Capitalist Development Got t Diener 1

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7 The Problem of Capitalist Development:

Theoretical Considerations in View of the

Industrial Countries and the New Industrial

Countries

John Milios

Capitalist development that is its economic and social characteristics! as well as the economic and

social presuppositions for it has alwa"s been a sub#ect of special interest in Mar$ist theor"! The issue of

contemporar" capitalist development however involves new conditions from those of the past that

derive from toda"%s socio&economic political and theoretical con#uncture namel" the world crisis of

capitalism' the subse(uent restructurin) processes ta*in) place in almost all capitalist countries' andabove all the rapid processes of capitalist development in some countries which were until recentl"

considered as %peripheral% or %semi&peripheral% +the %new industri'il countries% & NICs,! These new

conditions compel us to re&e$amine thr theoretical premises of Mar$ism re)ardin) capitalist

development anil underdevelopment&

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%5061D C3PIT31I/M%

4or at least five decades the Mar$ist theor" of capitalist development has been

dominated b" the conception of %world capitalism! 3ccordin) to this conception thecapitalist mode of production that is the fundamental social structures and relations

which constitute thes %specific difference% of a capitalist social order is bein)

reproduced in its ade(uate forms onl" on the world level! This also means that the

The Problem of Capitalist Development 155

Mar$ist theoretical s"stem the capitalist %laws of motion% which were discovered and

formulated b" Mar$ shall refer to the world level to the level of %world capitalism%!

3ccordin) to this conception of %world capitalism% development and

underdevelopment constitute simpl" the two opposite poles of one and the same process: capitalist development of some countries &the imperialist countries&

presupposes or even causes the underdevelopment of the ma#orit" of the world

countries the dependent countries which are sub#ected to imperialist e$ploitation!

This simple and easil" conceivable conception of %world capitalism% which on the

one pole creates %development% and on the other pole %underdevelopment% can however

hardl" be useful for a scientific investi)ation of social processes that are ta*in) place

toda" with re)ard to: the decline of ritain%s economic and political power after 5orld

5ar II the emer)ence of the New Industrial Countries +NICs, the modifications in the

power relations between 8/ .urope and Japan or accordin)l" modifications amon)

the .uropean countries themselves!

4urthermore the concept of %world capitalism% i)nores basic aspects of Mar$ism%s

Criti(ue of Political .conom"! Mar$ism understands capitalism as a s"stem of class

power which manifests itself not onl" economicall" but also politicall" +throu)h the


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capitalist state, and culturall"&ideolo)icall"! It claims therefore that capitalist power

has been constituted in its ade(uate forms onl" on the level of the separate capitalist

societ"& 3 world econom" is the result of the articulation of the different +capitalist,

societies which historicall" ta*es the form of the %imperialist chain% +1enin,! The

fundamental postulate of Mar$ism maintains that economic and social evolution anddevelopment mainl" reflects the results of class&stru))le between capital +capitalist

power, and the wor*in) class! In contrast dependenc" theories reduce class&stru))le

and class&power in the underdeveloped countries to mere resuhs of the %decisions% of

the rulin) classes abroad in the developed countries! Therefore the assumption that

class&stru))le is ta*in) place on a world scale i)nores the capitalist state that is the

%political condensation% of social power in each countr" +and the perspective of its

%overthrow% & 1enin, and converts Mar$ism into the evolutionar" do)ma of

%economism% !

3t present the theor" of world capitalism is responsible for a number of

misconceptions re)ardin) current restructurin) efforts of capital! 0f these perhaps the

most misleadin) is the notion of a %new international division of labour%!

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The concept of %world capitalism% has found its completest form in the %neo&inar$ist%

theor" of 5allerstein +97, about the %world capitalist s"stem%! 3ccordin) to this the

%world econom"% has been since its formation +that is since the 9;th centur", capitalist

in nature polarised in centre and peripher" +with the simultaneous e$istence of a

semiperipheral re)ion, and dominated b" monopolistic structures! Capitalism this

theor" claims can onl" e$ist as a world s"stem not as a national one +5allerstein

97,!

