 0 14

(. .)

5

4 15

14 34 ( 1 0) 5 16

12 36 ( 1 2) 6 16

11 35 (1 1) 8 14

11 35 ( 1 0) 6 13

11 33 ( 1 0) 6 13

12 30 ( 9) 8 13

1 1 0 12

1 1 0 11

1 1 1 10

1 0 1 10

1 0 1 10

1 0 1 10

1 0

15 33 (

9)

I 11

Sources: UN, Yearbook of International Trade Statistics, various years; UN, Monthly Bulletin of Statistics, 7/82; author's calculations .

tl'l n

0 z 0

s: � ..",

Table 3.7

Share ofselected countries and country groupings in the world exports ofprimary products (SITe 0-4, 68): 1955, 1960, 1963, 1965, 1968, 1970, 1973, 1975, 1978-1980 in per cent

World Industrial countries Developing countries (excl . OPEC) OPEC Centrally planned economies Industries countries USA EEC (Nine) (incl . W . Germany) Japan Other Developing countries (excl. OPEC) Brazil India South Korea Other

1955

1960

1963

1965

1968

1970

1973

1975

1978

1979

1980

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

46

48

49

50

} 44 } 41

} 40

50 25 14 11

51 24 15 10

51 21 19 9

41 19 31 9

42 19 29 9

41 19 32 9

39 18 35 9

10

11

11

} 40 11

11 17 ( 3) 1 19

12 17 ( 2) 1 18

12 18 ( 3) 1 19

12 19 ( 3) 1 19

11 19 ( 3) 1 19

11 20 ( 3) 1 19

11 21 ( 4) 1 18

9 18 ( 3) 1 13

9 20 ( 3) 1 13

3

2 1 0

2 1 0

2 1 0 22

2 1 0

2 1 0 21

2 1 0 18

2 1 0 16

2

0

0

8 20 ( 3) 1 12

8 19 ( 3) 1 12

...,

::r:

trJ (') c::: � �

ttl Z

..., .

'=' ttl <: ttl t"'" 0

�

a: ttl Z

...,

0

Jo:rj ..., ::r:

ttl

�� . 0

Sources: UN , Yearbook of International Trade Statistics, various years; UN, Monthly Bulletin of Statistics, various years; UNCT AD, Handbook of International Trade and Development Statistics, various years; author's calculations.

t"'" '=' ttl I

(')

0 Z 0 a: >-<:

I-"

0

W

�

0 �

Table 3.8

Share ofselected countries and coun try groupings in the world exports of man ufactured products (SITe 5-8 excl. 68): 1955, 1960, 1963, 1965, 1968, 1970, 1 9 73, 1975, 1978-1980

CIJ

in

Industrial countries Developing countries (excl . OPEC) OPEC Centrally plan ned economies I ndustrial countries U SA EEC (Nine) (incl . W. Germany) Japan Other Developing countries (excl . OPEC) Brazil I ndia South Korea Other Sources: see Table 3 . 7

cent

1955

1960

1963

1 965

1968

1 9 70

1973

1975

1 9 78

1979

1980

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

1 00

85

84

83

85

13

84 4 0 12

11

85 5 0 10

84 6 0 9

84 6 0 9

83 8 0 9

83 8 1 8

83 9 0 8

4 12

19 47 ( 1 5) 5 12

17 47 ( 1 5) 6 12

16 47 ( 1 5) 7 13

16 45 ( 1 5) 9 15

15 46 ( 1 6) 9 15

13 47 ( 1 7) 10 15

14 46 ( 1 6) 11 14

12 45 ( 1 6) .12 14

12 46 ( 1 6) 10 14

13 44 ( 1 5) 11 14

0 1 0

0 1 0

0 1 0

0 1 0 3

0 1 0

0 1 0 4

0 0 1 5

0 0 1 4

World

}

4 10

23

46

(1 2)

}

4 12

..oj � )Z

}

4

}

4

"'J:'j 0 �

3:

Z

0 ..oj :r: t'rj

�

0 � t'"" U

m

() 0 Z 0

3:

r< •

...:>

�:��'�'

Table 3 .9

Share of selected countries in the exports of manufactured products (SITe 5-8 excl. 68) of the developing countries: 1955, 1960,

1963, 1965, 1968, 197� 1973, 1975, 1978-1980 in per cent

Developing countries South Korea Taiwan Hong Kong Singapore Malaysia India Pakistan Egypt M exicoa B razil Argentina

1955

1960

1963

1965

1968

1970

1973

1975

1978

1979

1980

1 00

1 00

1 00

100

1 00

1 00

1 00

1 00

1 00

100

1 00

0

0

1 4 20

2 4 23 7 1 19

5 8 21 5 2 14 6 3 4 2 3

7 12 24 4 2 11 4 2 4 4 3

12 16 20 7 1 7 3 1 5 5 3

13 14 18 7 2 6 2 2 3 7 2

18 17 17 7 2

16 17 17 8

1 1

1 0

7 3

7

}

18 6 26 1 3 1

22 9 24 3 4 1

9 1 20 3 3 5 1 2

5 3 4 3 2

� ::c tTl () c:: � � tTl

� 17

0 tTl < tTl t"'4 0 "ti

a:

Sources: UN, Yearbook of International Trade Statistics, various years; UN, Monthly Bulletin of Statistics, various years ; UNG�AD, Hand� book ofInternational Trade and Development Statistics, 1976; Statistical Yearbook of the Republic ofChina, 1981 ; author' s calcu la�

tions .

a Exports from bonded factories mostly to the USA are not included . The value of this export trade was over 2 billion US dollars in, 1 977, L e . more than 4 per cent of the exports of manufactured products (SITe 5-8 excl . 68) of the developing countries (see UN, Yearbook of Interna� tional Trade Statistics, 1979, vol . I, p . 24).

tTl Z � 0 ":t1 � ::c tI1

�

0 � t"'4 0

to

() 0 Z 0

a:

�

"""'"

0 VI

Table 3.10

Developing countries' share in the world exports oj selected commodity classes: 1955, 1963, 1968, 1970, 1973, 1975, 1978-1980

in per cent

All commodities All commodities excluding fuels Primary products Fuels Primary products excluding fuels Food Cereals, feeding stuffs, oil seeds and fats Livestock products Other food excluding fish Raw materials Wood and pulp Textile fibres Ores and other minerals Non-ferrous metals Manufactured products Iron and steel Chemicals Consumer goods Plastics Wood semi-manufactures and paper Other semi-manufactures Engineering products Agricultural and industrial machinery Machine parts n . e . s . Office and telecommunications equipment Road motor vehicles Other transport equipment Power-generating machinery Other engineering products, scientific instruments Household appliances Textiles Clothing Other consumer goods

1955

1963

1968

1970

1973

1975

1978

1979

1980

25 21 44 58 40 43 (35) ( 1 0) (69) 40 ( 1 3) (38) 33 34 4 1 5 ( 3) (-) 2 11 1 ( 1) ( 1) ( 1) ( 0) ( 0) ( 1) ( 2) ( 1) 14 10 10

21 16 40 60 34 35 (27) ( 1 3) (6 1 ) 33 ( 1 5) (35) 32 30 4 2 4 ( 7) (-) 3 11 1 ( 1) ( 1) ( 0) ( 0) ( 1) ( 1) ( 3) ( 4) 16 14 9

18 13 40 65 31 33 (24) (1 1) (59) 30 ( 1 7) (33) 29 30 4 3 4 ( 6) ( 1) 6 09 1 ( 1) ( 1) ( 3) ( 0) ( 1) ( 1) ( 3) ( 4) 16 20 9

18 13 39 63 31 29 (21 ) ( 1 2) (55) 24 ( 1 4) (35) 27 29 5 3 4 ( 6) ( 1) 7 11 2 ( 1) ( 1) ( 3) ( 1) ( 1) ( 2) ( 3) ( 5) 16 22 13

19 13 39 68 27 26 ( 1 7) (1 1) (5 1 ) 22 ( 1 7) (27 ) 28 25 7 3 5 ( 6) ( 1) 9 13

24 12 50 74 28 27 ( 1 7) ( 6) (56) 21 ( 1 3) (27) 29 22 7 3 6 ( 6) ( 2) 6 11 3 ( 2) ( 2) ( 8) ( 1) ( 2) ( 3) ( 4) (1 1) 18 32 13

23 13 48 71 29 28

26 14 49 70 29 28

27

3

( 1) ( 2) ( 7) ( 1) ( 2) ( 2) ( 5) (1 1) 19 30 13

51

-

0 � ..., iC

)-

Z

en

"'Ij 0 iC

�

22

23

27 20 8 4 5

26 21

} 12

} 12

9

6 5

5

5

(1 1) ( 1)

( 1)

5)

6)

( 1 5) 19 37 16

( 1 6) 20 36 16

Z

a ..., ::c ttl

�

9

}( 2) }( 2)

}( }(

Sources: GATT, Networks of World Trade by Areas and Commodity Classes, 1955-1976; GATT, International Trade, various years;

0 iC � ti

tn

() 0 Z 0

� .� ",;)

�"

Exports from the OPEC countries for a number of years are only included in the following commodity classes: All commodities excluding fuels (ditto), primary products ( 1 978f; 1 97 0 , 1 97 3 , 1 975 excluding OPEC exports of non-ferrous metals), primary products excluding fuels (ditto) , fuels ( 1 970 , 1 973ff), manufactured products (1 978f; 1970 , 1 973 , 1 975 including OPEC exports of non- ferrous metals), chemicals (1970 , 1 97 3 , 1 975), textiles (ditto).

SITe numbers oj commodity classes used

All commodities All commodities excluding fuels Primary products Fuels Primary products excluding fuels Food Cereals, feeding stuffs, oilseeds and fats Livestock products Other food excluding fish Raw materials Wood and pulp Textile fibres Ores and other minerals Non-ferrous metals Manufactured products Iron and steel Chemicals Consumer goods Plastics Wood semi-manufactures and paper Other semi-manufactures Engineering products Agricultural and industrial machinery Machine parts n.e.s. Office and telecommunications equipment Road motor vehicles Other transport equipment Power-generating machinery Other engineering products and scientific instruments Household appliances ' Textiles Clothing Other consumer goods

0-9 0-9 excluding 3 0 -4, 68 3 0-4, 68 excluding 3 0 , 1 , 4, 22 04, 08 , 22, 4 00 , 0 1 , 02 0 5 , 06 , 07 2 excluding 22, 27 , 28 24, 25 26 27, .28 68 5-8 excluding 68 67' 5, 862, 863 54, 5 5 , 862 , 863 58 63 1 , 64 1 6 1 t 62, 63 , 64, 66 excluding 63 1 , 641 , 665 , 666 7, 69, 86, 891 . 1 excluding 862, 863 7 1 2, 7 1 5 , 7 1 7 , 7 1 8 7 1 9 excluding 7 1 9.4 7 1 4, 724.9, 729 . 3 732 73 1 , 73 3 , 734, 735 7 1 1 , 722 69, 723 , 726 , 729, 8 6 1 excluding 696, 697, 729 . 3 , 861 .4, 861 .6 696, 697, 725 , 8 64, 7 1 9.4, 724. 1 , 724.2, 861 .4, 861 .6, 8 9 1 . 1 65 84 8 , 665 , 666 excluding 84, 86, 891 . 1

� ::t tI1 (') c: liO liO tI1

� o tI1

�t'""

o 'i:J

3:

tI1

�

o "Tj � ::t trl

�

liO t'"" o

tn (')

o

a

3:

�

.......

o -...l

-

o 00

�

Table 3 . 1 1

Developing countries ' share i n the world exports t o industrial countries, selected com modity classes: 1955, 1960, 1963, 1965,

�

1968, 1970, 1973, 1975, 1978-1980 in

cent

1955

1960

1963

1965

1968

1970

1973

1975

1978

1979

1980

28

24

22

20

19

18

20

26

25

26

29

25

20

17

15

14

13

13

13

13

13

13

45

42

41

40

40

39

39

49

50

Fuels

57

62

62

67

68

73

71

42

37

35

32

64 31

53 72

Primary products excluding fuels

66 32

50 74

27

28

28

27

26

4

4

4

4

4

4

6

6

8

8

8

All commodities All commodities excluding fuels Primary products

Manufactured products

Source: UNCTAD , Handbook oj International Trade and Development Statistics, 1976; UN, Monthly Bulletin oj Statistics, various years : author ' s calculations.

SITe num bers oj commodity classes used All commodities All commodities excluding fuels Primary products . . . Fuels . . . Primary products excluding fuels . . . Manufactured products

� 63 � s:

Z

o � ::t: trl

�

o � � o

tT1

n o

� s:

�

...!/

•

0-9 0-9 excluding 3 0-4 , 68 3 0-4, 68 excluding 3 5-8 excluding 68

Table 3 . 1 2

Share of selected commodity classes in the exports of selected country groupings:

Developing countries exc/. OPEC

Industrial World 55 All commodities Primary products

65

70

75

55

80

countries 65 70 75

80

55

65

70

75

Centrally planned 80

55

OPEC 65 70 75

80

55

economies 65 70 75

80

1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 1 00 3 8 3 1 26 25 27 79 75 68 6 1 98 98 99 98 5 2 39 3 4 39 44

1 00 1 00 1 00 1 00 1 00 5 3 42 37 4 1 44

Manufactured products

45

55

61

57

55

Food

20

16

13

12

R aw materials

23

16

15

Fuels

11 5

10 7

18

25

Chemicals

1

67 14

72

73

72

16

25

31

38

2

2

1

10

60 15

11

10

38

34

29

21

6

5

10

9

18

14

12

11 9

10

33

34

22

17

7

1 2

9 7

19 7

24 7

5

3

3

5

7

7

18

22

86

95

7

8

9

9

10

9 2

9 82

1 2

3

3

3

0

0

1

29

28

26

24

31

35

37

35

1

4

7

11

0

0

0

47

55

58

55

51

. 16

13

11

10

8

16

14

95

24 12

10

9

11 17

10 26

0

3

5

5

5

5

0

23

27

30

29

27

1

21

Engineering products Other m anufactured 22 products

24

25

22

22

28

28

28

27

27

13

19

21

24

1

1

0

Raw materials . Fuel s .

.

.

.

.

Chemicals .

5-8 excluding 68 0, 1 2, 4, 68 3

.

.

Engineering products . . .

5 7

Other manufactured product s . . .

6, 8 excluding 68

8iO iO

�...,

\:1 tTl <: tTl � o "0

a:

tTl

� 23

24

21

19

Sources�' UNCTAD , Handbook of International Trade and Development Statistics, various years ; U N , Mon thly Bulletin ofStatistics, various years; author' s calculation s . Non-classified exports from the U SSR are included under SITe 9. SITC numbers of commodity classes used 0-9 All commodities . . . Primary products . . . 0-4, 68 Manu factured products . . . Foo d . . .

..., ::z:: tTl

o "'!1

�

tTl

�

iO � \:1

tTl

(j o

aa: -<

"""""

o \0

Table 3.13

Share of selected commodity classes in the exports of developing countries: 1955, 1963, 1968, 1970, 1973, 1975, 1978-1980

in per cent 1955

All commodities All commodities excluding fuels Primary products Fuels Primary products excluding fuels Food Cereals, feeding stuffs, oilseeds and fats Livestock products Other food excluding fish Raw materials Wood and pulp Textile fibres Ores and other minerals Non-ferrous metals Manufactured products Iron and steel Chemicals Consumer goods Plastics Wood semi-manufactures and paper Other semi-manufactures Engineering products Agricultural and industrial maChinery Machine parts n.e.s. Office and telecommunications equipment Road motor vehicles Other transport equipment Power-generating machinery Other engineering products, scientific instruments Household appliances Textiles Clothing

Other consumer goods

1 00 75 92 25 67 37 ( 9) ( 1) (23 ) 20 ( 2) ( 8) 5 5 8 0 1 ( 0) (-) 0 1 1 ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) 3 0 1

1963

1 00 70 88 30 58 33 ( 9) ( 2) ( 1 9) 15 ( 2) ( 7) 5 4 11 0 1 ( 0) (-) 0 1 1 ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) ( 0) 3 1

2

1968

1 00 65 86 35 51 28 ( 7) ( 2) ( 1 6) 11 ( 2) ( 4) 5 7 14 1 2 ( 1) ( 0) 1 2 2

( 0) ( ( ( ( ( ( (

0) 0) 0) 0) 0) 1) 0) 4 2

2

1970

1 00 68 80 32 47 24 ( 5) ( 2) ( 1 4) 8 ( 2) ( 4) 5 6 19 1 2 ( 1) ( 0) 1 2 3 ( 0) ( 0)

( 0) ( ( ( ( (

0) 0) 0) 1) 1) 4 2

3

1973

1 00 61 77 39 38 20 ( 3) ( 2) ( 1 1) 7 ( 2) ( 3) 4 4 22 1 2 ( 1) ( 0) 1 2 5 ( 0) ( 0) ( 1) ( 0) ( 0) ( 0) ( 1) ( 1) 4 3

3

1975

1 00 41 84 59 25 15 ( 3) ( 1) ( 1 0) 3 ( 1) ( 1) 3 2 16 1 2 ( 0) ( 0) 0 1 4 ( 0) ( 0) ( 1) ( 0) ( 0) ( 0) ( 1) ( 1) 2 3

2

1978

1979

1980

1 00 48 77 52 25 15

1 00 45 78 55 23 13

1 00 81

...... ...... 0

�

�

Z

til

25:;t1 �

-

Z 0

4

�

4

:I: t'd

2 2 22 1 2

} }

3 7 ( 1) ( 1)

2 2 21 1 2

} }

} :: } ( 2) 3 3

3

�

0 19

:;t1 t""I 0 I t'd (')

0

Z

0 �

2 6 ( 1) ( 2) ( 0) ( 2) ( 2) 2 3

3

� ....,

Table 3 . 14

Share of selected commodity classes in the exports of manufactured products (SITe 5-8 excl. 68) from the developing countries:

1955, 1963, 1968, 1970, 1973, 1975, 1978, 1979 in per cent

Manufactured products Iron and steel Chemicals Consumer goods Plastics Wood semi�manufactures and paper Other semi-manufactures Engineering products Agricultural and industrial machinery Machine parts n . e . s . Office and telecommunications equipment Road motor vehicles Other transport equipment Power�generating machinery Other engineering prod ucts, scientific instruments Household appliances Textiles Clothing Other consumer goods Sources and notes: see Table 3 . 1 0.

1955

1963

1968

1970

1973

1975

1978

1979

1 00

1 00 4 11 ( 4) (-) 3 14 13 , ( 1) ( 1) ( 0) ( 1) ( 1) ( 1) ( 4) ( 3) 32 9 15

1 00

1 00 6 9 ( 3) ( 1) 4 10 18 ( 1)

1 00 4 9 ( 3) ( 0) 4 10

1 00 4 11 ( 3) ( 1) 2

1 00 4

100

( 2)

( 2) ( 5) ( 2)

2

14

( 2) (

)

2 16 9

( 2) ( ( ( ( ( ( (

1) 1) 1) 1) 1) 4) 1) 36 4 17

5 11 ( 4) ( 1) 4 11 16

( 2) ( ( ( ( ( ( (

1) 3) 1) 1) 1) 4) 3)

25

14 13

( 3) ( 1) ( 1)

( 2)

( 4) ( 4) 19 13 17

25

( 1)

( 1) ( 1)

( 5)

( 7) 18 16 13

8 28 ( 2) ( 2) ( 6) ( 2)

( 2) ( 2) ( 5)

( 7) 15 16 13

5 8

8

}

12

}

11

3)

31

}(

3)

( 2)

( 8) ( 2)

} ( l 1)

} (I I)

( 8) 12

( 8)

( 7)

16 14

t:r1

() c:: � �

t:r1 z ..., '=' t:r1 <: t:r1 � 0 '"'0

31

}(

..., :r:

11 15 13

?:

t:r1 Z ..., 0 "rj ..., :r:

t:r1 �

0 � � '=' m

()

0 Z 0 ?:

-<

-

'�

I-" I-"

N � Regional matrix oj world trade: exports oj selected regions oj origin to selected regions oj destination as percentage oj total exports oj the respective region oj origin: 1948, 1953, 1958, 1963, 1968, 1973, 1978 in per cent

Table 3.15

I

Region of destination

World

Region of origin

World Industrial countries Dev . countries excl . OPEC OPEC Centr. planned economies Industrial countries USAa EEC (Nine)b Japan Sources:

UN,

1 00 1 00 1 00 1 00

Industrial

Developing

coun tries

countries

OPEC

68

73

78

48

53

58

63

68

73

78

18 18

16 16

15 14

16 I 15 I

3 4

3 4

4 4

7 9

6 4

9 2

II 3

12 4

II 4

10 5

9 5

} } } : ��

19

18

19

2

2

4

7

7

7

7

6

16

19

21 I

I

I

1

I

I

I

2

2 56

3 4 7

48

53

58

64 64

61 63

63 67

66 72

69 76

71 77

67 71

29 31

24 27

25 29

71

71

71

68

76

80

77

76

29

24

I I I

23

I

1 00

41

15

18

20

24

27

27

12

5

10 I 14

14

13

I

1 00 1 00 1 00

56 61 38

44 66 32

58 67 42

58 77 49

68 79 53

Yearbook of International Trade Statistics, 1962;

67 82 52

UN,

a Special category exports from the USA (share of US exports: 1 953 b 1 948, 1953, 1 95 8 : EEC (Six) + UK.

61 77 47

economies

I

63

78

40, 36 58

30 31 68

Statistical Yearbook,

26 070 , 1 963

=

9%)

I

41 I 27 29 1 5 I 55 4 1

I I I

13 I

} } } 3

2

3

I

2

2

4

44

78

71

65

61

57

5 4 6

5 4 5

5 4 7

12 9 15

3 3 3

0 2 0

1 3 3

I 4 5

1 5 4

4 4 5

I

26 12 38

24 9 35

I various years; UN,

I

24 I 10 I 31 I

'Tj

o it'

3: o � l:

Cen trally planned

:

73

:

OPEC

78

68

CIl

Z

I I

73

63

72

excl.

68

58

73

I 63

53

67

DCs

I

48

} } }

I

I

it' » Z

tTl

�

it' t'"" o I tTl (')

o z o 3: �

Monthly Bulletin of Statistics, 2/80, 5/80;

author's calculations.

are not completely allocated to regions of destination for all years.

.�

��': ' . Regional matrix of world trade: exports of selected regions of origin to selected regions of destination as percentage of wo exports: 1948, 1953, 1958, 1963, 1969, 1973, 1978

Table 3 . 16

Total exports (SITe 0-9)

I

I

Dest. Origin

World lCs DCexcl OPEC CPEs

48

1 00 64

World

58

53

1 00 65

1 00 66

10

23 11

} 30 } 26 } 6

}

63

69

73

48

78

100 100 1 00 100 67 7 1 7 1 68 12 12 12 20 6 7 1 0 12 1 1 10 10

Industrial countries

53

61 41

64 41

58

62 43

} 20 } 1 9 } 1 7 } 1

3

2

63 69 73 78

67 70 71 67 50 55 54 48 9 8 15 5 6 2 3 3 3

48

:}

Devo countries 1

53

29 20

I I } }

6 0

Exports of primary products (SITe 0-4) Dest. Origin

World lCs DCexc1 OPEC CPEs

48

1 00 0

0

World

a 53

58

1 00 50

1 00 45

3

44 11

} . . } 47 } o

.

}

63

69

1 00 1 00 48 48 24 41 16 11 11

73

1 00 50 20 20 9

48

78

1 00 42 19 29 10

0

0

.

0

Industrial countries

53a

77 39

58

71 36

} . . } 34 } 3 2 } o

2

.

3

63 69 73 78

72 7 5 3 8 40 17 30 13 4 4

74 40 15 16 4

73 32 13 23 4

48

Devo countries

53

o

a

.

0

1

0

Origin

World lCs DCexcl OPEC CPEs

48

1 00 .

.

} .. } .

0

53

1 00 93 6 1

58

}

1 00 83

5 12

}

63

69

73

78

100 1 00 1 00 100 8 1 · 8 3 83 83 6 7 6 10 9 1 3 10 9 9

�}

Industrial countries

a 53

48 ·

.

·

.

0

0

·

,

58 I

I

I

Dest. World

I

.

}

56 52

4 1

58

55 50

}3 } 1

63 69 73 78

6 2 69 70 64 57 63 63 57 4 5 4 0 0 1 2 2 2

DCs exc/o OPEC

i

48 0

0

.

.

, Devo countries ,

a 53 _

�}.. } o

31 28

.

OPEC

2 0

58 1

I } :}

I

Centrally planned economies

48

6 3

}1 } 3

53

58

9 1

11 2

OPEC

2 1 0 0 0

3 2 1 0 0

8

o

Centrally planned economies

48 0

0

·

.

}. } ·

a 53

2 1

.58

10 1

63 69 73 78

}2 }

1

7

.

9 8 3 2 2 2 2 2 0 0 6 5 4 4

II

2

9 I

o

in per cent OPEC

63 69 73 78 , 69 73 78

30 24 1 6 1 5 1 6 1 27 1 20 1 4 1 2 1 3 1 1 2 21 2 2 0 0 01 2 1 1 11 II

1 2 1 0 10 9 2 3 3 3 1 t 1 t 0 0 6 5 8 7 -

}1 }

0 7

I

DCs exc/. OPEC I

63 69 73 78

in per cent

I 63 69 73 78 1 69 73 78

} . . } 1O } }

Exports of man u factured products (SITe 5 -8)

a

OPEC

I 63 69 73 78 69 73 78 I

18 16 14 14 15 1 2 81 7 6 6 51 1 4 3 3, 0 91 8 3 4 61 0 1 1 I 1 1 1 11 0

19 9

o .

I

in per cent

25 1 21 17 1 5 1 6 I 3 4 8 18 1 5 1 1 10 10 I 3 3 6 2 2 2 0 0 1 4 1 1 21 0 0 0 5 I 1 1 I 2 1 1 I, 0 0 0

24 17

}

9 1

58

I DCs excf. I

4 4 10 3 4 8 0 0 1 0 0 0 0 0 0

Centrally planned economies

48 ·

.

o

.

}. } .

0

53

a

2 2

0

-

58

12 3

63 69 73 78

1 2 1 1 10 10 3 3 4 4 . 0 0 0 0 10 7 6 6

}o }o o o 9

Sources: U N , Yearbook of International Trade Statistics, 1962; UN, Mon th ly Bulletin of Statistics, various years; author's calculations. a Excludes trade between centrally planned economies Special category exports from the USA (share of world exports: 1 953 for all years .

=

5 070 , 1 958

=

2%) are not completely allocated t o regions of destination

..., :c tI1

()

� :;:1 :;:1 m Z ..., o m <: m r o '"0

�

m Z ..., o '1j ..., :c m

� :;:1 r o

tIl ()

o

a

3:

� W

Regional matrix oj world trade: exports oj selected regions oj origin to selected regions oj destination as percentage of world exports: 1978 in per cent Total exports (SITCO-9)

Table 3.17

Region of destination Region of origin

World Industrial countries Developing countries excl. OPEC OPEC Centrally planned economies Industrial countries USA EEC (Nine) (including W . Germany) Japan Other

World

ICs

DCexc/

OPEC

CPEs

USA

Industrial countries EEC(9) Japan

1 00

67

16

8

9

13

34

5

15

68 12 10 10

48 8 8 3

10 2 2 1

6 1 0 0

3 1 0 5

. 7 3 2 0

26 3 3 1

2 1 2 0

12 1 1 1

World Industrial countries Developing countries excl. OPEC OPEC Centrally planned economies Industrial countries USA EEC (Nine) (including W. Germany) J anan

...,

:::c ;J> Z

en

'Tj

0 :::c 3: .....

Z a ...,

11 36 ( 1 1) 8 14

7 27 ( 8) 4 10

3 3 ( 2) 2 '1

1 3 ( 1) 1 1

0 1 ( 1) 0 1

2 ( 1) 2 3

2 18 ( 5) 1 5

1 0 ( 0)

3 6 ( 2) 1 2 in per cent

Exports of primary products (SITC 0-4) Region of destination Region of origin

Other

...... ...... ..a::.

Industrial coun tries EEC(9) Japan

World

ICs

DCexc/

OPEC

CPEs

USA

1 00

73

15

3

8

15

36

11

42 19 29 10

32 13 23 4

5 3 6 1

2 1 0 0

2 2 1 4

4 4 6 0

20 5 10 2

4 2 4 I

9 19 ( 3) 1

5 16 ( 3) 0

2 1 ( 0) 0

1 1 ( 0) 0

1 0 ( 0) 0

1 ( 0) 0

2 13 ( 2) 0

2 0 ( 0)

1

3

5

2

Other

11 5 2 3 . 1

tt:

tI1

::E 0 :::c �

0 I tI1

(j 0 Z 0 ?! �

. .,;)

� :t tI1

Exports of manufactured products (SITe 5-8) Region of destination Region of origin

World Industrial countries Developing countries excl. OPEC OPEC Centrally planned economies Industrial countries USA EEC (Nine) (including W . Germany) Japan Other

in per cent Industrial countries EEC(9) Japan

World

ICs

DCexc/

OPEC

CPEs

USA

1 00

64

16

10

10

12

33

2

17

83 8 0

57 5 0

8 1 0 0

4 0 0 6

10 2 0 0

30 2 0 1

1

2

13 2 0 1

16 16 0 1

12 45 ( 1 6) 13 13

7 34 (1 1 ) 6 10

3 5 ( 1) 4 1

1 4 ( 1) 2 1

0 2 ( 1) 1 1

9

Sources: UN, Mon thly Bulletin of Statistics, 5/80, 2/8 1 ; author's calculations .

3

( 1) 3 4

2 22 ( 7) 1 5

1 0 0 1 0 ( 0) 0

Other

4 8 ( 3) 1 3

()

C � � tI1 z � t:I

tI1

� t'"'4

0

�.

� tI1 Z � 0 "TJ

� :t tI1 � 0 �

t'"'4 t:I I

tI1

()

0 Z 0 �

-<

� �

V\

....0'\

1-3

Table 3 . 18

Intra-trade of economic groupings as percentage of world exports and total group exports: 1960, 1970, 1972, 1973, 1975, 1978,

1979 cent

in

1972

8 2

14 3

15 3

EEC (Six) EFTAa EEC (Nine)

1973

Total group exports

1975

1978

1979

1960

1970

1972

35 16

49 22

50 23

1973

1975

1978

1979

19

17

18

19

52

49

52

54

6

5

6

6

14

13

13

13

1

1

1

62

9 59

11 61

16 10 57

16 8 57

13 9 56

13 7 52

35

35

37

48

45

48

48

Intra-trade in manufactures of the

6

6

6

5

5

5

1 1 4

17

24

26

34

29

31

31

remainder of EFTA COMECON TOTAL

2

2

USA-Canada (preferential)b

2

1

1

Source: UNCTAD, Handbook of International Trade and Development Statistics, Supplement 1980. Excluding goods shown in annex D of the Stockholm convention.

a

b Trade u nder the 1 965 United States-Canada Automotive Products Agreement.

1-3 ::r:: tTl

�

Trade i n manufactures between EEC (Nine) and the remainder of EFTA

i'T.1 0 :;tI

Z 0

World exports

1970

Z

C/}

� .....

Share of intra-trade in:

1960

�

0 :;tI t"'" 0 I tTl () 0 Z 0

�

t< .....,

Table 3 . 19

Export ratios (exports as a percentage of Gnp) ofselected countries and country groupings: 1948, 1953, 1958, 1963, 1968, 1970, 1973, 1975, 1978-1981 in per cent

Market economies Industrial countries Developing countries excl. OPEC OPEC Industrial countries USA EEC (Nine) (including W. Germany) Japan Developing countries excl. OPEC Brazil India South Korea

1948

1953

10

10

11

9

9

} 19

} 17

10 14 29

9 12 28

10 11 28

11 12 29

13 14 36

14 14 47

} 22

5 14 ( 1 3) 7

4 17 ( 1 9) 10

4 15 ( 1 5) 8

4 16 (1 8) 9

4 18 ( 1 8) 10

5 20 ( 1 9) 9

7 22 (22) 11

7 23 (22) 10

5 11 ( 3) 3

27 7 1

23 5 2

1958

13 4 1

1963

1968

10

10

6 4 2

7 4 8

1970

11

6 4 10

1973

1975

1978

13

16

16

8 4 26

7 5 25

15

1979

1980

1981

>-:l :r:

tTl (1 c::

� �

tTl

1 5a

1 6a

1 6a

�

tl tTl

<: tTl t'"" 0

8 24 (22) 10

9 24 (23) 12

8 25 (26) 13

7 6 27

Sources: UN, The Growth of World Indus�ry, 1938-1961: International Analyses and Tables; UN, Yearbook ofNational Accounts Statistics, various years; UN, Yearbook of International Trade Statistics, various years; OECD, Main Economic Indicators, 6/82; OEeD, Statistics of Foreign Trade, Series A , 1 /82, 6/82; author's calculations . a OECD .

"tI

� tTl Z >-:l 0

'"I1 >-:l :r:

tTl � 0 �

t'"" tl m (1 0 z

0 � . �

...... ......

.....,J

..... .....

00

Table 3.20

Export ratios of manufactured products (SITe 5-8) (exports of manufactured products as percentage of value-added of manu­ facturing industry) for selected countries and country groupings: 1953, 1958, 1963, 1968, 1970, 1973, 1975, 1978 in per cent

Market economies Industrial countries Developing countries Industrial countries USA EEC (Nine) (induding W. Germany) Japan Developing countries Brazil India South Korea

1953

1958

1963

15

20

19

26

36

15 12

21 11

20 13

27 19

39 21

3 8a

( ) 19 .

( J 23 .

9 3 1a (35) 21

1968

10 (39) 25

1970

12 42 (40) 26

1973

14 (42) 24

1975

21 54 (5 1 ) 37

1978

�

�

Z

C/:J

d�

�

�

� ::t: tr.1

19 (52) 33

� o � � o m

8 � �

�

..",

7

3 16 28

4 15 35

8 16 84

7 18 78

10 88

Sources: UN, Yearbook ofNational Accounts Statistics, various years; UN, Yearbook of International Trade Statistics, various years; UN, Statistical Yearbook, various years; UN, Monthly Bulletin ofStatistics, various years; UNCTAD, Handbook ofInternational Trade and Development Statistics, various years; author's calculations . aEEC (Six).

4

Western Europe ' s Economic and S ocial Development and th e Rationality and Reality of a New International Economic Order * Otto Kreye * *

The development of the capitalist world economy since the middle of the 1 960s - and the corresponding development of the West European economic and social situation - has been characterized by far-reaching structural changes . The most striking features of these changes are the emergence of a worldwide labour market and a world market for pro­ duction sites. Both of these are connected with the development of a new international division of labour. These structural changes in the capitalist world econonlY have been triggered off by a new set of condi­ tions for the valorization of capital, conditions which are themselves the outcome of capitalist development up to this point . This new set of conditions includes, on the one hand, the existence of a practically inexhaustible worldwide reservoir of cheap labour , above all in the underdeveloped countries , and, on the other hand , the technology now available in the areas of transport, organization, and communications , and i n the production process itself, which has created the possibility of splitting up production into a series of sub-procedures . It is precisely * Editor's note: This chapter was written in December 1 97 8 . It was presented at the UNU-G P ID/Max-Planck-Institut joint meeting, in Starnberg, August 1 979 and also orally and i n a much elaborated form at the UNU-GPID meeting i n Port o f Spain, Trinidad . January 1 98 1 . * *

A uthor 's note:

The author would like to thank the late Margaret Fay and Karen

Friedman for the translation of the text from German .

1 20

TRANSFORMING THE WORLD-ECONOMY?

these technological developments that have rendered the reservoir of cheap labour useable . The modern means of transportation , organizati9n and communica­ tion render the choice of site for industrial production and also for agricultural production, which has traditionally been carried Qut in the industrialized countries , increasingly independent of geographical (world-wide) distances , and the modern production technology permits the .extensive use of unskilled and cheap labour , even for highly com plex processes . 1 Today the worldwide labour market forces workers in the traditional industrialized countries to compete with workers in the new sites o f production i n the underdeveloped countries . The world market for production sites forces industrialized countries to compete with the underdeveloped countries for the retention or the acquisition o f industrial - and partly too , agricultural - production.2 Sheer survival dictates that manufacturing firms - and agricultural businesses and the service sector too to a certain extent - include these changed conditions of the world market in their cost accounting . Sheer survival likewise dictates that in an increasing number of cases these firms, guided by the results of their computations , remove production from the industria­ lized countries and relocate it in the underdeveloped countries . It is impossible to make sense of the present economic and soci al developments of West Europe without understanding the background of these structural changes in the capitalist world economy . Only an analysis of the developmental tendencies of the capitalist world economy as such and the economic and social effects anq manifesta­ tions of these tendencies in Western Europe permits us to predict the alternatives for action available to the countries of Western Europe in regard to the obj ectives o f a ' New International Economic Order ' . Only an analysis at this level - the level of the world economy - yields specific indications of which proposals will come up against resistance from the firms , trade unions and states of Europe, and conversely, to what extent these proposals are compatible with the interests of these agents and will consequently win their support . The situation developing in Western Europe is becoming critical . This development is an inevitable effect of the current structural changes i n the capitalist world economy and though it manifests itse lf as a regional crisis , it should in no way be treated as something equivalent to a general crisis of West European firms (West European ' capital) or a crisis of non-European firms operating in Western Europe (non-European capital) . Manifestations of the regional crisis include persistent and mounting unemployment, declining and absolutely low rates of growth of the gross national product (GNP), declining in absolute terms low levels of domestic investment, sharp reducti in production in an increasing number of manufacturing . tries - reductions which are by no means confined any longer to

WESTERN EUROPE'S ECONOMIC AND SOCIAL DEVELOPMENT

121

, ..... and clothing industry and miscellaneous consumer goods indus­ t ries , but affect many other branches , among them the iron and steel indus try, shipbuilding , machinery, and precision instruments and optic s . But the crisis also manifests itself in the excess capacity of fi rm s and in the increasing number of bankruptcies and mergers. The budgetary and currency problems that many states are now confronting are another aspect of the current crisis . These developments in Western Europe are being accompanied by a transnational reorganization of production; or more specifically, a relocation of production, a rise in investments abroad, an increase in measures to rationalize production , a change in the structures of foreign trade and the onset o f a trans­ formation in the structures of production . The vice-president of the European Comnlunity Commi ssion, Wilhelm Haferkamp , made the following assessment of the economic situation of West Europe at the end of 1 978 (and thereby gave a descrip­ tion of the situation almost identical to that already long before anticipated and published by the authors of the book referred to in fo otnote 1 ) : ' I_L..I"" ... .. ..

The world economy is increasingly becoming a single field o f action. On this field of action it is true that America and Europe are still as in the past playing a significant role, but their relative importance is declining. Other actors are laying claim to their place . The con­ sequences of this development are affecting employers as well as employees throughout Europe : employees in the Saar, in Liverpool or i n Lille are seeing their j obs threatened, because in Korea, Brazil , or o n the Persian Gulf, there are new export-oriented fertilizer factories , steelworks , oil refineries , or shipyards being established . Factories must close down, investments must be prematurely written off, because in other parts of the world, economic changes are occurring which other sectors of European industry have often been partly responsible for. A few areas of European industry must tighten their belts in order that others may expand and reap the benefits of the new direction o f the world economy. Adaptation t o worldwide economic changes demands sacrifices . It is bringing burdens and social tensions . These are unevenly distributed . They affect unskilled workers and women more severely than skilled workers and engineers . They affect areas that are structurally weak and remote more severely than the industrial centres , which have specialized from an early state in so­ phisticated industrial products . 3 The United Nations Economic Commission for Europe begins its latest annual report with the following remarks : Economic performance in the ECE region was not satisfactory in 1 977. The gross domestic product of the West European countries increased by only 2 per cent compared with 4 . 5 per cent in 1 976.4

_

1 22

TRANSFORMING THE WORLD-ECONOMY?

Later in the report, it is stated : . . . . the outlook for an improvement in the persistently depressed labour markets is bleak . At the end of 1 977 unemployment was higher than a year earlier in Belgium , Denmark , Finland , · Italy, Sweden , the United Kingdom . . . ; elsewhere in western Europe it was more or less unchanged or marginally lower. . . . It can be assumed , furthermore, that ' hidden ' unemployment has continued to increase in the guise of retraining schemes , public works, and withdrawals from the labour force.s Concerning investment growth and capacity utilization the report states :

Fixed domestic capital formation in 1 977 displayed its usual volatility and differences are large among countries as well as among maj or sectors and types of assets . Total fixed investment declined in Dennlark, Finland, Sweden, and the United Kingdom . It rose most in the Netherlands ( 1 2 per cent) , Ireland ( 1 0 per- cent) , and Austria (7 . 5 per cent); elsewhere the increase was modest . . . . The longer the recession lasts , the greater will be the proportion of unused capacity which is likely to become obsolete for technological and, especially, . economic reasons . Recent trade developments in manufactures between the industrialized market economy countries and the other regions , show that comparative advantages are shifting rapidly. 6 The unemployment situation i n Western Europe i s indicated in the following figures published in August 1 978 by the International Labour Office (ILO) : Between 1 976 and 1 977 , unemployment rose in West Europe (a total of 1 5 countries)7 by 14010 , increasing the number of unemployed in absolute terms by 9 1 3 ,000. The data available for the first months o f 1 97 8 show a furtlrer rise in the rate o f unemployment . In March 1 978 there were almost 7 . 9 million people registered as . unemployed in these 1 5 European countries ; this figure, according to ILO ' s estimates , represents 5 .6 010 of the potential labourforce. 8 These figures from the official unemployment statistics are only the tip of the iceberg . For the effects on those of the labour force still lucky enough to be with a j ob are also far-reaching. The total number of workers who are temporarily laid off in the course of a year is several times high er than the statistics given for the unemployed at a given point in time, for : example at the end of the year. In Germany, the number of those officially unemployed was given as approximately 1 million people for · 1 977 and 1 978 , where annually there are in fact 2 . 8 to 3 . 3 million: workers who have lost their j obs . Of these about 2.3 million find other employment in the course of the year 49 Equally, if not more, signifi are the miscellaneous effects that the changing West European lab market is having on the employed . These include declining real .. ...., i'r1i.?"n E-.... ,' and wage-shares , increasing pressures towards mobility together ·

SE LF-RELIANCE AND THE NEW INTERNATIONAL ECONOMIC ORDER

213

bourgeoisie - which generally dominates these states - can 'combat imperialism' to impose its point of view. There are those who argue that the new international division of labour is the strategic goal of impe­ rialism itself, and that this demand is therefore manipulated by the monop olies , particularly the North American monopolies , and does not express a specific goal of the Third World states in conflict with the strategy of imperialism . These people usually give priority to the inter­ imperialist conflicts (United States , Europe, Japan) over the apparent North-South conflict . We know that this ' theory' was abundantly for­ mulated in connection with the raising of the price of petroleum by OPEC in 1 973 , both in right-wing and left-wing (even ultra-left-wing) version s . But the facts do not bear out this interpretation. In fact the theory only reflects the naive views of an ultra-left which , with wishful thi nking , would like the bloc of bourgeoisies to appear without 'cracks ' on the world scene so as to 'simplify' (on paper) the tasks of the prole­ tariat which , they assume, are everywhere the same, because the prole­ tariat w ould not have to take account of the contradictions between the b ourgeoisies . In the past , the bourgeoisie of the peripheries had clashed with impe­ rialism ., The transition from the first to the second phase of imperialism was not 'planned' by the monopolies : it was imposed by the national liberation movement through which the bourgeoisie of the peripheries won, against imperialism, the right to an industry. But , as we have said, the in d ustrialization strategy pursued during this second phase trans­ formed the relations between the bourgeoisie of the peripheries and the monopolies . The peripheral bourgeoisie ceased to be national and became the subordinate ally of imperialism by j oining in the new division of labour . That ally is now rebelling and demanding new terms for this division of labour. It does not thereby beconle ' national' , since its demand is located right at the heart of the system, but it is rebelling all the same. If that rebellion were to succeed, it would simply inau­ gurate a new phase of imperialism characterized by a new division o f labour . For there is n o doubt that 'in theory' this new division can b e 'absorbed ' , 'co-opted' . But only ' i n theory' , because what counts i n history are t h e unexpected accidents , and there can be some here and there in the peripheries and in the centres (and laden with contradictions , from the second to the third ' theoretical' phase of imperialism . The s econd issue is whether this third possible phase would , or would not , be a stage towards the autonomy of the peripheries . The bour­ geoisies of the Third World argue that it would be , j ust as they asserted at the beginning of the second phase that it would be. But the facts have belied these illusions , which were shared at the time by a large pro­ portion of the left in the Third World . My own view is that if the demands of the peripheral bourgeoisie were to succeed, this would not by any means constitute a new stage along a line of development leading gradually to the flourishing of

1 24

TRANSFORMING THE WORLD-ECONOMY?

according to an analysis of the shipbuilding situation carried out by the Federal Republic' s Ministry for the Economy, have reduced their number of employees by 1 1 % since the middle of 1 975 , which means a reduction of employment to 69,000 , a loss of 1 9,000 jobs . Nevertheless , the ministry estimates a further decline in employment of about 30-40070 in the coming years , from 1 979 to 1 980 . 1 9 Similar declines in production and reductio n s in employment are also being reported by countries which do not belong to the European -Community, such as Norway, Sweden, and Spain. Typical of the crisis manifesting itself in the West European watch and clock industry are the recent developments in the Swiss watch industry. Switzerland ' s share in world production of watches dropped from 3 9 . 7 0/0 in 1972 to 27 . 7 070 in 1 976 . 20 The number of workers in the Swiss watch industry declined from 90 ,000 at the beginning of the 1 970s to 5 5 , 000 by the end of 1 977 . 2 1 Widespread changes in the electrical engineering industry and mechanical engineering throughout Western Europe can be measured by the production and employment situation of these sectors in West Germany. The number of jobs in the electrical engineering industry of West Germany dropped from 1 ,074,000 in 1 973 to 958 , 000 in 1 977 , according to figures issued by the Central Association of the elec­ trical enit neering industry (ZVEI) . 22 Production in the West German mechanical engineering industry- has stagnated - even though the ­ Federal Republic has continued to hold the first place for world exports in this field . According to figures announced by the Association of West German mechanical engineering manufacturers (VDM) , produc­ tion during the first 8 months of 1 978 is 95 . 8 0/0 of what it was during these s ame months in 1 970 .23 Similarly and again according to the figures of the VDM - there has been a drop in the number of employed from 1 970 to the end of 1 977 of about 1 50 ,000 workers .24 The number of j ob s in the West German machine-tool industry has declined from 1 25 , 000 in 1 970 to 97 , 000 at the end of 1 977 . 25 Complementing - but in contrast to - the decline in production and employment experienced in many industrial sectors of West Europe , there has b een i n these same sectors o f industry increasing relocation of production , rising levels of investment abroad, and frequent efforts on the part of European firms (and of non-European firms producing in West E urope) to reorganize production on a transnational basis . Relocation of production has been carried out not only in the form of direct investment (own production overseas) and subcontracting , but also in the form of replacing domestically produced goods by imports from foreign f>roducers . The most important manifestation of the transnational reorganization of production is the allocation of parts of the manufacture of a product or a part product to different production sites throughout the world . These processes , relocation of production and the transnational

WESTERN EUROPE'S EC'ONOMIC AND SOCIAL DEVELOPMENT

1 25

re01 rgcin1lzauon of production have been investigated and documented detail by the authors of 'The New International Division of Labour ' . we will simply present two examples - in anticipation of our dis­ on, which comes later in this paper, of West Europe 's attitude ssi cu to the issues raised by a 'N ew International Economic Order' - to illustrate how these two processes correspond to a growth in the pro­ duction of underdeveloped countries , particularly in the production of export-oriented manufactures . In the same year - 1 977 - when the output of crude steel in the EC countries fell by 5 . 8 0/0 , the production of cru de steel in the underdeveloped countries (of the Western world) rose by 1 1 .6 0/0 from 3 7 . 6 million tons in 1 976 to 42 million tons in 1 977 .26 The decline in the E C shipbuilding industry during the 1 970's has been matched by a rapid growth in the shipbuilding capacity and production of the underdeveloped countries , and particularly, Brazil , Korea and Taiwan. According to figures issued by the L ondon shipping register of Lloyds, Brazil' s shipbuilding orders, for example, amounted to 3 million registered tons in September 1 977 , while West Germany had received orders totalling only 1 . 48 million tons .27 In 1 970, the 1 8 Third World countries involved in building ships of over 1 00 GRT completed 23 3 , 000 GRT - j ust over 1 % of the world' s output . B y 1 97 7 , the number of countries involved i n shipbuilding had risen to 22 and they completed 1 . 5 million GRT - 5 . 6 0/0 of the world ' s outpUt . 28 We will likewise here restrict ourselves to documenting only two examples of the way in which the pressure to react to the changed condi­ tions of the world market is being reflected by the West European industrial associations and the business press with their usual out­ spokenness . Over the past two years the West German constructional engineering industry has made greater efforts to adj ust to the changing competi­ tive climate: product lines have been reassessed and in particular manufacturing processes unsuited to conditions in the Federal Republic have been relocated to production sites abroad , and those processes in which Germany has a strong tradition of constructional engineering have received special attention.29 The persisting and profound dislocati ons in the international division of labour are revealed in the case of a multinational corpora­ tion : the number of workers employed by Philips in Europe shrunk by 24, 000 from 1 970 to 1 977, while the number of those employed outside Europe has risen by 49 ,000 . The necessary level of profits , which . the Philips executive board regard as indispensable for survival , can only be achieved , in their j udgement, by transferring labour intensive production processes to countries which, because of

1 26

TRANSFORMING THE WORLD-ECONOMY?

their labour market situation, can be considered favourable in t his respect.30 , The relocation o f production to new production sites , particularly in the underdeveloped countries , has been accompanied by an unprecedented wave of rationalization in . production at the West European sites and throughout the worl d . Rationalization has become the order of the day, both in these branches of industry which are at present most severely affected by relocations and in other branches, including the service sector . These rationalizations affect both the labour process and the product mix ; i n many branches they have taken on the character of almost revolutionary changes of both process technology and product technology. In many West European Industries , announcements have already been made by companies , industrial associations and state institutions that because of anticipated rationalizations over the next two years, further losses o f j obs and consequently massive dismissals are unavoid­ able in 1 979 and 1 980. These involve especially the West European steel industry, ship-building , mechanical engineering, precision instruments and optics , printing , etc . It is frequently asserted that this wave o f rationalication in West European industries has nothing to do with the changed conditions on the world market and that it is a process that has developed indepen­ dently of - though admittedly parallel with - the process of relocating production . The fact is , however , that the opportunities and pressures for massive innovations in b oth process and product technology can only be understood in the context of the changed conditions of the world market (and these new conditions , as we have already stated , are themselves to a large extent the result of previous product- and process­ innovations) and of the relocation process which has been triggered o ff by the changing world market situation. These opportunities and pressures for innovation in turn generate new opportunities and pressures for relocating production. Innovations in processes and products are made necessary firstly by the fact that in the traditional industrial sites of West Europe, profitable use, of the installed production facilities - and this means profitable in comparison with production in the sites where cheap labour is available - can only be achieved by massive rationalization (with the result that relatively highly paid labour can be dismissed) . Herbert Giersch, the highpriest of the prevailing West German orthodoxy on the world economy, presents an accurate picture of this problem : Whoever produces in a high wage country and is hit by the import pressure from t he south , can protect his home site, if he succeeds in reducing his costs and keeping them low by means of process inno va­ tion and a moderate' wage policy . Another way out is prod uct :

WESTERN EUROPE'S ECONOMIC AND SOCIAL DEVELOPMENT

1 27

innovation: shifting to products which are new and more sophis­ ticated and which , because of their innovative and human capital content cannot be quickly imitated. Firms which cannot ward off the threat by innovations either in their processes or in their products must go the road of site innovation, L e . they must relocate their production facilities for the goods or intermediary processes which they have hitherto provided to sites with lower wages . 3 1 However , Giersch holds the mistaken belief (expressed in May 1 977) that ' on the basis of what has so far occurred, it is primarily parts of the textile and clothing industry, shoe and leather products , pulp and paper . industry, ceramics and sportsware and the electrical and automobile industry' which are affected .32 All industries , including at present parts of the iron and steel industry, shipbuilding , mechanical engineering and even construction of industrial installations, are affected. This is a point that needs to be repeated, for it is by no means just the consumer goods industries that are involved; the situation in industries producing the means of production is equally critical. A second circumstance compelling innovations in processes and products is the fact that many industries are being offered new processes and components as a result of microelectronics , which permit - and therefore compel - an enormously profitable substitute for traditional processing methods and product groups. But even the wave of rationalization that has been triggered off by microelectronics must be understood in the context of the changing international division of labour . The price per transistor function has dropped in the last years by approximately a thousand times fron1 1 US dollar to 0 . 1 US cent . This cheapening of electronic components and the consequent profitability of substituting electronics for mechanics both inside and outside the electrical engineering industry, for example in the precision instruments industry and the watch and clock industry, is a consequence of the massIve relocation of intermediary processes in the production o f electronic components t o sites with cheap labour i n the underdeveloped countries and hence and opportunity to do without capital intensive investment. This relocation of production has in turn made possible and is making possible the rapid introduction of ever newer generations of electronic components . Let it be n oted, in passing, that the efforts of West European industry to maintain their competitiveness in the world by developing new technologies , of which microelectronics is only one among many, receive massive support from the governments of many West European countries as West European firms are encouraged and assisted by the State in planning and implementing their decisions to invest in the relocation of their production to underdeveloped countries . There is no doubt, however, that relocation and rationalization are

1 28

TRANSFORMING THE WORLD-ECONOMY?

not only intimately linked to the West European labour market situa­ tion described above, but they are also generating overcapacity in many industrial sectors of Western Europe and throughout the world . The resulting intensification of international competition will mean bankruptcy fo r many companies , or at best an attempt to save their skins by merging . Conversely, companies who are successful in con­ " ducting their operations , predominantly multinational corporations , are in a position to appropriate enormous surplus profits, as can already be seen in many balance sheets . Further worldwide concentra­ tion and centralization, or in other words , an extension of oligopoly and monopoly on a global scale are becoming the order of the day. Given the world market context , described above, of West Europe' s social and economic development, there are perhaps only two alterna­ tives that need to be considered as relatively long-term possibilities : a) the continuation of the developmental trends we have already indicated ; and b) that West Europe increasingly develops along the lines that can currently be observed in the case of the US economy. The second alternative appears to be the more likely, in other words , given the increasing effects of relocation and rationalization , we nlay anticipate a long-term shift in manufacturing conditions that once again favours sites in West Europe. There are three . reasons for anticipating this trend on the basis- of what has already been s aid about the effects of the current changes : 1 As a result of rationlization and relocation , there will be an absolute decline in real, and even perhaps in nominal, wages in West Europe; there will be an absolute increase in the size o f West Europe' s industrial reserve army . 2 I n many cases , technological developments will make it more profitable to operate a capital-intensive, automatic production­ process , run with virtually no labour, than a predominantly labour­ intensive process relying on cheap wage labour in underdeveloped countries . 3 In underdeveloped countries , where the obj ectives promised by the relocation of production and the development of export-oriented industry remain unfulfilled , the negative economic and social con ­ sequences will inevitably create political unrest which will ultimately make it impossible to valorize capital at many of to-day' s profitable sites in the Third World countries . The analysis carried out so far allows us to indicate in broad outline which of the so-called issues in the programmatic statements s ubmitted for a ' New International Economic Order' , are meeting resistance - and likewise will meet resistance in the future - from West European firms , trade unions and governments , or conversely, to what extent they coin­ cide with the interests of these groups and for this reason, as far as West Europe has any say in the matter , will be carried through.

