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Chapter I of

Unequal Exchange and the prospects of Socialism. By Communist Working Group. Manifest Press, 1986, 233 p., pp. 19-30.

Notes are at the bottom of the Chapter.

“But, if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of the conflict with the powers that be…. In that case we do not confront the world in a doctrinaire way with a new principle: Here is the truth, kneel down before it! We develop new principles for the world out of the world’s own principles. We do not say to the world: Cease your struggles, they are foolish; we will give you the true slogan of the struggle. We merely show the world what it is really fighting for, and consciousness is something that it has to acquire, even if it does not want to.”

(Marx, Letter to Ruge, September 1843)

The Purpose of Theory is Practice

The function of theory is to be the basis and guidance of our practical conduct. Without an analysis of reality, practice becomes erroneous or marked by accidental occurrences. Whereas a correct understanding of reality makes a rational and efficient action possible.

The basis of our view of the world is our experience, our practice, and our studies. The purpose of this book is to make clear our theoretical basis and thus strengthen our practice.

Therefore, a revolutionary theory should not only describe the world, but should identify the revolutionary classes and be framed so as to form the basis of a strategy for action and be a direction of what actually ought to be done.[1]

The theoretical and practical work and their interaction are the basis of the work of a revolutionary organization. Without practice, theory loses its sense, and without theory, practice loses its direction and becomes accidental.

Marxism – Dialectical Materialism

The preparation of a theoretical basis – and the consequential practice – must start from an analysis of reality, from a realization of what the world to be changed actually looks like and how it functions. Marx’s theory with its materialist view and dialectical method applied to the concrete reality offers the best prerequisites of a realization of reality. Marx turned the study of society and its development into a science. Marxism is a method for the investigation of economic and social conditions which regards things as they are: constantly developing and constantly changing. The world has developed enormously since Marx and Lenin. Therefore, a fossilized and idealistic application of Marxism would prevent us from understanding capitalism as it appears today. Followers of Marxism must free themselves from dogmatism and wishful thinking and use the Marxist method when studying concrete reality.

The tendency to change Marxism into a religious dogma which should only be learned, remembered, and practised, and from which indisputable truths can be inferred, is just as old as Marxism itself. Marx and Engels fought against this tendency, against those who “only make the materialist conception of history a pretext for not studying history”.

Analysis of the Economic Conditions is Fundamental

In the Marxist sense, an analysis of reality means first and foremost an analysis of the basic economic conditions, of the development of the productive forces, of the conditions of production. Because these basic economic conditions determine social, class and political conditions.

“The materialist conception of history starts from the proposition that the production of the means to support human life and, next to production, the exchange of things produced, is the basis of all social structure; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or orders is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view the final causes of all social changes and political revolutions are to be sought, not in men’s brains, not in men’s better insight into eternal truth and justice, but in changes in the modes of production and exchange. They are to be sought not in the philosophy, but in the economics of each particular epoch.”

(Engels, Socialism, MESW, p. 411) [*]

However, this does not mean that the economic conditions are the only determining factors. Engels writes:

“According to the materialist conception of history, the ultimately determining element in history is the production and reproduction of real life. More than this neither Marx nor I have ever asserted. Hence if somebody twists this into saying that the economic element is the only determining one, he transforms that proposition into a meaningless, abstract, senseless phrase. The economic situation is the basis, but the various elements of the superstructure – political forms of the class struggle and its results, to wit: constitutions established by the victorious class after a successful battle, etc., juridical forms, and even the reflexes of all these actual struggles in the brains of the participants, political, juristic, philosophically theories, religious views and their further development into systems of dogmas, also exercise their influence upon the course of historical struggles and in many cases preponderate in determining their form. There is an interaction of all these elements in which, amid all the endless host of accidents (that is, of things and events whose inner interconnection is so remote or so impossible of proof that we can regard it as nonexistent, as negligible) the economic movement finally asserts itself as necessary. Otherwise the application of the theory to any period of history would be easier than the solution of a simple equation of the first degree.

We make our history ourselves, but, in the first place, under very definite assumptions and conditions. Among these the economic ones are ultimately decisive. But the political ones, etc., and indeed even the traditions which haunt human minds also play a part, although not the decisive one.”

(Engels, Letter to Bloch, MESW, p.. 417.)

The Main Social Contradiction

Marx and Engels discovered that the cause of social development and social upheavals is the economic conditions, the contradiction between the development of the productive forces and the limits which the conditions of production set to this development. In A Contribution to the Critique of Political Economy Marx writes:

“At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or – what is but a legal expression for the same thing – with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed. In considering such transformations a distinction should always be made between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, aesthetic or philosophic – in short, ideological forms in which men become conscious of this conflict and fight it out. Just as our opinion of an individual is not based on what he thinks of himself, so can we not judge of such a period of transformation by its own consciousness; on the contrary, this consciousness must be explained rather from the contradictions of material life, from the existing conflict between the social productive forces and the relations of production.”