5allerstein%s concept was thus applied in the earl" 9


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can be performed b" a labour force of low s*ill and specialisation! 0n the other hand

the development of transport and communication ma*es possible the scatterin) of

these sub&processes in a lar)e number of countries&

This concept of the %new international division of labour% is however problematic

not onl" because of its theoretical premises but also because of its empiricalinade(uac"! The whole construction simpl" e$a))erates the improvement since 97=

of the competitive position in the world mar*et of some Third 5orld countries! In

realit" empirical studies su))est that we cannot tal* about the transposition of an"

branch of capitalist production from the industrial countries to the Third 5orld& 3s

usch su))ests:

4rom 97? to 9

countries were above avera)e their shares in the world e$ports were diminished

from


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under such transformations can the low wa)es of the NICs be a viable factor for

location decisions! ut what is most important is that these chan)es in the peripher"

are not at all a %new% phenomenon as the theor" of the world s"stem maintains! Much

more substantial transformations on the level of the world mar*et too* place for

e$ample durin) the last decades of the 9th centur" up to 5orld 5ar I and durin) theinter&war period! Durin) this period a number of %a)ricultural% countries entered the

realm of developed capitalist countries throu)h radical chan)es in their social and

productive structures +loa*imo)lou 9cent in 9


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national capital on the level of its own national state e$pressed for e$ample in the

e$istence of a specific national currenc" for each countr" +absence of a uni(ue

international currenc" for all countries, or the persistence of protectionist economic

policies which restrict international trade does not allow the formation of international

production prices and thus the formation of an international "eneral rate of profit onthe level of the world mar*et!

International capitalist competition in the world mar*et resembles the competition of

une(uall" developed individual capitals within one and the same branch of a national

econom" +international mar*et prices differentiated rates of profit of each national

capital and so on,! The more developed industrial countries, which due to the hi)her

or)anic composition of capital )enerall" possess a lower rate of profit than the lesser

developed industrial countries, realise e$tra&profits throu)h e$port trade and

therefore increase their avera)e national rate of profit! The international differences

between the rates of profit decrease because the wea*er industrial countries +or

national industrial branches, lose in international trade! -owever international

competition is characterised b" the followin) modification: the e$tra&surplus&value

and the e$tra&profit of the more developed nation capitalist countries in the world

mar*et is )raduall" bein) annulled! This effect is caused +in the t"picall" ideal case:

absence of protectionist state measures, mainl" b" the undervaluation of the national

currenc" price of the less developed industrial countries +which realise deficits their

balance of pa"ments, and the overvaluation of the currenc" pri of the more developed

countries! The e(ualisation processes of tl national profit&rates are cancelled at the

same time as the mo productive and the less productive countries both realise avera)e

profits in the world mar*et! The capital of the more developed countries however canre)ain the lost e$tra&profits in the world mar*et onl" I direct investment in the less

developed +but possessin) a hi)her rate i profit, industrial countr"! In this wa" capital

flows overcome the protective mechanism of the currenc" e(uivalences b" partl"

%chan)il nationalit"% as capital invested abroad becomes incorporated into tl

accumulation process of the total social capital of the capital&importin) countr"! These

capital e$ports which re)ionall" ta*e place mainl" one direction create a)ain a

tendenc" towards e(ualisation of tl national rates of profit for the different industrial

countries!

It is therefore the case that world mar*et competition between tl commodit" capitalsof industrialised countries rather than the %oven interest% of %world capitalism% shall be

re)arded as the basis for dire investment +that is the lo)ic of capital flows, and the

internationalis tion of capital!

