2. THE GENERAL CHARACTERISTICS OF PERIPHERAL FORMATIONS

Despite their different origins, the peripheral formations tend to converge toward a pattern that is essentially the same. This phe­nomenon reflects, on the world scale, the increasing power of capitalism to unify.

The Predominance of Agrarian Capitalism

The predominance of agrarian capitalism is the most striking and obvious of the classical features of the underdeveloped societies. The classical image of the dominant class in the underdeveloped world is that of the large landowner — not the feudalist., but the planter, producing for the export market. Its most characteristic form is the Latin American Iatifund ia-owner. Cuba was the most complete example, because the system was established there from the beginning to serve this function, without the existence of any process of internal change or transformation of precapitalist for­mations. The fact that this Iatifundiary form used servile labor (slaves and peons) for a long time before evolving toward the systematic use of wage labor shows that, when capital finds that it lacks labor, it does not hesitate to use political means to obtain what it needs.

When the formation of the capitalist Iatifundium proceeds by way of transformation of precapitalist formations, it encounters resistance from internal social forces, which are all the livelier because the village community forms the basis of these precapitalist formations. In some cases when these forces are completely overcome, the finished pattern is realized, as in Egypt.

Paradoxically, where the road is closed because the original precapitalist formations are not sufficiently well-developed, it is the most dynamic and modern'form of agrarian capitalism that clears a way for itself. This is the case with the formations in the native plantation zones of Black Africa where the rich peasant has at once become the central figure of the new formations, whereas elsewhere agrarian reforms have not been able to favor kulakization until the internal contradictions of a Iatifundiary system integrated into the world market have developed (e.g., in Egypt, India, Mexico). Even where the conditions for transforming precapitalist formations integrated into the world market into formations of kulak-type agrarian capitalism are not favorable, it is in this direction that the tendency runs.

In the East and in Latin America the new' dependent national bourgeoisie generally grew out of the classes of large landowners and higher civil servants, and in some cases also out of the merchant class. The large landowners, often merging with the political ruling groups, by adapting to the requirements of export agriculture, grew stronger and changed into bourgeois-type land­owners. This large land-holding class was missing in Black Africa. Export agriculture was often carried on in large European plantations, as in the Belgian Congo and French Equatorial Africa. In other regions the economic de traite resulted from the work of millions of small peasants gathered in village communities. The survival of these community relations slowed down the process of differentiation that goes with the commercialization of agriculture. Nevertheless, under certain conditions, a rural bourgeoisie could most easily be formed within this type of small peasant economy.

For this to happen, four conditions had to be present. The first of these conditions seems to be the existence of a traditional society that is sufficiently hierarchical, so that certain strata of the traditional chiefdom have enough social authority to be able to appropriate large tracts of tribal land for themselves. This is how the traditional chiefdoms in Ghana, southern Nigeria, the Ivory Coast, Uganda, and the Kilimanjaro region were able to set up a plantation economy for their own benefit; anything of this kind was practically nonexistent among the Bantu peoples, who did not have such a hierarchy. It should be noted, however, that those (semifeudal) hierarchies that were too pronounced and well-developed, as in the Islamic savannah regions, did not foster the development of a rural bourgeoisie.

The second condition is the existence of an aveCtfg# population density of between ten and thirty persons per square kilometer. If the density is less, exclusive appropriation of the land becomes ineffective and the potential supply of wage labor inadequate. The mechanics of proletarianization are much easier when labor can be enrolled from outside the local ethnic group, as happened with the Volta people in the Ivory Coast. During a second phase, the junior members and dependents of original planter families may in turn join the proletariat. If the population densities are too high, as in Rwanda and on the Bamileke Plateau in Cameroon, the tribal chiefs have difficulty in appropriating sufficient lands.

The third condition is the existence of rich crops, so that there is adequate surplus produced per worker and per hectare from the earliest stage of development, when mechanization is very slight and therefore the productivity of agriculture, which is still largely extensive, is only mediocre. This is why it was not possible to do with cotton in. Uganda, groundnuts in the Serer region, or in general other food crops that are too poor, what could be dope with coffee and cocoa in other places.

The fourth and last condition is that the political authority does not oppose this type of spontaneous development. Facilities offered for private appropriation of land, freedom of labor, individual agricultural credit have everywhere played an important role in the formation of this rural bourgeoisie. The role played by the abolition of forced labor in the French colonies in 1950 was characteristic in this connection. The typical bourgeois demand for freedom of labor made it possible for the planters in the Ivory Coast to use for their own benefit a flow of immigrants whose numbers were incomparably greater than those provided by forced labor — which, moreover, had only been assigned to the French planters. It also became possible to organize a large-scale political battle in the countryside by obtaining support for the planters from the peasants who had been the victims of forced labor.

Does the same apply to policies of “rural guidance,” “rural action,” and “cooperative” development? These policies are imple­mented according to the same rather naive, paternalistic formulas everywhere, reflecting the utopian wish to see progress in the countryside take place everywhere at the same sustained pace. They have not prevented the development of a plantation system in places where this was possible, nor have they brought about appreciable qualitative changes elsewhere.

There are still enormous areas that are not affected by the movement because the prevailing conditions do not allow of change; the part of Africa “that has not taken off’ and that “cannot take off,’’ as Albert Meister puts it. This is also “problem-free” rural Africa, in so far as it can absorb population growth by merely extending the traditional subsistence economy without changing its structures. The incorporation of this Africa into the colonial world gave rise to a very limited development of export crops, often imposed by the government in order to ensure the payment of taxes. In some cases, when the terms of trade between these export products and the manufactured products that could be obtained in exchange for them deteriorated, or simply when the power of the government imposing them grew weaker, these crops were replaced by subsistence crops. The development of a parasitic urban economy and resultant inflation often underlie the deterioration in the terms of trade: e.g., the decline of the cotton economy in Zaire, which is the most spectacular example of this process.

The predominance of agrarian capitalism brings about agrarian crisis, which is also a general phenomenon in the Third World. Since the natural population growth cannot find a normal outlet in industrialization,.pressure on the land increases. Also, agrarian capitalist forms result in the eviction of overabundant farm labor from the production circuits. In the precapitalist systems, however large the theoretical surplus of labor, all the people nad the right of access to the land. As capitalist forms develop, this right is lost. The consequences of this process are an increase in the proportion of landless peasants and the elimination of a growing fraction of these peasants from the production circuit. At the same time the mechanisms of unequal exchange cause the rural population to grow poorer in spite of improvement in the productivity of their labor. These are the profound reasons for the exodus from the rural areas, and the increasing speed of this exodus, despite the lack of sufficient jobs in the towns.

The Limits Imposed by Foreign Capital

The predominance of the commercial capitalism that accompanies export agriculture is the second aspect of the problem. The comprador trade that arises assumes mainly two forms. This function can be carried out by a new urban bourgeoisie originating in the landed oligarchy, which was generally the case in Latin America and in many countries of the East. But it can also be carried out directly by colonial capital, as happened in Black Africa. When this has occurred, the room left for the formation of a local merchant bourgeoisie is extremely limited.

In the Eastern world the urban bourgeoisie generally appeared much earlier than the rural bourgeoisie, whose development was obstructed by the semifeudal relations existing in the rural areas. On the other hand, the fact that the urban civilization was very old made it easy for the old-type merchants to change into that modern type of bourgeoisie that the Chinese Marxists have dubbed prador” — middlemen between the dominant capitalist world and the rural hinterland. More often than not, this bourgeoisie of traders, together with the large landowners and the senior levels of administration, cooperated with foreign capital in setting up industries. The main nucleus of the national bourgeoisie came from these higher strata of society and not from the rural bourgeoisie or the Third Estate. As for the various strata of the Third Estate, especially the craftsmen, competition from foreign and local industry either proletarianized them or plunged them into irreversible regression. The large-scale underemployment in the major cities of the East is due mainly to this phenomenon.

