Accumulation on a World Scale: A Critique of the Theory of Underdevelopment. (2 Volumes) [1, 2] 0853452725, 9780853452720

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SamirAmin

Accumulation on a World Scale A Critique of theTiieory of Underdeveiopment Translated by Brian Pearce

Volume 1

Monthly Review Press New Yoric and London

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Copyright © 1974 by Monthly Review Press All Rights Reserved • Library of Congress Cataloging in Publication Data Amin, Samir. Accumulation on a world scale. Translation of L'accumulation a I'echelle mondiale. Includes bibliographical references. 1. International finance. 2. Saving and investment. 3. Economic development. I. Title. HG3881.A5613 332.4'5 72-92028 ISBN 0-85345-272-5 First Printing Monthly Review Press 62 West 14th Street, New York, N.Y. 10011 21 Theobalds Road, London WCIX 8SL, England Manufactured in the United States of America

Contents Volume 1

Introduction 1. UNEQUAL INTERNATIONAL SPECIALIZATION AND THE INTERNATIONAL FLOW OF CAPITAL The Theory of International Exchange The Forms of International Specialization and the Terms of Trade Foreign Trade and the Question of Markets 2. THE FOR_MATIONS OF PERIPHERAL CAPITALISM

1

37 44 ^ 64 90 137

Part 1: The Transition to Peripheral Capitalism

137

Precapitalist Modes of Production and Formations

137

Part 2: The Development of Peripheral Capitalism: The Development of Underdevelopment

169

Unequal International Specialization and the Distortions of Development international Specialization and the Transfer of Multiplier Mechanisms " International Specializatfon and the Monopolies The Structural Characteristics of Underdevelopment The Blocking of Transition

170 223 238 261 299

Notes to Volume I

303,

Bibliography

329

Introduction

One does not need to be an economist to know that our world is made up of "developed" countries and "underdeveloped" ones, that it is also made up of countries that style themselves "socialist" and of others that are "capitalist," and that all these countries are integrated, though to varying degrees, in a worldwide netvvork of commercial, financial and other relations such that none of them can be thought of in iso­ lation—that is, leaving these relations out ,of account—in the way that one can think of the Roman Empire and Imperial China, as they were unaware of each other. Accumulation on a World Scale is concerned with analyzing all these relationships in their fundamental aspect. This problem, which is essen­ tial for understanding the world of today, is obviously a complex one; moreover, the field it covers is all the greater because the interpenetration between international relations and internal structures is often decisive in character; and it is only beginning to be given system­ atic attention. Though Marxist analysis necessarily includes in its pro­ gram the development of the theory of this subject, little progress has been made since Lenin's Imperialism, while the basic theoretical equip­ ment of present-day university economics (marginalism) prevents the question from even being raised. The consequence is that current analysis of "underdevelopment" is at an incredibly low level. All these reasons both encouraged me to write this book and at the same time made me hesitate. Twelve years ago, when I chose this very subject for my doctoral'thesis, 1 was bolder.' It seemed to me that in order to go more deeply into the subject it was necessary first of all to undertake a number of concrete analyses, with as much precision and data as possible, and I have devoted myself to this task since then.^ I think matters are now ripe for a new advance in the theory of accumu1

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Accumulation on a World Scale

lation on a world scale. This is why, although it may seem very ambi­ tious on my part, I have resolved to jump into the water again and attempt a critical synthesis. I realize that this is only a stage along the road; I have tried to bring together my own personal work with some theqretical contributions by other people which seem to me to be of' crucial importance for the task in hand.^ My dearest wish is that this book may give rise to criticism, the elementary condition of further progress. The book is also addressed to students of economics. It bears the marks of the course of lectures from which it originated. This is why I thought it absolutely necessary to provide a critique of the economic theory that students are taught, including an internal critique—for this theory seems to me to have, strictly speaking, no point at all except as a way of evading problems. This becomes very apparent when we tackle the problems of underdevelO[5ment"; but we must then carry our analysis through to the end, to see just how this theory is beside the pomt and why it cannot frame the right questions. Though this critique may at some moments seem tedious, it is nevertheless essential for students who have been brought up on marginalism. It is also essential for my investigation, if only because it is by grasping why a certain theory is incapable of dealing with a given question that one manages to formulate more correctly the real problems involved, and to work out the scientific concepts needed. We shall see some examples of this truth. Though the current theory of underdevelopment is not worth much, a considerable mass of factual documentation is now available and ought not to be overlooked, even if it has in the main been put together in a very disorderly way, sometimes without any awareness of what was being looked for. Scientific theory is, after all, not theory that merely takes account of facts, but theory that proceeds from facts in order to integrate them into a coherent system. Here,, too, we are constantly amazed to observe the extent to which facts are ignored by current university theory, isolated in its ivory tower.

