How the system of capitalist contribute to inequality

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Short reflective response page . A page response on Tilla Siegel : Capitalism and the nation state (Chapter 2) in Politics and Economics in the Capitalist World Market: Methodological Problems of Marxist Analysis,International Journal of Sociology, vol. 14, no. 1, 1984, pp. i-154. JSTOR,

The page response should include one page answering :

what the reading tells us about structures of inequality?

**Please use the reading and highlight key points to answer the question on the paper**

Easy vocabulary.

Do not summarize reading, its more of like what you got from the reading and what it reminds you at the present day or past so please relate it to other people or historic events or current social issues in the U.S(current events).


I will provide the pdf file of the textbook. Make sure you do the right chapter.

Politics and Economics in the Capitalist World Market: Methodological Problems of Marxist Analysis Author(s): Tilla Siegel Source: International Journal of Sociology, Vol. 14, No. 1, Politics and Economics in the Capitalist World Market: Methodological Problems of Marxist Analysis (Spring, 1984), pp. i-v, 1-154 Published by: Taylor & Francis, Ltd. Stable URL: Accessed: 17-02-2019 03:01 UTC JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at Taylor & Francis, Ltd. is collaborating with JSTOR to digitize, preserve and extend access to International Journal of Sociology This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 2. Capitalism and the Nation State The capitalist mode of production can be characterized as an "open" mode of production, meaning that the division of social labor and the distribution of the social product are not regulated by a preconceived plan or by direct rule. It is ' 'open'' also in that capitalist production and circulation are by essence not limited to the society or nation characterized by this mode of production. Capital goes where the conditions for its valorization are best. Whether these conditions are found and made use of within a given nation or outside it is in principle irrelevant. In this sense the capitalist mode of production is universal. Theoretically and practically, the determining entity of capitalist production and accumulation is the world market and not the national economy. However, capitalism has not developed into a world society in the sense of a world state but into a system that is politically divided into nation states. If we look at the concrete development of capitalism, we can say that not only the world market but also the nation state are both preconditions and results of the capitalist mode of production. This statement sounds paradoxical. It can be understood only if we look at capitalism as a society and not just as an economy. It is true that social relations in capitalism are basically determined by economic relations. Workers, for example, are "free," not obliged by feudal constraints to work for an overlord. Similarly, the distribution of goods is determined by the law of value and not by feudal relationships. But this does not mean that we can ade quately explain the functioning of capitalist society by a purely economic analysis, because what we call economic relations are indeed a particular set of social relationships. Capital itself repre sents a social relation. The valorization of capital constantly 8 This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 9 reproduces the division of society into workers, who have no control over the surplus they produce, and capitalists, who do control the surplus because they own the means of production. And control over the surplus is the material basis for domination in a society. Capitalist domination, rooted in and perpetuated by the "eco nomic" process of capital valorization, has to be socially and politically protected. A given capital valorizes itself and only itself; as the individual capitals compete with each other for control over a part of the social surplus, they cannot directly provide a social and political framework that would guarantee this protection for the system as a whole. The general conditions of the reproduction of capitalist society (including the basis of rule in this society) must thus be set and safeguarded by an institution that stands above the interests of individual capitals. This institu tion is the state. Precisely because the valorization of capital is not just an eco nomic problem but also a problem of the reproduction of classes in society, the science of economics must be understood as a social science. This must be taken into account especially in analyses of the world market. When we analyze the very "eco nomic" problem of the international division of labor, we will see that purely economic explanations are insufficient and often even wrong. A purely economic approach cannot explain the present structure of the world market with its division into highly indus trialized nations and underdeveloped nations. Its development has not been and is not determined by natural and economic factors alone, but also by the social and political conditions that capital has encountered and created in the process of its ex pansion. In this chapter, I will not present a theory of the capitalist nation state. Rather, I will briefly summarize the basic functions of the state insofar as they are relevant to an analysis of the world market. To put some flesh on the bare bones of my abstract reasoning, I will include a short case study of the role of the state in the early development of capitalism in Japan. This will This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 10 INTERNATIONAL JOURNAL OF SOCIOLOGY illustrate the point that politics must be seen as an integral part of international economic relations, that the position of a national economy in the world market is not just an economic problem. 2.1. The function of the nation state: Theory From the viewpoint of classical laissez-faire theory the function of the state is to create and guarantee a framework for commodity production and circulation. The laissez-faire state stands for for mally free access to production and trade (e.g., abolition of the guild system), formal equality of those who participate in the circulation of commodities (including the commodity labor pow er), standardization and guarantee of the general equivalent (money), guarantee of private property; the right to sell all prop erty (including land and one's body), and the provision of a material infrastructure. The English classical political economists advocated this lais sez-faire state as the best state for economic development and the common welfare. They stressed the necessity of abolishing feudal restrictions on the circulation and production of commodities. But there was more to the matter than that. "Laissez-faire" basically meant "let English capital develop unhampered"?un hampered in a double sense: at home and abroad.1 It should not be forgotten that English capital at that time dominated the world market and depended for its accumulation on this world market. Thus advocating laissez-faire in connection with advocating free trade meant nothing else but that the English bourgeoisie called upon the bourgeoisies or rulers of other countries not to resist the world-wide operations of English capital. It was the demand: ' 'Laissez-nous faire!' '2 Laissez-faire at home means that the owners of the means of production, the capitalists, should be free to control the produc tion process and the surplus value produced in this process. The workers are to be formally free in the process of circulation?free to buy their means of subsistence (if they have the money to do so) This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 11 and free to sell their labor power. They are "free" from owning means of production and "free" of the responsibility to decide what should be done with their product (a responsibility shoul dered by the capitalists).3 During the time for which they have sold their labor power, the time of production, the workers are no longer free. Their labor power now belongs to the capitalists, and the workers must submit to the rules of the production process, rules controlled by capital. Laissez-faire or not, it is the function of the state to set the material conditions for the valorization