Direct capital investment in underdeveloped countries cannc thou)h be investi)ated

on the basis of modification theor" since til theor" onl" refers to the relations between

internationall" competitr industrial capitalist countries! Capital imports in

economicall" retards countries are mainl" either related to the profitable +social ai

technical, conditions of raw&materials e$traction +or minin), or thF aim to overcome

the %import substitutive% protectionist policies ofti local )overnments +the so&called

%tariff&investment%, +/chweers 9< pp! 9@/&


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406M3TI0N

1et us now return to the theoretical premises for a Mar$ist theor" of capitalist

development!

The fundamental concept of Mar$ian theor" the concept of #ode of Production and

specificall" of a Capitalist #ode of Production +CMP, does not refer to an e$istin)ob#ect nor does it concern the concept of an empiricall" conceivable realit"! It is a

theoretical cate)or" which refers to the specific difference of a specific +capitalist,

social power and structure of economic e$ploitation! It refers to the %*ernel% of this t"pe

of social relation the %*ernel% which differentiates this t"pe of social relation from an"

other!

The CMP does not therefore refer onl" to the %basic% social level &the capitalist

econom"! It also refers to the political and ideolo)ical levels +instances,! Capitalist

domination that is the relations of power of capital over the wor*in) class is therefore

also consolidated as a typically capitalist form in political relations +that is the

capitalist state, with its %relative autonom"% from the econom" as well as from the

different bour)eois factions, and in ideolo)ical relations +the domination of capitalist

ideolo"ies which %reflect% that is %realise% social class relations as individual relations

as relations between individuals,!

The historicall" formed t"picall" capitalist coherence between the anta)onistic

social classes in the ideolo)ical&cultural and the economic instances ta*es the form of

the %Nation%! The state appears in the framewor* of capitalist social relations as the

political conse(uence or the political %completion% of the nation and it ta*es the form

of a national&state!

It now becomes obvious that if Mar$ism relies on the concept of the CMP as itsmain theoretical cate)or" that is onl" because on the basis of this cate)or" one can

underta*e a scientific investi)ation of e$istin) ensembles of class relations capitalist

societies capitalist social formations alon) with their international articulations!

The main theoretical inefficienc" of the theories of %world capitalism% especiall" in

their %neo&Mar$ist% versions is that the" fail to consider the %political condensation% of

class&power relations materialised in the form of the national states! That is wh" these

theories tend to define capitalism as a mere economic %world structure%! These

economistic theories i)nore therefore not onl" the cate)or" of political power but

also of social&capital as the manifestation of the overall interest of class power in a

capitalist societ" +social formation,!

3 similar direction follows another conception which failin) to understand the

processes of capital internationalisation spea*s about %a territorial non&coincidence

between capital and its domestic state% +Murra" 979, foreseein) thus the overcomin)

of national states! The national state is a)ain conceived from an instrumentalist point

of view as an ensemble of %state functions% not as the specific form of the

manifestation of capitalist political domination that is not as a %political condensation%

of capitalist class power!

ut the economislic i)norance of the political instance of class power is as old as

Mar$ism itself!% 3t this point we would li*e to remind the reader of two positions

related to the Mar$ist cate)ories of the capitalist mode of production and the capitalist

social formation which will be of crucial interest for the theoretical understandin) of

capitalist development and underdevelopment:


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The cate"ory of $capitalist% mode of production $C% #P does not refer to the concrete

capitalist relations of power but to their &ernel&, to the basic aspects of their specific

structure. The conse(uence of the above position is that one should never consider

+capitalist, social formations as the result of a mere %articulation of modes of

production%!1et us consider here a *nown e$ample! 3s is *nown from Mar$ist theor" about the

modes of production the CMP +as well as ever" other MP, refers to onl" two classes

the bour)eoisie and the proletariat! 5h" then! in the e$istin) capitalist social

formations do there appear more than two social classesG 3ccordin) to the conception

of the articulation of modes of production this is onl" due to the e$istence in the

social formations of more than one MP! ut from which MP does there arise then the

so called %new&pett"&bour)eoisie% to which belon) for e$ample in the capitalist

enterprise the technicians and the en)ineersG The articulation concept fails because of

this contradiction at this point! 1et us follow here the ar)uments of PoulantHas:

If we confine ourselves to modes of production alone e$aminin) them in a pure and

abstract fashion we find that each of them involves two classes!!! ut a concrete

societ" +a social formation, involves more than two classes, in so far as it is

composed of various modes and forms of production. !!!Thus in contemporar"

4rance for e$ample the two fundamental classes are the bour)eoisie and the

proletariat! ut we also find there the traditional pett" bour)eoisie !!! the %new% petty

bour"eoisie composed of non&productive wa)e earners dependent on the monopoly

form of capital PoulantHas 97@ p! !

The contradictions of the above passa)e concernin) the %new% pett" bour)eoisie are

obvious! 4irstl" the so&called %monopol" form of capital% can in no wa" be counted as

belon)in) to the %various that is other than the CMP modes of production%! /econdl"

the technicians and en)ineers that is production a)ents that belon) neither to the

capitalist&owners of the means of production & nor to the proletariat do not first appear

in the so&called %monopolistic stadium% of capitalism& The" appeared at the same time

as bi) industr"!

The onl" outlet from the above obvious contradictions is to consider the CMP not as

capitalist social relations per se, but as their %*ernel%! /ocial classes are the result of

both the e$panded reproduction of the positions +and practices, that correspond to thecapitalist division of labour as well as the e$panded reproduction of the a)ents who

will occup" these positions! The CMP refers onl" to the %*ernel% of this process to its

main aspect: the e$panded reproduction of the positions +and practices, in the

capitalist division of labour! 4rom this point of view there reall" e$ist onl" two t"pes

of social positions +and practices,' those of capital and those of the wor*in) class! In

the e$istin) social formations the bour)eoisie has thou)h assi)ned some functions

and practices which refer to the or)anisation of capitalist class power to a)ents who

don%t belon) to the class of the owners of the means of production! +/uch practices are

those ensurin) the e$tortion of surplus value as for e$ample supervised control of the production process or those ensurin) the coherence !of capitalist!societ" as for

e$ample the members of the state repression apparatus,! The result of this

contradictor" aspect of capitalist relations of power in the e$istin) capitalist social


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formations +schematicall": %practices of capital% that are handed over to a)ents

belon)in) to the e$ploited classes, is the emer)ence of the class of the %new% pett"

bour)eoisie!

$Capitalist% social formations do not simply &condense& social relations referrin" to

different #Ps $under the dominance of the C#P%. The" also %condense% a histor"! This

histor" is that of the modification of the mutual stren)ths in the class stru))le of the

anta)onistic classes within one and the same t"pe of class power! In other words

condensation ta*es place throu)h the histor" of the forms of capital power and of

domination! 4or e$ample the fact that we deal with a capitalist social formation does

not indicate that the wor*in) da" will be 9@ 9= or 7 hours that the welfare state

services will be more or less e$tended that the wor*ers% trade unions will be stron) or

wea* etc! 5e refer to the variet" of the &e'ternal& determinations +e$ternal in re)ard to

the structural&causal relations that constitute the CMP, which act throu)h the

structural connections of the social relations +3lthusser 97


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social formations as well as social formations which develop capitalisticall" with

different rates as a result of the overall class relation of forces which is consolidated

mainl" in their interior!

The confusion created b" %neo&mar$ist% theoreticians with re)ard to the Mar$ist

cate)ories of the CMP and the capitalist social formation +as well as some ambi)uousformulations of Mar$ himself, has allowed anal"sts to maintain that Mar$ had

incorrectl" %foreseen% that all countries will follow the same sta)es of capitalist

development! In realit" Mar$ described on the one hand the immanent tendenc"

towards the development and revolutionisin) of the productive forces in the case of

capitalist productive relations dominatin) the class stru))le' on the other hand he

described the )eneral conditions which ma*e this domination of the CMP possible, but

not %historicall" inevitable% in a social formation! Mar$ wrote in 9


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production so that a process of rapid capitalist development is intiated then the inter&

