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Chapter V of

Unequal Exchange and the prospects of Socialism. By Communist Working Group. Manifest Press, 1986, 233 p., pp. 143-195.

On Productive Forces and Conditions of Production

According to the materialist conception of history, production and exchange of commodities are the basis of the social order. Therefore, social changes and political revolutions are in the last resort due to changes in the modes of production and exchange and not to the political ideas of the classes.

… the final causes of all social changes… are to be sought not in the philosophy, but in the economics of each particular epoch. The growing perception that existing social institutions are unreasonable and unjust, “that reason has become unreason and right wrong”, is only proof that in the modes of production and exchange changes have silently taken place with which the social order, adapted to earlier economic conditions, is no longer in keeping. From this it also follows that the means of getting rid of the incongruities that have been brought to light must also be present, in a more or less developed condition, within the changed modes of production themselves. These means are not to be invented by deduction from fundamental principles but are to be discovered in the stubborn facts of the existing system of production.”

(Engels, Socialism, MESW, pp. 411-12.)

Thus, it is not ideas in people’s heads or wretchedness and exploitation which form the basis of social changes. It is the lack of potentialities within the existing conditions of production which bring about the revolutionary changes. Instead of promoting development, the conditions of production have become a chain to development. As the chain is tightened, an economic, social, and political crisis arises, and the consciousness that a change is necessary grows out of this crisis. [1]

The class struggle must be considered in the light of the economic and material conditions and not as an independent, isolated motive power in history. Therefore, our evaluation of the possibilities of socialism in the world is primarily based on the tendencies of the economic development.

The Possibilities of Socialism in the Imperialist Countries

The perspectives of socialism in the imperialist countries cannot be analysed separately, as the position of the working class is closely related to the development of capitalism in the whole world. The possibility of a socialist development in the imperialist countries must therefore be considered in relation to the development of the imperialist system. The development of the working class in these countries – from being an exploited proletariat to becoming a class appropriating more value than it produces – is the most important material reason why the working class does not develop in socialist direction. It is the preferential position of the class internationally which determines its political attitude. Pari passu with the wage increases of the working class in the imperialist countries, trade between the exploited countries and the imperialist countries became characterized by unequal exchange. This led to an unequal development and a more profound division of the world into rich and poor countries. However, the wage increases not only meant a rise in consumption in the imperialist countries and a growing exploitation of the Third World. The changed conditions of the working class meant that it had an objective interest in the capitalist system continuing its international accumulation, paid by the proletariat in the Third World. A result of this development is the consumer society which emerged at the end of the 50s in Europe and somewhat earlier in the United States.[2] Thus the consumption of the Danish population is considerably bigger than the consumption of the whole population in North Africa. Put together, the domestic market of Denmark and Sweden is larger than that of Africa excluding South Africa. If Norway is included, the population of the whole of Scandinavia consumes more than the population of the whole of Africa. The domestic markets of West Germany and France are bigger than that of the entire non-communist Third World. And the United States alone, i.e. 6 per cent of the population of the world, consume more than 40 per cent of the total production of the world.

The imperialist countries, which make up about 20-25 per cent of the population of the world, consume about 70 per cent of the total amount of energy produced in the form of coal, petroleum, uranium, and electric power, and 75 per cent of the copper and aluminium production. The two thirds of the population of the world who live in Asia, Africa and Latin America consume only about 12 percent of the raw material in the world, in spite of the fact that about half of the raw material in the world is produced in these countries. (Emmanuel, Unequal Exchange Revisited, p. 73.)

The consumer society in the wealthy areas of the world offers perfect conditions for capitalism. It means mass production and mass consumption. Under these circumstances capitalism has shown its highest rates of growth. In the 1960s and the greater part of the 1970s the working class of the imperialist countries experienced an ability to consume never experienced by any working class before. In general, the imperialist countries started to contain only classes which appropriate more value than they produce. This situation could only arise and continue to exist because there are millions of extremely exploited workers in the surrounding world.[3]

The Welfare State, the considerable ability for consumption, the enormous improvement in productive forces in the rich countries, and the contrasting conditions in the Third World; are all due to the same cause: imperialist exploitation. Primarily, unequal exchange results in a growth in the imperialist countries which is considerably more rapid and extensive than in the Third World. At the same time these economic relations determine the attitude of the working class towards an international system of socialism in the world. The demand for a new economic world order, the demand for socialism, is foreign to the West European and North American working class.


Reformists are opposed to revolutionaries in that their political ideology and practice do not go further than to the capitalist conditions of production and are aimed at being effected on the premisses of the system. Against that, the revolutionaries organize their policy to overthrow capitalism. Parties which base their policy on the continuous existence of imperialism and ally with a working class with an objective interest in continuing imperialism, cannot be revolutionary. This fact is independent of the forms of the class struggle, i.e. its fierceness etc. The form has nothing to do with the actual basis of the class struggle.

Today, the revolutionaries of the imperialist countries have to base their policy on a class analysis taking its point of departure in global economic conditions. The revolutionaries have to ally with the classes in the world which have an objective interest in overthrowing the imperialist system, no matter where they are geographically.

The Rise of Reformism

It was the economic basis of the class struggle which resulted in the success of reformism within the working classes of the imperialist countries. During the first half of the nineteenth century the capitalists had no economic possibility of satisfying – even partially – the demand of the proletariat for better conditions. At that time a satisfaction of these demands was more than the capitalist system could bear. Therefore, any large demand for improvements had to be ruthlessly suppressed in order not to lead to a subversion of the prevailing conditions of ownership and the State. The bourgeoisie could not allow itself the luxury of introducing parliamentary democracy, the union rights, etc., which would have threatened the very existence of the capitalist system. But this changed with imperialism and the subsequent changes in conditions in the imperialist countries. It became possible for the ruling class to make concessions within the framework of the system. At the same time the high wages, the improved working conditions, and the extended political rights strengthened the faith of the working class in the possibilities of reformism, which again made it less risky for the capitalists to give the working class further political rights. However, the working class had to fight very hard to obtain these improvements in wages and working conditions. As a class, the capitalists will always be against wage increases, as they result in a proportional fall in the rate of profit.

Thus the improved conditions and the considerable political influence which the working class of the imperialist countries obtained were not a result of an ingenious scheme devised by the capitalists or of bribery in order to obtain social calm, but a consequence of the struggle of the working class itself. And it is quite as certain that these demands would never have been satisfied if the imperialist accumulation of capital had not been effected.

Historically, the entire working class did not all at once become a wealthy and bourgeoisified class of the imperialist countries. The development has been gradual. At the end of the last century the improved conditions of the skilled and well-organized part of the working class resulted in the weakening of the revolutionary labour movement concurrently with the advance of reformism. The Paris Commune was defeated and the First International was dissolved in 1871, whereas the industrial and political reformist struggle successfully gained ground. The reformist line turned out to be able to improve the wages and the working conditions of the working class within the framework of the capitalist system. The revolution was no longer on the agenda in Western Europe. Capitalism had regained its vitality and developed dynamically.

Marx and Engels were far from blind to the fact that these changes in the material conditions of the proletariat influenced the policy of the class. They found that the reasons for the insidious reformism within the British working class during the latter part of the nineteenth century were based on the British industrial and colonial monopoly.[4]

… the English proletariat is actually becoming more and more bourgeois, so that this most bourgeois of all nations is apparently aiming ultimately at the possession of a bourgeois aristocracy and a bourgeois proletariat alongside the bourgeoisie. For a nation which exploits the whole world this is of course to a certain extent justifiable. The only thing that would help here would be a few thoroughly bad years, but since the gold discoveries these no longer seem so easy to come by….

(Engels to Marx, 7 Oct. 1858, MESC, p. 110.)

Concurrently with the improvements in wages and working conditions the working class enforced a political democratization of society. In this way the labour movement was incorporated in the bourgeois parliamentary system by way of political reforms. The improvements in wages, in working conditions, and political reforms against which the bourgeoisie had fought tooth and nail during the 1820s, 30s, and 40s were obtained during the 1870s and 80s, when they no longer presented a menace to the capitalist system.

As regards the workers it must be stated, to begin with, that no separate political working-class. party has existed in England since the downfall of the Chartist Party in the fifties. This is understandable in a country in which the working class has shared more than anywhere else in the advantages of the immense expansion of its large-scale industry. Nor could it have been otherwise in an England that ruled the world market; and certainly not in a country where the ruling classes have set themselves the task of carrying out, parallel with other concessions, one point of the Chartists’ programme, the People’s Charter, after another. Of the six points of the Charter two have already become law: the secret ballot and the abolition of property qualifications for the suffrage. The third, universal suffrage, has been introduced, at least approximately; the last three points are still entirely unfulfilled: annual parliaments, payments of members, and, most important, equal electoral areas.

(Engels, The English Elections, p. 368.)

Marx and Engels repudiated heavily the reformist line within the labour movement:

For a number of years. past the English working-class movement has been hopelessly describing a narrow circle of strikes for higher wages and shorter hours, not, however, as an expedient or means of propaganda and organisation but as the ultimate aim. The Trades Unions even bar all political action on principle and in their charters, and thereby also ban participation in any general activity of the working class as a class. The workers are divided politically into Conservatives and Liberal Radicals, into supporters of the Disraeli (Beaconsfield) ministry and supporters of the Gladstone ministry. One can speak here of a labour movement only in so far as strikes take place here which, whether they are won or not, do not get the movement one step further…. No attempt should be made to conceal the fact that at present no real labour movement in the Continental sense exists here….

(Engels to Bernstein, 17 June 1879, MESC, p. 320.)