WESTERN EUROPE' S ECONOMIC AND SOCIAL DEVELOPMENT

129

Naturally the reactions of the different power groups will vary from co untry to country depending on the particular political, economic, and historical circumstances of each country; but these variations must h ere be left unexamined . The classification proposed by UNITAR divides the issue areas o f a ' New International Economic Order' into six main groups : develop­ m ent financing, international trade, industrialization and technology , food and natural resources , institutional and organizational policy, and finally social problems . These six main issue areas may in turn be collapsed into two : on the one hand issues related to the adjustment of the supranational trade and monetary-related political superstructure ·to the structural changes in the world economy, and on the other hand issues which constitute a potential threat to the capitalist structure o f the world economy itself. If we take into account the developmental trends in Western Europe exanlined above, we may anticipate that the firms, trade unions and governments of Western Europe will adopt the following attitudes towards these two broad categories of issues . West European firms (West European capital) will fully support those proposals which are likely to achieve a realignment of the supranational political structure and which facilitate and promote the transnational reorganizatiDn of production and the transnational mobility of the companies . They will be equally adamant about rej ecting out of hand and without discussion any proposal belonging to the second category, namely those that con­ stitute a threat to the capitalist structure of the world economy itself, and they will do everything they can to stop them . The West European trade unions will in the first instance adopt a positive, though restrained, attitude to the proposals for realigning the supranational political structure, an attitude. which is to be understood in terms of their perception of the power relations. But it is also possible that , as a result of the negative social consequences of continued reloca­ tion and rationalization, they will become a potential force behind the proposals which constitute a threat to the capitalist structure of the world economy, if - and this is at least a pOSSI bility which should not be excluded - they become politicized . As far as the first category of issue areas is concerned, West European governments and also the European Community Commiss­ ion will be caught in a dilemma on the one hand, to yield to the pressures to promote the competitiveness of West European firms on the world market and, on the other hand , to pacify social unrest . Their policies will therefore oscillate between restrained endorsement and restrained rej ection. Moreover, whatever policies they adopt , they will be con­ strained by the fact that their only instruments for coping with the structural changes in the internationally integrated economy and the effects and adj ustment pressures generated by these changes are those of national state policy or at most a regionally coordinated policy (the

1 30

TRANSFORMING THE WORLD-ECONOMY?

EC). These dilemmas were articulated by the Chancellor of the Federal Republic of Germany , Helmut Schmidt , in a speech deliver�d i n London i n September 1 977 . According to a repo.rt i n the Financial Times, he succinctly summarized the situation as follows : Nations , he .said, had lost their autononlY in economic policy . 33 AS far as the second category of issue areas is concerned , . all proposals containing even the merest hint of a threat to the capitalist structure of the world economy have so far been rejected by the states of Western Europe , even those with social democratic governments . The official reason given is always ' concern for the free market economy' . Of the j 3 issue areas of a 'New International Economic Order ' included in the UNITAR classification , the following five in particular belong to the first broad category, namely those that aim at adj usting the supranational trade policy superstructure to the structural changes in the world economy: 9) Appropriate adjustments in international trade, so as to facilitate the expansion and diversification of Third World exports ; 1 0) Lowering of tariffs and non-tariff barriers on the exports of manufactures from the Third World; 1 2) Promoting the par­ ticipation of Third World countries in world invisible trade; 1 7) The negotiated redeploYlnent of certain productive capacities from deve­ loped to developing countries and the creation o f-new industrial facili­ ties in developing countries ; 20) Elimination of restrictive business practices adversely affecting international trade especially the market share of developing countries . Of these five issue areas , the first four are regarded by West European firms themselves , with certain exceptions, as desireable, for they involve improvements in the international trade structure and measures to 'adj ust' national developments to the changing structure o f the world economy, that i s now a fact o f life . Consequently we may therefore anticipate that the removal of the industrialized countries ' tariff barriers and even, on a selective basis , their non-tariff barriers on exports from underdeveloped countries will find support among West European firms . This also means that all measures which facilitate the relocation o f production facilities to underdeveloped countries wil l receive support . Thus there is n o doubt that i n this case support will be forthcoming from West European firms for those measures which will in the last resort have no effect in general on the export of · manu­ factured products from underdeveloped countries to industrialized countries , but which will remove restrictions on the export o f goods which West European firms are themselves producing in the underdeve­ loped countries . The same is true of the support for measures aimed at developing new industrial facilities in the underdeveloped countries . Here, too , it is not a question of new industrial capacities for the under­ developed countries in general, but of new facilities (production installations) controlled by West European firms in underdeveloped countries . 34 We can readily assume that the creation o f these facilities

WESTERN EUROPE'S ECONOMIC AND SOCIAL DEVELOPMENT

131

will b e encouraged since they are precisely in the interests of the firms thems elves , but not in the interests of the underdeveloped countries . All rh etorical commitments uttered on behalf of the firms · against the proposition that 25 070 of world industrial production should fall t o the Third World in the year 2000 are for this very reason scarcely t o be taken seriously . Li kewise we may also safely anticipate that protec­ tionist policies in Europe and throughout the world will in general b e rejected b y the firms , apart from certain exceptions . As far as other issues are concerned, restrictive business practices serve the functio n o f ensuring that control o f production in underdeveloped countries and correspondingly the control over technology, management, marketing , turnover , and in particular p rofits remain securely in the hands o f the firms . All proposals which would mean for the firms a weakening in the efficacy of these instruments of control will therefore· meet with their resistance . The attitude of the trade unions o f Western Europe up to now suggests that they are more or less aware o f the changed conditions o f capital valorization and , unlike the U S trade unions , they are making hardly any attempt to halt the trend towards a n ew international division of labour by demanding a protectionist policy . Instead the demands coming from the trade unions urge that b oth national and supranational organization provide ' adjustment measures ' for employees who are affected by relocations and that b oth n ational and supranational measures be taken to promote the establishment of new, technically superior industries in West Europ e , thereby creating more j ob s . What this means for the development o f the Third World, h owever, i s nothing more than the fact that the demands articulated by the West European trade unions presuppose the continued techno­ logical leadership of the traditional industrialized countries and the further dependency of the underdeveloped countries on modern technology . The demand made b y West European trade unions , i n particular t o the E C Commission, t o negotiate t h e abolishment o f obstacles to exports from underdeveloped countries only in those cases where the so-called ' social clauses ' are contractually guaranteed i s at least the first indication of a proposal which , if implemented , would contribute to the improvement o f the working conditions of employees throughout the world . The social clauses are intended to guarantee that the minimum standards set by the I LO for working conditions and wages be instituted with the help of the supranational apparatus even in underdeveloped countries. The fluctuating attitude o f West European states and o f the EC Commi ssion t owards particular proposals for a removal o f interna­ tional trade barriers and for the construction of industrial facilities in underdeveloped countries , an attitude that is shaped by the dilemmas mentioned above , b ecomes evident from the following reports :

1 32

TRANSFORMING THE WORLD-ECONOMY?

The German Federal Government requests its . partners in the European Community to commit themselves unambiguously to the free enterprise system . On Tuesday, the Minister of Economic Affairs , Otto Graf Lambsdorff, submitted a German memorandum on the BC 's structural policy to the Council of Ministers meeting in Brussels . The Council 's Danish President proposed that the memorandum be used to introduce a debate on basic issues in June, but already initial reservations have been provoked by the memorandum . .. . . In making his plea for a free enterprise system, the Federal Minister had taken as his starting-point a request from Ireland to restrict imports of footwear from Poland . According to Vice-President Wilhelm Haferkamp, the Community is also currently holding talks with South Korea and Hong Kong on the problem of footwear i mports . It was suggested that efforts be made on the basis of a regulation issued by the Commission to monitor imports by means of previous notification , efforts which in Germany's view could provoke excessive pessimism . . . . Lambsdorf informed the Council of Ministers that the Federal Government had not vetoed exceptional branch provisions, in special cases such as steel and textiles . Any accumulation of such special branch provisions, however , would impair the overall efficiency of the economy . Many branch problems stem from cyclical rather than structural causes , he said. Lambsdorff admitted that inflation­ caused distortions , exchange rate imbalances , price increases of raw mterials and energy, import pressures originating in developing countries , wage costs , technological progress , shifts in demand structure , and industrial capacities in excess of market demand necessitate far-reaching structural adaptations of vast areas of the economy . But Germany is convinced that it is primarily up to business to master these problems . The most important stimulus for transforming outdated structures , he asserted, is market competi­ tion . Therefore, further markets throughout the world n1ust be opened up . Community funds as well as financial assistance by individual member states of the Community should be channeled into proj ects enhancing structural change rather than measure s stabilizing traditi onal structures . The growing pessimism that is extending to the whole world would be strengthened should the Ee (an important trading partner) opt for protectionist devices . Reactions to Lambsdorff' s . statement were fairly mixed . The British Secretary of State for Foreign Affairs , David Owen, was not prepared to separate the protectionist issue from the difficulties in the fields of economic structure, labour market , balance of payments, and currency problems . The French Minister for Externa l Trade , J ean-Fran�ois Deniau , reacted in a similar vein . Italy an d Denmark strongly committed themselves to the free enterprise system . The member of the EC Commission, Vicomte Etienne

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Davignon, stresses that the EC's structural problems are intimately connected in their external and internal aspects . Speaking on behalf of Belgium , which has to struggle with extraordinary structural problems , Foreign Minister Henri Simonet cast doubts on Germany' s stand on questions of economic policy, suggesting that it was somewhat out of date. 3S While national leaders are still vowing to avert all-out protec­ tionism, it is rapidly becoming the overriding long-term worry . Unless slow economic growth and the res sort to protectionism are reversed, U . K . Foreign Secretary David Owen cautions , these trends will frustrate development of the poor countries , which are counting on heavy exports of manufactured goods· to rich nations to make it feasible for the poor to build factories big enough to be efficient . If the poor countries are held down, he predicts , 'we shall face anarchy and chaos by the end of the century. ' He is confident this danger can be averted by a sensible balance between free trade and protectionism.36 Thus the policy adopted by West European governments and the EC Commission towards the influx of imports from developing countries will probably continue to reduce tariff barriers where these barriers adversely affect imports originating from West European production plants in developing countries . On the other hand , however, it is equally likely that there will be increasingly a selective application of various types of non-tariff barriers in order to keep out imports that are regarded as undesireable, particularly in terms of their possible adverse social consequences . 37 As far as the proposals contained in issue area no . 1 1 are concerned, there seems to be no likelihood at all that the governments of the West European countries will be willing to enter into negotiations for the reimbursement of monies derived from duties and taxes imposed on imports from underdeveloped countries . On the contrary, there is reason to expect that the governments of the industrialized countries will impose taxes on the turnover of imports on the domestic markets , by introducing and extending import turnover taxes , value-added taxes , etc. , in an attempt to absorb an everincreasing share of the economic surplus produced in the developing countries . These and other state revenues will then be used by the West European govern­ ments to finance a massive endeavour to improve the site conditions in their own countries in the hopes of influencing the firms ' decisions to maintain or expand production at home . The issue areas which deal with raw materials and indebtedness raise several proposals for the adaptation of the supranational superstructure. These proposals are at present viewed by the West European governments exclusively from the standpoint of the need to secure, firstly, supplies of raw materials to be processed and consumed

1 34

TRANSFORMING THE WORLD-ECONOMY?

in their own countries , and , secondly, repayment of debts originating from private lendings to underdeveloped countries . I n summary it may be said that many of the proposals for the adapta­ tion of international trade and monetary structures raised by the dis­ cussion of the need for a ' New International Economic Order' find widespread support in Western Europe ; from the West European firms , which are clearly taking the initiative; from the West European trade unions , which are acquiescing from a sense of powerlessness ; and from the West European governments , whose ambiguous attitude i s manifested in their contradictory policies . But i t i s j ust as clear, on the other hand , that the realization of these proposals , although allegedly in the interests of the underdeveloped countries , do not correspond to the interests of the peoples of the underdeveloped countries but in fact serve the interests of capital valorization . The obj ectives of a ' New International Economic Order' , which point towards a changing of the capitalist structure of the world economy itself, are especially evident in issue areas no . 1 9) Regulation and supervision of the activities of transnational corporations in promoting economic development of the Third World ; 2 1 ) The right o f State t o nationalize foreign property in accordance with their own laws ; 23) The right of States to full permanent sovereignty over their natural resources ; and 28) Free choice of States of their economic, social and political system and of their foreign economic relations . It follows from the analysis w e presented earlier that at present there is no prospective whatsoever that West Europe will be receptive to any of these proposals , they will not even be discussed, let alone find political support . There is no need to explain why these proposals for changing the capitalist structure of the international economic order are being dismissed without further discussion by the companies , L e . b y capital itself. Not only will they continue t o b e dismissed, but they will also be challenged by counterproposals for a stabilization of the capitalist structure of the world economy. There is already a compre­ hensive catalogue of such counter-proposals , which go under such names as reprivatization, free investment zones , cancellation of labour legislation, etc . As for the West European trade unions , their response t o the proposals for changing the capitalist structure of the international economic order' has hitherto been confined to announcing the need for new strategies , should the social problems that have already resulted from the recent structural changes in the world economy continue to increase . However , so far there is no indication what the content of such strategies could or will be. On the other hand, we must not overlook the fact that it is precisely the West European working class and their organizations , the West European trade unions, who will be increasingly compelled by current developments in the world economy to take note of the demands for a change in the capitalist structure of

WESTERN EUROPEtS ECONOMIC AND SOCIAL DEVELOPMENT

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international economic order . The attitude of the· West European governments towards the '-J' u...., oJ ' for a change in the capitalist structure of the international econo mic order is, as we have already demonstrated , at present a nega­ . tive one, even among the social democratic governments . What their attitude in the future will be, will depend , at least as far as the social democratic governments are concerned, on the future balance of power between West European firms and West European trade unions . The analysis we have so far carried out leads us to the conclusion to the extent that the West European powers are in a position to at, th influence the course of international development, a change in the fundamental structures of the international economic order is not · on the cards. Social international development will therefore continue to be shaped primarily by the forces of the existing ' order' , who se consequences have been well described in plain and unadorned language by UNITAR·: .....LoJ .

The existing international economic order is unsatisfactory for all members of the international community. It produces widening gaps between rich and poor nations , and between wealthy and marginal populations within nations ; it fails to assure a life free of alienation and unemployment in industrialized countries and free from hunger and deprivation in developing countries , and it makes the pro­ gressive achievement o f self-reliance difficult or impossible for the maj ority of nations and peoples . If continued unchanged , the present internationai economic order would create more injustice , suffering , and conflict . 3 8 The existing international economic order is the capitalist order and disorder of the world economy. The proposals which have so far arisen in the international discussion of a new international economic order, although they hint at the necessity of overcoming the existing structure, offer hardly any ideas for an alternative structure of the world economy. The discussion has not yet revealed any suggestions for a concrete utopia o f a socialist structure and a socialist development of the world economy. For those who are advocating the necessity of a New International Economic Order to serve the interests o f the people all over the world , the task of outlining, and struggling for , such a concrete socialist utopia of the international economy still remains .

Notes 1 A detailed exposition of the structural changes in the world economy and their effects outlined here is given in Folker Frobel, JUrgen Heinrichs , Otto Kreye, Die neue internationale Arbeitsteilung. Rowohlt Taschenbuch Verla.g, Reinbek bei Ha.mburg, 1 977.

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TRANSFORMING THE WORLD-ECONOMY?

2 See Ernst Feder, Stra wberry Imperialism: An Inquiry into the Mechanisms of Dependency in Mexician Agriculture, Editorial Compesinas , Mexico City, 1 978; and by the same author, The New Agrarian and Agricultural Trends in the Underdeveloped A gricultures, manus'cript, 1 97 8 . 3 Frankfurter A llgemeine Zeitung, Blick durch die Wirtschaft, 1 9 December 1 978 . 4 United Nations , Secretariat of the Economic Commission for Europe, Economic Survey of Europe in 1977. Part

1977, New York, 1 978 , p . 1 . 5 Ibid . , p. 3 .

/,

The European Economy in

6 Ibid. , pp. 1 3 arid 1 5 . 7 Austria, Belgium, Federal Republic o f Germany, Finland , France, Great Britain, Holland , Ireland , Italy, Norway, Spain, Sweden Switzerland, Yugoslavia, 8 Cf. ILO , Die Welt der A rbeit und der Entwicklung. Informationen und A rtikelfur die Presse, Geneva, August 1 978, pp. 12 and 1 3 . 9 These are the figures give by Helmut Minta (Vice-president o f the Federal Department for Labour, NOrnbetg) . Cf Helmut Minta, Rationalisierung und Arbeitsmarkt. Lecture delivered at the RKW-Congress , ' R ationalis­ ierung und Arbeitskrafte' , 2 November 1 978 , Munich. 9a 1 billion 1 ,000 million (translator's note) . 1 0 Handelsblatt, 24 September 1 97 8 . 1 1 See for example the reports of the Federal B ank of Germany, November 1 97 7 : the total amount of fixed capital investment in 1 975 was 66 .8 billion marks, of which 62 billion mark� , or approximately 94070 , were replace­ ments of capital assets , including investments for rationalization. 12 Cf. Handelsbatt, 6 January 1 978 . 1 3 Cf. Frankfurter A llgemeine Zeitung, Blick durch die Wirtsch aft , 24 October 1 97 8 . Cf. Frankfurter A llgemeine Zeitung, Blick durch die Wirtschaft, 1 2 July 14 1 97 8 . 1 5 Cf. Fran kfurter A llgemeine Zeitung, 8 November 1 978 . 1 6 Cf. Nachrichten fur A ussenhandel, 1 3 July 1 97 8 . 1 7 Cf. Metall, Zeitung der Industriegewerkschaft Metall, 1 0 March 1 97 8 . 1 8 C f. Nachrichten fur A ussen h andel, 6 March 1 978 . 1 9 Cf. Handelsblatt, 6/7 January 1 978 . 20 Cf. Handelsblatt, 1 9 April 1 97 8 . 2 1 C f . Die Zeit, 28 April 1 97 8 . 22 C f. Frankfurter A llgemeine Zeitung, 22 March 1 978. 23 Cf. Handelsblatt, 26 October 1 978 . 24 C f. Handelsblatt, 1 6/ 1 7 December 1 977. 25 C f. Handelsblatt, 30 January 1 97 8 . 26 Cf. Nachrichten fur A ussenhandel, 20 January 1 978. 27 Cf. Nachrichten fur A ussenhandel, 24 November 1 977. 28 H . P . Drewry (Shippi ng Consultants) Ltd , The Emergence of Third World Shipbuilding: A n Economic Study, London 1 97 8 . 2 9 Handelsblatt, 2 5 April 1 978 . 30 Frankfurter A llgemeine Zeitung, 1 3 April 1 97 8 . 3 1 Herbert Giersch , Z u den Forderungen nach einer neuen Weltwirtschaftsor­ dnung. In B . Schiemenz (ed .), Weltwirtschaftsordnung und Wirtsch aft=

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1 37

s wissensch aft: Vortriige der Festveranstaltung des Fachbereichs Wirts­ chaftswissenschaften der Philipps- Universitiit Marburg aus A nlass des 450-jiihrigen Jubiliiums am 26. Mai 1977. Gustav Fischer Verlag, Stuttgart

and New York, 1 978 , p . 27 . 32 Ibid . 33 Financial Times, 29 October 1 977 . 34 What both of these measures ultimately entail for underdeveloped countries cannot perhaps be more clearly expressed than the following evaluation of the economic situation of Taiwan, a paradignatic case for export-oriented industrialization, by the US�Department of Commerce: �Dependent on world economy Taiwan will continue to be a small factor in the world economy, extraordinatily sensitive to the vicissitudes in the economies of its leading trading partners, the United States and Japan, which together account for 54 per cent of its total foreign trade. The prospects for continued rapid growth in 1 979 and beyond hinge large, therefore, on conditions in the import markets of the developed countries, particularly in the United States . In this regard, many observers foresee some deceleration of the export growth rate and this of the GNP real growth rate in 1 979. ' (Business America, 1 ( 1 978), p. 26.) 35 Cf. Suddeutsche Zeitung, 3 /4 May 1 978 . 36 Cf. In ternaiional Herald Tribune, 7 July 1 978. 37 See for example a documentation by the ' Bundesverband des deutschen Gross- und Aussenhandels' , released in June 1 978. 38 UNITAR, Progress in the Establishment of a New International of a New International Economic Order: Obstacles and Strategies. A Joint Project of UNITA R and the Centerfor the Economic and Social Study of the Third World. Project OulUne, 1 978.

5 The Non-Aligned Movement and the New International Economic Order * Timothy M . Shaw

' The " new international order" is , at one and the same time, a program and an analysis . It is a progr
Non-Alignment as ideology Although a sense of kairos is apparent in the continual and continuing demand for a New International Economic Order (NIEO), the Move­ ment of N.on-Aligned states can hardly escape from· its own collective inheritance of dependence and incorporation . The contradictions into which the ruling classes of member states have been plunged cannot be resolved without fundamental structural transformation: transfor­ mation within both national and international political economies . * Editor's n ote: An earlier version of this chapter was presented, in the autho r's absence , b y this editor at the UNU-GPI D Expansion-Exploitation Sub-group meeting ·.

in Port o f Spain , Trinidad, January 1 98 1 . The editor assumed the responsi bility to edit the original version as the chapter for this boo k .

THE NON-ALIGNED MOVEMENT

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In the absence of such interrelated fundamental changes , the NIEO becomes an ideological construct , designed to salvage residual dignity and development for a few countries and classes in the Third World . If the Non-Aligned call for a NIEO is not merely an exercise in frus­ tration , it must constitute an attempt to devise an i deology to legitimise and protect the interests of the new indigenous ruling classes , s omewhat along the lines of the fatuous belief in 'indirect rule ' propagated in parts of the British Empire in the early decades of this century. To conceive of the NIEO demand and debate as an ideological onstruct is to deny neither their seriousness nor their prospects of c success . Rather , it is to recognize the inherent futility of the Non­ Aligned calling for a fundamental and fast restructuring of the global capitalist system, which has evolved over several centuries and continues to evolve under pressures more salient than those generated by this Movement. Changes in the international division of labour, in the prices and supplies of essential factors of production, and in parti­ cular relations of production in different parts of the world system have more impact on prospects for development than endless resolutions at Non-Aligned and United Nations conferences . Moreover, some elements among the Non-Aligned are themselves both ambivalent and nonchalant about the Movement's declarations, because various classes and countries within it have variable chances for growth. This is due to the fact that some factions within Third World bourgeoisies and some economies within the Less-Developed Countries (LDC) are better able than others to take advantage of the continuing evolution of the world system . In addition to this , the apparent cohesion of the Non­ Aligned coalition remains intact , because occasional efforts by maj or forces within the advanced industrialised states of the OECD - for example; the Trilateral · Commission - to 'peel off' particular leaders and countries from the ranks of the Non-Aligned are less important than continuing historical trends within the international division of labour .2 To be s ure., such efforts do yield some results ; but the essential cause both of tensions within the Non-Aligned and of collaboration between First ,and Third Worlds toward a NIEO is the structural position of maj or classes and countries in the world system of the 1 980s . In short, substructural relations determine outcomes rather than super­ structural manifestations, appearances and assertions to the contrary notwithstanding . The Movement will continue to change as dominant interests within it ris e and fall; hence the relevance of the relationship between its past characteristic trends and likely trends in its further evolution over the next twenty years . The NIEO , as a complete package of reforms , is likely to remain elusive but some issues on its agenda will be recognized and resolved whenever they are of salience to maj or interests in the North and/or the South. This chapter proceeds , then , from an overview of central

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TRANSFORMING THE WORLD-ECONOMY?

changes (and contradictions) in the contemporary world system to a history of the evolution of the Non-Aligned Movement as its percep­ tions of and location in the system have developed . The maj or theme presented here is that , because of the continual inte­ raction between Movement and system (and , of course, interaction among and between central forces within both Movement and system) , neither can be understood out of historical context . 3 I n short, the Non­ Aligned states are b oth products of, and now actors \vithin , the global capitalist economy; so their design of and demand for a NIEO are histo­ rically conditioned . Hence the initial focus on NIEO as ideology: an . idealist , nlystifying , and ambivalent response by the ruling classes of the global periphery to their unsatisfactory inheritance and uncomfort­ able dependent situation . The elements of idealism and ambivalence increase as changes in the world system become more apparent : the uneven incidence of rece s sion , inflation and protectionism between b oth countries and classes . As the new decade o f the 1 980s opens we are, then , as Immanuel Wallerstein indicates , ' at the beginning of one of those periodic down­ turns , or contradictions , or crises that the capitalist world economy has known with regularity since its origins in Europe in the sixteenth century' .4 This contemporary crisis , which commenced in the mid - 1 970s with the ending of the post-war Bretton Woods system and the beginning of an era o f high oil prices has three maj or feat ures : 1 US hegemony is over and a period o f inter-Western rivalries involving both countries and corporations - has begun . 2 The unity o f the Socialist Commonwealth is also over and a period of intense Sino-Soviet rivalry, as well as fragmentation in Eastern Europe, is in process . 3 Although most Third W orId countries continue t o b e very marginal in the world system , a few - those at the semi-periphery - are increasingly important to international production and exchange. These three factors are, of course, interrelated; major states , capitalist and s ocialist alike, are engaged in competition for the scarce resources and markets o f the minority of Third World countries with expanding economies . Together, they could constitute an historic con­ j unctureS - a turning-point in the world s ystem . And it is with s uch a situation that the Non-Aligned Movement has now to deal in its quest for order and j ustice for the maj ority of countries and peoples . If the Movement of Non-Aligned states was declared pregnant in 1 95 5 at Bandung , it was born in the era of the early 1 960s . Its first decade had been characterized by optimism - decolonization, develop­ ment and detente were both · possible and probable - but its secon d decade was characterized by greater pessimism (realism?) - decolo- . nization, development and detente were problematic and generate d ironies rather than irreversible advances . The Movement recorded con­ tinued progress towards political decolonization in the 1 960s - in many

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its golden age - but b y the early 1 970s i t had begun t o appreciate lack of power to force economic d�colonization or strategic detente . Indeed , the prospects for its second twenty years are , if anything, gl oomier in this regard than for the previous ten or twenty: Southern Africa may come under maj ority rule by the year 2000 , but dependence and underdevelopment are likely to be not only perpetuated but also int ensified. Hence the growing concern of Non-Aligned leaders as the . 1 980s open : Reviewing developments in the international economic situation since the Havana Summit , the Ministers noted with grave concern that while , on the one hand, the acute problems facing the developing countries had been aggravated and increased as a result of the - pursuance of policies contrary or unfavourable to their interests by the developed countries ; on the other hand, there had been no substantial progress in resolving the stalemate . in inter­ national negotiations for the restructuring of international economic relati ons .6 Nevertheles s, the Non-Aligned Movement is caught in the web of its own contradictions and can hardly opt out of the halting process o f 'global negotiations ' . Indeed, the heady optimism of the 1 960s and the new caution of the 1 970s are reflective not only of shifts in the world system but als o of a growing self-consciousness among Non-Aligned leaders : their position as the ruling class at the periphery remains tenuous hence, the imper­ ative of external association and support . Unless this leadership is willing and able to opt out o f such global networks - even though its place in them is marginal it has few options other than to hang in there and hope that a NIEO will somehow s someday materialize . 7 Meanwhile , the Movement has little choice but to revise its ideological position to incorporate contemporary demands and concepts from both external associates and internal constituents . In short, Non-Alignment can be seen increasingly as an ideological construct - a form of collective ' defensive radicalism ' . 8 This chapter provides a critical overview of the intellectual history of the Movement in terms of the historical conj uncture of the 1 960s- 1 970s and the con­ tradictions surrounding Non-Aligned leaders especially following the new inequalities apparent from the mid- 1 970s , 9 which precipitated the call for a NIEO .

Non-Alignment as collective response to decolonization The charter mernbers of the Non-Aligned Movement were the first independent states of the post-war period , eager to maintain the

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TRANSFOR.MING THE WORLD-ECONOMY?

nlomentum towards global decolonization. · Given : that the central issues of the time were considered to be essentially political, the Move­ ment concentrated also on the decentralization of world power structure . However, a combination of successful political decol o­ nization and decentralization (i. e . detente) plus the elusiveness of eco ­ nomic decolonization and decentralization (i. e . development) fostered a shift away from the political towards the economic in the second decade of the Movement' s history. The perpetuation of some elements of colonialism and centralization of world power along with the continued elusiveness of development generated a return to some original concerns of the 1 960s as the 1 980s open : dominance , inter­ ference and exclusion. These retrieved concerns are now expressed as self-reliance rather than decolonization, NIEO rather than development. If Non-Alignment was a response at first to bipolarity, it is now a reaction to underdevelopment . The shift away from Cold War issues along an East-West axis towards rich-poor issues along a North-South axis is symbolic both of changes in the world system including the .increase in Third World influence . Continuing trends in international affairs ate reflective of these interrelated transitions away from stra­ tegic and political questions and towards a new concentration on eco­ nomic and social issues . These are representative of the impact of the processes of decolonization and underdevelopment in the world system - the dialectical relationship between formal independence and actual dependence - and the continuation of inequalities . Glob al politics have evolved in important ways for the Non-Aligned, away from a Eurocentric system and towards a complex hierarchy of myriad actors , both state and nonstate . The rise, first, of non­ European superpowers (presently the United States and the S oviet Union and, for the future , China and Japan) ; second, the multipli­ cation of states (particularly in the Third World) ; third, the explosion of non-state actors (especially transnational, transgovernmental and intergovernmental ones at b oth regional and global levels) ; fourth, t he appearance of new coalitions as well as axes amongst these; and fifth the recognition of a range of new issues , together constitute a major change in the superstructure, if not the substructure, of the world" system. Students of global superstructure may argue that these several shifts represent a trend towards decentralization and democratization as the number of small states and of non-state actors grows . However , a rno radical approach would tend to examine continuing internati inequalities and hierarchies despite the proliferation of actors , insti­ tutions and issues . w This latter approach sees a perpetuation of trend towards concentration rather than to diffusion, looking in ticular at modes and relations of production rather than at dipl or resolutions at the United Nations. To be sure , substructure ...J ....... .... -...1

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. superstructure are related in both analysis and practice . Yet the differ­ ent levels and modes of analysis and prescription associated with the two maj or approaches lead t o divergent explanations and expectations . These affect different perceptions o f the place of the Non-Aligned states in the world system as well as ideological definitions and defences of their place. The alternative forms of analysis and advocacy represented by the orthodox and radical approaches respectively are reflected in the reso­ luti ons of the Non-Aligned summit . As suggested below, these two . approaches are espoused by different factions in the Movement leading to a growing debate and division . For the present , however, I merely . note that the former, orthodox, perspective welcomes detente but continues to emphasize politico-diplomatic issues of a superstructural variety whereas the latter , radical, perspective concentrates on (under) development as an aspect of political economy; I . e. on substructure. These two , differing emphases are reflected very clearly in the- reso­ lutions of Fifth Summit Conference of the Non-Aligned in Colombo, in 1 976. A . W . -Singham captures the common thread o f these two approaches to (political and economic) decolonization by arguing that ' the Non­ Aligned Movement has indeed come of age in the contemporary era. It is slowly transforming itself from being a social nlovenlent into a much more highly · organized pressure group . ' 1 1 This new concern with 'economics' and its impact on ' politics ' have implications for strategy and ideology . It also has implications , as shall been seen later , for unity . Nevertheless , for now note is just taken o f Singham ' s succinct summary of the Non-Aligned ' s transition: . . . the maj or thrust o f the Non-Aligned Movement has been its demand for a new economic order which is broadly defined at the United Nations and gradually translated into a programme of action through UNCTAD and other international gatherings . The Non­ Aligned Movement has developed into what can be broadly des­ cribed as a trade union strategy in dealing with capitalist nations of the world . It has essentially advanced a trade union bargaining process onto a global level. 1 2 This trade union-type activi$nl on NIEO is a considerable step from its earlier role as an advocate of decolonization. In the first decade (from Belgrade, 1 96 1 to Lusaka, 1 970) , the Non­ Aligned were mainly preoccupied by issues of political independence and East-West tension . They largely defined their international position in terms of ' positive' support for nationalist movements throughout the Third World and ' neutral ' abstention from (any overt and long-ternl) association with either of the Cold War blocs . They were ' positively neutral ' . They designated an activist role for them­ selves in terms of:

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TRANSFORMING THE WORLD-ECONOMY?

1 Mediation and arbitration in specific inter-state disputes . 2 ' Bridge-building' between the blocs . 3 Presenting an alternative , a Third Force , for those bloc states opposing bloc membership . 4 Active support for liberation movements and acting as their spokes­ man in international bodies . 5 Criticism of countries violating peace, i . e. acting as the conscience o f the world, putting blame on those who deserve it . 13 This concern for independence and impartiality , both as status and spirit , continues , although it is harder to define and maintain in a con­ sensual manner in a more complex multipolar system . Moreover, it has come to be conceived in terms of political economy rather than legality alone, in an era when economic pressure is being increasingly seen to be as effective as the political or the strategic. 14 This may be so , but it must be recognized that resistance to ' external' forces requires more than declarations and solidarity; economic auto nomy and resilience are prerequisites to enhanced 'independence' . But in the case of the Non-Alig"ned this is , always , a function o f the degree o f ideological cohesion and challenge displayed by the Movement . Not only has the international environment changed over the last two decades but the composition of the Movement has also evolved . Because o f the history and incidence of formal decolonization, the almost balanced 'Afro-Asian ' complexion of Belgrade shifted dram ati­ cally by Lusaka when Africa had double the number of representatives compared with Asia. Moreover, given the large number of highly dependent and very poor , largely francophone, African states that were eligible for membership by 1 970, the balance shifted away from a more radical and towards a nlore conservative or orthodox orientation. As Hveem and Willetts note in their empirical analysis of ' new' and ' old ' members at Lusaka: . . . the Movement increasingly has been taking aligned countrie s into its ranks . . . there is a decreasing degree of Non-Alignment from the 'veterans' through the ' once before' to the ' newcomers ' . Moreover , there is a considerable change o f balance between East and West. Formerly those that were aligned were split between an Eastern and a Western alignment . Now the West predominates com­ pletely . The explanation seems to be that the Movement really . . . has remained an 'open club ' . It recruits new members willingly i f they meet at least two criteria: that they are underdeveloped or developing countries , and that they are relatively small . The Movement has maximised membership at the expense of Non­ Alignment. 1 5 Using their four indicators - diplomatic association, military align- . ment , UN voting, trade with the communist bloc Hveem and Willett s

THE NON-ALIGNED MOVEMENT

1 45

ude that at Lusaka ' only four nations , Ghana, India, Nepal and ait, are Non-Aligned on every one of the four indices ' . 1 6 And , even gi ven a very liberal interpretation of their data, less than half of the 64 invited states were 'objectively Non-Aligned ' . . However , with the changed nature o f the decolonization process in th e 1 970s compared to that of the 1 960s , the pro-Western composition of the Movement shifted once again by Colombo ( 1 976) when up to 30 of the 86 members claimed to be ' socialist ' . This shifted to the left continued with the sixth summit in Havana, although the ideological complexion of the Movement is considerably more ' progressive ' than member-s ' actual political economies . The Non-Aligned Movement constitutes , then, both a continuing response to and an influence on the world system. In its first decade it was a reaction to , but also a constraint on, international bipolarity ; in its second decade, it has been a critical reaction to international inequality . As shall be seen in the concluding section, in its next , third, decade , the Movement may react to a combination of inequality and intervention and seek to advance both the development as well as the integrity and democracy of its members against bloc politics ; at least this appears to be the direction in which its ideological predispositions are pointed. The Non-Aligned Movement has moved , then , from being as impar­ tial and obj ective as possible during the Cold War era to being partial and insistent during the North-South debate. In the 1 980s , given the prospects of multipolarity and bloc politics 'on the one hand, and uneven development and resource scarcities on the other hand, the Non-Aligned may be preoccupied with a combination of issues , par­ ticularly those to do with intervention, of both structural (economic) and crisis (political) varieties . Moreover, as differentiation increases within the Movement because of unequal exchange and uneven development , so will questions about development strategy and foreign policy come to affect its dynamics and diplomacy. And it is on these central issues that the tension between orthodox and radical states and analysis will continue to be acute, even after the pas sing of the crisis­ ridden 1 970s . So ideological ambiguity and argument are unlikely to decline in the 1980s despite the growing. threat to the Movement from revived forms of neocolonialism - political pressure and econon1ic exertion ­ characteristic of the trend towards neomercantilism. However, in the 1970s , especially the first half of the decade, it was assumed that eco­ nomics were the panacea ; hence the ideology of development in resP9nse to the reality of dependence.

1 46

TRANSFORMING THE WORLD-ECONOMY?

Non-Alignment as collective response to dependence Faith in development among the Non-Aligned was short-lived as a col­ lective ideology because insufficient resourses were released by domi­ nant classes , corporations and countries in the world system to effect significant change in the Third World before the mid- 1 970s ; and shocks to the system from the mid- 1 970s onwards provided dnlmatic opportu­ nities for a few Third World forces but retarded prospects for the majority. However , the pervasive sense of crisis that has characterized the world system for much of the last ten years has both affected and, in part, been caused by, the Non-Aligned states . 17 If 'political' nation­ alism and decolonization produced the downfall of colonialism, then 'economic' nationalism and decolonization have begun to threaten the continuation of capitalism, at least in its characteristic Keynesian post­ war variety. In turn, the age of detente and (under) development has necessitated changes amongst the Non-Aligned . As Singham notes, 'the growing global economic crisis, especially the disparity between the rich and the poor nations , has dramatically changed the whole cQurse of the Non-Aligned Movement . ' 18 According to the radical mode of analysis , the series of interrelated crisis disrupting the global economy in the second-half of the 1 970s is reflective of a set of contradictions in the world system. This historical conjuncture is the result, then, qf a group of conflicting forces that cannot coexist for long . The nature as well as the timing of the response to this challenge - in its ideological as well as existential form - will profoundly affect the future of both the global economy and the world · system of which it is a part. The crisis can be seen to exist at two rather distinctive levels the superstructural and substructural . The former consists of the diplomatic debates and politicaL posturing that occur in a variety o f fora and media. The latter consists of the economic relations and social structure that underlie the former . A fundamental question about both the Non-Aligned states and the NIEO debates is whether they seek change at the level of super- and/or sub-structure. Before the 1 970s , the Movement was largely concerned with superstructural issues - decolo­ nization, diplomacy and detente. It only became concerned with sub­ structure as it became clear that dependence affect development and that incorporation in the global economy largely determined place in the world system as a whole. In other words , the contradictions and debate at the level o f substructure affected diplomacy and debate at the level of superstructure . There was not only a ' gap' between economic dependence and political independence: there was a tension or a contra­ diction between the two . Given the growing awareness of this relationship between sub- and super-structure a central question arises about the NIEO issue: is it

THE NON·ALIGNED MOVEMENT

1 47

ing t o be treated and (possibly) resolved at the level of superstructure only - ideological and diplomatic agreement - or will it also lead to ch ange in the global economy, the substructure? The Non-Aligned states (particularly the radical faction amongst them) increasingly demand change in substructure, recognizing that this will inevitably affect superstructure . By contrast, the industrialized states advocate change at this level of superstructure only, hoping both that they can prevent diplomatic agreement from affecting economic exchange and th at they can meanwhile re-establish their dominance throughout the global economy. There are constraints on the class-type struggle between ' bourgeois ' and ' proletarian' states because of the simulta­ neous class conflict occuring within each of them and the continuing connections between bourgeois interests in North and South. In short , there are limits to the i
148

TRANSFORMING THE WORLD-ECONOMY?

temporary, local difficulties , whereas the radical , structural approach treats them as inherent, long-term contradictions . The former believes that they are s usceptible still to incremental decisions whereas the latter asserts that they are merely features of a structural conditio n that requires fundamental change . From a radical world system perspective , the crisis may represent an historic conjuncture not a . passing problem . The orthodox prescription to overcome the crisis consists, then , of a routine response - negotiation and co-operation - whereas the radical reaction is the opposite - confrontation and conflict . The former represents the traditional reply from the old majority within the Non-Aligned group while the latter reflects the reaction of the new minority . Tradition is still contained in some . of the resolutions from Colombo : The international trend i s . . . favourable to peaceful coexistence , . . . it is furthermore a fact of great importance that the world is beconling increasingly interdependent , a factor of crucial signifi­ cance in shaping the world of the future . In an interdependent world, the only alternative to international cooperation is international . rivalry, tension and conflict , and the human aspiration towards a better world has inevitably to manifest itself through international cooperation . Consequently the trend is favourable to international cooperation in accordance with the Non-Aligned principle of peace­ ful coexistence . 1 9 By contrast , a growing number of new states recognize the inevitablity of conflict between rich and poor if the latter are to be free to develop . Their more radical perspective represents a more critical historical mode of analysis ; one that sees incorporation and co-operation as the problem not the solution . The ambiguities of the NIEO debates are, then, an aspect of the tensions within the Movement over how to respond to the current crisis . Heightened awareness o f the elusiveness o f development and the per­ vasiveness of dependence has generated something of a metamorphosis in the Non-Alignment Movement in the 1 970s . As consciousness grew of the gap b etween political independence and economic dependence, so determination increased to bridge it by realizing a greater degree of economic control and autonomy. The demand for international development and democratization - instead of dependence and domination produced the NIEO debate. The 1 970 Lusaka Summit (of Heads of State) and the 1 972 Algiers Summit (of Foreign Ministers) led to the Sixth and Seventh Special UN General Assemblies . The inter­ national agenda since the second half of the 1 970s has been dominated by this debate, for as Ervin Laszlo suggests ,

THE NON-ALIGNED MOVEMENT

1 49

the historical process which gave the maj ority of the world 's popu­ lation sovereign and equal status , but left them at the same time in a pos ition of economic dependence, triggered a set of factors configuring the context for the emergence of the NIE O . 20 But definitions , interpretations and expectations o f NIEO vary within the Non-Aligned : hence the ambiguities of its ideology. And , although some states still retain faith in incrementalism , many have come to recognize the imperative of structural change. New structures in the global economy are essential if co-operation is to replace conflict once again and if development is to reduce dependence: The Heads of State . . . consider that collective self-reliance within the NIEO is an important and necessary step in the wider process arriving at the establishment of international co-operation 'which would be a concrete and genuine expression of interdependence within the global economy . International co-operation is nowadays an imperative necessity. It requires the effective participation of all in decision making and demands that those processes and relation­ ships which lead to increasing inequality and greater imbalance are put to an end. In their strategy of international economic · co-ope­ ration , concurrently with the intensification of the relations between themselves , it is desirable that the 'Non-Aligned countries diversify their economic relations while the other countries , developed capl­ talist as well as socialist, on the basis of the principles of respect for national sovereignty, of equality and of mutual benefit . 2 1 If mutual and stable forms of political and economic co-operation are to be established then new values and structures have to be agreed upon and constructed , otherwise interdependence �ill continue to be a cover for dependence � It is for this reason that Non-Aligned Ministers declared in 1 98 1 that they categorically rejected any attempt: . . . to impose , under the pretext of interdependence , a world economy which would once again leave no place for the developing countries as full p artners in their own right . [They] were of the view that interdependence could only result from the establishment of the NIEO . . . 22 A persistent theme in the orthodox school of both states and scholars in both Third and First Worlds is that international conflict over the maldistribution of income and opportunity can be overcome not by continuing tension but rather by writing a new global contract. The pos­ sibility o f resolving differences in this manner is reminiscent of earlier attempts by international lawyers to design world governments or federations . It also reflects the awareness that some degree of change in the global economy may be essential for the advanced industrialized states too as resource shortages and environmental pollution increase .

1 50

TRANSFORMING THE WORLD-ECONOMY?

And it is a characteristic response of the rich to challenges of the poor - a superstructural rather than a sub-structural remedy. As L aszlo recognizes himself, ' The establishment of the NIEO is not only historically appropriate; it is also universally expedient. '23 The Non-Aligned have begun to adopt aspects of this notion of a new international contract and order for two reasons . First , they see it as a goal that will enhance their own unity and hence effectiveness . And second, theysee it as a means to put pressure on, and to blame, the rich. Moreover, if simultaneously they advance their own national and collective self-reliance , then should the contract prove elusive, they can always retreat into their own 'worid ' . These twin aspects of demanding a NIEO - solidarity and threat are reflected in the political declaration from Colombo : The Non-Aligned pledged themselves to make every effort in asso­ ciation with other developing countries , to strive for internation al co-operation in the establishment of the NIEO. Should they fail i n t heir efforts , the responsibility for creating a situation of confron­ tation between the developed and the developing countries would fall squarely on the developed world . The Non-Aligned pledged themselves to co-operate more actively amongst themselves and with other developi ng nations to improve their economiG status and inc�ease their bargaining power as they could thereby enhance the political effectiveness o f the Third World .24 And the advantages - both developmental and tactical - of adopting self-reliance , are reflected in the economic declaration: The principle of self-reliance, thus seen in its individual and col­ lective aspects , is not only compatible with the aims of the NIEO but is a highly important factor in the strengthening of the solidarity o f Non-Aligned and other developing countries i n their struggle t o achieve economic emancipation . 25 Finally, as already indicated, self-reliance may also be a response to the Limits to Gro wth debates and decisions in the North, as well as to a history of dependence . It consists of intellectual and political reactions which are mutually reinforcing: the dependence approach advocates disengagement because in the past integration has only produced underdevelopment , whilst the ' over-development ' approach advocate s disengagement because in the future integration might well be impos­ sible given ecological preoccupations in the North: The growing acceptance of national and collective self-reliance as a development strategy represents a victory for scholars who , during the 1 960s and 1 970s , have championed what is termed ' dependency ' theory. 26

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151

the call for national and collective Third World self-reliance efforts (is) to bring about indigenous or self-sustaining development . Unlike the 1 960s development strategy, which emphasised Third World integration into the global economy, the new strategy' s hall­ mark is a giant step back from full participation in the international econonlY. Elective and limited participation in the global economy is emphasised until such time that economic relationships between nations become more symmetrical . 27 Although dependence and · over-development p erspectives disagree profoundly on the causes of self-reliance - no development and no growth, respectively - they have b een able to reinforce Third World perceptions of the imperative of disengagement and restructuring . This solidarity has been achieved at a time when some elements in the North - corporations even if not nationalistic regimes - have begun to reconsider and to advocate interdependence based on Southern growth , rather than isolation based on ignoring Southern demands . But it may be rather late to revive such classical economic doctrines : Given the web of Third World-industrial nation interests . . . it is clear that growth in the industrial nations cannot now be curbed without seriously affecting Third World economic development . 28 It is ironic that j us t as the industr ial nations inch toward accepting many elements of the 1 960 Third World development strategy, the Third World should be preparing to venture upon a new develop­ ment strategy. 29 So the convergence of limited growth and self-reliance - the ideology of NIEO and global contract - is problematic now that the dominant interests in the world economy seek economic revival through Southern markets and activities . The pressure on the Third World to abandon self-reliance even before it is really tried is likely to gro\v , especially within the semi-periphery, as discussed below .