The Scope of the Analysis Accumulation-expanded reproduction-is an essential inner law of the capitalist mode of production, and doubtless also of the socialist mode of production, but it is not an inner law of the functioning of precapitalist modes of production. Now, the world capitalist system

Introduction

3

qUnnot be reduced, even in abstraction, to the capitalist mode of pro­ duction, and still less can it be analyzed as a mere juxtaposition of countries or sectors governed by the capitalist mode of production with others governed by precapitalist modes of production (the "dualism" thesis). Apart from a few "ethnographical reserves," such as that of the Orinoco Indians, all contemporary societies are integrated into a world system. Not a single concrete-socioeconomic formation of our time can be understood except as a part of this world system. Relations between the formations of the "developed" or advanced world (the' center), and those of the "underdeveloped" world (the periphery) are affected by transfers of value, and these constitute the essence of the problem of accumulation on a world scale. Whenever the capitalist mode of production enters into relations with precapitalist modes of production, and subjects these to itself, transfers of value take place from the precapitalist to the capitalist formations, as a result of the mechanisiris of primitive accumulation. These mechanisms do not belong only to the prehistory of capitalism; they are contemporary as well. It is these forms of primitive accumulation, modified but per­ sistent, to the advantage of the center, that form the domain of the theory of accumulation on a world scale. It is, indeed, necessarily a question of theory. The empiricalpositivist approach that is content to describe the facts and try to measure the ebb and flow of value is incapable of grasping more than appearances. It cannot reveal the "hidden transfers" and the essence of the laws of accumulation on a world scale. This theoretical analysis is far from having been accomplished. (We shall see a striking instance of this with the blunderings of the "theory" of international trade.) What must be the fundamental concepts making possible the construction'of this theory? This is the question I am asking. It will be seen that this theory cannot be an "economistic" one, because economism does not allow us to go beyond analyzing the apparent mechanisms "of the func­ tioning of the capitalist mode of production, and so does not enable us to examine the relations between formations of different kinds which are integrated in the same world system, and to frame the right ques­ tions. In order to see this it will be best to Start from the current theory of underdevelopment, precisely so as to appreciate its impotence. Before proceeding, however, we must certainly clarify one last point regarding the scope of our study. The center and the periphery of the capitalist world are not the only partners involved. The formations of the "Communist world" (Russia, Eastern Europe, China, North Korea, •Vietnam, Cuba) maintain relations among themselves and with the

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Accumulation on a World Scale

capitalist world. I am not going to go into the problem of the nature of these formations.' Nevertheless, the external relations of this world with both the underdeveloped world and the advanced countries of the West are dependent upon the capitalist world market. On this plane we have no grounds for considering trade between Russia and Eastern Europe, on the one hand, and the rest of the world, on the other, as being different in practice from the trading activities of the advanced Western countries. There are not two world'markets, one capitalist and the other socialist, but only one, the capitalist world market, in which Eastern Europe marginally participates. We shall see that Soviet theory about these relations coincides with Western theory. Nevertheless, the internal relations of the Soviet world (relations between Russia and Eastern Europe) are not dependent on the capitalist world market, for thotigh the Soviet formations are not fully socialist, they are not truly capitalist (being either "definitive" forms of a new type or else transi­ tional formations—in either case, distinctive in character), and so the internal relations of the Soviet system have their own laws. I am not going to examine these laws here. In other words, I consider that Russia and Eastern Europe do not, or do not yet, form part of the world capitalist system, although in their relations with the advanced Western countries and the underdeveloped world they form an integral part of the world capitalist market. Furthermore, international relations are not to be reduced to relations between the advanced West and the "Third World," for the internal relations of the Western world occupy an essential place in these relations, and one that is quantitatively much more important. I shall make a point of not discussing 'these internal relations within the "center," even though they form an important element in accumulation on a world scale, especially as regards the commercial exchanges and the movement of capital between the North American center and the other advanced centers (Western Europe and Japan). I shall have to refer to them, however, if only to show that the nature of these relations differs from that of relations between the center and the periphery. In other words, the main scope of my analysis embraces relations between the center (North America, Western Europe, Japan, Australia, New Zealand, and South Africa, on the one hand; Russia and Eastern Europe, on the other) and the periphery ("the three continents").

