Globalisation: Uneven and Combined Capitalist Development

The law of uneven and combined development

Capitalism, which proceeds on the basis of the struggle of opposing tendencies, exhibits an uneven and combined development. This mode of production proceeds at different rates of development in enterprises, sectors and countries, and this unevenness is the motive force for the expansion and spread of capitalist markets. Every “national” capitalism sooner or later has to turn to the world market, and the tendency towards integration brings countries into relations of economic interdependence. Despite the distorted processes of development and the problems it creates, the law of uneven and combined development has functioned as a stimulating factor for the progress of the productive forces under capitalism.

Over time, economic development has taken place in many capitalist countries and the interdependence between countries has deepened. But it is clear that the global development of capitalism has not eliminated inequality between various countries or regions. Despite the fact that this and similar points have been sufficiently proven in today’s world, there is still no shortage of erroneous views about the global development of capitalism. One of the main fallacies about globalisation is the one-sided emphasis on unequal relations, ignoring the feature of combined development. Another is to go to the opposite extreme and exaggerate the combined development.

The law of uneven development is in fact a law that has dominated all of human history to one degree or another. Thus, capitalism, in its point of departure, found different human communities experiencing different stages of historical development and therefore different contradictions, that is, a situation of extreme unevenness. Although relations of inequality have prevailed throughout history in various spheres of life, none of the modes of production that preceded capitalism had the ability to create a process of combined development on a world scale. In short, the law of uneven and combined development is unique to capitalism. In this respect, unequal development must also be analysed in its specific aspects under capitalism and with the characteristic of combined development.

Marx and Engels saw capitalist development as a process of combined as well as uneven development. Marxism explained most clearly that capitalism is a mode of production that will transcend localism and national isolation and create a world economy. Based on the different historical backgrounds of various countries, Marx referred to the different forms and tempos of capitalist transformation. He pointed out that the main problem in this process was the forms of articulation within modern bourgeois society.

Lenin, in his analysis of the development of capitalism in Russia, addressed the same issue, pointing out the characteristic of combined development, combining old and new forms, from which many contradictions arise. Explanations of the law of uneven development are clearly contained in Lenin’s studies. He emphasized the inevitability of the uneven and spasmodic development of individual countries and branches of industry in the capitalist system.

Capitalism is constantly moving in the direction of economic expansion, infiltration into new territories, overcoming economic differences to some extent. Thus, self-sustaining local and national economies have been replaced by a universal network of financial relations, and capitalism has brought various countries closer to each other. Imperialism has linked various economic units at the national and continental level much faster and more deeply than in the past.

As Trotsky once pointed out, the global development of capitalism, imperialism, makes the economic methods, social forms and degrees of development of different nations more similar than in the past. “At the same time, it attains this ‘goal’ by such antagonistic methods, such tiger-leaps, and such raids upon backward countries and areas that the unification and levelling of world economy which it has effected, is upset by it even more violently and convulsively than in the preceding epochs.”[1]

It is clear that capitalism unites the destinies of the countries of the world in its completely unique, i.e., anarchic way. That is why the imperialist stage has exacerbated the opposite tendencies inherent in the system. Imperialism, as Lenin emphasized, has made the uneven development characteristic of capitalism much more pronounced.

The Marxist analysis of the law of uneven development is crucial not only for understanding the characteristics of the economic development of capitalism, but also for the correct interpretation of the political consequences that derive from it. However, the Stalinist understanding of the law of uneven development, as in many other areas, has led to significant distortions in the Marxist understanding. The absurd claim that the feature of uneven development emerged with the imperialist stage of capitalism embodies the distortion created by Stalinism on this point. According to Stalin, Marx and Engels did not know about the law of uneven development because they lived before the monopolistic development of capitalism; the law of uneven development had not yet been discovered at that time, nor could it have been! Thus, with a sleight of hand typical of the masters of the school of ideological and political falsification, Stalin not only distorted the meaning of the law of uneven development but also fabricated the lie that Lenin was its discoverer.

Stalin’s fraud was not in vain. His aim was to convince the world communist movement that Marx and Engels had concluded that socialism in one country could not triumph because they did not know the law of uneven development. Stalin theorized that the law of uneven development had begun to operate in the epoch of imperialism and that socialism in one country was therefore quite possible. With these and similar distortions he created a complete ambiguity on the understanding of many political and economic realities.

The truth of the matter, however, is this: due to the political turmoil generated by the workings of capitalism and the uneven distribution of crises across different countries, the proletarian revolution could very well break out in relatively underdeveloped countries before advanced capitalist countries. The October 1917 proletarian revolution in Russia confirms this prediction. The contradictions piling up in Tsarist Russia, which was experiencing a delayed capitalist development, made it an extremely weak link in the system at that time, and the imperialist chain was broken from this weak link.