This model for the constitution of a national bourgeoisie is different both from the European model and from that of contem­porary Black Africa. In Europe the bourgeois classes of the Ancien Regime did not often play the chief part in the formation of the new industrial bourgeoisie. They frequently became feudalized through the purchase of lands, while the new rural bourgeoisie and the craftsmen provided most of the entrepreneurial elite of the nineteenth century. In the East the weakness of the rural bourgeoisie and the inability of the craftsmen to progress because of international competition caused the national bourgeoisie to be highly concentrated from the very beginning. The concentration of landownership, of which India and Egypt provide the best examples, and the constant transfer of urban fortunes to the countryside for the purchase' of land, enhanced the concentration of wealth and the merging of the large landowners with the new urban bourgeoisie.

In Black Africa, where urbanization developed only in the colonial period and large landownership hardly exists, the constitution of an urban bourgeoisie was long delayed. The traditional merchants had little ability to modernize their methods and enter into the modern trade circuits, for lack of financial resources. Their develop­ment remained limited, and their field of operation often restricted to traditional trade (e.g., cola, dried fish). Some of their activities, such as trade in salt and metals, even disappeared altogether. Certain sectors became quite profitable, however, as the voluι trade increased. This happened with the cattle trade in the Bend, Nigeria, and the Sudan, and with the dried fish tra Mali, Chad, and the Gulf of Benin. Some of these traders ventured into trade in modern items such as cloth and hardware but generally met with very limited success. The spirit of enterprise, however, was not lacking, as was evidenced by the migration of the Sarakole and Hausa to the far-off Congo, attracted by the diamond traffic. But numbers remained small, financial resources poor, and technical knowledge scanty.

For several centuries before the colonial conquest trade was carried on in coastal establishments where a merci] bourgeoisie, European in origin on the west coast and Arab in origin on the east coast, quickly became a community of mixed blood. This might have been the starting point for a national bourgeoisie of traders. Actually, although these traders followed the colonial conquest, they did not set themselves up in the new inland towns in the heart of the regions where agriculture was becoming commercial. Their development, which had begun too late, was suddenly halted by the victorious competition of the big monopolies of colonial trade at the beginning of the twentieth century. This was the cause of the bankruptcy of the merchants of St. Louis and Goree at the end of the nineteenth century, ruined by competition from firms based in Bordeaux and Marseilles. Their children all became civil servants.

The development of commercial relations in the countryside was also bound to give rise to a bourgeoisie of small merchants. Here, again, however, the power of the big commercial monopolies barred their advance beyond the level of retail trade, and wholesale trade in small quantities, to that of large-scale wholesale and import­export trade. The one field left to the local merchant bourgeoisie was trade in local food products, which to this day has remained very fragmented, and is often reserved for the women. In ∙certain places there seem, nevertheless,^to be some tendencies toward concentration.

All these strata that might have become bourgeois suffered from the absence of a rich landowning aristocracy in association with whom they might have been able to accelerate the rate of their accumulation. The fact that the African markets were very small also played a negative role. The needs of commerce were met by a very small number of agencies of the big firms located in the ports of call, and by petty immigrant traders (Greek, Lebanese, and Indian). Only exceptional recent circumstances — when European business withdrew after independence, or when the state intervened actively on behalf of national traders — have enabled the latter to enter the worlds of large-scale, wholesale and import-export business.

In general, control by foreign capital over national enterprises is more effective or less depending on whether or not these enterprises form part of trade circuits including external exchanges and, consequently, dominated by foreign capital. In Senegal, for instance, the margin from which accumulation for the benefit of the local bourgeoisie can be taken is completely determined by the hierarchical relations between the bourgeoisie at the center and the bourgeoisie at the periphery. Left to spontaneous economic laws alone, this margin always tends to be reduced to zero, because changes in relative prices cause profits to be transferred from the national bourgeoisie to the bourgeoisie at the center. These mechanisms explain the downfall of the Senegalese bourgeoisie between 1900 and 1930, and the poor results obtained in the modern sectors that are grafted onto the world market, e.g., truckers.

Arrighi used the term “lumpen-bourgeoisie” for this micro­bourgeoisie formed in the wake of foreign capital, which can only develop within the strict bounds assigned to it by the policy of the dominant capital. This wretched form of national capitalism is often found in Africa, where the bourgeoisie is mainly recruited from ethnic groups that have traditionally been traders (Dioula, Hausa, Bamileke, Baluba, Bakongo, etc.), or in certain countries consists of “market-women.” Although strictly limited by the degree oftoleration shown by the dominant capital, this bourgeoisie can, amid the general poverty, constitute a local social force of decisive importance, as is the case in southern Nigeria, where this type of “African enterprise” is often cited as an example of the success of a policy of promoting indigenous private enterprise.

Where the main aspect of colonial economic dependence was to be found in the field of trade relations, and where the main form of foreign capital was old-style colonial merchant capital, even this limited type of national capitalism had no possibility of developing. In the French colonies, especially, the mediocre dynamism of the metropolitan capitalism itself gave disproportionate specific weight to this old-style merchant capital of Bordeaux and Marseilles, a survival from the olden days of monopolistic companies and the slave trade. In our time, however, since the center of gravity of the dominant foreign capital has shifted from the trading houses to the large interterritorial mining and industrial concerns, this sector has lost its importance and is having to be relinquished to local capital.

The change in relations as a result of political independence has also had a decisive influence. The national bourgeoisie blosscmed all the more remarkably because of the many links with the state apparatus — family ties, corruption, etc. — which have favored its constitution. In the most extreme cases of concentration of local power, it has been the higher strata of the bureaucracy — merged with the landed oligarchy, where this exists — that have, either openly or through intermediaries, formed the comprador neobour­geoisie. Thus they have not only been able to take over the functions of colonial trade but have even managed to secure association with foreign capital in the modern sectors such as mining, industry, and banking.

Afterthe First World War the Iatifundia-Owning and comprador oligarchy went over, in Latin America and the East, to sporadic industrialization through import-substitution. As a rule, it joined forces with the foreign capital that dominated this new light industry.

There are striking differences between the industrialization movement in Black Africa today and the pattern this has assumed in the East and Latin America. In the first place, the movement in Black Africa was launched much later. The pacte colonial and the smallness of the markets were certainly the reason for this lag. But even after independence, wherever industrialization took place, it was carried out almost exclusively by foreign capital. Modem industry, even light industry, requires too much capital for partici­pation by local national capital to be possible, deprived as it is of the source of accumulation constituted in the East by the large landowners. The result is that there is practically no small-scale African industry. Those industries classified as such in statistical data are usually in fact urban craft enterprises (e.g., bakeries, carpenters’ shops) with very slight chances of accumulating capital. European enterprise penetrates very far down the scale of business activity.

The African rural bourgeoisie cannot itself create a modern industry because it does not have the financial resources. Those of its members who have gone into state service invest the money of their relatives who have remained on the plantations, in sectors that do not need too large amounts of capital, such as road transport, taxis, services, building. Conversely, civil servants buy plantations or lands cultivated as market gardens; but the meagerness of private urban fortunes limits the size of such transfers.

Whereas in the East capitalism started in the cities and spread later, and with difficulty, to the countryside, the opposite process is more usual in Black Africa, where, from the beginning, rural capitalist activity was divided among tens of thousands of planters. On the other hand, the highly concentrated big bourgeoisie of the towns, often allied to the class of large landowners, which is common in the East and in Latin America, does not exist in Black Africa.

