A THEORY OF THE TRANSITION TO PERIPHERAL CAPITALISM

Marx’s writings on hon-European societies are not extensive: little more than four hundred pages, mostly consisting of articles for the New York Daily Tribune, focused on topical matters — the Sepoy mutiny in India and the Taiping rebellion in China, the opium trade, etc.

From time to time Marx discusses the nature of precolonial "Asiatic” society, notably in the passage in the Grundrisse where he formulates the concept of the Asiatic mode of production. He emphasizes the obstacle that the village community — in other words, the absence of private ownership of land — puts in the way of the development of capitalism. Here he reveals brilliant insight, when we recall the state of knowledge about non-European societies at that time.

Discussing the transformation that colonial rule was bringing to these societies, especially in India, Marx claimed that this would lead the East to full capitalist development. True, he noted that colonial policy was opposed to this, forbidding the establishment of modern industry in the colonies after having destroyed the crafts. But he considered that no power would be able to hinder for long the local development of capitalism on the European model. The article devoted to “The Future Results of British Rule in India” is explicit on this point: the plundering of India by the British aristocracy and merchant capital will be followed by industrialization carried out by the bourgeoisie of the metropolitan country; the railways will give rise to autocentric industries. Marx is so certain of this that he fears lest a developed bourgeois East may eventually prevent victory of the socialist revolution in Europe.

In fact, the monopolies, the rise of which Marx could not imagine, were to prevent any local capitalism that might arise from competing. The development of capitalism in the periphery was to remajn extraverted, based on the external market, and could therefore not lead to a full flowering of the capitalist mode of production in the periphery. Writing as he was in this early period of colonialism, Marx perceived only those mechanisms of primitive accumulation for the. benefit of the center that belonged to the mercantilist phase and were coming to an end, and which he therefore regarded as belonging to the prehistory of capital.

Marx did, however, glimpse another possible outcome — Eastern society proletarianized for the benefit of the center, with the latter, proletariat included, becoming “bourgeoisified,” and the periphery emerging as the main revolutionary force. In The Poverty of Philos­ophy (p. 35) he writes of “millions of workers who had to perish in the East Indies so as to procure.for the million and a half workers employed in England in the same industry, three years’ prosperity out of ten.”

For my part, 1 put forward, as regards the theory of the transition to peripheral capitalist economy, the following nine theses:

1. Economic theory interests itself occasionally in the problems of “transition from a subsistence economy to a money economy." In reality, however, the pattern of transition to peripheral capitalism is fundamentally different from that of transition to central capitalism. ¹The onslaught from without, by means of trade, carried out by the capitalist mode of production upon the precapitalist formations, causes certain crucial retrogressions to take place, such as the ruin of the crafts without their being replaced by local industrial production.

2. Unequal international specialization is manifested in three kinds of distortion in the direction taken by the development of the periphery. The distortion toward export activities (extraversion), which is the decisive one, does not result from “inadequacy of the home market" but from the superior productivity of the center in all fields, which compels the periphery to confine itself to the role of complementary supplier of products for the production of which it possesses a natural advantage: exotic agricultural produce and minerals. When, as a result of this distortion, the level of wages in the periphery has become lower, for the same productivity, than at the center, a limited development of industries focused on the home market of the periphery will have become possible, while at the same time exchange will have become unequal. The subsequent pattern of industrialization through import-substitution, together with the (as yet embryonic) effects of the new international division of labor inside the transnational firm, do not alter the essential conditions of extraversion, even if they alter the forms that it takes.

3. This initial distortion brings another in its train: the hyper­trophy of the tertiary sector in the periphery, which neither the evolution of the structure of demand nor that of productivities can explain. At the center, hypertrophy of the tertiary sector reflects the difficulties in realizing surplus value that are inherent in the advanced monopoly phase, whereas in the periphery it is from the beginning a result of the limitations and contradictions characteristic of peripheral development: inadequate industrialization and increasing

fetter on accumulation, this hypertrophy of unproductive activities, expressed especially in the excessive growth of administrative expen­diture, is manifested in the Third World of today by the quasi­permanent crisis of government finance.

4. Unequal international specialization also underlies the distortion in the periphery toward light branches of activity, together with the employment of modern production techniques in these branches. This distortion is the source of special problems that dictate development policies in the periphery that are different from those on which the development of the West was based.

5. The. theory of the multiplier effects of investment cannot be extended in a mechanical way to the periphery. The significance of the Keynesian multiplier does indeed correspond to the situation at the center in the phase of advanced monopoly, characterized by difficulties in realizing the surplus. Neither hoarding nor imports constitute, in the periphery, “leaks” that reduce the multiplier effect. What annuls this effect is the exporting of the profits of foreign capital. Furthermore, unequal specialization, and the marked propensity to import that follows from this, have the effect of transferring the effects of the multiplier mechanisms connected with the phenomenon known as the “accelerator” from the periphery to the center.

6. Analysis of the strategies of foreign monopolies in the under­developed countries shows that, so long as the dogma of the periphery’s integration in the world market is not challenged, the periphery is without economic means of action in relation to the monopolies.'

7. Underdevelopment is manifested not in level of production per head, but in certain characteristic structural features that oblige us not to confuse the underdeveloped countries with the now-advanced countries as they were at an earlier stage of their development. These

production in the periphery to the needs of the center, which prevents the transmission of the benefits of economic progress from the poles of development to the economy as a whole; and (3) economic domination by the center, which is expressed in the forms of international specialization (the structures of world trade in which the center shapes the periphery in accordance with its own needs) and in the dependence of the structures whereby growth in,the periphery is financed (the dynamic of the accumulation of foreign capital).

4. The accentuation of the features of underdevelopment, in proportion as the economic growth of the periphery proceeds, necessarily results in the blocking of growth, in other words, the impossibility, Whateverthe level of production per head that may be obtained, of going over to autocentric and autodynamic growth.

5. While at the center the capitalist mode of production tends to become exclusive, the same is not true of the periphery. Consequently, the peripheral formations are fundamentally different from those of the center. The forms assumed by these peripheral formations depend, on the one hand, upon the nature of the precapitalist formations that were there previously, and, on the other, upon the forms and- epochs in which they were integrated into the world system. This analysis enables us to grasp the essential difference that contrasts the peripheral formations to the “young central formations” — the latter, based on predominance of the simple commodity mode of production, possessing for this reason a capacity for independent evolution toward a fully developed capitalist mode of production. Whatever their differences of origin, the peripheral formations all tend to converge upon a typical model, characterized by the dominance of agrarian capital and ancillary (comprador) commercial capital. The domination by central capital over the system as a whole, and the vital mechanisms of primitive accumu­lation for its benefit which express this domination, subject the development of. peripheral national capitalism to strict limitations, which are ultimately dependent upon political relations. The mutilated nature of the national community in the periphery confers an apparent relative weight and special functions upon the local bureaucracy that are not the same as those of the bureaucratic and technocratic social groups at the center. The contradictions typical

of the development of underdevelopment, and the rise of petty- bourgeois strata reflecting these contradictions, explain the present tendency to state capitalism. This'new path of development for capitalism in the periphery does not constitute a mode of transition to socialism but rather expresses the future form in which new relations will be organized between center and periphery.