The future of Non-Alignment as collective response to dominance The Non-Aligned states , for reasons of faction (class elements within national and transnational bourgeoisies) and function (divergent national elements within the LDCs) , have attempted to render compa­ tible contract and confrontation , interdependence and self-reliance . This continuing quest for ideological as well as institutional order is reflected in the reinterpretation o f notions of coexistence and detente . S o economic a s well a s political coexistence i s supported and detente is advocated for conflicts and areas outside the original narrow East-West

1 52

TRANSFORMING THE WORLD-ECONOMY?

nexus . And the Non-Aligned agenda continues to grow from colo­ nialism and independence,. race and conflict , disarmament and interference to Southern Africa , Palestine, the Indi an Ocean and the media.30 A particularly problematic question underlying many of these items and issues is how the Movement copes with a growing diversity o f interest and ideology, endowments and expectations . The elusiveness of economic decolonization and development has led not only to increasing concern amongst the Non-Aligned for a change in the global economy, it has also produced a profound re-evaluation o f development policy in a growing number of members . The maj ority continue to demand a NIEO as proposed at the Lusaka and Algiers meetings , compatible with an essentially orthodox approach t o development . By contrast , a new minority rejects any notion o f exter­ nally-oriented growth, prefering instead to overcome underdevelop­ ment by escaping from dependence . This radical approach and factio n advocates self-reliance rather than incorporation , autonomy rather than integration . And this division has important implications for the cohesion and influence of the Movement and reflects the emergence o f a g roup of new states following a non-capitalist pat h . 3 1 The established consensus (and optimism) favouring a new glob al economic structure is expressed in the (premature?) Colombo political declaration : The Conference noted with sati sfaction that the principles o f peace­ ful coexistence advocated by the Non-Aligned Movement as the basis for international relations had won widespread recognition from the world community. The timely initiative taken by Non-Aligned countries has led to the decision of the world community to create a New International Economic Order based on equity and j ustice. 32 And the economic declaration related the call for NIEO to the whole issue of development , a central focus - both ideological and instrumental - of the Movement : The Heads of State . . . . are firmly convinced that nothing short of a complete restructuring of international economic relations through the establishment of the New International Economic Order will place developing countries in a position to achieve an acceptable level of development . 33 However , whilst the maj ority still favour an outward-looking strat­ ' egy, a growing and influential minority prefers an inward-looking direction. Approximately 25 members (L e . over a quarter) now favour self-reliance and some form of non-capitalist path because of the inade­ quate results in both aggregate and distributional terms - of the esta­ blished growth policy . And within this more radical grouping there is something of a distinction between those who favour collective self­ reliance (as a rS!vised form of regionalism) and those who seek nationa l

I

THE NON-ALIGNED MOVEMENT

1 53

(or 'individual') self-reliance (as an aspect of non-capitalism or socialism) . The former collective variety is considered to be an impor­ tant part of the demand for a NIEO: The Heads of State . . . are of the firm belief that only a confident spirit of collective self-reliance on the part of the developing countries can guarantee the emergence of the New Internationa1 Economic Order . Self-reliance implies a firm determination on the part of developing nations to secure their legitimate economic rights in international dealings through the use of their collective bar­ gaining strength . . . It also involves the preparedness on their part to follow internally the discipline required of them by the process of economic development with justice . And , most importantly, it means willingness to explore and pursue the immense possibilities of co-operation among themselves in financial, technical , trade, industrial and other fields . . The focal point of this process o f growth with social justice will be eradiction of unemployment and poverty. It calls for the formu­ lation and implementation of a policy for satisfying the basic minimum needs of the population of the developing world . 34 However , as Singham cautions , self-reliance is not an easy strategy. And it is one that poses difficulties for the Movement itself between the old maj ority and the new minority; between more and less benign defi­ nitions of the ideology of development: In developing a trade union strategy, the Non-Aligned Movement has no doubt recognised the fact that within their union itself there are a number of contradictions . . . there are indeed divisions between the nations who - attempt to negotiate collectively with the capitalist nations , j ust as there were contradictions within the working class when they negotiated with capita1. 35 This tension at the level o f substructure is most acute- between those states in the semi-periphery and those following a non-capitalist path as is noted below. The (somewhat hopeless , and possibly misguided) attempt to forge a new consensus bridging the orthodox-radical , NIEO­ self-reliance 'gap' is reflected in Singham ' s own idealistic (as well as a­ historic and non-empirical) j uxtaposition: The present era of econon1ic reconstruction is a transitionat one when a variety of nations will choose between the old capitalist order and a new world economic order . The Non-Aligned Movement has entered a dramatic era in its history. It is calling for a new economic system . The Non-Aligned Movement which began as a broad anticolonialist movement seeking world peace by exhorting the powers to avoid a nuclear holocaust , has become the advocate for a new political ana

1 54

TRANSFORMING THE WORLD-ECONOMY?

economic order on a global level . . . Most of the Non-Aligned coun­ tries are experimenting with non-capitalist paths of development . The search for a NIEO, then, is simply a demand by the Non-Aligned nations to rectify the present imbalance that exists among states . 36 The issue of appropriate development strategy and ideology is a central one confronting the Movement . It has become more acute since the mid- 1 970s initially because of inequalities among members and more recently because of ' inter-imperial ' rivalries among OECD states . Historically, Non-Aligned states have been differentiated according to whether their leaders were influential in the Movement ; now they can be ranked according to economic position and potential . Changes in t4e world system at the level o f both super- and sub­ structure have generated an intermediate stratum of states between the centre and t he periphery - the semi-periphery}7 This group of 'middle powers' has been variously characterized as the Newly Influential Countries (superstructural role) or the Newly Industrializing Countries (substructural position) . The NICs are semi-peripheral in the sense that they are larger, more powerful , more industrialized and have more 'developmental' potential than most countries in the Third World . They have also generated a lively intellectual and political debate over their role in the world system . 38 Orthodox scholars take confidence from the ' success' stories afforded by the NICs to defend the claims of established development theory that outward-looking growth is still possible. Their renewed faith in 'trickle-down' approaches has been j oined by the growing interest taken in such states by global strategic planners who seek close ties with regionally influential actors . The ' Nixon-Brezhnev' doctrine has in turn b een reinforced by the proposal of the Trilateral Commis­ sion to bring at least more OPEC or NIC states into the charmed circle of the OECD . The new attention accorded the new affluence of the NICs has raised questions about their role in the Third World as well as about their espousal of established economic policies . The orthodox position on both questions is that the semi-periphery can lead the Group of 77 and apply classical growth strategies without generating divisiveness . The radical response, given the close association between centre and semi­ periphery and given the different experience of orthodox development policies in most o f the periphery, is that the NICs are becoming sub­ imperial and will thus split the Non-Aligned Movement and upset its unity. Ali M azrui is a defender of the former position, arguing that through ' counter-penetration' the NICs can advance common Third World interests . He sees the semi-periphery as serving a positive, integrative function of benevolent leadership rather than one of sub-imperial domination . He states :

THE NON-ALIGNED MOVEMENT

1 55

. . . one of the striking factors on the world scene since ( 1 973) has been the strange paradox of greater economic disparities among Third WorId countries than ever, combined with greater political solidarity among them . . . some degree of inequality is a necess ary precondition for certain forms of solidarity . . . The leadership of the Third WorId has passed for the tinle being into the hands of the Arab states . . . It was therefore the duty of the oil producers to use the oil weapon as a leverage not only to improve their own lot but also to help create a new international economic order at a global lev el . . . a dual stategy is evolving, led primarily though not exclu­ sively by the Muslim members of the Organisation of Petroleum Exporting Countries . This dual strategy concerns , firstly, putting pressure on the industrial countries of the northern hemisphere to help change the world eC'onomic system in the direction of greater equity towards the poorer southern hemisphere. The second aspect of the OPEC strategy is to increase OPEC ' s own performance in poorer countries of the Third World .39 Mazrui ' s optimism in seeing counter-penetration by the NICs as advancing both development and the advent of 'mature interdepen­ dence ' is not shared by more radical analysts . Instead , they see the rise of the s emi-periphery as a stage in the evolution of the world system brought about by emerging contradictions both within and between countries . For them, the emergence of NICs is not a vindication of esta­ blished development strategy but rather an indication of the continuing powerfulness of corporate and state interests in the centre . For the semi-periphery has not emerged on its own but rather by invi­ tation and by design : the rich need regional branches and b ases in the more complex contemporary system . And because of the semi­ periphery' s structural position, it can hardly avoid the charges of sub-imperialism. 40 It may attempt to be beneficient regionally and to practise counter-penetration globally but its intermediary status prevents it from contributing unequivocally to the cohesion of the Non­ Aligned Movement . This is particularly so in the two salient areas of the contemporary period - bloc politics and political democracy - which are the focus of the concluding paragraphs . The Non-Aligned states have sought independence and autonomy through political and economic decolonization and development . But inequalities , both structural and behavioural , in the world system tend to perpetuate dependence and domination, especially in the periphery but also , albeit in modified form , in the semi-periphery. The ubiquity of underdevelopment has led the Non-Aligned as a group to oppose bloc politics ; although, in practice , some members have been prepared to take advantage of them whilst a few seek to avoid them altogether by implementing a comprehensive self-reliant strategy. Nevertheless , the official ideology of the group remains that it has ' contributed

1 56

TRANSFORMING THE WORLD-ECONOMY?

significantly to the relaxation of tensions and the solution of inter­ national problems through peaceful means . It noted the contribution that the Non-Aligned Movment had made towards preventing the divi­ sion of the world into antagonistic blocs and spheres of influence . '4 1 As with the issue of 'interference ' , the group sees bloc politics as an ' external' rather than as a structural or transnational .phenomenon , so avoiding any notion of apparently ' national' ruling classes being depen­ dent or comprador . On the one hand , therefore, the real significance of or constraints on self-reliance are ignored. On the other hand , recog­ nition of continued foreign threats is a healthy antidote to the naive assumption that the world system is becoming more benign or equal . Bloc politics becomes a convenient motif for the variety of challenges and forms of domination in the contemporary international system for the MOyenlent as a whole , the removal of which all can agree to as the sine qua non of development and independence: Although colonialism as traditionally understood. is coming to an end , the problem of imperialism continues and can be expected to continue for the foreseeable future under the guise of neo-colo­ nialism and hegemonic relations . The Non-Aligned have to be alert against all forms of unequal relations and domination that constitute im perialism . The Conference noted also that the international trend is against power blocs and notions of international order based on balance of power and spheres o f influence, all of which imply unequal relations between nations which could amount to donlination . The Non­ Aligned will continue to oppose the principle of polarisation around power centres as it is inconsistent with true independence and the democratisation of international relations , without which a satis­ factory international order cannot be realised .42 The rej ection o f blocs and dominance is essential not only for national development but also for collective cohesion. As noted already, the emergence of a semi-periphery may pose problems for the Movement . However , some radical scholars reject any notion of differ­ entiation within the Third World as being of consequence compared to that between First and Third World , thus saving the Movement from further fragmentation . Such scholars see the Third World as a historical and ideological rather than as a contemporary category. Ismail-Sabri Abdalla, for instance, rejects any idea that differentiation within the Non-Aligned is either important or increasing . Instead , he asserts that they still share a common experience of exploitation and subordination : The Third World is a historical phenomenon that is part and parc el of the process of emergence of the present world order . . . . the differentiation process did not produce during the last

THE NON-ALIGNED MOVEMENT

1 57

fifteen years effects of such a magnitude that any group of ' developing nations ' can stand outside the Third World . . . the 'gap ' b etween the higher income group and the industrialised nations was still growing. 43 So Ab dalla is critical of any notion of the Third World differentiation and fragmentation, arguing instead that a · shared historical and exis­ te ntial experience will serve to reinforce cohesion and so support con­ frontation against the rich : dependence is with all its corollaries the basic common denominator of Third World countries and comprehensive decolonisation is the only path out of it. Features and specifications that disti nguish countries or groups of countries in the Third World fall short of des­ troying the fundamental community of condition and goal . 44 Abdalla rejects superstructural approaches, then, in favour of more critical substructural and historical analysis . But while the former's focus on sonle aspects of differentiation may be dismissed a s threats to the Movement' s cohesion, the latter' s orientation towards self-reliance poses a new and more profound challenge to the Non-Aligned . National self-reliance is , in many ways, a logical extensio n of the ideology of decolonization , a strategy that reduces external association and domination . Yet precisely because of the history of Third World incorporation in the world system, and the dependence of much of its leadership on links with countries and corporations in the North, it has not been widely espoused. And its adoption by a growing faction within the group not o nly undermines solidarity at the level of tactics but also at the levels of ideology and political economy . So even if sub­ imperialism can be regarded as a superficial problem , self-reliance cannot be so readily dismissed : it poses fundamental questions and dilemmas for the Non-Aligned . The challenge of self-reliance as an effective response to dependence and underdevelopment is exacerbated if the goal of development is seen to be a trans formation in political economy, not j ust political and/or economic decolonization. In other words, if development is defined in terms not only of stability and growth but also in term"s of satisfying the demands for autonomy, order, and eq uitable income distribution, then self-reliance is a powerful and persuasive response to an inheritance o f non-participation and non-production . When broadly conceived, self­ reliance is a strategy designed to secure development and autonomy and to overcome underdevelopment and dependence . The very salience o f this strategy, especially its emphasis o n democracy and participation, is a challenge to a Non-Aligned Movement which includes not only least developed states but also some rather oppressive regimes . Ultimately, then , the interrelated concerns of the Non-Aligned for development and equality together in the notion of a political economy

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TRANSFORMING THE WORLD-ECONOMY?

of democracy at the interrelated national and international levels . National development and international redistribution · not only improve the p rospects of satis fying Basic Human N.eeds ; they also serve to enhance the resistance of a country (and of its ruling class ? ) to external domination . At Colombo, the Movement declared that as a result of recent developments, the importance of ensuring the genuine and complete independence of states as distinct from merely formal sovereignty had been enhanced. The problem of unequal relations between states , o ften amounting to domination, continues to be a disturbing phenomenon even negating the hard won freedom of some states . Today , one of the principal tasks of the Non-Aligned remains the combating of unequal relations and domination . . . . 45 Whilst most members tend to see such domination as a largely external , as opposed to a transnational or structural , phenomenon, nevertheless they seek to defend and augment their 'independence' by resisting it : The Conference expresssed alarm at the increasing evidence of the resort to forms of aggression by foreign powers and other political and economic agencies or institutions , official as well as private , such as transnational corporations, aimed at preserving and protecting their special interests and dominant influence in order t o obstruct and thwart the processes o f political, economic and social transformation . Politics of pressure and domination were continuing to seriousl y threaten the independence of states . Measures calculated to cause disruption and destabilisation were threatening internal security and creating political confusion and economic chaos . Non-Aligned c ountries should act more resolutely against threats of foreign pressure and domination, subversion and interference in their i nternal affairs . 46 The demand for greater levels of development and equality to resis t domination also enhances the prospects for democracy i n b oth national and international domination . Given the adoption of welfare measures in the colonial metropoles on the basis of external exploitation, it may be a pre-requisite for the achievement of Basic Human Needs in the periphery: s elf-reliance, like Non-Alignment , may b e an expression o f self-interest . Singhanl comments from his world system perspective: That liberty, democracy , enj oyed by those living in the capitalist centre has been earned at the expense of those living in the colonies . The Non-Aligned Movement is suggesting not only that colonisation and capitalism brought economic benefits to the centre capitalist countries b ut -also that colonisation was largely responsible for the evolution of democratic institutions in the centre itself.47 Given the nature and results of the incorporation, disengagement and

THE NON-ALIGNED MOVEMENT

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self-reliance maybe prerequisites , therefore, not only for development but also for democracy in the periphery. And , even if the North is j ea­ lous for its own growth and welfare, it can hardly be selfish about its democracy. Political as well as ecocomic redistribution and democra­ tisation may be a central feature and result of any New International (Economic) Order , a paradox of political economy : The demand for a NIEO is an equalitarian as well as a libertarian demand . Redistribution of the world's economic resources is likely to weaken oligarchic and repressive regimes . Increases in standards of living should result in greater demands for democratic rights by those e nj oying newly won economic rights . The struggle against poverty is , indeed , the most significant democratic goal . 48 In which case, proletarian peoples as well as proletarian countries may yet come to benefit from ambiguities in the ideology of Non-Align­ ment . And as Wallerstein suggests , this struggle between democracy and underdevelopment will be most acute in the NICs in the Non­ Aligned Movement : The semi-peripheral states in the coming decades will be a battle­ ground of two major transnational forces . One will be the mul­ tinational corporations who will be fighting for the survival of the essentials of the capitalist system : the probability of continued surplus appropriation on a world scale . The other will be a trans­ national alignment of socialist forces who will be seeking to under­ mine the capitalist world economy, not by ' developing ' singly, but by forcing relatively drastic redistributions of world surplus and cutting the long-term present and potential organisational links between multinationals and certain strata internal to each semi-peripheral country, including such strata in the socialist semi-peripheral states .49 Hence the Non-Aligned conference' s recognition and rej ection o f 'external ' interference : a fine ideological position but a highly difficult , even idealistic, policy, given the contemporary conjuncture, or the paradoxical nature of the kairos.

Notes 1 Immanuel Wallerstein

The

Cambridge University Press ,

Capitalist

World-Economy

(Cambridge:

1 979) 269 and 282 ; see p. 21 and p . 3 1 of this

book . 2 On the essential features of the post-World War II and post-Bretton Woods global economy and contemporary reactions to it, see Timothy M . Shaw To wards an International Political Economy for the 1980s: from Dependence to (Inter) Dependence (Halifax: Centre for Foreign Studies ,

1 60

3

4 5

6 7

8

9

lO

11 12

13

TRANSFORMING THE WORLD-ECONOMY?

1 980) and Andre Gunder Frank Crisis: in the World Economy (London: Heinemann, 1 980) . For an earlier attempt to situate the Non-Aligned Movement in the context of the world economy using contrasting orthodox and radical approaches to analysis, see Timothy M. Shaw 'The Political Econ­ omy of Non-Alignment : from Dependence to Self-Reliance' , Inter­ natinal Studies 1 9(3 ) , July/September 1 980 , 475-502 . For a related attempt to advance the sociology of knowledge about Non-Alignment in a more critical and historical direction, see A. W. Singham 'Non­ Alignment - from Summit to Summit ' , Man and Development 1 (3 ) , October 1 979, 1 -40 . Wallerstein, The Capitalist World-Economy, 95 . On the notion of ' conj uncture ' as related to the development of national political economies , see James H . Mittleman Underdevelopmen t and the Transition to Socialism: Mozam bique and Tanzania (New York : Aca­ demic , 1 98 1 ) . 'Declaration of the Conference of Foreign Minister of Non-Aligned Countries , New Delhi , February 1 98 1 : Economic Part ' , Review of In ter­ national Affairs 32(74 1 ) , 20 February 1 98 1 , 3 0 . Non-Aligned leaders are caught in a di fficult dialectic: they are dependent upon external associates for support , capital, technology, markets , and imports yet they also require more of these goods than they can ever hope to get. Hence the ambivalence generated by simultaneous conflict and coope­ ration as leaders at the periphery attempt to improve their position vis-a-vis those at the centre of the world system . Hence the gap between superstruc­ ture rhetoric and substructural reality with the former increasingly diverging from the latter . On the adoption of such a rhetorical ploy by Third World leaders in their attempt to improve their position between external associates (who exploit as well as support) and internal demands , see Claude Ake Revolutionary Pressures in Africa (London : Zed, 1 978) 92-94 . For an overview of these, see World Bank World Developmen t Report 1 98 1 (New York: OUP , 1 98 1 ) and A ccelerated Development in Sub­ Saharan Africa: A n Agenda for A ction (Washington, 1 98 1 ) . On these two approaches , see Timothy M . Shaw 'Non-Alignment Rede­ fined: Africa' s quest for Development and Self-Reliance ' in Timothy M . Shaw and Ralph 1 . Onwuka (eds .) Africa and World Politics: Indepen­ dence. Dependence and In terdependence (London: George Allen & Unwin, forthcoming) . A . W. Singham (ed .) ' Preface ' , of his collection on The Non-A ligned Mo vemen t in World Politics (Westport, Conn . : Lawrence Hill , 1 977) (iii). A . W . Singham ' Conclusion' in ibid. 227 . See also Dinesh Singh 'Non­ Alignment and New International Economic Order' , Review of Inter­ national Affairs 32(7 5 5 ) , 20 September 1 98 1 , 8- 1 2, and Janez Stanovuik , ' Non-Alignment and the New International Economic Order ' R evie w of In ternational Affairs 32(757), 20 October 1 98 1 , 1 4- 1 9. H . Hveem and P . Willetts 'The Practice of Non-Alignment : On the Present and the Future of an International Movement' in Y .A. Tandon and D. Chandarana (eds. ) Horizons of African Diplomacy (Nairobi: EALB, 1 974) 2.

THE NON-ALIGNED MOVEMENT

161

1 4 See 'Political Declaration, 1 976' in Singham (ed . ) , The Non-A ligned Mo vement in World Politics, paras 7 and 1 42. 1 5 Hveem and Willetts 'The Practice of Non-Alignment ' 28 . 1 6 Ibid . 2 1 . 22 . 1 7 On thi s , see Timothy M. Shaw ' Dependence to (Inter) Dependence: Review of Debate o n the (New) International Economic Order' , A lternatives 4(4), March 1 979, 557-578 . 1 8 S ingham ' Conclusion' 227 . For more on the evolution of the Movement !

19 20

from political to economic preoccupations, see Miguel Angel de la Flor Valle ' The Movement of Non-Alignment and the New International Order' , Review of International Affairs 32(756) , 5 October 1 98 1 , 1 5- 1 8 . ' Political Declaration, 1 976' para 1 67 . Ervin Laszlo ' Introduction: the Objectives o f the New International Eco­

21

objective of the New International Economic Order (New York : Pergamon for UNIT AR, 1 978) xvii i . ' Economic Declaration of t h e Fifth Summit Conference of t h e Non­

omic Order in Historical and Global Perspective ' in Ervin Laszlo et al. The

Aligned Government s , Sri Lanka, August

1 976' in Singham (ed . ) The

Non-A ligned Movement in World Politics (263 -273) para 3 9 . . 'Declaration o f the Ministerial Conference, 1 98 1 : Economic Part ' Laszlo 'Introduction' xxi .

22 3 1 -3 2 . 23 24 ' Political Declaration, 1 976' paras 1 58 and 1 59 . 25 ' Economic Declaration , 1 976' para 3 8 . 26 Jack N . Barkenbus ' Slowed Economic Growth and Third World Welfare ' i n Dennis Clark Pirages (ed . ) The Sustainable Society (New York : Praeger,

27 28 29 30

1 977), 3 1 7 . 315. Ibid . 3 1 2 . Ibid . 3 1 4. Ibid .

On this range - from producers associations and nuclear energy to sports

and women - see ' Review of Implementation of the Action Programme for Economic Cooperation ' , Review of In ternational Affairs 32(64 1 ) , 20 February 1 98 1 , 40-46. 3 1 See Mai Palmberg (ed . ) Problems ofSocialist Orien tation in Africa (Stock­ holm : Almqvist & Wiksell and New York : Africana, 1 978) . For a rather partisan review of socialist-non-aligned relationship s , see S . G . Sardesai 'Achievements and Di fficulties Review 1 7 , March 1 974, 74-82 .

32 33 34 35

of Non-Alignment' ,

World Marxist

' Political Declaration, 1 976' para 1 3 . 'Economic Declaration, 1 976' para 1 9. Ibid. paras

34 and 3 5 .

Singham ' Conclusion' 227-228 . For further analysis of some o f these con­ tradictions , see Boj ana Tadic ' The Movement of the Non-Aligned and its Dilemmas Today' , Review of International Affairs

32(756), 5 October

1 98 1 , 1 9-24. 36 S inghaln 'Preface' x-xi . 37 See Wallerstein The Capitalist World-Economy 66- 1 1 8 and Timothy M . Shaw ' Kenya and South Africa: " Sub-Imperialist " States ' Orbis 2 1 (2) , Summer 1 977, 3 75-394 and ' International Stratification in Africa:

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TRANSFORMING THE WORLD-ECONOMY?

Subimperialism in Eastern and Southern Africa' , Journal of Southern .

African Affairs 2(2) , April 1 97 7 , 1 45 - 1 64.

3 8 See Timothy M . Shaw ' Inequalities and Interdep�ndence in Africa and Latin America: Sub-Imperialism and Semi-Industrialism in the Semi­ Periphery' , Cultures et Development 1 0(2), 1 978, 23 1 -263 . 39 Ali A. Mazrui ' Technology, International Stratification and the Politics o f Growth ' , International Political Science Association Moscow, August 1 979, 1 0- 1 2. For more on inequality and interaction within the Thi rd World , see his The Barrel of the Gun and the Barrel of Oi! in North-South Equation (New York : World Order Models Project, 1 97 8 . Working Paper Number Five) .

40 On this debate in the case of Nigeria in West Africa, see Timothy M . Shaw and Olaj ide Aluko (eds . ) Nigerian Foreign Policy: A lternative Perceptions and Projections (London: Macmillan, 1 983). See also Timothy M. Shaw ' Nigeria in the International System' in I . William Zartman (ed . ) The Political Economy of Nigeria (New York : Praeger, 1 983). 4 1 ' Political Declaration, 1 976' para 1 2 . 42 Ibid . paras 32 and 3 3 . 4 3 Ismail-Sabri Abdalla ' Heterogeneity and Differentiation - the End for the Third World? ' , Development Dialogue 2, 1 97 8 , 1 1 and 1 0. 44 Ibid . 1 8 . 45 ' Political Declaration, 1 976 ' para 1 5. 46 Ibid . para 1 44. 47 Singham ' Preface' xi . 48 Ibid . 49 Wallerstein The Capitalist World-Economy 1 1 7 - 1 1 8 .

Part 3 The NIEO and the Transformational Prospects

6

Rhetoric and Reality o f the New International Economic Order * Andre Gunder Frank

* *

Where the world goes depends mostly on the United States . US Secretary of State , Henry Kissinger I n the sphere of international power politics , sincerity counts for nothing . Michael Harrington

The call for a New International Economic Order (NIEO) has become the subj ect of innumerable international conferences , forums, decla­ rations , debates and discussion in the press as well as the obj ect of scientific research . Like all movements , that for NIEO li kes to add to its legitimacy by claiming a long pedigree and a venerable tradition . For NIEO these are said to go back to the first Afro-Asian Meeting of the Non-Aligned in Bandung , Indonesia in 1 955 on the o'ne hand and the first appearance of the Group of '77' Countries (which now number more than 1 20 and then started with 75) at the first UNCTAD Conference in Geneva in 1 964. Its Secretary General, Raul Prebisch (then Director of United Nations Economic Commission for Latin America - ECLA) already called for a new economic order in its * Editor 's

note: This chapter i nitially appeared as Development Studies Discussion

Paper. No . 3 5 , February 1 97 9 . It was presented at UNU-GPI D/Max-Planck-I nstitut

joint Meeting, in Starnberg , August 1 979.

.

* * A uthor's note: This chapter is one o f the several original papers which later, in their revised forms , composed my two-volume book on the 'Crisis ' : Crisis: In the World Economy. Lond o n : Heineman n , 1 980; and Crisis: In the Third World. London :

Heineman n , 1 98 1 . Most of the references cited to Frank 1 978 and 1 979 also became chapters in these same books .

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TRANSFORMING THE WORLD-ECONOMY?

opening session. So did in essence the Afro-Asian Economic Seminar � addressed by Che Guevara representing Cuba, also held in 1 964 in Algiers . In the meantime, UNCTAD conferences and related Group o f 7 7 caucus meetings have been held again at New Delhi i n 1 968 , Santiago in 1 972 and Nairobi in 1 976 , all without producing any noticeable change in the old international economic order . The Non-Aligned and Group of 77 countries for their part have met in Belgrade, Cairo, Algiers , Georgetown, Lima, Manila, Colombo , and Dakar , lately every year or two in an attempt to define their positions and to shore up their bargaining power by presenting a militant united front in the sphere of international power politics .

The background and reasons for NIEO On the initiative of the Third World ' s Non-Aligned summit meeting in Algiers in 1 973 , under the leadership of its President Boumedienne and while its Foreign Minister Bouteflika was President of the United Nations General Assembly, the latter at its Sixth Special Session in May 1 974 formally issued the Declaration and Programme of Action on the Establishment of a New International Economic Order in Resolutions 320 1 (S-VI) and 3202 (S-VI) and then the Charter of Economic Rights and Duties of States in General Assembly Resolution 328 1 (XXIX) in December 1 974 . The demands for NIEO were reiterated at the Seventh Special Session of the UN General Assembly in 1 975 and strengthened at the Non-Aligned Summit in Dakar in 1 975 , and again weakened at the Group of 77 Meeting in Manila in 1 976 . NIEO has b ecome a bargaining issue between the underdeveloped and the developed countries at every other international conference, and particularly at UNCTAD IV in Nairobi in 1 976 and at the ' North.;.South Dialog' which lasted 1 8 months from 1 976 to 1 977 in Paris . NIEO has also become the focus of attention at numerous non-official conferences , forums and declarations such as The Third World Forum (at meetings in Karachi , Santiago , Lima and elsewhere) , the Algiers Conference and the Association of Third World Economists , the seminars and declarations at Cocoyoc (Mexico) , The Hague, Stockholm, and elsewhere . The International Development Association, the European Institutes of Development Studies , the Bariloche (Argentina) Group , the Dag I:-Iammerskold Foundation, the Overseas Development Council , the Club of Rome at its meetings in Berlin in 1 974 and in Algiers in 1 977 and in its ' RIO' report on Reshaping the International Econ omic Order, prepared under the direction of Jan Tinbergen ( 1 976 , 1 977) , the United Nations Study on The Future of the World Economy, prepared under the direction of Nobel Laureate, Wassily Leontief ( 1 977) and count­ less research institutes , personalities , and individuals as well as very

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167

substantial press coverage have kept up the refrain about a NIEO . With all this smoke , where is the fire? We may ask, first of all , why this crescendo about NIEO has built up now, particularly since it claims a pedigree that goes back two decades and more . One reason, of course , is that the old economic order has disadvantaged the Vast Maj ority, -as Michael Harrington ( 1 977) calls it in his recent book, and some of the its elites as well (see Frank 1 978a) . The first United Nations Development Decade, launched in 1 960, was a complete failure . That the second one was off to a bad start became particularly clear with the onset of the 1 973 - 1 975 world economic recession and the realization that the world capitalist economy was entering (or had already entered) into a new period of crisis . There is now widespread recognition that existing international development policies have largely failed to achieve their stated obj ectives. The hopes that were placed on the International Development Strategy for the Second United Nations Development Decade, when it was adopted by the General Assembly in 1 970, have been essentially frustrated . . . . The Strategy had no signi ficant positive impact on the pace of development of the Third World . Indeed , it now appears evident that the policy measures envisaged in the Strategy, even had they been fully implemented , would not have provided an adequate basis for the long-term development of the developing countries (UNCTAD 1 977 TD/B /642: 1 ) . The reasons for this failure, according t o the above cited UNCTAD document , lay with the ' central concept ' of the strategy . This concept was that the expansion of the developed economies would be transmitted to the Third World. The 'maj or assumption' was that trade barriers would be reduced . This concept and assumption proved to be 'defective' and 'invalid' respectively . Additionally the Strategy 'did not take adequately into account the fact ' of the transnational corporations and that ' they tend to impose inappropriate patterns of development in the Third World ' . Moreover , a fourth maj or erroneous assumption was that 'expansion in the gross product of developing countries would engender economic development in the broad sense ' . Instead 'income disparities appear to have widened , while poverty, unemployment , under-employment , malnutrition and hunger have become more widespread . ' In sum, 'the weakness of the Strategy . . . can thus be attributed basically to the fact that its underlying concepts and assumptions were not in keeping with the realities of the world economic system ' and the ' ill-founded assumption' that 'governments would give high priority to implementi ng the Strategy . ' They have not done so , 'though, as argued earlier , even full implementation would have been inadequate . . . ' (UNCTAD 1 977 , TD/B/642 : 1 -3 ) . Recognition o f these facts and the inherent ill-foundation of pre­ vious strategy has become widespread indeed , so much so that even a

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TRANSFORMING THE WORLD-ECONOMY?

longtime member of the very moderate social democratic US Socialist Party is impelled to declare ' first of all , I was surprised to find out how much I agree with neo-Marxist theory that America is an imperialist power ' with widespread responsibility for the' under-development and exploitation of the Third World , after he had spent many years combatting this 'theory' (Harrington 1 977 :252) . This same recognition of 'the realities of the world economic system ' is now also expres sed through the call for NIEO and the many scientific studies and political declarations related to it . Two of these studies have received particularly widespread attention . They deserve this attention because they show - with the authority o f their authors and backers - both how necessary and how hopeless the establishment of a new international economic order really is . One o f these i s the three year long study under United Nations sponsorship b y renowned world personalities and specialists , under the direction o f Wassily Leontief ( 1 977) and using his 'input-output analysis ' , of The Future o/ the World Economy to the year lOOO . The study begins with an income gap between developed and under-developed countries of 1 2 to 1 in 1 970 and asks what would be necessary to reduce this gap to 7 to 1 by the year 2000 . Previous and current development strategies , with targets of economic growth of 6 per cent per annum and 3 . 5 per cent per capita in the Third World would not narrow this gap at all , according to the study . The real growth rates of recent years have been below these targets and would widen the gap still further to 1 6 to 1 and more . During the first half of the 1 970s per capita output in the Third World countries , other than the fast growing petroleum and manufacturing exporting ones , grew at 2 . 2 per cent ; and 29 countries with 40 per cent o f the Third World population saw their per capita income stagnate o r even decline . O f 98 Third World countries , 6 3 countries with 6 5 per cent of the population did not achieve the target of 6 per cent annual growth , and 68 countries with 75 per cent of the Third World ' s population did not achieve the target of 3 . 5 per cent growth per capita (UNCTAD 1 977, TD/B/642Add . 2 :6) . To narrow the gap to 8 to 1 in thirty years , growth rates wold have to be 7 per cent per annum and 5 per cent per capita in the Third World and 3 . 6 to 4 per cent (instead of the previous 4 . 5 per cent) in the developed countries (Leontief 1 977 : 3 , 30-3 1 ) . The world capitalist economic crisis - rather than any agreement on NIEO is indeed reducing the developed countries ' growth rates to . these percentages and below. But, far from increasing the growth rates of most Third World countries , the same crisis has so far reduced their growth rates per capita nearer to zero . To achieve the proj ected necessary growth rates for the next thirty years , the same Leontief study also calculated that , in the Third World , agricultural land would have to increase by 229 million hectares or 30 per cent , yields per hectare would have to be tripled and agricultural output would have to rise by 5 per cent a year (Leontief 1 977 : 4) . All of -

RHETORIC AND REALITY

1 69

these i ncreases are far beyond any achieved so far. During the first half o f the decade of the 1 970s , Third World agricultural production increased at an annual average rate of 2 per cent (UNCTAD 1 977 :TD /B/642/Add . 2 : 8) . Manufacturing production would have to increase to 6 to 7 per cent in African and 7 . 5 to 8 per cent in Asian non­ oil producing countries , to 8 . 5 to 9 per cent in Latin America and to 1 4 per cent per year in oil-producing Third World countries . Heavy industry would have to grow faster than light industry (Leontief 1 977 : 8) . By the end of the century, the Third World would have to account for 14 per cent of the world' s exports (and remain net importers) of light industrial products , 7 per cent of industrial materials and 2 . 7 per cent of machinery and equipment (Leontief 1 977 : 56-9) . Real investment in the Third World would have to rise to 3 0 to 3 5 and in some countries to 40 per cent of national product , the distribution of national income would have to become more equal , and balance of payments deficits would have to be substantially reduced (Leontief 1 977 : 1 1 ) . Therefore, it would be necessary to establish a NIEO in which the terms of trade would favour producers of primary products , the Third World ' s dependence on imports of manufactures would be decreased and its exports of manufactures would be increased, official and other foreign aid would be increased to and beyond the targets that are already being less and less attained, and the flow of capital investment would have to be substantially modified (Leontief 1 977 : 9) . For all this 'two general conditions are necessary: first, far-reaching internal changes of a social, political and institutional character in the developing countries , and second, significant changes in the world economic order ' (Leontief 1 977 : 1 1 ) . In a word, the obstacles are not technical but political . Moreover , the other well publicized recent study on Reshaping the In ternational Order (RIO) , � nder the direction of Jan Tinberger ( 1 976 , 1 97 7 : 1 03 ) , argues that not even a 5 per cent growth rate per capita is enough to reduce income differentials , and it is doubtful anyway whether all Third World countries can achieve and maintain such a growth rate. It is thus established by the most prestigious authorities that a NIEO is needed for 'the vast maj ority' o f mankind - but that has been so for a long time - and that the foreseeable future prospects of achieving such a NIEO are very dim indeed. If the need for a NIEO has been there so long and the prospects for it remain so dim , what then has moved so many Third World spokesmen to demand NIEO now and what has disposed representatives of the capitalist developed states at least to entertain , though not to accede to, these demands? A one word, and therefore perhaps simplified, answer is likely to be OPEC . The temporally near simultaneous and causally in part mutually related victory of Vietnam over American i mperialism, its consequent momentary political weakness , the economic challenge of Europe and Japan to American power and of the post 1 973 economic

1 70

TRANSFORMING THE WORLD-ECONOMY?

crisis to the Western-led world capitalist system as a whole , and related to all of these the challenge of OPEC, have encouraged Third World spokesmen to speak their demands and Western representatives at least to listen . In other words , the terms of Third World dependence are now subj ect to some negotiation . Thus the Foreign Minister of France , Louis de Go.iringaud , said 'j ust as there is no alternative to detente with the East , so there is none to the dialogue with the South. [There is] no political alternative . . . ' (lHT 24 June 1 977) . Spokesmen for the socialist countries attribute these developments in turn to changes in the international relations of political power due to political detente and the growing economic power of the socialist world (lPW Berichte 1 977) . Realistically speaking, OPEC has not only given moral encouragement but also direct political and economic support to the spokesmen for NIEO. Moreover, as the Club of Rome soberly points out , though 'there is still a lack of concrete indications that the rich nations are convinced of the need for structural change . . . it is surely correct that the maj ority of Western politicians are not driven to the conference tables by the misery of the poor nations , but by the poor economic situation in their own countries and through the strong shifts in the international system . . . which naturally explains their preoccupation with securing the supplies of raw materials and oil ' (Tinbergen RIO 1 977 : 6 1 , 57) . Not t o b e outdone or left behind by Western politicians , the Club of Rome, which only as recently as 1 972 had written the Third World off completely in its first report on Limits to Growth (Meadows 1 972) with 'zero growth ' , incorporated the Third World into a differentiated world economy in its second report (Mesarovic and Peste1 1 974, and has now placed the Third World at the centre of its new concern for 'reshaping the international order' under the guidance of Tinbergen 1 976) . Numerous testimonials indicate that the West, led by the United States , was attracted to the conference bargaining table, particularly at the ' North-South Dialog' in Paris , by its concern to assure itself stable supplies of petroleum at acceptable prices and secure conditions for foreign investment in the Third World . Henry Kissinger had failed in his initial attempt to break up OPEC (by dividing its menlbers through stick and carrot threats and offers) . The industrial oil-importing countries were obliged to parlay as long as the OPEC countries and the remainder of the Group of 77 maintained a common front , despite th e West's hopes to divide them and the world into petroleum producing and petroleum consuming states at the Paris Conference and elsewhere (Buira 1 977, CE July 1 977) . In the diplomatic language of UNCTAD ( 1 976, TD/ 1 83 : iv) : The question is no longer one of a moral imperative . There are solid reasons , both econonlic and political , which underlie the need for a positive response from the developed countries . . . . Today, the

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171

developed countries can be harmed by crisis conditions in the Third WorId . Disturbances which interrupt the flow of supplies , which lead to irregular movements in prices , and which prevent the orderly expansion of production through the normal processes of investment can have serious consequences on the economies of the developed countries . Nor is this all . The political aspects are no less signi ficant . Instability, tension, and social unrest in the Third World must have their inevitable repercussions on the rest of the international community. The frustrations of the countries of the Third World could erupt in many ways and go well beyond the actions of their governments . The avoidance of tensions in the Third World will prove to be an increasingly important element in global peace . Here is something the governments and bourgeoisies of the developed and underdeveloped capitalist countries can agree on, even if some of the rhetoric here may sound unpleasant to some ears there. I n the Third World i t has long been common practice in many countries to accompany or even to precede increasing active domestic political repression by 'compensating ' progressive pronouncements on foreign affairs that are internally costless and even help to neutralize some progressive political forces on the domestic seene . Why not generalize this ploy and/or extend it to the ' South ' vs . the ' North' as a whole? ' In certain cases , the agitation for a NIEO is used by s ome regimes for throwing all the blame of the worsening conditions of the masses on external forces alone , and for establishing an alibi for themselves ' (Mansour 1 977 : 83) and to provide a political publicity cover for increasing the repression of the masses . Moreover, ' since the propositions for a " new international economic order" com� from the representatives of the dominant classes [and) it is hardly to be supposed that the pay offs [if any) would in the first instance flow to the mass of the impoverished population, these additional resources could also flow into the weapons arsenals of the social war ' [against the masses) . For the moment, more speaks for this supposition than for the contrary one' (Senghaas 1 977:260) . In a word, the progressive demand for , let alone the partial realization of, any NIEO may well be partially designed and successful for increasing the political repression of the masses by the local bourgeoisies in the Third World who find themselves hemmed in by the crisis of the old international economic order . An example par excellence is that of Mexico , whose President Echevarria was perhaps the loudest Third World spokesman for NIEO . President Marcos of the Philippines hosted the Group 77 preparatory meeting for UNCTAD IV and of the World Bank Group/IMF and enforced his martial law on the philippines people along the way .

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TRANSFORMING THE WORLD-ECONOMY?

The demands of NIEO In this international and domestic political context, the demands for and of NIEO need not surprise us . Gamani Corea , the Secretary General of UNCTAD , one of the principal official institutional promoters of NIEO, speaking j ust before UNCTAD IV, which w as scheduled to be one of the main instances of NIEO 's negotiatio n , summarized : I am of the opinion that the underlying desire, indeed demand , indeed demand , of all is that the countries of the Third World be incorporated into the system of world wide trade. They do not any longer want to remain at the margin or outside of this system . They want to belong to it and to participate in the decisions and events that influence its development (LM 6 April 1 976, cited in Senghaas 1 977 :63 -4) . Johann Galtung ( 1 975 : 9) observes that 'First, NIEO is essentially trade­ oriented ; there is even talk of expanding the world economy . . . . Second , as far as improving world trade is concerned NIEO only aims at terms of trade . '-fhere is very little mention of changing the division of labor . . . . Third, to the extent that there is talk of improved terms of trade it is the deterioration in terms of trade that is discussed . . . not the absolute leveL . . . Fourth, to the extent that there is some talk of improved division of labor it centers on such tertiary sector institutions as transportation, insurance and finance institutions in general . . . . To summarize : what the New International Economic Order means , when translated into world reality, is some kind of 'capitalism for everybody ' charter ' (Galtung 1 975 : 8-9) . Manuel Perez Guerrero , the head of the Venezuelan delegation to the North-South Conference who served as its President and as the chief negotiator for the South, clarifies : 'those of us who preconize a change in the system of international economic relations do not do so with the aim of eliminating the principles of economic freedom and private initiative' (Guerrero 1 977 : 23 ) . Michael Harrington ( 1 977:2 1 7 ,232) i s 'struck b y the utter moderation o f what is proposed . . . . First the ideology of the demand for a New International Economic Order is impeccably capitalist. Second , the poor countries have been extraordinarily patient and long suffering . . . Third, American capitalism could make money from a moderate increase in world social j ustice ' . ' The essentials of a new order' are summarized by UNCTAD for it s I V Conference in Nairobi in 1 976 : ' emphasis on structural changes , rather than o n aid . . . . First, a new structure i s needed t o govern th e trade . . . in primary products . . . . Second , there is need for a reformed external framework to govern the industrialization of the developing countries . . . . Third, there is a basic need for a neW

RHETORIC AND REALITY

1 73

international monetary system . . . . A fourth area . . . encompasses co-operation among the developing countries . . . . Fifth, a maj or expansion of trade and other exchanges between the developing c ountries and the socialist countries of Eastern Europe is required . ' Additionally, and cutting across these, UNCTAD mentions the special needs of the least developed, land-locked and island developing countries , and the need for a new institutional mechanism for negotiating the above-mentioned demands (UNCTAD 1 976, TD 1 83 : 1 2- 1 4) . These utterly modest proposals for a better and greater integration of the Third World in capitalist world trade are reflected in a long list of concrete demands formulated in the aforementioned and other international conferences . Of the many statements and summaries o f these proposals , we may cite the convenient summary list put together by the United Nations Institute for Training and Research (UNITAR) as a catalogue of specific research tasks under the title 'Progress in the Establishment of a New International Economic Order : Obstacles and Strategies ' :

UN/TAR: Documentat ion on the N/EO, 19 74- 77 Principal issues covered : 1 The attainment of UN glob al development assistance levels and other quantitative targets . 2 The linkage of development assistance with the creation of SDR ' s , and the utilization of SDR 's as the central reserve asset of the international monetary system . 3 The negotiated redeployment of certain productive capacities from developed to developing countries and the creation of new industrial facilities in developing countries . 4 Lowering of t ariffs and non-tariff barriers on the exports of manufactures from the Third World . 5 Development of an International Food Programme. 6 The establishment o f mechanisms for the transfer o f technology to the Third World separate from direct capital investment . 7 Regulation and supervision of the activities of transnational corporations in promoting economic development 'of the Third World . 8 Elimination of restrictive business practices adversely affecting international trade, especially the market share of developing countries . 9 Reform of the procedures and structures of the IMF, the World Bank and IDA to facilitate favourable conditions for th� transfer of financial resources for development . 1 0 Improving the competitiveness of natural resources vis-a.-vis synthetic substances .

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TRANSFORMING THE WORLD-ECONOMY?

1 1 Full reimbursement to developing countries of monies derived from customs duties and taxes applied to their exports . 1 2 Appropriate adj ustments i n international trade s o as to facilitate the expansion and diversification of Third World exports. 1 3 Creation of buffer stocks through producers ' associations and other means . 1 4 Renegotiation o f Third World debts . 1 5 Promoting the participation of Third World countries in world invisible trade. 1 6 The establishment of a system of consultations at the global , regional , interregional and sectoral levels with the aim o f promoting third world industrial development. 1 7 Adoption of an integrated approach to price supports for an entire group of Third World commodity exp orts . 1 8 The indexation of Third World export prices to tie them to rising prices of the manufactured and capital exports of developed . countries . 1 9 Free choice of States o f their economic , social and political system and of their foreign economic relations . 20 The right of States to full permanent sovereignty over their natural resources . 2 1 The right o f States t o nationalize foreign property in accordance with their own laws . Restitution and full compensation for the exploitation and 22 depletion of, and damages to , the natural and all other resources of States , territories and peoples under foreign occupation , alien and colonial domination or apartheid. The need of all states to put an end to the waste of natural resources . 23 24 The right of association of primary product producers , and the duty of other countries to refrain from interfering in such associations . 25 The use of funds released through disarmament for Third World development . 26 Exploitation of the sea-bed and ocean floor taking into account the particular interests and needs of developing countries . 27 Special measures to assist in meeting the developmental needs of land-locked, least developed and island countries . 28 Technical Co-operation among Developing Countries (TCDC) (indigenous technology) 29 Strengthening of Third World regional , sub-regional and inter­ regional co-operation . 30 Technical and financial development aid and assistance to Third World countries . 3 1 Social questions (enlployment and income distribution) . 32 Restructuring of the Economic and Social Sectors of the United Nations .

RHETORIC AND REALITY

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Andre van Dam summarizes , 'in essence NIEO may be considered as new global model of industrialization, based on the worldwide of labour, resources and capital, in that order o f stribution di importance' (CE March 1 976: 306) . The sectors o f capital that are domiciled in the Third World part of this global model are bargaining for more profits from 'their ' labour and resources , in that order o f importance. a

NIEO

results so far

They can pass resolutions at Colombo and in the United Nations until hell freezes over , but none of them will have any important impact until they negotiate with the industrial states . (USN 1 6 Aug . 1 976, quoting ' a top American economic official') What have been the results of the many-sided negotiations for NIEO so far? In the United Nations General Assembly sessions , where the Third World commands the votes but no executive authority that goes beyond rhetoric, a Third World united front has been able to pass NIEO resolutions with substantial majorities that have had the support of the socialist countries and have attracted or neutralized some industrialized capitalist countries ' votes as well. Thus , the original NIEO Programme of Action was adopted by consensus (without votes by the opposing minority) and the Charter of Rights and Duties was adopted with 1 20 votes for, 6 votes against and 1 0 abstentions . When the Third World countries have been among themselves, excluding some o f the more reactionary governments and seeking to build a common front among the others , such as at the Non-Aligned Summits , they have taken more militant positions to further their collective self-reliance. At the meeting of the 77 in Dakar in 1 975 , in connection with the negotiations on raw materials , a Third World 'solidarity fund' was proposed to defend raw materials prices through producers associations that would withhold some sales and compensate the potential sellers largely with OPEC, that is Arab , oil money from the fund . However, in preparation for the negotiations with the industrial countries at UNCTAD IV in Nairobi , the UNCTAD Secretariat itself launched the proposal for an 'integrated programme' and a ' Common Fund' that would finance a stockpile of raw materials through contributions - and therefore votes and decisions - of all countries , including the industrial ones . In the meantime, at their Manila preparatory meeting for UNCT AD IV, the 77 backtracked to a ' stabilization fund ' that would be j ointly financed and managed by Third World and other countries (Amin 1 976) . On other matters as

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well, the Manila meeting of the 77 represented a weak compromise on the least common denominator of the least offensive demands to be . made at UNCTAD IV. At the UNCTAD IV Conference in Nairobi in May 1 976, US Secretary of State , Henry Kissinger, arrived with an alternative proposal , while the West Germans sought to obstruct any and all agreements until the last night 's session . The integrated programme was unacceptable because it contemplated a wholesale approach to raw materials in which the decline of some prices would be compensated by the rise of others through the Common Fund . Instead , the industrial countries , including the socialist ones, wanted a piecemeal approac h that would guarantee their bargaining power at each turn . A stabilization scheme financed by a solidarity fund against them , was o f course anathema to them ; but then the Third World had dropped that proposal already anyway . Mr. Kissinger proposed an International Resources Bank to be associated with the World Bank Group and to b e controlled by the United States and . the international financial institutions instead . That was unacceptable in turn to the Third World and many other countries . The only agreement that could be reached , after West Germany retreated from its recalcitrant minority of one position - which nonetheless served the purpose of softening every­ body else's position - was to agree to continue talking about the Common Fund and to adj ourn the talks to the 'North-South Dialog ' i n Paris, where the North would b e in a relatively stronger and the South in a relatively weaker position than in Nairobi . The results of the LTNCTAD IV with regard to the other maj or issues were similar : wholesale consideration, let alone a moratorium or even cancel­ lation , of Third World debt was also unacceptable to the industrialized - again including the socialist - creditor countries , as well as Brazil and Mexico , who want debts considered case by case (that is all creditors against one weak debtor each time) ; so it was agreed t o talk some more i n Geneva . With regard to technology transfer, the West was more amenable to the establishment of a code of conduct , since that in turn will be more rhetoric than reality if and when it is agreed upon . A UN Conference on Technology is planned for 1 979 . Evaluations of UNCT AD IV differ . By and large they have been negative, though perhaps less so than of the previous three UNCTAD conferences , which had accomplished nothing at all . Since th e · developed countries are now themselves concerned about raw material s supplies and prices and about the mounting Third World debt problem , they were at least willing to talk about them . Nonetheless , Comer cio Exterior (June 1 976 : 66 1 ) , for instance, summarizes 'on balance what happened at Nairobi leaves . . . one unmistakable feature , failure' . A relatively positive evaluation of UNCT AD IV is that o f Mig uel Wionczok ( 1 976 : 573) from Mexico . He argues that , if it was not a success, at least the conference was not a failure for the following .