of capital and to safe guard the social relations inherent in the concept of capital. The state has to help create and uphold a social consensus by which private ownership of means of production and the concomitant control over the surplus value are generally accepted. In short, the function of the state in capitalism is to safeguard capitalist production and accumulation and the rule of capital. In the history of capitalism the state has fulfilled these func tions in a variety of forms, from that of guarantor of the freedom of action of the "invisible hand" to interventionist economic policies, from direct oppression of the proletariat to intervention in favor of a social consensus on the ideological level and on the level of labor and welfare legislation. An abstract theory of the state in capitalism cannot by itself explain which form or mix of forms is chosen in any concrete instance to safeguard the repro duction of capitalism. I would even go so far as to say that a theory of the state in capitalism can do no more than describe its basic functions and limitations, given the characteristics of the capitalist mode of production and the level of its development. Anything beyond that has to be explained in terms of the concrete economic, political, and social conditions obtaining at a certain point in history and in a certain nation. We cannot, for example, formulate an abstract law that defines a relation between the "stages" of capitalism?the stage of free competition and the stage of monopoly capitalism?and certain forms of political organization. There is no linear development from more freedom to less or vice versa. Free competition in the This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 12 INTERNATIONAL JOURNAL OF SOCIOLOGY economy is not always tantamount to free participation in politics or the freedom to associate for all. In the (laissez-faire inspired) democracies of the nineteenth century the right to vote was linked to property, gender, and/or race, thus excluding large groups of people from institutionalized politics. The police or national guard were sent to suppress strikes and other efforts of workers to organize themselves. On the other hand, monopoly capitalism does not automatically mean either political tyranny or more democracy. In addition, we cannot give a clear-cut definition of the relation between state and capital that would apply to capitalism as a whole. The form taken by the relation between the capitalists (or, in political terms: the bourgeoisie) and the state differs from time to time and from nation to nation.4 From the fact that the state must ensure the reproduction of capitalism and that it would destroy the basis of its own existence if it did not do so in the long run, it does not follow that all the actions of the state are rational in the sense of being motivated directly by the necessity of safe guarding this reproduction. Nor does it follow that the state does directly what capitalists tell it to do. There is no denying the fact that the state is very much influenced by individual capitals, because they control the basis of power in a nation. But the individual capitals also compete with each other. Thus the state must to a certain degree stand above the (conflicting) interests of individual capitals in order to counter effects of competition that might threaten capitalist society as a whole. In this contradictory position the state fulfills its functions more often than not by way of a hit-or-miss process. Here again, the shape of this process depends on the characteristics and concrete conditions of the nation for which and in which the state operates. That the capitalist state has taken the form of the nation state is basically the result of the concrete historical conditions under which capitalism came into being. The existence of nation states seems to contradict the general laws of capitalist production and accumulation, because these laws require essentially free move ments of capital and labor. But capitalism is more than just an This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 13 economy; it is a class society. The nation state stands for the fact that rule in this society is organized nationally. That means that the bourgeoisie of any given nation has to defend the basis of its rule not only against those in its nation who have no control over the social surplus product but also against the bourgeoisies of other nations who?as competing capitalists?want to get a share of the surplus product of the former. At the same time, the bourgeoisie of one nation is eager to take advantage of better conditions for the valorization of capital outside its nation and thus threatens the existence of foreign ruling classes.5 The international competition of capital is thus not simply a competition of individual capitals operating under uniform con ditions. The power and economic strength of the nation is an important asset, contributing to the competitive strength of the individual capital. The state as a nation state has as its primary task to safeguard the reproduction of the national capital and not that of capital per se. The safeguarding of the free movement of capital, labor, and commodities, the guarantee of the general equivalent, the improvement of the conditions of capital valoriza tion, intervention (by force if necesssary) to create and maintain a social consensus?all these functions are determined by the inter ests of the national capital, and most of them stop (so to speak) at the national borders. Many actions of the state are aimed at favoring the capitals of its nation against capitals of other nations. Here I am thinking not only of common measures like restrictions on imports of commodities and capital, but also of measures like England's forbidding the export of machinery or the emigration of skilled workers, up until the first half of the nineteenth century (until 1842 and 1825 respectively).6 Finally, it is the function of the nation state not only to protect "its" capital against the competition of foreign capital within the nation but also to open the way toward better valorization of capital outside the nation. Examples here range from the direct subordination of other peo ples by colonization and the more modern establishment of pup pet regimes to the framing of "peaceful" international treaties and development aid. This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 14 INTERNATIONAL JOURNAL OF SOCIOLOGY The fact that the political organization of capitalism has taken the form of the nation state reveals the social relation of class rule embodied in the essence of capital. The reality of the world market should force marxists to apply the knowledge of the laws that govern the dynamics of capitalism as Marx understood them. The law of value, the valorization of capital, the law of the creation of prices of production?these laws appear to be anony mous laws of "the economy," but they have a social content. They define not relations between humans and things, but rather relations between humans and humans. The postulate of the ' 'pri macy of the economic" in capitalism does not allow us first to make a purely economic analysis and only later introduce politics as an exogenous factor. Although the activities of the state are still in principle determined by economic factors insofar as it has to safeguard the reproduction of (national) capital, the state in turn sets conditions for the economy, so that politics itself becomes an economic force. In the recent West German marxist debate on world market problems it has been argued that the nation state is just an his torical, and thus a transient, category in the development of capitalism.7 Referring to such assertions of Marx's as that "the tendency to create the world market is directly given in the concept of capital itself,"8 some authors claim that there is a tendency for the nation state to disappear.9 This position reflects a one-dimensional conception of the "primacy of the economic" as well as the idea that the state is the "ideal general capitalist" {idealer Gesamtkapitalist). If one looks only at the universal character of the capitalist mode of production, thinks of its laws as merely economic laws, and interprets the state as the guardian of capitalism per se, it is easy to forget that competition and class domination are also part of the ' 'concept