The weak links of the imperialist system have a more fragile structure than the economically strong capitalist countries, as embodied in the situation of some Latin American countries today. Therefore, there is a high probability of the outbreak of depressions and revolutionary situations that upset the whole political and social life in these countries. But these revolutionary situations can only be crowned with a victorious workers’ revolution and workers’ power if the proletariat has a revolutionary leadership. This infallible rule aside, the building of socialism is another matter entirely. Uneven leaps in the political sphere can never automatically remove the obstacles erected by economic realities.

The proletarian socialist revolutions that will bring the working class to power and begin to some extent the construction of socialism may break out asynchronously in various countries. But the preservation of workers’ power and the march towards socialist construction absolutely depend on the continuation of the revolution. In this respect, the workers’ revolution, no matter in which country it comes up, is in fact an unbreakable link in the chain of the world revolution. Thus, the uneven and sporadic character of the political revolution and the combined character of the social revolution form a dialectical whole that determines the forward movement.

In Trotsky’s words, “From the uneven sporadic development of capitalism flows the non-simultaneous, uneven, and sporadic character of the socialist revolution; from the extreme tensity of the interdependence of the various countries upon each other flows not only the political but also the economic impossibility of building socialism in one country.”[2] As he puts it, “Uneven or sporadic development of various countries acts constantly to upset but in no case to eliminate the growing economic bonds and interdependence between those countries.” [3]

The law of uneven and combined development is at work both on the international level and on the national level. This feature can be clearly observed when the history of capitalism is analysed. In addition to unequal relations between countries, there is also inequality within the same nation in terms of different areas and different sectors. While capitalism creates a globally combined economic system, unequal relations are reproduced at various levels. In order to catch up with the advanced countries, backward countries try to import science and technology from them and to make moves in certain fields. For this reason, within the same nation-state, the traditional peasant economy and modern industrial production, large and advanced industrial enterprises capable of exporting to the world market, and scattered, relatively backward and conservative manufacturing sectors structured on the basis of production for the traditional domestic market coexist. In sum, capitalism can produce highly contradictory structures within the borders of a country by combining the most backward forms with the most advanced techniques.

The globalisation of the capitalist mode of production is embodied in the universalization of monopoly capitalist relations, in the way in which large capitalist monopolies bring various countries into a complex chain of mutual relations. The movement of capital from the advanced capitalist countries to the underdeveloped ones carries monopoly development from the former to the latter, so that capitalism spreads to the periphery with the peculiarities of the latest stage reached. In cases of delayed capitalist development, leaps and bounds of progress can be made, but this does not eliminate the inequality between different capitalist countries. As can be seen, the global movement of capitalism is characterized by a truly uneven and combined development. It is incompatible with the facts to arbitrarily dismantle this dialectical unity and claim that the economic movement is characterized by a simple and one-sided uneven development.

However, such theses have been put forward for years by writers who tend to reduce Marxism to a kind of petty-bourgeois socialism. Reformist and petty-bourgeois socialist approaches have an opportunist character, although they appear to support the peoples of the underdeveloped countries against the imperialist countries. It must be remembered that sound policies can only be based on sound analyses. The political disposition of those who persistently ignore the combined aspect of the capitalist movement and speak only of uneven development is obvious/evident. They have never been able to transcend the limited oppositional stance known as third worldism. One can recall, for example, the views of Samir Amin and others who made a name for themselves in this political lane.

Inequality within inequality

Capitalism has created a hierarchical structure based on the law of uneven and combined development. The leading imperialist countries of the top layer, Japan, Germany, France, Britain, Canada and Italy, headed by the hegemonic power USA, have a say over the world economy through various organizations[4] they have formed. The capitalist countries, which are not as developed and powerful as these, are classified as the middle and lower layers respectively. In some classifications, this structure is roughly divided into two groups: “centre” and “periphery” countries. It should not be forgotten that the countries in the so-called periphery group are not homogeneous and that there are significant developmental differences between them. In fact, for the sake of political and economic analysis, it is necessary to distinguish between the moderately developed capitalist countries and the underdeveloped ones.

There can be shifts in this economic structure over time, but the hierarchy persists. Climbing up from the lower levels of the hierarchical system to the higher levels is characterized by a noticeable leap in capitalist development. For example, countries such as India, Brazil and Turkey, which were once referred to as underdeveloped countries, have joined the ranks of the moderately developed capitalist countries as a result of their leapfrogging development. The change has not stopped there either, and these countries have gradually risen to the level of regional powers that should be taken into account on the world scale. Turkey today ranks twenty-first on the list of developed countries and is struggling to become a sub-imperialist power in its region.