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reaso ns : it at least discussed real problems , which will have to continue to be discussed for another ten years ; the Third World achieved co nsid erable cohesion and successful political orchestration .in its negot iation - after having already watered its negotiating position down at Manila -, because the developed countries were unable to present a united front themselves (particularly the Scandinavian ones J oined the Third World positions and while West Gernlany no longer insisted to go it alone) ; and the documentation was prepared at a high technical level . But no significant concrete measure was agreed upon and much less enacted , and NIEO certainly was not moved further alon g . The next maj or conference, known a s the ' North-South Dialog ' was initi ally convened in Paris by President Giscard d 'Estaing of France especially to -negotiate with the Third World , or rather part of it. The Western countries wanted to talk about security for their supplies of petroleum and their i nvestments in the Third World . The socialist countries were not invited and only 1 9 selected Third World countries represented all the others . The latter, however , made it a condition for their participation that the questions of principal concern to- them be considered as well . After long drawn out discussions about what to discuss , the North reluctantly agreed to the establishment of four commissions on energy , raw materials and trade, development, and money and finance . The North' s efforts to split the South into oil and non-oil countries - and indeed among the OPEC countries themselves - failed at least partially, and that was perhaps the most significant result of the conference . But for the same reason , and despite some intra-Northern disunity, t he relations of forces led to 1 8 months o f stalemate during 1 976 and 1 977. But since neither side wanted to close the door completely, the ' North-South Dialog ' in its last nights ' sessions finally came to a minimum agreement - mostly to continue talking at other conferences later . It was agreed to take some special measures to favour the least developed, land-locked and island Third World countries , and to increase official development aid (ODA) to the Third World, although this promise has been made several times before. The target of 0 . 7 per cent of the developed countries ' GNP recedes further as ' aid ' , however generously defined, has fallen to less than half of that . The other ' agreement ' was �o agree to the Common Fund in principle. Previously it had been rejected outright . Now it was agreed to consider it in some form at least and to talk abou it again at the next conference in Geneva. Britain and some other industrial countries began to take a more accommodating attitude . On the other hand , these countries are trying to transform the proposed Common Fund from a stockpile towards that of a bank, which not incidentally is what Mr Kissinger had proposed in Nairobi (FER 28 April 1 978) . The Geneva conferences subsequently took place in November 1 977 and March 1 978 . At the end of the last conference the Group of 77 issued a

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statement saying ' we cannot fail to express in the most unequivocal terms that the conference is ending in complete failure' because of the ' serious lack of political will by the industrialized and socialist states ' (IHT 4 April 1 978) . Besides sidestepping the Common Fund for raw materials , the Paris North-South Conference only agreed to disagree about securing s upplies and stabilizing prices of oil , debt relief for the Third World , (a subsequent conference in Geneva made no progress on this issue either) and all other significant financial questions . Nobody wanted to call the conference itself a complete failure; but its results were ' clearly miniscule . . [and] the " old " international economic order remains virtually as it was ' (Amuzegar 1 977: 1 4 1 ) . For the head of the Mexican delegation , Jorge Eduardo Navarrete ( 1 977a: 1 59) the conference was an experiment in the negotiated search for NIEO which is on the ' border of failure' . As far as reaching any agreement on the principles of NIEO is concerned 'the effort has so far sub stantially failed' (Navarrete 1 977b : 1 059) . Each side has overestimated its own and underestimated the other side' s bargaining power , and neither had the ' political will ' to do better . Progress towards NIEO through other international conferences h as also failed to materialize so far. Of the various measures to deal with the Third World food problem discussed at the 1 974 World Food Conference in Rome, none have been effectively implemented . Only the weather improved , so that there have been record crops in South Asia and surpluses in North America. But good weather is normally followed by bad. The Law of the Sea conferences in Caracas , New York and Geneva have gone from one stalemate to another . The Third World wants protection for its raw materials from the competition by seabed mining and deepsea fishing by the developed capitalist and socialist countries . While the Third World demands a new institutional ocean authority and enterprise over which it would have substantial power, the United States is introducing laws in Congress to have the USA itself license the multinationals to exploit the sea and sea bottom � if the Third World is not prepared to accept the regulation of the s eas on US , West German (and last b ut not least Soviet) terms . At world monetary conferences in Jamaica and elsewhere 'the process of restructuring the international monetary system has come to a virtual halt . The various ad hoc decisions . . . . cannot be considered as constituting nlonetary reform ' (UNCTAD 1 977 , TD/B/642/Add . 1 :6) . To the extent to which there have been any such decisions and reforms , they only favour capital in the industrialized countries and not the Third World states, not to mention their population (as we will further observe below) . The only areas in which apparent reform has not come to a halt are progress toward codes of ' conduct by transnational corporations and for technology transfer (though who knows who if anybody would enf such codes and how) ; measures to increase some Third Worl

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participation in insurance, liner conference and other matters relating to shipping (though Liberia and Panama already lend or rent their flags to foreign bottoms and banks) ; and the agreement and implementation of the 'stabex ' scheme to compensate some raw materials producers for som e price declines within the Association of African, Caribbean and Pa cific countries with the European Common Market . In short , in the conference ring around the rosy, 'shrewd analysts understood that the Seventh Special Session [of the U . N. General Assembly in 1 975] marked the "re-emergence of the moderates " in the Group of 77 ' (Harrington 1 977:235) , which was also reflected in the Third World backtracking at its Manila conference, its conciliations at Nairobi and its temporizing in Paris . In the meantime , the North did not make one single significant concrete concession on NIEO or on anything else. Third World spokesmen have become increasingly persuaded that as king for any , even the most 1110derate 'new ' international economic order overnight is utopian and that the only realistic procedure is to follow the salami tactic , slicing off a little bit at a time . But will this tactic not turn out to be rather more like peeling an . onion, hoping to get to NIEO after each next layer , until there is nothing left - except tearful eyes? To consider this question, we may look at what in the meatime has been happening in the real world outside the conference rooms . We nlay divide the catalogue of 3 2 NIEO demands (on pp . 1 73 - 1 74) into its maj or subj ect matter categories and inquire what has happened with regard to these subj ects , not so much at the conference tables , but in the real world itself. These maj or subj ects are (a) money; (b) raw materials ; (c) manufacturing exports; (d) technology and transnational corporations ; (e) Third World state sovereignty; (f) Third World co­ operation; and (g) ' social questions ' . (a) Money and finance: foreign aid and foreign debt ; financial payments to the Third World to return importers' tariffs and taxes , for restitution o f colonial damages , and i n lieu of armaments expenditures ; and special aid to less developed, land-locked and island Third World countries (demands Number 1 , 2 , 9 , 1 1 , 1 4, 22 , 25 , 27 and 30) . ' No significant progress has been made so far in implementing the General Assembly' s recommendations i n the area of international monetary reform and development finance . . . . The effort to establish a link between the creation of special drawing rights [SDRs] and the provision of additional development finance has so far been frustrated . . . . No agreement was reached . . . as regards development finance, compensatory financing, alleviation of the debt burden of developing countries or the reform of the international monetary system' (UNCTAD 1 977 TD/B/642: 1 2) . Arms expenditures , of course, have i ncreased ; and restitution of taxes or damages to the Third World is literally out of the question. On the contrary , as can be seen in Frank 1 979a , far

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frQm advancing tQward debt Qr any Qther financial . relief fQr the Third WQrld , its fQreign debts have dQubled Qr tripled during these past years and with higher rates Qf interest , shQrter terms o f maturity, and mQre Qnerous cQnditions Qf debt management . Canada and SQme small European countries have unilaterally cancelled the debts of a few poor Third WQrld countries , and Senator Humphrey even intrQduced a bill in the US CQngress to. authorize the US to do likewise . But ' Carter administration officials have no intention of a blanket or a significant write-o ff of IQ ans to some poor natiQns, even if such a step is given legislative approval ' (lHT 20 March 1 978) and ' in BQnn a gQvernment sPQkesman denied that West Germany has entertained any plans to take part in a write-Qff Qf Third World debts' (lHT 28 Feb . 1 978) . The Third World countries with the largest debts , Brazil and Mexico. , have themselves oPPQsed all consideration Qf debt moratQria for fear Qfdamaging their own credit rating, which they need to. get new loans to pay Qff old ·ones . The dQllar has been devalued three times , which has reduced the real value of the dollar debt but also. of the Third World's dQll ar reserves ; and it has signified an effective devaluatiQn of thQse Third WorId currencies that are pegged to the dollar in one way Qr another. These real monetary - changes have , of CQurse , occurred withQut the slightest consideration of or regard for the interests Qf the T h ird World ; and it is the Third WQrld countries and their PQPulatiQns which have suffered from them the mQst , if only because they are the most defenceless against the world-wide inflatiQn, particularly in prices of manufactures , that is fed by the reckles s printing Qf devalued dollars by the United States . The sUPPQsed measures to. demonitize gQld and to replace it by SDRs Qr SQme similar universal reserve currency have led Qn the one hand to the strengthening of gold and the increase of its price, to. the disadvantage of Third World countries that have little no gQld mines Qr stocks . On the Qther hand, with regard to the creation of SDRs and Qther funds by the IMF and Qther financial institutions, . Qnly the equivalent Qf US $2 .5 billion have been destined fQr nQn-Qil producing Third WQrld cQuntries . This is equivalent to about 1 per cent Q f their current fQreign debt and a very small share of the tQtal additiQnal funds , almost all of which thus went to th e rich CQuntries . So much then for the ' link ' between additional money and development finance. MQre important than refusing t link in principle , it has been denied in practice , except in opposite direction . (b) Raw materials: terms Qf trade of raw materials prices ; integr programme and/or producer associations· for raw materials ; fo and agricultural programmes ; seabed and Qcean management; conservation of natural resources (numbers 5, 10, 1 3 , 1 7 , 1 8 , 23 ,

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and 26) . In this area there has been some so far successful maintenance of OPEC unity and prices , which have provided the impulse to the remaining demands for NIEO . However , the effective price of oil has again been eroded to an equivalent of $7 by world inflation and dollar devaluation. For a time the OPEC countries were not united enough (in view of Saudi Arabia ' s effective veto power) t o raise the oil price again ; and i n view o f their common fears of rocking the world economic boat on its current crisis j ourney, they have now united on the policy of not increasing the dollar price of oil again for the foreseeable future, despite the devaluation of the dollar . Be that as it may, and as we have also observed in Frank ( 1 979a) , most of the effective cost of the rise in oil prices has also been passed on to the non-oil producing countries of the Third World , while the industrial countries have increased their exports to the OPEC countries and have recycled the remaining OPEC surplus through their banks . Some other raw materials producer associations have been fxormed or strengthened , but (as examined in Frank 1 979b) they and their price stabilization efforts have been unable to prosper much against the opposition of developed raw materials producing countries and low world market price in years of recession and times of crisis . Other raw materials producers do not have the relative monopoly power of OPEC and the prospects for their independent successful action through stabilization , let alone ' solidarity' funds, �e dim (Frank 1 979a) . Common action with the raw materials irftpQrting industrial countries is limited by the latters ' own interests , wniell may admit some stabilization of supply and price , but more in favour of consuming than of producing countries . In any event , although the terms of trade for non-oil producing Thir'd World raw nlaterials exporting countries increased briefly between 1 972 and 1 974 , they have on balance declined again with the world recession and the mild recovery since then . For non-oil exporting countries in the Third World , the terms of trade fell by more than 1 0 per cent since 1 970 and they suffered an 'unprecedented deterioration in the balance of trade ' of US $32 billion between 1 970 and 1 975 . Of this sum $5 billion are attributable to changes in the volume and $27 billion to changes in prices of the goods they traded . Of these $27 billion due to price changes in turn , $8 billion are attributable to international inflation and $ 1 9 billion to unfavourable changes in the terms of trade (UNCTAD 1 977: TD/B/642/Add . 2 : 1 5) . The increased availability o f food and even the higher price for coffee have been almost exclusively due to the weather and not to any negotiations of NIEO . Developments in seabed mining, which would be monopolized by a few metropolitan and/or socialist multi-national firms , threaten some of the Third World saw materials exporting countries with ' unfair ' competition. And

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natural resources , in the West , 'E ast and South , far from being conserved , are being ravaged more and more , ifonly because it is defended as temporarily necessary during the ' emergency' of the present economic crisis . There is no NIEO in this area either . (c) Manufacturing exports: includes tariff reduction and trade in invisibles (demands 2,4 , 8 , 1 2 , 15 and 16) . We have seen in Frank ( 1 979b) that the export of manufactures and their production especially for export has indeed been increasing in many Third World countries . We also saw that the principal reasons for this trend has been the desire of international capital to produce at lower costs in Third World countries and their competition wit h each other t o attract such capital b y offering the most favourable conditions of production, and especially the lowest wages , at the cost of the masses of their local population. This modification in the international division of Labour may constitute an aspect of a ' new' international economic order , but it is not ·derived from any hard bargaining for access to the industrial countries ' markets t hrough the reduction of their tariffs , domestic excise taxes or other restrictive measures as part of NIEO . On the contrary, the combination of this wave of cheap Third World manufacturing exports with the demands for protection raised by some sectors o f local capital and lab our , which are faced b y competition and . unemployment in the current economic crisis, has had the result that the European Common Market , its member countries and the United States have moved to increase tariffs and to impose quotes on the inlport of manufactures from the Third World . Examples are the provisions for increased protection in the Multifibre Ag�eement negotiated at the end of 1 977 and American restrictions on the import of shoes , textiles , as well as television sets, steel , etc . Th e outcome o f this struggle between higher profits for some and protection for others remains uncertain and is further examined below . (d) Technology and transnationals (6 ,8 ,28): the industrialized countries have agreed to talk about codes for the transfer of technology and for the conduct of transnational enterprises . But the real life conduct of both continues to be j ust as determined b y the global interest o f the transnational corporations as before . Far from promoting the self-reliance of the Third · World countries through the selection of more appropriate technology and still les s through its development in the Third World itself, the latter ' s technological dependence on the trans nationals and o n the industrial countries generally is increasing day by day. Moreover, while the Third World states talk about collective codes of conduct for everybody, most of them are individually reducing or eve n eliminating the few restrictive provisions on transnationals and technology transfer that they had nationally or regionally imposed

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in the late 1 960s and early 1 970s . Thus , Malaysia, India, Pakistan , Bangladesh , Egypt, Tunisia, Zaire, Mexico, Argentina, Chile , Peru, the Andean Pact as a whole, and other countries are all busily engaged in relaxing controls on foreign enterprise and are com­ peting with each other to grant more and greater concessions to international capital . It would be too long and tedious to document this trend for each case or country individually (and some of this documentation is already provided in Frank 1 979c) . But we may quote Business Week: ' There is good news coming out of Latin America for US and other foreign companies with a stake in this vast region . Maj or countries are opening their doors wider to private enterprise . Multinational executives consider the region to be one of the world' s maj or investment opportunities ' (cited in MR Feb . 1 97 7:22) . But maj or countries in Asia and Africa are not far behind in opening their doors wide. (e) So vereign ty and equal rights of Third World states: the Third World states are achieving formal equality among unequals where it counts least, such as in the United Nations General Assembly. The Security Council , the Secretariat and the UN Specialized Agencies remain under the near exclusive control of the larger developed states . The international financial agencies , such as the World Bank and the IMF, remain' under US (and the latter partially West European) control; and if any Third World countries are admitted to their Boards , it is more to co-opt them than to permit them to help steer world financial affairs in a different direction (o f which more below) . Collectively, the Third World countries are admitted to the conference bargaining tables . But , as we haye s een, they have no power there to impose even their rhetorical demands , while the metropolitan states and multinations have and use their effective power to negate in practice even the little that they were moved to grant in principle. Individually, the Third World states use their sovereignty more often that not as we ' have seen - to compete with each other in greater concessions to international capital and more repression of their own popljIlations without outside interference and violation of national sov ereignty . (f) Third World co-operation (28, 29) : technical co- dperation among Third World countries certainly does not mean th � development or use of ' indigenous' technology to promote th ore self-reliant development for the masses of their people . If it m eans anything , it protects capital in a few Third World couni ries from some competition from metropolitan capital and /or op e ns a few markets in some parts of the Third World to capital fr d m some others , as when Brazil , Mexico and India - often with transnational participation - sell advanced technology and/ b r sophisticated knowhow in petro-chemical and machine build1 ng industries to some Arab countries . In the meantime, while the Arab states have

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found it politically convenient to present a united political front with other Third World countries , Arab capital flowed into the banks of New York , London and ZUrich . There it sought the economic and political guarantees of imperialism for its profitable investment in Europe and North America and its loan to other Third World countries through tbe Eurocredit market (see Frank 1 979a) . (g) Social questions: employment and income distribution (question 3 1 ) . These ' social questions ' are examined in great detail in Frank ( 1 97ge) on increasing unemployment , Frank (1 978a) on the increasingly unequal distribution of income, Frank ( 1 978b) on sharpened super-exploitation, Frank ( 1 979c) on increasingly severe political repression , and Frank ( 1 979f and g) on the militarization and other institutionalization of the state and society to serve the interests of international capital and its local j unior partners . These Third World partners in turn demand a ' new' international economic order to institutionalize their collaboration with foreign . capital abroad and their exploitation of local labour at home. It is therefore not necessary to elaborate what is ' new ' in this order here. It is enough to note that there will and can be no new internation al economic order between states without a new political order within these states .

Interpretation of and p rospects for NIEO It becomes increasingly evident that the demand for NIEO is a political conflict between the governing classes in the Third World and the political representatives of international capital in the world capitalist economy. The political conflict is about the terms of the formers' economic integration in the latter . How may we then interpret this conflict and what is its likely outcome? 'The most articulate and persuasive spokesman of the Third World, Mahbub ul Haq , provides here a graphic though disturbing picture . . . ' according to the publisher of his book The Poverty Curtain . Haq has used his position as Vice-President and Director of Policy Planning and Program Review at the World Bank as a platform from which to launch his most active call for NIEO . Mr Haq writes By 1 972, I was becoming convinced, however , that the rich nations were mistaking the short-run weaknesses in the bargaining power of the Third World for permanent impotence. It was at that stage that I �; started arguing that the poor nations should ' organize their poor power to wring maj or concessions from the rich nations and to arrange for a genuine transfer of resources ' . I advocated the use of collective bargaining techniques by the Third World for raising the

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prices of non-renewable resources , negotiating a settlement of past debts , staking out a claim for the exploitation of common-property resources like oceans and space, and levying international taxes on the consumption of the rich nations . While these views spread some shock waves in the Western world at that time , they were, on the whole, taken quite lightly . After all , where was the real collective bargaining power of the Third World that I was advocating so passionately? (Haq 1 976 : 1 43). Where indeed? Haq argues that the ' poor' nations often are lightly dis missed by the 'rich' ones for lack of economic bargaining power ; but that ' in the last analysis , however, the real bargaining power of the poor nations is political , not economic' (Haq 1 976 : 1 78 , also see . pp . 1 69- 1 83 ) . According to Haq the sources of this political power are that the poor nations will soon have the overwhelming maj ority of the population, some atomic bombs and delivery systems , a greater monopoly of natural resources , a wider market , some control over the 'international commons ' like the ocean . . and OPEC . Haq thinks that the oil states are not likely to j oin the rich but will stick with the poor , while the rich can be divided by driving a wedge between the United States and Western Europe and Japan . Bernard Lietaer ( 1 978) thinks that the growing Third World debt �ill become so explosive for the North that it will have to defuse it through a sort of global Marshall Plan in its own interest, and he proposes a world development stock exchange as a technically feasible way of financing this plan at least cost . Michael Harrington ( 1 977:242-245) thinks that ' the United States is likely to be reasonable about Third World debt ' not out of com­ passion but for money . Michael Hudson (1 977) goes even further and argues under the title, Global Fracture. The New International Economic Order, that the balance of payments deficit or debtor nations in the world, that is the United States and most of the Third World countries , will line up together against the surplus or creditor countries . in Europe , Japan and the Arab world. On the other hand , the US also has two other prongs in a ' triple strategy' : a consumer cartel to roll back commodity prices and 'confronting both Third World and industrial nations by US - Soviet detente to keep the satellites of each system in their place ' (Hudson 1977 : 262) . Others are not to sanguine about the collective political bargaining power of the Third World. Guy Erb ( 1 975 : 1 3 8) reminds us that ' for every instance of economic or political power exercised by the poor nations , examples can be cited of their persistent poverty and their p olitical-economic weakness' . Michael Harrington dampens his own optimism by reviewing conversations with Third World Anlbassadors and high level technicians at the United Nations: It was an enlightenting, depressing evening, I had asked, how, specifically, do you move toward a new international economic

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order. As far as I am concerned , no one among that shrewd informed and Third World group had answered (Harrington 1 977 : 2 1 8) .

US News (9 Aug . 1 976: 27) reviews the relative strength and weakness o f North and South and suggests that the oil crisis gave the Third Warld ' a false sense o f power . . . . Rhetorically, they will make noises about forcing us to accept a new international order on their terms . But when it gets down to hard bargaining , they know that we have the power' . The RIO Report suggests that in the short run changes in the structure of power can only be produced through acts of violence and that many such are in fact to be expected in the coming years. But to let such violence take its course on the international plane would lead to nuclear war, which is unacceptable; so that the countries of the Third World will have to rely on other instruments , such as control over natura l resources and o f direct foreign investment and new coalitions , t o improve its position o f unequal power (Tinbergen 1 976 , 1 977: 1 1 9) . But we have already seen how weak these instruments are, especially against the economic , political and military power of international capital and its metropolitan states. And Third World coalitions ate fragile: The developing countries do not have enough power to impose demands that do not correspond to the interests of international capital . Their weakness is deepened by the tendency of many developing countries to seek individual economic advantages , which leads to a competitive struggle among them . It is true that , as is o ften emphasized, they all sit in the same boat ; but the discussion is about who will be the first to be thrown to the sharks (Heyne 1 976 : 22) . Where Mahbub ul H aq sees the establishment of NIEO through a process of collective bargaining, Fawzy Mansbur ( 1 977) suggests that NIEO should be regarded as ' an attempt to establish Global Society Democracy' , which is ' uncannily similar ' to social democracy at the national level in the imperialist countries . Nonetheless , Mansour also notes three crucial differences : the global ' dice are much more loaded in favour of the rich metropolis vis-it-vis the Third World periphery than they ever were in favour of capitalists vis-it-vis their own working populations ' ; 'a similar alliance on a world scale - that is , between the centre and the periphery of the world capitalist system - is almost a contradiction in terms , since there is no other planet from which to draw the enormous surplus necessary to finance it' as in the metropolitan countries part of it was financed out of ' the exploitation of Third World resources and populations ; and most inlportant the Third World is much nlore heterogeneous than the non-bourgeois classes in the metropolitan countries, thus making coalitions much more difficult' (Mansour 1 977: 1 1 - 1 2,97) . This reasoning leads to two conclusions . One is the co-optation of the bourgeoisies , state machineries , and political leadership of the Third

RHETORIC AND REALITY

1 87

rld ; and the other is the use of this political alliance to exploit and s the masses in the Third World still more effectively. In an nterestIn.� article in the most authoritative voice of the US establish­ , Foreign Affairs, and whose signi ficance was not lost on Michael .L .L.L.L,� ....., n ( 1 977 :23 1 -2) , Tom J . Farer suggests ...

What in fact happened to mitigate class conflict . . . [in] the national societies of the West . . . . What , in essence, did accommodation invo lve? . . . There was the creaming off and co-optation of the natural elite of the working class . . . . There is no evidence that any existing wealth was redistributed; but there was some redistribution , alb eit modest , of shares in the large increments . . . . Is the present struggle between the classes of nation-states not susceptible to mitigation by the employment of an analogous strategy of accommodation? . . . In many respects , indeed , the strategy o f accommodation might in fact be easier to implenlent in the present case than in its predecessor . Our conflict is not with huge , anonymous masses whose demands have to be aggregated through fairly uncertain representational arrangements . For the most part . Third World elites are even less committed to hum.an equality as a general condition of humanity than we are. They are talking about greater equality between states . And in their largely authoritarian systems, the state is they . . . . [They are] articulate, well organized representatives with whom to negotiate . . . . There is , moreover , no reason to doubt whether the negotiators can deliver their constituents . . . . A third factor facilitating accommodation is the very small number of representatives that have to be co-opted into senior decision - making roles in the management structure of the international economy. In Africa, only Nigeria . In Latin America, Brazil and Venezuela, perhaps Mexico. · In the Middle East , Saudi Arabia and Iran . And in Asia, I ndia and Indonesia. (Farer 1 975 : 9 1 -93 ) . Commenting o n the North-South Conference i n Paris , the Mexican Foreign Trade B ank' s Comercio Exterior (July 1 977 : 835) suggests that 'the capitalist system is in crisis and everybody is trying to save what he can' and goes on to observe that - beyond the limits of the North-South . blocs - that it is evident that the United States 'has been successful in getting Saudi Arabia, and to a lesser extent Iran, to draw closer to its own positions and that the Third World has given evidence of its splits , although formally it voted i n unison within the conference' . It appears from our discussion of unequal accumulation (in Frank 1 979d) how this strategy of co-optation is being advocated also by the Trilateral Commission, whose members include President Carter and his National Security Advisor Brzezhinsky . Therefore , Mansour suggests that NIEO should more appropriately be called RIEO . a reformed international economic order :

1 88

TRANSFORMING THE WORLD-ECONOMY?

It is on the basis of this RIEO that a new class alliance is merging at the level of the world capitalist system between the center of that system and the bougeoisie of Third World countries . This class alliance is the manifestation, on the political level, of global social democracy . . . [which] is not essentially opposed by the center , or at least by the more forward-looking sections of it (Mansour 1 97 7 : 84) . Pedro Vuscovic ( 1 978 :265) already observes 'the weakness of t he governmental representations of the Third World in the forums o f international negotiation a s a result o f the presence among them o f regimes that are absolutely committed and sub-ordinated t o foreign interests ' . The other side o f the coin of the co-optation of corrupted bourgeois and state interests in the Third World into a subordinate participatory role in t.he Global Social Democracy of a New International Economic Order must be the exploitation and repression of the ' anonymous masses ' by this same coalition of international and national capital . Even if the discussion is only about the distribution not of existi ng wealth but only increments to it - as the Leontief and Tinbergen studies make quite clear - ' as long as there is no other planet to draw the enormous surplus necessary to finance' whatever the accomnlodatio n between international and Third World capital may turn out t o be, the anonymous masses of the Third World will have to be persuaded to bear a substantial part of the cost of this NIEO . And if the mas ses cannot also be co-opted into the collective bargain of accommodation to this global social democracy - and this seems to be neither possible nor even contemplated by the bourgeois bargaining agents - then these nlasses will have to be forced to bear this buden . . . if they will do so, instead o f revolting . The increasing exercise of this force through economic exploitation and political repression is documented in Frank ( 1 978b and 1 979c) . However, if NIEO is essentially a ' new global model of industrializa­ tion' (as the above cited van Dam and our review of the dem suggests), and if the Third World bourgeoisies and their spokesmen are to have a secure and profitable place in the same , it is necessary that the, establishment of this global model really proceeds without too obstacles . Non etheless , there are other obstacles . The same economic crisis that promotes NIEO and generates the demand for it some sectors of the Third World also places obstacles in the path o f realization of NIEO . Some of these obstacles are inadeq investment and market demand , unemployment and notably pro tionism and other restrictions to or competitive modifications international trade .

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protectionism and other obstacles to NIEO ' With continued high unemployment and business failures , official US so urces said : " There is a rising tide of protectionism, . . . which is (FER 2 Dec . rapidly becoming unmanageable and uncontrollable" 19 77) . Since mid- 1 977, the press has increasingly reflected concern ab out and toward protectionism all around the world . 'US Tariffs , Global Risks . . . . Protectionist forces are gathering strength in Europe and the- less-developed countries ' (NYT editorial in IHT 1 9-20 March 19 77) . ' Don't rely on world-trade gains to spead weaker economies al ong the road to prosperity. New barriers could slow the flow of commerce in years ahead ' (USN 20 June 1 977) . 'Protectionist moves to cut the deficit would only make matters worse' (BW 30 Jan . 1 978) . 'A new protectionist offensive is beginning to roll in Washington . . . . [which] could release all these forces in a protectionist landslide ' (BW 13 March 1 978 . 'The Gathering Forces of Protectionism . . . . EEC shifts to Protectionism to Fight Unemployment Rise' (IHT 6 Oct . , 1 977) . ' Bonn Warns Paris of Possible "Super-Protectionism " (IHT 12 Aug . 1 977) . ' Conversation with EEC Commissioner Wilhelm Haferkamp about the Dangers of Protectionism' (Zeit 1 7 Feb . 1 978) . 'Has Brussels [the site of the EEC Common Market Commission] begun the march back to the 1 930s? ' (FR 23 July 1 977) . ' The danger of a world depression . . . is very much on the minds of Japanese leaders today . Nobuhiko Ushiba, Minister of External Economic Affairs . . . is particularly worried about the threat of protectionism and the fragility of the world monetary system ' (IHT 10 May 1 978) . The Far Eastern Review (FER 1 1 Nov. 1 977) devotes 10 pages to 'Protectionism. The game everyone wants to play' . ' GATT Warns on Protectionisnl Spread . Callsit Threat to World System' (IHT 13 Sept 1 977) . Olivier Long, the Director General of General Agreement on Tariffs and Trade (GATT, the inter-governnlental organization for the regulation of world trade and the negotiation of tariff reductions) informs in greater detail about 'The Protectionist Threat to World Trade Relatipns ' : Protectionism is in the air for the first time in this generation . . . . There is evidence, convincing to most observers , that the will to resist protectionist pressures has weakened in some countries at the very moment when these pressures have become unusually insistent. Over the past two years , and most particularly in recent months, a significantly higher number than usual of protectionist moves have been initiated or tolerated by governments . Others have been seriously threatened . Competitive pressures are driving domestic industries in many countries to voice new demands for relief through restrictions on imports , or for government help for their own

1 90

TRANSFORMING THE WORLD-ECONOMY?

exports . The real possibility that these demands will be not - is encouraging protectionist influences everywhere, is threatening hopes of establishing more constructive relations between developed and developing countries. and is clouding the prospects for rapid recovery from the present recession. The product sectors most affected by protectionist action are clear. Apart from special cases as restrictions on trade in beef introduced by the European Communities , Japan and others . . . they are textiles and clothing; shoes , steel; transport equipment (particularly ships) ; and certain sectors of light engineering, including especially electrical and electronic goods and ball-bearings . Significantly, these are all areas of trade in which there have recently been maj or shifts i n comparative advantage towards producers who until the past decade or so were not significant exporters of the products concerned . � . . Our own best estimates in GATT, however, suggest that actions taken since 1 974 have affected somewhere between 3 and 5 per cent of world trade . In other words , trade of some $20 to $50 bn . annually , previdusly unaffected by restrictions other than tari ffs , has been subj ected to restriction or disruption. O f course , it is not only the industrialized countries which have in recent months intensified or introduced restrictions . Many developing countries have done so too, usually in ' response to balance-of-payments difficulties or as an element in the development plans . But the actions by i ndustrialized countries are in my view much more significant both in their present impact on world trade and in their implications for future world trade relations (Long 1 977:283-4) . ' To put it another way, there is a ' worldwide tendency of cartel formation under the protection of state authority' (FR 27 June 1 978) . The President of the Central Association o f German Chambers o f Industry and Commerce, Otto Wolff v o n Amerongen, observes , moreover , that ' only the strongest countries dare nowadays resort to patently and directly protectionist me�sures such as minimum prices for bulk steel or quantitative import restrictions on some textiles from developing countries ' . In other countries 'subtle forms of protectionism are the fashion today as never before . They include appeals to buy goods made at home . . . administrative regulations on foreign trade . . . i nsisting on certificates of origin for textiles . . . ' (von Amerongen 1 977:289-90) . These non-tariff barriers have increased enormously in recent years and are ' 75 per cent of what the Tokyo round [of tariff reductions] is all about ' (BW 26 June 1 978) . Japan has charged the United States with the outright violation of the rules of the General Agreement on Tariffs and Trade (GATT) because of the unilaterial way some US restrictions on imports of Japane s e ' television sets and other electronic equipment were imposed (lHT 4-5

RHETORIC AND REALITY

191

June 1 977) . But the American stance i n negotiations i s even more seri ous. The editors of the influential Japanese newspaper Yomiuri . Sh imbun commented on the visit of the US trade delegation, headed by President Carter' s chief tariff negotiator Robert Strauss , in November 1 977 : The behaviour of the US negotiators . . . . was shocking because they tried to intimidate and almost dictate terms to this country. Many Japanese could hardly b elieve that this was the attitude of a supposedly friendly nation and ally. The negotiators attempted to bring Japan to its heels (quoted in the Washington Post 24 Nov . 1 977 and cited in ICP 6 Feb . 1 978: 1 32) . ·They did. The Wall Street Journal (5 Dec . 1 977 , cited in ICP 6 Feb . 1 978 : 1 32) reports that the Japanese ' conceded more than they may have wanted ' and that a high Japanese official remarked ' we were pushed into a corner 40 years ago . It isn't good to see similar unfortunate and dangerous pressures being placed on us again' . Forty years ago these dangerous pressures led to the Japanese attack on P earl Harbour in World War I I . And Mr Ushiba, the Japanese minister already quoted above, points out that 'there is no question that the depression led to World War I I ' (IHT 10 M ay 1 978) . To reduce the US trade deficit and the Japanese trade surplus Japan has been obliged to agree to increase its imports from the US and to limit its exports particularly of colour TV sets and steel . And , by devaluing the dollar , the US has in effect obliged Japan to revalue the yen and to make its exports less competitive. In the United States , these measures were demanded not only by the government and by business, with the Committee to Preserve American Colour Television (COMPACT including 1 1 labour unions and 5 firms) led by the Zenith Radio Corporation, and the steel industry in the forefront, but also by labour . With one fifth o f American steel consumption now being imported from abroad - and maj or steel exporters now include Japan , Western Europe, Eastern Europe, Spain, South Africa, Brazil , Mexico and South Korea - the United Steelworkers Union of America calls for import restrictions for steel ' conditions with an enforceable commitment by industry to modernize at their existing locations ' in the USA (IHT 8-9 Oct . 1 977) . The American union federation is also active: 'AFL-CI 0 Economic Proposals Stress Import Quotas , Curbs to Protect US Industry, Jobs' (IHT 1 2 Dec . 1 977) and its President 'Meany Says Free Trade Is " a Joke" ; Urges US Set U p Strict Controls ' (IHT 1 0- 1 1 Dec, 1 977) . U S labour 'plans a maj or push in Congress next year [ 1 978] for a n updated version of the Burke-Hartke bill of 197 1 -74, the most controversial o f all protectionist trade initiatives . . . . The union-backed bill called for import quotas on a product-by-product basis rolled b ack to the 1 965-69 average' (lHT 8 Nov . 1 977) .

1 92

TRANSFORMING THE WORLD-ECONOMY?

' Europe shifts to Protectionism to Fight Unemployment Rise . ' The European Economic Community, once a staunch crusader for free trade and competition, has quietly shifted in recent months to the camp of protectionism and cozy cartels to combat unemploy­ ment . . . . They advocate an urgent need for ' organized' world trade - meaning import curbs dressed up as ' voluntary' quotas . . . . EEC officials . . . claim that the comnlunity is doing no more than matching the efforts o f Japan and the United States . . . to stave o ff a flood of cheap foreign- imports . . . Led by Britain and France , EEC countries have grown alarmed . . . . Even West Germany, a n ardent backer of free market capitalism , now favours some trade controls (IHT 6 Oct . 1 977) . Quotas and voluntary restraints were once regarded as sores , now they are viewed as chic beauty-sports renamed ' orderly marketing arrangements ' and ' ordered liberalism ' . . . . At The Downing Street s ummit [on the world economy by Western heads of government i n May 1 977] French President Valery Giscard d ' Estaing introduced the concept of ' organized liberalism ' to j ustify his claim that ' free ' trade should be internationally organized . The concept was given a measure of substance by his Prime Minister, Raymond Barre , two months later . Barre , a former profess or of economics , argued . . . that the free trade philosophy . . . has been rendered obsolete by recent development . . . . The fact remains that the developing countries are the principal targets of recent protectionist measures . . . . Whatever may - and must - be s aid about protectionism in Europe, it is now clear that developing countries must start looking elsewhere for their industrial market (FER 1 1 Nov. 1 977). For dishonesty, cynicism and arrogance, the current attitude of the EEC to textile agreements with developing nations is hard to bear . It must be combated with all available weapons . Not merely because agreements have been broken . Not merely because textiles is the largest manufactured export of developing nations . But because this is the most conspicuous example of the drift towards a world not only of protectionism but of trade chaos. When the world ' s largest trading bloc unilaterally tears up the single most important set of rules governing trading in a major commodity, it is clear that the j ungle threatens . If the laws and conventions that govern it are undermined, trade itself will falter . The EEC i s attempting t o hold total 1 978 textile imports to' 1 976 levels , at the same time as making payoffs elsewhere - including to Soviet bloc countries . The main immediate sufferers will be Hong Kong, South Korea and Taiwan , which are to make the major . ' sacrifices ' to make room for these payoffs . . . . Meanwhile , as the EEC dangles wormridden carrots , in front of some developing nations and makes political payoffs in the Mediterranean and

RHETORIC AND REALITY

1 93

Eastern Europe, the countries which will suffer are j ust those which over the years have proved most prepared to adj ust themselves , through bilateral arrangements under the MFA and its predecessor, to European problems . Years of behaving with reason and understanding are ,rewarded with a kick in - the teeth . It is primarily newcomers from the Mediterranean and Eastern Europe, many of which are signatories neither to GATT nor the MFA , whose imports to the EEC- have grown most rapidly in recent years - (FER 7 Oct . 1 977) . The Multifibre (textile) Agreement (MFA) was extended after long drawnout bargaining during 1 977 , but with escape clauses that may well be used to restrict imports further during the life of the agree­ ment . Industry and labor are giving signs of increasing concern . Representatives of employers and workers in the Western European textile and clothing industries have issued ' solemn warnings . . . aqout the critical position with which these industries are faced ' . They claim that in these industries , which now employ 4 million workers , more than 1 million (750,000 textile and 300 ,000 clothing) j obs were lost between 1 965 adn 1 976 and that unemployment reached 30 per cent in these jndustries in the latter year . For certain products , such as shirts and trousers , imports account for up to 80 per cent of consumption (COMITEXTIL nd) . According to Folker Frobel the decline of employment in the textile and clothing industries of the original six European Common Market countries plus Britain was 762 , 000 or about 1 8 per cent, between 1 960 and 1 975 of which half is attributable to improved productivity in these countries themselves and about half . to imports from Third World and Socialist countries (Frobel e( al. 1 977 : 75) . The International Textile, Garment and Leather Workers ' Federation, which represents workers in developed and underdevel­ oped countries , is under pressure from the former to demand protection from imports produced by the Jatter (personal communica­ tion from its General Secretary, Charles Ford, Feb . 1 978) . In the meantime, the United States has signed new 'orderly marketing ' agreements for textiles , clothing and shoes with Brazil, Hong Kong, South Korea and is negotiating others with Taiwan and other countries . The previous agreement with the largest exporter, Hong Kong , allowed for a more than 6 per cent annual growth rate o f U S imports and the new one, after the 'toughest bargaining ' , restricts the quota to 1 . 5 per cent in the first year (FER 1 2 Aug . 1 977). The new 5-year agreement with South Korea permits no growth in sensitive items for the first year, 2 per cent growth the second year and 3 . 9 per cent growth during the following years (FER 1 7 Feb . 1 978). As a result South Korea will not �approve the expansion of textile production facilities for the time being (IHT 7 Oct . 1 977) . The growth of protectionism as a response to the crisis also has repercussions on North-South relations in general .

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TRANSFORMING .THE WORLD-ECONOMY?

US Toughens Economic Policy Toward Developing Nations . With protectionism rising, the United States has been articulating a tougher economic policy toward developing countries , telling them, in effect , that some of their demands for a shift in the distribution of the world ' s wealth are simply out of touch with reality . The sharp er tone in the North-South dialogue between rich and poor countries is in marked contrast ot the position of the Carter administration a year ago when it was emphasizing accommodation and conciliation . . . . Attitudes are hardening among European trading partners [with the Third World] as well . . . Positions of the United States and other industrialized countries have hardened against a background of stagnant economic conditions in the industrialized world and continued high unemployment . 'The . North-South dialogue is not exactly in the freezer , j ust in the fridge ' , said a Common Market Ambassador (IHT 6 Feb . 1 978) . It is difficult to be certain about the extent to which the political ­ demands for protectionism are likely to place maj or obstacles in the way o f NIEO and other changes in the international division of labour and profits . This political conflict is not yet decided one way or the other . The political demands for protection from labour ravaged and · threatened b y unemployment , b usiness concerned by low profits , industry plagued by shutdown or runaways , and governments haunted by b alance of payments. deficits is evident . Behind these p olitical demands are two maj or and interrelated economic problems . One is the overall capitalist over-accumulation o f the past, which now mani­ fests itself in rates of profit, frequent cyclical recessions with poor recoveries , and the world economic crisis generally. The other economic problem arises out of the differential changes in productivity among particular economies and industries and the resulting changes in their competitiveness relative to each other. Both of these economic problems lead to increased competition for markets among b usinesses and states , which reflect themselves in competitive devaluations of currencies and outright protective measures . These tendencies manifest themselves , as we have observed , on national and regional bases; and ·" they also lead to some pressures toward the renewed formation of economic blocs : ' a division o f the developing world into spheres of influence, with Europe "taking" Africa, leaving Southeast Asia to Japan and South America to the US ' (FER 1 1 Nov . 1 977) . The demands for protectionism are the strongest in the economies in which investment and productivity have risen the least and in which the economic crisis is the most serious . Foremost among these is the United States , which has not only the highest rate of unemployment among major economies b ut also the most outdated equipment in many " industries . In manufacturing 2 1 per cent o f the installed equipment was more than 20 years old in 1 974, compared with 1 7 per cent in 1 970.

RHETORIC AND REALITY

1 95

Obsolescence is particularly high in the transportation equipm�nt , iron and steel, nonferrous metal , machinery and rubber industries (USN 30 Nov. 1 974) . Labour productivity in the major industrial economies increas ed at very different percentage rates over the past decade and a half, as follows : 1963-1969 United States Britain France Germany Japan

1970-1976

14 17 35 34

17 37 42

72

40

17 +

(Busch et al. 1 97 1 :79 for the 1 960s and IHT 30-3 1 J uly 1 977 for 1 970s . )

Thus , in the United States and Britain productivity rose less than half as much as in France and Germany , and in these it rose in turn about half as fast in the 1 960s and at about the same rate in the 1 970s as in Japan . These differential changes in productivity, more than differences in wage rates , are at the bottom of the Japanese and to a lesser degree the West European (but not British) competitiveness today. For instance , between 1 97 1 and 1 976, yearly production of crude steel per worker w as 480 tons in Japan, or double the 240 tons in the United States (ICP 6 Feb . 1 97 7 : 1 32) . This Japanese steel, which is produced in efficient new oxygen-fed blast furnaces instead of the old open-hearth furnaces still widely used in the USA, is the basis of the Jap anese offensive in the export of steel and in part of steel-using products like ships and automobiles . The devaluation of the American dollar and pressures for protec­ tionism in the USA and Europe are the natural consequence. But this response also - or even more so - hits the still weaker exporting countries in the Third World, who are less able to defend themselves than Europe and Japan. The devaluation of the dollar and the revaluation of the German mark and the Japanese yen, 'in turn convert increases in labour and other production costs in Germany and Japan into very substantial increases compared to American costs of production when measured in dollars in the US or Third markets . On the other hand, with a cheaper US dollar, foreign investment in the US becomes much less costly and much more attractive. In consequence , the past couple of years have witnessed a vast new wave of European and Japanese, as well as of course Arab , foreign investment in the United State in order to produce there for the large American market with American labour that with today' s exchange rates has become cheaper than labour in Germany and some other countries . This foreign

1 96

.

TRANSFORMING THE WORLD-ECONOMY?

production - for instance of Japanese television sets and Oerman Volkswagens - within the 'United States is not subject to exclusion b y US tari ffs o r quotas , and i t competes with electronic equipment and automotive parts or engines from Third World countries like Mexico , Brazil , South Korea and Taiwan, whose exports are subj ect to import restrictions by the US . At the same time certain technological advances , such as those in microcircuits on ' chips' and lasers , encourage the production of some products to return from the Third World to the industrial countries . These products are now to be produced there with highly capital-intensive labour-saving processes , such as cutting textiles and clothing with mini-computer guided laser beams . These protective ob stacles to changes in the international division of labour or impulses to changing it in a ' reverse' direction through competitive devaluation, import restrictions , ' reverse' foreign investment and the use of new technology may pose significant problems also in the way of the establishment of the NIEO that the Third World leaders are asking for . The other economic problem that poses a threat t o NIEO (among other more important things in the world) through protectionism and other brakes on world trade is , of course, the world economic crisis itself. Since discussion of this problem requires a book in itself, it is here possible only to suggest some connections between the progression o f the economic crisis and NIEO o r other changes i n the international division of labour and profits . On the one hand, as we have argued, the crisis generates both t he demand for NIEO and the pressures to accelerate the modification of the international division of labour in assigning new and increasing tasks to various part of the Third W orId . On the other hand , the crisis itself also places obstacles , such as protectionism, in the course of this process and/or slows down that international trade or its expansion, which serves as the vehicle of exchange required for this new international division of labour (NIDL) . Thus during the last recession , in 1 974 a modest expansion of world trade was maintained principally through exports from industrial capitalist countries tothe Third World and the socialist countries (extension of NIDL) ; and in 1 975 total world production declined by . about 2 per cent (5 per cent in manufacturing and mnre than that in the capitalist industrial countries) and world trade declined by about 5 per cent (GATT 1 976: 1 ) . Manufacturing . exports from Third World countries , especially in Asia, encountered severe obstacles of market demand in the developed countries ; and production and employment in South Korea, Hong Kong , Taiwan and elsewhere suffered (contraction of NIDL) (FER Asia Yearbook 1 976). The cyclical recovery since 1 975 has been accompanied by renewed expansion of manu facturing exports , production and employment in • these and other Third World countries (GATT 1 977) . What is likely to happen in the next cyclical recession and what are the prospects for it or its beginning?

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1 97

GATT reviews the essential elements of the cyclical recovery in its review of the 'main features of 1 976/77' . These provide a basis for expectations , about the next recession . In the industrial countries the recovery of demand , was due essentially to a rise of roughly 4t per cent in private consumption, substantial restocking , and a rise of a.bout 1 1 per cent in the volume of exports . . . Compare d with the previous peak in 1 973 , the rise in world output stemmed entirely from the increase of industrial and agricultural output in developing countries , of industrial output in the Eastern trading area, and of agricultural output in the indu strial countries ; industrial output in industrial countries and agricultural production in the Eastern trading area stagnated . . . . (GATT 1 977: 3 ,2) . After noting the significant 'continuing weakness of fixed investment ' , which has not recovered at all since 1 973 and which has · been directed not so much into the expansion of productive capacity as in the rationalization of existing capacity to produce at lower costs and with less labou r , GATT goes on to observe : I n most industrial countries, the recovery in employment has generally been less pronounced than in production. . . . In most Western European countries , as' well as in Japan, employment i n manufacturing actually declined at an annual rate of nearly 2 per cent for the third consecutive year. In the Unite� States , manufacturing employment recovered by about 3 per cent in 1 976 , but remained below its 1 973 and 1 974 levels . . . . The level of unemployment [in the OECD industrial countries as a whole] by the end o f 1 976 was close to, or in some couptries above, the peak reached during the recession . A continuing feature is the particularly heavy unemployment among the young (GATT 1 977 : 3 -4) . For 1 977, the OECD. observes 'industrial production has broadly stagnated since April , . . . particularly business investment . . . [has] also been hesitant; [and] total unemployment is now about 1 6 . 3 million , some half million higher than at the trough o f the 1 975 recession . . . . This would leave OECD unemployment at the end of 1 978 even higher than now, amounting perhaps to some 17 million, or over 5t per cent of the labour force . For Europe the rate could rise to 6 per cent ' (EO Dec . 1 977: 3-5 ) . With regard t o the prospects for a renewed · recession and the continuation or aggravation of the world economic crisis , the most significant element in these official reviews of and outlooks on the economic situation is the 'weakness ' and ' hesitancy ' of fixed investment and the (officially unmentioned) weakness of profits that lies behind it . Although the economic crystal ball is very clouded and gazing into it or engaging in economic astrology is adventurous indeed

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(see Frank 1 978 c , d) ; it m ay be safe to suggest that the recovery cannot persist unless investment recovers , which it gives no indication of doing . On the contrary. At the time of this writing 'more and more economists are forecasting a recession' and the US index of leading indicators has again begun to decline (BW 20 March 1 978, IHT 7 April 1 978 , IHT 2 May 1 978). For some sectors of business and industry, the high level of unemployment - as distinct from the low level of profits - may well not be of concern . On the contrary, it is a desideratum for part of business and the state (as is documented in Frank 1 978c) . But for those who are already unemployed and those who are threatened by and with unemployment, the latter is a matter of concern . And this concern can be politically translated into additional pressures for protectionism and support for political policies that will bear on the establishment of NIEO and/or the 'progress ' to a new international division of labour . Political pressure from labour is not likely to be sufficient in any capitalist country to move its state to invoke such protectionist and other policies , but it can weigh in the balance along with perhaps more significant pressures from interested sectors of capital. Considering that , as GATT and the OECD observed, unemployment has actually risen during the recovery, we may imagine what will happen to unemployment and b usiness failures during the next recession. We could similarly speculate on the likely prospects for world trade, further protectionism, and 'progress ' ; toward NIEO. In this context , we may also take seriously the speculations of Business Week and of the chief US tariff and trade negotiator Robert Strauss : The possibility remains that a discontented Congress could force outright p rotectionism on the [unwilling] Administration . The resulting retaliation by other nations very likely would leave the US deficit about where it is, b ut at a vastly lower level of total trade (BW 30 Jan . 1 978) . When Congressman Hawley and Senator Smoot took a small step toward protection in 1 930, their bill became a vehicle on the Senate floor for the addition of 1 ,250 amendments providing protection for specific products . The Smoot-Hawley Act set off a wave of retaliation that locked us into this nation' s greatest depression (Robert Straus s cited by BW 1 3 March 1 978) . US Congressman Abner J . Mikva reflects : I ' m going to support the President [against protectionism] . But what do I go back home and tell the people who are unemployed? The Administration was against Smoot-Hawley, but the people were for it. I worry that Congress will reflect the mood of the country now as it did then (cited in BW 1 3 March 1 978) . If the US Congress does what Mr Strauss and Mikva fear - and if the

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not so innocent US ex�cutive administration follows in the footsteps of President Franklin D. Roosevelt who torpedoed and sabotaged the very World Economic Conference he had called in London in 1 93 3 and prevented the salvage of the then existing world monetary system and forced Germany and Japan into bankruptcy; or if President Carter follows the example of Richard Nixon, when he suddenly scuttled the world monetary system and penalized Japan especially with a 1 0 per cent surcharge tariff in his ' New Economic Policy' initiated on August 1 5, 1 97 1 (which the Japanese called the 'Nixon shokku'); or if President Carter follows further in his own footsteps of recklessly permitting the dollar to be devalued without US intervention and breaking all his domestic and most of his international economic promises - then of course the prospects for a world depression are still better and those for NIEO are still dimmer . But if the New International Economic Order (NIEO) is dependent on - indeed is the institutionalization of - the expansion of world trade as the vehicle for a new international division of labour in which . the Third World bourgeoisies negotiate the terms of their dependence to participate more actively and profit more handsomely at the expense of the increased exploitation and the heightened super-exploitation of their agricultural , industrial and service, including government , workers, and if this entire NIEO can only be established and maintained through the intensive political-economic repression of the masses of the population around the Third World; then the significant aggravation of the world economic crisis , the substantial breakdown of world trade, and all other obstacles to NIEO can only signify the lesser evil for the masses of the Third World . As we argued over a decade ago in our ' developnlent of under-development ' , (Frank 1 966, 1 969) asuch a crisis could offer some Third World countries greater opportunities for relatively more autonomous and ' self-reliant ' capitalist develop­ ment b ased on a more populist democratic alliance of classes between sectors of the bourgeoisie and the working masses . Perhaps this alliance and this capitalist development during the world economic crisis and its aftermath would be temporary. Perhaps · it would then finally b e replaced b y the NIEO that their bourgeoisies call for now already i n their demands for integration i n the imperialist capi'talist system . But perhaps this interregnum .would be temporary in that it could also give way to a really new international economic, social and political order through the revolutionary destruction, here and there, of the old one . But for the time being , the most realistic prospects would seem to be the maintenance, and indeed the new extension and intensification, of the old · international economic order under the guise of a ' new' one.

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Abbreviations and references cited BW CE EO FER FR ICP IHT IPW LM MR NYT USN ZT

Business Week, New York Comercio Exterior, Mexico Economic Outlook, DEeD , P aris Far Eastern Economic Review-, Hong Kong Frankfurter Rundschau In tercontinental Press , New York (incorporating Inprecor, Brussels In ternational Herald Tribune, Paris IP W Berichte, Berlin DDR Le Monde, Paris Monthly Review, New York New York Times US News and World Report, Washington Die Zeit, Hamburg

Amerongen , Otto Wolff von, 1 977 , ' Protectionism - a Danger to our Prosperity' , Intereconomics, Hamburg , No . 1 1 / 1 2. Amin , S amir , 1 976 , After Nairobi - Preparing the Non-A ligned Summit in Colombo . An Appraisal of UNCTAD IV. Dakar , United Nations African Institute for Economic Development and Planning, DIR/2747 , June. Amuzegar , J ahangir , 1 977, 'A Requiem for the North-South Conference' , Foreign Affairs, Lancaster , Penna, October . Buira, Ariel , 1 977, ' Dialogo Norte-Sur: final del j uego ' , Comercio Exterior, Mexico, v, 27 , No . 9 , Sept . Busch , Klaus; Scholler and Seelov , 1 97 1 , Weltmark and Weltwlihrungskrise, (Bremen, Margret Kuhlman fur Gruppe Arbeitspolitik) . COMITEXTIL, nd . The European Textile and Clothing Industries and the Internationalflivision ofLabour, Comite de Coordination des Industries Textiles (COMITEXTIL) , Bruxelles ( 1 977) . Mimeo . Erb , Guy F, 1 975 , 'The Developing World ' s " Challenge" in Pen�pective ' in Guy F. Erb and Valerina Kalbab , eds . Beyond Dependency. The Developing World Speaks Out, (New York : Overseas Development Council) . Farer , Tom J , 1 975 , ' The United States and the Third World : A Basis for Accommodation ' , Foreign Affairs, Lancaster , Penna. , OcL Frank, Andre Gunder, 1 966, 'The Developmerit of Underdevelop ­ ment ' , Monthly Review, New York , September , (reprinted in Frank 1 969, Chapter 1 and elsewhere). 1 969, Latin A merica: Underdevelopment or Revolution, (New York, Monthly Review Press) . -- 1 978a, ' Postwar Boom : Boom for the West , Bust for the South ' , University of East Anglia, School of Development Studies ,

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Reprint No . 66, reprinted from Millenium: Journal of Inter­ national Studies, Vol. 7 , No . 2 , Autumn 1 978 . 1 978b , 'Superexploitation i n the Third World' , University of East Anglia, School of Development Studies, Reprint No . 64, reprinted from Two Thirds, Vol . 1 , No . 2 , Fall 1 978 . - 1 978c, 'Mainstream Economists as Astrologers : Gazing Through the Clouded Crystal Ball ' , U. S. Capitalism in Crisis, New York , Union for Radical Political Economics . 1 978d , ' The Economist as Soothsayer and Ideologist . The Clouded Crystal Ball and Keynesian Class Policy' , Critique, Glasgow, No . 9 (incorporating Frank 1 978c) in Spanish Cuadernos Politicos, Mexico , No . . 1 2 , April-June 1 977, and Zona A bierta, Madrid , No . 1 3 , 1 977 . 1 979a, 'Debt Bondage and Exploitation of the Third World ' , University of East Anglia, School o f Development Studies , Discussion Paper No . 3 6 . 1 979b , ' Third World Manufacturing Export Production ' , University of East Anglia, School of Development Studies , Discussion P aper No . 3 7 . 1 979c, ' Political Economic Repression i n the Third World-' , University of East Anglia, School of Development Studies , Discussion Paper No . 40 . -- 1 979d , ' Unequal Accumulation: Intermediate , Semi-Peripheral and Sub-Imperialist Economies ' , University of East Anglia, School of Development Studies , Reprint No . 67 , reprinted from Review, forthcoming issue . -- 1 97ge , ' The New Economic Crisis in the West ' , University of East Anglia, School of Development Studies , Discussion Paper No . 42 . -- 1 979f, ' Economic Crisis and the State in the Third World ' , University of East Anglia, School of Development Studies , Discussion Paper No . 30. -- 1 979g, ' The Arms Economy and Warfare in the Third World ' , University of East Anglia, School of Development Studies , Discussion Paper No. 32. Frobel, Folker; Heinrichs , Jiirgen and Kreye, Otto, 1 977, Die neue internationale A rbeitsteilung. Strukturelle A rbeltslosigkeit in den Industrie-landern und die Industriealisierung der Entwicklung­ slander, (Hamburg: Rowohlt) . Galtung , Johann, 1 975 , Self-Reliance and Global Interdependence. Some Reflections on the INew International Economic Order' , Society for International Development, European Regional Conference . Linz, Austria, Conf. Doc . No . 1 2-e. GATT, 1 976, International Trade 1975176, Geneva, General Agreements on Tariffs and Trade. -- 1 977, Prospects for International Trade. Main Conclusions of GA TT Studyfor 1976� 77, published Geneva, General Agreements -

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on Tariffs and Trade, Press Release GATT 1 1 96 , .7 September . Haq, Mahbub ul, 1 976, The Poverty Curtain: Choices for the Third World, (New York: Columbia University Press) . Harrington, Michael, 1 977 , The Vast Majority. A Journey to the World's Poor, (New York : Simon and Schuster) . Heyne, H . 1 976, 'Neue Weltwirtschaftordunung - Veranderung fur die .Dritte Welt? ' , Blatter des Informationszentrum Dritte Welt, Freiburg, Germany, No . 54,- June . Hudson , Michael , 1 977, Global Fracture. The New International Economic Order, (New York: Harper and Row) . Kis singer, Henry, 1 976, 'UNCTAD TV: Expanding Cooperation for Global Economic Development ' , address by Secretary Kissinger , Department of State Bulletin , Washington , No . 1 927 , May 3 1 . Leontief, Wassily et al. , 1 977, The Future of the World Economy. A United Nations Study, (New York: Oxford University Press) . Lietaer , Bernard A, 1 978, 'EI pr6ximo conflicto Norte-Sur ' , Comercio Exterior, Mexico , v. 28 , No. 3 , Marzo . Long, Oliver , 1 977, 'The Protectionist Threat to World Trade Relations ' , Intereconomics, Hamburg, No . 1 1 - 1 2. Mansour, Fawzy, 1 977. 'Third World Revolt and Self-Reliant Auto­ Centered Strategy of Development ' (a draft) , Dakar, United Nations African Institute for Economic Development and Planning, Reproduction 406 . , Meadows , Donelle and Dennis , 1 972 , The Limits to Growth . (New York : Universe Books) . Mesarovic M . and Pestel E , 1 974, Mankind at the Turning Point, New York . Navarrete, Jorge Eduardo, 1 977a, ' EI dialogo Norte-Sur. Una busqueda negociada del nuevo orden econ6mico internacional' , Nueva Politica, Mexico , v . ·1 , No . 4, Oct-Marzo . 1 977b , ' La Conferencia de Paris : un final esperado ' , Comercio Exterior, Mexico , Sept . Perez Guerrero , Manu'el , 1 977, ' Un nuevo orden econ6mico internacional' , Nueva Politica, Mexico, v. 1 , No . 4 , Oct-Marzo . Senghaas , Dieter, 1 977 , Weltwirtschaftsordunung . and Entwicklungs - poUlik. Pladoyer fur Dissoziation . (Frankfurt : Edition Suhrkamp . Tinbergen, Jan, 1 976 , 1 977 . Reshaping the International Order (RIO) . (Amsterdam : Elsevier) . Citation here from the German translation: Wir Haben nur eine Zukunjt. Reform der Interna­ tionalen Ordunung, (Oplacten, Westdeutscher Verlag , 1 977) . UNCTA D , 1 976, 'New Directions and ·New Structures for Trade and Development' , report by the Secretary-General of UNCTAD to the Conference, Nairobi . TD/1 83 . 1 977 , 'The evolution of a Viable Inter national Development Strategy' , report by the Secretary-General of UNCTAD, Geneva. --

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TD/B/642 , 30 March . 1 977 , 'Implementation of International Development policies in the Various Areas of Competence of UNCTAD' , report by the Secretary-General of UNCTAO , Geneva, TD/B/6421Add . 1 , 3 1 March . . - 1 977 , 'The Recent Economic Experience of Developing Countries in Relation to United Nations Development Objectives ' , report by the UNCTAD Secretariat , Geneva, TD/B /642/Add . 2, 13 April . UNITAR , nd, ' Progress in the Establishment of a New International Economic Order: Obstacles and Strategies' , United Nations Institute for Training and Research . Vuscovic, Pedro, 1 978 , ' La restructuracion del capitalismo mundial y el nuevo orden economico i nternacional' , Comercio Exterior, Mexico, v. 28, No . 3 , Marzo . Wionczek , Miguel S , 1 976, ' La IV UNCTAD: exam en de problemas reales ' , Comercio Exterior, Mexico, Mayo . -

7

Self-Reliance and the New International Economic Order * Samir Amin

I The decades following the Second W orId War were marked by the rise of the liberation movement on three continents, the main goals of which , in Asia and in Africa, were the reconquest of nati9nal indepen­ dence and its defence by refusing, the military alliances through which the United States sought to dominate the policy of the Third World states . But in general, the goals and methods of economic development pursued did not challenge the main features of the international divi­ sion of labour shaped during the last century . Hence an externally oriented and dependent development model was usually accepted . The objective failure of this model and the increasingly difficult problems gradually induced the Third World countries to embark upon a new strategy with the aim of consolidating their reconquered political inde­ pendence by strengthening their economic independence . The new development strategy is asserted in three complementar y aspects: ( 1 ) the choice of a ' self-reliant' development based on the prin­ ciple of depending on one ' s own resources; (2) the priority given to co­ operation and economic integration between the countries of the Thir d World ('collective self-reliance'); and (3) the demand for a new inter­ national economic order based on higher prices for raw materials and the control of natural resources , access by the manufactures of the Third World to the markets of the developed countries, and the acc e* Editor's note: The author was present at the UNU-GPID/Max-Planck-Institut joi nt meetings, 1 97 8 - 1 980, in Starnberg, at which an oral and detailed presentation of the ideas in this chapter , and other papers by the author relating to the subj ect , served as key inputs . This chapter is a reprint from Mon thly Review. 29 : 3 , July/August 1 97 7 ,

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leration of the transfer of technologies . It is easy to understand that such general slogans even if they are sound - lend themselves to different interpretations . Apart from comnlonplace demagogic attempts by local circles , which cannot envisage development as other than dependent, to take up the slogans , and apart from their verbal and opportunistic acceptance by certain of the external forces which are in practice hostile to the goals of the new international economic order, some serious divergences remain both as to the ultimate goals and as to the means of a self-reliant development within the context of an effective attempt to impose a new world order . Actually, the real issue is whether the alternatives can be defined as . we have j ust done, L e . irrespective of ultimate goals , the choice between socialism and capitalism. In other words , is the goal of autonomous capitalist development in the Third World countries realistic? For the developed capitalist economies are indeed self-reliant, although not economically self-sufficient . In this case, it makes sense to speak of interdependence - even among unequals (for French capitalism is not the equal of German or American capitalism) . But the peripheral capi­ talist economies have so far been externally oriented and dependent , not 'interdependent' . Could they becom� ' self-reliant ' without with­ drawing from the world system of exchange of commodities , techno­ logies , and capital? Could they do it by forcing the world system to readj u st , by imposing an equal , and no longer unequal , division o f labour? Could they attain this goal b y means which define the pro­ gramme of the new international economic order? These issues cannot be evaded . To s um up , does this recent evolution of the Third World call into ,question our theory of peripheral capitalism? I )Vould recall that this theory asserts that there is a fundamental difference between the model of self-reliant accumulation and the model that describes the peripheral capitalist system, thus rej ecting any linear theory of ' stages ' of develop� ment . It excludes the prospect of a mature, autonomous capitalism in the periphery. It asserts that a socialist break with this system is here objectively necessary. Thus , in this very precise sense, it claims that the national liberation movement constitutes a period in the socialist trans­ " formation of the world and not a stage of the development of capitalism on the world scale. This is a permanent question, but one which arises continually in new terms . And it is these new terms that we propose to consider in this article.

