February 16, 2008

Prices and Appropriation

Filed under: Economics — duncan @ 9:06 pm

The exploitation that structures the global economy can be read in the prices of similar commodities worldwide. Commodity X, worth ten pounds in developed country A, is worth ten pence in developing country B. This is a measure, in large part, of A’s exploitation of B.

Let’s say you want to appropriate the resources of a nation, a people, a continent, a hemisphere – and let’s say you want to do it through the medium of voluntary free exchange. In the long run, the value of a country’s exports must equal the value of its imports. How, then, can A appropriate B’s resources, while exchanging them for resources of equal value?

Simple: A’s commodities must be worth more than B’s. The same commodity, X, must be worth more when moving from A to B than it is when moving from B to A. In this way, A can appropriate B’s resources – without appropriating any ‘value’.

The differences in prices worldwide aren’t a result of relative wealth; they are a result of the power relations that create this relative wealth. The refusal to consider the effects of power on the operations of the free market is one of the greatest scandals of economics.

[NB: I know, things are so much more complex than this. Don’t even say it…]

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