Contemporary Tendencies Toward the Development of National Bureaucracies

The contemporary world sees bureaucratic machinery developing in all fields of social life (state and business administration, trade union and political life, etc.) that in its scope and efficiency is on a completely different level from anything that existed in the past, at least in the capitalist formations at the center. Some say that it has been made necessary by the development of “technology,” sometimes adding (Burnham and Galbraith) that this phenomenon represents a transfer of political power from parliamentary democracy to state technocracy. The proof that it is required by modern technology is said to be found in the ∙ development going on in Russia and in Eastern Europe, the convergence of the systems that is taking place despite the fact that the means of production are publicly owned in one part of the world and privately owned in the other. The requirements of accelerated development in the Third World, it is said, only strengthen this general trend.

This theory does not stand up well to analysis. The capitalist mode of production at the center implies polarization of society into two classes, the bourgeoisie and the proletariat (even if in­creasingly large sections of the latter — cadres of every type — though wage earning, deny that they are members of the proletariat). When the bourgeoisie exercises political power and administers the economy, it cannot carry out all the functions of management and execution itself. As society progresses, these mechanisms become ever more complicated, and this phenomenon becomes more marked. That is why social bodies responsible for these duties are set up: higher ad­ministration, police, army, technostructures of large firms, groups of professional politicians, etc. Some of these bodies have lost theit tradi­tional function — e.g., the professional politicians who, in the context of parliamentary democracy, served as negotiators on behalf of different interests when capital was still dispersed and competitive. With the rise of monopolies, these men have been replaced in their functions by the technocrats of the large firms or the state, and this has led to the decline of parliamentary government in the West. It is only during periods of serious crisis, such as the one that gave rise to Nazism, that the bourgeoisie loses control of these bodies, which then seem to constitute an independent social force. In the countries of the Soviet bloc, the strengthening of the technocratic machinery and its demand for democracy (limited to the technocrats) reflect an evolution toward a new form of generalized state capitalism, mainly characterized by the re-establishment of the market mecha­nisms and the ideology that goes with this: economism.

But nothing justifies transposing these analyses to the periphery. In the East and in Latin America the domination of central capital engendered, as we have seen, social formations comprising local ruling classes (large landowners and comprador bourgeoisie) on whom the local political power devolved. These classes exercised this power within the framework of the world system, that is, to the benefit of the center and of themselves. This did not happen in certain other regions of the periphery. In the Maghreb, for instance, because of direct colonization and the settlement of ‘‘poor whites,” the possibility for social classes similar to those in the East to be formed was extremely limited. In Black Africa, generalized direct colonization, which was especially crude and brutal, for a long time reduced the local population of vast areas to the condition of an undifferentiated mass, since the traditional hierarchical structures had largely lost their significance, all the new economic functions having been taken over by foreigners.

With the coming of political independence and the formation of- national states, the connection between the new bureaucracies and the social structures took on very different forms. In places where the peripheral formations were advanced, the national bureaucracy found itself, in relation to the social structure, in a position appar­ently similar to that of the national bureaucracy at the center. This was only apparent, however. Since the peripheral economy exists only as an appendage of the central economy, peripheral society is incomplete; what is missing from it is the metropolitan bourgeoisie, whose capital operates as the essential dominating force. Because, of the weaker and unbalanced development of the local bourgeoisie,. the bureaucracy appears to have much more weight. Where the peripheral formations are not very highly developed, the local bureaucracy is even the only actor on the stage. Elsewhere, however, a specific contradiction may develop. The state either fulfils its function within the system — that is, at best, helps to promote a local peripheral bourgeoisie — or it seeks to free the nation from domination by the center through promoting national industry, which then must be publicly owned, and so may come into conflict with the social groups from which it has arisen.

The trends for state capitalism to develop, found throughout the Third World, thus originate in the dominant place held by foreign capital and the weakness of its counterpart, the urban national bourgeoisie. Often, especially in Africa, this national movement was led by the urban ρetty-bourgeoisie (civil servants and office workers), together with a bourgeoisie of small entrepreneurs and planters, where there were any. The traditional elites in the country­side generally backed the colonial order which they felt safeguarded tradition, threatened by cultural modernization in the cities. The urban bourgeoisie was overwhelmed by the petty-bourgeois nation­alist movement.

Independence suddenly increases the specific weight of the new state bureaucracy in the national society — all the more so because the rural bourgeoisie (where it exists) is still dispersed and limited in its horizon. The bureaucracy inherits that prestige of state power that is traditional in non-European societies and is strengthened by the experience of the colonial administration’s power, which seemed absolute, and by the fact that the petty-bourgeoisie from which this bureaucracy stems has a monopoly of modern education and tech­nical skill.

The new bureaucracy tends to become the main social driving force. What will most probably be the form of development of national capitalism? Private capitalism or state capitalism? Actually, these two forms-combine in different ways, depending on the stage of development attained at the end of colonization.

The development of capitalism under colonial rule was first based on the transformation of subsistence agriculture into export agriculture, and on mining. The rate of growth of colonial capitalism was thus determined by the growth rate of the developed countries’ demand for basic products from the colonies. At a later stage, the local market created by the commercialization of agriculture and related urban development made it possible for units of light in­dustry — almost exclusively financed by colonial capital — to be set up. In certain cases foreign capital had not exhausted potential development of this type when independence came, and so the new local administration has had to leave untouched the economic structures inherited from the colonial period. But in other cases the new administration has been impelled to covet the foreign-owned sector, which constitutes its only means to expand rapidly by acquiring an economic basis. It then tends to change from a classical admin­istrative bureaucracy into a state bourgeoisie.

In the first case, as the foreign sector develops, a certain place may be found for national capital through the state’s efforts to promote this type of development. But this place is necessarily very limited. In the other case, the development of national capitalism at the expense of the foreign sector offers greater possibilities and can take various forms, benefiting either private or state-owned nation­al capital. The transfer of foreign-owned plantations to the well-to-do classes of urban society, and acquisition of shares in new foreign- owned industries, are examples of this type of process. In all cases, however, the state’s role is essential, because the process would be impossible through the operation of economic forces alone. The local bourgeoisie of planters and traders does not possess the finan­cial resources to buy up the investments of foreign capital. In order to do this,, public funds must be made available. This drift toward state capitalism constitutes the essence of what is called “Third World socialism.”

Some circumstances have favored making the ongoing evolution more radical and bending it toward what is called the socialist type Oforganization (in the sense that it is inspired by the Soviet state model); others, on the contrary, favor what are called liberal forms (in the sense that they dr w inspiration from the Western mode of economic organization). When advanced colonial-style development had been arrested for a long time, so that problems became more critical, pressure from the masses in town and country led, after independence, to the adoption of a more severe attitude toward the private bourgeoisie. Similarly, and paradoxically, when there is no private bourgeoisie, because of backwardness caused by colonial development, the administration’s influence over the life of the country can enhance trends toward state control. On the other hand, an ongoing colonial style of development, as in the Ivory Coast, can strengthen liberal tendencies and change the relations between the private bourgeoisie and the administration. In general, however, state bourgeoisies have never eliminated private bourgeoisies but have been satisfied with absorbing them or merging with them. The rural bourgeoisie of planters in particular has always main­tained a dynamic economic role and an important political position.