of capital.'' The state as a nation state is the form in which the bourgeoisie defends its rule both within the nation and against foreign competitors. No capital or group of capitals will voluntarily give up the possibility of improving its competitive strength by mobilizing its nation state. History has This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 15 shown that the political integration of several nations is only achieved by force, under the hegemony of one of them. That the capitalist mode of production is theoretically and practically uni versal does not imply that nation states are alien to the essence of capitalism. The nation state is as much precondition and result of the capitalist mode of production as the world market. The world market is a precondition because capitalism thrived on it from the outset; it is a result, because capital created it in its expansion. Similarly, the nation state as a state sets the political and social framework for capitalist production, and as a national institution is the result of the competition between capitals and between ruling classes. The creation of the capitalist world market through the expan sion of nationally organized capitals not only created new capital ist nation states but has led to the existence of two categories of such states, with differing economic, social, and political struc tures. These are the highly industrialized capitalist nations of the "center" of the world market, on the one hand, and the depen dent capitalist nations of the ' 'periphery,'' on the other. It made a decisive difference in the development of the world market whether a national ruling class succeeded in securing control over national production and the surplus product or whether a foreign bourgeoisie controlled (and controls) that surplus product. The development of the international division of labor cannot be ex plained merely by reference to economic and natural advantages of one country or another. Bananas, for example, are not Guate mala's most important product because they grow so well there, but because the ruling class in that country was not able to orga nize on a national level to control Guatemala's social surplus product. The ruling class in Guatemala exists by participating in the exploitation of Guatemala by foreign capitals. A contrasting example is provided by Japan, whose ruling class succeeded in organizing politically against the competition of foreign capitals. Special conditions inside and outside Japan enabled capital to develop there to an extent that cannot be explained in purely economic terms. This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 16 INTERNATIONAL JOURNAL OF SOCIOLOGY 2.2. The function of the nation state: Practice The case of 19th-century Japan It may seem strange that I take the "special case" of nineteenth century Japan as an example. But, compared to the "standard" example of the development of capitalism, Great Britain, all other capitalist nations can be taken as special cases, because the condi tions under which each of them developed differed widely. Apart from the fact that Japan's development presents a very interesting contrast to that of the dependent capitalist nations in the world market today, I have chosen to describe the first stage in the development of capitalism in Japan because it dramatically dem onstrates the importance of politics in the concrete development of the world market, which after all is the development of the nations which it comprises. This case study will serve to illustrate the importance of the national character of the state, the fact that the character of the state is determined by the requirements of the valorization and accumulation of the national capital and not by those of capital per se. Be it the law of value or that of the creation of prices of production, be it the theorem of comparative advantages, the theorem of factor proportions, or the theorems of unequal ex change?economic laws and theorems alone cannot explain the development of Japan into an industrialized capitalist nation. Indeed, this development even seems to contradict these laws and theorems. To understand it we have to take into account the involvement of the Japanese state in creating favorable conditions for the valorization and accumulation of the national capital, and this even before the national bourgeoisie had become the ruling class. These activities of the Japanese state could be so effective, on the one hand, because the structure of Japanese society made the introduction of capitalist commodity production possible, and, on the other hand, because these activities were in compliance with the laws of capitalist production. It is true that the policy of This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 1 7 the Japanese state went in a certain sense against the laws of capitalist production, because it protected and favored Japanese capital against superior foreign competition and because it initiat ed branches of production that Japanese capital was unable to develop by itself. But this policy acted with the laws of capitalist production in that it created, in the long run, conditions under which Japanese capital could develop a stronger position relative to international competition. This case study does not claim to be a new or more extensive interpretation of the early development of modern Japan in all its aspects.10 As I omit the discussion of the many political and social conflicts of that period, this may look like a streamlined success story. But this is not my intention. This case study should be read as an illustration of the argument made in the first part of this chapter for the importance of politics in the concrete develop ment of capitalism. As far as the social and political framework is concerned, the year 1868 is commonly taken as the starting point of the develop ment of capitalism in Japan.11 In this year rebellions of daimyo and samurai (mainly from the provinces Satsuma, Chosen, and Tosa) ended the rule of the already decaying Tokugawa shogun ate, and the fifteen-year-old Tenno (emperor) Meiji was pro claimed the supreme ruler. His name became the name of the new government and also of the period, which in the literature about Japan is referred to as the Meiji Restoration or Revolution. During the Tokugawa shogunate Japan had been a feudal soci ety almost completely barricaded against the outside, in which central political power remained in the hands of the Shogun.12 When for lack of a better word I use the adjective "feudal" to describe this society, I mean to imply merely that social and economic relations were basically determined by direct depen dencies. Japanese "feudalism" was, of course, in many respects different from feudalism in Europe. The estates that made up this society can be briefly described. The daimyo (feudal lords) drew their revenues in the form of tribute levied in rice on the peasants on their han (fiefs), over This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 18 INTERNATIONAL JOURNAL OF SOCIOLOGY which they had ultimate legal authority. The Shogun guarded his control over the daimyo, by taxation and demands for the financ ing of particular projects that weakened their financial power and so their ability to rebel against him. Another effective means to secure the subjection of the daimyo was the sankin-kotai system, under which the daimyo were required to spend a few months every year in Edo (later Tokyo), the seat of the Shogun, and to send their families in their place when away from there, as guar antee of their loyalty.13 Through this system the daimyo were forced to transform a large part of the tribute in kind from their peasants into money, in order to be able to finance their and their families' residence in Edo. This was a very strong impetus for the development of artisan commodity production, the circulation of money, and trade. The samurai?the ' 'warrior caste"?served as vassals of either a daimyo or the Shogun. They lived on rice stipends from their feudal lords and were not permitted activity as artisans, peasants, or merchants. Their increasing poverty and the progressive dis appearance of their function as fighters?by putting an end to fighting between the daimyo the Tokugawa had rendered their warriors superfluous?was a very important factor of the uprising against the Tokugawa shogunate.14 The