unequal exchange

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unequal exchange

trade between peripheral capitalist and centre capitalist countries which operates to the disadvantage of the former. The concept is particularly associated with the Marxist economist Arghiri Emmanuel (1972), who argued that low wages in peripheral countries lead to international exchanges which involve the flow of economic surplus to the core capitalist countries. In Marxist terms, in international exchange, centre capitalist countries exchange commodities in such a way as to acquire commodities embodying more labour time (i.e. greater VALUE) than the goods they exchange. This phenomenon is seen as not something that can be accounted for simply by differences in ‘productivity’ arising from training and capital inputs, etc. in more developed countries (see also LABOUR THEORY OF VALUE).

Emmanuel's suggestion is that the major cause of unequal exchange is the historically high wages in developed nations, resulting from the power of strong trade unions to maintain wages, compared with the low wages in poorer countries, resulting from a very great surplus of labour. The immobility of labour between countries prevents any tendency to the equalization of wages in these circumstances. The overall process of unequal exchange is also seen as accentuated by a high ‘ethical wage’ which becomes established in developed countries, and which also contributes to a cycle of growth, while in poor nations a vicious cycle of stagnation occurs, contributed to by both low wages and a poor return from overseas trade.

While Emmanuel argued that unequal exchange is the key to explaining how economic surplus is transferred, other Marxists have argued that the theory is not precise enough, and in particular that Emmanuel does not satisfactorily distinguish between labour values and prices. He also ignores that in addition to the exploitation that arises from unequal exchange there is exploitation by the processes of production within poorer nations. Amin (1980), for example, presents an account of the exploitation involved in unequal exchange which emphasizes the existence of NONCAPITALIST AND PRECAPITALIST MODES OF PRODUCTION alongside capitalist modes, which means that labour is available to capitalism in poorer nations without the necessity for any widespread provision of welfare programmes. This process, in which resources or values are thus transferred to the capitalist sector from the noncapitalist sector, is referred to as superexploitation by Amin. Since this capitalist sector may be indigenous (see COMPRADOR CAPITALISM) an analysis such as Amin's points to an appropriate role for analysis of internal CLASS CONFLICT within developing nations as well as an emphasis on divisions of interest between nations.

New competitive advantages enjoyed recently by some newly developing nations of the 'semi-periphery’, and the consequent DEINDUSTRIALIZATION of some previous Western centres of industrial production -in which capital has moved to cheap labour -do not mean that the conditions for an unequal exchange have disappeared. For, although levels of employment may increase in the semi-periphery, this does not automatically mean high wages, and some profits from such relocated production will continue to be exported. However, the longer-term implications of such changes -which may or may not include lower levels of employment, lower wages and salaries in developed countries, and may or may not bring improvement in wages and a new diversity of production in developing societies – are not easily unravelled.

Many economists have suggested that changes now occurring in many developing nations indicate that these nations will increasingly be competing directly with established capitalist core economies, following in the steps of nations like Japan. There are also many economists and some sociologists who dispute whether richer nations can be said to exploit the poorer nations – have these nations been ‘redeveloped’ or UNDERDEVELOPED by colonialism and capitalism as Marxist and sociological DEPENDENCY THEORISTS suggest? Since theorists of different persuasions make judgements about ‘fair’ exchange in terms of different criteria (e.g. theoretical ‘labour values’ compared with simple prices and values are difficult to calculate), any simple resolution of the debates between the several sets of protagonists is unlikely.

Although the theories behind it may be in dispute, the concept of unequal exchange is still useful in that it indicates aspects of the nature of trade relationships existing between richer and poorer countries, between CENTRE AND PERIPHERY. See also INTERNATIONAL TRADE, TERMS OF TRADE, IMPERIALISM, UNEVEN DEVELOPMENT.

References in classic literature ?
It would be an unequal exchange, to give a warrior, in the prime of his age and usefulness, for the best woman on the frontiers.
Isabella appeals instead to the unequal exchange of Christian salvation, reminding Angelo that "all the souls that were, were forfeit once, / And He that might the vantage best have took / Found out the remedy" (2.
Only a more equal society can hope to be truly sustainable, because only equality will correct the unequal exchange between society and nature.
These particularities also included the predominance of workers as producers and their irrelevance as consumers, the burden of extraordinary surplus value and the difficulty of transferring accumulation to the field of relative surplus value, the transfer of value to the imperialist economies through unequal exchange, the acute form assumed by the processes of concentration and centralization of capital, and finally, but no less relevant, a system of production sustained by superexploitation.
Absolute unequal exchange occurs on three levels: first, the loss of nurses intensifies the undervaluing of health care labour in exporting countries; second, the temporary nature of migration leads to reduced terms of employment for the migrant nursing labour force, while creating a hierarchy of employment within the historically stratified, capitalist world economy; third, this situation leads to an undervaluing of skills and experiences of internationally trained registered nurses.
The appropriation of ecological space; agrofuels, unequal exchange and environmental load displacements.
A fabulous example was his installation for the Singapore Biennale 2011 Unequal Exchange / No Exchange Can be Equal (2011) for which Rungjang filled an area in the Old Kallang Airport with IKEA furniture.
It does not fully explain religious and cultural unequal exchange within the rational choice framework.
If the trade costs' size equals the initial comparative advantage's size, allegedly without these trade costs, the exchange cannot be made anymore, but for the case of an unequal exchange, in which at least one of the two partners will not achieve comparative advantage.
Second, the idea of the absence of Riba or usury in Islam should also have been examined in promoting peace, which addresses the issue of unequal distribution of wealth and unequal exchange leading to many social evils.
Each is charged with presenting work related to the specific circumstances of a different metropolis--Buenos Aires, Caracas, Mexico City, New York, and Sao Paulo--whose setting can be understood as a cultural flashpoint: the scene for a shared condition, both the boon and burden, in which communities are engaged in an unequal exchange.
Second, it addresses itself to the economic dominance of the "core" of the world-system in the postcolonial regions of the world: the pernicious effects of transnational corporations, unequal exchange in trade and technological dominance.