ABSTRACT

Ecologically unequal exchange theory has become popular in recent years but it is confused, internally inconsistent, and misrepresents the nature of global extractivism and labour exploitation.

KEYWORDS: Exchange; unequal; ecological; labour; value; exploitation

Introduction

The concept of unequal exchange has a long history, going back to the British political economist Ricardo (1823). He argued that the value of commodities depended upon the amount of labour required to produce them, and, since the commodities were sold at a price higher than the wages the labourers received (with profit making up the difference), the exchange between employer and employee was unequal—effectively, the workers were being cheated of what was rightfully theirs. Later on, the concept of unequal exchange was used very differently to describe imperial relations between colonisers and colonised, in which powerful countries and companies were able to gain excess profits through the exploitation of labour and resources in less powerful countries, typically through monopolies backed by military force (Hobson 1902; Lenin 2017). It was this latter theme that was taken up in the late 20th century by many others, in particular Emmanuel (1972) and Amin (1976). Throughout its history, it has sat uncomfortably with the earlier theme of labour exploitation, with Lenin criticising the “labour aristocracy” in imperialist countries for having been bought off by the ill-gotten gains from imperial adventures.

How little has changed! Labour continues to be exploited across the world (the original sense of unequal exchange, between workers and capitalists), and the working class continues to be divided along imperial lines (between the beneficiaries and victims of unequal exchange in its later sense). More recently, however, a new concept has emerged of ecologically unequal exchange (EUE) (Bunker 1985; Hornborg 1998; Givens, Huang, and Jorgenson 2019; Dorninger et al. 2021). Definitions of this term vary, but the gist of it is that material resources flow more from the South to the North, while material waste flows more from the North to the South: “Global South nations are structurally positioned as both a tap for resources and a sink for waste within the world-economic system of extraction, production, and consumption,” and “wealthier, more powerful countries within the Global North have disproportionate access to natural resources and sink capacity … within Global South nations” (Givens, Huang, and Jorgenson 2019, 2). This looks like unequal exchange in the second, imperialist sense, but the increased emphasis on the ecological seems to be accompanied by a reduced attention to the first sense of labour exploitation.

Problems

The main problem with ecologically unequal exchange theory is that it lacks coherence or explanatory force. In general, it describes certain features or patterns of global power inequality without providing an underlying explanation. The “exchanges” that it talks about actually look more like non-reciprocated flows of resources or value transfers, disproportionately from South to North—that is, not real exchanges at all. Bunker (1985, 253), for example, talks of “the flow of energy to the world center,” which may proceed by means of a series of exchanges (and what is the energy exchanged for?) but is not itself an exchange. This flow is seen as unjust because it is too one-sided, so that it needs to be slowed down, but it is not clear how such slowing down would benefit the South—or indeed how it would disadvantage the North. Traditionally, unequal exchange is explained in terms of wage differentials (Emmanuel 1972), but the causes of these differentials are not usually explored except in neo-Ricardian terms (e.g. workers in the South are seen simply as more exploited than those in the North). Introducing a concept of ecologically unequal exchange then complicates the picture by presenting factors external to exchange relations (specifically, environmental harms) as somehow part of the exchange process itself.

This confusion is only deepened by interpreting transfers of value in terms of material or biophysical resources (e.g. raw materials, energy, land and labour, see Dorninger et al. 2021) rather than in terms of exchange value, and then assuming that these transferred resources can themselves be measured in terms of their monetary value. However, the measure of their monetary value is not the same as the amount of value that has been transferred, as the latter depends on what the resources were exchanged for (that is, it depends on the amount of money that was paid for them). Unequal exchange occurs only if the value of the transferred resources is more than what was paid to buy them. The real basis of imperial expropriation and labour exploitation is obscured in this approach, not least because the harms caused by the production and distribution of the transferred resources are not taken into account.