peasants, who in the formal ranking of the feudal estates stood higher than artisans and merchants, bore the main burden of the system. In addition to the tribute owed the daimyo15 came a series of taxes. In the course of the Tokugawa period an increas ing emiseration of the peasantry was visible, and found expres sion also in ever greater uprisings.16 This emiseration and the increasing commercialization of the rural economy were accom panied by a process of differentiation within the peasantry itself. A small stratum of rich peasants appeared, who were at the same time moneylenders and "rural capitalists," who in certain re gions produced by way of the putting-out system.17 This differen tiation created conflicts in the villages, which the Tokugawa shogunate was increasingly less able to master. Lowest of all in the scale of ranks of the feudal estate system This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 19 were the artisans and merchants.18 We have earlier already em phasized that the sankin-kotai system stimulated the development of artisanry and commerce. Extremely wealthy commercial es tablishments arose, which handled the transformation into money of the daimyo's tribute in kind. The fact that, on the one hand, the merchants were hindered in their development by the rigid estate system,19 while, on the other hand, their existence was closely tied to that of the daimyo, is the reason why a few of them even gave financial assistance to the forces that worked toward the overthrow of the Shogun in the period of the disintegration of the Tokugawa shogunate,20 but also why only a few of the rich mer chant houses?in the long run only Mitsui?succeeded after the Meiji Restoration in becoming modern industrial capitalists. I have given a rather ample description of the estate system during the Tokugawa period because it points to the factors that led to the collapse of the Tokugawa shogunate: the growing in debtedness of the majority of the daimyo, the impoverishment of the samurai; the growing power of merchant capital, which was nevertheless hindered in its development by feudal barriers; the emiseration of the peasantry, leading to uprisings beyond the control of the Tokugawas; the appearance of a stratum of' 'landed capitalists," the development of which was blocked by the feudal system. Together with these (here only unsystematically enumerated) signs of the collapse of feudal society the roots of a new society were developing, namely conditions on the basis of which a new, private capitalist system could arise after the elimination of the feudal barriers: a relatively developed social division of labor, commodity production, and circulation of money; the existence of groups from which would later come capitalists (landed cap italists, merchants, and samurai) and wage laborers (proletarian ized peasants, working in the putting-out system, artisans ruined by foreign competition, and impoverished samurai). I will return again below to these aspects of Japanese feudalism in decline. Another factor contributing to the fall of the Tokugawa sho gunate was the pressure exercised by the imperialist powers, This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 20 INTERNATIONAL JOURNAL OF SOCIOLOGY which saw in Japan yet another object for their business interests. In 1853 the American Commodore Matthew C. Perry with his gunships forcibly opened up Japan. In the course of time unequal treaties were forced upon the Shogun, which the Tenno refused to ratify. The opposition to the Tokugawa shogunate took form under the slogan, ' 'Honor the Tenno, drive away the barbarians" (Sonno-Joi). The insurrection?led, at the call of the daimyo of the above-mentioned provinces, by their vassals?was financed by a few great merchants and the landed capitalists, and was essentially the work of the impoverished peasants and the lower samurai. The appeal to the Tenno as highest authority facilitated the creation of loyalty to the new Meiji regime. This regime not only created the outward institutional frame work of a capitalist system, by doing away with the feudal bar riers to it, but contributed actively to the promotion of industrial ization by the private capitalist route. Before we pass to the description of these measures, I will briefly describe from which social strata the leading men of the Meiji regime came, and why they sought not to establish a better feudalism but?more or less consciously?to create a society after the model of the Western industrial capitalist nations. (This must be dealt with here, for the new leaders did not come from a bourgeoisie.) The leading figures of the Meiji regime were recruited from the ranks of the lower samurai. As a result of the powerlessness of the Tenno during the Tokugawa period, Herbert E. Norman ex plains, the vassals of the imperial court were not in a position to lead the new regime. This was just as little open to the victorious daimyo, who had long since given over control over their han to a few samurai. As a result of this traditional duality of control it came about that when the emperor was elevated to the position of a ruling sovereign he could not himself assume his proper role, nor was there in the immediate circle of his court anyone with sufficient ability to act in his stead. The nominal heads of the clans were in no better plight in this respect. The majority of them were This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 21 feeble in body as well as mind, while the vigorous minority were devoid of nearly every statesmanlike quality. Shimazu, the lord of Satsuma, was so sunk in conservatism and so over weening in his pride that nothing could be expected of him and the great Saigo, though nominally his henchman, was in reality the leader of the clan. Hence the only men qualified to guide the new government were the samurai, and it was these men who exercised the authority, though they did not fill the highest offices in the government.21 It was the samurai, who already had occupied key positions in the regional provincial governments during the Tokugawa sho gunate, who now took over power also in the Meiji regime, in which formally the emperor and the court nobility were the rul ers. Of course this was only a very small group of the samurai. The majority?insofar as they did not succeed in acquiring posts in the new bureaucracy, the army, or the state enterprises?were among the first Japanese who had to hire themselves out as wage laborers in the new industrial enterprises.22 If we take into consideration that the leading men of the Meiji regime were samurai, whose possibilities had been greatly limit ed by the feudalism of the Tokugawa period,23 and observe that Japan at that time had before its eyes the fate of China and Indochina, subjugated by the colonial powers, and was in acute danger of suffering a similar fate, it is perhaps understandable that these men oriented themselves in their aims after the then most powerful nations?those same imperialist powers.24 It was clear to them that the military strength that Japan needed in order to defend itself against these powers could come only from a strong economy: and the example for this was again those same powers. The Meiji regime, conscious of its weaknesses, at first avoided direct confrontation with the foreign powers, made com promises with them, endured the unequal treaties that gave the foreigners privileges in trade and jurisdiction, and punished the forces of the anti-Tokugawa movement who sought immediately to realize the "expulsion of the barbarians." The road taken by the Meiji leaders to the "expulsion of the barbarians" went by This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 22 INTERNATIONAL JOURNAL OF SOCIOLOGY way of forced economic development on the capitalist model.25 Among the means employed to this end by the Meiji regime we may here distinguish measures that indirectly amounted to the promotion of capitalist development and those that directly pro moted industrialization by the capitalist road.26 I will limit this discussion in the first instance to the pre-1880 phase, marked by power struggles and peasant uprisings within the country27 and by the forced opening up of Japan to the outside world.28 From the description of the groups that contributed to the overthrow of the Tokugawa Shogun, it should be clear that they represented, aside from the common