But the manufacturing monopoly of England is the pivot of the present social system of England. Even while that monopoly lasted the markets could not keep pace with the increasing productivity of English manufacturers; the decennial crises were the consequence. And new markets are getting scarce every day, so much so that even the negroes of the Congo are now to be forced into the civilisation attendant upon Manchester calicoes, Staffordshire pottery, and Birmingham hardware. How will it be when Continental, and especially American, goods flow in the ever increasing quantities – when the predominating share, still held by British manufactures, will become reduced from year to year? Answer, Free Trade, thou universal panacea?…

But what is to be the consequence? Capitalist production cannot stop. It must go on increasing and expanding, or it must die. Even now, the mere reduction of England’s lion’s share in the supply of the world’s markets means stagnation, distress, excess of capital here, excess of unemployed work people there. What will it be when the increase of yearly production is brought to a complete stop?

Here is the vulnerable place, the heel of Achilles, for capitalist production. Its very basis is the necessity of constant expansion, and this constant expansion now becomes impossible. It ends in a deadlock. Every year England is brought nearer face to face with the question: either the country must go to pieces, or capitalist production must. Which is it to be?

And the working class? If even under the unparalleled commercial and industrial expansion, from 1848 to 1868, they have had to undergo such misery; if even then the great bulk of them experienced at best a temporary improvement of their condition, while only a small, privileged, “protected” minority was permanently benefitted, what will it be when this dazzling period is brought finally to a close; when the present dreary stagnation shall not only become intensified, but this its intensified condition shall become the permanent and normal state of English trade?

The truth is this: during the period of England’s industrial monopoly the English working class have to a certain extent shared in the benefits of the monopoly. These benefits were very unequally parcelled out amongst them; the privileged minority pocketed most, but even the great mass had at last a temporary share now and then. And that is the reason why since the dying-out of Owenism there has been no Socialism in England. With the breakdown of that monopoly the English working class will lose that privileged position; it will find itself generally – the privileged and leading minority not excepted – on a level with its fellow-workers abroad. And that is the reason why there will be Socialism again in England.

(Engels, England 1845 & 1885, pp. 393-4.)

Engels’ hopes that the destruction of the British industrial and colonial monopoly by the other advanced capitalist countries would result in the British working class losing its privileged position and again becoming revolutionary, were not fulfilled. As described; capitalism developed in other directions than Marx and Engels had imagined. The British industrial and colonial monopoly was broken before the end of the century. It was broken because it came to include the leading West European powers and the United States. This happened without bringing about a decline in the standard of living of the British proletariat. On the contrary the working class of these countries also succeeded in obtaining higher wages, improved working conditions and more political rights within the framework of the bourgeois parliamentary system. Thus the breach of Britain’s monopolistic position only meant that reformism spread to these countries.

At the beginning of our century Lenin had to realize that Engels’ hopes that the destruction of the British industrial monopoly would lead to economic conditions which again would place the revolution on the agenda, were not fulfilled. On the contrary Reformism was fortified within the working class. Lenin also realized that this development originated in imperialism. The “treachery” of the leaders of the working class was only expressive of this economic fact. Lenin writes:

However, as a result of the extensive colonial policy, the European proletarian partly finds himself in a position when it is not his labour, but the labour of the practically enslaved natives in the colonies, that maintains the whole of society. The British bourgeoisie, for example, derives more profit from the many millions of the population of India and other colonies than from the British workers. In certain countries this provides the material and economic basis for infecting the proletariat with colonial chauvinism. Of course, this may be only a temporary phenomenon, but the evil must nonetheless be clearly realised and its causes understood in order to be able to rally the proletariat of all countries for the struggle against such opportunism.

(International Socialist Congress, p. 77.)

The First World War laid bare the strength of chauvinism within the labour movement, when under the leadership of the Social Democratic parties it followed the national bourgeoisies in the first imperialist war about colonies and spheres of influence. The interests of the bourgeoisie and the upper strata of the working class coincided to a certain degree. The prosperity of the country was their common prosperity.

By social-chauvinism we mean acceptance of the idea of the defence of the fatherland in the present imperialist war, justification of an alliance between socialists and the bourgeoisie and the governments of their “own” countries in this war, a refusal to propagate and support proletarian revolutionary action against one’s “own” bourgeoisie, etc. It is perfectly obvious that social-chauvinism’s basic ideological and political content fully coincides with the foundations of opportunism. It is one and the same tendency. In the conditions of the war of 1914-15, opportunism leads to social-chauvinism. The idea of class collaboration is opportunism’s main feature….

… Opportunism was engendered in the course of decades by the special features in the period of the development of capitalism, when the comparatively peaceful and cultured life of a stratum of privileged working men “bourgeoisified” them, gave them crumbs from the table of their national capitalists, and isolated them from the suffering, misery and revolutionary temper of the impoverished and ruined masses. The imperialist war is the direct continuation and culmination of this state of affairs, because this is a war for the privileges of the Great-Power nations, for the repartition of colonies, and domination over other nations. To defend and strengthen their privileged position as a petty bourgeois “upper stratum” or aristocracy (and bureaucracy) of the working class – such is the natural war-time continuation of petty-bourgeois opportunist hopes and the corresponding tactics, such is the economic foundation of present-day social-imperialism.

(Lenin, The collapse, pp. 242-3.)

The Political Development in the Interwar Period

Around 1920 Lenin again and again stresses that an understanding of the roots of opportunism and the fight against social-chauvinism are the most important tasks for the West European revolutionaries during this period.

Is there any connection between imperialism and the monstrous and disgusting victory opportunism (in the form of social-chauvinism) has gained over the labour movement in Europe?

This is the fundamental question of modern socialism.

(Lenin, Imperialism and the split, p. 105.)

Lenin does not doubt the answer. In his article “Revision of the Party Programme”, he writes:

It would be expedient, perhaps, to emphasise more strongly and to express more vividly in our programme the prominence of the handful of the richest imperialist countries which prosper parasitically by robbing colonies and weaker nations. This is an extremely important feature of imperialism. To a certain extent it facilitates the rise of powerful revolutionary movements in the countries that are subjected to imperialist plunder, and are in danger of being crushed and partitioned by the giant imperialists (such as Russia), and on the other hand, tends to a certain extent to prevent the rise of profound revolutionary movements in the countries that plunder, by imperialist methods, many colonies and foreign lands, and thus make a very large (comparatively) portion of their population participants in the division of the imperialist loot.

(Op. cit., pp. 168-9.)

Lenin’s policy for Western Europe after the First World War was to bypass the highest paid upper strata of the working class and concentrate on the actual proletarians. His strategy did not come true. It was not possible for the revolutionary part of the labour movement to wrest the leadership of the working class from the reformist. In Germany, where the revolutionary line was in a strong position, the Communists tried to revolt in 1918 but were betrayed by the Social Democrats. In 1924 the Social Democracy came into power in Denmark and the Labour Party in Britain, not in order to get rid of capitalism but to resolve its crisis. The majority of the working class wanted reforms, not revolution. In the countries where a Social Democratic policy was pursued, the crisis was eased through government intervention and reforms.[5] In Germany, the loser of the war, stripped of all colonies, and fleeced by the demand of the other imperialist powers for reparations, neither the Communists nor the Social Democrats but the Nazis became victorious.

On the policy of the Comintern during this period, Fritz Sternberg writes:

As Lenin misjudged the real strength of Reformism so did his epigones even more. He never gave a systematic analysis of the sociological prerequisites which formed the basis of Reformism, and which prevented it from being shaken during the period up to the victory of Fascism. The Comintern has contented itself with slogans. It has never made it clear that the differentiation in the pre-war years within the working class took place on the basis of the increasing wages of the entire class.

The Comintern has not corrected Lenin’s mistake as to the question of the labour aristocracy and thus the evaluation of the real strength of Reformism. On the contrary: It has made it even deeper.

(Sternberg, Der Faschismus an der Macht, p. 91. )

The rapid economic growth in the countries of Western Europe during the period after the Second World War meant considerable increases in prosperity to the working classes of those countries. The Social Democratic parties became one of the strongest political powers. The working class represented by the Social Democratic party often had the government power, and in many cases they administered the capitalist system more efficiently than the antiquated liberal parties did.

The Effects of Unequal Exchange on the International Solidarity

The effects of imperialist exploitation on the national policy of the exploiting countries did at the same time influence international questions. The policy of the working class of the imperialist countries became still more nationalistic, as the prosperity of the country was the prosperity of the working class.

As already described, this did not mean that the class struggle stopped in the imperialist countries. Whether the wages are high or low, whether the social product is big or small, the wages of the working class and the profit of the bourgeoisie are two amounts which are inversely proportional, and, therefore, the object of continuous struggles.

But when the relative size of the value created by the working classes of the imperialist countries continuously falls compared with the values they receive by way of unequal exchange, and when they appropriate more value than they create because of the low prices of commodities from the exploited countries, then the increase in the national product becomes more important than international solidarity with the members of their own class in the exploited countries. These are the material and economic realities behind the lack of solidarity between the workers of the imperialist countries and the workers of the exploited countries.

Below, a number of concrete examples are given. They illustrate the bloom of chauvinism and the withering of the international solidarity of the working class in some of the countries which participate in the international exploitation. As early as in the latter half of the nineteenth century this chauvinism played a prominent part in the attitude of the British working class to Ireland and the Irish working class. In a letter to Meyer and Vogt 9 April 1870 Marx writes on this attitude:

And most important of all! Every industrial and commercial centre in England now possesses a working class divided into two hostile camps, English proletarians and Irish proletarians. The ordinary English worker hates the Irish worker as a competitor who lowers his standard of life. In relation to the Irish worker he feels himself a member of the ruling nation and so turns himself into a tool of the aristocrats and capitalists of his country against Ireland, thus strengthening their domination over himself. He cherishes religious, social, and national prejudices against the Irish worker. His attitude towards him is much the same as that of the “poor whites” to the “niggers” in the former slave states of the U.S.A. The Irishman pays him back with interest in his own money. He sees in the English worker at once the accomplice and the stupid tool of the English rule in Ireland.