Trotsky makes an important point about uneven development and explains that the unevenness in the historical development of different countries and continents is itself uneven. For example, it is well known that European countries develop unevenly in relation to each other. Moreover, none of the European countries has been able to run ahead of the others in the way that America has run ahead of Europe. In short, the scale of unevenness that is effective in different regions is also uneven. “For America there is one scale of unevenness, for Europe there is another.”[5] Depending on the difference in geographical and historical conditions, the combined development of different countries and regions is also at different levels.

It is obvious that the development of a backward country will lead to a unique combination of different phases of the historical process. Economically backward countries can benefit from the material and ideological achievements of advanced countries. Capitalism has brought human development to a universal level, albeit on the basis of its own anarchic laws. Therefore, a backward country can move up by the gravitational pull of advanced countries. And, in the course of its historical leaps, it is not obliged to follow exactly the same sequence that has been gone through before.

Trotsky writes that “The privilege of historic backwardness – and such a privilege exists – permits, or rather compels, the adoption of whatever is ready in advance of any specified date, skipping a whole series of intermediate stages.”[6] But the possibility of skipping over the intermediate stages is only a possibility, it may or may not materialize; the outcome depends on the economic and cultural capacity of the country concerned.

Even if we group them under the common heading of underdeveloped or developing countries, there are great inequalities in the pace of development of such countries. Whether a “national developmentalist” or “dependent on imperialism” line is pursued, the pace of capitalist development in a country is closely related to its structural characteristics and historical background. For example, the low rate of capitalist development in some African countries that have emerged from colonial status to the level of nation-states is not only an external feature imposed by the imperialist countries. These countries had to suffer for a long time the pains of suddenly rising from tribalism to nation-state status in a capitalist world. The acquisition of nation-state status alone in the absence of a national market and a favourable infrastructure for the development of industry did not provide any country of this nature with the opportunity for an economic leap.

Recent history shows that in order for there to be a significant movement of capital from advanced capitalist countries to underdeveloped ones, and for there to be an economic revival on this basis, there must be certain conditions favourable to capitalist development. For example, in capitalist countries like Turkey or some Latin American or South Asian countries, which have the potential for significant development, economic progress has been achieved despite the factor of imperialism. But in some underdeveloped regions and countries, such as in continental Africa or the Indian subcontinent, no such development has been achieved.

Underdeveloped countries, which for many years have been held as mere reservoirs of cheap raw materials, or which have been less fortunate in terms of natural resources, have yet to benefit from global capitalist development. It is an important fact that global capitalism has not eliminated the differences in development that exist between countries, which in some cases amount to gulfs. The inequalities created by capitalism continue to be produced at unequal rates at all levels today.

All these developments in concrete life reveal what a bourgeois lie it is to present capitalist globalisation as a phenomenon that will eliminate inequalities in the world. The claim that globalisation will finally make every country prosper, that it will provide almost everywhere with the opportunity for satisfactory economic development, and especially that it will gradually close the gap in inequality between classes, is an enormous lie. Today’s world points in the opposite direction. Moreover, even some bourgeois ideologues who are worried about the widening social and economic gaps on our planet can no longer help but point to some burning realities.

It is openly stated that there is no ray of hope for many African countries in the spontaneous course of globalisation. Some experts of the World Bank, one of the top institutions of the imperialist system, speak of the gigantic problems that will arise if these countries are not given a helping hand. They point out that easing the debt burden of the underdeveloped countries and cancelling at least some of the accumulated debts could save the system from dangerous explosive possibilities. While on the one hand the capitalist system is exhibiting signs of doom for the future of humanity, on the other hand, the far-sighted representatives of the system seem to be in a hurry to find solutions to certain problems that they hope can be solved within the capitalist system.

The bourgeois media themselves are now voicing the view that civilization is threatened by global poverty and that poverty must be fought. With utter hypocrisy, the leading representatives of the capitalist system state that achieving economic and social development, establishing democracy in backward countries or protecting the environment are the most fundamental problems of our planet. The inevitability of global cooperation in tackling these problems is emphasized at every opportunity. It has even been announced that the World Bank, under the presidency of Paul Wolfowitz (Wolfowitz, former US Deputy Secretary of Defence and a leading member of the hawkish team), will give priority to the fight against global poverty.