A good example of where this confusion can lead is to be found in Hickel, Sullivan, and Zoomkawala (2021). To be fair, the authors do recognise the key role of military force in paving the way for seizures of the resources (land, labour, energy, minerals, etc.) required for capitalist industry. However, unequal exchange is understood essentially in terms of wage and price differentials, with the result that worldwide labour exploitation and ecological harm (not to mention real debt owed by the South to the North) are largely ignored. A most unfortunate effect of this is that low prices in the global South are seen as a problem: “Southern prices have been kept artificially low, which enables patterns of imperial appropriation that remain a dominant feature of the world economy” (2021, 16). From this it seems to follow that higher prices in the South would be the way forward (assuming that eliminating imperial appropriation is desirable). This is nonsense, of course (especially food and energy prices), so something must have gone wrong.

Solution

To resolve these confusions, it is necessary to emphasise a number of points. First, going back to Marx’s critique of Ricardo, in a labour market the exchange is not between labour itself and wages but between the hire of the labourer (so-called labour power) and the wages received; and the cost of that hire is the cost of what is required for the daily and generational reproduction of that labourer. In a free market it is possible to have an equal exchange between labour power and wages while at the same time the worker produces more value than the value of their wages. This ideally equal exchange is what is usually called a “fair wage,” and it is key to explaining the dominance of free market ideology, liberalism more generally, and the widespread acquiescence of the working classes to capitalist rule. In practice, of course, markets are rarely completely free, and unequal exchange is everywhere but greater clarity is needed about how such inequality arises, particularly in the context of global imperialism.

Second, it is true that wages are higher in the North than in the South, but this is primarily because the cost of labour power reproduction is higher in the North than in the South. It does not follow that the rate of labour exploitation is higher in the South than in the North or that the exchange of labour power for wages is more unequal in the South, though this could well be the case. All it shows is that wage differentials per se cannot be used to explain global inequality. Also, politically, such an emphasis on wage differentials, in its search for an illusory “parity,” tends only to weaken the prospects for international worker solidarity. For the same reason, prices tend to be higher in the North (but by no means always) because the cost of Northern labour hire is higher, not necessarily because Northern workers are more privileged relative to workers in the South (though again they may well be).

Third, there are many ways in which global inequality can arise, within countries as well as trans-nationally: market domination by monopolies or monopsonies (unfree trade), government subsidies for their own producers (unfair trade), regressive forms of taxation, and, perhaps most importantly, through global inequality chains (Campling and Quentin 2021). Campling and Quentin make an important distinction between value production (by labour) and value capture (largely by capital), and the latter is what mainly gives rise to unequal exchange at numerous points along the chain. Interestingly, they do not use the terminology of unequal exchange, and the theory is not mentioned anywhere in the edited book in which their chapter appears. Instead they talk of:

The countless millions of people who are not paid at levels sufficient for their social reproduction, thereby allowing for the survival of small capitals below the average rate of profit. These include (self-exploiting) petty commodity producers in Africa and Asia, where the work of women and children in the household or extended families is often exploited, unpaid, by men; informalised, casualised and flexibilised workforces the world over; the systematic feminisation of low-paid work (meaning further downward pressure on wages) in firms in Latin America that are articulated with GVCs [global value chains], reproducing and reproduced by gender relations in local communities; armies of immiserated workers at ‘the bottom’ of the economy in South Asia; and the millions of people enduring slavery and forced labour across the planet in their adverse incorporation into the world economy. (Campling and Quentin 2021, 41; emphasis added to indicate the type of unequal exchange involved here)

Conclusion

This seems to summarise the key issue, which is about the super-exploitation of labour produced increasingly by complex global chains, mostly centred in the global North. These chains need to be better understood—and this is without even considering the inequalities arising from global debt, or from the effects of climate change and ecological damage (so-called climate and ecological debt; see Ajl (2021)). On balance, therefore, it can be concluded that the concept of ecologically unequal exchange is unhelpful, not least because it tends to obscure more than it reveals about the nature and causes of imperialist global expropriation and appropriation of labour and nature.

From: Capitalism Nature Socialism 2022 33 (1)

Link: https://www.tandfonline.com/doi/full/10.1080/10455752.2021.2010107?src=recsys.