Re: [OPE-L] the "unequal exchange" controversy

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Wed Dec 28 2005 - 13:11:32 EST

----- Original Message -----
From: "Jurriaan Bendien" <>
Sent: Wednesday, December 28, 2005 12:30 PM
Subject: Re: [OPE-L] the "unequal exchange" controversy

 >> Hi Jurriaan,
>> Putting aside for the time being some theoretical issues,
>> how would one go about developing reliable empirical
>> estimates of unequal exchange on world markets?

I wrote a quick wikipedia article on it a while ago, but it's still a trifle
vague and I need to work on it a bit more - I really prefer my articles to
be crisp, succinct and precisely to the point. But anyway, Raul Prebisch
was mainly concerned with the economic exchange of industrial goods and
agricultural goods, macroeconomically, i.e. that you had to produce and
sell  more and more agrarian product to obtain the same amount of industrial
product, as shown by the terms of trade. Mutatis mutandis the same thing
could be applied to a range of other products.

In Marx's case, the unequal exchange is evaluated objectively also in terms
of quantities of labour-time, i.e. more labour-time exchanging for less
labour-time. All markets involve unequal exchange to some extent insofar as
some have a stronger and others a weaker market position etc., allowing
people to offload costs and reap extra benefits etc. but in general the
argument in favour of markets is that markets permit one to "trade up", and
thus "get even" over time.

So long as people really are able to "get even" through markets, they don't
object too much, but when that is not the case, the issue of unequal
exchange is raised, i.e. people feel they should get more back for what they
give, and they resent the exchange relation. Marxists typically focused on
"exploitation at the point of production" but of course Marx himself never
believed that was the end of the story - exploitation can occur in all sorts
of ways. In my experience, working  people often have a very keen sense of
unequal exchange, the focus is on getting even, or staying even. But in the
ideology of bourgeois competition this is computed as "winners and losers"
with the implication that some always have to win, others to lose, as a
natural fact. When this becomes visibly absurd, they start to talk about
"win-win" situations, and so on.

You might even say - still in the Xmas spirit - that for love (or good
intentions) to flourish, there has to be some kind of harmony in the
processes and relations of giving and taking, getting and receiving,
inclusion and exclusion. If markets function well, that pumps up love and
good feeling, if they work badly, there are jeremiads and protests about
the loss or lack of love - you can easily trace this dialectic for example
in the history of pop music. When I was ten years old, John Lennon sang
"love is all you need" but by 1977 Bob Geldof was singing "Lookin' after
number 1"  and so on. The mood changes over time in accordance with

The complexity of unequal exchange is really that it can be looked at from
many different points of view, shaped by the interests of social classes
and nations. We can measure objectively what people are tangibly supplying
and  getting back for it, using a variety of criteria, but how they view
that themselves, is another story. We can say that objectively an exchange
is unequal using some yardstick, but whether that is good or bad, is another
story. As I've said often, markets supply no intrinsic morality other than
the obligation to settle transactions ("market freedom") - hence the need
for legal regulation and enforcement.


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