We are also witnessing the reflections of this situation in Turkey. In his speech at the Forum Istanbul 2005 meeting of the world’s leading economic and political experts, Prime Minister Tayyip Erdoğan said that globalisation ignores human beings and that nothing can be done against globalized terrorism with this approach. It is also noteworthy that such statements are linked to the appointment of Kemal Derviş, a former vice president of the World Bank, as the head of the United Nations Development Program (UNDP). On the one hand, the imperialist supreme organizations keep the stick on the backs of the poor masses, while on the other hand they assign some of their employees to the role of “benevolent priests” dangling carrots.

At first glance, it may seem that there is nothing wrong in demanding more “aid” to African countries where millions of poor people are starving and thirsty, or in carrying out “charitable” campaigns for the cancellation of the debts of poor countries (which they obviously cannot pay anyway!). However, the fact that demands such as “aid to the poor” or “cancellation of debts” are “owned” by the bourgeois summit itself should be meaningful and thought-provoking enough to expose the real political content of appeasement demands and campaigns that do not actually disturb the capitalist order.

In order to prevent revolutionary upsurges, the bourgeoisie resorts to various political tactics, keeping both the stick and the carrot at hand. On the one hand, fascist practices are being spread. On the other hand, reformist approaches that will not shake the bourgeois order are imposed in order to dilute the working class’ perspective of struggle and revolution.

Inequality in the distribution of surplus-value

It is well known that the ambition of the big monopolies to make larger and larger profits in the face of falling rates of profit is a factor that intensifies competition. But how profit is formed cannot be explained by competition. Competition in itself does not create profit, it only influences the formation of the average rate of profit. The source of profit lies in the exploitation of surplus-value in the production process. The fact that some capitalists are able to make more profit than others is a question of the distribution of surplus-value extracted from the working class. As Marx said, such problems of distribution do not change the nature of surplus-value, nor the fact that it is the source of capitalist accumulation.

The imperialist stage of capitalism and the monopoly development that has come to dominate it have not changed the fundamental laws of capitalist mechanism. It has only given them much more pronounced and sharp characteristics. Monopoly and competition are not mutually exclusive phenomena. They rule together in accordance with the nature of dialectical movement. “In present-day economic life you will find, not only competition and monopoly, but also their synthesis, which is not a formula but a movement” Marx says, and continues: “Monopoly produces competition, competition produces monopoly. That equation, however, far from alleviating the difficulties of the present situation, as bourgeois economists suppose, gives rise to a situation even more difficult and involved.”[7]

It is clear that the emergence of large monopolies has affected the conditions of competition that existed between large and small capitalist enterprises in earlier periods of capitalism. This has also brought new issues of debate to the agenda. An example is the debate on whether an extra monopoly profit arises due to monopolistic power relations. Under monopolized capitalism, there is certainly no equality in the distribution of profits among capitalists. Moreover, monopolistic conditions may weaken the bargaining power of labour against capital and thus lead to an increase in the rate of surplus-value. But in the final analysis a certain total mass of surplus-value is obtained, including all these factors, and the monopolies do not create an extra or super-profit out of it.

While the productivity of social labour employed by total capital makes the amount of surplus-value or profit for the capitalist class as a whole a given, the value of the capital invested in this or that field and the specific level of productivity of labour in that field will determine the rate of profit corresponding to that capital. In Marx’s words, “We thus have a mathematically exact demonstration of why the capitalists, no matter how little love is lost among them in their mutual competition, are nevertheless united by a real freemasonry vis-a-vis the working class as a whole”.[8]

Under the domination of monopoly capitalism, the mechanism of competition continues to be a factor in the formation of the average rate of profit. Competition in the market creates a general tendency to equalize inequalities. Nevertheless, total profits are distributed unequally according to the balance of power between capital groups. Those who are stronger receive a higher rate of profit in proportion to the capital invested. It is in this sense that we can speak of a monopoly profit that is transferred from the weak to the strong and thus rises above the average.

Marx says the following about monopoly profits: “Finally, if the equalization of surplus-value to average profit in the various spheres of production comes upon obstacles in the form of artificial or natural monopolies, and particularly the monopoly of landed property, so that a monopoly price becomes possible, above both the price of production and value of the commodities this monopoly affects, this does not mean that the limits fixed by commodity value are abolished. A monopoly price for certain commodities simply transfers a portion of the profit made by the other commodity producers to the commodities with the monopoly price. Indirectly, there is a local disturbance in the distribution of surplus-value among the various spheres of production, but this leaves unaffected the limit of the surplus-value itself.” [9]

Imperialist capitalism has given the circulation of capital a global character. Indeed, from the Bretton Woods agreement to today’s IMF Articles of Agreement, the lords of capital have sought regulations that would eliminate the obstacles that nation-states might put in the way of the free movement of capital. The owners of capital in developed countries have created ways to freely penetrate countries with cheap labour and make more profits. But when it comes to the free movement of labour, the situation is completely different. Both the fragmentation into nation-states and national borders that prohibit or restrict the free movement of migrant workers are living realities. Even within the EU, let alone the negative situation worldwide, the right to free movement of labour is recognized in parallel with the level of development of the member states and is ultimately restricted in one way or another.