national role of the )iven countr" can no lon)er remain that of an %a)rarian appenda)e%

or of a %raw materials supplier%! This is toda" e$actl" the case of the new industrial

countries +MenHel 9


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the result of the followin) factors: +9, the or)anic composition of capital is lower in

the less developed countries'

conse(uentl" the avera)e national rate of profit is hi)her in these countries +a fact

which is mentioned as verified b" the main direction of the international direct capital

movement: from the more developed to the less developed industrial countries,' +@, inthe less developed industrial countries the social sphere of simple commodit"

production is more e$tended! 3t the same time there is thou)h a hi)her rate of

dissolution of this production form! The result is a lar)er %reserve arm"% the e$istence

of which tends to lower the price of the labour force' +?, in the more developed

industrial countries there is a hi)her percenta)e of wa)e earners in the economicall"

active population and therefore a hi)her wa)e (uota which results in a pressure on the

)eneral rate of profit!

It is obvious that the above mentioned three factors do not e$haust the variet" of the

%e$ternal% +to the CMP, factors that determine the manner of capitalist development!

6ealit" is alwa"s much more complicated and that is wh" )eneral theoretical remar*s

can never substitute for but onl" open the wa" to the %concrete investi)ation of the

concrete situation%!B

3N I118/T63TIV. .K3MP1.: C3PIT31I/T D.V.10PM.NT IN 26..C.'

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The case of capitalist development in 2reece since the formation of the first

independent 2ree* state in 9


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mention here that the 2ree* per capita 2DP was in 9;9 ?=!? per cent of the avera)e

per capita 2DP of the nine ..C countries and BB!7 per cent of the avera)e per capita

2DP of the ..C in 97< in constant prices! 3ccordin)l" the international economic

relations of the countr" were restructured with si)nificant domination of industrial

products in e$ports si)nificant capital imports and the secondar" phenomena of

capital e$ports!This whole picture of 2ree* capitalist development allows at first si)ht a %world

capitalism% e$planation: 2reece was positioned in the peripher" of the %world capitalist

s"stem% and that is wh" it developed slowl" durin) the whole 9th centur"! This

approach posits that a %new international division of labour% after 5orld 5ar I enabled

a t"pe of %dependent% capitalist development!

This e$planation is thou)h superficial and it is contradicted not onl" b" the social

and political features of the 2ree* state mentioned before but also b" two basic

aspects of the 2ree* social formation which do not allow its classification as a so&

called %peripheral% societ"! 4irstl" 2reece possessed on the world scale a ver"

d"namic capitalist faction namel" its shipowner capital! The 2ree* merchant fleet

was durin) the 9th centur" the seventh )reatest in the world! /econdl" 2reece practised since the formation of the first 2ree* state an e$pansionist polic" in the

al*an 3sia Minor and North 3frican re)ions aimed at the formation of a 2ree*

empire from the river Danube to 3le$andria and from the Ionian Islands to the eastern

mountains of 3sia Minor! This imperialist strate)" was confronted since 9emal 3tatur*!

Thus 2reece did not fulfil its %2reat National Idea% +as the imperialist strate)" was

named,' it succeeded thou)h until 9@@ in triplin) its national territor"!

The anne$ation of the new territories caused the emer)ence of a %land (uestion% in

2reece: the a)rarian econom" of these re)ions was characterised b" the domination of

lar)e land ownership of a feudal *ind!

The economic and social basis of 9th centur" 2ree* e$pansionistic imperialism was

the dominant position of 2ree* capitalists and respectivel" 2ree* minorit"

communities in all the re)ions involved! 4or e$ample 2ree* capitalists controlled A=

per cent of the industrial production of the 0ttoman .mpire 2ree* merchants

controlled ;=&


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2ree* e$pansionism and to the respective scatterin) of 2ree* capital and the labour

force outside 2reece! In this wa" it opened the era of %national homo)enisation%

social reform +for e$ample a)rarian reform in the newl" anne$ed territories, and

therefore capitalist development!

