Redditors gather around to cry about jason hickel's article on unequal exchange. Lot of genius scientist economists chime in to deboonk all the bad science.
Redditors gather around to cry about jason hickel's article on unequal exchange. Lot of genius scientist economists chime in to deboonk all the bad science.
Posted in r/science by u/six-sided-bear • 3,689 points and 377 comments
Some genius takes:
The whole Global North/South split is a pet peeve of mine as a social scientist working in development policy. It's a bunch of outdated garbage from the Cold War that was really just a thinly veiled dogwhistle for 'white/the good Asians' and 'not white'. It doesn't hold up to any rational examination. South Africa was part of the Global North until white rule under Apartheid ended, and now they're in the Global South. southern nations.
Real educated economist chimes in:
Jason Hickel is an anthropologist (read: not economist) and degrowther. Despite having no background and seemingly almost no understanding of economics as a field, he somehow continues to get 'economics' papers published in reputable journals despite their obvious low quality. But to anyone with a cursory understanding of economics, it should be entirely unsurprising that exports from developing nations to developed are more labor intensive than vice-versa. This is not a novel conclusion and is not 'appropriation', but is entirely explained by a concept in economics called comparative advantage.
Another genius owns the article epic style
This paper is a demonstration of why input-output (IO) models are bad for economic research. IO models were used by the soviet central planners to allocate resources. IO models are bad for research for the same reason the are bad for planning. The authors look at “embodied labor” (adjusted for human capital), the idea being that any two things produced by an hour of (human capital adjusted) labor must have the same value (btw, this “labor theory of value” goes back to Adam Smith, and was later promulgated by Marx).
Other facts that the authors’ framework will struggle to explain: why is it that the poor countries that most integrated with global trade networks became rich (s korea, Japan, Singapore) or are otherwise growing quickly (china, Panama, Vietnam)? Why is it that countries with severe barriers to trade with the global north struggle to grow (n Korea, India for second half of 20th century)? That’s very hard to explain if trade with the global north is fundamentally exploitative.
Okay this is not the nazcom guy, this is some anthropologist.
Economists shouldn't throw around accusations of "almost no understanding of Economics as a field" around near anthropologists or we'll pull out all the papers explaining why "Economics as as field" is a religion with at best a tenuous relation to any actually existing economy. You're on watch Economists don't fuck with us.
Okay back to whatever y'all we're doing.
In many African countries, corrupt border guards will demand bribes to allow the movement of goods, which can make trade unprofitable; thus, many farmers, who would otherwise specialize in food for export, decide instead produce food for personal consumption (subsistence farming), which reduces the value of their labor.
Can’t really read that and keep a straight face.
Full blown Degrasse Tyson syndrome .
s korea, Japan, Singapore
massive infusions of western capital in a desperate struggle against communism
china, Panama, Vietnam
socialism, dunno probably because they finally control the canal, socialism
n korea, India for second half of 20th century
sanctions and siege warfare by the west, and dunno
Obligatory
The whole Global North/South split is a pet peeve of mine as a social scientist working in development policy. It's a bunch of outdated garbage from the Cold War that was really just a thinly veiled dogwhistle for 'white/the good Asians' and 'not white'. It doesn't hold up to any rational examination. South Africa was part of the Global North until white rule under Apartheid ended, and now they're in the Global South. southern nations.
Translation:
"I'm going to call you racist and uneducated for pointing out how my empire categorizes your brown nation as the 'Global South' and pretend this isn't the ideological justification we use for exploiting your resources."
Jason Hickel is an anthropologist (read: not economist) and degrowther. Despite having no background and seemingly almost no understanding of economics as a field, he somehow continues to get 'economics' papers published in reputable journals despite their obvious low quality. But to anyone with a cursory understanding of economics, it should be entirely unsurprising that exports from developing nations to developed are more labor intensive than vice-versa. This is not a novel conclusion and is not 'appropriation', but is entirely explained by a concept in economics called comparative advantage.
Translation:
"Me no like Jason Hickel, he no worship muh economy. We make politically correct word for exploitation!!!"