Phenomena such as the role of the privileged strata and classes in the Third World cannot be understood without prior analysis of the structure as a whole. Colonialism, especially in Black Africa, was led to favor, during the preindependence phase, certain differ­entiations in the reward of labor. Direct colonial rule became less and less bearable. Urban growth and the creation of industries made it essential for the city wage earners, brought into contact with European modes of consumption, to receive higher pay. Moreover, the solidity of traditional social relations in the country­side, which were slow in disintegrating, limited the inflow of labor into the towns. Revision of wage levels was made possible by the shifting of the center of gravity of foreign capital from old-style merchant capital to that of the big firms with a high level of pro­ductivity. In the Belgian Congo, the most highly industrialized country in Africa, between 1950 and 1958 real wages in industry doubled, without this increase hindering the progress of new industry; on the contrary, it stimulated modernization and’ expansion. Instead of relying on a dependent, peripheral local bourgeoisie, colonialism sought to make concessions in this way only to social strata with a low level of skill, avoiding the constitution of more demanding elites.

The scope and distribution of these petty privileges were changed after independence. Inflation in the ex-Belgian Congo between 1960 and 1968 ended in a considerable change in the distribution of native income, but with the share taken by foreign capital re­maining unchanged. The setting up of a local bureaucratic machine (and simultaneous creation of a bureaucracy whose upper levels today constitute by far the most privileged strata of the Congolese com­munity) was financed, on the one hand, by a drastic reduction in the real income of the peasants producing for export (a deterioration of the internal terms of trade for them that was much worse than the deterioration of the external terms of trade), and, on the other, by a no less drastic reduction in the real wages paid to workers in industry and commerce, which fell back to the 1950 level. Ryelandt showed the regressive nature of these changes: the larger import­content of the new income distribution, which involved greater consumption; the twofold, potentially permanent, structural crisis of the public finances and of the balance of payments that was entailed; and the increased dependence on the outside world implied. With inflation absent, similar phenomena are characteristic of the development of the countries in the franc area, as well as in other countries such as Ghana, where there was only moderate inflation. The mechanism worked as follows: freezing of wages and of prices paid to the producer for agricultural products; increased indirect taxes to balance public finances; leading to an internal increase in prices and a drop in the incomes of peasant farmers and wage earners. The peasant classes everywhere react to this deteriorated situation by withdrawing from the market and going back to a sub­sistence economy, thus diminishing the tax base available to the state for raising revenue.

Despite this, there is a deep-rooted tendency throughout the Third World today for political and social changes that go in the same direction, namely, overthrow of the local political power of the large landowners and the comprador bourgeoisie wherever these exist, direct exercising of authority by the bureaucracies, civil or military (the army often appearing as the vehicle for the new regimes, since it is the best-organized and sometimes the only organized body), and the creation and subsequent development of a public economic sec.or. A similar evolution takes place, through a continuous internal movement, even when there is no old authority to be overthrown. This phenomenon can be explained by the con­tradictions specific to peripheral formations. Because Ofinadequate industrialization and the absence of the foreign bourgeoisie, petty- bourgeois-style strata (civil servants, office workers, sometimes survivors from the crafts, small traders, middle peasants, etc.) acquire great importance. The expansion of the educational system and increasing unemployment give rise to a crisis of the system. The very requirements of accelerated industrialization in order to overcome the crisis lead to the development of a public sector, since the rules of profitability (which determine the flow of foreign capital) and the insufficiency of private local capital hold back the necessary rate of industrialization. The subsequent strengthening of the state bureaucracy can lead to a general application of state capitalism. This development is more radical or less so depending on whether or not it nationalizes foreign capital and on whether state capitalism tolerates to a greater or lesser extent a local private sector, and associates itself with it. Even in extreme cases, however, state capitalism tolerates, and even encourages, the development of private capitalism in rural areas (kulakization' subsequent to agrar­ian reforms is an example) — even if it tries to organize this devel­opment by controlling it, through cooperative systems, for example. If it does not call in question the country’s integration into the international market, this state capitalism must remain fundamen­tally peripheral, like its predecessor, private capitalism, and merely reflect the new lines of development of capitalism at the periphery — the transition from the old forms into the future forms of inter­national specialization..

The national bourgeoisie continues with differing degrees of success the work started by foreign capital, namely, the development of plantation economy and light industry. For a certain time it has even been able to expand by gradually taking over foreign enter­prises. In order to go further it would be necessary to overcome serious handicaps in food cropping and to create those large eco­nomic spaces that are the necessary condition for further develop­ment.

Meanwhile, peripheral capitalism is engendering a special structure, mainly based on a development of agrarian capitalism in which the kulak form tends to become predominant. This structure is dominated by the industrial and financial capital of the center, and the main transmission belts tend to be represented either by the bureaucracies or by the local state bourgeoisies.

The first of these two models is undoubtedly the. poorest. It corresponds to the situation in those Third World countries in which import-substitution industries are still directly dominated by foreign capital, and where a local business bourgeoisie cannot be formed. This is typical of Africa as a whole. Herein lies the funda­mental failure of capitalist development policies in Africa. In the Ivory Coast, for example, after fifteen years of exceptional economic growth, there is no national bourgeoisie, apart from a few artificial enterprises that have been set up in between the state and foreign capital, and somewhere along the way collect a commission that is due merely to bureaucratic collusion.

In these formations, the basic national problems remain unsolved. Africanization of appointments corresponds to the aspirations of the petty-bourgeoisie, which seeks not to transform the colonial system but to take over the jobs held by its predecessors. The administrative bureaucracy serves it as a model here.

The second model appears when the bureaucracy seeks to play a role in the process of production. It then becomes a state bourgeoi­sie: that is, it takes over, by controlling the economy, part of the surplus generated in the country. This bureaucracy nonetheless remains dependent in so far as the economy itself is dependent and as domination by the center makes it possible for the latter to appropriate the main part of the surplus for itself.

Proletarianization and Marginalization: The World Dimension of the Class Struggle

Current writing on employment, unemployment, and the social distribution of income in the Third World countries has recently uncovered a number of facts that have begun to worry the conven­tional theorists of underdevelopment.

Firstly, there is the inequality in the social distribution of income, which is not only very marked but also increasing. A comparison between the various countries of the Third World shows that the higher the average income is per head, the more marked is the inequality in income distribution. Thus, for the whole of Latin America, the 20 percent of the population that is richest receives 65 percent of the national income (as against 45 percent in the United States), with 5 percent taking 33 percent and 1 percent taking 17 percent; while, at the other end of society, the poor half of the population receives barely 13 percent of the income.

In Black Africa, for the coastal countries that are regarded as relatively developed and where income per head is around $200, 93 percent of the population — made up of the urban (20 percent) and rural (73 percent) masses — receives only 55 percent of the national income. Although the average monetary income for the urban popular masses is about twice that of the rural masses, in terms of standard of living, and allowing for the differences in the way of life and cost of living between town and country, these averages in fact indicate comparable degrees of poverty. The privi­leged stratum is therefore very small (7 percent of the population). It is smaller still in the less-developed savannah countries of the interior where average income is around $100, and the privileged stratum makes up not more than 2 percent of the population (al­though it takes a relatively smaller proportion — less than 10 percent — of the total income). In other words, when we pass from the present stage of some of the countries still underexploited to that of the ones that have been more fully opened up, we observe no change at all in the situation of the bulk of the population, whose average income remains at $70-80 per head per year; on the other hand, a small minority is being built up whose income is gradually approaching the average income of the developed coun­tries ($1,500 per head).

This increasing inequality in the social distribution of income is a cause for concern for at least two reasons. The nrst is that the evolution of the system in no way suggests that, by gradual expansion, this privileged stratum will extend to embrace the whole population. Even when the rate of growth of overall income is very high (between. 7 and 10 percent per annum, for example), the numerical growth of the privileged stratum remains small (increasing at the rate of 3-4 percent a year at most). In other words, the privileged stratum reaches a ceiling of some 20-25 percent of the population irrespective of the time-prospect, even if this be a century. The second reason is that this evolution is radically different from that which characterized the development of the countries of the center. All studies done in this field show that, at the center, the pattern of income distribution — in particular, between wages and profits — is relatively rigid, however far back we go into the nineteenth century. On a first estimate, the rate of surplus value has fluctuated only a little around its average of 100 percent since 1850 (although there have been a number of waves several decades in length and, along these waves, some more or less severe Conjunctural fluctuations, depending on the particular period). This difference in situation means that the argument according to which inequality is the price that has to be paid for growth in the Third World is false.