Introduction

5

The Conceptual Equipment of Current Economic Theory The only possible science is the science of society, for social reality is one: it is never "economic" or "political" or "ideological," etc., even though social reality can be approached, up to a certain point, from a particular angle—that of any one of the traditional university disciplines (economics, sociology, political science). But this particularized ap­ proach can remain scientific only if it is aware of its limits and prepares the ground for universal social science, rtowever, since 1870, trium­ phant marginalism has set itself the task of working out an economic science that is "pure," or, more precisely, independent of all the other social sciences. This "pure" economic science must necessarily be ahistorical, since the laws it seeks to discover have to be true whatever the economic and social system may be. Abandoning the universal outlook introduced by Marxism, breaking down the bridges that the latter had laid between the various branches of social science in its attempt to explain history, neoclassical economics was led to become, first and foremost, an algebra of logical deductions from a certain number of axioms based on a sketchy psychology of "eternal man." The conceptual equipment of this "pure" economic theory is situ­ ated at a level of abstraction that makes it useless for analyzing the working of the mechanisms—even the economic mechanisms—of any society whatsoever. The fundamental concepts (especially subjective value) are worked out on the basis of a set of axioms regarding the behavior of Robinson Crusoe on his island: man (in individual isolation) face to face with nature, economics becoming the "science" of man's relations with things (wants and scarcity). Well, Crusoe will never form a society, and men's relations among themselves when they are produc­ ing and distributing wealth—the real domain of the economic mecha­ nisms of society—are evaded by marginalism from the very outset. On this basis, marginalism defines concepts that are metaphysical, absolute,ahistorical, such as Saving, Investment, Capital (as a thing), etc., which are supposed to exist outside of any structure, that is, whatever society's mode of production may be.^ When they come down from the remote heaven where they originate to the earthly reality.of an actual society, these concepts are adapted as well as possible by means of vulgarly empirical methods that enable phenomena to be interrelated at the level of immediate appearances: saving depends on income, investment on the expectations of entre­ preneurs (on the amount of optimism in their natures!), and so on.

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Accumulation on a World Scale

Moreover, since Crusoe's axioms are by very definition tlie algebra of the absolute rationality of economic-behavior, and this behavior is ex­ tended from Crusoe to all "economic agents," it is found, needless to say, that the system represents pure .rationality.' Everything is for the best in the best of worlds; a phenomenon is rational merely because it exists. The entire theoretical construction of marginalism is erected upon this monstrous tautology, and is therefore nothing but an ideology, without anything scientific about '\i—the ideology of universal harmonies. It can be shown that each of the "pieces" of this "economic science' is- itself based on question-begging derived from this original tautology. This is so with the quantity theory of money, the theory of comparative advantages in international trade, the theory of conjunc­ ture, of equilibrium in the balance of payments, and so on. We shall see that in the case of the underdeveloped economies, the internal weak­ ness of all these theories appears in a yet more flagrant way, since they do not even account for obvious facts and thus are quite simply false. The study of underdevelopment accordingly helps us to appreciate still better the impotence of the marginalist concepts, exposing the origin of their falsity, because in order to carry out this analysis we are obliged to reintegrate a structure. Now, marginalism, by virtue of its approach, is without the concept of structure. Current university economics talks of structures, in the plural (technical, demographic, intra-enterprise, institutional, and so on), as empirical facts that are without any interconnections, and with­ out any connection with "theory," which remains "general."® It thus forbids itself from the outset \o raise the question of the dynamic of systems (the transformation of structures), which it even excludes from its field of study, calling it a matter for historians.' It also forbids itself to raise the real question about underdevelopment, namely, how it began historically. There is something even more serious.' Preoccupation with the ideolpgy of universal harmonies compels "economic science" to put on the garb of a ' theory of general equilibrium," which is necessarily static in the sense that progress and change are seen as originating outside the system. The internal dynamic—accumulation—which is of the very essence of the capitalist system, has to disappear. This is why marginal­ ism carries out the feat of banishing profit from its schema. Profit is no longer even the "income of a factor" f it vanishes because it is no longer anything but the "difference between any income as it actually is and what it would be in the theoretical position of general equilibrium of the economic system as a whole." All incomes—wages, rent, interest—

Introduction

7

thus contain "a little profit." It is clear that the assumption of a "static capitalism" on which this entire construction is based is not just fac­ tually unreal: it can lead nowhere but to a false theory, since it begins by eliminating the essential phenomenon. Reintegrating the concept of profit on capital into economic theory implies abandoning the marginalist notion of the "productivity of the factors," since it requires that the concepts of "saving," "investment," "capital," and "profit" be given their historical dimension—that the profound links connecting these concepts in the capitalist mode of production be grasped; that we stop confusing these concepts in the capitalist system with other concepts that belong to other modes of production; that we understand, for example, that the saving (or "hoarding") of precapitalist societies is not the saving (or "hoarding") of the capitalist mode of production." If these concepts are, in the capitalist mode of production, profoundly interlinked, then determin­ ing equilibrium by- supply and demand, which is meaningless if the curves of supply and demand are not independent of each other, is no longer possible. We have to go beyond appearances, to analyze the origin, the generation, of the surplus from which profit is derived. We then need a theory of value. And this can only be objective—that is, social—in character, not based on subjective tautology. The last stage of the degradation of economic science will be reached when men completely cease to understand the essential need for a "theory of value," which, vanishing to give place to "empirical observation" of appearances ("prices depend on supply, demand-, income, time, etc.," or, in other words, on everything), leaves theory as meaning what can be summed up in the simple phrase, so shallow in its impotent ab­ surdity: "Everything exists in everything else."