This paper is a demonstration of why input-output (IO) models are bad for economic research. IO models were used by the soviet central planners to allocate resources. IO models are bad for research for the same reason the are bad for planning. The authors look at “embodied labor” (adjusted for human capital), the idea being that any two things produced by an hour of (human capital adjusted) labor must have the same value (btw, this “labor theory of value” goes back to Adam Smith, and was later promulgated by Marx).
Other facts that the authors’ framework will struggle to explain: why is it that the poor countries that most integrated with global trade networks became rich (s korea, Japan, Singapore) or are otherwise growing quickly (china, Panama, Vietnam)? Why is it that countries with severe barriers to trade with the global north struggle to grow (n Korea, India for second half of 20th century)? That’s very hard to explain if trade with the global north is fundamentally exploitative.
Translation:
"REEEEEE MUH GOMMUNISM IO SOVIET BAD!!!111!!! Why did these western military and trading outposts run by neoliberal dictators we pumped tons of money into.... get rich?!?! Why is socialism good?!?!? Why is it that sanctions and genocide make countries poor!?!??!?! THAT IS VERY HARD TO EXPLAIN!!!111!!!"
Top minds.
it should be entirely unsurprising that exports from developing nations to developed are more labor intensive than vice-versa. This is not a novel conclusion and is not 'appropriation', but is entirely explained by a concept in economics called comparative advantage
so... not really arguing against Unequal Exchange as a concept, just against the name that makes you uncomfortable
exports from developing nations to developed are more labor intensive than vice-versa
Fucker! Did you even READ our text books? Did you skip the section talking about perverse incentives and moral hazards?
Other facts that the authors’ framework will struggle to explain: why is it that the poor countries that most integrated with global trade networks became rich (s korea, Japan, Singapore) or are otherwise growing quickly (china, Panama, Vietnam)?
The country didn't get rich you fucks, SOME people in that country got rich you absolute bellends.
Side point but Hickel's book "the divide", is probably the best introduction on unequal exchange and modern imperialism. There's so many other great books, but they can be a bit harder to read.
I've always hated reddit. Like, I used to be Angry Online about the existence of reddit before it was a normie hotspot - i know hexbear is running a similar system, but aglo driven discussion hierarhcy is literally discourse poison and at volume everyone is so stupid that what's popular will inevitably be really dumb - I love that the thread is filled with people throwing "degrowther" out like a slur, because it's really telling in the worst way that they worship Number Go Up and the upside of this is you can assume everything downstream in their book-length post is pure ideology and cope - and if you're smart enough to already know they're the court soothsayers whose main job is justifying American hegemony by exalting the virtue of Number and doing the equivalent of parlor tricks with numbers to categorize sub.Number.x-y in such a way that comports to their worldview and has, if not a moral justification, a "rationalized" one - something that a dumb person or a sociopath can go "hey it sucks but that's just the way It Works"
A traditionally trained Astrologer will literally have a higher predictive hit rate than these people for any matter they ostensibly went to school to "understand"
It would be funny if these people weren't a big part of how this massively unjust thing we all live under justifies itself.
(it's still pretty funny)
Anyone who thinks the economy is real is a fool
Anthropology is real, political economy is real, economics is fake. That's why an anthropologist can publish bangers in economics journals.
I’m so confused by that last bit, do they think countries can pull themselves up by their bootstraps and become perfectly developed without any trade? They’re literally saying “dang isn’t it weird that embargoes and harsh sanctions work” to prove their point. Yeah no shit you need to be integrated with global trade networks to gain access to resources you can’t extract/create internally. That doesn’t mean that trade deals with great powers are fair and not ruthlessly exploiting the different market conditions. Just because you get some benefit from a bad deal you’re strong armed into taking doesn’t make it not exploitative (labor). What a shock that becoming a puppet state in strategic location leads to more foreign investment, clearly this proves neo-imperialism is actually based and good for everyone
What's funny is if you ever talk to wealthy people they will admit to basically all this shit as long as you pretend like you don't have a problem with it. Like I had the misfortune recently of being around some yuppie types who talked like an LLM trained on Financial Times articles and I literally made a statement about how the US controls the world's financial system and it funnels resources from "poorer" countries and their response was essentially "That's exactly right!" with a chuckle. They just don't like when you point out that what they are doing by participating in the system is fucking evil.