In reality, increasing social inequality is the mode of reproduction of the conditions of externally oriented development. It opens up a much bigger market for luxury consumer goods, in particular for consumer durables, than would have existed if the distribution of income had been more even. When the privileged elite reaches 20-25 percent of the population, this means that durable luxury goods make up approximately the same proportion of total demand. At this level, and taking into account requirements in capital, tech­nicians, ancillary infrastructure, etc., for the production and con? sumption of these luxury goods, the process of resource allocation is distorted to such an extent as to undermine all possibility of decisive progress in the sectors producing mass consumer goods.

Inequality in the distribution of income is increased owing to the constant spread of unemployment and underemployment. With rates of urban growth of between 4 and 10 percent per annum, according to country and period, in the Third World of today, the rates of growth of wage-paid employment are between 30 and 50 percent lower, that is, they range between 2 and 7 percent. At these rates, the population of all the towns of the Third World would rise from 300 million in 1970 to 2 billion in the year 2000, while the mass of unemployed would increase by 200 million adults.

It is everywhere observed that the ratio of wage earners to total urban population is falling; and this general tendency is even more marked if we consider only the wage earners of the modem productive sector, industry in particular. On the other hand, with capitalist development in the periphery, other categories of employ­ment appear and increase at high rates. Some of them are the counterpart of the increasing inequality in income distribution (domestic servants, persons employed in services, etc.). Others are attempts to cover up disguised unemployment (hawkers, etc.). Under these conditions, the border zone between unemployment and employment is widening to the extent of removing all meaning from the official statistics on unemployment — as official organi­zations such as the ILO have now found out.

It is very tempting for the ideologists who avoid studying the functioning of the socioeconomic system, in order to attribute changes to natural phenomena independent of the system, to have recourse to the theory of Malthus. The most glaring example of this type of aberration was provided by McNamara, president of the World Bank, when' he compared the “cost” of a child in the Third World (around $600) to the cost of the means of avoiding it ($6). This comparison clearly has no scientific value whatsoever, since the "cost” must be compared with the “benefit” in terms of the value of the labor that the child in question will provide throughout his adult working life. In reality, the ultimate motive of the Malthusian campaign lies elsewhere, and McNamara’s formula is put forward only to mislead.

The predominant “neo-Malthusian” trend can in fact be summed up in the two following propositions. First, our planet is experiencing an unprecedented population explosion. Projections over thirty or fifty years or more, based on present rates of population growth, show that astronomical figures of population will be reached that make one fee! giddy, and spell a danger of absolute overpopulation in relation to natural resources, and in particular to land. The exploitation of these resources will take place, it is said, under conditions of diminishing returns that will thereιore require pro­portionately higher investments to obtain a given rate of growth. Second, a high rate of population growth increases the non­working proportion of the population (the young), who have to be cared for by that proportion responsible for production. This distortion lowers'society’s capacity to save and consequently slows down its potential economic growth. It shuts the underdeveloped countries still more firmly in “a vicious circle of poverty.”

The facts as they appear at first sight may tend to confirm these two propositions. Stagnation in agriculture in many regions of the Third World, or at least stagnation in agricultural output per head, limits the possibilities of financing accelerated industrialization. It brings us to the paradox that the countries of the Third World, which are agricultural countries, are finding it harder and harder to feed themselves and that the increasing imports of food products they need in order to feed their town populations reduces their capacity to import equipment. Now, this stagnation is often due to the shortage of arable lands, or to the high cost involved in increasing the area of such lands (irrigation, etc.). The exodus from the countryside caused by the overpopulation of certain regions leads to a high rate of urban growth. Even rapid industrial­ization is unable to cope with such a growth; therefore unemploy­ment results and assumes alarming proportions. The cost of install­ing a social infrastructure (investment costs and running expenses, in particular as regards education) being very high under conditions of a high rate of population growth, this lessens the capacity of a society to keep up with the growth of its population.

This reasoning leads to an obvious conclusion: a decrease in population growth would not only make it possible, with a given rate of growth of the economy, to increase income per head, but it would also ensure a higher rate of overall economic growth, since an allocation of resources would become possible that is relatively more favorable to accumulation. Hence the world campaign for birth control.

This very broad reasoning' is, at all events, not valid for the Third World as a whole, which is highly heterogeneous as regards the ratio between population and natural resources. Many regions of the African continent, for example, were more densely populated in the past than they are today. The flourishing kingdom of Kongo had two million inhabitants in the sixteenth century, when the Portuguese visited it. At the time of the colonial conquest, after three centuries of slave trading, the region did not contain even a third that many people. Even now, it has hardly got back to the figure of the sixteenth century. The depopulation resulting from slave trading often led to a regression of agricultural techniques and productivity. But the devastation of Africa did not stop with the end of the slave trade: colonial rule continued this work. Forced labor (porterage in Central Africa, road and railway con­struction, etc.), compulsory military service, the herding of the population into cramped “reserves” intended to provide cheap migrant labor, all contributed to the depopulation of the rural areas, taking away a large proportion of their labor force. These phenomena led to a deterioration in the food and health conditions of the population, and sometimes to famines; they were instrumental in the spread of serious endemic diseases (such as sleeping sickness). The same is true for the American Indian territories.

Today, everywhere in Tropical Africa, there are large areas of potential arable lands that have yet to be cultivated. But the low population density of the rural areas is a serious handicap to the raising of agricultural productivity. The capital outlay needed for the development of these lands is so high that the reduction of this cost per head that can be obtained through an increase in population density will outweigh the additional cost (in particular for education) that a high population growth would require, in order to get this better density. As an example, let us consider two agricultural regions, A and B, of 100 square kilometers each, with different population densities: 10 inhabitants per km² in A (which has 1,000 inhabitants) and 30 in B (with 3,000 inhabitants). The cost of the transport network to be set up in the region in the course of the year is independent of the population density: 200 kms. of road, costing 1 billion CFA francs. The relative advantage of B over A can therefore be estimated at 666 million, this being the marginal benefit to community B, with a population three times that of A. What would be the discounted cost of education if the population were to rise from 1,000 to 3,000 in thirty-five years (assuιp^^ high population growth rate of 3 percent per annum’'⁰ The community with a fixed population of 1,000 inhabitants needs 8 classes at an annual cost (investment and running costs) of about 20 million. Community B will require 24 classes (annual cost: 60 million). The transition from situation A to situation B over thirty-five years would therefore involve, in discounted terms, an additional (marginal) cost that will depend on the discount rate. At a rate of 5 percent the cost of education is equivalent to only half the benefit to be gained from a trebled density of population; at a rate of 10 percent, it would be one-third. In this case, the cost of population growth is much less than the benefit to be derived from a higher density of population.