goal of removal of the Sho gun, thoroughly divergent interests. The measures taken by the Meiji regime were thus strongly determined by its attempt to secure its power position against the supporters of the Shogun and other groups whose interests were threatened by the new policy. The most significant step in this direction was the weakening of the daimyo and the samurai; the rice tribute paid by the peasants was transformed into taxes paid to the government, which now itself paid stipends to the daimyo and samurai. These stipends were reduced in the course of time, and were finally transformed into state bonds, the income from which only in the most unusual cases (for the highest ranks of the former feudal nobility) sufficed to meet the living expenses of the recipients. In this way the privileges of the daimyo and samurai were progressively reduced, and they were forced to incorporate themselves in one or another way into the new?capitalist?social system. A further step toward the weakening of the daimyo was the transformation of the han into prefectures, management of which at first remained in the hands of the daimyo but was later taken over by governmental officials. The military bands supporting the daimyo were dissolved and an army under governmental command established. Juridical authority was taken from the daimyo and a centralized legel system set up. Aside from the destruction of the feudal estate system we may note a series of other measures that went to create the general framework for capitalist production: the currency was unified; This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 23 internal customs barriers were abolished; the freedoms of choice of profession and of settlement were introduced; taxes?now paid (as explained above) directly by the peasants to the regime in the form of money?were calculated no longer on the yearly produce of the land but on the size of the holding. This new form of taxation and the right to private ownership of land had far-reaching consequences for the structure of the rural economy. The introduction of money taxes led to an expansion of the circulation of money. It led also to increased dependence of the peasants on the merchants (and money lenders), to whom they had to sell their crops in order to be able to pay the taxes. While the system by which land was taxed was a stimulus to increasing the productivity of agriculture (since the increased yield now fell to the producer),29 it also hastened the process of differentiation in the countryside, since taxes now remained constant even when harvests were poor, and poorer peasants were forced in periods of bad harvests to borrow on or sell their lands. The impoverish ment of the peasants was accelerated further by the privatization of the common lands and the attendant loss of the free fodder for livestock and firewood previously obtained from the commons. Increasing foreign competition devastated production under the putting-out system, from which many poor peasants had pre viously drawn supplemental income. The impoverishment of the peasantry was accompanied?how could it not have been??by an increasing concentration of land ownership.30 The impoverish ment of the peasants and rural artisans, together with the growing productivity of agriculture,31 also reflected the fact that Japan's industrial development took place in great measure on the back of agriculture. One index of this?in view of the heavy financial engagement of the regime in industrial development?is the pro portion of total taxation during the Meiji period (when there was practically no taxation of incomes) paid as taxes on land: 60% ,32 The Meiji regime not only did away with feudal barriers to capitalist development but also?as we have said above?initiated direct measures to further industrial development by the private capitalist route. These must now be discussed. This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 24 INTERNATIONAL JOURNAL OF SOCIOLOGY The development of capitalism in Japan was greatly hindered during the Meiji period by an acute capital shortage. The mass of capital accumulated by the great merchants, one of the most important groups from which the new industrial capitalists could potentially arise, was relatively modest in comparison with the mass of merchant capital in Europe in the early capitalist period, for the field of action of the Japanese merchants included only Japan and not the world market. In addition the great Japanese merchants were at first hardly prepared to invest in the as yet little developed industry.33 Moreover, the amount of capital required for the establishment of industrial enterprises was very much greater than it had been, for example, in England at the time of the Industrial Revolution, as Japan now had to compete with the much further developed and more capital-intensive production of foreign firms. Before we briefly discuss the measures taken by the Meiji state to counteract the capital shortage, we must briefly deal with the importation of foreign technology. Not only did the Meiji govern ment orient itself, in the construction of its state administration, army, police, and banking system, very much after European and American examples,34 it also supported the importation and pro curement of Western technology and managerial personnel, in short of Western "know-how." To be sure it is to be stressed that?according to David Landes35?the number of Western ex perts in Japan was at that time no greater than the number of English experts in Germany at the beginning of capitalist devel opment in that country. The importation of Western know-how into Japan in the Meiji period is very likely so striking and so strongly noted in the economic literature because it was pushed forward so systematically and in such an organized fashion and because it affected nearly every sphere of society.36 It is also striking that the assimilation of foreign knowledge was extremely intensively pursued, but not the integration of foreign experts, whose employment was always considered as only temporary, so that the attempt was made to manage without them as soon as possible.37 This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 25 The Meiji regime was even more foresighted with respect to the importation of foreign capital. Already during the Tokugawa period Japanese statesmen were aware of the danger of depen dence through debt. When the Tokugawa Shogun wished to bor row six million dollars from France, Yoshinage Matsudara, the daimyo of Echizen, warned the ruler, "If the government should be unable to repay, it will lose the land offered as a security. This will lead to foreign invasion, as in the case of India."38 In the second year of its existence the Meiji regime forbade the raising of foreign loans by provincial governments. In 1870 it forbade the importation of ships and machines against foreign credit. When the provinces were finally transformed into prefectures administered by the Meiji government, the latter took over the foreign debts of the Tokugawa shogunate and the earlier daimyo and repaid them. In 1872 foreigners were forbidden to invest in mining, railroads, and natural gas.39 From the Meiji Restoration (1868) to the war with China (1894-5) the regime only twice took out foreign loans: of one million pounds to build a railroad (1870) and of 2.4 million pounds for the transformation of the rice stipends of the samurai into state bonds (1873). Despite the enormous costs of the repres sion of the Satsuma Rebellion (1877)?the last great uprising against the Meiji regime?in 1880 it was again decided not to raise new loans abroad, a decision in which fear of dependence on foreign powers played a central role, as is evident in this declara tion of the then finance minister Matsukata: * To pay back a large amount of foreign debts, we must raise a large amount of capital. Since repayment is exclusively handled by the Toyo bank, which is a foreign bank, it will come to control the finance of Japan and will cause not small damage to this country."40 The reparations paid by China after the war won by Japan (1895) indeed exceeded the cost of the war to Japan, but in the succeeding phase of rapid industrial growth and accelerated ar mament, both of which brought with them an even greater short age of capital, the Japanese government decided to facilitate capital imports. The government