II The determining interrelation in a self-reliant capitalist system is that which links the sector producing mass consumption goods with the

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sector producing capital goods . This determining interrelation has been the characteristic feature of the historical development of capitalism in the centre o f the system (in Europe, North America, and Japan) . Thus , it provides an abstract definition of the ' pure' capitalist mode of pro­ duction and was analyzed as such in Marx's Capital. Marx, in: fact , showed that in the capitalist mode of production , there is an objective (L e . necessary) relation between the rate o f surplus value and the level of development of the productive forces . The rate of surplus value is the main determinant o f the pattern of social distribution of the national income (its distribution between wages and profit) , and hence that o f demand (wages being the main source o f demand for mass con­ sumption goods and profits being wholly or partly 'saved ' for 'invest­ ment ' purposes) . The level of development of the productive forces is expressed through the social division of labour - the allocation of the labour force, in suitable proportions , to each of the two sectors . Despite the schematic nature of this model , it nevertheless describes the core of the system . External relations are left out of the model , meaning not that the development of capitalism takes place within a framework of national autarky (economy self-sufficiency) but that the main relations within the system can be understood without including such relations . More precisely, external relations are subj ect to the logic and the requirements of self-reliant internal accumulation . Further­ more , the model clearly brings out the historically relative nature of the distinction between mass consumption goods and luxury goods . In the strict sense of the term , ' luxury' goods are those for which the demand originates from that part of profit which is consumed , whereas the demand which stems from wages increases with the progress o f the pro­ ductive forces . However , the historical sequence in the types of 'mass­ consumption' goods is of decisive importance for an understanding o f the problem i n hand . The structure o f demand in the early history o f the ' system speeded the agricultural revolution by providing a domestic market for food products. Hence , agrarian capitalism came before the expansion and maturity of the capitalist mode in industry. So, from the lessons of this model , we may derive three important conclusions: 1 The emergence of the capitalist mode of production in the regions which were to become the centres of the world capitalist system stemmed from an internal process of breaking-up the pre-capitalis t · (here, feudal) modes. This breaking-up of the feudal relations o f production i n the European rural world constitutes the social framework conducive to the famous ' agricultural revolution ' which precedes - and makes possible - the subsequent 'industrial revolution ' . The prior increase of productivity in agricultur e makes it possible to drive out of the rural world a 'surplus ' (proletarianized) population and simultaneously gives rise to a surplus of marketed foodstuffs necessary for the reproduction

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of this proletariat . The interrelation in time and space of class alliances which enable new capitalist relations to flourish in industry, while it takes various forms , always expresses the same principal condition : the alliance between th� new dominant class (the industrial bourgeoisie) and the landowners (either peasants - after a French-type revolution - or latifundists when the former feudal landowners are transformed and integrated into the market, as in England or Germany) in the context of a nlature and powerful national state. 3 Thus the sUbj ection of external relations (economic and political) to the requirements of internal accumulation gradually shapes the world capitalist system . The latter emerges as a series of central for­ mations , self-reliant and interdependent (even if they are unequally advanced) , and of peripheral formations subj ected to the logic o f accumulation i n the centres that dominate them . So we conclude that , although the vision of a development by ' stages ' (with s ome simply lagging historically behind others) is roughly valid as regard s the gradual constitution of the centres , it is not valid as regards the peripheries . It is precisely this conclusion which is the real obj ect of the explicit or implicit divergences in all the debates about the future o f the Third World . Hence we must now consider the stages in the formation and evolution of the peripheries , and the likely prospects in front of them . For the opposite view maintains (explicitly or implicitly) that , despite their externally propelled origin, the underdeveloped economies are progressing through the specific stages of their evolution towards the constitution of mature self-reliant economies . These could be either 'capitalist ' or ' socialist' for reasons related to a sphere which lies out­ 'side the one which defines our analytical tnethod .

III 'Let us now consider the stages in the evolution of the peripheries of the world capitalist system , at least since the middle of thelast century. This model of accumulation at the periphery of the world system begins , under an impetus from the centre, with the creation of an export sector in the periphery which will play the determining role in the creation and shaping of the market . The underlying reason which rendered possible the creation of this export sector must be sought in the conditions which make its establishment ' profitable' . There is no pressure for central national capital to emigrate because of insufficient possible outlets at the centre; but it will emigrate to the periphery if it can obtain a better return there . The equalization of the rate of profit will redistribute the advantages of this higher return and use the export of capital as a means

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to fight the trend of a falling profit rate . The reason for creating a peri­ pheral export sector therefore lies in obtaining, from the periphery, products which are constituents of constant capital (raw materials) or of variable capital (food products) at production costs lower than those . at the centre for similar products (or for substitutes in the case of speci fic products) . This is therefore the framework for the essential theory of unequal exchange . The products exported by the periphery are important to the extent that the difference between the returns to labour is greater than the aifference between the productivities . And this can be so because the peripheral society will by every means - economic and noneco­ nomic - be made subj ect to this new function of providing relatively cheap labour to the export sector . Here, then, the main main link which characterizes the process of capital accumulation at the centre - expressed by the obj ective relation between wage rate and the level of development of the productive forces - disappears completely. The wage rate in the peripheral expo rt sector will, in this case, be as low as the economic, social , and political conditions allow it to be . As regards the level of development of the pro­ ductive forces , it will be heterogeneous (whereas in the self-reliant model , it was homogeneous) , advanced (and sometimes very advanced) in the export sector , and backward in 'the rest of the economy' . This backwardness (maintained by the. system) is the condition which allows the export sector to benefit from cheap labour . Under these conditions , the domestic market generated by the development of the export sector , will be limited and distorted . The smallness of the internal market explains the fact that the periphery attracts only a limited amount of capital from the centre although it offers a better return . The contradiction between the consumption and production capacities is overcome at the level of the world system as a whole (centre and periphery) by a widening of the market at the centre , the periphery - fully deserving its name - merely fulfilling a subor­ dinate and limited function . This dynamic leads to an increasing pola­ rization o f wealth toward the centre . Once the export sector has expanded to a certain size , however , a domestic market emerges . As compared with the market generated in the central process , it is (relatively) biased against the demand for 'mass ' -consumption goods and in favour of the demand for 'luxury ' goods . If all the capital invested in the export sector were foreign , and if all the returns to this capital were re-exported to the centre , th e domestic market would , in fact , be confined to a demand for mass-con ­ sumption goods ; and the lower the wage rate, the smaller the demand would be . But a part of this capital is locally owned . In addition, the met hods used to ensure a low return to labour are based on the streng­ thening of the various local social classes which serve as conveyor belts : latifundists in some place, kulaks in others , comprador commer ci al

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b o urgeoisie, state bureaucracy, etc. The domestic market will thus b e mainly based on the demand for ' luxury goods' from these social strata. This scheme actually corresponds to the historical reality of the first phase oj the imperialist system . No doubt this phase had its golden age between 1 8 80 and 1 9 1 4 ; but it started earlier for Latin America, and it has sometimes lasted much longer (up to the 1 950s) elsewhere, such as in tropical Africa . It is the age of the 'colonial pact' , the colonial and semi-colonial form of domination exerted over the periphery. As opposed to the central model, this has three qualitatively different features : 1 Here the capitalist model is 'introduced from outside' , by political domination . There is no breaking-up of precapitalist rural relations , but rather (this is quite different) a distortion of them because they are subj ected to the laws of accumulation of the central capitalist mode which dominates them . This is shown in the absence of a prior 'agricultural revolution ' , i . e . the stagnation of productivity in agriculture . 2 The class alliances which provide the political framework for the reproduction of the system are not principally internal class alliances , but an international alliance between. the capital of the dominant monopolies and its (subordinate) ' allies ' , to use an all­ embracing term : the ' feudal lords' (meaning the varied range o f dominant classes i n the precapitalist rural systems) and the ' com­ prador bourgeoisie' . There is no really mature independent natio nal state serving these local classes , but only administrations serving monopoly capital, directly (colonial case) or indirectly (semi­ colonial case) . 3 In this case external relations are not subj ect to the logic of an internal development , but on the contrary are the driving force o f development and determine its direction and pace.

IV This first phase of imperialism is now over . What forces led to this and what type of evolution is taking its place? The engine of change is provided by the anti-imperialist national libe­ ration movement. This movement comprises three social forces : ( 1 ) the (still emerging) superexploited proletariat ; (2) the mass of peasantry, doubly exploited by the local classes which dominate it (the ' feudal lords ') and by monopoly capital which has drawn the ' feudal lords ' into · the ' world market ' ; and (3 ) the national bourgeoisie , at this stage a 'potential' class rather than a 'real ' one , which aspires to alter the terms of the international division of labour so as to acquire an economic base

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o f its own . For the international division of labour of the ' colonial pact ' is simple: the periphery exports only primary commodities , with which it has to buy all the manufactured goods necessary to satisfy its needs , mainly for luxury consumption: i t is not allowed any industry . The national bourgeoisie and the proletariat compete for the leadership o f the national liberation movement, i . e . the leadership o f the peasant revolt . On the whole, this first phase ended in the victory of the national lib e­ ration movement under bourgeois leadership . This victory forced impe­ rialism to revise the terms of the division of labour , and so enabled the Third W orId to start industrializing . We can date this victory: it is earlier in some places (for example in Mexico with the revolution of the 1 9 1 0s , in Turkey with Kenlal Atatiirk , in Egypt with the Wafd , in Brazil and Argentina in the 'populist ' form) and later in the others (in South Asia after the Second World War, in Africa with the independence o f t h e 1 9608 , etc . ) . Except for East Asia and Cuba , where the national libe­ ration movements effected at that stage · a withdrawal from the world imperialist system , everywhere else the triumphant national bour­ geoisie embarked upon a strategy of industrialization which now has a name: the strategy of import substitution . Since the peripheral model is characterized by the specific intercon­ nection expressed by the link between the export sector and luxury­ goods consunlption, import-substitution industrialization will start from ' the end' , i . e . the manufacture of products corresponding to the more advanced stages of development of the centre, in other words, consumer durables . These products are highly capital-intensive and users of scarce resources (skilled labour , etc. ) . The result will neces­ sarily be a distortion ' in the allocation of resources ' favour of these products and to the detriment of the production of mass consumption goods . The latter sector will be systematically handicapped : it will not give rise to any 'demand ' for its products and will not attract any capital or labour to ensure its mordernization. This explains the stagnation in ' subsistence agriculture' whose potential products attract little demand, and which does not acquire a large enough share in the allo­ cation o f scarce resources to enable any serious changes to be made. Any 'development strategy' based on 'profitability' (the structure of ' income distribution, relative prices, and demand being what t hey are), necessarily leads to this type o f systematic distortion. From the ' social' angle, this model leads to a specific phenomenon , the marginalization of the masses . By this we mean a series of mechanisms of various kinds which impoverish the masses : proleta­ rianization, semi-proletarianization, and impoverishment without pro­ letarianization of the peasants ; urbanization and massive increase of urban unemployment and underemployment; etc. Unemployment and underemployment thus have a function different from their function in the central model : the high level of unemployment ensures a nlinimum .

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21 1

wage rate which is relatively rigid and frozen both in the export sector and in the luxury goods sector ; wages do not emerge both as a cost and an income which creates a demand , vital to the central nl0del , but on the contrary figure only as a cost - demand itself originating elsewhere, from abroad or from· the income o f the privileged social classes . Jhe ' externally propelled ' nature o f this type o f development which erpetuates itself in spite of the increasing diversification of the p economy, its industrialization, etc . , is not original sin or a deus ex machina foreign to the dependent peripheral model o f capital accu­ mulation, since it is a model o f reproduction of its functional social and economic conditions . The marginalization of the mas ses is the very con­ dition underlying the integration o f the minority within the world system , the guarantee o f an increasing income for this minority, which conditions the adoption by them , o f ' European' patterns o f con­ sumption . The extension of this pattern o f consumption ensures the 'p rofitability' of the luxury-goods sector and confirms the social , cul­

tu ral , ideological , and political integration qf the privileged clas ses . At this stage o f diversification and reinforcement o f underdevelop­ ment , there appear new mechanisms o f domination/dependence . Cultural and political mechanisms , but also economic ones : techno­ logical d ependence and the domination by transnational companies . The luxury-goods sector, in fact , calls for capital-intensive investments which only the big transnational oligopoly firms are in a position to embark upon and which constitute the material basis for technological dependence . But also, at this stage, more complex forms o f the structure o f o wnership and economic management make their appea­ rance . Experience shows that the participation o f private or public local capital - however subservient - in the process of import-substitution industrialization is quite common . It also shows - at least in the big countries - that a large enough market created by the development o f the export and luxury-goods sectors may make it possible to create a sector producing capital goods . The latter is frequently brought into being by the state. B ut the development of a basic industry and a public sector does not in any way mean that the system is evolving towards a mature self-reliant form, since the capital-goods sector is here used , not for the development o f mass consumption, but to serve the growth o f export and luxury-goods production . So this second phase of imperialism is by no means a ' stage' towards the constitution of a self-reliant economy. It does not reproduce a previous phase of central development, but on the contrary extends the first externally-propelled phase. In fact : 1 The ' agricultural revolution' has still not taken place . We must , however , quali fy this a little . The national bourgeoisie in power has often eliminated s ome former allies o f imperialism and has , among other things , carried out some land reforms on the basis of which a development of capitalism in agriculture has sometimes been

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launched (the 'green revolution ') . Can this developm.ent 'wipe out ' the original backwardness of agriculture and bring the peripheral model closer to the central model? This question must be settled not in 'theory ' , but in ' faGt ' . What we note is that the relative backward­ ness of agriculture has been i ncreasing to the paradoxical point where the Third World countries , the majority of whose populati on is rural, have become importers of food. The reason for this failure is not mysterious , it is political : in our era the bourgeoisie had to be supported by. classes capable o f dominating the peasants , even if these are more broadly based (kulaks instead of large landowners) ; it cannot be supported by the peasant masses whose interests are in conflict with its own . While the central bourgeoisies had the 'neces­ sary time' for a slow primitive accumulation based on alliance with the peasants , those of the periphery face the dual constraint o f exter­ nal pressure from the monopolies and the internal threat of socialism. 2 The dominant class alliances remain international: the bourgeoisie takes the place of the former ' feudal lords' and the compradors as the subordinate ally of imperialism . Because of this, the bourgeoisie dtiring the second phase loses its fornler national character : it is ' compradorized ' . The 'national ' state it dominates therefore remains weak and poorly integrated . 3 The continuation o f the development process remains dependent on exports , which still consist essentially of raw materials . This main source of finance for the necessary imports of capital equipment ulti­ mately determines the rates of growth , and in this sense growth is still externally propelled . The crisis of this second phase of imperialism was opened by t he demand for a ' new international economic order ' . Reduced to its bare outlines , this demand seems to be the following: to impose a rise in the real prices of raw materials exported by the Third World countries in order to acquire further resources which, t ogether with the importing of advan,ced technologies , could finance a new stage of industrialization involving large-scale exports to the centers of ' products manufactured in the periphery with the advantage of favour­ able natural resources and abundant cheap labour - hence the demand for access to the markets of developed countries for these industrial . products. Since 1 973 this demand has constituted the clear common objective of all the Third World countries . It is put forward as the necessary and sufficient condition for completing political independence by giving it an economic basis . It is also presented as a possible joint demand of all the Third World states irrespective of their social options and their ' international sympathies . This new situation raises some essential issues o n which there i s a need for the most open-ended debate. The first issue i s whether the local

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bourgeoisie - which generally dominates these states - can 'combat imperialism' to impose its point of view. There are those who argue that the new international division of labour is the strategic goal of impe­ rialism itself, and that this demand is therefore manipulated by the monop olies , particularly the North American monopolies , and does not express a specific goal of the Third World states in conflict with the strategy of imperialism . These people usually give priority to the inter­ imperialist conflicts (United States , Europe, Japan) over the apparent North-South conflict . We know that this ' theory' was abundantly for­ mulated in connection with the raising of the price of petroleum by OPEC in 1 973 , both in right-wing and left-wing (even ultra-left-wing) version s . But the facts do not bear out this interpretation. In fact the theory only reflects the naive views of an ultra-left which , with wishful thi nking , would like the bloc of bourgeoisies to appear without 'cracks ' on the world scene so as to 'simplify' (on paper) the tasks of the prole­ tariat which , they assume, are everywhere the same, because the prole­ tariat w ould not have to take account of the contradictions between the b ourgeoisies . In the past , the bourgeoisie of the peripheries had clashed with impe­ rialism ., The transition from the first to the second phase of imperialism was not 'planned' by the monopolies : it was imposed by the national liberation movement through which the bourgeoisie of the peripheries won, against imperialism, the right to an industry. But , as we have said, the in d ustrialization strategy pursued during this second phase trans­ formed the relations between the bourgeoisie of the peripheries and the monopolies . The peripheral bourgeoisie ceased to be national and became the subordinate ally of imperialism by j oining in the new division of labour . That ally is now rebelling and demanding new terms for this division of labour. It does not thereby beconle ' national' , since its demand is located right at the heart of the system, but it is rebelling all the same. If that rebellion were to succeed, it would simply inau­ gurate a new phase of imperialism characterized by a new division o f labour . For there is n o doubt that 'in theory' this new division can b e 'absorbed ' , 'co-opted' . But only ' i n theory' , because what counts i n history are t h e unexpected accidents , and there can be some here and there in the peripheries and in the centres (and laden with contradictions , from the second to the third ' theoretical' phase of imperialism . The s econd issue is whether this third possible phase would , or would not , be a stage towards the autonomy of the peripheries . The bour­ geoisies of the Third World argue that it would be , j ust as they asserted at the beginning of the second phase that it would be. But the facts have belied these illusions , which were shared at the time by a large pro­ portion of the left in the Third World . My own view is that if the demands of the peripheral bourgeoisie were to succeed, this would not by any means constitute a new stage along a line of development leading gradually to the flourishing of

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m ature capitalist formations similar to those of the developed centres . Once again, the vision of a linear development by stages will inevitably be disproved . The reason, a quite fundamental one , is that the new division of labour would be based on the export by the periphery of cheap manu­ factured goods , i . e. goods for which t he advantage of low wages (bearing in mind comparative productivities) makes it possible to rais e the rate of profit in the world system as a whole . The world-wide equali­ zation of profit would then modify relative prices and hence would con­ ceal this extra transfer of value from the periphery to the centre . In other words , the new division of labour would perpetuate and worsen unequal exchange . Furthermore , this unequal division of labour would perpetuate the distorted pattern of demand in the peripheries to the detriment of mass consumption , j ust as in the previous phases . There­ fore, the development of the world system would remain funda­ mentally unequal, and external demand would still be the main motive force propelling this still dependent type of development . Need we add that, in this context of renovated dependence, the back­ wardntrss of agriculture would also be perpetuated? No doubt some nuances must be introduced here , because, after all , capitalism would continue the progress in agriculture which it started in the second phase of imperialism, but certainly at rates far lower than the progress to be expected in the traditional and new export sectors and in that of luxury goods production for the domestic market , since these sectors benefit from massive importing of the most advanced world-scale technologies . In this general context, we may well wonder what could be th� real significance of the slogans about ' self-reliant development ' and ' collective self-reliance' which accompany the demand for this new international division of labour. Actually, the first of these slogans would be devoid of all content . It would mean nothing more than the ideological j ustification of the (impossible) claim that a development 'by progressive stages ' within the world system 9f (unequal) division of labour ought to lead to economic independence . On the other hand, the second slogan - ' collective self-reliance ' does acquire a meaning, albeit a particular one, in this perspective. The first two phases of imperialism did not imply any 'co-operation ' between countries and regions of the periphery . Being exclusively o ut­ ward-oriented and limited in their industrialization to the satisfaction of their domestic markets , the peripheral economies had nothing to exchange with each other . In theory, the third phase of the unequal divi­ sion of labour does not call for any more positive co-operation between the Third World countries , apart from conducting a j oint struggle for an increase in the prices of their primary exports (through producers ' associations) , since the ' second wind' of peripheral industrialization

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d derive its momentum from exports t o the. centres . The fact s that the Third WorId countries are highly unequal candidates for taking advantage of this new division of labour . Those best placed as reg ards their economic potential (abundant natural resources , more advanced proletarianization , etc .) and their political solidity ('legitimation ' of the power of the weak local bourgeoisie, military strength, etc . ) co uld advance faster on the path of the new dependence if they also had mark ets in the less developed countries and if they could have direct and cheap access to their supplies of raw materials and food . Naturally, the pr oblematic of the so-called sub-inlperialism is relevant here . An example will illustrate this vision of the interlinking of the 'Third' and ' Fourth' Worlds in the new global perspective . Together , the countries of the Persian Gulf, Egypt , and Sudan constitute - if the political conditions were favourable which is far from being the case today a 'good candidate' . The Gulf would provide the capital ; the . export industry would be concentrated in Egypt; and Sudan would export food to the latter . Let us look more closely at the mechanism of this interlinking. Even if Sudanese agriculture were to be ' modernized ' so as to supply the necess ary exportable surplus, its productivity would still for a long time to come be lower than that of the advanced countries . But Sudanese foodstuffs will have to be competitive with those of North America on the Egyptian market to ensure the lowest possible wages in Egypt . This would be possible only if Sudanese peasants were superexploited (rewards to labour more unequal than the differential productivities) . In its turn, Egypt proletarians would be superexploited since their starvation wage together with their relatively high productivity would make it possible to export their products to the centres . A double and interlinked unequal exchange would operate in favour of the centre; the Sudan would cease to. be directly dependent on . the centre and would become the partner of the higher ranking peri­ phery in which the export i ndustry would be concentrated. "'... ... ........ .·,... ...

v But if this is the content of the organization of the new phase of impe­ rialism , cannot the triple demand for national autonomy, collective self-reliance, and a new world order have quite a different meaning and aim at different goals ? If so , under what conditions ? While the pivot of the neo-imperialist interpretation of the program in question is a new unequal international division of labour condi­ tioning both the internal strategies and the obj ectives of intra-Third World co-operation, this same programme assumes quite a di fferent meaning when one proceeds in the opposite direction, i . e. when one first defines the internal obj ectives of a really self-reliant and ' popular '

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development and then considers the ways in which the world order must be acted on in order to promote the achievement of these obj ectives . A genuinely self-reliant development is necessarily that of the people , because externally-propelled development in all phases of evolution o f t h e imperialist system effectively benefits the privileged dominant classes which make an alliance with the monopolies . Conversely and as a corollary, a 'popular' development can only be national and self­ reliant . For in order to serve the mass of the peasantry, industrialization must first be made to concentrate on improving rural productivity . Similarly, i n order t o serve the urban masses , i t i s necessary t o give up luxury production for the local market and give up exporting , since they are both based on the reproduction of a cheap labour force . Let us co nsider more " closely this authentic strategy aimed both at national independence and social progress . So far the industrialization of the Third World has not been contem­ plated as aiding the progress of agriculture. Unlike the countries of the centre, where the ' agricultural " revolution' preceded the ' industrial revolution ' , the countries of the periphery have imported the latter without having started the former stage. That is the source of the dis­ tortions typical of these countries , and of the renewed dependence · which fetters them . First we must go into . reverse gear . Up to now industry in the Third World has been parasitic , in the sense that is has based its accumulation on extortions from the rural world in real terms (it gets its labour from the rural-urban migration) and financial terms (heavy taxation, internal terms of trade unfavourable to the peasants, etc . ) with no counterpart provided in return to sustain a take-off of agriculture . How can this course be altered? Clearly all cost-benefit criteria, which are necessarily based on reproducing price and income­ distribution patterns, must be entirely abandoned and replaced by other fundamental criteria of resource allocation . Two essential issues are involved here which we will simply point out : ( 1 ) how a 'modern' industrial sector , with its basic guidelines renovated, is to be linked up with the sector of small-scale rural industries which can directly mobi­ lize the latent forces of progress , and (2) why the social form required here is that o f rural collectivization , even at a low level of development of the productive forces , and not the form of 'private' agriculture even if remodelled by a radical land reform . It is only on these conditions that agriculture - which must first makeup its historical time-lag - will be able to finance a healthy industrialization and provide a food surplus sufficient to ensure national independence . Similarly , industry must be made to serve the poor urban masses and no longer be guided by the 'profitability' criteria which favour the pri­ vileged local market and exports to the developed centres . In any case, this kind of remodelled industry cannot find its tech ­ nological models ready-made in the developed countries . Nor can it find them in the technological past of the centres , borrowing their .

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uction techniques of yesterday, as the theme of 'intermediate tech­ 'es ' suggests . This is because the problem here is different , since in s case industrialization has to enable the agricultural revolution to place , whereas in the centre it was based on that revolution . So the issue is not the conditions of 'transfer of technology ' , but the cre atio n of conditions conducive to creativity in this field, not out of m otives of ' cultural nationaHsm' but for objective reasons . Further­ nlore, there is another problem to be pointed out : the borrowed techno­ es are necessarily carriers of capitalist relations of productio n , the social framework required b y the agrarian revolution and rban mobilization must be socialist . This is a fundamental question which reflects the fact that socialism is necessary in the periphery since it is an essential condition of progress and independence and not , there­ fore , the result of an ideological or moral motivation which could be 'free' . We simply raised this question in passing; it is the reason why we shall continue to assert that the national liberation movement of the periphery mainly constitutes a stage in the socialist transformatio n of the world and only secondarily a phase i n the development of capitalism. Although a self-reliant development model is not in theory synony­ mous with autarky, it may lead to it whether we li ke it or not, for obvious internal and external political reasons . This may be the case, not only for vast countries - witness the experiences of the USSR and China - but even for small countries (Korea, Vietnam, Cambodia, Cuba, Albania). So , although autarky in itself is not synonymous with self-reliant development (think of Burma) , it may be the condition for it under certain historical circumstances . But imposed autarky may also, if it is too drastic or total , hamper self-reliant development by involving extra costs which could in some cases be very heavy . For the point is not to reject any theory of compa­ rative advantages , but only to note that if the international division of labor is unequal , the argument of comparative advantages loses its vali­ dity. A country choosing the self-reliant and ' popular ' path may find itself in a situation where it is relatively cheaper to import certain inputs needed to accelerate its development (such as energy in some cases , or certain raw materials , or capital goods) than to do without them . To deal with this type of problem , the liberated states of the Third World could act collectively in two directions : The first is that of mutual assistance . For those Third World countries rich in natural resources which are usually exploited for the sole benefit of the developed countries , could exchange with each other the raw materials that will be useful for their national projects of self­ reliant development . At present these imports nearly always transit through the developed centres which control the raw materials 'markets ' and centralize the payment facilities . By agreements for mutual assistance (trade agreements and multilateral-payments

TRANSFORMING THE WORLD-ECONOMY?

agreements), the liberated countries of the Third World could short­ circuit these middlemen . Moreover , exchanges of technology could accelerate the development of appropriate production techniques , since the problems the Third World countries have to solve are often similar. We can see that this type of co-operation within the Third World is very different from what was envisaged in the ' neo-imperialist context. We are no longer talking of 'common markets' which can only reproduce and aggravate the inequalities of development. What we propose is guidelines for a 'package deal' in the spirit of co-operation in the service of an autonomous national development. The second direction of collective action is aimed at modifying the international division of labour between developed countries and Third World countries in the direction of a reduction of inequalily, and no longer that of a ' renovation ' with no reduction of inequality. At present a large number of Third World countries have already been won over to the idea of confronting the veritable monopoly of the 'consumers ' with associations of raw-materials producers , and of strengthening these . associations by establishing collective support funds . A self-reliance development strategy involves more than this . It requires as a first s tep the national (state) control of the exploitation of its natural resources . By this we mean not only the formal nationalization of that expl oi­ tation, but also and above all the regulation of the flow .of exports and the reduction of the flow of imports required by the internal strategy of self-reliant development. For at present the externally oriented strategy is based on exactly the opposite relation : exports are first pushed to the maximum, solely as a function of the ' demand' (of the centres) , and then the question arises of how to use the export earnings . The unequal international division of labour is based on this strategy . Reducing inequality in the division of labour most certainly implies reducing the flow of raw-materials exports . The incredible resistance of the developed world to this reduction is evidence that the centre, despite so many misleading speeches, cannot do without the pillage of the Third World. If t hat pillage were to stop , the centres would be forced to modify their structures accordingly, in order to adj ust to a new, less unequal international division of labour. Then , and only then , could we begin to speak of a genuine new world order , and no longer merely new terms of the unequal international division of labour. These two general lines - that of a new imperialist order and that o f an order which would really promote progress in the liberation of th e peoples of the Third World - are not just two verbal themes , two possible theoretical alternatives . They are already actualy clashing and are the subj ect of daily conflicts . The main reason for this is the contradictory nature of the national liberation movement . This reflects both the development o f capitalism and its crisis . Hence the trends of capitalism and those of socialism are . constantly clashing within the movement itself, precisely because the ·

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fo rces o f capitalisnl here are still those o f a weak , peripheral , dependent capitalism , which objectively cannot attain the goals of a mature capi­ talism . These forces are clashing in all the regimes of the Third World . We know very well that these bourgeois trends also persist in those co untries that have broken with capitalism. But , conversely, the capi­ talist states of the Third World do not have the complete and unilateral nature of the central capitalist states . Hence the volatility of their regimes and the wide range of situations , ranging from triumphant neo­ co lonialism through shamefaced or crisis-ridden neo-colonialism to nationalism in conflict with colonialism . For the conflict with imperialism has well and truly begun . S o far the themes of the new international order have been totally rej ected , as witness the failure of UNCT AD IV and of the North-South nego­ tiations . At the ideological level itself, the Club of Rome is endea­ vouring to oppose a substitute construct to these themes . The fact is that the themes of the new order involve the aspiration to control natural resources and to strengthen national states , which imperialism does not accept . I mperialism would therefore like to substitute for the new order the ' Rio Proj ect ' (Reshaping of the International Order ! ) which i s an ideological formulation o f the need t o transfer some o f the industries of the centres to the peripheries under the wing of the multinationals . In theory, the new unequal division of labour would suit the bour­ geoisies of the peripheries and the monopolies of the centres . For the transfer of industries would make it possible to recreate in the centre a reserve army of unemployed which a quarter of a century o f growth has reduced to such an extent that the system has lost its 'normal ' flexi­ bility. And this unemployment would raise the rate of surplus value in the centre itself. In the longer run , the centre would develop the new activities that control the whole system - the ' quaternary' (so ftware, research and development , etc . ) , the new leading industries , the mili­ tary sector - thereby renewing and extending the conditions of the Social Democratic hegemony in the centre. But in the long run, as we know, we are all dead . At present resistance to the transfer of industries still largely prevails . And this resistance frustrates the Third World bourgeoisies who , being the weaker partners , would have to bear the whole brunt of the crisis . It then becomes impossible to attenuate the violent social contradictions of the Third World : the food deficit gets bigger, the establishment of export industries is postponed sine die, etc . Hence the political conditions may evolve in a direction favourable to the beginning of self-reliant develop­ ment . This is the reality: the struggle of the Third W orId against the dominant imperialist hegemony. For many reasons , this struggle is still today the main force for the transformation of the world .

8 Technology and Development : NIEO ' s Quest for Technology Transfer * George As eniero

The benefits inventors confer extend to the whole human race . . . And there is this too . Inventions come without force or disturbance to bless the life of mankind , while civil changes rarely proceed without uproar and violence. - Francis Bacon, Novum Organ um , 1 620 The benefits of technological progress are not shared equit­ ably by all members of the international community. NIEO, 1 974

The New International Economic Order (NIEO) is the inheritor of a belief that has survived unscathed in the face o f anlbivalent facts. In the 1 8th century, the Age of Enlightenment , scientific rationalism held the promise for socio-economic and moral progress to all those who had the right to it - namely, the .ascending bourgeoisie. In the 1 9th century, scientific and technological progress was seen as a maj or factor in the development of productive forces which would inevitably clash ' with capitalist relations of production, whose dialectical outcome would be the emancipation of the proletariat . 1 Now, in the last quarter of the 20th century, Third World states demand as their right , through the NIEO,

*A uthor 's note:

This paper was written in 1 980 and presented at the UNU-GPID

Expansion-Exp loitation Sub-group meeting in Port of Spai n , Trinidad , in January 1 98 1 . The' paper was revised as a chapter for this book in November 1 982 , in Port

of

Spain , during the UNU-GPID Final Report Meeting . Th e original paper was intended for the UNU 's HSDP-GPID Series .

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' to benefit from the advances and developments in science and techno­ logy for the acceleration of [their] economic and social development' . 2 The aspiring beneficiaries have changed somewhat in t h e last three cent uries, but the same faith endures , from Francis Bacon's techno­ cr atic utopia (New A tlantis, 1 624) to the New International Economic Or der ( 1 974) . Within the NIEO framework this conviction has acquired a precise name: Science and Technology for Development (STD) . It . derives from the idea that science and technology have played a crucial , all-encompassing , and beneficial role . in the historical and contem­ porary development of the industrialized countries , and that they can have the same developmental impact on the Third World countries if given the chance . The problem, however , as the NIEO sees it, is that although 'technological progress . , . has been made in all spheres o f economic activities in the last three decades , thus providing a solid potential for improving the well-being of all peoples ' , the fact remains that ' the benefits of technological progress are not shared equitably by all mem bers of the international community' .3 Hence the glaring 'technological gap' between the developed and the underdeveloped countries, and the contention that this is one crucial reason for the inability of Third \Vorld countries to develop themselves . To a great extent NIEO perceives the problem of development as a problem o f means, and sees these means - technology being the case in point - as monopolized . by the developed countries . How to acquire these means is what ' technology transfer ' , one of the ten pillars of the NIEO 's Programme of Action, is all about . No one would deny that there is some truth in all this. In a world where the most basic necessities of existence are far from being ade­ quately met, the problem of production how to produce more., how to increase productivity, how to better utilize linlited resources , with what instruments and techniques of production - remains funda­ mental . The stark contrast provided by the seemingly unlimited pro­ ductive capacity of the industrialized countries easily leads to wishful thinking that science and technology, which apparently have served these countries so well , will perform the same wonders in the Third World . Production however is first and foremost a social activity, grounded on s ocial relations and geared to societal aims, and only secondarily a technical matter . It is when this order is reversed, when the problem o f production i s reduced to a mer� question o f means , and when these means themselves are fetishized , that the real developmental issues are obscured and other problems emerge . Implicit in the NIEO programme of action on technology transfer is the assumption that this transfer is feasible (i f di fficult) , desirable, and necessary. This assumption is not gratuitous . It is thoroughly consistent with the develop mentalist strategy that NIEO aims to pursue in · the world-economy, Indeed such a strategy can hardly be implemented

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without a massive transfer of technology from the industrialized countries . It is nevertheless an assumption that must be questioned on all three points , a task that compels us also to question in toto NIEO ' s broader developmental strategy of which it is an indispensable component. Is the NIEO programme of action on technology transfer feasible? To answer this we must look at the global technological structure that parallels the international division of labour, its dynamics and on-going developments , and the maj or institutions involved in technological development . This leads us to relate NIEO ' s demands to global busi­ ness strategies of transnational corporations . Is technology transfer , as the NIEO conceives it , desirable? It is not possible to answer this question without first clarifying what techno­ logy is and how it relates to production and society. Is technology transfer, in the light of the preceding discussion , neces­ sary? This really refers to the following questions . Transfer of what? Transfer for whom? For which purposes?

NIEO as a developmentalist strategy The NIEO was conceived against the immediate background of a dismal failure and a phenomenal s uccess . The failure was that of devel­ opment strategies being pursued in separate ways by Third World countries based on foreign aid , trade , dependency and import-substi­ tution . After almost three post-war decades of such development efforts , NIEO could only conclude in 1 974 that 'the developing countries , which constitute 70010 of the world' s population , account for only 30010 of the world ' s income' , and that the gap between the devel- , oped and developing countries ' continues to widen in a system which was established at a time when most of the developing countries did not eyen exist as independent States and which perpetuates inequality' . 4 The success was that o f OPE C , whose collective action in quadrupling , oil prices caught the entire' world by a double s urprise - the shock of ' realizing how utterly dependent the world is on one single con1modity, , , ' and the disbelief that a handful of countries in the periphery, acting in .'' unison, could have such an overwhelming in1pact on worId events. The lesson was well-learned : Third W orId countries must co-operate with each other and collectively demand , within the framework of mul­ tilateral negotiations , a new international economic order based on improved terms of trade for raw materials , increased control of their own resources and production systems , enlarged access to the world­ market of manufactured goods, accelerated transfer of technology and financial resources , and reform of the international monetary system . While confronting the industrialized countries at the negotiating tables,

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Third World states are to build and promote 'collective self-reliance' among them , conceived in terms of sectorial co-operation (e . g . Tech­ nical Co-operation among Developing countries (TCDC}) , regional . common markets (preferential South-South trade) �nd most impor­ tantly as producer associations, a fa OPEC. As envisaged by NIEO, col­ lective self-reliance is one mechanism 'to defend the prices of their exportable commodities and to improve access to and stabilize markets fo them ; '5 the financial surplus thus redirected and transferred to the producer associations will constitute an enormous potential for financing their development efforts .6 It was a bold move . Finally, it seemed then , the Third World countries had discovered each other in the commonality of their plight and unfulfilled goals , and . were to tackle the gross inequalities of the global economy through concerted action . This historically unprece­ dented event was appropriately accompanied by high-flying rhetoric on the part of b oth its advocates and detractors . And yet, beyond the din of false hopes of a new world o:rder and unj ustified fears of an imminent global disorder, the NIEO is in fact , and was from the very beginning, a developmentalist strategy that is perfectly consistent with the constitutive logic of the world­ economy - that of valorization and accun1ulation of capital on the world scale . Far from challenging the logic of the world-system , it actually only -seeks a more active role in it for the ruling classes of the Third World . Rather than aiming to transform the system ' s basic structure, the international division of labour , it hopes only for its read­ j ustment , for a better accomodation of the peripheral economies . If it makes a strong case of the plight of the periphery, it is in order to strive for ' the active , full and equal participation of the developing countries . . . in the international community' . 7 All the demands of the NIEO cohere into a logically consistent in tegrationist developmentalist strategy. The plea, in a word , is for stengthening the world-economy and (or ' by') strengthening the position of the Third World countries within it . It is within the framework of this readj usted global economy, and in pursuit of its logic of global capital accumulation , where the underdeveloped countries intend to 'catch up ' , eliminate the 'gap ' , and develop themselves. Even the rationale for collective self-reliance and strengthened ' economic integration at the regional and sub-regional levels ' ­ undoubtedly the most progressive component in NIEO ' s development thinking8 finds a higher rationale in the deeper integration of these countries , collectively, in the international economy. Beyond the gap lie the targets that NIEO has set for itself. One such target was concretely forn1ulated in the Lima Declaration of 1 975 : the developing countries should by the year 2000 account for at least 25 0/0 of world industrial production (as against 8 . 6 0/0 in 1 975 and 9 . 0 0/0 in 1 977} .9 The requirements - investments , technology, export market

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absorptive capacity, etc . - of such a full-scale industrialization pro­ gramme are enormous , to say nothing ab out its chances of realization . 1 0 Within this integrationist developmental strategy, science and tech­ nology assume a paramount importance. This is the real motivation behind NIEO 's demands for technology transfer and , consequently, the types of technology being aimed at . If the Third World countries are to compete in the world market according to the theory of comparative advantages , they need the kind of technology that will enable them to produce more efficiently , for the world export market , products that are of competitive quality . That kind of technology being ful ly monopolized by the industrialized countries , the immediate pt:0blem is how to acquire it. NIEO ' s demands for technology transfer aim simultaneously to facilitate the acquisition of foreign technology on improved terms , promote international co-operation in scientific research and development , and to create a �suitable indigenous techno­ logical base' . 1 1 Uncomplicated as it may sound in the
The international technology structure : a statistical overVIew Although there is much discussion within the NIEO framework of 'appropriate' and 'intermediate' technology , locally developed or exchanged between Third World countries (TCDC) , the real obj ect sought for, in fact the real bone of contention in the NIEO nego­ tiations, is advanced technology from the industrialized countries . The choice of technology is to a large extent pre-determined by the type of industrialization strategies being pursued . With export-l ed industrialization there is hardly any choice : to make and sustain any headway in the intensely-competitive export-market of manufactured goods , it is necessary for developing countries to reach existing glob al technology frontiers in the exporting sectors . 12 The imperative of attaining this level may be weaker in the case of import-substitution industrialization, depending on the extent to which national protective measures are able to fend off competitive imports ; but cost-efficiency calculations and the nature of the products themselves dictate , all the same , the necessity to be at or near the world technology frontier . This industrialization policy, aimed at manufacturing luxury goods and consumer durables for the local high-income market (a consumption pattern imitative of that of the industrialized countries , including fixa­ tion with prestigeous foreign brand-names) , requires the importation of advanced capital goods and intermediate inputs . Even Third World

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agricultural development is becoming increasingly technology-inten­ sive, as the Green Revolution proceeds to reorganize agricultural systems . The only strategies whose implementation would be techno­ logically less dependent or even self-reliant - i . e. production for domestic mass-consumption goods with priority to basic needs - are precisely those not contemplated by the NIEO . Hence , the need for imported advanced te dhnology - and the greater technological depen­ dence that this entails - is inherent in NIEO's developmental and industrialization strategies . A quick glance at some empirical data on the structure of global sci.entific and technological development gives an idea of the enormity of the problems that NIEO must tackle through its programme of action on technology transfer . A 1 978 OECD survey of world research and development (R + D) expenditures indicates that Third World countries account for a minis­ cule 2 . 9 0/0 , as against the 97 . 1 % taken up by the developed countries (OECD and COMECON combined) . Within this gross division is a lllore p ronounced concentration of world R + D funds : six countries (USA ; USSR, Japan, Federal Republic of Germany, France, UK) between them spend nearly 85 070 of world R + D funds ; the two super­ powers , USA and USSR, already take up more than half of global R + D expenditures ; and the biggest spender, the USA, spends almost 3 5 070 of world ·money devoted to scientific and technological research and development . 13 Within the United States , as in the other OEeD countries , a similar ' pattern of concentration emerges, here in terms of monopoly firms . In the United States , two-thirds o f R + D expenditures are shouldered by the state and one-third by private firms . But three-quarters of the latter (viz. industrial research financed by private. enterprise) is accounted for by a couple of hundred of the largest transnational corporations (TNCs) , which also receive the bulk of state R + D funds through government contracts (military technology,. aerospace and aeronautics , electronics , communications , energy, health , argriculture, etc. ) . 1 4 Part of these state funds goes to financing the work of so-called 'centres of excellence' of research , which are oriented towards . the frontiers of scientific knowledge. But ultimately the fruits of technological develop­ ment are brought into commercial use by the TNCs through product and process innovation and imitative and adoptive research . The monopoly rent accruing to technological development is safe­ guarded world-wide by the international patent system , whose registry structure reflects the extreme concentration of R + D operations . According to a 1 975 UNCTAD study, 94 0/0 of the world 's patent rights are owned by j uridical entities based in the developed countries , while 60/0 are accounted for by Third World Countries ; of this 6 0/0 registered in the underdeveloped countries , however , roughly 8 5 0/0 of the patents are actually owned by TNCs with headquarters in the US, Federal

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Republic of Germany, France, UK and Switzerland. Only 1 070 , there­ fore, of all the patents registered world-wide are owned by · firms and individuals of the Third W orld. I S Using another indicator , the distribution of world production of capital goods, we find the same dense concentration . In 1 970, world production of the engineering and electrical industries was distributed as follows : 3 . 1 070 was produced by the Third World (a significant number of 12 developing countries produced 92 070 of the Third World ' s miniscule share o f global capital goods production) , 3 6 . 6 070 b y the COMECON, and 60 . 3 070 by the OEC D . I6 In 1 976 , the distribution b y countries o f world exports o f machinery and transport equipment showed an even greater concentratio n : 3 .4 070 was exported by the Third World , 9 . 7 070 by COMECON , and 86 . 9 OJo .by OECD countries . 17 Finally, data on imports by the Third World of machinery and transport equipment from different country groups give an idea o f the magnitude o f the Third World ' s technological dependence o n the . metropolitan centres . In 1 976, 90 .3070 of Third World imports o f these capital goods came from the OECD countries, and ony 5 . 1 070 from other developing countries (South-South trade) . 1 8 The direct costs to the Third World of technology transfer are astro­ nomical. A 1 975 lJNCTAD study estimates that in 1 968 (latest available figures then) , Third World countries spent a total of US $25 ,663 million for foreign technology . It should be noted that this concerns only direct costs , comprised of (a) direct payments for patents , licenses , trade­ works , management fees [5 . 8 070 ] ; (b) importation of capital goods [7 1 . 8 070 ] ; (c) profits on direct foreign investment [6 . 7 070 ] and (d) service payments o f external public debt [ 1 5 . 7 070 ] . 19 Not included in the calcu­ lation are numerous hidden and indirect costs which are not identified properly in the balance of payments due to, for example, trans fer price manipulations in intra-TNC transactions, losses due to restrictive busi­ ness practices stipulated in the licensing agreements , tied-in purchases , etc . Finally , there are the 'social costs ' , which remain incalculable, b ut which seem to interest NIEO less. It is with this type of statistical overview of the international structure of technology productio n and utilization - its monopolization by the 'North ' , the corresponding technological dependence of the ' S outh ' , and the abyssmal technological gap running along the North-South axis that NIEO frames its demands for a new international techno­ logical order , based first and foremost on improving the conditions for technology transfer from the developed to the developing countries . While such quantitative data are factual and certainly substantiate NIEO ' s legitimate concerns , they nevertheless paint a misleading picture , because the conceptual framework is wrong . The dialectics of global technological development, its generation . and expansion dynamics and its unequal and uneven development on a world scale, cannot be understood in terms of a theory and accounting

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s ystems (balance of payments , input-output matrices) premissed on the ass umption that distinct and separable national economies and countries are the basic units of analysis . Such national and in ternational statistics clearly show discrepancies between countries, emphatically revealing North-South ' gap s , b ut they cannot by the them­ selves capture the transnational processes which generate and perpe­ tuate such discrepancies in the first place; in effect , they obfuscate these processes . This i s particularly true with the problematique of tech­ nology transfer , which is inseparable from an analysis of the trans­ nationalization of capital . The international technology structure must be situated within the context of the international division of lab our ; only then will the real problems involved - the causes of technological dependency, the contradictions inherent in the trans nationalization o f production processe s , and t h e developmental implications of imported ' technology systems - be properly understood . In this alternative pers­ p ective , NIEO ' s favoured solution of faci litating technology transfer

on improved conditions itself b ecomes part of the problem .