But the argument in cost-benefit terms is not the main one. Ester Boserup has shown that population pressure has, in the course of history, been a favorable and decisive factor in the intensification of agriculture, a precondition for raising productivity. A number of modernization programs in Tropical Africa have failed because, among other things, they ignored the fact that under conditions of a weak pressure of population on the land, extensive cultivation with low productivity can successfully combat the proposed change. Tlie forms of social organization related to the type of extensive agriculture constitute a serious handicap. It is noted that the areas of high population density (such as the Ibo or Bamileke regions) have experienced a greater degree of development than the vast underpopulated areas. Again, the development of export crops requires a relatively high population density. The reason why these regions of potential growth have failed to give the results that might have been expected from them lies in the general policy adopted by peripheral capitalism, which confines them to the role of suppliers of export crops, or of a pool of cheap labor for the modern economy of the plantation zones or of the towns. In Japan, however, important progress was made in rice production and this made it possible to feed a very large town population, since the entire (autocentric) economic policy contributed to this progress: intensified agronomic research made possible improved cultivation of food crops for the home market, improvement of this sector of agriculture being necessary as part of the overall strategy.

The same applies in Latin America and in some regions of western Asia, the southern part of the Indian subcontinent and Southeast Asia (Thailand, Indonesia excluding Java, etc.). There are only a few regions of the Third World (the Caribbean, the Egyptian Nile valley, the delta areas of Asia, Java) that are not underpopulated in the sense in which I have defined this phenomenon.

Although it does not stand up to the facts as regards agriculture, is the neo-Malthusian argument of some validity in explaining urban unemployment? The argument that, if urban growth can be slowed down, the increase in both employment (in relative terms) and urban income per head will be higher overlooks two facts. The first is that industrialization at the center of the system absorbed an urban population increasing at very high rates (rates of 3 percent in the nineteenth century were as costly as rates of 7 percent today) because this industrialization was autocentric. The second is that externally oriented development gives rise to a distortion in resource allocation which, coupled with technological dependence, is the source of increasing underemployment, whatever may be the demographic characteristics of urban growth. Thus,, when population growth is lower, we find that the overall rate of growth of output is also lower.

The important phenomenon of marginalization, which is entirely independent of demography, manifests itself as the increasing gap between economic dynamics and population dynamics. It may therefore give the impression that the population explosion constitutes a barrier to development. In fact, overpopulation is only the appearance outwardly revealing the functioning of a certain socio­economic system, that of peripheral capitalism.

The failure of birth control campaigns is often attributed to the inadequacy of the means utilized, to the ignorance of the peoples involved, and to the irresponsibility of the agencies responsible for the implementation of these campaigns. The question ought rather to be asked whether, at the level of the families addressed, the aim of reducing the number of children is justified. In the context of marginalization — that is, of increasing underemployment and poverty — a large family constitutes, in reality, the only form of social security. A strategy for development may well include measures with respect to population, either to slow down — to speed up its growth. But these measures will bring results only if there is com­patibility between the motivations of the individual families and the objectives of the nation. This presupposes that the strategy followed aims at autocentric, independent development. The independent precapitalist societies already knew how to influence the population variable, using the means then available to them. And if today China has succeeded in controlling this variable, it is because other, more fundamental problems in defining an independent development strategy have been solved.

All the computations in “cost-benefit” terms disregard the vital psychosocial aspect of population phenomena. The history of all known civilizations shows that every period of intensive change and development has been characterized by a population explosion. No civilization with a stagnant population has ever been progressive. The population challenge, the stimulating conflict that it gives rise to between generations, the readiness to absorb new ideas and the active search for new solutions, explain why this is so.

The world campaign for birth control in the Third World expresses, in fact, the fears of the developed countries faced with the danger of a radical challenge to the international order by.the peoples who have been its first victims. Taken to the limit, a development of the spontaneous trends in the present system would require a reduction in the population of the periphery. The con­temporary technical and scientific revolution within this system in fact rules out the possibility of productive employment of the marginalized masses of the periphery. The literature on the “environment” has made Westerners aware of the rate at which they are exploiting the natural resources not only of their own countries but of the entire planet. If the masses of the Third World could divert these resources and exploit them for their own benefit, the conditions under which the capitalist system functions at the center would be upset.

The center and the periphery both belong to the same system. To understand this set of related phenomena, one should therefore not reason in terms of nations, as if the latter constituted indepen­dent entities, but in terms of a world system (a world context for the class struggle), possessing strong links and weak links, which are the.points of maximum contradiction.

The controversy relating to the question of unequal exchange concerns the main problem of our day. Since the relations between the center and the periphery of the system are relations of domination, unequal relations resulting in a transfer of value from the periphery to the center, should not the world system be analyzed in terms of bourgeois nations and proletarian nations, to use expressions that have become common? If this transfer of value from the periphery to the center leads to a larger increase in the reward of labor at the center than would otherwise be the case, ought not the proletariat at the center to side with its own bourgeoisie in order to maintain the status quo in the world? If this transfer lowers both the reward of labor and the profit margin of domestic capital at the periphery, is there not reason for national solidarity between the bourgeoisie and the proletariat of the periphery in their struggle for national economic liberation?

This argument remains confined to a “classical” context, that is, it is pre-Leninist. By this, we mean that it deals with the question as if the world system were simply the juxtaposition of national capitalist systems. In reality, the class struggle takes place not within the context of the nation but within that of the world system.

The main contradiction of the capitalist mode of production is that which exists between production relations that are based on private ownership of the principal means of production (which become capital), and are therefore restrictive, and productive forces that, as they develop, reflect the necessarily social nature of the organization of production. The monopolies carry this contra­diction to its highest degree: the time is ripe for socializing the ownership of the means ofρroduction. This maturity is reflected in the monopolists’ increasing recourse to state intervention, needed to coordinate the monopolies’ activities and to support them. Hence national economic policy takes over from laissez-faire, which was possible only so long as the spontaneous market mechanisms made it possible to increase accumulation, only so long as the capitalist mode of production was progressive. But recourse to the state does not cause the contradiction to disappear. For the state is the monopolies’ state, and the rationality of the system remains capitalistic.

The main contradiction, between productive forces and production relations, is expressed, on the social level, in the contradiction between the two opposing classes of the system: the bourgeoisie and the proletariat. So long as we confine ourselves to the frame of reasoning of the capitalist mode of production, matters remain quite simple. But capitalism has become a world system. The contradiction is not between the bourgeoisie and the proletariat of each country considered in isolation, but between the world bour­geoisie and the world proletariat. But this world bourgeoisie and this world proletariat do not fit into the framework of the capitalist mode of production — they belong to a system of capitalist formations, central and peripheral. Therefore the problem is: what constitutes the world bourgeoisie and the world proletariat, respectively?

As regards the world bourgeoisie, this consists principally of the bourgeoisie at the center and, secondarily, of the bourgeoisie that has been constituted in its wake at the periphery. But where is the world proletariat situated? What is its structure? For Marx, there was not the least doubt: in his time, the main nucleus of the proletariat was to be found at the center. At that stage of the development of capitalism, it was impossible to understand the full implication of what was later to become the colonial problem. Since the socialist revolution did not take place at that time at the center, and since capitalism continued to develop and became monopolistic, the world conditions of the class struggle altered. This was clearly expressed by Lenin in a line that has now been taken over by Maoism, namely, that, “in the last analysis, the outcome of the struggle will be determined by the fact that Russia, India, China, etc., account for the overwhelming majority of the population of the globe.” This meant that the central nucleus of the proletariat henceforth lay at the periphery and not at the center.

The main increasing contradiction of the system is expressed in the tendency of the rate of profit to fall. There is only one way to combat this on the world scale: raise the level of the rate of surplus value. The nature of the formations at the periphery makes it possible to raise this rgte to a much higher degree there than at the center. Consequently the proletariat at the periphery is being more severely exploited than the proletariat at the center.