The Current Theory of Underdevelopment If marginalist economic theory is worthless as a special discipline of social science, it is not to be wondered at that fittempts to work out a "theory of underdevelopment" within the' framewofk of marginalism have proved particularly poverty-stricken. The sjcarting point is, to begin with, the choice of a concept of underdevelopment that leads nowhere: the assimilation of under­ development to poverty in general. Then follows a long and incredibly platitudinous description of the various manifestations of poverty (par­ tial indices: health, illiteracy,,nutrition, death rate, etc.; or S synthetic

8

Accumulation on a World Schle

index: average income per head), undertaken so as, to fill the analytical void with commonplaces.'^ What is worse is that this definition leads straight-away to an essential error: the underdeveloped countries are seen as being like the "developed" ones at an earlier stage of their development. In other words, the essential fact is left out, namely, that the underdeveloped countries form part of a world system, that the history of their integration into this system forged their special structure—which thenceforth has nothing in common with what pre­ vailed before their integration into the modern world. It is now our good luck that this theory of underdevelopment and development has been formulated in a systematic, clear, and concise way by W. W. Rostow.' As is well known, he has given us a universal theory of the five stages through which all societies either have passed or will have to pass: (1) the stage of traditional society, (2) that of the preconditions for development, (3) that of "take-off," (4) that of maturity, and finally (5) that of mass consumption. Each of these stages IS defined rigidly, universally, and in "economistic" terms (by the "level of saving"). The total absurdity of this systematization has been demonstrated^. It is impossible . . ., to find in the world of today any country or society which has the characteristics of Rostow's first, the traditional stage. This is not surprising, since the construction of Rostow's stages takes account neither of the history of the new under­ developed countries nor of their crucial relations with the new developed ones over several centuries past This long relationship . . . did not affect only the export enclave in the under-developed coun­ tries, as the almost universally accepted and just as empirically and theoretically erroneous 'dual' society or economy thesis has it. On the contrary, this historical relationship transformed the entire social fabric of the peoples whose countries are now under-developed. . . Eclecticism is the inevitable price paid for this false theorizing. In order to explain why countries have been "frozen" at the first stage, by accomplishing the feat of not mentioning their integration into the world capitalist system, it is necessary to resort to "exogenous" ex­ planations. The demographic explanation, in neo-Malthusian terms, is the one most used at present. It does not stand up to either analysis or facts. Its concepts remain hazy (when "natural wealth" is mentioned, does this mean that which is already being exploited, or the country's potential) and its basic axioms ("the law of diminishing returns") are erroneous. It ignores many facts of history, such as that, betwten 1870 and 1910, Great Britain and Germany developed despite a very marked growth of population (58 percent in forty years), whereas India re-

Introduction

9

mained underdeveloped in the same period, although its population increased by only 19 percent! It ignores the fact that though there are underdeveloped zones that are apparently overpopulated (if they are obliged to remain agricultural), there are also many others that are underpopulated (even in relation to their agricultural potentialities alone); that Gabon, the demographic dynamism of which is very low (a population growth of around 0.5 percent per year), is no less under­ developed than other countries where the rate of population growth is very high.'^ This does not mean that a real policy of development, centered in the countries concerned, would not have to take account of the demographic factor and that, under certain concrete conditions, a policy of reducing population growth would not have to be envisaged. What it does mean is that demography does not account for under­ development. Explanations in terms of "vicious circles of poverty" evade the real problem in the same way." Underdevelopment is said to result from insufficient "saving," wjiich itself results from the low level of income (poverty, and so underdevelopment). It is beyond comprehension how what are now advanced societies ever managed to break through these "vicious circles." In order, moreover, to give full scope to these "vicious circles," recourse is had to an extremely feeble theory that contradicts even what is essentially correct in the "law of outlets," namely, that investment, under certain conditions, creates its own outlet ex-post, even if it never has one ex-ante. To establish the thesis of "vicious circles" it is further necessary to make an assumption which is contrary to the facts, namely, that the surplus in the underdeveloped countries is,- if not-nonexistent, then at most very slight. Baran has shown that what is typical of the-underdeveloped coun­ tries is not lack of surplus but a distinctive way of using surplus: un­ productive, wasteful, exported.'® I have calculated what this means for Egypt: between 1939 and 1953