The ' New International Division o f Lab our ' and tech­ nology transfer It is not by chance that NIEO emerged when it did , and not earlier . Certainly its ' discovery' o f the integral unity of an interdependent inter­ national economic order came a bit late - by a century or s o . But what it was discovering , and to which it was a response , was not so much the 'classical ' international division of labour underlying the centuries-old capitalist world-economy, but rather the emergence of a 'new inter­ national division o f labour ' supporting and perpetuating this same capitalist world-economy. 2o This profound structural change , which began in the 1 960s and intensified in the 1 970s , consists primarily in the transnational reorganization o f production, i . e . the relocation of pro­ duction throughout the world Of, more precisely, the increasing world­ wide subdivision of the production process into separate partial processes at different industrial sites in different countries . These developments are themselves the result of, and monopoly capital ' s response to , qualitative changes in the conditions for the valorization and accumulation of capital . Transnational corporations , as the prin­ cipal organizational form of m onopoly capital , are compelled by the changed conditions for capital valorization and accumulation to relo­ cate segments of their production to new industrial sites (within the centre , but increasingly in the periphery) wherever and whenever pro­ fitability dictates . The transplantation of t echnology systems neces­ sarily goes together with the relocation o f industrial production . Indeed technological developments in production , communication and

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transportation were a contributing factor , even a pre-condition, for the global relocation process to take place . From the TNCs ' profitability criteria , a number of Third World countries emerged as excellent sites for these transnationally - inte­ grated but locally-incomplete production processes . The proliferation in these countries of TNC subsidiaries, j oint ventures , and sub­ contracting and licensing arrangements is responsible for n1uch of the impressive aggregative growth rates of manufacturing value added of the Third World in the last two decades . Indeed, as UNID,O studies covering the period 1 960- 1 977 show, the industrial growth rates of developing countries have been consistently faster than those of the OECD countries (except in 1 976) . 2 1 In 1 977, developing countries attained a growth rate of 1 0 .4070 (up from 6 . 4 070 during 1 960- 1 970 and 8 . 7 070 during 1 970- 1 975) , as against 4 . 1070 of the OECD countries (down from 6 . 0 070 and 3 . 2 070 during the equivalent periods) . This transnational reorganization and relocation of production, taking place world-wide under the aegis of transnational corporations, constitutes a ' new international division of labour ' . It is not the result of the ' New International Econon1ic Order ' ; rather the reverse: it provided the obj ective conditions for Third World countries to b ase their hopes on this global process for a new industrialization phase (after the impasse of import-substitution industrialization) . Wher eas the old international division of labour precluded sustained i ndustrial­ ization of the Third World countries , much less permitted their partici­ pation in the export-market of manufactures , the new international division of labour makes industrial relocation to these countries neces­ sary, as a response to the changed conditions of the global accumu­ lation process . These are the 'irreversible changes in the relationship of forces in the world' that NIEO sees as having 'thrust into prominence the reality of interdependence of all the members of the world comn1unity ' .22 Never­ theless, the new international division of labour carries with it its own contradictions . As NIEO observes , 'the present international economic "" order is in direct conflict with current developments in international political and economic relations ' . 23 What this means , essentially, is that beyond the symbiosis that obtains at a certain level between international capital and Third World elites , the global strategy of TNCs - viz . , industrial relocation - runs into conflict with the long­ run developmental objectives 'of Third World countries I . e . the est a-: blishment of an autonomous and coherent national economies that are no longer a peripheral . The production units relocated to industrial sites in Third Wo rld countries are incomplete by themselves , consisting mainly of branches and stages of a production process that are integrated only tra ns­ nationally by monopoly capital . Decisions concerning these relocated operations are made at the world level , by the transnational firms, in

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consonance with their global business strategies . All other conside­ rations (international co-operation for development , etc . ) are subsi­ diary, incidental, or irrelevant to the dominant logic of global capital valorization and accumulation . These partial processes remain as enclaves ('export processing zones ' or ' free production zones ' , as they are appropriately called) in those countries to where they are relo­ cated, with no significant linkages with other sectors of t he national economies . The disarticulation between sectors which is a structural feature of peripheral capitalist economies is thus maintained . The extraverted nature of peripheral capitalism is reinforced by such an industrialization process . Essentially oriented to the world market as it is , local industrial needs can hardly compete with foreign demands; and they are therefore largely ignored . Scarce resources (skilled labour, local capital participation , infrastructural investments , etc . ) are chan­ nelled into the export sector, thereby accentuating the sectorial dis­ tortion of t he economy. In short, while it provides considerable stimuli for industrial growth (but which accrues only to a dozen developing countries , in any case) ,24 the new international division of labour perpe­ tuates. the basic structural problems of underdevelopment ....: depen­ dency, extraversion, disarticulation (lack of intersectorial coherence), and distortion ('growth poles ' concentrated in a few areas and stag­ nation of the rest of the economy) . 2,5 The same dilemma is faced by the developing countries with respect to technology transfer . For them the objectives are three-pronged : to acquire advanced technologies from the metropolitan centers; to adapt, modify and diffuse them through the rest of the national economy ('spill-over effects '); and to build an adequate and autonomous techno­ logy infrastructure based on the imported and indigenous technology systems . In theory, these obj ectives are supposed to be mutually sup­ portive; in current practice , they are often irreconcilable . Given NIEO' s developmental approach , the first obj ective can only be carried out through the operations and co-operation of transna­ tional corporations . At a glance , this seems perfectly logical : the reloca­ tion by TNCs of production processes to industrial sites abroad is necessarily accompanied by the transplantation of the requisite tech­ nologies there . This the TNCs do at nobody' s urging but solely on their own corporate imperatives . Here technology comes in a 'package ' , to use the current j argon, along with capital, management, etc . as part of the industrial relocation set-up . The institution at the receiving end is in most cases a TNC subsidiary, either l OOOJo -owned by the mother company or a j oint-venture with local equity participation . It is obvious that the ' host country' can do little with this kind of transfer , except to offer ideal investment climates to attract TNCs , in competition with other countries . It is equally obvious that this is not even a transfer as understood in the NIEO framework (L e. country-to-country transfer) , but simply an intra-corporate geographical transfer. The utilization of

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this technology is exclusive to the local affiliate, safeguarded by patent protection . If the mother company's global strategy so dictates , the entire processing operation may be withdrawn and transferred else­ where, along with the technology . Furthermore, these production processes are in most cases incomplete processes , and , correspon­ dingly, so are the technologies involved . One cannot speak of acquisi­ tion of technology by the host country in any meaningful sense. The predominance of this type of private technology transfer has resulted in serious problems for developing countries . Uncontrolled technology imports , based solely on the requirements of profit-oriented decision-making by international capital and local partners , have had deleterious effects on the host countries . The unsuitability of these ' technologies (capital- and energy-intensive technologies brought into countries of high unemployment and scarce energy resources) , the envi­ ronmental damage, negative social and cultural effects , overpricing , etc. - all this is widely understood now , but far from being corrected.26 For reasons of their own, TNCs may prefer not to utilize their technologies themselves but instead com mercialize them through licensing arrangements and management-contracts , or even ' sell ' them outright (such as ' turn-key plants ' ) . This method of technology transfer may offer at least some possibilities for the government of the host country to exercise some influence over the choice of technology with respect to national developmental obj ectives, and to pr ovide some bargaining support to the local fir m so as to ameliorate the ternls and conditions of transfer , especially if the receiving party is a public enter­ prise . Here one speaks of an ' unbundled technology package' which may allow some leeway for bargaining and control. But these prove to be very limited possibilities , for one simple reason : within this frame­ work , all considerations concerning technology transfer are subordi­ nated to one o ver-riding logic, the accumulation and valorization of capital. Other developmental and social 'requirements ' o f the country

will not be permitted to interfere with this logic. It does not matter whether the buyer or user of the technology is a foreign affiliate, a domestic private firm or a state enterprise, so long as profitability is the criterion; the government' s other considerations (employment absorption , environmental protection, etc. ) become subsidiary at best or simply incompatible . Public transfer of technology is often cited as an alternative, where states or international organizations , and not private firms, are the sources of technology . This mechanism usually operates within a ' foreign aid ' framework , and often consists of infrastructural develop­ ment proj ects , supply of public social services , exploration of natural resources , energy development, and supply of military and police technologies . NIEO puts much emphasis on this mechanism, while recognizing that the maj or source by far will continue to be private firms . In practice, public transfer clearly plays a secondary and

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23 1

complementary role to that of private transfer . It helps to establish some of the institutional and infrastructural preconditions for private technology transfer to take place. Thus foreign states may help Third World States to set up the infrastructure for export-processing zones , assist in securing a m.inimum stability of the over-all system, and there­ by prepare a ' favourable investment climate' for the- transnational corporations. 2 7 An important component in NIEO ' s programme of action on tech­ nology transfer concerns South-South transfer . This indeed is a maj or step forward, as the developing countries share by and large the same problems and have much to learn from each other ' s experience in developing their own technology systems . China' s technological developments over the last three decades are of great importance here, to cite but one example . But this alternative can only progress as far as NIEO puts enough impetus to it - and within NIEO ' s scheme of things it is advanced western technology neces sary for the export-oriented industries that matter most . 28 I f the acquisition of advanced nlodern technology is difficult enough, the second obj ective - the diffusion and adaptation of such technology through the rest of the economy - is even more intractab le . This follow as a consequence of the predominance of private transfer o f technology. Both the provider/seller and t h e user/buyer of technology will in their own interest see to it that the technology concerned will retain its scarcity on which monopoly rent is based . 'Seepage " and ' spill­ over effects ' will therefore be reduced to the minumum . A host of insti­ tutional instruments are available for this purpose, patent rights and restrictive stipulations in licensing contracts being the most common .29 This contradiction is nothing else than the conflict between social use and private appropriation of means of production, a fundamental con­ tradiction of capitalism. According to the degree of dissemination of the transferred techno- · logy in the industrial structure of the recipient country � the methods of transfer may range from ' closed circuit ' to ' open ' . Intracorporate transfer and licensing agreements are , by nature , closed-circuit mecha­ nisms . In many cases , not only does the licensor see to it that technical know-how does not seep out into the industrial environment; it even makes technology absorption by the licensee impossible, by preventing the latter from continuing to use the technology after the termination of the agreement . This practice is the reason for the insistence by Third Wor ld countries that technology transfer through licensing should be regarded as purchase of technology, with all the ownership rights transferring to the purchaser, just as any other commodity in the market . Once again , in this context, 'technology transfer ' proves to be a misnomer . What is involved is technology commercialization, (which becomes possible through the patent system) , with all the

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consequences that this implies . 30 The preceding discussion leads us to conclude that the third objective - building an adequate autonomous technology infra­ structure based on imported and indigenous technology systems - will continually recede into the horizon of unachieved aspirations . NIEO' s policies o n technology transfer are inherently contradictory because , while aiming for decreased technogical dependency in the long run , they have the effect of increasing that dependence in the short term - and there is no way of knowing how far that 'long run ' will have to be. And this contradiction itself is the consequence of NIEO ' s depen­ dent developmental strategies based on increased integration with the capitalist world-system . The world-system now finds itself in the throes of the most severe structural crisis in the post-war years . 3 1 The greatest boom in capitalist history has come to an end , and has been succeeded by a phase of dece­ lerated or even negative growth rates , falling rate of profit , declining investments , increased interest rates , increasing unemployment and heightened political instability everywhere - all these intensi fying pressures to revise the modalities of the international division of labour . The boom in the centre that provided the impetus for the export-led boom in some areas in the South , furnished the dynamism for the new international division of labour , and gave rise to Third World expect ations of 'prosperity for all within the international community' , has all but fizzled out . Contradictions , which are always there but easily glossed over by "the illusion of high growth rates , ate again clearly in the open. NIEO 's progress , or lack of it , since 1 974 reflects these intensi fied contradictions . In the course of its very first year , as Karl P . Sauvant notes ,32 there was already a significant change in NIEO' s tone con­ cerning international capital , from a triumphant and exigent 1 974 ' Declaration and the Programme of Action on the Establishment of a New International Economic Order ' to a more subdued and solicitous 1 975 ' Resolutio n on Development and International Economic Co­ operation ' . In 1 974 right after OPEC 's triumph and the 'commo­ dities boom ' , a year of generally favourable economic performance of the world-economy - NIEO pronounced itself on the transnational corporations : while encouraging their operations in the developing countries , it asserted the Third World' s right of 'regulation and super­ vision of the activities of transnational corporations by taking measures in the interest of the national economies of the countries where such transnational corporations operate on the basis of the full sovereignty of those countries ' .33 This was repeated the same year in the ' Charter of Economic Rights and Duties of States ' . In 1 975 the tone was very dif- " ferent : the quest t o control the activities of TNCs was silently dropped; only the solicitation of their presence and co-operation was retained , and further encouraged . -

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The reason for this change was the 1 974/7 5 world recession, whose impact on the centre was only exceeded by its devastating effects on the , periphery. Yet one more recession in the intensifying structural crisis o f th e world-economy struck the message home - how utterly and hope­ lessly dependent developing countries are on international capital and on the world-market . Technology transfer, as envisioned by NIEO, is once again at a cross­ roads, with no clear directions to go . The dynamic period of inter­ national technology transfer, marked by a relative harmony of interests between international capital and the Third World elites , is giving way to a series of new grave difficulties .34 The intensifying competition in the . world-market, within OECD, between OECD , COMECON and now also the NICs ('newly industrializing countries ' ) , once again puts into question the modalities and logical consequences of the inter­ national division of labour . In the technology field , transnational capital is attempting to surmount the crisis by rationalization (cost­ reducing reorganization of production techniques), innovation, and further relocation, but each of these solutions creates more problems in turn . Rationalization and relocation only aggravate the unemployment problem in the centre , while innovation is severely constricted · by low investment rates, high interest rates, and low p ro fit rates . Relocation of production processes to low-cost areas abroad is only reasonable as long as profitability rates hold up, but the situation is precisely the opposite . As for the NICs, whose masses have paid arid continue to pay an enormous price for their export-led industrialization, the objective raised by NIEO in 1 974 - ' improved access to markets in developed countries through the progressive removal of tariff and non-tariff barriers and of restrictive business practices ' 35 remains as distant as ever . Competition in the market is fuelling competition in technological R + D which remains the exclusive domain of the transnationals . 'The capacity to innovate in the manufacturing industries and in the service sector which is linked to it is vital for the competitiveness of the OEeD countries in the 1 980s ' ,36 says a 1 980 OECD study . So that OECD-based firms can maintain their technological and economic dominance world­ wide, ' . . . it is necessary that the rate of innovation of technologies retained by the North be greater than the accelerating technological obsolescence resulting from technology transfers to the South' .37 Easier said than done for the North , as the OECD studies recognize, because such a drive for technological innovation can only be undertaken under favourable economic conditions . But the prospects are worse in fact for the South, for that reason. Bacon 's technocratic dream of a New Atlantis , which is also that of the New International Economic Order , where the benefits o f science technology ' extend to the whole human race' , remains a distant dream. Jose Arcadio Buendia , the unforgettable character in Gabriel Garcia

TRANSFORMING THE WORLD-ECONOMY?

Marquez' novel Cien alios de soledad, was also in quest of 'los grandes inventos � coming from across the seas . En el mundo estan ocurriendo cosas increibles - Ie decia a Ursula - . Ahi mismo , al otro lado del rio , hay toda clase de aparatos magicos , mientras nosotros seguimos viviendo como los burros . 38 Nunca llegaremos a ninguna parte - se lamentaba ante Ursula - . Aqui nos hemos de pudrir en vida sin recibir los beneficios de la ciencia . 39 Jose Arcadio Buedia believed that progress for Macondo was possible only by acquiring the great inventions from abroad . His quest t o acquire them was frustrated at every turn. His frustrations could well b e NIEO ' s , too .

Technology and the developmental proj ect Should we lament the fact that technology transfer, as the obj ect of NIEO demands , has neither been accelerated nor made more accessible cost-wise to Third W orId countries to any significant degree? This pre­ supposes the question of whether technology transfer, as envisaged by the NIEO, is desirable in the first place. This leads us back to consider what technology is , and its relation to production and development . All production necessarily involves technology, as instruments and techniques of making things . But production is first and foremost a social activity, grounded on social relations and geared to societal aims . These social relations define in concreto the production complex: who produces what for whom and with what means? In a capitalist s ocial system , and in contrast to a society of direct pro­ ducer s , what are produced, by whom, for what purpose and by what means , are all decided by the owners of the means of production , by the . o wners ofcapital. In this system of generalized commodity production, . the labour process, the organization of work , the instruments and techniques employed , are all dictated by the preponderant pursuit of maximization ofpro fit and minimization of risk . Efficiency is geared to the expropriation of surplus value; the organization of work is meant to assure domination over labour . The types of technology used and . developed in any particular production process incorporate the logic of the system which determines this process , and are therefore never neutral . Capitalist technologies are necessarily carriers of capitalist relations of production .40 The historical development of capitalism has gone far beyond the initial separation of workers from the means of production . Since the . Industrial Revolution, and at an ever accelerating pace during th is century, capitalist technological development has meant the steady

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degradation of work, as the sub-title of Harry Braveman ' s masterful study concisely puts it . Modern technology has made it possible for the division of labour to become increasingly complex and for production p rocesses to be reduced to the simplest operations ; the over-all result is that workers have lost all holistic conception of the work process , the easier for them to be dominated. This is the obj ective meaning of Herbert Marcuse' s thesis that 'the li berating force of technology (the instrumentalization of things) turns into a fetter of liberation : the instrumentalization of man . '41 Not that modern technology has become a Frankenstein monster to its master , but that the exploitation of man by man has become ever more effi­ cient, pernicious and intractable through the medium of technology. Modern technology has so altered the production process that whereas until recently the direct appropriation of the means of pro­ duction was the necessary medium of control (and expropriation of surplus value) by capital, this is no longer absolutely necessary in a growing nUITlber of cases , at various levels of the production process . Control of the vital points of technology systems is sufficient , in such cases , to assure the accumulation of surplus value generated in the process as a whole .42 As we have seen in the earlier sections of this chapter, the greatest strides in technological innovation and development are being made by transnational corporations . Technology for production has become the gigantic industry of production of technology, and this is fully in the hands of monopoly capital, from R&D to production, utilization and commercialization. Whether the trans nationals sell these technologies as commodities , or utilize them under licensing arrangements and j oint ventures , they are able, by these means , to appropriate some of the sur­ plus value generated by the production processes using these . technologies . The impact of technological development in the twentieth century is not confined to the production process . Paralleling the increasing effi­ cency in producing things is the increasing. efficiency i n controlling people; having passed into the direct service of capital , science and technology have entered into the direct service of the State. Scientifi"c rationalism has become a veritable totalitarian ideology that pervades all the interstices of modern social life and dominates the develop­ mentalist conception and practice of societal organization and social change.43 The technocratic ideology is even more insidious because, like the capitalist ideology of which it is a variant , it rides on the claim to neutrality and universality, a claim all too readily reinforced by the self­ serving consensus of contemporary regimes purporting to be ' socialist ' . It is not surprising that the technocratic vision also inspires and pervades the demands raised by the NIEO . The technocratic vision is irresistible in its simplicity and optimism. It reduces complex social problems into technically and administratively

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manageable dimensions , promises their solvability through rational negotiation and scientific means , and contains within itself the idea o f ever-ascending progress for all those who have a right t o it . The appro­ priation of tasks , from problem-identification to problem-solving and implementation, legitimizes and reinforces the preponderant role of technocrats and problem-solvers in the economy, government and research . 44 In a world riddled with contradictions , the technocratic vision upholds the illusion that conflicts and problems can be solved technically, by those who have the monopoly of scientific knowledge . Francis Bacon ' s credo , expressed in Novum Organum ( 1 620) , remains that of today ' s New Order technocrats : science can solve society' s problems painlessly, and usher in an era of plenty and well-being for all , while attempts by the people to tackle their problems their way will only lead to civil strife and violence . Thus the ' Green Revolution ' is imposed from above, as an attempt to pre-empt authentic 'red' revolutions from below. To sum up what has been said so far : technology, as a complex o f tools and equipment , s kills and knowledge needed for production (o f goods and services), necessarily incorporates within this complex the social relations and the organizational logic of the social system which produced it . Technological development , whether it comes about by orginal invention, imitation, or adaptation, is induced by the critical needs and overall dynamics of the particular society in question . Thus , a capitalist or socialist s ociety requires its own specific technology, and so does a developing society trying to respond to its specific production needs . The transfer of technology from one system to another thus raises the question of the social ' appropriateness ' of the technology being transferred . 45 Extensive studies have shown that many of the large-scale capital­ intensive technologies brought into the underdeveloped countries are unsuitable to local needs and resource requirements . They are usually ' very costly relative to t he financial resources locally available; they require an educational and industrial infrastructure which are not always congruent with the developmental priorities of developing countries ; and their disruptive social and cultural consequences tend to be much more abrupt than in their culture of origin . Coming from industrialized countries faced with high labour costs, they are normally designed to be labour-saving ; their utilization in countries with high unemployment rates thus aggravates socio-economic problems instead of contributing to their solution . Very often they require more energy to operate, and their maintenance costs are very high . Worst of all , the ready recourse to imported technology fosters on the local population a psychological dependence on the Centre countries as the source of ready-made solutions - 'solutions ' which are in fact a source of problenls of the Third World . If the driving force of technological innovation remains concentrated in the monopoly firms of the Centre

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countries , ' developing . countries will be vulnerable to technological choices made , not only outside of but contrary to , their system of prio.;.: rities and needs. All of this is to say that if NIEO' s demands for technology transfer are motivated -- as the NIEO documents profess - by a desire to bridge the widening ' technology gap' between the metropolitan centres and the Third World, to equip the latter with the latest technologies in order to bolster industrial and agricultural productivity, and thereby to lessen Third World dependence on the Centre countries , the over-all and long­ run res ults could paradoxically be quite the opposite . What we are witnessing now , which would be greatly accelerated if the NIEO demands for technology transfer were to be successfully pursued , is the steady transformation of the world i nto a technological monoculture , with the Periphery utilizing the same industrial processes , agricultural methods , managerial techniques , transportation systems, communi­ cation networks, computerized data centres , etc. developed and con­ trolled by the Centre. If this type of technology transfer were to be accelerated, as the NIEO demands, the global system of dominance relationships will not only be retained intact, it will be further strength­ ened at a qualitatively higher level . The ' new' international economic order will, in its basic structure and accumulation dynamics , be very similar to the ' old ' . Our general considerations on the desirability o f technology trans fer , . as conceived in the NIEO framework, are not meant to deny blankly the ' necessity for borrowing technology from abroad . They are intended rather to put the problematique of technological development in a dialectical perspective, which enables us to be aware and wary of the possibility of what lean-Paul Sartre calls ' counter-finality' ,46 the ever­ present possibility that the end result of social action could turn out to i be something completely unexpected , or worse, the opposite of what was origi nally i ntended . History is full of counter-finalities , which become easy enough to see with the benefit of hindsight. The challenge in critical social theory is to be able , to the extent possible , to anticipate dialectically where present action could lead us . This necessitates, as an initial step , constant questioning of our assumptions and presumptions about social reality . The assumption inherent in the NIEO demands of the benevolence of science and technology, the neutrality and universal applicability of technological knowledge , the unilinear technological determinism that underlies the developmentalist model, all this must be sUbjected to a critical and dialectical examination, if the Third World is to avoid the counter-finality of becoming ever more dependent and dominated by the Centre of the world-system, through the very process by which it hopes to lessen that dependence and domination . 47 It is in the light of these considerations that one should approach the technological needs of the Third World . There is no question that now more than ever the Third World is in urgent need of adequate and

23 8

TRANSFORMING THE WORLD-ECONOMY?

appropriate technology, and that some of this can be acquired from abroad . It cannot be denied that the developing countri'es are greatly ' hampered' in their development efforts by, anlong other things, the deficiency of their t echnological infrastructure and the meagerness o f their present scientific and technical capacity. But it is equally clear that , while borro\ved (or purchased , or imposed) technology can to some extent be modified and adapted to suit local nee ds and resources , it is- never j ust a set of techniques and equipment alone, but implies built-in structures whose impact go well beyond the purely technical . Our focus in this chapter on the problem of technology transfer only serves to highlight what really is the central issue involved: the necessity to choose the developmentalproject. Only in relation to this primordial political choice can Third World countries proceed t o tackle the concrete technical problems of production ' and the technological choices that they entail . This leads us back to the theme of this book , the transformation of the world-economy, and the critical appraisal of the NIEO ' s potential and limitations in taking on this historic task. From what we know about the NIEO , it is a developmentalist strategy aiming only for readj ustment of the existing international division of lab our, to the extent that this is permitted by the dominant forces and the underlying logic of the capitalist world-system . It is in pursuit of this integrationist strategy that the demands for technology transfer are raised . Our study of the concrete ,problems involved would caution u s fronl imagining that the NIEO demands in this particular crucial area could get very far. Given this, the plea is for a radical reconsideration of what the obj ectives are, in the first place. It is raised as a theoretical problem, but , as always , it calls for a political decision. The choice remains as it was when the NIEO emerged from a generalized dissatis­ faction with the world-system: developmentalism , with all its contra­ dictions and paradoxes , or social transformation in its total global meaning . 48

Notes 1 Marx was clearly an exception in rejecting technological determinism, an

exception all too easily lost to the overwhelming optimism of his contempo­ raries on the long-run emancipatory impact of technological development . The determinist view is firmly entrenched in the official theory and practice of existing ' socialist' states . See Nathan Rosenberg, ' Marx as a Student of Technology' in Mon thly Review, Vol. 28, No. 3 (July!August 1 976) pp. 56-77 ; Harry Braverman , Labour and Monopoly Capital (Monthly Review Press , New York, 1 974) pp . 1 4-24 .

TECHNOLOGY AND DEVELOPMENT

2 Chapter I I , Article 1 3 , para 1 , Charter of Economic Rights and Duties of States, UN General Assembly 328 1 (XXIX) 1 975 . 3 UN General Assembly, Declaration on the Establishment of a New Inter­ national Economic Order, 320 1 (S-VI) , May 1 974. 4 NIEO Declaration , ibid . 5 Part VII , NIEO Programme of Action, UN General Assembly, 3202 (S­ VI), 1 97 5 .

6 See Samir Amin, ' NIEO and Strategy for the Use of Financial Surpluses o f Developing Countries ' , A lternatives (Vol I V , No . 4 , March 1 979). 7 NIEO Declaration , op. cit . 8 See Herb Addo's essay in this book for a discussion of the world-system transformation potential of this particular component. Whether this proves to be a valid or arrested transition potential depends , in Addo ' s view, o n how NIEO pursues collective and individual self-reliance, and towards which goals .

9 UNIDO, World Industry Since 1960: Progress and Prospects (UNID O : Vienna, 1 979) , Table 1 1 . 1 . 1 0 See the thorough study undertaken by UNIDO for its Third General Conference (New Delh i , 1 980) , Industry 2000: New Perspectives. This study finds the Lima target unattainable, given the present trends .

1 1 Part I V , NIEO Programme of Action. 12 See UNIDO, op . cit . Chapter 2 , ' International Flows o f Technology' . 1 3 OECD , World R + D Survey, 1 97 8 ; UNIDO , ' International Flows of Technology' .

14 OECD , Technological Gaps (Paris 1 970) : R Murray, ' The International­ ization of Capital and the Nation State ' , New Left Review No . 67 (May­ June 1 977) p. 90. 1 5 UNCTAD , Major Issues A rising from the Transfer of Technology to Developing Countries (New York, 1 975). 16 United Nations , The Role and Place of the Engineering and Electrical Industries in National Economics and the World Economy, Vol. 1 , 1 974. 17 United Nations , UN Handbook of International Trade and Development Statistics, 1979. 1 8 Ibid . 4 . 2 per cent was imported from Eastern Europe (including USSR) and 0.03 per cent from Socialist countries of Asia . 1 9 UNCTAD , Major Issues . . . op . cit . p . 28 . 20 The following discussion is based on Folker Frobel , Jiirgen Heinrichs , Otto Kreye, The New International Division of Labour (Cambridge University Pres s , 1 980). See also Froobel's and Kreye ' s contributions in this volume. I follow Immanuel Wallerstein' s concept of 'world-economy' which assumes that 'there exists an " economy" wherever (and if but ony i f) there is an ongoing extensive and relatively complete social division of labour with an integrated set o f production processes which relate to each other through a "market " which has been "instituted " or " created" in some complex way . Using such a concept, the world-economy is not new in the twentieth century nor is it a coming together of " national economies " , none of the latter constituting complete divisions of labour. Rather , a world-economy, capitalist in form, has been in existence in at least part of the globe since the sixteenth century. Today, the entire globe is operating within the framework of this singular social division of labour we are

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calling the capitalist . world-economy . ' (From Wallerstein, ' Patterns and Prospectives of the Capitalist World-Economy ' , mimeo , 1 980, p. 1 . ) 2 1 UNIDO , World Industry Since 1960: Progress and Prospects, Op e Cit . table II, 4 . See Frobel 's thorough and detailed study in this book.

22 NIEO Declaration, p ara 2 and 3 . 2 3 Ibid. 24 A total of only ten developing countries accounted for nearly 75 per cent of the total Third World increase in manufacturing value added in the period of fastest growth ( 1 966 to 1 975) ; while four of them (Brazil, Mexico , Argentina and South Korea) were responsible for 52.2 per cent. See UNIDO , Industry 2000: New Perspectives, OPe cit . p . 5 9 . 2 5 See Samir Amin, A ccumulation o n a World Scale (Monthly Review Press : New York, 1 974) . Chapter 2, part 2. See also his ' Le houvel ordre econo ­ mique international : quel avenir ? ' in Revue Tiers Monde, t. XXI , 8 1 , Janvier-Mars 1 980. 26 This will be taken up in the last secti on o f this paper . 27 See Dieter Ernst, ' International Transfer of Technology, Technological Dependence and Underdevelopment ' in D . Ernst (ed .) The New In ter­

national Division

of Labour,

Technology

and

Underdevelopmen t

(Campus Verlag: Frankfurt , 1 980). 28 As in the North-South case, South-South technology trans fer may take place through public or private trans fer mechanisms. For the latter , see Peter O ' Brien, ' Third World Industrial Enterprises : Export of Technology and Investment ' in Economic and Political Weekly; Vol . IV, Nos . 4 1 , 42 and 43 , Special Number, 1 980. See also S . Lall , ' Third World Technology Transfer and Third World Transnational Companies ' , as well as P eter O ' Brien et ale ' Direct Foreign Investment and Technology Exports Among Developing Countries : San Empirical Analysis of the Prospects for Third World Co-operation ' , both in UNIDO, International Flo ws of Techno­

logy, Ope cit . 2 9 For one case illustrating this dilemma o f technology acquisition and tech­ nology diffusion , see George Aseniero, ' Multinational Corporations and Transfer of Technology' , in W. Clemente, F. Bacungan and F. Laxa (eds . )

Multinational Corporations in the Philippines (Technology Resource Center: Manila, 1 979) . See also ' Patent Pressure on Manila' in Asiaweek, · 23 June 1 978, pp . 35-6.

30 See Constantin Vaitsos , ' The Process of Commercialization of Technolog y in the Andean Pact ' in H . Radice (ed . ) International Firms and Modern Imperifllism (Penguin, London, 1 975) p . 1 83 . 3 1 For an all-emb racing study o f the contemporary crisis see Andre Gunder Frank ' s three volumes : Crisis: In the World Economy, Crisis: In the Third World (both by Heinemann, London , 1 980 and 1 98 1 , respectively) and Reflections on the World Economic Crisis (Hutchinson , London, 1 98 1 ) . See also Frobel ' s and Kreye ' s chapters in this boo k .

32 Karl P . Sauvant, ' The NIEO Programme : A Framework for Restructuring the World Economy? ' in D. Ernst, The New International Division of Labour . . . OP e cit . 3 3 : NIEO Declaration, OP e cit . para 4(g). 34 See Dieter Ernst , ' L ' age d ' or du transfert de technologie, touche-t-il a son term? ' in Le Monde diplomatique, December 1 98 1 , pp. 1 0- 1 1 .

TECHNOLOGY AND DEVELOPMENT

24 1

35 NIEO Programme of Action, OPe cit . 36 OECD , Changement technique et politique economique: La science et la technologie dans Ie nouveau contexte socio-economique (Paris , 1 980) quoted in D . Ernst , Le Monde diplomatique, OP e cit.37 OECD , Les enjeux des transferts de technologie Nord-Sud (Paris, 1 98 1 ) , also quoted i n ibid . 38 Gabriel Garcia Marquez, Cien alios de soledad (Editorial Argos Vergara: Barcelona, 1 975). ' Incredible things are happening in this world ' , he said to Ursula. ' R ight there , on the other side of the river, there are all kind of magica, instruments , while we (here in Macondo) continue living like donkeys . ' (p . 1 3) 39 'We will never reach anywhere' he lamented to Ursula . ' Here we shall rot our lives away without receiving the benefits of science . ' (p . 1 6) 40 See Harry Braverman, Labour and Monopoly Capital, Op e cit . , particu­ larly Chapter 9, 'Machinery' ; and see also Karl Marx, Capital, Vol. 1, par­ ticularly Chapter 1 4 onwards . 41 Herbert Marcuse, One-Dimensional Man (Beacon Press : Boston, 1 964) , p. 1 5 9. 42 See Samir Ami n , Imperialism and Unequal Development (Monthly Review Pres s , New York , 1 977) p. 1 72. 43 See JUTgen Habermas, La Technique et la science comme ideologie: La Fin de la lnetaphysique (Gallimard , Paris , 1 978) for a critique of the technocra­ tic model of d ecision-making and a response to Max Weber ' s praise of rationalism . 44 See lohan Galtung , Methodology and Ideology (Christian Ej lers , Copen­ hagen, 1 977) . 45 See Wilfred A. Ndongko and Sunday O . Anyang, 'The Concept o f "Appropriate Technology" : A n Appraisal from t h e Third World ' , in Monthly Review (February 1 98 1 ) , pp. 3 5-43 . 46 lean-Paul Sartre , Critique de la raison dialectique (Gallimard, Pari s , 1 960) , p . 23 5 . 47 See Herb Addo, 'Beyond Eurocentricity: Transformation and Transfor­ mational Responsibility' in Addo et al., Development As Social Transfor­

mation (forthcoming United Nations University publication, 1 983) . 48 For a fuller discussion o f the reasons for this choice, see Addo e t al. ibid .

Part 4 The NIEO as a Valid Transition

�I ··

9 Approaching the New International Economic Order Dialectically and Transformationally * Herb Addo

Introductio n : identity and purpose This chapter deals with the well-trodden thesis that the capitalist world­ economyl has always been characterized by the concentration and the centralization of capital; and that , in its inter-state context , it assumes the form of the unequal incidence of accumulating capital between the centre and the periphery parts of the world-system . The chapter is self­ consciously set in the tradition of knowing that ' dialectics ' is not j ust a wor d to be bandied about in its normally accepted forms . Dialectics is not j ust a method or analytical frame for the study of social pheno­ mena. It is more than a scheme of analysis which alerts us to the conflicts involved in the interrelations and the interactions between *

A uthor's note: This chapter is a product o f the Structural Interpretation of Inter­

national Inequality Project (S3 IP), conducted for the United Nations University Project o n Goals, Processes, and Indicators o f Development (UNU/GPI D) . The research was done between October 1 979 and October 1 980. An earlier and a briefer version of this chapter, ' Foreign Policy Strategies for Achieving the NIEO : A Third World Perspective ' , is to be found in Charles Kegley and Patrick McGowan , eds . , ' The Political Economy of Foreign Policy Behaviour ' , Sage International Yearbook of Foreign Policy Studies, VI ( 1 98 1 ) , chapter 1 0. This chapter was presented at the UNU/GPID Expansion-ExploitationlAutonomy-Liberation s ub-group meeting at Hotel Normandie, St . Ann s , Trinidad, 1 6- 1 9 January 1 98 1 , later circulated as a UNU working paper, HSDRGPID-53/UNUP-3 1 8 . Thanks to Lily Addo for her typing and research assistance, to Margaret Blenman­ Harris for her editorial services , and to Terence Hopkins for his m uch appreciated comments on

an

earlier draft.

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TRANSFORMING THE WORLD-ECONOMY?

opposing social forces . Dialectics is more than a way of teasing out additions and explanations from social phenomena as they unfold , through the technique of questions leading to more questions , i n the search for answers in the course of inquiry in order to provide informa­ tion for its own sake. Dialectics is all this and more . It is essentially the application of its forms as a method , an analytic frame, and a general scheme for the drawing out o f lessons from the experience of a phenomon. It is a learning process and an education : the uti lization of the phenomenal and the experiential effects of the move­ ments in the flow, or the motion, of social history in order to inform and influence its future unfolding . I n addition to being self-consciously dialectical , this chapter also claims to be structural-relational . It is structural because it attempts t o g o deeper than the superficialities o f the capitalist exploitation pheno­ menon to unearth the supporting and the inner relationships and rela­ tions which sustain the relational superficialiti�s of the unequal incidence of accumulated and accunlulating capital which define the centre-periphery relations and interrelations in the capitalist world­ economy. The dialectical obj ective is to understand the phenonlenon o f -exploitation, so that the forces and the structures which give rise t o and sustain it can be influenced in directions that will make them ineffective and so aid the transformation of the world-economy , within which they operate, to make it more j ust and equitable . The forces involved here are many and must therefore be resolved into analytically neat folds and vectors . This is why we employ the dialectically appropriate scheme of opposing the positive with the nega­ tive : the theme with its anti-theme, the thesis with its antithesis . In this regard, we endeavour to unearth underlying real contradictions within an apparen t contradiction : the fact that capital leaks from the periphery" to the centre is not itself a contradiction . It is natural order in the capitalist world-economy; and for this reason it cannot be approached directly . What constitutes contradictions are the i nner pro­ cesses and relations implied by this order which make exploitation so persistent when both the world-system and its economy appear to be changing so much . This approach should compel respect for 'the opposite' at every turn . If, however, this is not evident at all points in the essay, it is because o f some obvious constraints and not because of any lack of optimism and confidence in anti-systemic forces and t heir eventual triumph . This chapter focuses on states as the organizing nodes in the capitalist world­ economy; and the hope is that a subsequent essay will address directly, in transformational terms, anti-existing-states forces . The New International Economic Order (the NIEO) , viewed as the -summary of the main problems in the political economy of the capitalist world-economy, is a convenient and appropriate source of entry into ,

_

A PPROACHING THE NEW INTERNATIONA L ECONOM IC ORDER

I

i.

�

.

247

the politicals of the dialectics of the transformation of the capitalist world-economy into another form which would be more j ust and equitab le . In this chapter, I conceive the NIEO as the foreign policy consequence of the contradiction of the dependency of the periphery parts of the world-economy on its cent re parts . The thesis is ·that the NIEO can succeed in transforming the world-economy to make it more just and equitable only if its contents are appreciated by the periphery states in much broader and deeper political senses than they appreciated the NIEO ' s predecessor ' developmental ' slogans . . The idea of transformation , as a process , is also approached diai ec ... tically by the distinction that we establish between two sets of opposed processes within it . The set of processes that can aid the transition of the world-economy into a more j ust and equitable form in the reasonable future we call valid transition potential; and the set of processes that can work against such a transition we call arrested transition potential. The main argument is that broader and deeper political considera­ tions for the transformation of the world-economy will reveal the nexus between the internal-periphery and the internal-centre sources of imperialisnl as the main obstacle to the transformation of the world­ economy. This nexus we call the imperialist probliffm atique. The NIEO can aid the dissolution of this imperialist nexus only if the periphery states practise what we call valid politics of transition, which, as the name suggests , is the kind of politics informed by the valid transition potential in the world-economy, and avoid the practice of its opposite , the arrested politics of transition, which is informed by the dialectical counterpart of arrested transition potential. The attempt here is to link internal-peri p hery inj ustice with the inj us­ tice in the capitalist world-economy. The proposition is that exploita­ tion in the periphery is linked to that in the centre , and that both brands of inj ustice are related characteristics of the capitalist world-economy. The argument is that the negation of inj ustice in the periphery could signal the negation of inj ustice at the world level . This chapter is , then , meant to be read as an invitation to take a few steps down the dark realms of the misconception that imperialism concerns only the inter-state relations between the centre and the periphery of the capitalist world-economy. The invitation has become . necessary because of the pressing need to move from the correct, but by itself unhelpful , criticism of the imperialist dialectic at its inter-state level only. Criticisnls of imperialism at this level alone lead to dubious calls for 'world revolution' . What we need at this stage of capitalist development is the endeavour to understand the imperialist pheno­ menon enough to realize that its roots are deeply sunk in internal­ periphery contradictions within the global processes , which result in capital leaks from the periphery to the centre . In the context of the transformation politics of the world-economy, this realization poJnts to the strategic primacy of internal-periphery transformation o ver

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inter-state reformations in the negation processes of the imperialist exploitation generally and the dissolution of what is referred to here as the imperialist problematique in particular.

Why the earlier slogans failed : poverty of vision Despite the fact that a lot has already been written on the NIEO , a lot more can and certainly will be written on it. The reason for this is simply that , from a distance , the NIEO appears to be dealing with the seemingly inexhaustible problems of the political economy of the single, interdependent , active , and rapidly evolving capitalist world­ system , insofar as these problems deal with the differences in the quali­ ties of individual lives from the perspective of the world-system . Intellectually , therefore, the NIEO falls in the domaIn of the obj ective laws which claim to govern and explain the production and the distribu­ tion of material means of subsistence . In this light, the NIEO would appear to be concerned with how these laws explain the historical fact of exploitation, as it expresses itself in our present world , and in terms of the transformational potentialities of controlling, ameliorating , or altogether removing exploitation . When we square the NIEO with the temper and the goal of our present capitalist world, it soon becomes clear that what are really in contention are the maintenance, the probable attainment , and the potential transcendence of what has become known as the Bourgeois Way of Life (BWL) , 2 as it relates to the production and the distribution of Basic Human Needs . It is , therefore, not surprising that the various treatments of the NIEO have come to serve all ideologies ; and that the NIEO itself is held as a 'developmental' slogan by many.3 The NIEO has come to refer to both the rationalizations and the irrationalities of the capitalist world-economy, as this economy is typified by the peculiar combination of the exploitation modes that underpin it and the transformation potential inherent in it . Two things should be made very clear about the NIEO. First , it is at one and the same time an affirmation and a protest : an affirmation of the thesis of the capitalist world-economy and the protest of its antithesis, b oth forming the dialectical unity that the world-economy must neces sarily have by virtue of being a historical process. Second, as a protest , the NIEO has had a chain of inglorious precedents in the . recent history of the world-economy. The recent phases of this history can be identified by a parade of slogans , 4 as they have come to attach themselv es to the pathetic unfolding of an impossible dream . These slogans have included: ' massive infusion of technical aid ' , ' foreign aid ' , ' import substitution' , and 'trade not aid'-. The dream has been the organization of the idea of converting th e . .

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249

socio-economic circumstances of the periphery parts . of the world­ economy into circumstances similar to those of its centre parts .5 This organization is what is often, and in our view wrongly, referred to as ' development' . 6 The impossibility of the dream lies precisely in the futility of seeking to organize this conversion within a refurbished capitalist world-economy . It is in this context that, if we have heard a lot about interdependence and collective and individual self-reliance in . co nnection with the NIEO, we should realize that these terms would not have commanded the attention accorded them today were it not that they are considered potent antidotes to the current exploitation strains in the long and historic7 story of the development of the capitalist world-economy. Let us proceed , then, by asking: why did the 'developmental ' slogans which preceded the NIEO fail? In the early post-war period, -it was believed that all that was needed to develop some parts of the periphery was the infusion of technicalaid into these periphery parts of the world-economy from its centre parts . 8 Later , in the 1 950s and early in the 1 960s ; import substitution , aimed at the conservation of scarce foreign exchange for the purpose of laying the foundations of industrialization in the periphery, had its firm hold .9 During this same period, in fact all along , aid in its many forms was touted as the thing to pursue, if economic growth , humanitarian justice, and social stability of periphery societies were to be guaranteed within a smooth-running world-economy. 10 Soon after this , the slogan of 'trade not aid ' , still in pursuit of foreign exchange, began to echo in international settings (especially in GATT and UNCTAD) , where nations of the periphery dared to confront those of the centre on the crucial matter of fairness in the world-economy. I I Towards the end of the 1 960s , calls for the need to adj ust the structural relations between the centre and the periphery of the world-economy on a much wider basis and in more comprehensive terms began to be heard . By the early 1970s , as the developmental frustrations mounted, the demands of the periphery states had evolved into what appeared to be higher forms . This led to a situation where, by the mid-seventies , we had come to see the packaging of these old trade- and foreign-exchange-related demands , and some new additions , into a neat bundle of demands for a more just and equitable international economic order . This bundle is what is known today as the NIEO. 12 It looks very much, then, as if, as one slogan appeared inadequate for developmental organization , new ones were coined; and as if as each slo­ gan proved not merely inadequate but perhaps even dangerous for devel­ opmental purposes , in the everchanging context of the world-economy, they were all put together , and held together by the new additions , in the package called the NIEO . The hope was that where the different slogans failed , the collective would succeed . But can this be true? The following pertinent questions are in order : Can the NIEO as a

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TRANSFORMING THE WORLD-ECONOMY?

collective slogan succeed where the earlier solitary slogans failed? If s o , what makes this probable? Is the NIEO package realiy that new to guarantee success ? Or is it something about the system itself? Has the system itself changed that much to allow success? If the periphery states are to do something to ensure success , what must they do? What should be their strategy, then? In other words, how should the periphery states do what they must do to ensure the obj ective of the NIEO? This , indeed, i s the basic question with the NIEO , and I intend t o treat it in this chapter from the point of departure that , with some years ' hind­ sight and from the retrospective reading of history, 1 3 we should now be in a position to appreciate the astonishing inability of these develop­ mental slogans to embrace any more than the tangentials of the real meaning of the history of the world-economy. The initial conviction here is that these earlier development slogans were unsuccess ful mainly because the periphery states failed to read the world-economy and its history properly . First, they tended to assume wrongly that there was ample room in the centre of the world-economy for both themselves and the centre states . Second, they acted as if what­ ever needed to be done to move them to, and accommodate them in, the centre , needed only to concern the international aspects of the struc­ tural relations between the centre and the periphery parts of the world­ economy. Third, the periphery states naively tended to believe that what needed to be done could be left to the initiatives of the · centre s t ates . Fourth , the periphery states misunderstood development to mean no more than the growth-led imitation of the centre societies' Bourgeois Way of Life . From the world-system perspective, all this constitutes an amazing ten.dency to ignQre the harsh central fact o f the world-economy, to misread the ever present and glaring differentiations within this economy, and to misunderstand the subtle variations which must, of necessity, attach themselves to the stubborn realities of the develop­ ment of the capitalist world-economy, so that it can appear to be chang­ ing ' while, in fact, it remains essentially the same. The central fact of the world-economy is its historic theme of , accumulating capital in the centre and away from the periphery . 1 4' The glarin differentiation within this economy is precisely what Amin has estab lished as constituting the difference between the central forma­ tions and the peripheral formations that compose the world capitalist mode of production and distribution . I S The subtle variations we refer to are the ever-changing, but persistently subborn, forms of the struc­ tural-relational mechanisms of the world-economy, brought about by the improvements in the efficiency of the exploitation of both human and non-human resources in aid of capital accumulation in the centre, resulting in the pauperization of the periphery. These variations bring about changes within the centre and within the periphery; and yet maintain the related separateness of the central and the peripheral

g

APP ROACHING THE NEW INTERNATIONAL ECONOMIC ORDER

25 1

formations , within the single world capitalist formation, for the p urpose of sustaining the historic theme of the system . This is the rela­ tio n which Amin has described convincingly as still bearing , in essence, . the order of primitive accumulation from the periphery to the centre . 1 6 And it i s this same relation which Johan Galtung has described, in the context of the expansion-exploitation processes of the capitalist world­ system, as 'a process with a centre and a periphery, both of them moving , the context of them moving , the exact processes within and between changing, but the gradient of (!xpioitation remains, enriching th e centre , impoverishing the periphery in various ways ' . 1 7 It is this subtle variation , characteristic of the world-economy, that I have described elsewhere 1 8 as the different phases of imperialism. I see imperialism as a related and a persistent phenomenon of capitalism from its very inception in Europe, in the late 1 5th century. Imperialism is the globalizing process of capitalist exploitation .. It changes in form , as capitalism develops , for the sole purpose of continuing t o make it impossible for capital to accumulate in the periphery, but possible in the centre . I have called this manner of viewing imperialism 'the con­ tinuity of imperialism thesis ' . 19 This is a way of pursuing Oliver Cox's insight that imperialism has been an abiding attribute of capitalism . 20 With the pioneering aid of James Caporaso, 21 I have argued that to the extent that imperialism at the international level deals with exploitation of the periphery by the centre, in aid of capital accumulation in the centre and away from the periphery, it is a function of the mUltiplicative relationship between augmented value-inequality22 between the centre and the periphery, and induced dependency of the periphery on the centre. I suggest , then, that the predecessor slogans of the NIEO failed because they were aimed at the impossible removal of the exploitation resulting from imperialism at the international level , while its support­ ing props of i nequality and dependency, and the mutual relationship between them , were ignored . This is what should lead us to say that embraced no more than the tangentials of the history of earlier slogans c:: capitalism, by which we mean that they embraced the historic effect of capitalist exploitation but not its historic structural and relational roots . The argument is that, at this phase of its development , the signi­ ficance of capitalist exploitation is much larger than its international manifestations , because its roots run much deeper than their shallow international expressions . We believe therefore that the NIEO will fail, as surely as its earlier forms did , for as long as the periphery states continue to see the con­ flict of interests between themselves and the centre states in terms of an 'international elites deal ' , in which , as Frank says , the only cost involved is t1;J.at to be incurred by the centre states in the formal integration of the periphery elites in the capitalist world-economy. 23 We suggest , then , that if the NIEO is to succeed in transforming the

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economy into another form which is more j ust and equitable, then the periphery governing classes must see the problem of the unfairness and the injustice in the world-economy, and its probable transformation, in terms of the main problem of the persistence of imperialism . They should aim to undermine imperialism at both its internal-periphery and its internal-centre sources . This will entail reasoning downwards from the high level of world imperialism, in order to isolate its fundamental causes in terms of the imperialist problematique, which we see as the vexing persistence, at the periphery end , of the nexus between the internal-periphery and the internal-centre sources of world imperialism. The argument , in the main , is that the periphery sources of imperialism have come of age and, without prompting, they are capable of independently exploiting the periphery for the benefit of capital · accumulation in the centre states . This , however, is only one side of the coin. In true dialectical fashion , there are forces opposed to the periphery sources of imperial­ ism. The problem in this regard is whether these opposing forces can be precisely identified as genuine dialectical opposition . The problem is confusing regime opposites with dialectical opposites. 24 The imperialist nexus I refer to above has been developing both in complexity and in subtlety as the world-economy has been developing. Therefore, I can argue with respect to the NIEO that , from the point of view of the dialectics of world-history, it must eInbody some properties which could be used to dissolve this nexus in the 'respectable future ' ,25 and some which could be used to dissolve it in some very distant ' final analysis ' . Later in this chapter and in the context of transformation , I refer to the properties and processes that make for transition of systems in 'respectable time' as valid; and those properties and processes that work against such transition as arrested. But, meanwhile, I argue further that it is not possible to treat the transformation potential in the world-economy without hinging this treatment upon those of the imperialist probh�matique and its transformation potential. I am inclined to view the conflict between these two types of proper� ties of the NIEO' s transformation potential as the domain of the politics of foreign policy consequence and as evidence of the further maturation of the contradiction of periphery dependency on the centre. For this reason , I am inclined to argue that the foreign policy considera-I tion of the NIEO is more political in implication than economic in substance; and, therefore, that in discussing the foreign policy strateg ies for achieving the NIEO, we should isolate, and then stress , what is politically viable about the NIEO' s transformation potential . This potential can be approached in many different ways . But, however viewed, it will have to depend upon the extent to which it can be said that the NIEO represents a crisis26 of sorts at this phase of the world­ economy, and the extent to which it can be said that the crisis expresses the near maturation of the contradictions embedded in the wor ld-

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economy generally and in the imperialist problematique in particular . The arguments so far would suggest that , if we mean to approach the NIEO in comprehensive trans formation terms , we shall have to do so in the context of three derivative questions. The first would relate the NIEO to the specificity of the long history of capitalist development; 27 the second would explain the NIEO , as a probable embodiment o f crisis , i n terms of the phenomenal relationship between capitalism and imperialism ; and the third would stress the automaticity of the link between the properties of the NIEO , as probable crisis , and the proper­ ties of the present New International Division of Labour (NIDL) phase of imperialism.28 Once this is done , it should then become very clear that the NIEO is nothing if it is not the foreign policy consequence of the dependency of the periphery states on the centre states at this NIDL phase of imperialism . It will not be easy to treat the subj ect fully, as outlined above . However , I reason that the essence of such treatment would amount to treating the NIEO in terms of its potential for the negation of the imperialist problematique . Approaching it this way, I realize that, while the actual economic contents of the NIEO are not unimportant by any means, they matter less than the political character that , distinguishes the NIEO from its predecessor slogans . The basic argument in support of this position is rather simple. Given the reality of the world situation, economic policies alone are incapable of transforming the world-economy, for the transformation capabili­ ties of specific economic policies derive their particular transforma­ tional potential from precise political readings and appreciation of the world capitalist reality. With respect to the NIEO , the political readings must of necessity spring from some degree of dissatisfaction of the peripheral states with their dependent roles in the world-economy. So far as the NIEO is concerned, it is the depth and breadth ,of this political dissatisfaction that forms the stuff of its transformation politics . It is this that I intend to treat below in terms of the inevitable dialec­ tical struggle between the valid and the arrested transition constituents of transformation. This could be a complex matter, 'and it should be approached with some caution and determination. One thing to note and stress, as we proceed , is that, given the com­ plexity of world reality, econonlic policies are by themselves incapable of promising the transformation of the world-economy, because such policies are double-edged in their transformation abilities . Whether the same policy aids the valid transition form or its dialectical counterpart of arrested transition depends on the political appreciation mentioned above . So that, if the NIEO indicates a higher political appreciation than the earlier slogans , then the question becomes whether the appreciation is high enough to transform the world-economy in the

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respectable future . This is our chosen question with respect to the NIEO , and we intend to treat it in terms of ,how stich politics would appear were the NIEO to be transitionally valid. Our position will b e that the periphery states will b e pursuing the correct transformation strategy, the more their politics can be said to approximate our descrip ­ tion below of valid politics of transition . This calls for n o less than a bold attempt t o draw the political context for evaluating the transformation potential of the NIEO in terms of the dialectical struggle which attends the maturing of the maj or contradic­ tion of the age. Towards this end , I ask Inany logically pertinent analytic questions . Most prominent among them are the following: 1 . What is 'transforma ­ tion' , and h o w does i t differ from ' transition' ? 2. Given that w e know what properties constitute a transition , is the NIEO a transition? 3 . If the NIEO is a transition , what is valid , in terms of the respectable future, about its transition potential? Prior to seeking answers to these question s , I need to reduce the imperialist problematique to its plain political essence , the quality o f the peripheral state , s o that I can link this essence to the different politics of transition .