But the proletariat at the periphery takes different forms. It does not consist solely or even, mainly of the wage earners in the large modem enterprises. It also includes the mass of peasants who are integrated into the world trade system and who, like the urban working class, pay the price of unequal exchange. Although various types of social organization (very precapitalist in appearance) form the setting in which this mass of peasants live, they have eventually become ρroletarianized, or are on their way to suffering this fate, through their integration into the world market system. The peripheral structure — the condition for a higher rate of surplus value — also gives rise to an increasing mass of urban unemployed. These are the masses, in our contemporary world, “who have nothing to lose but their chains.” Clearly, they are also forms of incomplete proletarianization at the periphery. Their revolt, the most important one, leads to a worsening of the conditions of exploitation at the center, since this is the only means available to capitalism to compensate itself for the shrinking of its area of influence.

We must try to transcend a sterile controversy. The contention of some that the proletariat at the center remains the principal nucleus of the world proletariat, is not Leninist: it denies the worldwide character of the system. The thesis that suggests an opposition between proletarian nations and bourgeois nations also denies the worldwide character of the system, the effect that the revolt at the periphery must have on conditions at the center, and implies that the bourgeoisie of the periphery, equally “exploited” (the term is inaccurate: only its scope for expansion is limited), can oppose its counterpart at the center. But the violence of the main revolt means precisely the opposite; for the bourgeoisie of the periphery is obliged to make its own proletariat pay for the plundering from which it suffers.

Furthermore, the picture that represents the proletariat at the center as being collectively privileged, and therefore necessarily in league with its own bourgeoisie in the exploitation of the Third World, is only an oversimplification of the facts. It is true that, with equal productivity, the proletariat at the center receives, on average, a better reward than the workers at the periphery. But in order to counteract the law of the tendency of the rate of profit to fall at the center itself, capital imports labor from the periphery at a lower wage (reserving for this labor the most thankless tasks), in order to depress the labor market of the metropolitan countries. This import is assuming considerable proportions: in Western Europe and in North America, immigration from the periphery has been increasing since 1960 at rates of between 0.7 percent and 1.9 percent per annum, depending on the country and the year; in other words, at levels far higher on the average than the rate of growth of the national labor force. This additional immigrant labor force constitutes also a disguised transfer of value from the periphery to the center, since the periphery has borne the cost of training this labor force.

Similarly, there is the mobilization of the internal colonial reserves: thus we have the proletarianization of the blacks in the United States, now forming the bulk of the proletariat of many large industrial towns in North America. The extreme form of this system is to be found in the racist countries: South Africa, Rhodesia^ Israel. Thus the world system increasingly mingles together the masses it exploits, raising the need for internationalism to an even ^higher degree than before. At the same time, it uses this process of mingling to develop racist and chauvinist tendencies among the “white" workers for its own benefit. Capital, through its development at the center itself, continually gives rise to unification and differ­entiation. The mechanisms of centralization for the benefit of the dominant capital also operate between the various regions of the center: the development of capitalism everywhere means developing regional inequalities. Thus each developed country has created within itself its own underdeveloped country: the southern half of Italy is one example. The resurgence of regionalist movements in our time would be difficult to understand without this analysis. It follows that even if the concept of the labor aristocracy, in the Leninist sense, has now been overtaken in reality by more complex differentiations, the concept of aristocratic nations conceals these complex differentiations.

In putting forward the existence of the theoretical concept of marginalization, Jose Nun denies that Marx’s analysis of the

capitalist mode of production can explain this new and specific set of facts. For, he says, Marx’s Capital is an analysis of the pure capitalist mode of production, whereas marginalization, peculiar to the periphery, belongs to the analysis of formations, the theory of which (historical materialism), merely outlined in the works of Marx, is yet to be perfected.

Capital is, to be sure, not the theory of the world capitalist system. It is clear that Marx proposed first to clarify the main point: the theory of the capitalist mode of production. He also did not fail to analyze the relations between the center and the periphery in the genesis of this mode, in his chapter on primitive accumulation. But he could hot possibly set out the theory of the future world system.

How can this necessary theory be constructed? Two ways are open, One, outlined by Jose Nun, attempts to propound this theory of the world system without basing it on the theory of the capitalist mode. This is clear in Nun’s repeated contrast between the plane of the theory of the capitalist mode and.that of the theory of formations. But here, as Fernando Henrique Cardoso observes, historical mate­rialism turns into metaphysics if it attempts to derive general laws of history over and above those governed by the modes of production. There is no possible general theory of formations, but only the theory of particular formations or groups of interconnected formations. There are no general laws of social formations, but only a set of scientific concepts that make it possible to formulate laws for particular formations. These concepts are those of mode of produc­tion, interconnection between different modes, dominance, instance, and articulation of instances.

How then do we proceed to deduce the laws of the capitalist system, conceived as a structured group of capitalist formations that, central and peripheral alike, are all dominated by the capi­talist mode of production? Not by looking for specific social laws situated at a level other than that defined by the above-mentioned concepts — for example, by looking for a specific “law of popu­lation,” as suggested by Nun — but simply by making a concrete analysis of the functioning of the system, using the concepts in question. We then notice that the phenomena of marginalization are no more than an expression of the fundamental law of the capitalist mode of production under the concrete conditions of the world capitalist system.

As Cardoso says, the general law of accumulation and of impoverishment expresses the tendency inherent in the capitalist mode of production, the contradiction between productive forces and production relations, between capital and labor. This contra­diction rules out an analysis of the capitalist mode of production in terms of harmony, and leads us to understand that the quest for an ever increasing rate of surplus value in order to compensate for the downward trend in the rate of profit makes a harmonious develop­ment impossible. This law operates within a concrete historical framework. In Marx’s time, England provided this framework, because the world system was not yet established. Today, this framework has been enlarged to include the capitalist world as a whole. Hence the “harmony” achieved here, at the center, where the rate of surplus value cannot be raised, must be counter­balanced by an increasing “disharmony” elsewhere, at the periphery, which is made to pay for the fundamental contradiction of the mode. This disharmony is revealed in the “marginalization” group of phenomena, which are the way in which the general law of capitalist accumulation finds expression today.

One final problem is — whether marginalization constitutes a concept. In fact, it is only a convenient way of describing a group of phenomena resulting from a law (that of capitalist accumulation) that operates within a concrete framework (that of the present-day capitalist system), just as the expression “industrial reserve army” corresponds to a realistic description of the effects of the same law within a different context (that of England at the time of Marx). There is therefore no need to raise the question of the meaning of marginalization in functionalist terms. The marginalization of today and the industrial reserve army of yesterday are results of the system. Their function, which is the same, is to enable the rate of surplus value to be raised. Social disharmony is necessary for the functioning of the system.

New Central and Peripheral Formations

The most popular theory regarding the origins of the development OfEnglish-Speaking North America and the “White” Dominions is that of Max Weber, according to which these countries owe the dynamism they have shown to the Protestant ideology of their population, which is contrasted with Latin Catholicism.

Colonization by European settlers formed, as a whole, part of the gradual formation of a periphery. In Latin America, its function was to set up, from the start, the peripheral structure toward which tended later on the national societies of the other regions that were to form the Third World. The settlement of the “poor whites,” as in the Maghreb and in Kenya, performed the same functions of peripheral agrarian and commercial capitalism. It was only in the extreme and exceptional cases of North America, Australia, and New Zealand — and also, with some special characteristics, of South Africa, Rhodesia, and Israel — that colonization by European settlers ended in the creation of new central formations.