… This antagonism is the secret of the impotence of the English working class, despite its organisation. It is the secret by which the capitalist class maintains its power. …

… Therefore to hasten the social revolution in England is the most important object of the International Workingmen’s Association.[6] The sole means of hastening it is to make Ireland independent.

Hence it is the task of the International everywhere to put the conflict between England and Ireland in the foreground, and everywhere to side openly with Ireland. And this is the special task of the Central Council in London to awaken a consciousness in the English workers that for them the national emancipation of Ireland is no question of abstract justice or humanitarian sentiment but the first condition of their own social emancipation.

(MESC, pp: 236-7.)

The Central Council of the First International did not succeed in “provoking” the British working class to be aware of the conditions in the oppressed countries or to be aware of the fact that the emancipation of these countries was a prerequisite of their own emancipation. On the contrary the defence of the colonial empire by the British working class was cemented in the following years.

On the attitude of the British working class to the fight for the emancipation of the oppressed countries Lenin writes:

I would also like to emphasise the importance of revolutionary work by the Communist parties, not only in their own, but also in the colonial countries, and particularly among the troops employed by the exploiting nations to keep the colonial peoples in subjection.

Comrade Quelch of The British Socialist Party spoke of this in our commission. He said that the rank-and-file British worker would consider it treasonable to help the enslaved nations in their uprisings against British rule. True, the jingoist and chauvinist-minded labour aristocrats of Britain and America present a very great danger to socialism, and are a bulwark of the Second International. Here we are confronted with the greatest treachery on the part of leaders and workers belonging to this bourgeois International…. The parties of the Second International have pledged themselves to revolutionary action, but they have given no sign of genuine revolutionary work or of assistance to the exploited and dependent nations in their revolt against the oppressor nations. This, I think, applies also to most of the parties that have withdrawn from the Second International and wish to join the Third International. We must proclaim this publicly for all to hear, and it is irrefutable. We shall see if any attempt is made to deny it.

(Lenin, The Second Congress, p. 245.)

At the same congress Lenin says about the British Labour Party:

The comrades have emphasized that the labour aristocracy is stronger in Britain than in any other country. That is true. After all, the labour aristocracy has existed in Britain, not for decades but for centuries…. This stratum is thoroughly imbued with bourgeois prejudices and pursues a definitely bourgeois reformist policy. In Ireland, for instance, there are two hundred thousand British soldiers who are applying ferocious terror methods to suppress the Irish. The British Socialists are not conducting any revolutionary propaganda among these soldiers, though our resolutions clearly state that we can accept into the Communist International only those British parties that conduct genuinely revolutionary propaganda among the British workers and soldiers.

(Ibid., p. 261.)

The resolutions of the Third International about the importance of the emancipation of the colonial countries to the world revolution were not followed up. The West European parties were not at all interested in the question.

Ho Chi Minh, who later became the president of the Vietnamese Communist Party, was in Europe at that time. He attended the 5th congress of the Third International (COMINTERN) in 1924, where he severely criticized the West European communist parties, particularly the French for its chauvinist attitude towards the colonial question.

Thus, nine countries with an aggregate population of 320,657,000 and a total area of 11,407,600 square kilometres, are exploiting colonies with a total population of 560,193,000 and covering areas adding up to 55,637,000 square kilometres. The total area of the colonies is five times that of the metropolitan countries whose total population amounts to less than three fifths of that of the colonies….

Thus, it is not an exaggeration to say that so long as the French and British Communist Parties do not apply a really, active policy with regard to the colonies, and do not come into contact with the colonial peoples, their vast programmes will remain ineffective, and this, because they go counter to Leninism….

According to Lenin, the victory of the revolution in Western Europe depends on its close contact with the national-liberation movement against imperialism in the colonies and dependent countries; the national question, as Lenin taught us, forms a part of the general problem of proletarian revolution and proletarian dictatorship.

Later, Comrade Stalin condemned the counter-revolutionary viewpoint which held that the European proletariat could achieve success without a direct alliance with the liberation movement in the colonies.

However, if we base our theoretical examination on facts, we are entitled to say that our major proletarian parties, except the Russian Party, still hold to the above-mentioned viewpoint because they are doing nothing in this matter….

As for our Communist Parties in Great Britain, Holland, Belgium and other countries whose bourgeoisie have invaded the colonies, what have they done? What have they done since the day they assimilated Lenin’s theses in order to educate the proletariat of their countries in the spirit of genuine proletarian internationalism and close contact with the toiling masses in the colonies? What our Parties have done in this domain amounts to almost nothing. As for me, born in a French colony and a member of the French Communist Party, I am sorry to say that our Party has done very little for the colonies.

(Ho Chi Minh, Report, pp. 30-32.)

Ho Chi Minh’ s criticism was never understood, even less observed by the communist parties of the imperialist countries. They upheld their half-hearted attitude towards the colonial question. But worse than that, the Social Democratic parties, which by then represented the majority of the working class in the West European countries, turned out to be directly pro-imperialist.

At the 6th Congress of the Comintern, July-September 1928, Palmiro Togliatti, who later became the leader of the Italian Communist Party, presented a detailed report on the Social Democratic movement in Western Europe and its attitude towards the colonial question. After the Second World War Togliatti himself represented a policy which hardly differed from that of the Social Democrats, but at the congress in 1928 he gave a thorough description of the pro-imperialist policy of the Social Democratic parties. Social Democracy, he said, had always had a colonial policy

which consisted in allying itself with or directly participating in the colonial enterprises of the bourgeoisie…. the Social Democrats have become colonial politicians. They recognise the possession of colonies as something which their countries could never renounce and that, when their country has no colony it is up to them to demand a colony for it in a more or less open manner. In this field there is not a single Social Democratic Party which is an exception.

(Togliatti, “Social Democracy and the Colonial Question”, speech at the 6th congress of the Comintern

– quoted from Edwards, Labour Aristocracy, pp. 36-7.)

In his report Togliatti gives a large number of examples of the pro-imperialist policy of the Social Democrats in proof of his statement.

In France the Socialist Party had always voted in favour of colonial projects. In December 1927 at the congress of the French Socialist Party it was declared that “the post-war problems cannot be solved without the colonies”. Similarly, the party voted in favour of military appropriations to be used for the suppression of nationalist riots in Syria, when the French troops massacred the population of Damascus.

In Holland the Socialist Party did not even discuss the need for colonies. They were only interested in the methods of government in the colonies. The Dutch Socialist Party warned its government that a revolt was in the offing in Indonesia. When it broke out in 1926 in Western Sumatra and Java under the leadership of the Indonesian Communist Party, it got no support whatsoever from the Dutch socialists. On the contrary, they condemned the revolutionaries in strong terms, “whether they originated from Moscow or Canton”. When the revolt was suppressed by mass executions, the Dutch socialists dissociated themselves from there. Only the labourers and the peasants “who were the cause” of the revolt should be executed!

At its conference in 1919 in Germany the Social Democratic Party protested against the fact that Germany had been deprived of her colonies. At the Marseille congress R. Hilferding demanded on the part of the Social Democratic Party colonies for Germany. This demand was repeated in 1928.

In Italy in 1928 the Social Democratic Party passed a resolution protesting against the distribution of colonies after the First World War according to the Treaty of Versailles. They demanded a new agreement about the colonial problem, which considered the Italian capitalism.

In the British Labour Party programme of 1918 it appears that they are against the decolonization of the British empire, because the Labour Party considered it its duty to “defend the rights of British citizens who have overseas interests”. And finally,

as for this community of races and peoples of different colours, religions and different stages of civilization which is called the British Empire, the Labour Party is in favour of its maintenance.

(Ibidem, p. 39.)

Until 1934 the parties of the Third International attacked vigorously this Social Democratic opportunism, chauvinism, and pro-imperialism. But under the impact of Fascism they turned to the strategy of the popular front in the middle of the 30s, which meant co-operation with the Social Democrats.

At the end of the Second World War the last remnants of internationalism were disappearing from the West European and American labour movement. Concurrently with the bourgeoisification, the slogan “the proletariat has no native country” lost its importance to the working class of the Western World completely. It had got somewhat more than its “chains” to lose.

Generally, the British working class, has been behind the imperialist policy of the changing British governments. The Labour government under Ramsey Mac Donald (1929-31) refused all demands from the Egyptian government for the withdrawal of British soldiers, and politico economic “advisers”, and for the independence of the Suez Canal.

The Labour government under Clement Atlee (1945-51) undertook several dirty tricks to suppress the labour and peasant riots in the British colonies. The Labour government sent its men-of-war to Sudan “to do anything to maintain peace and order”. (Jack Woddis, Africa and Mr. Wilson’s Government, quoted from Edwards, op.cit., p. 33.) In Kenya the government of Clement Atlee was responsible for the suppression of labour troubles at the end of the 1940s. In 1947 in Mombasa, The African Workers’ Federation and The Railway Staff Union called a general strike. Workers within catering and business as well as servants joined the strike for higher wages and lower rent.

The Colonial Office under the Labour Government acted with the same ruthlessness as under any Tory Government. Police and troops were called in, the strike was suppressed, and the President of the African Workers’ Federation, Chege Kibachia, was banished without trial to a remote village in Northern Kenya.


During a strike later in the same year police shot at the strikers and killed three. During 1949-50 legislation was passed in Kenya which was to stop the labour riots. Wage freezes and forced labour at starvation wages were used. Strikes were made illegal and emergency legislation was introduced. The emergency legislation gave the British governor the right to deport troublemakers. This legislation was passed and introduced by a Labour Government, elected and supported by the majority of the British working class. In the then British colony of Nigeria the coal miners in Enugu were on strike in 1949 demanding higher wages – a completely normal Social Democratic demand. But in the colonies it was not supported by the Social Democratic government, but was met by arms. The result was 21 dead and 50 injured miners. During the war over the Falkland islands in 1982 an almost united British labour movement supported the imperialist war by the Conservative Government against the Argentine.