I know it's fun to dunk on these people and it helps us build our own knowledge and understanding but never forget that these people know exactly what they are doing, this is all defensive posturing, and if you schmoozed them up at hotel bar all of their real thoughts and feelings would come pouring out. Don't get too mad or frustrated about this shit because it's all a performance. Yes I'm saying this mostly for myself.
Fubby2 is a redditer (read: not scientific journal editor) and wiener. Despite having no background and seemingly almost no understanding of scientific journal publishing, they somehow continue to act like they know better than the professionals who thought this was worth publishing.
Their criticism is "they didn't engage with conventional capitalist theories like comparative advantage," which they insist explains away the whole exploitation framing ("some countries are just better at producing certain goods"), though you'll notice in their comment they kinda completely gloss over the wage comparison that shows southern workers consistently get paid way tf less than their northern counterparts for the same work, which they are generally also doing more of.
They also complain that the paper references sources with titles about imperialism, exploitation, colonization, etc., and that this is a sign of bias. "Talk about the problem without using words I don't like." Capitalists chose not to engage with these issue in any way but to dismiss them or re-frame them as positive, so of course the literature is dirty pinko stuff.
Time for some theory posting to debunk everything redditors say. Let's read Samir Amin's Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value, Chapter Four, Accumulation on a Global Scale and Imperialist Rent. I'll quote section one in the spoiler section.
1. THE GLOBAL HIERARCHY OF THE PRICES OF LABOR POWER
The world system does not appear to lend itself to formalization in algebraic terms. It is, in fact, made up of segments that appear heterogeneous and even incongruous: groups of capitalist firms producing commodities by means of more or less efficient techniques and employing wage-labor at various rates of real remuneration; zones that seem to be precapitalist, where products, not all of which are marketed, are produced in the setting of various peasant modes, with or without extortion of surplus labor in various forms (ground rent, tribute, and the like); groups of natural resources (minerals), access to which is more or less obstructed, depending on the laws of the states concerned—on whether or not they appropriate the resources. Furthermore, no world economy can be analyzed without considering the states; these exist not only on the plane of political reality but also on the economic plane. The economic exchanges among these states have to balance; there are national monetary systems, some of these are linked with others, and so on.
Any attempt at translating this set of realities into a system of equations seems to be a long shot. Even summing up a system regarded as being close to a pure capitalist mode in a model, whether Marxian (with Department I and Department II expressed in values) or Sraffian, constitutes a simplification that must be surrounded with many precautions.
I do not think, however, that resort to relatively simple schemata must be ruled out. Each of these schemata will possess some value, not merely pedagogic but scientific (even though such value is necessarily limited)—provided that we define precisely what data we are using and realize what these data signify.
Here is an example. One can define a system in which commodities 1…, i…, z are produced, some by means of techniques characterized by material inputs Ac and quantities of direct labor Lc, and others by means of other techniques characterized by inputs Ap and quantities Lp of labor . This system can be characterized as follows: (a) a single rate of profit r, the only regulator of distribution throughout the system; (b) a single price Pi for each product i; (c) two different wage levels Wc and Wp (Wc >Wp). Certain commodities (l to m) have, under these conditions, a lower price if they are produced with techniques (Ac Lc) , others (n to z) with techniques (Ap Lp) , it being understood that those produced according to the first formula pay the wages Wc, and the others pay the wages Wp, and that in every case the capital receives the same reward r.
This system might illustrate (without explaining) the conditions of reproduction (equilibrium between supply and demand and so on) in a model reflecting a certain reality, namely: (a) all products are world commodities (these commodities have only one price—that which is obtained under the conditions that make it the lowest); (b) capital is mobile on the world scale; (c) labor is not mobile, and obtains different rewards at the center and at the periphery. In other words, it is a schematization of the way the production process has been turned into a world process in the imperialist epoch.