was, however, careful after this This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 26 INTERNATIONAL JOURNAL OF SOCIOLOGY to keep the resulting potential dependence on other countries as small as possible. Thus the Industrial Bank of Japan was founded expressly in order to centralize and control the importation of foreign capital by private firms.41 Extremely little foreign capital was employed in the opening phase of the industrial development of Japan in comparison to the nations of continental Europe.42 The most important sectors of Japanese industry during the first phase of its capitalist development were nearly exclusively built up with Japanese capital. Only with the development of the ma chine, electric, and automobile industries just before and after World War I did more foreign capital flow into Japanese industry. Thus, just as the decision to industrialize capitalistically showed the Meiji leaders' clear consciousness of the danger of the loss of national autonomy to colonial domination, so the mea sures they employed to overcome the capital shortage in the formation of Japanese industry showed their understanding of the dangers accompanying the financing of this formation by foreign capital. (It must of course be emphasized that they were so suc cessful in the limitation and control of capital imports in part because the imperialist countries were not yet as interested in investing in Japan as, for example, in China.) As I have already said above, the capital shortage resulted not from an absolute shortage but from the fact that the great mer chants, in whose hands a large part of capital was then concentrat ed, hesitated to invest their capital in young and still risky indus try. As Norman writes,' 'big private capital preferred to remain in trade, banking, and credit operation, particularly in the safe and lucrative field of government loans, while small capital had no inducement to leave the countryside, where trade, usury, and above all, high rent?averaging almost sixty percent of the ten ant's crop?prevented capital invested in agriculture from flow ing into industrial channels."43 As a result the Meiji state played the decisive role in the allocation of capital among the different spheres of production. It offered credit at low interest rates and subsidies to already exist ing concerns, and eventually established enterprises when private This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 2 7 initiative was not prepared to do so. The state financed these measures by borrowing from rich merchants and out of its in come, which?as mentioned above?stemmed to a great extent from taxes on land. Nearly all the modern enterprises founded before 1880 were government concerns. They did not, however, enter into competition with the private sector of the economy, but represented a support of this sector. This is mde clear in the Preamble of the law of 5 November 1880 handing state factories over to private hands: "The factories established to encourage industry are now well organized and business has become pros perous, so the government will abandon its ownership [of fac tories] which ought to be run by the people."44 Essentially three reasons for the establishment of these enter prises by the state may be mentioned.45 (1) Japan's balance of trade was in deficit throughout the Meiji period. This deficit was to be settled not so much by capitalist imports as out of Japan's gold and silver reserves. Measures for the production of substi tutes for imported goods had therefore to be found, if an even balance of trade was to be achieved and the outflow of precious metals stopped.46 A glance at the composition of imports makes clear that a large part of Japanese production was threatened with ruin by these imports47: Chief Imported Article as % of Total Imports 1868-72 Sugar (products) Cotton (yarn) Cotton (cloth) Wool cloth Metal goods 9.37 19.29 16.39 15.97 2.30 1873-77 10.67 16.73 18.93 16.74 4.63 1878-82 11.30 23.67 15.71 14.40 6.01 Cheaper sugar ruined domestic sugar production, cheaper cotton yarn and cloth destroyed Japanese production of these goods, which had notably progressed under the putting-out system.48 This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 28 INTERNATIONAL JOURNAL OF SOCIOLOGY The peasants and tenant farmers, whose parcels of land were too small to secure their existence, found additional work in this system; the ruin of domestic handicraft by imports thus meant also the emiseration of the peasantry. (3) Work had to be created for the samurai to do; I have already pointed out that by no means all the samurai could assure their existence by work in local administration, the new army, or the government. In the first period after the Meiji Restoration the government was menaced by a series of rebellions and uprisings, in which the impoverished samurai played a leading role. The Meiji regime was thus forced, in order to preserve its power, to accompany the transformation of the former feudal dues of the samuari into government bonds, which for most of them did not suffice for their living expenses, with measures providing the samurai with new means of livelihood. The few samurai who had sufficient capital at their disposal were supported by the regime in their attempts to become capitalists. Others, with sufficient knowl edge, abilities, and connections, found posts in the administrative apparatus, the army, and the state enterprises. The mass of them, with none of these advantages,49 were the first wage laborers in the new industrial plants. The regime sought to overcome the problems mentioned earli er by attempting to make the spheres of production particularly exposed to foreign competition more competitive. This involved subsidization, the importing of foreign specialists and machinery, and the setting up of state plants (by which at the same time work was created for poor peasants, artisans, and samurai). These plants in part played the role of model enterprises, whose task was the dissemination of foreign know-how. (Examples of this are the state works in silk and cotton manufacturing.) But they also, as in the case of the state sugar factories, performed the task of creating additional demand for domestic production (in this case, of raw sugar). But the leitmotif of the Meiji regime was the development of Japan's economic strength and with it its military power. In this also state concerns, largely devoted to these ends, had first place This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 29 in the policies of the regime (apart from the fact that these were also the most capital-intensive branches of industry). Thus the building of railways and of a telegraph system by the state were of great importance for the development of capitalist production in Japan, as by this means transport costs were lowered and the turnover of capital hastened. The Meiji government took over the mining industry, which had been founded in the Tokugawa period by the Shogun and some daimyo, and pushed forward their devel opment to the lastest technological level. Just as strongly pushed forward was the extension of armaments plants under govern mental control. Also of particular importance were the extension and construction of dockyards, which were first used as repair stations for foreign ships but then for shipbuilding. Finally, state concerns were also founded in new branches of industry, such as the strategically important chemical production, in cement pro duction, and in glass and brick production. A particularly important example of the extent of governmen tal subsidization is the state's contribution to the establishment of a private merchant fleet. At the start of the Meiji period all of Japan's foreign trade was in the hands of foreign trading compan ies. In the attempt to break this monopoly, the Meiji regime bought thirteen ships and loaned them to the Mitsubishi Shipping Co. Later this company was given government credits with which they were able to buy these ships on the best possible terms.50 After 1880 most of the state concerns were sold. Only strategi cally important plants remained under governmental control. This sale took place in the framework of the previously mentioned deflationary program of the Japanese regime. Different explana tions for this sale have been suggested,51 but it was at any rate the result of a changed strategy