More precisel" as more than one million refu)ees came in 9@@ from Tur*e" to

2reece a new social and political con#ucture and relation of forces was created in the

countr" which enabled capitalist development! The whole process functioned b" firstl"

acceleratin) the land reform! Then in a short time private propert" relations were

established for the overwhelmin) ma#orit" of the farmers a situation which resulted in

a rapid increase in the productivit" of a)riculture and in a rapid decrease in the price

of labour force reproduction! The inner mar*et was enlar)ed and supplied industrial

capitalism with a cheap and relativel" (ualified labour force! This chan)e brou)ht into

2reece the mone" capital of the 2ree* 3sia Minor capitalists and lastl" it ensured

2ree* population ma#orit" in the anne$ed re)ions )*+(+ of Macedonia and Thrace!The hi)h developin) rates of 2ree* capitalism in the post&5ar period are

furthermore connected with the defeat of the 2ree* left and labour movement

immediatel" after the 5ar and the international political militar" con#ucture of

the %Cold 5ar% which enabled 2ree* capitalism to improve its strate)ic and

economic position b" activel" participatin) in the western %roll&bac*% strate)ic

plans!

3 C0NC18DIN2 6.M36>

Capitalist development is neither a result ori)inatin) from the interest of the

%world capitalist division of labour% nor is it the %destin"% of all countries! It is the

inevitable outcome of capitalist social power and domination! The enforcement

and e$panded reproduction of the latter in a social formation is decided b" the

class stru))le! It is in other words a contin)ent outcome that varies accordin)

to the /pecific historical circumstances of each social formation!

N0T./

9! 1enin for e$ample criticised in Jul" 99; the economism of the %world&capitalism% conception:%The" don%t want to thin* aboul either the frontiers of the state or the state in )eneral! It is a form of

imperialist economism similar to the old economism of the period 9


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hi)her than avera)e development rates in comparison to the three other countries!

-owever the development rates for Ital" leave behind those of aEEthe other three countries

onl" in the period 9;9&7= The acute class conflicts between capita, and ihe wor*in)

class as well as the development )ap between northern and southern Ital" were the main

factors that impeded capitalist development in llal"! In contrast! 2reat ritain not onl"

attained the lowest rates of capitalist development in comparison to the other countries

but in the 9;=s it also lost its previous economic si)nificance in .urope to the benefit of

both 2erman" and 4rance! This relative decline of ritish capitalism is however not a

mere result of its %maturit"% but is connected both with the social relation offerees in

ritain as well as to the international role which ritain unsuccessfull" tried to pla"

within the framewor* of the imperialist strate)" of the 5est +that is persistence in a

classical colonialist polic"' ver" hi)h militar" e$penses' persistence in the hi)h price of

sterlin) so that it can *eep up its international role and so forth!,

6.4.6.NC./

1! 3lthusser %Introduction in 2! Dumenil e concept de lo-cynomfque

dans le Capital +Paris: Maspero 97! usch %8n)leicher Tausch&Our Dis*ussion fiber Internationale Durchschnittsprofitrate 8n)leichen Tausch und>omparative >osten&theorie anhand der Thesen von 3! .mmanuel% P/0!, onHerne! Ow 3nal"se der 5ellmar*tbewe&

"un" des 0apituls +4ran*furt: /uhr*amp 97B,! ! >! usch %Prote*tionistische TendenHen

im 5elthandel und die Politi* der

2ewer*schaften% 8-f #9teilun"en BE


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>! Ver)opoulos The !"rarian Problem in :reece +in 2ree*, +3thens: .$andas 97A,!

I! 5allerstein %3ufstie) und >unfti)er Nieder)an) des >apitalistischen 5elts"stems% in D!

/en)haas +ed!, 0apitalistische 8eltoonomie +4ran*furt: /uhr*amp 97,!

Capitalist Development Got t Diener 1

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