The French labour movement does not differ from the British as regards lack of solidarity with the proletariat of the Third World and pro-imperialist tendencies. When the Algerian liberation movement FLN fought for a free Algeria in the 1950s and 60s, it found only little sympathy within the French labour movement. The French Communist Party behaved like a racist party, which must be considered in connection with the fact that it had many members among the European workers in Algeria, who were paid far better than the Algerians – just like the Whites in South Africa today – because they were Europeans. An independent Algeria would mean that they lost their privileges, and, therefore, they fought desperately for a French Algeria: It was also. among these that the terror organization OAS[7] found its assassins. The OAS fought for a French Algeria even after the French Government had given up. It should also be mentioned that the future “socialist” president Mitterand was one of those responsible for the violent attack on the Algerian people in the late 1950s, when he was Minister for Algeria under a Social Democratic government.

The author Simone de Beauvoir writes about the attitude of the French people towards the Algerian liberation struggle:

It (the French Communist Party) made no effort to combat the racism of the French workers, who considered the 400,000 North Africans settled in France as both intruders doing them out of jobs and as a subproletariat worthy only of contempt…. What is certain is that by the end of June (1955) all resistance to the war had ceased…. the entire population of the country – workers and employers, farmers and professional people, civilians and soldiers – were caught up in a great tide of chauvinism and racism….

What did appal me was to see the vast majority of the French people turn chauvinist and to realize the depth of their racist attitude.

(Ibidem, p. 195.)

The American working class has supported American imperialism in general. The American settlers began by putting the original population out of the way, and expanded towards the South on account of Mexico. The African slaves in the South did not meet with any solidarity on the part of the white labourers; on the contrary, the white American working class developed an undisguised racism. The white working class feared that the abolition of slavery would result in a fall in their wages as a consequence of the competition from the emancipated slaves.

As regards the foreign policy of the United States, the American working class has by and large supported it. The dominant position of the United States in the world was a prerequisite of its economic development and therefore of the greatest importance to the labour movement. As part of the fight against “World Communism”, the American unions have supported the policy of the United States in Asia, Africa, and Latin America.

It was students, intellectuals, and Liberals who were behind the demonstrations against the Vietnam war in the 1960s, not the American working class. To the extent that parts of the working class criticized the war at all – and this applied also to the other parts of the population – it was because they did not want to lose “their sons” in the war. The unions even took an active part in the support of the war against the NLF and North Vietnam.

In May 1967 the American seamen’s union, the dock labourers, the mechanics, the masons, and several other unions arranged a “Support the Boys” march along the 5th Avenue in New York. They carried bills with the wording “Bomb Moscow”, “Bomb Peking”, “Throw the H-bomb on Hanoi”. Now and then union members left the demonstration to thrash the onlookers who expressed their disapproval. (Jack Scott, Yankee Union Go Home, p. 261.)

The American union support of the Vietnam war could also be seen at the union congresses. At 13 union congresses in 10 American states in October and November 1967 attended by a total of 3542 delegates, 1448 voted for a continuation of the policy of the government, 1368 were for an escalation of the war, 471 found that the war efforts should be scaled down, and only 235, less than 7 per cent, advocated a complete withdrawal (Ibidem, p. 262.)

In the months of April and May 1970 when the Nixon administration intensified the bombing of North Vietnam and invaded Cambodia and 12 students were killed in anti-war demonstrations in the United States, the unions reacted by escalating their support of the war. J. Beirne, vice-president of the AFL-CIO explained in a speech that opposition to the war was against the interest of the American working class. A termination of the war would lead to unemployment. J. Beirne said among other things:

Suppose last night, instead of escalating into Cambodia, President Nixon said we are pulling every man out in the quickest manner, with airplanes and ships; if he had said that last night, this morning the Pentagon would have notified thousands of companies and said, – “Your contract is cancelled” – by tomorrow millions would be laid off. The effect of our war, while it is going on, is to keep an economic pipeline loaded with a turnover of dollars because people are employed in manufacturing the things of war. If you ended that tomorrow these same people wouldn’t start making houses.

(Ibidem, p. 265.)

George Meany, who was for many years president of the AFL-CIO, announced his unconditional support of Nixon’s escalation of the war. The grateful Nixon visited the union headquarters to express his pleasure of the support of the unions. As Meany gave his full support to Nixon, he said: “In this crucial hour, he should have the full support of the American people. He certainly has ours.” (Ibidem)

On the 8th of May 1970 the “Hard Hats” (the construction workers) began a hunt for anti-war demonstrators. Anti-war demonstrations were attacked by workers wearing their hard hats and armed with lead pipes and crowbars. Several hundred demonstrators were injured in the following weeks. The police remained totally passive and not one single “Hard Hat” was arrested. The demonstration on the 20th of May proved that it was not a question of a few extremists. An amalgamation of several of the biggest unions in the New York area mobilized more than 100,000 workers for a demonstration in support of Nixon’s policy in Indochina. Nixon expressed his gratitude for this “meaningful manifestation of support”, and in return he was given a hard hat marked Commander in Chief.

The Danish working class was not immediately in favour of the Vietnam war, but in general it was not against it either: they were more or less indifferent: It was not involved in the same way as the American. However, the then Communist-led seamen’s association did not refuse to transport supplies to the regime in Saigon, if they got their war risk allowance according to the tariff! (Ny Tid, April 1969 – the Danish seamen’s paper). Just like in other places in Europe, the opposition against the Vietnam war came mainly from young people, students, and intellectuals. Any solidarity of importance with liberation movements of other places in the world has not been seen during recent years. Thus, support of the Palestinian liberation movement by the Danish labour movement has been extremely poor. On the contrary, both the Danish Social Democratic Party and the Socialist People’s Party have backed the State of Israel massively. The struggles in South Africa have not been favoured by the working class either. In spite of numerous requests to the Danish labour movement from the South African liberation movements and the Front Line States for a boycott of trade with South Africa, the Danish Social Democratic Government continued to allow the importation of South African coal and other commodities. These cheap products were more important than the solidarity. In September 1981, when the Angolan ambassador to Scandinavia asked Danish dock labourers to refuse to unload South African vessels because of a South African attack on southern Angola, she received a lot of excuses and a “No”. The Latin American anti-imperialist struggle is treated in much the same way by the unions. The solidarity of the Danish working class with the oppressed people of the Third World is certainly not up to much.

The Working Class Has Become a “Sacred Cow” to the Left Wing

The Social Democratic parties and the parties which do not differ considerably from these, have had the greatest support from the working class in the imperialist countries. Their nationalist policy has improved the conditions of the working class within the framework of the capitalist system so much that left wing parties of all kinds have had very little or no success at all in their attempts to win the working class over to their policy. The left wing explains away the entry of chauvinism into the working class, even though it ought to regard it as a duty to find out why and to counteract this tendency. Marx and Engels dealt with the first slight signs of the advance of opportunism and chauvinism within the working class. They exposed the causes, condemned these phenomena without hesitation and without “making any excuses” for the working class. In 1916 Lenin wrote that the connection between imperialism and the split in the socialist movement was “the fundamental question within modern socialism”. In the 1930s the question of imperialism and the bourgeoisification of the working class was still discussed, but since the Second World War the question has almost been taboo within the left wing of the Western World. Also within the very narrow circle of students and intellectuals who discuss theories of “imperialism”, “center-periphery” etc., the question of the consequence of imperialism to the working class of the Western World and consequently to the international solidarity has always been avoided. This is not because the question is not of current importance; the cleavage between the working class in the imperialist countries and the working class of the exploited countries has never been wider both as regards standard of living and as regards mentality. The reason why the criticism of the opportunism and chauvinism of the working class has ceased is that those within the left wing who before the Second World War still criticized the bourgeoisification of the working class and its results, have today become the spearheads of the bourgeoisified class. When the Social Democrats demand one Danish Krone more per hour, the extreme left wing demands two. When the Social Democrats demand a reduction of the weekly hours by two hours, they demand five hours with full wage compensation, and so on. To the left wing the working class has become a “sacred cow”; it makes mistakes but this is “not its own fault”. The left wing believes that the Danish working class has been misled by Social Democratic traitors, and indoctrinated with bourgeois tendencies through school, television, radio, and newspapers. The task of the revolutionaries is therefore to “disclose this treachery” and these delusions, whereupon the working class will show its “true revolutionary disposition”.

It is not quite in accordance with the materialist conception of history to explain the opportunism of generations by the treachery of the Social Democratic leaders. The working class has the leaders it deserves, and it pursues a policy which reflects the will and aim of the class, and as such it must be said that the Social Democratic parties have done well. It is also an extremely superficial and idealistic view that the bourgeoisification should be a result of indoctrination and the propaganda of the media. The question is then why the proletariat of the Third World, who are exposed to a propaganda which is at least as bourgeois, have not fallen into the same ditch. And why the working class of the imperialist world is accessible to this propaganda to such a degree. In Denmark we live in a very democratic society compared to the rest of the world. As a result of its relative economic affluence, the Danish working class has become harmless. It does not present a menace to the capitalist system. The bourgeois parliamentary system agrees well with the working class. In Denmark you can by and large say and write anything you want, the economic and social situation makes this right harmless. The majority of the population of the Third World does not have the same rights, as these very rights present a menace to imperialism and to the ruling class, because of the economic and social conditions in the Third World.