(Marx, op. cit., MESW, pp. 181-2.)

The Relationship Between Consciousness and Being

“The history of all hitherto existing society is the history of class struggles.

Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary re-constitution of society at large, or in the common ruin of the contending classes.”

(Marx & Engels, Communist Manifesto, MESW, pp., 35-6)

The class struggle is the motive power of history. Man creates his own history. But what determines man’s motive or rather the motive of the masses? What provokes the clashes of the struggling classes? The answer is: their conflicting economic interests.

About the relationship between being and consciousness Marx writes:

“In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness.”

(Marx, Preface to Critique…, MESW, p. 181)

Of course, a change does not take place without being wanted. Without this desire, anger, and indignation it is not possible to organize the subjective forces of the revolution, who are to carry out the change. But it is important to maintain that revolutions do not primarily occur because people want them. Revolutions occur as a result of a necessity in the social development, – a development which can be restrained or encouraged by the social classes, but not terminated. By this we do not mean that historical development is just one big mechanic, objective necessity, that the subjective forces of the revolution and the classes do not play any part in the development of history. On the contrary, it is through these that the objective necessity stands out.

Ultimately, the economic conditions force the oppressed into revolutionary action. Thus it is primarily the fact that they cannot live under the prevailing conditions which makes them revolt. Secondly, it is the fact that they do not want to. It is not possible to convince a class of the necessity of socialism if there is no economic background to this.

Thus it is not by chance that revolutionary upheavals have taken place in Russia, China, Cuba, Algeria, Southern Africa etc., and not in the United States or Western Europe. Neither is it accidental that today’s desire for a change, for socialism, has gained much more ground in the Third World than in the United States and Western Europe. This is due to a fundamental difference in the objective economic conditions in the two parts of the world.

The Population of the World is Divided into Rich and Poor

The present economic world order is characterized by a division of the world population into rich and poor classes, mainly appearing as a division into rich and poor countries. This division is a consequence of the development of capitalism during the last one hundred years, when the growth of capitalism has been determined by this continuous polarization. The growth, wealth, and social welfare of the imperialist countries are inextricably bound up with the wretched poverty of the Third World. Imperialism constitutes these two aspects of. the same economic system. The fact that, generally speaking, the capitalist world is divided into rich classes in the imperialist countries, and – a small privileged upper class apart – poor classes in the Third World, can hardly be explained away or denied. The historical facts and the material conditions of today’s world speak for themselves.

In 1978 the World Bank quoted the gross national product (GNP) per capita of the 18 richest capitalist countries, which include Denmark, at $8,070.[**] In the so-called medium income countries, average gross national product per capita was $1,250, and in the 38 poorest countries it was $200. In other words, the GNP per capita of the richest countries is 6.5 times as high as that of the medium income countries, and 40 times as high as that of the poorest countries.[2]

The difference between the rich and the poor countries is worse than ever. The rich imperialist countries with only 25 per cent of the total population of the world dispose of 83 per cent of the GNP of the world. They consume 75 per cent of all energy, 70 per cent of all cereals, 92 per cent of all industrial products, and use 89 per cent of all education offered in the world.

FAO has made a conservative estimate that 450 million people of the underdeveloped countries suffer from serious under-nourishment, which means that they starve. Several hundred million other people in the Third World suffer from general under-nourishment and malnutrition. The per capita consumption of animal protein is 6 times as large in the industrialized countries as in the underdeveloped countries. The consumption of fat is 4.5 times larger, of cereals 2.3 times, and of milk 6 times larger.

UNESCO has made an estimate that in 1980 there were about 820 million illiterates in the poor countries, which means three out of ten adults. This figure does not include those millions of children who do not attend school today and who will eventually join the masses of illiterates. The richest fifth part of the world, i.e. 20 countries with 21 per cent of the total population of the world, spend 50 times more on education per capita than the poorest fifth part, i.e. 26 countries with about 23 per cent of the total population of the world.

The health situation in the exploited countries also reflects the gulf between the rich and the poor countries. According to WHO, more than one thousand million people or 25 per cent of the total population of the world live in conditions so bad that their lives are threatened. Seventy per cent of the children in the underdeveloped countries suffer from infectious diseases and parasites. Infant mortality in the rich countries varies between 10 and 20 per 1000 live births. In Africa the figure is 150-200 per 1000. In Asia it is between 100 and 150 per 1000 and in South America between 30 and 170 per 1000 live births.

