I have no firm views on the subject. I certainly agree that the plight of the third world has a lot to do with the arrogance, greed, and indifference of the first world. Butwe are addressing a specific question: whether the poverty of the third world is a necessary condition for the prosperity of the first. That is a different question from whether the poverty of the third world _adds_ to the prosperity of the first. Third world poverty might increase first world prosperity without being in any sense necessary for it.
One also has to wonder about the Keynesian effect. Businesses have long dreamed of selling one of their products to everyone in China. The third world, with at least 2/3 of the world's population, is a huge potential market. But people in the third world cannot become consumers without disposible income. Wouldn't it very much be in the interests of business to raise the disposible income of people in the third world so that they can be consumers? Why doesn't this happen? This is the Keynesian paradox.
Now, I am perfectly aware that it is in the interest of each business that all the others, but not that particular business, raise the wages, etc. of its employees. And perhaps the public goods problem that this creates is part of the explanation of the problem of superexploitation in the face of the Keynesian paradox. There are other explanatory factors. The world Bank and the IMF, the agencies charged with overseeing Third World development, are in the grip of ideologues. So too perhaps in part are US and European foreign policy makers. Some of the US policymakers may be concerned about "the threat of a good example." Others may be just true believers. (This was the case in 19th century England too, when free trade orthodoxies helped cause terrible famines in Ireland and India, according to Mike Davis in Late Victorian Holocausts.) That raises the question of whyt true believers and ideologues get such a grip on policy when that seems to run counter to the interests of capital.
More questions . . .
--- Charles Brown <cbrown at michiganlegal.org> wrote:
> Is "foreign trade", including neo-colonialism, still
> a way in which
> capitalism counteracts the tendency of the rate of
> profit to fall ? ( the
> law of the tendency of the rate of profit to fall
> consists of the tendency
> of the rate to fall and , contradictorily, the
> counteracting influences, one
> of which is "foreign trade" , including imperialism
> and colonialism.)
>
> Charles
>
>
> Capital Vol. III Part III
> The Law of the Tendency of the Rate of Profit to
> Fall
> Chapter 14. Counteracting Influences
>
>
> V. FOREIGN TRADE
> Since foreign trade partly cheapens the elements of
> constant capital, and
> partly the necessities of life for which the
> variable capital is exchanged,
> it tends to raise the rate of profit by increasing
> the rate of surplus-value
> and lowering the value of constant capital. It
> generally acts in this
> direction by permitting an expansion of the scale of
> production. It thereby
> hastens the process of accumulation, on the one
> hand, but causes the
> variable capital to shrink in relation to the
> constant capital, on the
> other, and thus hastens a fall in the rate of
> profit. In the same way, the
> expansion of foreign trade, although the basis of
> the capitalist mode of
> production in its infancy, has become its own
> product, however, with the
> further progress of the capitalist mode of
> production, through the innate
> necessity of this mode of production, its need for
> an ever-expanding market.
> Here we see once more the dual nature of this
> effect. (Ricardo has entirely
> overlooked this side of foreign trade. [D. Ricardo,
> On the Principles of
> Political Economy, and Taxation, Third edition,
> London, 1824, Ch. VII. -
> Ed.])
> Another question - really beyond the scope of our
> analysis because of its
> special nature - is this: Is the general rate of
> profit raised by the higher
> rate of profit produced by capital invested in
> foreign, and particularly
> colonial, trade?
