In this Brief Claudio Jedlicki* assesses economist Arghiri Emmanuel's theory of Unequal Exchange, to delve, from an economic analysis angle, into TLWNSI`'s central argument: that we endure a North-South system of exploitation, which, among other features, has a direct and premeditated impact on the misery wages paid in all countries in the South. This unequal exchange constitutes a trade imperialism that historically has generated vast earnings for the North, greater than the interests recovered by banks and the profits obtained by transnationals.
Nonetheless, the author alerts us, these are only the traceable evidence left by the system of exploitation, for the earnings, in themselves, cannot be seen, since they are hidden in the prices the North manages for all the goods and services in its transactions with the South, as well as for the miniscule value of Southern exports, which is mainly the result of its low labour endowments.
Indeed, in this commercial imperialism labour endowments stand out, which, in a fashion exogenous to the so-called logic of market economies, are established by way of institutional policies. In this way, the author's assertion that the North-South unequal exchange constitutes a very meaningful endowment for the high average living standard of Northern Societies becomes an indisputable argument. To be sure, the South's misery subsidises "the North's good living".
This is why Jedlicki argues that any serious assessment in pursuit of a solution to the North-South's unequal exchange cannot escape this reality. Thus, any re-assessment of the South's exports, with the sustainability of people and planet in mind, forcefully entails rebalancing living standards on both sides, increasing in the South and diminishing in the North.
*Researcher at the Centre de Recherche et de Documentation de l'Amérique Latine (CREDAL), which is part of the Centre National de la Recherche Scientifique (CNRS) of France.
Brief prepared on September 2007. For a full review of this brief, click here or on the picture to download the pdf file.