A model of this kind can be expressed either in Sraffian terms or in terms of value. It is not a substitute for historical materialism, any more than the schemata in Volume II of Capital are. But it is useful because it makes explicit what seems to be an objective economic law in such a system, and therefore a basis upon which historical materialism can operate.
If we accept the data of the system and try to stay within its framework, we are obliged at the outset to ask three questions. First, why in the peripheral zone do they not combine the techniques (Ac Lc) with the wages Wp, which would give a higher profit than can be received with the techniques (Ap Lp)? Second, why in this case doesn’t all capital migrate from the center to the periphery? Third, at a given moment, the distribution of techniques being what it is, is the international division of labor that results from it (the center specializing in branches of production l to m, the periphery in n to z) compatible with equilibrium in exchange, since the fractions of products l to m exchanged for products n to z, at prices pi, ought to be equal?
Economic theory endeavors to answer these questions, and fails. I have examined the various theories produced to explain the equilibrium of the balances of payments (theories of price effects or exchange effects), have shown the circular character of these arguments (based on the quantity theory of money or on assumptions regarding elasticities of demand that presuppose the result), and have concluded that they amounted to nothing more than an expression of the ideology of universal harmonies. But when economic theory, turning away from these nonsensical notions, speaks of “re-equilibrating” income effects, it hits the nail on the head. By so doing, however, it invites us to ask the real question, which sits outside its own field: how are the structures adjusted to each other—that is, by the effect of what forces does this adjustment take place?(What is involved here are class struggles on the world scale.)
The model illustrates one possible case: the case in which labor is not exploited uniformly—that is, when the rates of surplus-value are unequal. In order to introduce this hypothesis (it is, at this stage, no more than a hypothesis) we need to construct the model in terms of values, rather than directly in price terms.
Unequal exploitation is manifested in unequal exchange. Unequal exploitation (and the unequal exchange that results from it) dictates inequality in the international distribution of labor. It distorts the structure of demand, accelerating self-centered accumulation at the center while hindering dependent, extroverted accumulation in the periphery.
Some dude there is saying that mines in Africa are less efficient than the mines in US so they take more labour for the same output. My dude half the mines in Africa are owned by American and Canadian companies.
Sorry unequal exchange? Is he posting his opinions on anime now?
Honestly, this is a terrible paper. Unequal exchange is not a good way of understanding the world as it is. The only real unequal exchange under Capitalism is the payment of wages for labor. (Yes, there is rent of various kinds and some other things maybe, but they are very small compared to surplus value extraction). To make it more concrete, US farmers selling corn to Mexico is not unequal exchange, even though it may take 1 hour of labor to make corn equivalent to 10 hours of labor of avocados that exchange for the same value. On the other hand if a US company employs workers in Mexico, it is exploiting them to make profit which filters back to the US without equivalent. There is of course a legitimate point to make that if the world economy were truly as open and integrated as the Neoliberals sometimes claim, these production differences should equalize. One of the big reasons production methods don't equalize is that wages are artificially suppressed in 'global south' countries. There are lots of other reasons though which would be interesting to investigate more, rather than clinging to unequal exchange theories.
edit: In fairness they do kind of acknowledge this. I think they underestimate the differences in physical production. Take India, a large part of the agriculture is not mechanized to this day, so of course it is 10-100x less productive.
It is important to note that, in cases where physical productivity differences do exist, this is often because it is more profitable for capital to use cheaper, more labour-intensive methods than to invest in modern equipment—especially in cases where state investment in technological development has been curtailed by structural adjustment programmes, or where patents prevent affordable access to necessary technologies—precisely because Southern wages are maintained at artificially low levels34,35. This arrangement benefits Northern consumers with cheaper goods and benefits Northern capital with an increased surplus. In such cases, the use of labour-intensive methods facilitates value transfer and should be understood as constituting unequal exchange. Under these conditions, the South is compelled to allocate more labour to production for international trade than would be required if technology was deployed more rationally and fairly, thus draining—and wasting—a crucial productive capacity that could otherwise be allocated toward producing goods and services necessary for local well-being and development (see Supplementary Discussion 2).
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