Of the more than 122 million children born annually in the Third World, 10 per cent die before they reach the age of one year, and a further 4 per cent before they are five years old. On a world scale, about 18 million children under five years of age die each year. Seventeen million of them, i.e. 95 per cent, die in the underdeveloped countries. The risk of dying before adolescence is one to forty in the rich countries, one to four in Africa as a whole, and one to two in certain African countries. The expectation of life at birth is 72-74 years in the rich countries. In the poor countries, the average is 50 years but in certain parts of the world less than 40 years.

To sum up, the present situation of the poor countries can be described by the following figures (1980):

Under-nourished (under the necessary energy and protein level, i.e. starving):570 millions
Adult illiterates:820 millions
Totally without hospital facilities:1,500 millions
Annual income under $90:1,300 millions
Life expectancy under 60 years:1,700 millions

The Consequences of the Present World Order

If the present is tragic, the future looks even worse. The total population of the world is estimated at about 4,400 million people, of whom 75 per cent live in the underdeveloped countries. In the year 2000 the total population will reach about 6,400 millions. More than 90 per cent of this increase in population will occur in the poor countries, which means that 80 per cent of the world’s population – 5,100 million – will be living in the poor part of the world in the year 2000. Four out of five will live in the underdeveloped countries.

Estimates made by the United Nations show that the GNP per capita in the year 2000 will be at a world average of about $2,311 (in 1975 dollars). This means a global increase of 53 per cent compared with 1975. But the increase will not be equally distributed. The GNP per capita of the industrialized countries will increase to about $8,500, whereas the GNP per capita of the underdeveloped countries will remain at less than $590 on average. Thus in the year 2000, the average income per capita in the industrialized countries will be 14 times as high as in the underdeveloped countries. If we compare the GNP of the ten richest capitalist countries with that of the underdeveloped countries, the difference is of the order of 20. All this means that the gulf between the rich and the poor countries will become twice as wide during the next twenty years. In 1975, the average difference in the GNP per capita between rich and poor countries was about $4,000, in the year 2000 it will be about $8,000. The gulf which separates rich and poor today, and which seems so bottomless, will in only 18 years be twice as wide, if the present world order continues.

The profound economic, social, and political crises which the Third World is now experiencing, and which cannot be resolved within the imperialist world order, will inevitably result in profound revolutionary changes in the individual countries and in the relationship between the rich and the poor countries. The crisis in the Third World has resulted in a demand for socialism and for a world order which advances development in the exploited countries and reduces inequality in the world. This demand will gain strength during the coming years.


Below we shall deal with the historical background of this division of the world into rich and poor countries (classes). We shall describe how the rich imperialist countries exploit the poor countries, and how this has influenced economic development in the poor and in the rich countries, and we shall outline how this has affected the struggle for socialism on a global scale.

We have in our account concentrated on “unequal exchange” and its consequences, as we consider this to be the most important mode of imperialist exploitation. By the same token, world trade has become the main subject of our analysis. Consequently, the economies of the socialist countries will only be touched upon superficially, because their foreign trade is relatively small compared to that of the capitalist countries. In the global struggle against imperialism, and for socialism, socialist countries play an important role as counterweight against imperialism in the struggle of the oppressed masses in the poor countries. This role of the socialist countries in the world economy is a question of great importance, to which we will return in our future writings.

In the following we shall deal with the most important general lines. Undoubtedly, there are situations and exceptions which our representation does not cover. Thus, this is neither an adequate historical account nor any profound analysis of capitalism; it is rather an outline of some general features which we consider important for the understanding of the development and function of imperialism.


[*] See Bibliography for full references.

[**] Throughout this book, the $ symbol indicates United States’ dollars; and the term “billion” is used in its American sense, i.e. one billion = 1000 million (a European milliard).

[1] “Marxist philosophy holds that the most important problem does not lie in understanding the laws of the objective world and thus being able to explain it, but in applying the knowledge of these laws actively to change the world. From the Marxist viewpoint, theory is important, and its importance is fully expressed in Lenin’s statement, ‘Without revolutionary theory there can be no revolutionary movement’. But Marxism emphasizes the importance of theory precisely and only because it can guide action. If we have a correct theory but merely prate about it, pigeon-hole it and do not put it into practice, then that theory, however good, is of no significance. Knowledge begins with practice, and theoretical knowledge which is acquired through practice must then return to practice.” (Mao Tse-tung, “On Practice”, Selected Readings from the Works of Mao Tse-tung (Peking, 1967), P. 63.)

[2] The following figures and information come from a speech held by Fidel Castro at the Conference of The Interparliamentary Union in Havana 15-23 September 1981 (quoted from Granma, Havana, 27 Sep. 1981), from World Bank Atlas 1978, Washington DC, 1979, and from United Nations Statistical Yearbook 1978, New York, 1979.