The imperialist problen1atique and the quality of the peripheral state The idea that an exploitation relation is a multiplicative function o f inequality and dependency can b e expressed to mean that any entity that relates to another entity in unequal and dependent terms is exploit�d by that other entity. Presented in this manner, the concept exploitation and the category from which it is derived become too highly general to be of much analytic use . In these general terms , exploitation is applicable to all unequal and dependent relations at all times and in all places . We therefore need to ' provide a context from which our use of exploitation would derive its precision and specificity. We suggest that , within the world-system methodology, the context is the capitalist historicity, which is to be understood in terms of evolu­ tionary capitalism from the late fifteenth century till now . In this context , exploitation is inextricably connected with the expan­ sion and the domination processes of capitalist development . Capi­ talist expansion and domination are what make imperialism the epiphenomenon of capitalism . Imperialism is present in capitalist development where capitalism ' s expansionist impulses and dominating tendencies create the structuraI­ relational conditions of inequality and dependency between entities to produce the exploitation relation of unequal exchange; and it is present

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where the mutually reinforcing relationship between inequality and dependency leads to the reproduction of the exploitation relations. Since capitalism from its earliest has possessed these impulses and tendencies , imperialism is not only as old as capitalism, it is also synonymous with capitalist exploitation.29 This means that , when we refer to imperialism, we simply refer to the exploitative relation between an exploited entity and exploiting entity brought about by the mutually reinforcing relationship between the structural conditions of inequality and dependency . Since the accumulation of capital - primitive or not - is all that capitalism appears to be about , then capitalist exploitation means nothing if not the process of unequal exchange which enables capital to accumulate with the exploiter at the expense of the exploited: the phenomenon of capital leak from the exploited to the exploiter. It is from this context that we should derive the meanings of inequality and dependency, i f the above formulation of exploitation is not to appear too economistic . To the extent that exploitation stands for the process of unequal exchange leading to the phenomenon of capital leak , from parts of the capitalist world-econonlY to other parts of it , this process is brought about by the relationship between two factors : the unequal incidence of accumulated capital on the one hand, and the unequal incidence of the circumstances favourable for further accumulation on the other . Inequality, at any one time and in terms of the exploitation process of the capitalist world-economy, stands for the disparities between entities of the system in their possession of or control over accumulated capital . Dependence, which can and has been viewed in many different ways ,30 similarly stands essentially for the structural-relational con­ straints in the world-economy that make it impossible for certain units in the system to accumulate capital , because these constraints deprive the dependent units in the system of the internal strengths they need first to initiate and then to sustain capital accumulation. The exact view being advanced here is that the process of exploita­ tion, the process of unequal exchange leading t o the unequal incidence of accum ulating capital, is set in motion when and where the two condi­ tional inequalities - the disparities in accumulated capital under pos­ session or control and the disparities in the abilities to initiate and sustain accumulation - become coincidental and interrelated. Such coincidence and interrelations produce a hierarchical system of varying status levels defined by degrees of exploitation, as described by the interrelating coincidence of differing degrees of inequality and dependency . The capitalist world-economy, in evolution has always been such a system. In its early phases of development, Wallerstein suggests, there were the core and the periphery as well as the external arena.31 However, since the late 1 9th century, when the entire world was finally overrun by

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capitalist dominance , the world-economy has divided itself -roughly into a three-level hierarchy comprising the centre , the semi-periphery, 32 and the periphery . To take the two extremes , high levels of possessed or controlled accumulated capital and/or low levels of dependency define the centre ; low levels of possessed or controlled accumulated capital and/or high levels of dependency define the periphery. This is what makes the centre-periphery relation a simple power relation, 33 which leaves the periphery open to the automatic , if not the natural, exploitation by the centre. Three observations are worth making with respect to this formula­ tion of capitalist exploitation. The first is that capital appears both as the effect as well as one of the two structural causes of exploitation: the exploitation resultant of capital leak is capital in its various forms; the structural condition of inequality in possess-ed or controlled accumulated capital is also capital in its various forms . This , we n1ust admit , should not be surprising in a capitalist world-economy . 34 Elsewhere, 35 I have expressed the relationship between exploitation (Z) , inequality (X), and dependency (Y) by a mUltiplicative formula­ tion : Z X. Y. The s econd observation, therefore, is that where inequality and/or dependency equal zero there is no exploitation , since in such cases (Z X.O and Z o. Y) Z o � A much more realistic variant of this reasoning will be that in situations where either of the two variables , or both, is small to the point of approximating zero , exploitation itself then b ecomes small to the point of approximating zero . Even though in such cases there could still be capital leak s , such leaks cannot be considered exploitative in our terms in that they cannot be attributed exclusively to imperialist relations as we have presented them above. For example , as it is well-known, US firms own or control a very large proportion of the capital in Canada and yet thi s does not appear to pauperize Canada to any great extent while enriching the US alone. How do we explain this case? According to our scheme, one plausible explanation can be that the huge size o f US owned or controlled capital in Canada notwithstand­ ing , it would appear that Canadian dependence on the US , in the sense described above, may be in real terms rather very small , thus enabling Canada to retain a large part of the capital accumulating in that country to its own capitalistic advantage within the world­ economy . The Canadian case contrasts with the cases of US capital in Latin American countries , for example. In these latter cases, because dispar i­ ties in both the inequality and dependency conditions are large, huge capital leaks occur, pauperizing Latin American countries . The third observation is that exploitative capital leaks are qualified depending upon the hierarchical standings of the units interacting . This means that the magnitude of real exploitation depends not only upon =

=

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the degrees of inequality and dependence, but also upon the hier­ archical identities of the interacting units . The degrees of inequality and dependence notwithstanding , there is a coefficient w4ich qualifies the resulting capital leaks in all interactions. The values of these qualifica­ tions depend upon whether the interacting context is centre-centre, centre-periphery, or periphery-periphery. Let me explain further . One of the axioms of the capitalist logic is uneven development : the axiom which indicates the biblical position on the fact that to those that have, more will be added and from those that have not, even that which they have will be taken away from them. To the extent that this is true, and we all know that it is true, we suggest that where the interactions are between centre units, the coefficients or the qualifications to the capital leak would tend to be very snlall; where they are between centre and periphery units they would tend to be large. 3 6 The third interaction, that between periphery-controlled capitals , is rather new to the world capitalist experience. To the extent that such interactions are not proxies for centre-controlled capitals , we will suggest that the qualifications will probably ' be a little lower than the centre-periphery ones . The foregoing, as useful as it may be, presents a somewhat static conception of the imperialist phenomenon . What is more interesting for our purposes , because it is analytically more useful , is the concep­ tion of imperialism in motion . It should not be contentious to say that at the initiation of the capitalist exploitation process, there ought to have existed inequality of some kind - for example, technological superiority in boats and guns , or the structural need to expand and hence the determination to succeed - between the exploiter and the exploited. Dependency, in the sense presented above, could not have existed at the initial stage of capitalist imperialism . It had to be nurtured or induced by the initial inequality in order to complete the conditions for automatic and efficient capitalist exploitation. This , however, in no way suggests that , in changing capitalist circumstances , an initial non-exploitative depen­ dency could not be converted to serve exploitative inequality . The interesting thing to note here is that the initial inequality, which was used to induce dependence , is itself augmented in due course by the induced dependence . The two processes go on, and they are mutually supportive . This is what has made the unequal power premises inherent in the capitalist exploitation process effective enough to enconlpass the entire world . The strength of capitalist expansion and the resilience of its exploitation are owed to the above mutual relationship between inequality and dependence . The mutual unfolding of the two processes is what accounts for the stubborn persistence of capitalism ' s historic theme of accumulation of capital in the centre and away from the periphery. The articulation between the two processes is what accounts

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for the changing nature of centre-periphery relations , for the singular purpose of enabling what Galtung has called 'the gradient of exploit a­ tion'37 to so remain that accumulating capital will continue to desert the periphery for the centre - the continuity of capitalist imperialism . The periphery parts never interact with the centre parts on an equal footing within the world -economy. We all know that the exploitation processes within the centre and the periphery parts are not closed systems within the world-economy. They are interdependent , that is , they are open and interrelated processes . From the world-system perspective, it is the world-wide unfolding of these processes which , within the development of the capitalist world­ system , accounts for the generally acknowledged secular growth of world accumulated capital , its high distributive incidence in the centre, and its high generation in and desertion from the periph�ry . The desert­ ing or the leaking capital from the periphery goes to add to the capital stock of the centre. The exploitation relation between the centre and the periphery h as existed all through the nearly 500-year history of the world-economy in formation . What has changed during this period is not the effects of the exploitation phenonlenon on the accumulation of capital in the centre and in the periphery, but theforms which this phenomenon has taken. The forms of capitalist exploitation have always been clear; and even the changing forms bear a commonality which Ainin has described as still bearing the order of primitive accumulation . In the early phases of the world-economy, potential capital deserted the periphery in formation in the forms of plundered valuables and potential productive forces . Later , during the colonial era, when capitalism had taken a more distinctive shape, imperialism took the form of huge profits gained from unequal trade . All through these periods , the changing process in the periphery in formation revolved . around the firm institutionalization of the dynamic props of capitalist exploitation. The centre used the inequality in capital stocks to induce dependency of the periphery; and , as the dependency developed , it aided exploitation of the periphery by its magnifying effects on the desertion of capital from the periphery. This is how the mutual relation­ ship, posited above, makes the periphery' s exploited subordination to the centre an essential and permanent part of world capitalism . From the above , it should be clear that the capitalist world-economy has been interdependent, and unequally so, all through the history of its formation . Some observers in the centre , however , underplay the his­ torically unequal interdependent nature of the world-economy. When these observers come to admit the interdependent nature of the world­ economy , but not the inequality of it , at its present New International Division of Labour phase, what they seem to be acknowledging is that the periphery parts have matured to become so intractably integrated into the world-economy in their easily exploitable dependent roles that

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they are needed in these roles to guarantee th� normal functiuning o f t he world-economy i n its capitalist form . The other side o f t h e concep­ tion o f the world-economy at its present NIDL phase is the assumption by the periphery parts that their own economies have become so

dependent on the centre economies that they cannot hope to accumulate capital in their economies without the continual inj ection of capital from the centre economies . But thi s is precisely what the - problenl i s : the periphery economies , by virtue o f being dependent , have no internal strength to generate capital which they can retain to their benefit , no matter what the source o f the ' initial ' capital i s . This indeed is the problem : dependency and its piti ful maturation in the course of the development of the world-economy to the point now where most parts of the periphery do not even need the factual and the

visible presence of colonial exploiters , symbolized by feather-hatted colonial governors , to maintain the imperialist link in aid of capital leaks from the periphery to the centre - the 'post-independence' reality within the NIDL phase of world capitalist development . This would have been an appropriate point to refer to the role that the state has played in the development of capitalism at the world scale and the role that the peripheral variants of the capitalist state have played in this development . I shall suspend the detailed treatment of this vital reference in this chapter . Suffice it to s ay that the imperialist problematique refers precis ely and specifically to the way in which' the internal conditions o f peripheral societies and the peripheral states themselves, having been made to s erve as automatic mechanisms for capital leaks from the periphery to the centre, continue to b e mechanisms for capital leaks from the periphery to the centre at this post-independence period in the NIDL phase of the development of world capitalism . The existence o f this problematique , of course , i s explained b y the penetration, in fact the creation , o f the peripheral economies by the centre economies through the expansion imperative of world capitalism . It may h elp to say that the effectiveness of the imperialist problematique i s due to the strength of the institutionalization o f the dependency factor in centre­ periphery relations ; but its persistence, its development , and its maturation are to be explained differently: the persistence o f the problematique i s due to the imperialist connection , lin k, or nexus , which over the years has come to assume the proportion and the potence of the peripheral state, a facilitator of capital leak from the periphery t o the centre. Let me explain . Every state has a quality . And by the quality of the state, I am referring to a particular property o f the state, the particular relevance o f its historic nature: the paradox composed by the difference

between what the state claims to be about and what it actually is about ; and how this paradox relates to the historic theme of the time. This par­ ticular nature of the state refers to the extent to which the state is in or

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out of tune with the requirements and the expectations at historic points in time . Whether a historic epoch i� at its thetic or antithetic phase i s 0 f extreme pertinence in the evaluation of the quality of the ' states . From the very beginning , in the development of world capitalism , the emerging centre states set about interfering with the qualities of the states then existing in the emerging periphery. Whatever the initial qualities of these states in the emerging periphery, they had to b e changed t o suit the novelty o f capitalist development b y being con­ verted into organizing nodes for the facilitation of capital leak to the emerging centre . The process consisted essentially of the development of corps o f clientele groups, which over the years have come t o serve a s the able representatives of the in�erests of the centre economies in the periphery economies . It is these groups , which , with the development 9f world capitalism , now come in the various capitalist ideological hues , that now constitute the peripheral states and serve as their 'reserve armies ' . I f we describe the imperialist problematique in terms of the per­ sistence of the connection between the organizing nodes of the centre and the periphery, then this very persistence must be further explained in terms of the perpetuation of a comnl0n interest shared by both ends of the connection . The common interest is thi s : both ends of the connection claim the Bourgeois Way of Life as their own. With the development of world capitalism , the periphery ends of the imperialist problematique have come to adopt this way of life as their own . As they understand this way of life more and more, they seek internal and external conditions which would enable them to attain more and more of this way of life exclusively for themselves , thus forcing an increasing number of their population to be subjected to the Proletarian/ Proletarianized Way of Life . These periphery ends of the imperialist connections have become, in contemporary capitalist reality, the periphery domestic sources of world imperialism . As these sources understand world capitalism more and more, the maj ority have been struck not by the painful irrationality and the obscene immorality of capitalist exploitation, but by the smallness o f their compensations for serving as the able domestic sources of imperialism in the periphery. As world imperialist exploitation grows in secular terms , they see that they only receive a small part of the exploited proceeds to continue repre­ senting the centre's interests . This realization has been expressed in various development slogans in recent years by these domestic sources of imperialisnl, as they seek to replicate in their various peripheral economies the exact world imperial­ ist conditions in which they play the subordinate roles . It appears that their intentions are to assume greater control of the periphery economy so that they can reserve for themselves larger and larger parts o f the exploited capital from the periphery to enjoy more of the Bourgeois Way of Life .

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This ambition is futile, because world capitalism is constantly chang­ i ng through the increased efficiency of exploitation. The very policies the periphery domestic sources of imperialisnl had hoped could aid th eir ambitions have failed to do so . In fact, these policies have deprived them of sor:ne of their share of the products of exploitation, because the changing conditions of imperialism ,. behind which ' developmental ' slogans have the tendency to lag, have made the multi­ p licative effect of periphery dependency more and more pronounced . Our position on the NIEO, then, is this: if the periphery economies want a really new order, one that is equitable and just, the newness in this order should undermine the old by affecting the internal roots 0/ periphery external dependency on the centre. A s long as the new order is directed at the exploitation resultingfrom 'capitalist domination alone, to the neglect of the internal roots of the dependency factor, not much of a new order can result. What has been said should not be confused with the vulgar position taken by some centre sources of imperialism . They suggest that the problem of inequality in the world-economy is more pronounced in the periphery states than between the centre and the periphery, and , for that reason, until the periphery inequalities have been removed, inter­ national corrective actions cannot be considered . 38 We are more than aware of the gross inequalities in periphery states , but our sentiments are different. We seek , for developmental strategy, to make the periphery elites aware of the untenability of the belief that the sources of imperialist exploitation must, by logic and fact, always reside where they do not . These elites , whether they reside in the centre or in the periphery, still remain the periphery domestic sources of imperialism . Our arguments do not slow. action on the international plane . They indicate that , for the purposes of periphery strategies , the periphery ends of the imperialist connections are what must be recognized and worked on, if the intention is to transform the world-economy. In any case, those ends of the imperialist connections ought to be easier to handle than the centre ends . A novelist, Ayi Kwei Armah , shows he is very much aware of the imperialist problematique when he expresses the following sentiments with specific reference to African political leadership : The main political characteristic of African leadership since the European invasion is its inability and unwillingness to connect organically with the African people because it always wants first of all to connect with Europe and Europeans . Hence the chronic inability of African leadership to create the indispensable maji, a workable one .39 The term maji is a Swahili word meaning water and , in Armah ' s context , it derives from the name given t o the fierce war fought i n East Africa in the 1 9th century against imperialist encroachment the Maji -

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Maji Wars. It is believed that the East Africans lost the anti-imperialist

war because the resisting leaders encouraged their peopie to fight on the superstitious belief that consecrated water had magical powers to deflect bullets . One should not laugh at this . It contains a profound lesson for the autonomy-liberation processes which constitute the anti-imperialist struggle against capitalist expansion-exploitation processes . Listen to Armah: Maj i Maj i leaders did understand the need to create a means of defense that could operate on two levels : 1 . Psychologically, remove the fear of death, i . e . the fear of . . . agents of death . 2. Practically , neutralize the implements and strategies of death . Maji Maji leaders understood that their implementation of that understanding was raw, faulty, imagical, not practical . That is the fault an authentic African leadership would correct . But those with access to practical k nowledge of the means are conditioned inevit­ ably to loose sight of the aim . The maji i s not something existent, waiting to be collected and used . It would have to be created, an antidote to the potent poison of E uropean penetration. 40 For as long as the imperialist connection , the factor linking the peripheral states to world capitalism , exists , then the quality of the , peripheral states can be said to be strained . For this reason, we should realize that we have a set of speci fic and related problems which consti­ tute a single problem for autonomy-liberation processes in the anti­ imperialist struggle . This single problem is what I have called the imperialist problematique. The diss olution of this problematique calls for the crucial recognition of the strained quality of the peripheral states . Creators o f an effective maj i for the dissolution of the imperialist problematique must know the world for what it is: a capitalist world­ economy, composed of central , socialist , and peripheral types , in which capital auton1atically deserts the peripheral types for the other two types (especially the central type through the historically established mechanism of capital leak) . The paradox involved in the imperialist problematique is plainly that while the peripheral states claim to be mobilizing to liberate themselves from exploitation, they appear to be doing everything to reinforce ' exploitation. In this sense, the peripheral states are in tune with the thetic requirements of world capitalism , because capital continues to leak o ut of the peripheral states . The strategic implication here is that the peripheral states should reject the Bourgeois Way of Life and, by means of this rejection , move the peripheral states out of tune with world capitalism and by so doing move it antithetically and transitio n­ ally toward a non-exploitative world-economy .

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. The dialectical politics of transformation ' We have asked above whether the NIEO could succeed where the earlier slogans failed . We meant by this question much more than whether the NIEO could change the world-economy. We meant whether the NIEO co uld transform the world-economy by affecting its structural-rela­ tional characteristics of augmented inequality and induced dependency so fundamentally as to make them unimportant, in that they would no longer result in exploitation beyond a certain ' tolerable' minimum . Much more than 'in other words ' , what we are asking is whether the NIEO is a transition . The graduating com plexity of the structure of our . question is due to the fact that the word change is of little analytic use , and therefore what w e are really asking is the following compound question : what is transformation; how does it differ from transition; and what is potentially transitional about the NIEO? The terms ' trans formation' and 'transition ' are congeneric and problematic .41 One can say that they ref�r to the obvious truth that any human s ociety, irrespective of time, place , or duration , is always involved in some kind of 'transit ' from one ' form ' of society to another. But the problem is that the transformation and transitio n ' processes of societies are not easy to detect with any degree of con­ fidence, and hence they do not lend themselves to reliable predictions,. Robert Cox, for example, in considering the role of ideas in'relation to the positions of conflicting forces , concluded with the observation that ' the significant breaks or turning points in history are points at which mental constructs which have hitherto been recognized as generally valid science . . . come to be seen as ideology' .42 He further observed , with specific reference to the NIEO , that 'it remains an open question whether the debate over the NIEO indicates such a turning point ' .43 This should illustrate the difficulties involved in the detection and the prediction of probable transitions . The problems with the terms are not entirely removed even when Rodney assures us that 'to speak of transition from one mode of production to another allows for a somewhat greater precision ' ,44 because he believes transition can be understood inferentially to mean a state which is ' a link between two historical epochs and it incorporates elements of both the old and the new' .4S It hardly helps the identifica­ tion of transition when he adds that , by definition, the state of 'transi­ tion lacks unique, classical or sharply defined features ' .46 Rodney goes some way toward clarity in identifying transition, however , when he states that a transformation is a transition only when it 'is a brief inter­ locking rather than an amorphous and protracted phase [between two historical epochs] ' . 47 If, therefore, what determines a transition is the contradictions in the preceding era, then the presupposition is that 'the contradictions have reached a point of maturity and their resolution necessarily implies a qualitatively different situation. It is for this

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reason that transition is a brief period of intensified activity when new social forms triumph over the old in a context of sharp struggle . '48 Transition to Rodney, then, is 'the ultimate goal and means of trans­ formation' , 49 because it ' equates with guided transformation' . 50 We shall refer to this as the ' transition equation' . The above s uggests clearly that transition is a special case of the ambiguous and nebulous process of transformation . It is that special case of the transformation process where the 'transition equation' holds in a context of sharp struggle . But .then transformation is a complex phenomenon , and therefore where there is one such special case , the dialectical appreciation of history can only lead one to suspect another special case which works against it within the total process , if trans formation is not to assume the absurdity of a daily occurrence. What we suspect, therefore, is that in any transformation process where the materialization of the 'transition equation' is held in check , there must be ' reasons ' which constitute a force to arrest the valid unfolding of the ' transition equation' . If this is true and conceptually clear, then what we suggest is that within the undisputable transformation process in . any human society there are two sets of mutually antagonistic processes . One set of processes makes for the validity of the ' transition equation' , and the other makes for its arr�st. We shall conceive the pro­ cesses that aid the unfolding of the 'transition equation' as having valid transition potential, and those that work against it as having arrested transition potential. Both of these transition potentials constitute the transformation potential of a given society at a given time; they form a dialectical unity; and they are constantly engaged in a dialectical struggle for immediate transitional superiority within a transformation process . So that in the short run , and in every instance, we can argue that a transformation process is valid to the extent that the valid processes in it overpower its arrested processes ; and that the transformation process is arrested to the extent that the arrested processes have the upper hand over the valid processes . These two processes are political ; and the differences between their political stances derive from their respective readings , in particular contexts , of what are paradoxes that intimate contradictions and what are their levels of maturity. Therefore, the same policies will be understood and employed differently by each transition politics . This is precisely where the double-edged property of each probable transformational policy comes in. Each policy can be used to aid either valid politics of transition or its arrested counterpart . The different politics select differently between the two edges of each policy; and it is the coherence between the selections which .constitutes the identities of valid and arrested transitions . Before we proceed with further �nalysis of the terms transition and transformation, let us ask an important question . It is whether, for the crucial 'transition equation' to hold , the guide for the transformation,

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the nature and maturity of the contradictions , must be clear to the prin­ cipal carriers of the transformation. It is generally agreed that this c ondition need not be and , in fact, has not always been true for all transitions . As Amin puts it , with respect to our present world, ' . . . what counts in history are the unexpected accidents , and there can be some here and there in the periphery and in the centre . . ' ; 5 1 and , as Rodney adds, ' all historical leaps have not been consciously directed . '52 Rodney goes o n to argue, however, that the present epoch and its trans­ formation properties are unique, 'because of the highly developed consciousness of the . . . combatants ' .53 So that if the evaluative reactions to the NIEO as a transition tend to come in the forms of extreme rejection and extreme acceptance ,54 then it would be that the guide to the transition is not clear, because either the contradictions are not mature enough to be noticed by its principal carriers or, even though they are mature , the historical background against which the NIEO as an embodiment of a transition is to be j udged is not appreciated enough in a manner which highlights both the nature of the contradictions and their levels of maturity . We would therefore venture, as the premise for further discussion o f the NIEO , t h e cautious proposition that the problem i s both the nature and the maturity of 'the contradictions, and the lack of the proper appreciation of the dynamics of the history which the NIEO is supposed to transform and the product of .which it is. Let us return very briefly to Cox's useful survey of the intellectual literature on the NIEO for some insight . It is clear from Cox ' s essay that even though the ideological foundations of ' science' are being exposed by 'radical' departure, 'science' is far from being dethroned . Our main concern is not to investigate whether 'radical ' ideas informing the · NIEO are capable of resolving conflicting forces , in the near future, in favour of turning history in a particular direction. It is whether in these ideas , and their relations to conflicting forces notwithstanding , there is a political quality to the NIEO which indicates that it ,has the ability, bred by historic tensions , to serve as the true organization for turning history - that i s , of satis fying what we have called the 'transition equa­ tion' . To reiterate, our concern is whether , irrespective of intellectual traditions , the negation properties of the history of the development of the world-economy have sufficiently influenced the formulation of the NIEO to make it an effective means of turning this same history towards the realization of the ideals embodied in the NIEO, by employ­ ing the same ideals as its means . This concerns whether the NIEO is itself the shape of things to come. And it implies the following analytic questions : 1 . What is new about the NIEO, that makes this question worth asking , seeing that its earlier forms did fail? 2 . With the principal carriers of the NIEO as a probable transition identified , what should be their strategy , with respect to what is new about the NIEO , if they are to succeed in turning history in the desired direction? .

,

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What is the NIEO ?

To proceed, however, we need to see the NIEO for precisely what it is . For the purpose of maximum strategy for the periphery states , we need to approach the NIEO from the reality and the rationality of these states' situation in the world-economy . The rationality of these states ' strategy, clearly, ought to derive from the relationship between the reality of their situation, within the world-economy, and the magnitude of their transformational ambition . What we are interested in is the political significance of this derivation, and not the policy substance o f the NIEO . The NIEO is no more than a package o f demands presented by the periphery dema.ndeurs of the world-economy to the centre of this economy, and to themselves; and it is intended to make the world­ economy more j ust and equitable . We should note first that there i s nothing novel i n the history o f man about underdogs o f a social system demanding changes in the situation in which they find themselves; and second that the nature of these demands and the manner in which they are made and pursued are directly related to the history which shaped and sustains the structural-relational peculiarities of that society. There is nothing novel in this , except we should add that while the ends to which s uch demands are aimed could vary, they fall within a given range . They could be aimed at no mo're than the amelioration o f the onus on the underdog; o r at ' the total and complete negation o f the existing social order ; and , in between, we can have a situation where the underdogs seek not so much to abolish the system as to share the 'crown' with the topdogs in the system . 55 In each of these instances , the probability o f success is impaired by the high probability that the stubborn facts and the subtle variations within the particular histories will conspire to make things appear to have changed, while in fact they remain essentially the s ame . The principal carriers of the NIEO are the periphery states . To the . extent that the NIEO aims to affect the capitalist world-economy at all , . it can aim merely to ameliorate the cost of peripheral subordination; or to raise the status of these states to that o f the centre, but still within a capitalist world-econolny; or it can aim to serve as the vehicle for radical change in the nature of the world-economy so that it will no longer be capitalist, as it would be based on a radically different historic theme and production-distribution culture. This latter kind of change can occur , in the present world circumstances, only when the contradic­ tions within the system are not only mature but also clear. By this we mean that the problems generated by the system within itself would have become so profound and s o pronouncedly clear that the system cannot compens ate for their transitional effects .

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The NIEO as the foreign policy consequences of depen.dency With specific reference to the NIEO , and its transition virtue at the present phase of the world-economy, what distinguishes it from earlier forms is not some nebulous conception of contradictions and their maturity , but the presumed developed consciousness of the principal carriers of the NIEO . This consciousness can be credited to a deeper unders tanding of the world-economy that exposes its exploitation mechanisms and their dynamics , and rej ects them as unjust, immoral, and therefore irrational. We know that transition vehicles do not usually arrive wrapped in packages and labelled as ' transition vehicles ' . We already know that, because of the different possible ends to which changes in a system may aim, an accurate one-shot prediction o f a transition would probably be more of a lucky guess than a scientific exercise . So that if we ask whether the NIEO is a ' transition ' , we are asking a false question . No matter how false the question may be, however, it serves two causes very well . First , it enables us to continue to reason on the cautious but still realistic proposition that the NIEO is not necessarily an assured transition , in that it is not necessarily an immediate product, or an embodiment , o f mature contradictions at this phase of the development of the world-economy. The fear betrayed here is the realization that, whatever the contradictions which ' brought about the package of demands called the NIEO , they can resolve themselves , along lines which could validate or arrest the transition potentials which the NIEO may posses s . Second , and resulting from the first , we must then ask whether the NIEO 's transition has some potential . On this , we reason further that however viewed , whether in terms of its substantial content or its political stance , as indicated by both its long and short histories , the NIEO must possess some transition potential , which must indicate a certain degree of mature appreciation of the exploitation basis of the development of the world-economy and in particular, the form it takes in the present totally interdependent world-system . It is this appreciation of the contradictions within the world capitalist economy that a historic reading of the capitalist history will express as the foreign policy consequence of the main source of capitalist exploitation dependency . By this we mean that a historic reading of the NIEO will see it as the foreign policy consequence of the dependency of the periph­ ery on the centre of the capitalist world-system . This means the NIEO, as a set of demands , was inevitable . It had to come, sooner or later ; and this is explained by the fact that the same history which created the dependencies of the periphery nations and their subordination to the centre, to facilitate the accumulation o f capital i n the centre and away from the periphery, i s the same history which created the contradiction o f demands from the periphery which has led to the formulation of the NIEO . The link between the two

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aspects of this history is that the second is explained by the first : the NIEO is explained by some maturity in the contradiction of periphery dependency on the centre at t.h is NIDL phase of world capitalism . Vindication of a false question as a point of departure

From the above , we can see that even though the question as to whether the NIEO is a transition may be a false question , it is not misleading for it forces us to focus our attention - critical and analytical - where it should be: on the transformation potential of the NIEO . As we have indicated above, transformation processes have their valid and arrested transition proces ses . A valid transition is one that satisfies what we have called the 'transition equation ' ; and an arrested transition consists of the processes which seek to prolong or even reverse the actualization of the 'transition equation' . This is what makes valid transition the counterpart of arrested transition and constitutes both into a trans­ formation dialectical unity . Every transformational process has its share of the two transition processes . , For this reason, the political instance in any transformation process is located in the dialectical conflict bet\veen the two transition types . Given the above, we can reason that , in the short run , a transforma­ tion process is valid to the extent that the ' transition equation' is satis­ fied, t hat is , to the extent that in the dialectical struggle we refer to , the valid overpowers the arrested . A transformation process is considered arrested to the extent that , in the dialectical struggle, the arrested over­ powers the valid . So that, when we question if the NIEO is a transition, and if by this we are betraying our hopes that the NIEO will be a valid transition, then we need to know the identities of the valid and the arrested properties of the transformation process well enough to enable us to aid the resolution of the dialectical conflict between t hem in favour of the valid . A large part of the relevant literature on the ' NIEO dwells on the matter of how to make it a valid transition. They tend to present t heo­ retical analyses of the world capitalist economy and they then proceed to treat either the prescribed strategy itself, or its tactical component s . I n other words, writers tend t o confront directly the question o f how to make the NIEO a transition by drawing inferences about the NIEO from their conceptions of the world-economy, and what is desirable and possible within it . In the intellectual debate on the NIEO , contro­ versy attaches less to what is desirable and more · to what is maximally possible toward realizing the ideals of the NIEO, at this phase of the world-economy. In this chapter we j oin the debate on the side of those who argu e that we cannot obtain a new international economic order if the capitalist world-economy is not to be radically transformed in the pro ­ ces s ; and we are on the side of those who see the main problem in this

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transformation as relating'to the phenomenon of imperialism . Our point of departure is based on the distinction we have established above between valid and arrested transitions and on the position that the political interface between the dialectical counterparts within the transformation process is where the strategies for valid transition must be derived . This is the precise point where we must worry about how the idea of transformation can be made to serve as its own organization . Further, our approach is in the form of an indirect detection of an appropriate strategy. It is hinged on the detection of the differences. between the politics oj valid transition and the politics oj arrested transition . The sensitive detection ' of this difference is important because we reason that the ability to detect this difference is itself the source from which to derive strategies , or organization policies , which will enable the valid aspects of the NIEO , as a potential transition, to overpower its arrested counterpart in the dialectical struggle . Since one strategy can only presuppose another , neither valid nor arrested transition politics can exist or have meaning by itself: each owes its existence· and its meaning to the other� For this reason, the transition relation between them, what we have derived as the transition strategy, cannot be anything more than the mutual and constant reaction to and anticipation of each other . This is the essence of dialec­ tics, the unending drawing of lessons from wanted and unwanted experiences , a learning process . 56 The dialectical contrast we have established above between valid and arrested transition politics is not enough , however. It does not mention the critical and intricate detail of the antinomy within the two dialec­ tical counterparts of transition politics . The point is that both valid and arrested transition politics each contain within themselves antinomic political counterparts , �hich are also dialectically related. 57 We shall call these two opposites , within the established opposites , politics oj re-creation and politics oj de-orientation . As the terms may suggest, re­ creation processes seek to maintain their particular transition orienta­ tions, while de-orientation processes aim to neutralize them, if not negate them · entirely . We should note carefully that the transition orientations of these two latter politics are reversed within each of the two primary opposites . Valid transition politics has its arrested contents in the Jorm oj politics oj valid deorientation, which aims to negate the politics oj valid re-creation in the overall valid orientation oj valid transition politics. The politics oj valid transition remains such because its politics oj re-creation dominates its politics oj deorienta­ tion. The reverse holds true in the case ojpolitics oj arrested transition, where its politics oj re-creation aids the arrested orientation, and pre­ dominates over the politics oj deorientation which aims to negate the arrested orientation in the primary opposite oj the politics oj arrested transition. The Fig . 9 . 1 below summarizes what we have just said.

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APPROACHING THE NEW INTERNATIONAL ECONOMIC ORDER

27 1

Essentially, the illustration means that in Box A , + > ; in Box B , > + ; and that t o the extent that a society i s i n transition , mutuality D > mutuality C and vice versa . Therefore, we can see that the real source o f dynamism in transition politics lies in the mutual r einforcement between valid transition politics oj re-creation (VTPR) and arrested transition politics oj de­ orientation (A TPD) on the one hand, and their dialectical struggle with the mutual reinforcement between valid transition politics oj de­ orientation (VTPD) and arrested transition politics oj re-creation (ATPR) on the other hand . This further distinction between VTPR and ATPD on the one hand , and VTPD and ATPR on the other , is extremely important in that it makes for increased subtlety in transformation analysis . In the particu­ lar case of the NIEO , it can explain why certain transformation argu­ ments emanating from the central societies sound so similar to certain arguments emanating from the peripheral societies, even though the arguments claim to have opposed transitional intentions . Further it can help us to realize possible transition political alliances based on the mutualities in transition political orientations . As can be seen from the illustration , VTP R and ATPD can have some arguments and visions in common , for example the need to transcend capitalism and the visions of desirable world and societies . Political alliance can be established on the mutuality between the two . The same goes for VTPD and A TP R . A full treatment o f the NIEO along these lines for the purpose of transition strategy will have to provide contents for the categories established above . What we intend to do next in this chapter is to point briefly to some aspects of the contents of ATP R and ATPD (boxes 3 and 4 in figure) , and then proceed to treat the two orientations in the valid politics of re-creation (boxes 1 and 2 in figure) at some length . In tune with our approach , this latter treatment will take the form of establishing the differences between the two antagonistic types of valid transition politics , if the peripheral societies are to be . considered the main carriers of the NIEO ' s valid transition potential.

The transformation potential of the NIEO The quest ion: does the NIEO make a difference? We must remember , as we turn specifically to discuss the transforma­ tion politics of the NIEO, that we have depicted the NIEO as the foreign policy consequence of the periphery nations' dissatisfaction with their exploited subordinate roles in the capitalist world-economy. We have also said it is the political depth and breadth of this dissatisfaction, as they inform the understanding of policies , that would indicate t h e transformation potential inherent in the NIEO . In addition, we have

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argued that earlier slogans failed principally because they were politic­ ally thin and shallow . This latter fact was due to the initial misreading of world-history , which led these slogans to focus on the external aspects of exploitation to the utter neglect of . the imperialist problematique . The conclusion to be drawn from this summary is that the earlier slogans were low on valid transition potential and high on arrested transition potential in the course of the normal articulation of the world-economy' s transformation process . The obvious question, then, is this : does the NIEO make a difference? Are there indications that the NIEO is politically broader in its sweep of policies , and politically deeper in its recognition of the imperialist problematique? Is the NIEO ' s transition validity more pronounced than that of its pre­ decessor slogans? In this context, Cox's excellent 1 979 review of the subj ect provides more grounds to restate that the appreciation of the NIEO ' s apparent valid properties is caught between nihilistic rej ection and hyperbolic acceptance. 5 8 There js a. reason for this . The NIEO pretends to be nothing less than a 'giant ' step toward the transforma­ tion of the world-economy, but the apparent size of the step can very easily divert attention from the transitional ineffectiveness of the level at which it operates .

Aspects of the NIEO 's arrested transition politics Frank views the NIEO as an 'utterly modest proposal for a better and greater integratio n of the Third World in capitalist world trade . . . ' 59 To him , it i s becoming increasingly 'evident that the demand for NIEO is a political conflict between the governing class in the Third World and the political representatives of international capital in the world capitalist economy. The political conflict is about the terms of the former' s . . . integration in the latter . '60 The incorporation proper of the periphery elites could only mean the ' use of the politicai alliance to exploit and oppress the masses in the Third World s till more and effec­ tively' . 61 This , indeed, is the dreadful fear of the future, projecting from the frightening facts of the present . Frank ' s views on the transforma­ tion potential of t�e NIEO is crisis-based. He sees crisis within the capitalist world-economy as the only chance that the periphery nations would get to enunciate 'relatively more autonomous and " self-reliant " capitalist development based on a more populist democratic alliance of classes between sectors of the bourgeoisie and the working masses ' . 62 Such an alliance would still be a part of the capitalist world-order, but then it could lead to its destruction. But for the moment , Frank thinks that 'the most realistic prospects would seem to be the maintenance, and indeed the extension and the intensification, of the old inter­ national economic order under the guise of a " new" one' . 63 Galtung sees the transformation potential of the NIEO in thes e

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terms : ' what the New International Economic Order means , when translated into the world reality, is some kind of "capitalism for every­ body" charter' .64 He states elsewhere : Very crucial in the evaluation of the NIEO at the international level , which is the level at which it is intended to work, would be the relative weight between 1 . improved terms of trade, 2 . more control of world economic cycle and 3 . improved trade among periphery countries . If the first predominates it might very well freeze the present structure but possibly at a higher level where income to the periphery coun tries is concerned. If the other two predominate the present structure might be changed, present centre-periphery trade might decrease in relative terms . . . . One might argue that thefirst scenario could be a transition on the way to the second. 65

The argument means that the NIEO is an international deal which could lead to some change within the world-economy, but also that the world-economy would remain essentially capitalist because these changes can be accommodated within a capitalist world-economy. In this respect , both Galtung and Frank appear to agree that, for as long as the NIEO is seen as an international 'elitist deal ' , it can promise some change, but not much of a change, if rapid transformation of the capitalist world-economy is what we ' have in mind . Unlike Frank's crisis-based discussion of the NIEO, however, Galtung' s is Basic­ Needs-based . Galtung argues that ' whereas the NIEO is very macro . . . Basic Needs (BN) is a miGro approach going down to the level of the single individual human being . ' 66 The BN approach sets production and distribution priorities in favour of what is basic to meet human needs, and , in particular, it biases distribution in favour of those most in need . Basic Needs are to be understood in the deep sense of including both material and non-material needs . If the NIEO is essentially inter­ national , the BN approach is essentially intranational . Galtung argues that the difference in political stance notwithstanding , there is no contradiction between the two approaches ; that indeed the two approaches are compatible and complementary. Galtupg's impressive master argument is that making the internal orders of periphery nations more similar to the international order demanded by the NIEO is the surest way to realize the transition potential of the NIEO to its fullest. 67 From this , it would be quite correct to argue that the transitional challenge of the NIEO deals with the intranationalization of its inter­ national nature. We shall adopt Galtung's argument as our own, and it

will serve as the criterion for distinguishing the valid from the arrested political clusters . Otto Kreye treats the rationality and the reality o f the NIEO from the point of view of Western Europe's economic and social develop­ ment within the capitalist economy, and in particular in terms of the

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contradictions at the present NID L phase of the world-economy . 68 He argues that the development of the world-economy since the mid- 1 960s has been marked by far-reaching structural change s . Kreye states : the most striking features of these changes are the emergence of a worldwide labour market and a world for production sites . These structural changes . . . have been triggered o ff by a new s et of conditions for valorization of capital, conditions which are them­ selves the outcome of capitalist development up to this point . This , new s et of conditions includes , on the one hand , the existence of a practically inexhaustible worldwide reservoir of cheap labour, above all in the underdeveloped countries, and , on the other hand , the tech­ nology now . available in the areas of transport , organization, and communications , and in the production process itself, which h as ' created the possibility o f splitting up production into a series o f sub­ procedures . It is precisely these technological developments that. have rendered the reservoir of cheap labour usable . 69 .

.

.

It is against this background that Kreye measures the crisis in the present Western European economic and social development to deter­ mine which of the NIEO demands will be acted upon and which will be rej ected . Kreye breaks down the long list o f NIEO demands into fwo issue­ areas : (1 ) the adj ustments of the supranational t rade and monetary political super-structure ; and (2) the issues which constitute a potential threat to the capitalist structure o f the world-economy itself. He concludes that Western European capital, Western European states that is , will fully support demands that seek to align the political super­ structure to the structural changes in the world , because they will facilitate and promote transnational reorganization of production and mobility of companies ; but that they will reject out of hand those demands which threaten the capitalist nature of the world-economy � 70 This conclusion i s interesting, but even more interesting is Kreye 's view that Western European strategy in the politics of the NIEO will consist of clever tactical oscillations between 'restrained endorsement and restrained rej ection ' . 71 It could not be otherwise in the dialectical politics of transition. The rationality and the reality of the Western European crisis seem to square the dictates of the NID L with Western European anticipated reactions to the NIEO . · And this can only aim at the arrestation of the transition validity of the NIEO . Insofar as the NIEO is no more than an 'international elitist deal' between periphery and centre capitals o f the world-economy, the Western European strategy with respect to the NIEO , like the EEC-ACP Lome deals , will remove the NIEO from the s etting of acute confrontation between the centre and the periphery and place it in the s etting of a series of gentle­ manly negotiations which will lead to a series of NIEOs in the very very long run . In the end , barring 'accidents ' , the cumulative effects of

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NIE01 NIEOn could achieve the impossible dream of makin
•

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the themes of the new order involve the aspirations to control natural resources and to strengthen national states , which imperialism does not accept . Imperialism would therefore like to substitute for the new order the ' Rio Proj ect ' (Reshaping of the International Order ! ) , which is an ideological formulation o f the need to transfer some o f the industries o f the centre to the peripheries under the wi ng o f the multinationals . 73 So that , to the extent that the NIDL phase of world capitalism has already begun and means no more than that the extensive wings of multinationals are well and flapping insatiably, the attempt to convert the NIEO to what Amin calls the 'Rio' is international capital ' s politics of arrested tr ansition to entrench and legitimize the world capitalist ;ystem in its present form . Thus , if one does not believe in impossible, or even long, dreams, and If one is not to confuse the vital dialectical distinction between the valid Ind the arrested aspects of the politics of transition, then one would �ead the brief review in this section as essentially illustrating some, and )nly some, of the arrested aspects of the NIEO ' s total transformation )otential . In the precise terms o f our perspective, this review points to p art of :he arrested . transition politics of fe-creation as one would expect the :entre to play it with respect to the NIEO , in order to make the world­ �conomy appear to be changing, while in fact it remains essentially :apitalist and therefore exploitative. Its potential and eventual con­ ribution to accomplished transition would appear to be in the very ong term . Its immediate ideological obj ective, it seems, is to reduce the leat in the system , produced by maturation of the contradictions and tecessary for transition metabolism, so that concomitant crises can be :ontained , that is ' resolved ' , in favour of the dominant classes . There i s , o f course, the arrested transition politics of de-orientation .spect to the above argument . This other argument (box 4 in figure) akes a conception of politics that seeks to transcend the present

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capitalist ethos of the world-economy, b ut unfortunately usually seeks to do so within 'accepted ' socialist departures from capitalism . 74 These departures do not necessarily recognize the imperialist problematique as the main transcendental problem . There appears to be the belief that once the centre sources of imperialism and their predator agents o f multinational corporations are banished , o r at least are allowed to control themselves , the obj ectives of the NIEO can be achieved . The arrested politics of deorientation, therefore , tends to overlook the importance of the imperialist problematique. It tends to concentrate on such policies as natipnalization and indigenization . These policies could be transitionally useful, but in most cases where the imperialist probematique is ignored they do no more for periphery societies than over-bureaucratize these societies and spread generated wealth unevenly within them , all in the name of development misconceived to mean econonlic growth in pursuit of industrialization . The reality of social imperialism is such that it is compatible with the non-recognition imperialist problematique as we have described it . This compatibility notwithstanding , arrested transition politics of deorientation still shares the depicted mutuality with valid transition politics of recreation by virtue of their . shared transcendental aspira­ tions with respect to the world-economy. This mutuality, however , does not go all the way, in that arrested transition politics 9f deorienta­ tion approaches the transcendental intent without much imagination. It seeks to utilize policies which may have sonle valid potentials but at the same time runs the great risk of being easily converted tq serve the ends of arrested transition politics of re-creation . There is a reason for thi s . I t is principally that t h e arrested transition politics o f deorientation takes its transcendental aspirations from the view that centre sources of imperialism constitute the main transcendental problenl . The prominent fact that imperialism has its internal-periphery sources is lost to this orientation . Valid inputs in the NIEO 's transition potential

Indeed , what is validly new about the NIEO? There are many references in the literature that attempt to deal with how the NIEO could benefit the transformation of the world-economy. But because their under­ standing of the world-economic reality and their meanings of trans­ formation differ widely, the same policy remedy can very easily appear prescribable from different diagnoses . This has led to some confusion in policy prescriptions with respect to the NIEO as a transfornlation agent . Essentially the problem is this: the utility of economic policies , measured by their immediate economic gains , is confused with , or rather discussed apart from , their contribution to 'transformation' by essentially political means . Admittedly, the distinction between the two could be very fine at

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times . However , it is precisely upon this fine distinction that our argu­ ments in this chapter are based . It is that a large part of the NIEO demands are aimed at immediate economic gains ; and , while there is nothing wrong with this , such gains without the proper political guidance are easily dissipated in. the false pursuit of transformation , without contributing effectively toward the realization o f the transition equation. In fact , such false pursuits do work against the realization of the equation by taking out the heat generated within the system by its own contradictions . What matters most in our discussion of the NIEO as a transition , therefore, is the political context within which economic and other gains can be measured in terms of their positive and negative contribution to the transition equation . Given the above and the earlier position that the NIEO is not all that new , it is still in order to ask : no matter how unformed , what appears to be valid about the NIEO ' s transformation potential? Sauvant points to what is generally held to constitute the fact , when he states that what distinguishes the NIEO from its predecessors are its ' obj ective and the new environment in which they were formulated and advanced' . 75 Specifically the objective was no longer 'merely to improve the functioning of the existing international economic system , but rather to change its purposes , mechanisms and structures ' ,76 so as to make it more j ust and equitable. As to the environment, three highly interrelated factors describe it , and, in Sauvant ' s words , they are: ' 1 . the emergence o f the non-aligned movement as an international economic pressure group ; 2 . the politicization of the development issue; and 3 . the growing assertiveness of the developing countries . '77 These three factors with which Sauvant describes the environmental aspects of the newness of the NIEO really collapse into one , for as Reis puts it , the newness o f the NIEO stems ' from the sudden coalescence of virtually the entire developing world around a common position ' .78 Reis states further that the significance of thi s event ' was enhanced b y the fact that, in order t o secure t he implementation of the NIEO, a complete change in the structure and mechanisms of international rela­ tionships were required, going far beyond the established development policies and institutions heretofore relied upon' . 79 We are inclined to agree that what distinguishes the NIEO suffi­ ciently to make it noticeable , as validly new , are constituted by its declared o bj ective to transform the capitalist world-economy and the novelty of the politics of pursuing this transformation . We shall add , however, that these novelties make sense only in terms o f the belated discovery by dominant ' science ' that, despite the novel nuisance of the NIEO, it cannot be ignored because the world-economy has become too interdependent . The NIEO , therefore, differs from its earlier forms by virtue of the coincidence of three acts by those who are its main carriers, the periphery states . They are: ( 1 ) the act of putting the separate demands

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together in a single package; (2) the act of standing behind these den1ands collectively; and (3) the act of pursuing these demands self­ reliantly. The context which gives these three acts their valid political viability is the acknowledgement by all sides that the world-economy is interdependent . When we translate what we have j ust said above into more current symbols , what we mean is simply that the NIEO's political viability is located in self-reliance and collective self-reliance as p olitical tools to correct, or negate, the structural-relational underpinnings of the unequal interdependency that characterizes the world capitalist system . From our perspective, then, what is new about the NIEO is the belated discovery by dominant ' science' that the capitalist world­ economy has become interdependent and the sudden realizatio n · by the subordinate parts o f the world-economy that they can use thei r individual and collective self-reliance, within this interdependent world, as maj or means to extract enough concessions from the centre t o transform the world-economy sufficiently t o make i t j ust and equitable and therefore rational. What is new about the NIEO , in our sense o f valid transition, is no more or less than the political utilities of indi­ vidual and collective self-reliance in the transformation of the unequal interdependent world-economy along the lines indicated by the ideals of the NIEO . As to whether the obj ectives of the NIEO and the politics of their pursuit differ, our view, . from the politics of valid transition perspective , is that they should not, because we believe that a proper organization of an i dea is indistinguishable from the idea itself. Having isolated interdependence, individual self-reliance, and collective self-reliance as the three crucial inputs in the valid politics of the NIEO , we now proceed to establish the characteristic coherence i n the differences in the understandings of,' and orientations to , these inputs which distinguish valid politics of re-creation from that of valid politics of de-orientation . The reasoning is this : since the periphery states are the main carriers of the vali d transition virtues of the NIEO , the distinction we establish between each o f the three crucial inputs must cohere , consciously or unconsciously, into the two opposed p olicy packages of valid transition politics of re-creation on the one hand, and valid transition politics of de-orientation on the other .

The NIEO ' s valid transition politics of de-orientation Interdependence

The identity of this type of transition politics derives from its peculiar . reading of the historic identity of the world-economy, the structural-relational contradictions which it contains, and how both relate to define the nature and the root causes of this economy' s

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interdependence property. It sees the world-economy as inter­ dependent , but it does so from the restrictive perspective that this interdependence is something of a recent (post-World War II) pheno­ menon. This politics either cannot or does not conceive the qevelop­ ment of the interdependence of the world-economy in terms of the whole history of the development of capitalism , suggesting that the interdependence is a product of world-history, and that the changing forms of dependency are merely reflections of the changing relations between centre sources and periphery sources of world imperialism . The argument i s not that the valid politics o f de-orientation i s incap­ able of appreciating the interdependent nature of the world-econon1Y . It is very much capable of doing this . The argument is that , apart from seeing interdependence in shortened historic retrospect, it appreciates the interdependence property of the world:..e conomy, and the unequal centre-periphery component of it, in terms of its international referents only. For this reason , this politics comes to identify the main contradic­ tions in the world-economy as international; and strategy comes to be conceived as no more than so acting on the international plane as to oppose these contradictions , while internal-periphery contradictions are ignored . Again, the argument is not that the valid transition politics of de­ orientation is incapable of distinguishing the internal from the external aspect of peripheral economies . It surely can; but its domain is the external , or the international , because its strategic aim is to check and utilize the external elements in the world-economy in order to create, internally , miniatures of the very world-economy which it finds untenably contradictory. In this politics , the imperialist problematique features very little in the algebra of the contradictions posed by the development ' of the world-economy; and therefore, not surprisingly, the arithmetics of the dissolution of these contradictions do not take the dissolution of t he imperialist probematique much into account. This means that the valid transition politics of deorientation proceeds to transform the world-economy without first attempting to sort out the labyrinth of exploitation nodes within the peripheral economies . In short, in this politics , discrete actions are not intended to equate the ultimate goals and the means of transformation with 'conscious and guided transformation ' . It i s for this reason, when considering the so-called ' underdevelop­ ment ' of peripheral economies within the world-economy and how this relates to the idea of exploitation which explains it, that the valid transi­ tion politics of de-orientation wrongly begins from the premise that exploitation is something the centre societies do to the periphery socie­ ties . In this reasoning , what follows is the unsettling and false conclu­ sion that somehow exploitation can be corrected, if not entirely banished from international relations and by extension from>the world, by the systematic negation of exploitation at the international level of

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world capitalism . This is, of course, wrong and has been wrong for a long time. Unarguably, exploitation may have been something that the emerging world capitalist centre did to its emerging periphery in the very early phases of their involvements in world-history . Certainly, since the late 1 9th century, at least, exploitation has been something the periphery elites and ruling classes have aided the centre states in per­ petuating upon the masses of the periphery . More certainly, . we can argue that at this NIDL phase of world capitalism, the exploitation of the masses of the periphery by the centre is assisted in critical ways b y the periphery states themselves , as they are personified b y their elites and ruling classes . These classes in each periphery nation are the critical links in the interlocking exploitation chains which constitute the structural-relational totality of the system. This link is the locus of the strength in the asymmetric interdependent nature of the world­ economy _ The elites and the ruling classes hold on to their false belief for many reasons . Among them is that they see the prosperity of their societies i n terms of t h e prosperity of their individual and class circunlstances . S o long as they can 'better' their lots - secret Swiss bank accounts and opulent living style - they believe seriously that everybody else can , if they try hard enough . 80 And so long as their 'bettered' lots go with high production figures and there are some appearances of trickle-down effect upon the masses of their nations , they tend to believe that all could be well within the exi&ting system if it is cosmeticized enough t o hide its disturbing intra-national features . It is primarily because the elites and the ruling classes want , or already have, a stake in the system , that they cannot see and admit that they themselves are important to the exploitation enterprise as a whole . These are sonle of the reasons that make the classes we have been referring to in the' periphery states demand changes which appear to affect international dependency and inequality, but which have little to do with intranational dependency and inequality. We must remember that valid politics of de-orientation is also transition-oriented, except that, because of the reasons given above, we can say very confidently that it goes about its transition intention in the most ineffectual manner . This politics believes that once the peripheral economies come to produce what the central economies produce, or that once, t hrough affordable tokenism from the centre, they come to show healthy balance of payments, all will be well: the unequal inter­ dependent nature of the world-economy would then have changed for the better . Our argument is that a transition strategy based essentially on these factors will lack the brevity of the transition period, because it would slow down the metabolism o f the contradictions in the system , by reduci ng the heat necessary for the 'sharp struggle' that a transition must possess to be a valid transition .