While capitalism gives capital great freedom of movement, it erects numerous obstacles to the free movement of labour. Some of the benefits of globalisation under capitalism are not evenly distributed between labour and capital. While capitalist development inevitably gives an international character to the movement of capital and the process of production, and develops multilateral relations between countries, it never promises spontaneous progress for the working-class movement and its organizations.

Capital, which does not hesitate to stop the influx of migrant workers with ruthless methods when it does not suit it, wants to make use of the benefits of cheap labour as well. The big monopolies have turned the whole world into their “backyard”, shifting their production to regions where wages are as low as possible. The capitalist production process in many countries loses its national character and becomes part of the universal, and the exploitation of labour is thus globalized. For the working class, the nationality of the boss is of no importance. The capitalist production process has acquired the character of a process in which the bourgeoisies of various countries share in proportion to their power from the total surplus-value created by the workers of the world on a global scale.

However, the globalisation of capitalism has not eliminated the fragmentation, national rivalries and contradictions deriving from the existence of nation-states. The globalisation of large capital flows has made the production processes in different nation-states increasingly interrelated, but this does not mean, say, the US economy and the German economy have become one economic formation without conflict. As an even more striking example, one can recall the recent crisis that the EU has been plunged into and the rivalries and frictions that have not disappeared between the EU countries themselves. Moreover, despite globalizing capitalism, the exchange relations between the imperialist countries in the centre and the less powerful capitalist countries in the periphery continue to be based on inequality.

The law governing the exchange between capitalist countries with different degrees of development is the exchange of unequal values. In this exchange, the better-off country will get more labour for less labour. Marx says that the excess will be pocketed by a particular class, just as in the exchange between labour and capital in general.[10] So what is at stake here is not “national exploitation” but class exploitation. Due to unequal exchange relations, the working class of developed capitalist countries does not exploit the working class of underdeveloped countries. The transfer of value is essentially for the account of the bourgeoisie, wherever it is in the world.

The relations of inequality between the large monopolistic capital groups, which have great power and control over the world market, and the less powerful are reproduced not only on a global scale but also on a national scale. Thus, there is a transfer of surplus-value from relatively small enterprises to the big monopolies, both at the national and global level. The appropriation of the extra monopoly profits arising from the inequalities in the distribution of surplus-value is one of the main activities not only of big capital in the imperialist countries, but of all big monopolies, from the most nationalist to the most cosmopolitan.

As a result of this situation, powerful monopolies have a much higher bargaining power vis-à-vis the working class than others and can also pursue a relatively good wage policy if it suits them. Monopoly profits, which are the subject of various levels of debate and, as Lenin once explained, the source of the workers’ aristocracy, are not a phenomenon unique to imperialist countries. In all capitalist countries, this situation leads to income differences within the working class and creates privileged sections. But these and similar inequalities are inevitable economic consequences of the capitalist mode of production. The trick for communists is to build a revolutionary organization at the international level that will unite the class, not divide it, despite the objective differences that exist between workers.

The relations of inequality in the distribution of surplus-value are an internal problem of the bourgeoisie. Just as the unequal sharing of surplus-value between monopoly bourgeois sections and other bourgeois sections within the borders of a country does not change the fact that the working class is under their joint exploitation, this is also the case on a global scale. In underdeveloped or developing countries, the surplus-value created by the working class is not only appropriated by foreign bosses, but also by local bosses, and they are happy to do so! Capitalist exploitation is a class problem, not a national one. The working class is exploited, not the countries.

In order for the proletariat not to hold back from defending its own independent line of struggle in the name of “defending national interests” or “patriotism”, these facts must first be made clear to the class. At this point, the nationalist petty-bourgeois politics, which persist in the wrong, continue to perform the sinister function of building “revolutionism” on the internal contradictions of the bourgeoisie. However, capitalism has already taken away the land, the places, the homelands that people claim as their homeland and turned them into the cheque books and coffers of the bourgeoisie. As it has been emphasized since the Communist Manifesto, you cannot take away from the workers what does not exist, “workers have no country”! Only through workers’ revolution and workers’ democracy will every inch of the earth be transformed into a place of peace and happiness shared by all the humanity that produces its life through labour.