The British colonies of North America, taken as a whole, were no exception to the rule. The West Indies and the slave colonies of the southern part of North America were no different from the Spanish and Portuguese colonies. They fulfilled the same peripheral functions within the framework of the same mercantilist system. The exception was constituted not by the British colonies in North America as a whole, but by New England alone. This was not formed as a periphery of the mercantilist system: from the start, it was special, and not shaped by the metropolis as a dependency. New' England was a by-product of the proletarianization process in England. The destitute emigrants who were to form the population, of New England were of no interest to mercantilism in the metropolitan country, which allowed them freedom to organize themselves for their own survival. The ρetty-commodity economy of farmers and craftsmen that they organized was poor but autocentric. This type of society based- primarily on the simple commodity mode of pro­duction — only seldom realized throughout history — has the capacity to give rise to capitalism. Thus, gradually, New England acquired the function of metropolis in the American system. It replaced Britain as the new' center dominating the British slave colonies. This substitution was only partial, until the war of independence, but it then became total. Freed from the monopolistic control of metro­politan merchant capital, the United States became a full-fledged center before reaching the position of world metropolis.

There is a widespread trend in current American literature that seeks to “rehabilitate” the South by attributing to it a decisive role in the development of the United States. Among others, Douglass North has shown the strategic role of cotton exports from the South in financing the United States’s “take-off” in the nineteenth century. The ideologists of the system have concluded from this that develop­ment is possible with an externally orientated economy, based on the export of raw materials. This view disregards the decisive fact that it was the North that animated the life of the United States from the end of the eighteenth century onward, and that the South remained its domestic colony, as was shown by the Civil War.

The history of Canada was no different. Here also, from both the French and British standpoints, what was involved was not a periphery but a distinct by-product of social changes in Europe. When, by the Treaty of Paris of 1783, France preferred to retrieve Martinique rather than Canada, which she had lost twenty years earlier, Voltaire declared the choice to be an intelligent one: 30,00.0 Negro slaves were worth more to French mercantilism than a few “thousands of acres of snow” inhabited by poor devils who had nothing to export.

In much the same way took place the original formation of a white Oceania based on petty-commodity production. But for a long time this remained predominantly agricultural, exporting to Europe rather than to the periphery, as in the case of North America. For that reason, it experienced greater difficulties in passing over to the industrial stage. But again the dynamism of the simple commodity mode of production, unhampered by precapitalist modes, showed its ability to move forward to that stage. Here, it is worth comparing Australia and Argentina. At the end of the nineteenth century, the two countries were in an identical situation: exporters of agricultural products (meat and wool) supplied by a commodity economy of independent producers. But, in Australia, the discovery of gold led to the creation of a working-class nucleus. It was the latter that insisted on a protectionist policy to maintain its level of employment. This protectionism altered the center of gravity of the economy and of the society from the externally oriented sector to the autocentric sector, and so made possible the entire subsequent development. The compradors of Buenos Aires and the cattle breeders of La Plata imposed free trade on Argentina; and that country, which in 1900 enjoyed the highest standard of living in the world, then began to slip down the slope of under­development.

Much the same can be said about white South Africa. The patriarchal Boer economy was at first a simple commodity economy linked with the maritime navigation system of the seventeenth to the nineteenth centuries: the Boers supplied ships with dried meat, under conditions similar to those which characterized the nascent capitalist agriculture of the European metropolises. At that stage, white society was still isolated from the black world that surrounded it, but which it did not exploit: it drove this black world back, in the same way as had happened with the North American Indians earlier. At the end of the nineteenth century, the British conquered the country, not for any attraction the Boer economy might have had for them but in order to work the gold and diamond mines that had recently been discovered. For that purpose, they required a proletariat, and this was derived from the black population. It was the British colonial administration that created the system of reserves: the British were the originators of apartheid. The Boers were then of no importance; they lived in an autocentric economy that made it impossible to proletarianize them for the benefit of the new British capital dominating the externally oriented mining sectors.

Gradually, however, the Boers’ petty-commodity economy gave birth to a local capitalism, which was autocentric even though partly grafted onto the externally oriented colonial economy. This later took over economic and political control from British capital, relying on its state power and exploiting for its own benefit the internal colony constituted by the reserves.

In the analysis of this particular formation made by Ralph Horwitz and Serge Thion, among others, South African racism no longer appears as an epiphenomenon inherited from the past that the present economic system could do without if it chose. The reserves play an essential role in the service of the modern sector: the supplying of cheap labor. Henceforth, the economy must necessarily remain essentially externally oriented. The reason is that the internal market is restricted by the low wages of the Africans, while the export sector takes advantage of these wages which, combined with the use of modern techniques, produce particularly high profits. The mining economy set up by British capital was the first to benefit from the system of reserves and apartheid. The patriarchal Boer agrarian economy, which appeared to be threatened by modernization and concentration, managed to survive despite its backward techniques, thanks to the cheap labor available. It is also because of the limited internal market that the state has had to take the initiative in creating autocentric industries. The system, which is perfectly coherent, is not likely to collapse by itself, as a result of an alleged contradiction between the economic structure (which is said to be interested in improving wages) and the politico-ideological structure. The natural solution for the system is expansionism, that is, the extension of the dominated area in order to make up for the narrowness of the domestic market. The link with Rhodesia, South Africa’s designs upon Angola and Mozambique, the economic annexation of Malawi, the threat that hangs over Zambia, Madagascar, and Tanzania, show that fifteen years of growth have brought South Africa to this conclusion. To the optimists who think that economic wealth must necessarily lead to a reduction in social distortions, South Africa provides a hard refutation.

In Israel the Zionist colonies are also the by-product of pro­letarianization in Central and Eastern Europe. They also are organized in a petty-commodity production economy that has given rise to a local capitalism. Here also the state plays an important role in this process: it is the Zionist bureaucracy of the Histadrut that organizes and exploits this capitalism for its own benefit. Machover has shown that there is nothing here of a “socialist” nature and that the Histadrut is not a social-democratic trade union. Backed by imperialism — at first British, then American — and with international Zionism as its tool, the Histadrut₁ having benefited from a capital inflow that is totally out of proportion with what is known as “aid” to the underdeveloped countries, maintains a tight control over this inflow. As regards the Israeli working class, this consists of immigrants who are ranked on the basis of a racial hierarchy (Jews from Central and Eastern Europe on top, Jews from the Arab countries underneath) and still retain petty- bourgeois aspirations of climbing the social ladder out of the working class. This autocentric society had no room for the Arabs that formed the population of Palestine. They had to be exter­minated or driven out. Today; Israel has reached the crossroads. One way forward is to consolidate this autocentric economy, giving it the status of an independent imperialist capitalism (even if it has to be small-scale and hence necessarily allied to other imperialisms, as a minor partner but not as a vassal) and opening up the markets of the Arab world to its products — in other words, carving out a share of periphery for itself from the Arab world. The alternative is to set up an internal colony by extending its frontiers so as to acquire an Arab proletariat. In both cases, expansionism, either by peaceful or warlike means, is the law of the system.

We must take care not to confuse these models of the genesis of new capitalist centers based on petty-commodity formations with that of Japan. The Japanese model is no different from that of Europe. The social formation of precapitalist Japan, at the periphery of the tribute-paying system of eastern Asia, was similar to that of Europe at the periphery of the tribute-paying systems of the ancient East. From the start, therefore, Japan gave birth to its own autocentric capitalism. The fact that it came later, so that it was able to draw inspiration from the European development, did not do it any harm, as would have been the case had the country been colonized. Fortunately for Japan, since it was lacking in resources, it was of no interest to the Europeans and Americans, who looked instead toward China.

A few other precapitalist societies also escaped the world capitalist system for more or less prolonged periods (Ethiopia, Yemen, Afghanistan, Thailand). Precapitalist but not underdeveloped (peripheral capitalist), these societies did not, however, give rise to an independent autocentric capitalism, because their original for­mations (of the central tribute-paying type) did not permit it. This explains why, sooner or later, they gave in and started, in the aftermath of the Second World War, along the road of under­development.