The left wing of the imperialist countries have totally neglected the objective economic causes, which are the basis of the bourgeoisification of the working class of the imperialist countries,[8] and the lack of solidarity with the members of their own class in the exploited countries. The left wing does not want to see that in the last resort the present economic struggle of the working class can only be a success at the expense of the proletariat in the exploited countries. On the contrary, the left wing, on behalf of the Danish working class, avows international solidarity with the proletariat of the Third World in the common fight against imperialism.[9] It is extremely difficult to see any concrete contribution on the part of the West European working class towards the fight against imperialism.

According to the left wing there should be an “organic connection between the struggle in the Third World and the class struggle in Denmark”. (International Forum, op.cit., p. 56.) Again it is very difficult to see for example the connection between the struggle of the Palestinian People for national liberation and the struggle of the Danish working class for higher wages and better working conditions. Apparently the Danish working class also finds it difficult to see the connection, if we are to judge from the lack of sympathy, even hostility, displayed by the majority of the Danish working class towards the struggle of the Palestinian People.

The solidarity expressed by the workers of the Western World with the “members of their own class” in the exploited countries has been very limited. They have by and large been indifferent to the suppression of the proletariat of the Third World. When it has been necessary, they have even offered political support to or participated directly in the suppression of the proletariat of the Third World. Not because they did not know any better, but because it was in accordance with their immediate interests. Economists and politicians from the Third World are much more aware of the real facts. The former president of Tanzania, Julius K. Nyerere, writes as follows:

“To him that hath shall be given” is a law of capitalist and international economics; wealth produces wealth, and poverty, poverty. Further, the poverty of the poor is a function of the wealth of the rich…. For the poor nations are now in the position of a worker in nineteenth century Europe…. The only difference between the two situations is that the beneficiaries in the international situation now are the national economics of the rich nations – which includes the working class of those nations. And the disagreements about division of the spoils, which used to exist between members of the capitalist class in the nineteenth century, are now represented by disagreement about division of the spoils between workers and capitalists in the rich economics.

(“A Call to European Socialists”, Third World, November 1972;

quoted from Nyerere, Freedom and Development, Dar es Salaam, 1973, pp. 374-5.)

Conclusion for the Imperialist Countries

No social order ever perishes before all the productive forces for which there is room in it have developed; and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself. Therefore mankind always sets itself only such tasks as it can solve; since, looking at the matter more closely, it will always be found that the task itself arises only when the material conditions for its solution already exist or are at least in the process of formation.

(Marx, Preface to Critique, MESW, p. 182.)

As we have described above, imperialism meant a rapid process of change in the economy of the imperialist countries. The productive forces have developed explosively, particularly after the Second World War, concurrently with an increase of the standard of living and political power of the working class. This has changed the perspectives of the class struggle radically in the imperialist countries. While the implementation of demands for higher wages, better working conditions etc. was incompatible with the capitalist conditions of production during the first half of the last century, these demands are satisfied today within the framework of the system. The class struggle between workers and bourgeoisie has continued sometimes with the use of very militant means. But concurrently with the improvement of the standard of living of the working class by means of the imperialist exploitation of the poor countries, the class struggle has become a struggle for the share of the loot from the poor countries.

Therefore, a change in the economic situation of the imperialist countries is a prerequisite for restoring a revolutionary socialist aim to the class struggle in these countries. When the economic and political emancipation of the Third World has weakened imperialism to such an extent that the system lands in a deep economic crisis, the possibilities of socialism in the imperialist countries will be present. When unequal exchange disappears, the working class of the imperialist countries will lose its privileged position in the world. The capitalist class will have to turn to the working class in the rich imperialist countries to obtain profit by forcing down wages. The working class of the imperialist countries will again become an exploited, class, again be the class which maintains society. The flourishing markets of the rich countries will cease to exist and capitalism will again experience its classic crisis of overproduction. The conditions of production will become a fetter on the development of the productive forces. This will result in economic, political, and social crises, which will place socialism on the agenda of these countries again.

The present economic crisis – or rather stagnation – in the imperialist economy has not nearly been serious enough to create such an effect. The economies of the imperialist countries have been capable of “recompensing” about 20 million unemployed and have in this way prevented social unrest and prevented a major decrease in the level of purchasing power. Thus a serious crisis of overproduction has been prevented. The present crisis has not meant any basic change in the economic and social conditions of the working class. The most pessimistic estimates talk about a return to the 1973 standard of living! In spite of the fact that its effect has been weakened by the recirculation of oil incomes, the oil crisis has proved how vulnerable imperialist economy is to price increases of products from the Third World. Similar price increases of other kinds of raw material from the Third World combined with the spending by these countries of. the subsequent profits on a centrally planned development of their own economies would affect the economies of the imperialist countries far more seriously. The vulnerability of the imperialist countries to price increases and threats of decreasing supplies of Third World products also shows that it is not the Third World which depends on the rich countries, as it is often alleged, but vice versa. The rich countries only remain rich because they drain the poor countries of enormous values. The poor countries can easily manage without the rich countries, in fact they would do much better. But the imperialist countries cannot maintain their enormous standard of living if they do not exploit the poor countries. Therefore, the emancipation of the Third World is of vital importance to an outbreak of crises in the imperialist countries – crises which will change the nature of the class struggle and make possible a revolutionary situation.

The Possibilities of Socialism in the Exploited Countries

The development and prosperity, of which imperialism was the basis in the rich countries, have an obligate counterpart in the Third World. The tendency of capitalism towards a concentration of wealth at the one pole and of poverty at the other has become evident internationally. It is only in the imperialist countries that capitalism seems to have solved its contradictions; they still exist globally. The wealth and the rapid development in the imperialist countries and the poverty and underdevelopment in the exploited countries are two interdependent phenomena, two aspects of the same matter, imperialism.

Just as original accumulation – i.e. the immediate violent plundering of America, Africa, and Asia – was one of the prerequisites of the rapid development of capitalism in Britain, plundering and destruction during original accumulation were also the basis of further exploitation of the suppressed countries. However, during the period from the birth of industrial capitalism and until the last third of the nineteenth century, it seemed (for example to Marx and Engels) as if capitalism would spread all over the world and develop the exploited areas, so that they would reach a level corresponding to that of the old capitalist powers. But with the rise of imperialism and the growth of unequal exchange, this tendency turned towards an increasing inequality. The imperialist countries developed much more rapidly than the colonies and the other exploited countries. As unequal exchange between the old industrialized countries and the exploited countries grew more important, the economic development in the world became still more unequal.

What is Development and Underdevelopment?

Before we start describing unequal development, it would be appropriate to define the concept of development. By the development of a country is meant the development of its productive forces within all sectors. The development of the productive forces means a development both of human labour, its quantity, knowledge and skill, and of the quality and quantity of the production apparatus (buildings, machinery, tools, etc.) in its widest sense. A development of the productive forces results in an increase in productivity by means of a raising of the quality of labour power through training and education, by means of a better organization of work, and by the use of new and more efficient technology. Thus underdevelopment must be seen in relation to the potentials, existing at a given time in a given society, of the development of the productive forces compared with actual production. If the rate of development of the productive forces is lower, and if, consequently, there is less productive use of the total labour power compared with the limits put by the existing level of technology on a world scale, then it is a question of underdevelopment. The exploited countries can be characterized as underdeveloped in the sense that under the present conditions of production it is not possible for them to exploit their human labour power potential.[10]

Development means mechanization, automation, and increase in knowledge and skill within all sectors of production, both within the industrial sector and within agriculture, fishing, and forestry. Too often, development is equated with growth within the industrial sector particularly. However, such countries as Denmark, New Zealand, and Australia have prospered by an industrial development of the agricultural sector, whereas countries with a very big industrial sector, for example Taiwan, Hong Kong, or South Korea, remain comparatively underdeveloped. The superiority of the imperialist world does not consist in industry representing the largest part of the national product. The superiority consists in both their industry, agriculture, and other sectors having been developed. Thus the boundary between over- and underdevelopment is not between industry and agriculture. It is between a highly developed and varied economy and a restrained and one-sided economy.

The Connection Between Unequal Exchange and Unequal Development

Unequal exchange and unequal development have the same basis, namely the international wage variation which have arisen between the rich imperialist and the poor exploited countries. Thus there is no immediate connection between unequal exchange and unequal development. The amounts which are transferred by means of unequal exchange from the poor part of the world to the rich result in a low and a high rate of consumption, respectively.

The basic problem of capitalism is not to produce but to sell. The capitalist crises do not arise as a result of a lack of capital but because of a lack of purchasing power. The circulation of capital is upset by the lack of marketing possibilities. If there is not sufficient purchasing power in society for the sale of manufactured commodities at a price yielding profit, capital will not be attracted. On the cause of the crises of capitalism in the middle of the nineteenth century Marx writes:

But as matters stand, the replacement of the capital invested in production depends largely upon the consuming power of the non-producing classes; while the consuming power of the workers is limited partly by the laws of wages, partly by the fact that they are used only as long as they can be profitably employed by the capitalist class. The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit.

(Capital, v. III, p. 484.)

The situation which Marx describes – overproduction in relation to purchasing power – which was the cause of the recurring crises in the middle of the last century, changed in the imperialist countries, as described earlier, through the increases in wages which the working class obtained in the last third of the century. At the same time, this contradiction was intensified in the exploited countries. The low wage level of the poor countries does not represent a market of sufficient purchasing power to attract capital for an industrial development which comes anywhere near the one in Western Europe and the United States.

Capital is attracted when there are openings for profitable investments. This implies a market with purchasing power. The imperialist countries, with their high wage level, represent such a market. It is the enormous purchasing power of the imperialist countries which attracts capital and which is the basis of the more rapid development of the productive forces. Almost three-quarters of the investments of the developed capitalist countries are made in the developed countries.