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So that if the valid politics of de-orientation is a transition of the kind that does not engender the necessary 'sharp struggle ' , it is mainly because it misunderstands and misreads the interdependent fact of the world-economy . It does not respect , mainly because it is unaware of, the fundamentally irreconcilable differentials between the peripheral and the central formations within the world-economy. It sees the peripheral economies as dependent on the central ones only in the sense that the former are merely highly oriented toward the latter, in an inter­ dependent world. It is for this reason that this politics seeks to do no more than to de-orient the peripheral economies from the central economies . Such an orientation has transformation potential in the long run, but because of its slow and restrictive transition articulation it runs the grave ris k , in fact, of reinforcing the existing order in the respectable short run . Armed with this misconception of interdependence, the NIEO 's valid transition politics of de-orientation would see the meanings and the transitional utilities of self-reliance and collective self-reliance in complementary ways , which would ·c ohere into a valid de-orientation rationality of transition .

Individual self-reliance This deals with the part of the NIEO package that the periphery states address to themselves individually. And our objective is to indicate how the logic of valid transition politics of de-orientation would tend to understand and utilize the transition input of individual self-reliance . We would read the political significance of this input to be that , individually, the periphery states have come to realize that they cannot rely on the benevolence of 'rich uncles ' of the centre, as President Nyerere put it in a speech in the early 1 970s , to consider their interest and welfare in the world-economy; and so they are beginning to learn to rely primarily on themselves . But toward what end is this realization? From the view of valid transition politics of de-orientation, it is toward the end of individual periphery states relying on themselves to imitate the centre nations , with the hope that having so imitated the centre and having succeeded in looking like the centre nations , there will be no more exploitation of the periphery by the centre because there will be no periphery. All will be centre and centre ali ke. To achieve this, certain policies are considered indispensable. Parmar describes such policies well in his depiction of the narrow sense of self-reliance. He says it ' merely refers to policies that will , over time, ensure a balance in the foreign exchange budget commensurate with a satisfactory rate of growth . . . . To a large extent this corresponds to the idea of 'self­ sustaining growth' . . . . It is therefore a limited, resource-oriented approach whose central concern is that the country earn enough foreign exchange to be free of foreign assistance. ' 8 1

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Thus , we see that , while the policy of self-reliance could · be very important as a transition policy, in the context of valid transition politics of de-orientation, its transition potence is very much reduced because this politics views self-reliance as j ust a new word for the old and discredited policy of self-sustaining growth . Within the perspective of valid politics of de-orientation, the policy of self-reliance does riot hinge on the kinds of meaningful changes which must exist domestically in the individual periphery societies , if this policy is to contribute to the ' transition equation ' . Self-reliance entails some transitionally effective autarky policies , such as import substitution , political independence, and sovereign non-accountability. However , in the politics of valid de-orientation , such policies , since they do not immediately aim at transcending periphery capitalist formations , but rather aim at i mitat­ ing the central capitalist formations , could very easily degenerate into the retarding and pernicious . policy of: 'whatever we do inside our countries is none of your business ' . 82 And since in this politics , inter­ dependence and exploitation are misunderstood, and further since the ambition of the periphery elites and the ruling classes is their integratio n into the select group of the international system o f elites , ' this degenerate ' none-of-your-business ' policy could degenerate eve n further into a n even more pernicious policy of ' we shall corrtinue t o exploit our masses and that i s none of your business ' . 83 I n other words , the policy o f individual self�reliance could very easily deviate radically, in the valid politics of de-orientation, into a policy of ' self-help ' by the elites and the ruling classes of the periphery societies . The ruling classes form the critical link between the internal and the external sources of imperialism. To paraphrase Galtung , these sources in the periphery are in the position to tell the external sources of imperialism to give them what they want, and a little over that , to appease their masses , or they will incite their masses against the centre nations so as to interfere with their peaceful accumulation o f capital . And while the politics of self-reliance degenerates into that of self-help by the periphery elites and ruling classes , who constitute the periphery capitalist states , and as they entrench their integration into the world­ system, they can always point out to their masses the unavoidable pai n and suffering involved i n the · difficult business of transition from peripheral status to central status in the capitalist interdependent world-economY, 84 in which the exploitation of the periphery societies is externally located and serviced . Our arguments here should not be confused with the arguments advanced by some in the centre of .world capitalism to j ustify their unwillingness to assist some deserving periphery nations in their efforts to grapple with imperialism . Their arguments are based on vulgar inter­ pretations of the self-reliance and the BN approach to the NIEO. 85 Such policy arguments emanate from arrested transition politics of re­ creation sources within the world-system . The two arguments could be

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easily confused due to the fact that these two sources of the argument share a mutuality with valid transition politics of de-orientation sources (see mutuality C in Fig. 9 . 1 on page 270) . Our main concern here has been to show that it would matter very little what specific policies the valid transition politics of de-orientation undertakes in the name of individual self-reliance , because for as long as the elites of the periphery misconstrue the nature of the inter­ dependence of the capitalist \yorld-system and its functional relation.;. ship to the exploitation resultant, the imperialist problenlatique will persist , because its peripheral structural-relational props would be left intact . Collective self-reliance

In the general context of the periphery nations ' strategy for achieving the NIEO, there is no doubt that 'the logic of collective self-reliance is indeed compelling' . 86 What is more compelling , however, is the transi­ tional end toward which this logic is aimed . In the case of the valid transition politics of de-orientation, because it approaches self-reliance in its narrow conception, the logic appears compelling only because it is aimed at de-orienting the transformation potential from fulfilling the transition equation. Let us agree that the policy of collective self-reliance embraces two elements : 'co-operation among developing countries to apply a maximum of leverage so as to increase their bargaining power in negotiations . . . vis-a.-vis the industrialized countries . . . and efforts to strengthen and intensify trade, investment and technological co­ operatio n among themselves. ' 87 With respect to the first of those two . elements , the valid transition politics of de-orientation encourages the �l ites of periphery · societies to band together for mutual negotiating support oilly when it suits their bargaining ploys to press some argu­ ments in support of increasing the affordable tokenistic .ameliorations they can extract from the centre states . The maximum effect of collec­ tive self-reliance is lost in this politics , because it holds the narrow conception of self-reliance . The kinds of domestic transformations which would make their collective self-reliance transitionally meaning­ ful are ignored for the most part, since such transformation would work against the integration of the different periphery elites into the international system of elites . With respect to the second element of cooperating to strengthen and intensify trade, investment, and technological cooperation among periphery states , politics of valid de....orientation's conception of self­ reliance works against the collective utility of self-reliance, since in this politics the aim of the elites is to rely on and imitate the centre in all things including investment and technological culture . This being the case , th� periphery nations would have very little confidence in each

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other and there would be very little in their readings of capitalist ·history to suggest to thenl that, to transform the entire system, the periphery nations must act collectively in aiding the transition equation . Again, the valid transition politics of de.;,orientation is transforma­ tional in intent , but it lacks the proper conception of the domestic foundations which would provide the moral strength and the structural security needed to make collective self-reliance more effective than the sheer expedient for extracting affordable tokenism from the centre. Let us repeat that the moral strength and the structural security needed t o transform t h e world-economy are t o b e derived from the dissolution o f the imperialist problematique , and that not until this dissolution i s undertaken can we b e said to b e engaging i n the fulfilment o f the t ransition equation . The NIEO is a foreign policy consequence of periphery dependency o n the centre in the world-economy. And the valid transition politics of de-orientation is the strategy 'which aims to negate this dependency, but d oes so not by undermining the deeply sunk internal-periphery sources of dependency but by tinkering with its international superficials . It does not take much of a consequence o f dependency, it does not take much of a consciousness , to practise the valid politics of de-orientati o n , at this NIDL phase of the world-economy. All it needs i s for the elites o f the periphery to interpret the historic aim of the age as the growth o f things and t o translate this to mean healthy balance of payments . With this done , the elites need only to recognize the BWL as their own and proceed to sacrifice all these, including self and national pride, to appear to be on the winning side in the outcome of the North-South confrontation. In fact, this appears to be the dominant conception of the idea o f transformation among the periphery states . A testimony to this fact is that a recent writing on the NIDL points to the disappointing haste with which periphery nations compete among themselves to attract the construction of Multinational branch plants in their yarious societies . 88 This testimony may be unhappy, but it clearly speaks to the highly pro bable fact that the NIEO , as it is presently understood and pursued by the periphery nations , is not capable of transforming the world-economy into one which is more j ust and equitable in the respect­ able future. This , in our view, is due to the fact that the imperialist problematique is yet to be seen and appreciated for what its negation would mean in fulfilling the transition equation .

The NIEO ' s valid transition politics of re-creation Strategy i s the science, or the art, which enables a party in a conflict situation to so act as to impose conditions favourable to that party as the effective grounds upon which the resolution of that conflict will

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depend . It deals therefore , with the conception and the management of actions in such ways that a conflict can be resolved -as efficiently as p ossible in favour of a party to a conflict . Strategic actions, therefore , do not necessarily have to appear logical to the unstrategic eye , even though after the fact these actions may display a logic of their own . Furthermore, strategic actions need not necessarily be o f the same kind of action as the goal in contention . A strategist, however, must know, or at least must have an idea of, the logic inherent in his conceptions and management of his strategic actions . If we have conceived the periphery strategy for achieving the NIEO in terms of political actions in pursuit of economic goals , then we must present what we consider the underlying strategic logic linking the valid p otentials in our conceptions of interdependence , self-reliance , and c ollective self-reliance . For , as we have indicated , it is the logical coherence between our conceptions of these terms that should con­ stitute the NIEO as a valid transition strategy for the periphery nations . Interdependence

The logic of the NIEO's valid transition politics should be prenlised on a definite conception of the existing interdependent world-economy. To this politics , the interdependency' of the world-economy is not new b ecause it conceives the history of this interdependency as dating from the periphery' s enforced dependence on the nascent centre to initiate the process of capital accumulation in the developing centre and away from the developing periphery. From this conception, the NIEO ' s valid transition processes would come to hold the conviction that peripheral economies , in their dependence upon the centre economies , have not merely become oriented toward the centre economies , but were in fact created by historical forces to service the accumulation of capital in the centre. For this reason, the transition essence of the actual practice of th e politics of valid transition is not the practice of mere politics of deorientation, but the practice of politics of re-creation . This latter p olitics is four-squarely based on the conviction that it is not possible to transform the world-economy to make it j ust and equitable, while keeping it essentially capitalist . It therefore seeks ' to recreate this economy by transcending its capitalist form and its goal of BWL . The aim , in this politics , is to creatively trans form the existing economy into another , which is not based on the accumulation-disaccumulation contradiction between its parts . Toward this end , this politics identifies a chain of inner contradictions within this major contradiction in the w orld-economy and acts on them . With respect to interdependence, this politics further reasons that the incidence of the benefits of interdependence depend on the rules of the g ames defining this interdependence . It reasons that periphery econo­ mies lose out in the interdependence reality because of the capitalist

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nature of the economy. That is, that the periphery economies lose out not simply because a division of labour exists in the world-economy, but because of the historic end that this economy serves . Allied to this conviction is the realization that some of the values which the existing order holds as goals and cherishes (among them the growth of things to feed the BWL) are unacceptable because they are immoral . In their places , this politics would substitute the goal, the supreme end , of the growth of the human being ; 8 9 and it would make the growth of things subj ect to the growth of the human being . The politics of valid re-creation would use as its criterion of measure­ ment of success , therefore, not the rate at which things are produced , but the extent to which that which is produced is used to enhance life in aid of human growth . Thus , the politics of valid re-creation returns to the first principle of political economy to aim at fulfilling Basic Needs for all. The fulfilment of basic needs for all is not an incidental by­ product of the growth of things but the goal consciously sought . The politics of valid transition is aware of the internal and the external aspects of the periphery economies and the contradictions within and between them; but it sees the main contradiction as the link between the centre and the periphery . For this reason, it acts on these contradictions in ways which will change, principally, the internal: periphery contradictions . This politics aims to establish , within and between the periphery societies , precisely the kind of economic order it seeks internationally. The politics of valid re-creation is very much aware of the transformational futility of seeking to transform the world-economy while keeping the peripheral economy untransforme d . It , therefo re , aims to affect the exploitation props of the capitalist world-economy by concentrating more on internal-periphery trans­ formation. Not that it neglects international reform; it does not . It combats it all it can . However, what is important to this politics is that it uses any gains at the international level to reinforce internal-periphery transformation in order to negate the contradictions that link the periphery with the centre to form the unequal interdependent world­ economy . This politics believes that, by isolating and approaching the imperialist pro blematique in this manner, it can equate the ultimate goal and its means with conscious and guided trans/ormation . It is important to capture the characteristic difference of the p olitics of valid re-creation . It is that whatever gains it obtains in concessiqns from the centre are valued not for the immediate comfort they may provide the elites of the periphery, but for the use to which they could be put to combat inequality and dependency at home , so as to provide both the structural conditions and the moral bases for making inter­ dependence at the international level equitable . The politics of valid r e­ creation, then , understands the idea of development to mean not the growth of things but the negation of exploitation. This means that development , as a process , is the renloval of inequalities and harmful

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dependencies in arder to assure the growth of the human being . We should observe also that the purpose in this conception of development does not exclude the growth of things, except that in the hierarchy of developmental purpose, the primacy of equity, meaning the reductions in inequalities and harmful dependencies to their . unimportant minimum , is unchallenged . Individual self-reliance

The kind of politics under discussion will view individual self-reliance as an i nstrument of policy in a comprehensive way that will embrace the imperialist problematique . Such politics will view this instrument of policy similar to the way in which Parmar views it . 90 P armar says that comprehensive self-reliance assigns central importance to the process , of structural change, which involves more than the mere balancing of accounts in the foreign trade sector of the economy. In this sense of self­ reliance , growth must promote social j ustice and it must . engender public participation in the developmental process . This process should aim at the reduction in the concentration of economic power, at both the domestic and the international levels . All this is true, except that, in the valid transition politics of re-creation, the view of the subj ect will entail the position that growth, participation, and the structure of the world-economy are important only i f they aid the negation of internal periphery inequalities and dependencies , as the bases for a frontal attack on the world capitalist system . Self-reliance as a transition policy may be based on the prin­ ciple of depending on one's own resources;91 but fronl the perspective of the valid transition politics of re-creation, these ' resources' are inter­ preted to include the proper reading of world-history. Such a reading will identify the imperialist problematique as the crucial problem . Self­ reliance would therefore mean relying on oneself to herald the trans­ cendence of the capitalist world-system by means of dissolving the centre-periphery imperialist nexus . In this politics , the unquestioned means towards this end is the institution, by self-help , within the periphery societies of the non-exploitative economy they claim to seek . at the world-level . Collective self-reliance

The compelling relevance of collective self-reliance for the purpose of valid transition politics of re-creation is plainly due to the fact that it is not possible for individual 'small states '92 to mount any valid transition challenge to the existing capitalist economic order, if they were to act singly toward this end. This being the basis, the logic is that these states stand a much better chance of influencing the world-economy if they were to act collectively. But we can see that numbers alone , no matter

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how large, are no guarantee that such a challenge would succeed . In fact, the argument is that such a challenge would not succeed beyond the limit of affordable tokenism, from the centre to the periphery, but then s uc h a s uccess hardly constitutes a serious challenge to the existing system . The reason for this is that the challenge would not be addressed to the dissolution of the imperialist problematique. In contrast, the valid transition politics of re-creation aims at maximal s uccess , because it aims to approximate the 'transition equation ' . And to achieve this , it knows that it must begin by attacking the imperialist problematique by initiating , through individual self­ reliance, the structural and moral preconditions for valid collective self-reliance. In the strict , context of the valid politics of re-creation , collective self-reliance would mean intensified cooperation between periphery countries in the areas o f trade, investment, and technology. In this cooperation, a state inspired by the valid politics of re-creation would cooperate most intensely with states of similar inclination. Such states would have confidence in one another , and this confidence should grow, if the situation is really one of valid re-creation. An integral part of this politics would clearly be that states inspired by it should do all they can to influence those states not so inclined to change their way s . It is not necessary to say any more than this on the valid politics of re-creation ' s conception of interdependence, individual and collective self-reliance . The NIEO ' s recreative potential is enhanced to the extent that more periphery states understand and practise the principles of these transition inputs along the line indicated above. So that, if at the moment most periphery states are not practising these principles in t he proper ways , with respect to the NIEO, then perhaps the sad truth of the matter is that the NIEO is still very low in valid transition potential for the re-creation of the world-economy. The question then is why is this so? c

The strained quality of peripheral states The imperialist problematique is set in the complex processual context, where everything appears to be changing and yet, so far as the exploita­ tion of the periphery is concerned , everything appears to remain essen­ tially the same. The main argument was that, if the process of unequal development is what explains the persistence of the exploitation processes and their reproduction, then the interface between the pro­ cesses of unequal and combined development within the world­ economy is where the imperialist problematique is situated . It is important to realize that what I am referring to is the axial point of contact between the centre and the periphery as they operate within the

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contradiction of uneven development within combined world capitalist development . In this connection , I am not referring to the mechanisms of unequal exchange, it. la Prebisch , in the form of terms of trade,93 or it. la Emmanuel, in the form of unequal wages.94 I am referring to the processes that constitute and reproduce the relations which confer organizational sanctity upon the terms of trade and other nlechanisms' of unequal exchange in aid of capital leaks from the periphery to the centre, at this present NIDL phase of world capitalism, where capital itself h as become truly transnational. To be precise, I am referring to the state, as the organizing node in societies : the node in any society which arrogates. to itself the management of societal scarcities , con­ trived or real , by deciding who gets what , when , how, and, most impor­ tant why. 95 What then is the nature or character of the peripheral capitalist state? This question is of extreme importance, in that, whereas exploitation of the periphery has been going on all through the history of world capitalism and whereas exploitation has been resisted all along, exploitation of the periphery survives , changing its forms as world capitalism develops . The question, therefore, is both what made resistance to exploitation ineffective at the early phases of imperialism and what makes exploitation continue to be so effective in this late day of world capitalism. The real question , however, is : why the peripheral state has not been used as an instrument for negating exploitation. I ask , then: what is it about the peripheral state that makes its capitalist historicity persistently exploitation-prone? We need to answer this question if we are going to be able to construct a bold political confrontation with the most bizarre contradiction whereby the emergence of sovereign periphery $tates over the last few years seems to have done very little to undermine the imperialist problematique. To the extent that the NIEO is low on the required valid transition potential for the transformation of the world-economy, we suggest that, to that extent , this is largely due to the strained quality of peripheral states . Earlier in this chapter we described the quality of the states in terms of the paradox composed by the difference between what a state claims to be about and what it is actually about with reference to the historic theme of the time. In this regard, the quality of peripheral state appear to be strained because, while they claim to be negating exploitation in order to accumulate capital in their societies , what they appear to be actually about is the perpetuation of exploitation by their policies which appear to maintain the ' exploitation gradient ' . If this is so, then our presentation o f the imperialist problematique should lead to the realization that the negation of the periphery 's dependence is hinged on the emergence o f states which would appre­ ciate the valid properties of transformation policies enough to embark on the practice of the politics of valid re-creation.

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As we said earlier, economic policies per se amount to very little of transformation consequence , if the political intents . behind them are not valid. There is no dearth of recommendations as to what the periphery nations must do economically to achieve the NIEO . However, many of these recommendations , in our view, are wrong­ headed , in that they are intended to make the peripheral formations convert themselves into crude imitations of the centre formations in a capitalist world . There is practically nothing new in these recommenda­ tions that will provide the desired transition validity. What is needed are developmental ideologies that derive their legitimacies from the valid recognition of the imperialist problematique. Therefore , our argument will be that the viability of the politics of valid transition is contingent upon a change in the quality of the peripheral state, to the effect that periphery states will abandon the crude attempts to convert themselves into imitations of the centre formations in the capitalist world; and instead, practise the first prin­ ciple of 'honest' political economy by producing and distributing non­ exploitatively to meet basic needs for all in their areas . This , I suggest , can be done only if the periphery states in the world-system begin to orient themselves to practise domestically the same just and equitable economy that they appear to seek at the world level . But how is this to be done, when it is clear that the emergence o f the valid developmental ideologies is itself dependent to some large extent on the emergence in the periphery of states whose very qualities are themselves formed by these very developmental ideologies? As difficult as the answer to this question may be, it should be clear to' all that the first step must be the politically informed intellectual recognition of t his need as transitionally necessary: as a sine qua non . This "" ill call for many things including the painful changes in analytical and other perspective, the need to redefine concepts , and the rejection of the false beliefs that exploitation of the periphery is done only by centre sources of imperialism. As our consciousness grows with respect to real world problems so must our political understanding of how to change the world . I f this is so , then today we need to be forced to reconsider the crucially vital difference between the current 'independent politics ' being practised in the' periphery societies and the much needed 'post­ independence politics ' necessary for the negation of dependency and its consequent exploitation. The difference between the two kinds of politics is to be located in the strained quality of the peripheral state, as described above . Many peripheral societies behave as though the latter politics is merely a con­ tinuation o f the former . This is wrong, i f what we have in mind is the valid re-creation of the world-economy. The forces which defined the levels o f the dissatisfaction - the depth and breadth of the contra­ dictions - which precipitated independence should be different from

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those which should guide peripheral states after independen�e, i f the valid re-creation .of the world-economy is to make it more j ust and equitable . .

Notes 1 It is important to say at this early stage that when I refer to the world­

economy and the world-system as capitalist, I do not use this reference as ideological opprobrium; neither is it due to any insensitivity to the differ­ ences between the economic systems within the world-economy, nor is it without reference to the different social systems within the world-system as suc h . I call the world capitalist because of the dominance of the capitalist mode of production in the world formation, which makes other economic forms behave as though they were capitalist, no matter how different or unsuccessful , principally because the principal capitalist condition o f accumulating capital consciously and methodically i s considered an evolu­ tionary property of the world-economy. This conception of the world­ economy derives from the works of Oliver Cox , Paul Sweezy, Andre Gunder Frank , Samir Amin, Immanuel Wallerstein, and others . It differs from other conceptions of the world-system, such as those by Ernesto Laclau and Robert B renner , which appear to derive from Maurice Dob b ' s Eurocentric conception of capitalism. See my ' Historicity Model of the Capitalist World-System' (mimeograph, 1 980) . See also note 14 below . 2 lohan GaItung describes the Bourgeois Way of Life (BWL) as 'the mode o f production, t h e mode o f consumption, a n d t h e goal around which motiva­ tion and action do cluster in the world today. It is the particular mode of production which encourages the escape from manual labour, the search and the desire for material comfort, familism, or privatism and nuclear­ ism , as a source of security. ' See his ' Global Goals , Global Processes and the P rospects for Human and Social Development' (mimeograph, 1 979) . See also R. Heilbroner, A n Inquiry into the Human Prospect (London : Calder and Boyars , 1 975), pp. 1 6 and 75 . The concomitant to the BWL is the Proletarian Way of Life (PWL) . The PWL , I will suggest, deals with the struggle to deprive the capitalists of some of the exploited surplus so that proletarians can also pursue the BWL . 3 Robert Cox , ' Ideologies and the New International Economic Order: Reflections on Some Recent Literature' , International Organization , 3 3 , no . 2 ( 1 979) : 257-302 . 4 Samir Amin, ' Self-Reliance and t h e New International Economic Order ' , Mon thly Review, 2 9 no. 3 ( 1 977): 1 ; and i n this book , p . 205 . 5 What we call here the periphery and centre parts of the capitalist world are what are often referred to as the peripheral and central societies, nations,

states , countries , or nation-states . These terms are controversial in their

usages , and we shall therefore refer to the periphery and centre parts of the world-economy when we are referring to the world-economy as the seamy unit it is . B ut we shall use the expressions periphery states and centre states (or variations of them depending upon context) when we are refer.,. ring to the organizational aspect of the world-system, including the

292

TRANSFORMING THE WORLD-ECONOMY?

world-economy. These latter aspects are the political links which super­ impose themselves on the economic in the unit world.:.system . This clari ­ fication has become necessary as a result of conversations with Terence Hopkins of The Braudel Centre , SUNY, Binghamton. See my ' Approach­ ing the Peculiarity of the Caribbean P light' , HSD RGP ID-24/UNUP- 1 3 5 . 6 See m y 1 98 1 manuscript o n ' World-System Critique o f Eurocentric Conceptions of Development' , where I argue that development is the nega­ tion of dehumanizing exploitation and not the blind imitation of the BWL . 7 In my 1 980 mimeograph on the ' Historicity Model of the Capitalist World­ System ' , I argue in favour of the view that the acknowledged uniquenes s of the modern world-system i s not properly recognized in the realms of history when its historical properties are not sharply distinguished from other historically unique properties . For the purposes of such sharp distinc­ tion , I sugg�st that the term historic be used to describe deserving proper­ ties composing the unique identity o f the capitalist world-economy in evolution . This distinction is meant to stress the relevantly unique aspects of historical events within world-history - that i s , the history of the ' capitalist world-economY, the roles these events played in the evolution of this economy, how t hey explain the present state of the world, and how they inform the politics o f its probable transformation. In short , the term historic is meant to emphasize the singularity of the development of the modern world-economy. 8 Recall President Truman' s Point IV suggestions in 1 949 and the s ub­ s eq uent Act o f International Development, 1 950. See US Government ,

Staff Papers Presented to. the Commission on Foreign Economic Policy (Washington D C : Government' Printing Office, 1 954) . 9 Raul Prebisch, The Economic Development of Latin A merica and Its Principal Problems (New York : United Nations , 1 950) . See also his Change and Development: Latin A merica 's Great Task, a report submitted to the Inter-American Development Bank (New York: Praeger , 1 97 1 ) . 1 0 Lester B . Pearson , Partners in Development: A Report by the Commission on International Development, prepared for the IBRD (New York : Praeger , 1 969) ; Sir Robert Jackson , A Study o.fthe Capacity of the United

Nations, a report prepared for the UN International Development Plan (Geneva: United Nation s , 1 969) ; Barbara Ward et aI , The Widening Gap: The Develo.pment in the 1960s, a report on the Columbia Conference of International Economic D evelopment , Williamsburg, West Virginia, and New York , 1 5 -2 1 February 1 970 (New Yor k : Columbia University Press , 1 970) ; Jan Tinbergen , Committee for Develo.pment Planning: Report on the Sixth Sessio.n (5-15 Jan uary 1970), UN Document E/4776, ECOS OC , ' 49th Session , Supplement No . 7 ; and Goran Ohlin , Fo.reign A id Policies Reco.nsidered (Paris : OECD , 1 966) . See also the collection o f speeches by Robert S . McNamara in his One Hundred Co.untries, Two. Billion People: The Dimensions of Development (New York : Praeger, 1 97 3 ) . 1 1 Raul Prebisch , To ward a New Trade Policy for Development, the Secretary-General' s Report to the 1 964 UNCTAD (New York : United Nations , 1 964) . See also various Report s of GATT and UNCTAD . 1 2 There is easy access to the contents of the NIEO . For some readily acces­ sible sources see the following: United Nations General Assem bly, ' Declaration and Programme of Action on the Establishment of a New

APPROACHING THE NEW INTERNATIONAL ECONOMIC ORDER

293

International Economic Order' , 320 1 (SV- 1 ) , and 3202 (SV- 1 ), May 1 974; United Nations, 'Resolution on Development and , International Co­ operation' , 3362 (S-VIlI), September 1 97 5 ; Jyoti S . Singh, A New

International Economic Order: To ward a Fair Redistribution of the World's Resources (New York: Praeger, 1 977); UNCTAD, 'The Recent

Economic Experiences of Developing Countries in Relation to the United Nations Development Obj ective' , report by UNCTAD Secretariat, Geneva, TD/B/642/Add . 2, April 1 977; UNITAR, 'Progress in the Estab­ lishment of a New International Economic Order : Obstacles and Stra­ tegies ' (Geneva: UNITAR, 1 978); and K . P . Sauvant and H. Hasenpflug, eds . , The New International Economic Order: Confrontation or Coopera­ tion between North an.,d South? (Boulder, Colo . : Westview Press, 1 977). Essentially, the NIEO , as it stands , asks for the following: ( 1 ) a new structure to govern trade in primary products ; (2) a reformed external framework to govern industrialization of the periphery nations ; (3) a new monetary system; (4) co-operation among periphery nations and East European socialist nations ; (5) transfer of technology from the centre to the periphery; (6) particular attention to the more 'handicapped' among the periphery nations ; (7) regulation and supervision of transnational corporations' activities in favour of periphery nations' development; and (8) a new institutional mechanism for negotiating the above. And , further, the above demands are to be negotiated with the following conditions as given: (1 ) the freedom for nations to choose their economic, social , and political systems and their economic relations ; (2) the rights of nations to full permanent sovereignty over their natural resources ; and (3) the rights of nations to nationalize foreign property in accordance with their own laws . This is the programme of demands which some politicians, policy makers , and international civil servants from the periphery nations tend to regard as a giant developmental step forward and which their counterparts i n the centre tend to regard as pernicious and unwarranted, if not exactly a quite retrograde step for the capitalist world-economy. 1 3 Andre Gunder Frank, World A ccumulation, 1492-1 789 (London: Macmillan and Co. , 1 978), especially the preface, pp. 1 1 -23 . 1 4 This fact is held at the status of an axiom by the Marxist wing within the adherents of the world-system methodology . See the following: Paul A. B aran, The Political Economy of Growth (New York : Modern Paper­ backs , 1 968); Samir Amin, A ccumulation on a World Scale: A Critique of the Theory of Underdevelopment, vols. 1 and 2 (New York: Monthly Review Press , 1 974), and Unequal Development: An Essay on the Social Formations of Peripheral Capitalism (Hassocks , Sussex: The Harvester Press , 1 976); Oliver Cox, Capitalism as a System (New York : Monthly Review Press , 1 964); Andre Gunder Frank , Dependent A ccumulation and Underdevelopment (London : Macmillan and Co . , 1 978), and Latin A merica: Underdevelopment or Revolution (New York: Monthly Review Press, 1 969) (also see note 13 above) ; Paul Sweezy, Theory of Capitalist Development (New York : Monthly Review Press , 1 956) , and Modern Capitalism and Other Essays (New York : Monthly Review Press, 1 972); Immanuel Wallerstein, The Modern World-System: Capitalist Agriculture and the Origins of the European World Economy in the Sixteenth Cen tury

294

TRANSFO.RMING THE WORLD-ECONOMY?

(New

York :

Academic

Press ,

1 974);

and

Christopher

Chase-Dunn ,

' Comparative Research on World-System Characteristics , ' · International

Studies Quarterly , 2 3 , no . 4 (1 979): 60 1 -624. See also many other relevant essays in Review and in Political Economy of World-System A n nuals, vols .

1

and

2.

This position differs from that wing in the world-system

perspective which is concerned with security aspects of the world-system . S ee , for example, George Modelski , 'The Long Cycle of Global Politics and the Nation-State ' , Comparative Studies in Society and History ,

15

no .

2 (1 978): 2 1 4-23 5 .

Samir Amin, Unequal Developmen t (Hassoc k s , Sussex : The Harvester Press ,

16 17 18

1 976),

and Class and Nation, Historically and in the Curren t Crisis

(London and New Yor k : Monthly Review Press , S amir Amin , A ccumulation Development, pp .

75

and

1 68 .

on a

1 980). p . 22,

World-Scale,

and

Herb Addo, 'The New International Economic Order and Imperialism : A

1 94-2 1 5 ,

21

Unequal

Johan Galtung, ' Global Goals , Global Processes and the Prospects for Human and Social Development ' , p. 1 4 . Context for Evaluation ' , IPRA Studies in Peace Research ,

19 20

20,

7 (1 979) :

and ' World-System Critique of Eurocentric Conceptions of

Imperialism' (mimeo , 1 980). Ibid . , especially ' \Vorld-System Critique' , chapters

5

and

6.

Oliver Cox, Capitalism as a System (New Yor k : Monthly Review Press ,

1 964),

p.

1 3 6.

S e e note 18 above. S e e also James Caporaso , 'Methodological Issues in the Measurement of Inequality, Dependence and Exploitation ' , in Steven J . Rosen and James R . Kurth, eds . , Testing Theories of Economic Imperial­

22

ism (Lexington , Mas s . : D . C . Heath , 1 974), pp . 87-1 44 . I n earlier formulations value-inequality represented some vague concep­ tion of inequality in national attributes . In this instance we see x as repre­ senting inequality in accumulated capital , dependency as represented by y, and exploitation by z . We see the three ideas related multiplicatively as z =

xy . For some earlier comments on this formulation, see James Caporaso, ' International Development and Equality : Comments on the Structural Interpretation of I nternational Inequality Project ' , and my response to Caporaso , both in Caribbean Yearbook of International Relations,

23

255-266 and 267-277,

Andre Gunder Frank , ' Rhetoric and Reality of the New International Economic Order' , Development Studies Discussion Paper, no.

24

1 977:

respectively.

37-38;

and in this boo k , pp .

1 84-5 .

35 (1 977):

What I am alluding to here is the dialectical sensitivity to distinguishing between forces which seek and aid genuine transformational change and those forces which seek change in order to ' share the crown ' , as Albert Camus put it in his Rebel (New York : Random House,

1 956).

Even though this latter form o f change can have some input in the trans­ formational final analysis , it is precisely for this reason that we should not confuse it with the former . The plea here is for a distinction between

25

anti-systemic and anti-regime forces . I use ' respectable future' in this context because too many studies on trans­ formation of the world-system make it appear as though the world can be transformed in a matter of a few years . I read in this a coloss al insensitivity

0

APPROACHING THE NEW INTERNATIONAL ECONOMIC ORDER

295

to the difficulties entailed in transforming the world , and perhaps even some disrespect for the future. It has taken nearly 500 years to create the present world-economy; and, while nobody knows how long it will take to transform it, it will certainly take 'some' many years. Out o f respect for these many years, I use the expression ' respectable futur�' . 26 See Folker Frobel et al. , eds . , Krisen in der Kapitalistischen Weltokonomie (Hamburg: Rowohlt, 1 98 1 ) . 2 7 I n the precise context o f capitalist historicity. 28 See Folker Frobel et al. , The New International Economic Division of Labour (Cambridge: Cambridge University Press, 1 980) . 2 9 As this scheme has evolved, imperialism i s now seen a s synonymous with capitalist exploitation of the periphery z. Recalling 'note 22 above, where x represented inequality in accumulated capital , and y represented depen­ dency, the comprehensive scheme now becomes z a·xy + k, where a is a coefficient and k is a residuaL 30 See Heraldo Munoz� ' Strategic Dependence and Foreign Policy: Notes on the Relations between Core Powers and Mineral-Exporting Countries' , Sage Yearbook of Foreign Policy Studies, VI ( 1 980) . I n this piece, Munoz distinguishes between structural dependence of the periphery countries on the centre countries , and the strategic dependency of the centre countries on the periphery. This distinction is useful in the analyses of specific foreign policies, as Munoz demonstrates7 but we should be careful not to let strategic aspects of dependency divert our appreciation from the imperialist problematique, as it holds in all peripheral cases whereas stra­ tegic dependency does not.. A p robable danger inherent in this distinction is that the dependency idea will not be seen as a process which begins with the initiatioJ;ls of (capitalist) imperialism . Attention will stray from the effectiveness and the pre­ dominance of structural dependence to the exaggerated importance and effectiveness of strategic dependence. Strategic dependence may account for shifts in particular foreign policies, but its significance in the trans­ formation of peripheral capitalism is perhaps very little. 3 1 See Wallerstein, The Modern World-System . 32 For a discussion of the ' semi-periphery' , see Immanuel Wallerstein, 'Semi­ peripheral Countries and the Contemporary World Crisis' , in his The Capitalist World-Economy (New York: Cambridge University Press, 1 979), pp. 95- 1 1 8 . 33 This is an important point . Power is not unrelated to certain crucial historic abilities at points in historic periods . 34 How else can it be in a capitalist world? 3 5 See notes 22 and 29 above. 36 See Ransford W. Palmer, Caribbean Dependence on the US Econ omy (New York : Praeger, 1 979) . In this book, Palmer provides tables of figures for the percentage rates of return and reinvestment for centre and periphery countries which , when substituted in the equations above, could give some idea of the flow of capital from periphery countries to centre countries, as compared with the flow between centre countries . See his table S . 7 on p. 75 , for example. 37 GaItung, 'Gl obal Goals ' , p. 1 4 . 3 8 For a comprehensive treatment of such positions in the centre countries,

296

TRANSFORMING THE WORLD..:ECONOMY?

see C. Reis , 'The New International Economic Order: The Skeptic 's View' , in K . P . Sauvant and H . Hassenpflug, eds . , The Ne w International

Economic Order: Confrontation or Co-operation between North and South , pp. 63-84. 39 Ayi Kwei Armah, Why A re We So Blest? (London: Heinemann, 1 974) ,

p . 22 1 . 40 Ibid . , p . 222 . Emphases added . 4 1 As illustrations of the difficulties with these terms , see Fernand Braudel , Capitalism and Material Life 1400-1800 (Glasgow : Collins , 1 977) ; Maurice Dobb, Studies in the Development of Capitalism (London : Routledge and Kegan Paul, 1 975); and Rodney Hilton, ed . , The Transition from Feudalism to Capitalism (Norfolk: Lowe and Brydow, 1 976) . 42 Robert Cox , ' Ideologies and the New International Economic Order ' , p . 3 00. 43 Ibid . 44 Walter Rodney, 'Transition ' , Transition , 1 , no . 1 ( 1 980): 1 . 45 Ibid . , p . 2. 46 Ibid . 47 Ibid. 48 Ibid . 49 Ibid . , p . 3 . 5 0 Ibid . , p . 8 . 5 1 Samir Amin, Monthly Review, 3 , no . 29 ( 1 977): 1 3 ; and i n this book , p. 2 1 3 . 5 2 Rodney, 'Transition' , p . 7 . 5 3 Ibid . 54 Herb Addo , IPRA Studies in Peace Research , 7 ( 1 979) : 1 94 . See also Robert Cox , ' Ideologies and the New International Economic O rder ' , pp . 257-302 . 5 5 See the reference to Albert Camus i n note 2 4 above. 56 l owe a sharp reminder of this interpretation of dialectics to the discussio n which followed the presentations of the following papers at the Twentieth International Studies Association meeting in Los Angeles, 1 9-22 March 1 980: Hayward R. Alker , Jr. , 'The Dialectical Logic of Thycydides ' Melian Dialogue' ; and James Schmidt , 'A Paideia for the ' Burgerals Bour­ geois ' : War and Exchange in Hazel' s Philosophy of Right '. 5 7 But this makes sense only after the main carriers of a transition process have been identified . 5 8 I expressed this view in my earlier essay on the NIEO . See note 54 above . 5 9 Andre Gunder Frank , 'Rhetoric and Reality' , p . 1 6; and in this book, p . 1 73 . 60 Ibid . , p . 1 84. 61 Ibid . , p . 1 87 . 62 Ibid . , p p . 64-65 . 63 Ibid . , p . 1 99 . 6 4 Johan Galtung, ' Self-Reliance and Global Interdependence : Some Reflections on the New International Economic Order' (paper presented at the Society for International Development meetjrtg in Linz, Austria, 1 975) , p. 9. 6 5 J ohan Galtung , 'The New International Economic Order and the Basic

APPROACHING THE NEW INTERNATIONAL ECONOMIC ORDE R

297

Needs Approach : Compatibility, Contradiction and/or Con flict ? ' (paper presented at the UNU-GPI D meeting on 'Basic Need s ' , Berli n , 1 1 June 1 979) , p . 1 . Emphases added . 66 Ibid . , pp . 1 -2 . 6 7 Ibid. , p . 6 . 68 Otto Kreye, ' Western Europe 's Economic and Social Development and the Rationality and Reality of a New International Economic Order ' (unpub­ lished UNU/GPI D research paper) ; chapter 4 in this boo k , pp . 1 1 9-37 . 69 Ibid . , pp . 1 1 9-20. 70 Ibid . , p . 1 29 . 7 1 Ibid . , p . 1 30 . 72 K . P . Sauvant , 'Toward the New International Economic Order' , in Sauvant and Hassenpflug , The New International Economic Order: Con­

frontation or Co-operation between North and South , p . 6 . 7 3 Amin, ' Self-Reliance and the New International Economic Order ' , p . 2 1 9 . 7 4 See, for example, Michael Hudson , Global Fracture: The New Inter· national Economic Order (New York : Harper and Row, 1 977) . 75 Sau vant, ' Toward the New International Economic Order ' , p . 1 3 6. 76 Ibid . 77 Ibid . 78 Reis , ' The New International Economic Order: The Skeptic ' s View' , p . 64. 7 9 I bi d . 8 0 The perfect allusion here i s t he Shakespearian admonition not to , like the unscrupulous clergyman, ' . . . show me the steep and thorny way to heaven' . 8 1 S . L .. P armar , ' Self-Reliant Development in an " I nterdependent World " " in G . F . Erb and K. Valeriana, eds . , Beyond Dependency: The Developed World Speaks (Overseas Development Council, 1 975), p . 6 . 8 2 Galtung, ' The N e w International Economic Order a n d the Basic Needs Approach ' , p . 7 . 83 Ibid . 84 See note 80 above . 85 See Galtung, 'The New International Economic Order and the Basic Needs Approach ' , and Reis , ' The New International Economic Order: The Skeptic 's View ' . 86 UNCTAD , New Dimensions and New Structures for.Trade and Development (New Yor k : UN, 1 977) , p. 54. 87 Ibid . , p . 5 5 . 88 Frobel et al. , ' The N e w International Economic Division of Labour ' . 89 For further discussion of this matter see my ' Informing Visions of Desirable Future Societies Through Dialogue of Civilizations : A Peripheral View ' , in Eleonora Masini, ed . , Visions of Desirable Societies, (Oxford : Pergamon Pres s , 1 983), p p . 1 5 7-76 . 90 Parmar, ' Self-Reliant Development ' , p . 6. 9 1 Amin , ' Self-Reliance and the New International Economic Order' , p . 1 ; and in this boo k , p . 204 . 92 For my · position on the concept of 'small-state ' , see 'Approaching the Peculiarity of the Caribbean Plight ' , as well as ' Caribbean Prospects for the 1 980s : The Plight and the Destiny' (mimeograph , December 1980) , and

' Deducing

the

Small-State

Problematique

from

the

Capitalist

298

TRANSFORMING THE , WORLD-ECONOMY?

Problematique' , mimeograph, January 1 98 1. 93 Prebisch , The Economic Development of Latin A merica. 94 Arghiri Emmanuel, Unequal Exchange (New York: Monthly ' Review Press, 1 972). 95 This vital component, for reasons difficult to understand outside Euro­ centric methodology, is left out of the liberal (Lasswellian) definition o f politics .

Epilogue

I t must be clear now that the chapters i n this book bear interlocking relevance to one another . Wallerstein 's ,and Preiswerk 's concerns with the ' mythology of change' permeates all the other chapters ; they all address , d irectly or indirectly , the notion of ' crisis ' in the world­ economy; and they all have aspects of the NIEO as their subj ects . But neither mythology nor crisis, however viewed , is a stranger to the world-economy : the world-econo'my has been in one crisis or the other ; and it has been based on a consistent myth all through its all too long life . It is, however , the awareness of this mythol08Y which provides the chapters with the determination to approach the NIEO critically from the transformational perspective; and this is what spawns the optimistic belief prevalent in all the chapters, that the time of crisis is also always the time for change . A proper diagnosis of the crisis in the world-economy cannot be done without an empirical reference point which depicts the factors indicating the trends that describe the nature o f the crisis . Such empirical reference points are difficult to come by in the literature . I n most cases , what pass a s empirical analyses lack the analytical depth and breadth that convince. The chapters by Frobel, Kreye and Frank base their separate convictions that there is a crisis in the world­ economy on the honest and immaculate marriage between the elegant and courageous understanding of history as practical theory and the marshalling of credible statistics . In studying crisis in the world-economy, it becomes clear that some factors in the crisis are more important than others either, because, from the transformational point of view , they aid the valid transitional unfolding of the crisis or they retard it more than other factors do . This is where A min 's analysis of transnational corporations , Aseniero 's on Technology Transfer , and Shaw 's on the Non-Aligned 'Movement alert us to the transitional meaning of these factors in the crisis in the world­ economy. The reader would have noticed that in all the chapters , there is the logical compulsion for the authors to refer to the strategic primacy of the political . The reason for this is that , from the world-system perspec­ tive, economic and other transformational policies can serve a dual pur­ pose : depending upon the political intentions behind them , they can either aid the transitional potential in the transformational processes or retard it . Addo 's chapter attempted to draw attention to this fact by way of the transformational complexities inherent in the NIEO .

_

300

TRANSFORMING THE WORLD-ECONOMY?

With reference to the querries and the questions raised earlier in the Prologue, we can say that the NIEO does not appear to have a high potential for the initiation of the rapid transformation of the world­ economy . It does not go far enough in this direction . This much must be clear . It must also be clear that for this very reason, the kairos cannot be said to have grasped those who proclaim it and those who disclaim i t ; and yet the transformational relevance of the NIEO cannot b e ruled o u t altogether . Here the kairos displays its paradoxical , even surrealisti c , essence of being wrong and , a t the same time , being right . Even more important in this matter is the fact that those who proclaim it may, by their actions , disclaim it ; and those who disclaim it may, by their actions, proclaim it . The problem is precisely that it is within this dialectical confusion that we must somehow try to make the NIEO transitionally valid and specify its transition path . But will the kairos ever arrive? Of course it will . In fact it is now ! By its strange nature of being there all the time and yet not being there, its actualization becomes the more real, the more we search for it con­ sciously . To search for the kairos properly, always involves s ome division an.d even some conscious duplication of the research lab our, as this book must indicate . So that , even if the NIEO is not exactly the perfect embodiment of the kairos, the NIEO becomes part o f the kairos by virtue o f the ease with which the NIEO lends itself as an instrument for searching for the kairos. This book , then , is intended as a modest contribution toward this search .

Development as S o ci al Transformation

The central thesis o f this book i s the conviction o n the part of the con­ tributors that , if development is understood in terms of the improved living conditions of the maj ority of the world' s population, this cannot be achieved through changes to the existing world-system , but o nly through a transformation of this system . Although the contributors view this transformation from a number of different perspectives , they provide an interesting insight into the ways of bringing about such a change and the possible effects it would have . The editor, JUrgen Heinrichs, works at the Starn berger Institut zur Erforschung Globaler Strukturen, Entwicklungen and Krisen , Starnberg, West Germany. Produced in association with the United Nations University , J apan 0 340 3 5634 0 288 pp 235

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A World o f Differentials

Why is it that in one African country the Permanent Secretary earns twenty-five times as much as an unskilled 'labourer, while in another he only earns s even times as much? And why in s ome African countries has the narrowing of such differentials proceeded so slowly over the past two decades , while in others it has been dramatically fast? These · and other questions are answered in this book which sets out for the first time to ,examine wage differentials in seven African countries , and t o analyse the reasons for the differences between the countries in the patterns of change they have experienced in the salary structures of their public and private (including both local and multinational com­ panies) sectors . This book is written in an accessible and readable style, and will be of interest t o non-specialist general readers and students of ' economics and development studies alike. Ragia A bdin is an economist, working in the Institute o f . National Planning � ' Cairo, Egypt .' Paul Bennell is : Research Officer at the Institute of Development Studies , Brighton , England . Olufemi Fajana is a senior lecturer and head of the economics department at the University of ' Lagos , Nigeria. Martin Godfrey is a Fellow of the Institute of Development Studies , Brighton, England . Bachir Hamdouch is an economist , working in INSEA, Rabat , Morocco . Published i n association with the International Development Research Centre , Ottawa, Canada. 0 340 3 34 1 5 0 1 60 pp 23 5

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S ocial S cience Research Methods: A n African Handbook

This is a comprehensive and detailed introduction to research methods for social scientists , and is the first to draw all its examples from Africa. It offers a much-needed comparison between research methods used i n Europe and America and those used i n a developing country, and gives examples of the difficulties posed by illiterate respondents, houses without numbers, the multiplicity of languages , polygamous marriages , and so on. The book is designed for those who are either actively involved , .Or are likely to be involved, in fieldwork. It should be of great interest to all students of research methods courses in African c�lleges and universities .

Margaret PeU is Reader is Sociology at the Centre of West African Studies , Univer�ity of Birmingham, UK. Peter K Mitchell is Senior ' Lecturer (Ge�graphy) and Doug/as Rimmer is Deputy Director and Senior Lecturer (Economics) , both also at the Centre of West African Studies, University of Birmingham'. 0 340 26205 2 1 92 pp 23 5

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Environmental Decision­ making

Based on the report on the proceedings of the Intergovernmentai Expert Group Meetings which were organised by the United Nations Environment Group between 1 979 and 1 98 1 , this' study attempts to examine the basic concepts underlying the application of cost-benefit analysis . VOLUME ONE has been prepared with a two-fold obj ective: firstly to provide a general introduction to the relevance and utility of cost-benefit analysi s in environmental decision-making; and secondly to examine some of the technicai and analytical problems that arise in such applications . VO LUME TWO presents a nUlnber o f case studies which serve to illustrate the practical nature of cost-benefit analysis . Each case study has its own separate introduction which draws together the practical and theoretical aspects of the analysis . These case studies were selected because they throw light on difficulties that may arise when cost-benefit analysis is applied to the formulation of environ­ mental policies . They also illustrate techniques that have been developed in different contexts to contain or overcome these difficulties . The editor , Yusuj J Ahmad, is the Director for Special Assignments , and Assistant t o the Executive Director in the Office of the Executive Director , United Nations Environment Programme, Nairobi , Kenya. Sponsored by the United Nations Environment Programme, Nairobi , Kenya. Volume One . 0 340 34298 6 48 pp 235 x 1 5 5 mm Paperback £3 . 50 net b . Volume Two . 0 340 3430 1 X 368 pp 235 x 1 55 mm Paperback £20 . 00 net b .

Information , Economics and P ower The North-South Dimension

The need to find more secure funding and finance for the developing world and to help the countries to achieve better bargaining capacity i n the 1 980s i s central to the alleviation o f poverty in rural regions . The Brandt Report published in 1 983 emphasised once again the need to find a more equitable sharing of global resources . One of the ways this can be achieved is by a more effective· marshalling of information i n negotiatio ns crucial to present and future capacity. The uni que con­ tribution of this book is its consideration of information gaps and how they might be remedied . It looks at the organisation of information at the national level and its management, and considers new technology and its relationship to international trade and communication . The editor, Rita Cruise O 'Brien , who has written widely on informa­ tion and communication issues in the 1 970s , is Fellow of the Centre for International Studies at the London School of Economics and Politics . 0 340 336 1 4 5 1 76 pp

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mm Paperback £7 . 50 net b .

EEe and the Third World : A Survey 3 The

A tlan tic Rift

As its title suggests , the central theme of The A tlantic Rift is the import­ ant and growing division between the EEC and the USA regarding their policies towards the Third World . It questions whether the sharp con­ flicts apparent in the rhetoric of the EEC and USA are translated into differences in actual policies . A range of important contemporary issues are examined at both the international level (including the Law of the Sea, export credits , UN Global Negotiations) and the regional level (Southern Africa , the Caribbean Basin and the Middle East), and it assesses the EEC' s past performance and future plans for relations with the Third World as a whole, and Africa in particular .

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The A tlantic Rift addresses itself to these very topical issues in an informative and accessible way. The contributors are all experts in their particular fields . As well as containing pieces by leading academics , the Survey also includes articles by several eminent political figures , i nclud­ ing Willy Brandt and US Congressman Lee H Hamilton, who is Chair­ man of the US House of Representatives ' Sub-Committee on Europe i and the Middle East . .

The editor, Christopher Stevens, is Research Officer at the Overseas Development Institute and a Research Fellow at the Institute of Development Studies , England . Published in association with the Overseas Development Institute and the Institute of Development Studies .

o 3 40 32646 8 256 pp 23 5

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EEC and the Third World : A Survey 4 Renego tiating Lome

Completed as the negotiations for a successor to the present Lome Con­ vention commenced, A Survey 4 is an analysis of the first two Lome Conventions . It contains a thorough examination of the Lome institu­ tions and discusses whether or not the Convention really has developed trade links between the EEC and the African, Caribbean and Pacific signatory countries . Special attention is paid to the orientation of EEC aid, and case studies of Malawi and Sierra Leone raise questions about its efficiency and effectiveness . The book concludes with an analysis of the true nature of EEC and ACP interests in relation to mineral pro­ ducts, and identifies a number of provisions which could be incorpor­ ated into the next Convention . The editor , Christopher Stevens, is Research Officer at the Overseas Development Institute and a Research Fellow at the Institute of Development Studies , England . Published in association with the Overseas Development .Institute and the Institute of Development Studies . 0 340 3 5330 9 208 pp 23 5

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1 35 mm Paperback £7 . 95 net b .

Protectioni sm and Industrial Decline

This book results (rom a project to . study the adjustment o f UK industries to the com'petition of imports from developing countries . It considers the economic and political issues involved in the adoption o f protectionist measures , a s well a s looking at alternatives t o protection­ ism . The book draws on case studies of the UK electronic, knitwear , .; cutlery and footwear industries , and also illustrates the international ' implications of a policy of protectionism . There is very little work available which has brought all the factors relating to this issue together . Therefore this book, with its use o f specific case studies , �nd fQllow,- u J? , suggestions , will b e a n invaluable . tool for people who have to taRe' decisions today on economic planning either at national or local level , in government , industry, commerce, trade unions or lobby groups . It will also be essential reading for all economics students . Vincent Cable was formerly the Deputy Director of the Overseas Development Institute and is now Special Adviser in the Economic Affairs Division , Commonwealth Secretariat , London. Published in association with the Overseas Development Institute i

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340 3 30 1 9 8 288 pp 23 5

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