> Capitals invested in foreign trade can yield a
> higher rate of profit,
> because, in the first place, there is competition
> with commodities produced
> in other countries with inferior production
> facilities, so that the more
> advanced country sells its goods above their value
> even though cheaper than
> the competing countries. In so far as the labour of
> the more advanced
> country is here realised as labour of a higher
> specific weight, the rate of
> profit rises, because labour which has not been paid
> as being of a higher
> quality is sold as such. The same may obtain in
> relation to the country, to
> which commodities are exported and to that from
> which commodities are
> imported; namely, the latter may offer more
> materialised labour in kind than
> it receives, and yet thereby receive commodities
> cheaper than it could
> produce them. Just as a manufacturer who employs a
> new invention before it
> becomes generally used, undersells his competitors
> and yet sells his
> commodity above its individual value, that is,
> realises the specifically
> higher productiveness of the labour he employs as
> surplus-labour. He thus
> secures a surplus-profit. As concerns capitals
> invested in colonies, etc.,
> on the other hand, they may yield higher rates of
> profit for the simple
> reason that the rate of profit is higher there due
> to backward development,
> and likewise the exploitation of labour, because of
> the use of slaves,
> coolies, etc. Why should not these higher rates of
> profit, realised by
> capitals invested in certain lines and sent home by
> them, enter into the
> equalisation of the general rate of profit and thus
> tend, pro tanto, to
> raise it, unless it is the monopolies that stand in
> the way. [1] There is so
> much less reason for it, since these spheres of
> investment of capital are
> subject to the laws of free competition. What
> Ricardo fancies is mainly
> this: with the higher prices realised abroad
> commodities are bought there in
> return and sent home. These commodities are thus
> sold on the home market,
> which fact can at best be but a temporary extra
> disadvantage of these
> favoured spheres of production over others. This
> illusion falls away as soon
> as it is divested of its money-form. The favoured
> country recovers more
> labour in exchange for less labour, although this
> difference, this excess is
> pocketed, as in any exchange between labour and
> capital, by a certain class.
> Since the rate of profit is higher, therefore,
> because it is generally
> higher in a colonial country, it may, provided
> natural conditions are
> favourable, go hand in hand with low
> commodity-prices. A levelling takes
> place but not a levelling to the old level, as
> Ricardo feels.
> This same foreign trade develops the capitalist mode
> of production in the
> home country, which implies the decrease of variable
> capital in relation to
> constant, and, on the other hand, causes
> over-production in respect to
> foreign markets, so that in the long run it again
> has an opposite effect.
> We have thus seen in a general way that the same
> influences which produce a
> tendency in the general rate of profit to fall, also
> call forth
> counter-effects, which hamper, retard, and partly
> paralyse this fall. The
> latter do not do away with the law, but impair its
> effect. Otherwise, it
> would not be the fall of the general rate of profit,
> but rather its relative
> slowness, that would be incomprehensible. Thus, the
> law acts only as a
> tendency. And it is only under certain circumstances
> and only after long
> periods that its effects become strikingly
> pronounced.
> Before we go on, in order to avoid
> misunderstandings, we should recall two,
> repeatedly treated, points.
> First: The same process which brings about a
> cheapening of commodities in
> the course of the development of the capitalist mode
> of production, causes a
> change in the organic composition of the social
> capital invested in the
> production of commodities, and consequently lowers
> the rate of profit. We
> must be careful, therefore, not to identify the
> reduction in the relative
> cost of an individual commodity, including that
> portion of it which
> represents wear and tear of machinery, with the rise
> in the value of the
> constant in relation to variable capital, although,
> conversely, every
> reduction in the relative cost of the constant
> capital assuming the volume
> of its material elements remains the same, or
> increases, tends to raise the
> rate of profit, i.e., to reduce pro tanto the value
> of the constant capital
> in relation to the shrinking proportions of the
> employed variable capital.
> Second: The fact that the newly added living labour
> contained in the
> individual commodities, which taken together make up
> the product of capital,
> decreases in relation to the materials they contain
> and the means of labour
> consumed by them; the fact, therefore, that an
> ever-decreasing quantity of
> additional living labour is materialised in them,
> because their production
> requires less labour with the development of the
> social productiveness -
> this fact does not affect the ratio, in which the
> living labour contained in
> the commodities breaks up into paid and unpaid
> labour. Quite the contrary.
> Although the total quantity of additional living
> labour contained in the
> commodities decreases, the unpaid portion increases
> in
=== message truncated ===
__________________________________ Do you Yahoo!? Protect your identity with Yahoo! Mail AddressGuard http://antispam.yahoo.com/whatsnewfree