The low wage level in the exploited countries means a market which is too small to attract any considerable amounts of capital. Thus, only few productions based on the domestic market are established. Even national capitals – for example from OPEC – often seek towards the imperialist countries, where the openings for profitable investments are better. The poor countries which try to develop through capitalist dynamics try in all possible ways to attract capital. For example by establishing free trade areas, by tax concessions, etc. But even under such favourable conditions of production, these countries attract only inferior amounts of capital, simply because the domestic market is too limited. The foreign capital which nevertheless is invested in the exploited countries because of the geological conditions, the climatic conditions, or the cheap labour power, is mainly based on exports to the world market, i.e. rich imperialist countries as far as 75 per cent is concerned. This applies particularly to investments in the mining and plantation sectors, but lately also to investments in industrial sectors such as the electronics and textile industries. Thus, the productive forces in the Third World often develop very unequally. A modern export industry exists together with widespread subsistence farms and underdeveloped crafts, which are the continuous source of cheap labour power.

Emmanuel describes how investments in the imperialist countries lead to development, and how investments in the exploited countries remain limited and isolated:

Why is it that European capital in the United States and Australia, and United States capital in Canada, have benefitted these countries by developing their economies, whereas in the Third World they have played a harmful role by forming enclaves? An enclave merely means a foreign investment that refuses to participate in the country’s process of expanded reproduction. In less learned terms, it is an investment that restricts itself to the self-financing of the branch in which it is installed and then, once this expansion has been accomplished, repatriates the whole of its profits. The Société Générale de Belgique installed the Union Minière in the Congo and Canadian Petrofina in Canada. The former exploits copper miners, the latter oil wells. When the investment has reached its maximum potential, Canada Petrofina uses its profits to establish a refinery: for this purpose it even increases its capital…. For several years Canadian Petrofina refrains from paying any money dividend and instead grants stock dividend. This is not displeasing to the Belgian shareholders since, unlike dividends paid in money, a stock dividend is not subject to income tax. Then the company interests itself in the distribution of oil products and buys a network of selling points.. Next, it sets up a petrochemical industry, followed by a works to produce tank cars; and, after that, what? Perhaps a chain of department stores, or else a shoe factory. If the company does not do this, its shareholders will, by instructing their bankers to use the product of their dividends to purchase a wide variety of shares on the Montreal stock exchange….

In contrast to all this, the Union Minière du Katanga, once its program for equipping its copper mines is completed, ceases to expand and pays its dividends in money. It becomes an enclave. Why? Are we really to suppose that the heads of the Société Générale in Brussels are solely concerned to overdevelop Canada and “block” development in the Belgian Congo? The reality is different. The simple fact is that in Canada the high standard of living of the people, resulting from the high wage level, constitutes a market for all sorts of products, whereas wages and standard of living in the Congo are such that there is nothing there to interest any fairly largescale capitalist – nothing except the extraction of minerals or the production of certain raw materials for export that have inevitably to be sought where they are to be found.

This situation is the effect, not the cause, of low wages, even though, once established, it becomes, through the capitalist logic of profit-seeking, a cause in its turn by blocking the development of the productive forces….

(Unequal Exchange, pp. 376-7.)

The low wage level and the consequent underdevelopment of the exploited countries is a self-intensifying process. Through unequal exchange and the exportation of the majority of profits to the imperialist countries, the exploited countries are deprived of the conditions for a dynamic capitalist development. The more limited the investments are, the higher the rate of unemployment and the higher the pressure on wages. At the same time this means a further reduction of the market and thus reduced possibilities of attracting capital.

On the other hand, the high wage level means a comparatively high rate of consumption and thus a large market with considerable purchasing power in the imperialist countries. This attracts capital, and a development of the productive forces follows. All this strengthens the industrial and political opportunities of the imperialist working class for further improvements. The rich get richer, and the poor get poorer.

High wages are an incentive to investments in labour-saving mechanization and machinery in the rich countries to a greater extent than in the underdeveloped countries, where it is an immediate advantage to use manual work because of the cheap labour power.

The enormous incomes of the OPEC countries in connection with the price increases of oil illustrate in a way the importance of the wage level to the attraction of capital and thus to the development of the productive forces. Through OPEC, the oil exporting countries succeeded in enforcing an increase in the price of oil, which improved their exchange conditons.[11] The increase in oil prices was not a result of an increase in the wage level in the oil exporting countries. As the OPEC countries (all belonging to the Third World) held the majority of oil production they could increase prices by a political decision. The increases in oil prices meant an enormous increase in the income of these countries compared to their former national product. However, this income did not result in the rapid development of all OPEC countries that might have been expected. A large part of the increased oil incomes returned to the imperialist countries. Large parts of the outstanding accounts of the OPEC countries actually never left the Western banks, they just changed accounts. OPEC countries like Algeria, Iraq, and Libya, the economies of which to some extent are controlled on the basis of a central plan, were mainly able to spend the increased income on a national development of their economics, even to such an extent that they had to go to the international loan market to get additional capital for their ambitious plans. In a society of planned economy, where investments are not made to gain immediate profits but in accordance with national planning, a low wage level is no obstacle to development – on the contrary. Here low wages result in the fact that a large part of the national product is accumulated and used for further investments instead of forming part of an unproductive consumption via wages. The case of the OPEC countries Saudi Arabia, Kuwait, and the United Arab Emirates, is different. The majority of the investments of these countries are made with a view to profit. Therefore, the majority of their oil income returns to the imperialist countries, where profitable openings for investments are much more numerous than at home. In 1974 the oil incomes of the Arab countries totalled about $60 billion. Between 43 and 48 of these returned to the Western World as investments in industry and as hot money. The amounts came mainly from Saudi Arabia and Kuwait.

The OPEC countries which have economics guided by capitalist dynamics, have difficulty in transforming the relatively large amounts of capital into a national development. The low level of wages which exists in most of these countries limits the extent of market purchasing power, and thus the profitable openings for investments in industry and agriculture. The oil money thus partly flows back to the imperialist countries as investment capital, or is used by the upper class to import luxury goods.

The development of Venezuela during the recent years constitutes an excellent example of these dynamics. During the 1970s Venezuela obtained an increasing income from oil exports, due to the increasing oil prices. In 1980 alone, the revenue from oil amounted to $18 billion. The Government had nationalized the oil industry in the beginning of the 1970s and intended through favourable loans to canalize the revenue into a national development of industry and agriculture. But this failed totally. Only a minor part of the oil income was in fact invested in industrial or agricultural projects, and these few projects mostly showed a deficit. The bulk of the oil revenue went through the favourable state loans into the service sector, import business, speculation in land and property, or disappeared abroad, mainly to the US, as financial and currency speculation. The oil revenue supported not only a class of capitalists reluctant to invest in industrial and agricultural development, but also the growth of a large unproductive and corrupt state sector.

In spite of the enormous oil income, the real wages of the majority of the population decreased by about 10 per cent from 1974 to 1977, unemployment rose, there was a periodical shortage of important food items, a decline in the level of social welfare, and there were growing urban slums. (See J. P. Petras and M. H. Morley: “Petrodollars and the State: The failure of state capitalist development in Venezuela, Third World Quarterly, vol. 5, no. 1, p. 7, London 1983. )

The lacking commitment of the private sector to invest inside Venezuela was expressed as a flight of capital and imports of luxury goods. The flight of private capital began in the middle of the 1970s. In 1981 it reached an estimated level of about 100 million dollars per day, and in March 1982 it reached 133 million per day (ibid. pp. 14, 16). To finance the resultant deficit of the balance of payments, the state had to secure large foreign loans. Today Venezuela is deeply in debt.

The Venezuelan bourgeoisie also invested heavily in luxury dwellings in the United States, channelling an estimated $2.3 billion in 1977, for example, into the purchase of weekend houses and condominiums in southern Florida. Meanwhile, even conservative estimates agreed that at least 25 per cent of the population lived in substandard housing. The large urban centres also experienced a decline in public services, water and electricity shortages, inadequate educational facilities, serious and persistent unemployment, and a notable contraction in available state-funded health facilities.

The low purchasing power of the mass of the Venezuelan population contributed to the inability of the economy to absorb the petrodollar wealth. Instead, the government acted to channel the surplus financial resources abroad in the form of interest-bearing loans and investments.

(Ibidem, p. 15.)

By the end of 1978 about 40 per cent of Venezuela’s oil income was being invested in financial operations abroad, and only 60 per cent in Venezuela. This resulted in a stagnation of the Venezuelan economy by the end of the 1970s. The rate of growth of the gross domestic product was 8.4 per cent in 1976, declined to 6.8 per cent in 1977, and 1980 it became negative: -1.2 per cent – the lowest rate of growth in the oil-rich country for decades.

In a word, state ownership serves as a mechanism for redistributing economic surplus among segments of the national and foreign bourgeoisie, increasing their profit opportunities but not necessarily expanding the productive forces in either industry or agriculture…. it is clear that neither oil wealth nor state ownership have laid the basis for a more equitable and productive society. In addition, the vaunted economic independence which the oil wealth was supposed to have bestowed has turned into a chimera; Venezuela has now become as dependent on finance capital as it was earlier on investment capital.

(Ibidem, pp. 26-7.)

Emmanuel describes the situation of the capitalist OPEC countries in the following way:

After having been, for a long time, too poor to sell their oil at a normal price, it happens that when they are finally able to adjust the prices they are too poor to collect the real money these prices represent.

This deadlock is one of the signs of capitalism’s basic contradiction between social production and private appropriation.

(Unequal Exchange Revisited, pp. 72-3.)

Capitalism, as it appears in the Third World, is not capable of extending the productive forces to a social extent – and not capable of releasing the enormous resources of human labour power of the Third World. The continuous drain on capital prevents directly and unequal exchange prevents indirectly the investments which are necessary for the development of the productive forces. However, this does not mean that there is no development at all in the Third World. But the countries of the Third World are prevented from developing at the same speed as the imperialist countries – they fall more and more behind. Therefore, the social and political conflicts become more and more serious. Several countries of the Third World approach a situation in which development is no longer possible within the framework of capitalism. This is the basis of the revolutionary changes which take place in the Third World.