on the part of the government, ac cording to which only the particularly important enterprises were to remain under state control52 while the other branches of indus try would be left to the free play of laissez-faire. In any case it can be said that the enterprises sold had certainly operated at a loss in their start-up phase, but were extremely profitable for their new This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 30 INTERNATIONAL JOURNAL OF SOCIOLOGY owners, as the experimental stage had been traversed and as they were sold at extremely low prices53 and under particularly favor able conditions. They were sold to the financially powerful fam ilies that supported the regime, the zaibatsu,54 whose economic power was by this considerably strengthened. Before we briefly discuss the consequences of the particular conditions under which Japanese capitalism developed for the development of the industrial structure in Japan, it should be mentioned that the very early establishment of joint stock com panies?the first was incorporated in 1869?was very important for the overcoming of the problem of capital shortage. As a result of the government's policy?which Japan would in any case have been forced by world market competition to adopt, if it wished to take the capitalist road to join the imperialist nations?the course of industrial development presents a different appearance in Japan than, for example, in England. While in England the production of consumer goods was the first to be industrialized, and this only after industrial methods had pro gressed to a certain degree, in Japan the heavy industry sector very rapidly became the most important, as a result of govern mental policy, which forced the growth of the arms industry and related sectors. Sectors that neither were closely connected to arms production nor competed with imported goods were rela tively neglected in their development. The result was a pro nounced industrial dualism?of spheres of production with a high degree of technical development and a marked concentration of capital, on the one hand, and spheres of production with lower productivity and a lesser degree of concentration, on the oth er55?that is still to be noted in Japan today. The particular conditions under which capitalism developed in Japan?a relative shortage of capital for accumulation, exacerbat ed by the relatively high capital requirements set by the need to compete with the highly developed technology of the West; very early introduction of joint-stock companies; the policy of the government, with its subsidies and assistance given to a few favored capitalist groups?led from the start to the predominance of finance capital. Norman gives the following data as indic ative56: This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 31 Authorized Capital of All Limited Companies Before the Japanese Chinese War End of 1877 End of 1883 End of 1893 Activity (1,000 yen) (1,000 yen) (1,000 yen) Agriculture ? 1,053 2,542 Trading 454 35,904 57,616 Manufacturing ? 14,725 68,259 Railways ? 12,080 57,945 Banking 24,981 75,375 11 Total 25,435 139,137 297,997 The predominance of bank capital in the Japanese economy was the basis of the power of the financial oligarchy, the zaibatsu. The power of the zaibatsu reached to all branches of the economy. In their hands were concentrated finance capital, and smaller enterprises in sectors that were not supported by government subsidies had to borrow from them (at extremely high rates of interest) on account of the general lack of capital, thus coming into dependence on them. The state, with which the zaibatsu worked closely, borrowed from them the capital for the founding of factories requiring a very high minimum capital, which were later?as we have seen?sold back under extremely favorable conditions to the same zaibatsu. In this way by the end of the Meiji period (1912) the zaibatsu dominated not only the banking sector but also the modern branches of industry. Moreover, it was the zaibatsu who took leading roles in government commissions (particularly in the two wars with China and Russia). Finally, most of the zaibatsu had great trading companies, which handled not only the merchandising of the products of their own firms, but also those of other enterprises. This was an additional basis of zaibatsu power in spheres of production in which they were not represented by plants of their own.57 Particularly characteristic of the zaibatsu, in comparison with the large combines and trusts of the other industrial countries of that time, was the extended field of their activities and influence. They were not only bank capital, but also industrial and merchant This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 32 INTERNATIONAL JOURNAL OF SOCIOLOGY capital. Their involvement in industry at any given time was not limited to one or two branches of production, but extended to many. They exercised power not only in their own firms, but also, through their banks and trading companies, in other spheres of production, in which they did not themselves produce. (It should of course be noted that the zaibatsu role as sketched here emerged clearly only after 1880.58) So far I have given a rough picture of the first phase of the development of capitalism in Japan. I have left out a whole series of phenomena?such as inflation, party-formation, transforma tions of the political system and the construction of the regime, development of large-scale landed property, etc.?as I have limit ed the discussion to the particular conditions under which this development took place and to the measures taken by the state in this process. Before I summarize the consequences with regard to the question with which I began, I must mention a few other factors that have been held to be decisive for the development of Japan's ability to compete on the world market, but which I have neglected in my account of the measures employed to this end by the Japanese state. That I am only describing these factors now reflects not a consideration that their relevance to Japan's devel opment is slight, but the orientation of this excursus. It should in addition be noted?and I hope this will also emerge clearly from the discussion?that Japan's development into an industrial state, precisely because of its particularities, can in no way serve as an example for the countries of the periphery today. The moment at which the development of capitalism in Japan was (as we can surely say) "driven forward" was, with respect to the state of the world market, an extremely advantageous one. Imperialist England was mainly interested in conquering new markets and raw materials?in the Far East, above all in China. In North America the Civil War was in progress. Germany and France were caught up in war with each other. These were factors very favorable to the Meiji regime's attempt to preserve a posi tion of relative autonomy for Japan. From the economic standpoint it was very much in Japan's favor that the middle of the nineteenth century saw the destruc This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 33 tion by disease of silkworm culture in Europe (especially in France and Italy) and with it raw silk production. As a result Japan was master of an export good?raw silk and related pro ducts?that from 1868 to 1882 made up 46.7% of its total ex ports,59 and which as a very important source of foreign currency made possible the importation of the machinery that was the first step toward achievement of international competitiveness. (The second step was the assimilation and domestic development of new technology.) At this time also Japan began to utilize kerosene, which as lamp fuel made possible night work in the factories, while in Europe night work was forbidden by factory regulation. Run day and night the machines were substantially better used and the turnover time of fixed constant capital was increased, which contributed to an increase in the rate of profit. Another very important factor that furthered the development of industrial capitalism in Japan, despite the superior world mar ket competition, was the low level of Japanese wages. Not only was the supply of labor very large and the standard of living of the peasants and tenant farmers very low, which together put pres sure on the wages of industrial workers,60 but the particular way in which the class of wage laborers was