For a New World Order – What is Progressive?

The problems of development in the Third World cannot be solved within the framework of the present economic world order. The solution demands partly national planning, which encourages national development benefitting the masses in the exploited countries, and partly a new economic world order which eliminates the unequal exchange between the rich and the poor parts of the world. The present international unequal accumulation of capital results in the exploited countries being in continual economic, political and social crises, which intensify both the national class struggle and the antagonism to the imperialist countries. This situation has been reflected by a number of revolutionary situations in the Third World. The struggle of the exploited and oppressed masses has been aimed partly at the imperialist powers in the form of wars of national liberation, and partly at the ruling classes at home.

Of course it is not accidental that the revolution is on the agenda in the Third World. Because of the very small rate of consumption on the part of the population in these countries, the production is restrained to such an extent that the conditions of production have become a fetter which must be broken in order that the productive forces can continue to develop. This is the cause of the social unrest and the revolutionary changes in the Third World. If these changes are to lead to improvements, they must be directed towards socialism, which means that society owns the production apparatus so that a social planning of production and consumption can be made under the leadership of the proletariat. Thus, under socialism the contradiction between the social production and private appropriation disappears, a contradiction which is characteristic of the capitalist mode of production. Under socialism the contradiction between production and consumption takes another shape because a market with purchasing power, i.e. an unproductive consumption, is not a prerequisite of investments and thus of development. The connection between consumption and development which exists under capitalist conditions of production does not exist under socialism. On the contrary, consumption and investments are treated as the inversely proportional quantities they are. In a society of planned economy a low wage level is an accelerating factor for development. A comparatively large part of the social production can be accumulated, which means that it can be invested productively in the development of an industrial basis or agricultural production. In this way the basis of a long-term increase in the standard of living of the masses is created. The Russian and Chinese revolutions are historical examples of this.

The Russian revolution meant the establishment of new conditions of production, and the Soviet Union was the first society of planned economy under the leadership of the proletariat. This resulted in a rapid development of the Soviet Union from a comparatively underdeveloped country to a modern industrial state. The rapid development of the Soviet Union in the 1930s was partly achieved by keeping down wages and thus unproductive consumption. Through this strategy, the majority of the production could be set aside for new investments.

After the revolution, the Peoples’ Republic of China developed at a speed never seen before in the Third World. From the first Five Year Plan in 1953 until the end of the 1970s, China had a ratio of accumulation to consumption which meant a rate of accumulation of 35-40 per cent. This resulted in an average annual growth in the industrial production of 13.5 per cent and in agriculture of 5.5 per cent, which is higher than the growth of any capitalist country.[12]

For a Socialist World Order

National development is one thing, international economic relations is another. The exploited countries can establish planned economy internally and thus create a certain basis for an increased speed of national development to the benefit of the population. However, the wretchedness of the Third World is closely related to the connection with the capitalist world market. The price at which Angola sells its coffee on the world market did not change because MPLA defeated the Portuguese colonial power and established a people’s republic introducing planned economy to a certain extent. At first Angola could only spend its income in another way.

There is a growing consciousness in the exploited countries of this situation. Slowly and hesitantly the cooperation between the poor countries is beginning to be established. The “Group of 77” countries within UNCTAD [13] and the demand for a “New Economic World Order” which was made at the extraordinary general meeting of the United Nations in 1974 are some of the signs of a growing consciousness.[14] No matter what economic policy the poor countries have pursued, they have had to see how their individual efforts to develop their economics have been checked by the conditions prevailing on the world market. The conditions of the world market cause the poor countries to sell their products at a low price and buy their imports at a high price. At a meeting of the Group of 77 in 1979, Julius Nyerere said:

Nations which have just freed themselves from colonialism and old countries in Latin America, have all inherited the same opinion from the prevailing Euro-American culture: “Work hard and you will become rich”. But gradually, we have all learned that hard work and wealth were not cause and effect. External forces always seemed to break the alleged connection! The so-called neutrality of the world market turned out to be the neutral relationship between the exploiter and the exploited, between a bird and its prey…. Even though we have not tried to do anything but to sell our traditional exports and buy our traditional imports, we can buy continuously less for continuously more of our hard work.

(J. K. Nyerere at a pre-UNCTAD V conference, translated from the Danish magazine Kontakt, no. 3, 1980-81.)

On the demand for a New Economic World Order Nyerere says:

… the complaint of poor nations against the present system is not only that we are poor, both in absolute terms and in comparison with the rich nations; it is that within the existing structure of economic interaction, we must remain poor and get relatively poorer. The poor nations of the world remain poor because they are poor and because they operate as if they were equals in a world dominated by the rich. The demand for a new international economic order is a way of saying that the poor nations must be enabled to develop themselves according to their own interests and to benefit from the efforts which they make.

(“The Plea of the Poor: new economic order needed for the world community”,

in New Direction 4, October 1977; here quoted from Third World Quarterly, vol. 3, no. 3, p. 511.)

The main demand of the poor countries at the UNCTAD negotiations during the so-called “North-South” dialogue and in similar situations has always been: A fair and just connection between the prices of the commodities exported by the exploited countries and the prices of the imports.. Furthermore the action programme of a New Economic World Order attaches importance to the sovereign right of disposal by the exploited countries of their own natural resources. Fidel Castro sums up the ten most important demands of the underdeveloped countries in the following way:

1: Unequal exchange is impoverishing our peoples; and it should cease!

2: Inflation, which is being exported to us, is impoverishing our peoples; and it should cease!

3: Protectionism is impoverishing our peoples; and it should cease!

4: The disequilibrium that exists concerning the exploitation of sea resources is abusive; and it should be abolished!

5: The financial resources received by the developing countries are insufficient; and should be increased!

6: Arms expenditures are irrational. They should cease, and the funds thus released should be used to finance development!

7: The international monetary system that prevails today is bankrupt; and it should be replaced!

8: The debts of the least developed countries and those in disadvantageous position are impossible to bear and have no solution. They should be cancelled!

9: Indebtedness oppresses the rest of the developing countries economically; and it should be relieved!

10: The wide economic gap between developed countries and the countries that seek development is growing rather than diminishing; and it should be closed!

(Speech at the 68th conference of the Union of Inter-parliamentarians, Havana 1981; quoted from Granma, 27 Sept. 1981.)

After almost ten years of negotiations about the majority of these demands, the poor countries have only achieved very inferior results. Only the OPEC countries have had sufficient power to obtain a change in the exchange of one single commodity: oil. It becomes more and more clear to the exploited countries that even though most of the imperialist countries speak of a need for a New Economic World Order, they do not at all contemplate satisfying the demands. The exploited countries slowly recognize that it is not possible to obtain fundamental changes in the economic world system by means of negotiations. Because there is no consensus of interests but a conflict of interests between the rich and the poor countries.

Therefore, a new economic world order will not be reached as a result of negotiations and supranational control, but as a result of a confrontation between the imperialist countries and the exploited countries. A change in the present system presupposes that the exploited countries can put force behind their demands. One of the forcible means, which the poor countries could use is production cartels. OPEC has shown both the strength and the weakness of such cartels. On the one hand it has been possible to introduce considerable price increases, in spite of the fact that OPEC far from has the monopoly of oil production. On the other hand OPEC has turned out to be weak in the long run, because reactionary regimes dominate the organization. The demand of the nationalist regimes for higher prices have been weakened by the dual position of the reactionaries. Countries such as Saudi Arabia and Kuwait have by now considerable investments in the West and their upper classes are allied with imperialism to such an extent that they do not want to harm the imperialist countries. A cartel which consists only of states under the leadership of the proletariat would be much more effective.

As more and more of the Third World countries obtain the internal conditions of development by doing away with the capitalist conditions of production and replacing them by planned economy, the possibilities of effective international co-operation between the exploited countries are also increased. This can be established not only as cartels but first and foremost as increased trade and technical and political co-operation directed against imperialism.

Conclusion Concerning the Perspectives of Socialism in the Exploited Countries

In Latin America, Africa, and Asia, imperialism and capitalism stand in the way of progress and development. Therefore, it is here that the struggle against this system takes place. This struggle against the imperialist world order is the most important progressive force in today’s world, and it opens the possibilities of socialism both in the exploited countries and, in the long run, in the imperialist countries.


[1] Lenin described the revolutionary situation as follows: “To the Marxist it is indisputable that a revolution is impossible without a revolutionary situation; furthermore, it is not every revolutionary situation that leads to revolution. What, generally speaking, are the symptoms of a revolutionary situation? We shall certainly not be mistaken if we indicate the following three major symptoms: (1) when it is impossible for the ruling classes to maintain their rule without any change; when there is a crisis, in one form or another, among the ‘upper classes’, a crisis in the policy of the ruling class, leading to a fissure through which the discontent and indignation of the oppressed classes burst forth. For a revolution to take place, it is usually insufficient for ‘the lower classes not to want’ to live in the old way, it is also necessary that ‘the upper classes should be unable’ to live in the old way; (2) when the suffering and want of the oppressed classes have grown more acute than usual; (3) when, as a consequence of the above causes there is a considerable increase in the activity of the masses, who uncomplainingly allow themselves to be robbed in ‘peace time’, but, in turbulent times, are drawn both by all the circumstances of the crisis and by the ‘upper classes’ themselves into independent historical action.

“Without these objective changes, which are independent of the will, not only of individual groups and parties but even of individual classes, a revolution, as a general rule, is impossible. The totality of all these objective changes is called a revolutionary situation.” (The Collapse of the Second International, pp. 213-14.)

[2] The American consumer society came into existence as early as in the 1920s, a development which Europe did not reach until at the end of the 1950s. The 1920s in the United States were characterized by an enormous increase in consumption. House building increased rapidly, totally new lines of industry were founded – producing automobiles, aeroplanes and durable consumers goods.