formed also played a great role. This mode of formation of the class of wage laborers was to a great extent conditioned by the particular form in which the system of tenancy on the land developed. On the basis of the limited task I have set for myself in this excursus on Japan I cannot go into the development of agricul ture, of extreme importance for the development of Japan's soci ety.61 I restrict myself here to noting that the worsening of rural living conditions, which I have already briefly mentioned above, had the consequence that the younger members of peasant fam ilies hired themselves out for a limited period of time in indus try?at that time mostly the textile industry?as wage laborers, in the hope of contributing with their wages to the maintenance of their families.62 This was particularly the case of women from peasant families, who worked for a few years in industry, at extremely low wages and under terrible living conditions, and This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 34 INTERNATIONAL JOURNAL OF SOCIOLOGY then returned to the country to their families or to marry. According to Norman the average percentage share of women among all industrial workers in five-year periods was in 1882, 69%; 1895-99, 59%; 1900-04, 62%; 1905-09, 61%; 1910-14, 71%. Since 1924 their share has amounted to something over 50%. The percentage of women among textile workers in 1909 was 80.1 %. Also striking is the age structure of industrial work ers: in 1909, 45.1 % were over 20 years old; 30.6% were 16-20; 13.9% were 14-16; 8.2% were 12-14; and 2.2% were under 12.63 Quite apart from the social, political, and ideological conse quences of this system, it made possible a further lowering of wages. If we take as our starting point Marx's conception of the wage as the value of labor power, determined by the cost of reproduction of the commodity labor power, we see that in this system of only temporary wage labor the entire reproduction cost did not have to be covered by the wage. Also contributing to this were the facts that the bearing and rearing of children and caring for old people were "financed" by the rural economy. It was to the countryside that these wage workers returned after only a few (around five) years' activity in industry, during which they worked at such high intensity and under such bad conditions that they could hardly have survived a longer period. Thus the rural economy contributed to industrial development not only by its taxes paid to the state, which the latter then transferred to industry as subsidy, but also by the fact that it covered a portion of the costs of reproduction of the commodity labor power used in industry, to which thus corresponded lower wages. Low wages, however, mean high rates of surplus value, which increase industry's ability to accumulate. Low wages also mean low production costs, which in turn?in a situation of com petition with foreign producers?can at least in part compensate for the advantage of foreign capitals in productivity.64 It may seem strange that I have devoted such a long digression to the opening stage of the capitalist development of one country, in what is a book on the capitalist world market, and that I have in This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to SPRING 1984 35 it essentially concentrated on internal events, leaving the world market to the side. We have also not dealt with the circumstance that during the period discussed Japan not only "endured" its opening-up to the capitalist world market but even rapidly became an expansionist power?as is shown by its wars against China and Russia. In the first place I embarked on this excursus in order to show, by way of a practical example, to what extent the state can influ ence the conditions of accumulation of national capital. For this purpose I could have taken as my example any capitalist country in any phase of its development within the capitalist world mar ket. In this sense it is accidental that I chose Japan in the Meiji period. But this period seemed to me, just because Japan was at that time clearly inferior in its capitalist development to the indus trial nations of Europe and to the United States, very illustrative of some points made in the beginning of this chapter as well as in the book as a whole. At the time of Japan's entry into the capitalist world market Japanese capital was very much underdeveloped in comparison to the capitals with which it competed on the world market. To be sure these disadvantages were alleviated for Japan by the particu lar situation of the world market at the time?such as the interest taken by the imperialist countries in other regions of Asia and their being tied up in wars and civil war?but that these could be turned into favorable conditions for Japan with respect to the world market was also a result of the policies of the Meiji government. Its policy with respect to the import of foreign capital shows particularly clearly how conscious the Meiji regime was of the danger of dependence on other imperialist powers65 and how much it aimed at furthering the development of the national capital. Precisely because the Meiji regime could not make use of the possibilities for direct intervention into Japan's foreign trade?only at the turn of the century did Japan achieve customs autonomy?this example shows clearly to what extent internal factors, in the narrowest sense, can influence the development of This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to 36 INTERNATIONAL JOURNAL OF SOCIOLOGY a country's position in the capitalist world market. This digression does not claim to offer a new or a particularly comprehensive interpretation of the Meiji period. It is intended solely as an illustration of the relationship between the organiza tion of capitals into national states and the development of the capitalist world system. Annelotte Piper67 emphasizes one aspect underexposed in my account, which was concerned above all with the significance of Japan's forced development by the na tional government into an industrial state: 4 4In Japan,'' she notes, 4'the typical small craft workshops of an agrarian state could continue to exist even into the epoch of industrialization. They even contributed importantly to that industrialization."68 The continued existence of small workshops was significant, first, because through their gradual application 4 4of relatively simple technological improvements that did not depart radically from tradition and required no great investments,"69 they contributed to the adaptation of foreign technology to Japanese conditions, and, second, because by including this labor force, which existed as potential surplus population, in commodity production, they led to a wider extension of the internal market.70 This excursus suggests only that already during the Meiji peri od the basis was laid for the development of branches of industry that would have had no chance to develop on the sole basis of Ja pan's position in the world market. Certainly my account is not a sufficient explanation for the way in which Japan's economy has developed up to the present day.71 From the statistics, however, it can be seen that even the development of the structure of Japan's foreign trade can by no means be explained solely in terms of foreign trade or unequal exchange theories.72 In chapter 3 I will seek to show, by way of discussion of a few theories of foreign trade, that these theories?insofar as they deal with it at all?cannot explain the development of the system of relations constituting the international economy, but at best only its state at any particular time. This content downloaded from on Sun, 17 Feb 2019 03:01:59 UTC All use subject to

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How the system of capitalist contribute to inequality
In this article we can see how the geopolitical relationship in the world is oriented to
capital and how it influences the development of nations and their respective
economies. Siegel introduces us to the deep state relationship that exists with capital
and how social relations emerge from this. They are surprisingly influenced by all this
dynamics, since economic relations cannot be subordinated solely to the economy but
also to sociology. Although Siegel's analysis is confusing at the moment of ca...

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