The production of durable consumer goods increased twice as rapidly as the production of non-durables. In the United States in the 1920s, private cars gained ground to an extent unknown in Europe until the 1960s. Henry Ford began a mass production of cars and a large-scale and modern marketing. In 1920 the United States produced 83 per cent of all cars in the world. There were 20 times as many cars on the American roads as in the second greatest car nation, Canada. From 1909 until 1927 15 million cars of the Ford model T were produced, a record which was not beaten, until in the middle of the 1970s by the “Beetle” of the Volkswagen factories. In connection with the car industries, oil, rubber, and glass industries were established. The Crash of 1929 meant a temporary halt, but the New Deal and the Second World War accelerated the American development. At the end of the war, the US was undisputably the leading economic and political power, in the world. The basis of the dynamic American development, the establishment of the “pure” white settler state, has been described above in Chapter 2.

The high wage level – the large internal market of relatively well-to-do freehold farmers and industrial workers – led to a rapidly growing industrial development.

[3] On this, Kwame Nkrumah, the late president of Ghana, writes: “Neo-colonialism constitutes the necessary condition for the establishment of welfare states by the imperialist nations. Just as the welfare state is the internal condition, neo-colonialism is the external condition, for the continued hegemony of international finance capital.” (Nkrumah, Handbook of Revolutionary Warfare, p. 12.)

[4] Lenin further develops this conception: “It must be observed that in Great Britain the tendency of imperialism to split the workers, to strengthen opportunism among them and to cause temporary decay in the working-class movement, revealed itself much earlier than the end of the nineteenth and the beginning of the twentieth centuries; for two important distinguishing features of imperialism were already observed in Great Britain in the middle of the nineteenth century – vast colonial possessions and a monopolist position in the world market. Marx and Engels traced this connection between opportunism in the working-class movement and the imperialist features of British capitalism systematically, during the course of several decades.” (Imperialism, p. 283.)

[5] The US New Deal and the social reforms of K. K. Steincke in Denmark are examples of this. In the 1930s, as a Danish Social Democratic minister, Steincke put through a large number of reforms for the labour market, the social services, and the health services, and in this way he laid the groundwork for the Danish social security system of today.

The New Deal is the name of Franklin D. Roosevelt’s reform policy from 1933 to 1938 in the wake of the Great Crash in 1929. It was a policy with a strong social touch, and it was close to the ideas of the European Social Democrats. The basis of the New Deal was an American capitalist society also in the future. But capitalism should be modified and humanized. In accordance with the ideas of the British economist, Keynes, the state should intervene in the economy as a regulating and smoothing factor. Employment on public works was provided to reduce the rate of unemployment. By the Act on Social Security, 1935, old-age and unemployment insurance and public assistance were introduced. In 1938, rules as to maximum working hours and minimum wages were introduced.

[6] The International Working Men’s Association is the same as the First International, formed on 28 September 1864. After the defeat of the Paris Commune in 1871, the First International began to dissolve due to various reasons – partly because of persecution, partly because of internal disagreements (especially between Marx and Bakunin). Formally it was dissolved in 1876. The Second International was founded in 1889. In spite of the many resolutions and assurances that the workers of the various countries would never take up arms against each other, both the German and the French socialist parties voted in favour of war appropriations in their respective parliaments just before the First World War. The national Social Democratic parties made peace with the bourgeoisie and definitively gave up the principles of the Second International. The Third, Communist, International was founded at Moscow in 1919 (generally known as the COMINTERN). “The Second International has died defeated by opportunism”. (Lenin at the foundation of the Third International.)

[7] OAS (Organisation de l’Armée Secrète.) A terror organization consisting of French officers and colonists who tried to stop the negotiations between the French government and the Algerian liberation movement FLN on the independence of Algeria in the spring of 1962 by means of bomb outrages and assassinations both in Algeria and in France.

[8] Concerning the situation in Denmark, the left wing – in this case the “International Forum”, a non-party anti-imperialist organization – is blinded by its own “prevarications” to such a degree that in a folder on the relationship between the rich and the poor countries, it writes the following about the economic conditions of the Danish working class during the period from the middle of the 1960s to the oil crisis in 1973: “It is ‘not possible to conclude that the working class has been strengthened economically during this period, as the increase in money wages should be seen in relation to the increases in consumer prices compared with the productivity increases of the same period”. (The emphasis is original but quite odd.)

“It is not possible to conclude that the working class has been strengthened economically” during this, period, when charter trips to Majorca, stereo sets, cars and weekend cottages, bungalows or yachts, became amenities of the working class! The period from 1965 to 73 showed the greatest increase in affluence ever achieved by the Danish working class. On the other hand the same people conclude in the line below the above quotation: “The considerable unemployment of later years (1973-77) has meant an economic weakening of the Danish working class.” (Both quotations translated from: International Forum, “Imperialisme og klassekamp, Perspektiver for en ny verdensorden”, p. 51, Copenhagen 1977.)

And this in spite of the fact that during the first years, the “crisis” meant only a stagnation in the increase in real wages. Not until 1977 did a recession set in, and by “recession” is meant a return to the 1973 level!

[9] For example the. following statement from the Youth organization of the so called Danish Communist Party (DKU): “Today three important forces unite against imperialism: the people who build up socialism and communism, the working class of the developed capitalist countries and the national liberation movements. These three main forces fight on one sector each of the front of the international class struggle. But no matter what immediate problems they face, the struggle against imperialism is a common struggle.” (Translated from: DKU, Kampens Vej, Copenhagen, May 1975.)

[10] Emmanuel finds that, if this definition of development is used – the only logical definition – we have an underdeveloped and poor world in which the rich countries are exceptions and the majority of the countries are poor. He writes: “If by economic underdevelopment we mean a certain ratio, which may be the ratio, both quantitative and qualitative, between the means of production actually set to work and the potential of the productive forces as shown by the technological level attained at the present time – or, more concisely, between the existing implements of labour and those that could exist – then the world is an underdeveloped planet. In this age of interplanetary rockets and of automation we have, for a population of nearly 3.5 billion, only 930,000 miles of railway line and an annual production of some 25 million motor vehicles of all kinds, so that several hundred million people continue to travel by the most primitive means or even on foot.

“Our production of cement and steel does not exceed 450 million tons of each, so that a substantial proportion of the earth’s inhabitants live in straw huts or something similar.

“It has already been pointed out that our world still largely lies fallow. Out of some 27 million square miles of cultivable land, less than one-eighth, a mere 3.38 million is under cultivation, and a large section of this eighth is worked neither by tractors nor even by draught animals.

“Our world is poor. From the series published in 1955 by Kindleberger we can work out the world net product at about $330 per head per year, which is approximately the average product of Latin America: and Singer is able to declare that the economic well-being of the average person in the world outside the U.S.S.R. was in 1956 less than in 1913 and perhaps less than in 1900.

“Within this poor and underdeveloped world, however, there are some islets of advanced development, in which approximately nine-tenths of the equipment and, in general, of the human and material productive forces of the entire world are concentrated. As a whole, the world of today offers much the same picture as a European nation at the beginning of industrialization, and history has proceeded as though, instead of the centrifugal forces foreseen by economic science, which were to diffuse progress from the center to the periphery, unforeseen centripetal forces had come into play, drawing all wealth toward certain poles of growth. History has proceeded, too, as if the industrialized countries had succeeded in exporting impoverishment so effectively that the forecasts of Marxism, which have begun to show signs of losing reality within the context of the industrial nations, are being realized to perfection on the scale of world economy.

“In the face of these inequalities, the same problems that confronted the industrial nations at the end of the eighteenth century and the beginning of the nineteenth now stand before the world as a whole.” (Unequal Exchange, pp. 262-3.)

Unequal development must not on any account be confused with Lenin’s theory of “different development”, by which is meant the development of the various imperialist powers at various speeds – when one power is in the lead one day, and another power the next day. According to Lenin, this creates unstable conditions and possibilities of war. By “unequal development” is meant a fixed division which is reproduced and deepened between the imperialist powers and the Third World.

[11] In spite of the relatively high increases in oil prices during the last 10 years, this is in fact only a minor, insufficient, adjustment of the exchange relations. In 1950 an average Danish worker could buy 14 litres of oil from one hour’s wage. In 1982 he could buy 21 litres.

[12] The Beijing daily Guangming Ribao, 9 May 1980. During recent years a change of this policy has taken place. The leading economist in China, Xue Mubiao, wrote in the October 1981 issue of Jing Guanli (Economic Leadership): “The drawback of the Chinese economic policy during 30 years (1949-1979) was the ratio of accumulation to consumption. During the period from 1952 to 1978 Chinese industrial production increased by 11.2 per cent annually, which is more than in any capitalist country. However, the standard of living saw only few improvements between 1957 and 1978, because the rate of accumulation was so high and the economic effect of production so low.” (The somewhat lower percentage is due to the fact that Xue uses 1952 as basic year, whereas “Guangming” uses 1950)

Thus from 1979 to 1980 the rate of accumulation began to fall to around 30 per cent and the industrial growth rate was reduced to 6-8 per cent, whereas unproductive consumption increased. (The information comes from an article on “The New Economic Policy of China” by Dino Raymond Hansen in the Danish newspaper Information, 1981.)

[13] The Group of 77 was founded on the basis of the need of the Third World for speaking with one voice at UNCTAD conferences and at similar international meetings about the economic situation in the world. Since the first meeting in 1967 in Algeria, the group has been increased from 77 to 120 Third World countries.

[14] On behalf of the non-aligned states, Algeria called this conference, where the subject was “Raw Materials and Development Problems”. In spite of strong opposition from the Western countries two resolutions were passed, which are known as “A New Economic World Order”.