1. This neglects the “problem of transformation” (of labor values into production costs). This is acceptable in the admittedly unrealistic hypothesis of a system of production where in any department (branch) the organic composition of capital is identical. The implications of this simplification are discussed in Elsenhans, Hartmut, “Egalitarisme social et critique des modes de production dans la péiriphérie…,” in European Association of Development and Training Institutes, Discussion entre MM. les professeurs Emmanuel et Elsenhans (Paris: IEDES, 1981), p. 14.Google Scholar

2. This common simplification depends on the assumption that workers consume their whole income while capitalists invest all their profits.

3. This has an important consequence: in the long term, capitalist growth is not possible if there is only capital deepening. So argues Lenin, (Werke [Berlin: Dietz, 1971–], 3:42)Google Scholar, who hypothesizes that effective demand is created by a rising organic composition of capital. The argument is repeated in Palma, Gabriel, “Dependency, A Formal Theory of Underdevelopment or a Methodology for the Analysis of Concrete Situations of Underdevelopment,” World Development 6, 7–8 (07–08 1978), p. 904.CrossRefGoogle Scholar

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5. Cf. Leon, Paolo, Structural Change and Growth: A Set of Hypotheses (Baltimore: Johns Hopkins Press, 1967), p. 142.Google Scholar

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7. The classic statement is Strassmann, W. Paul, “Economic Growth and Income Distribution,” Quarterly Journal of Economics 70, 3 (08 1956), pp. 426–30.CrossRefGoogle Scholar

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10. Coffee, tea, sugar, and tobacco constituted the major share of Britain's imports from Asia, Latin America, Africa, and the West Indies. As a percentage of England and Wales's imports from these regions, the four products represent 76% in 1770; 61% in 1780; 68% in 1790; 71% in 1800; 68% in 1810; 94% in 1820. Calculated from Mitchell, B. R. and Deane, Phyllis, Abstracts of British Historical Statistics (Cambridge: Cambridge University Press, 1972).Google Scholar

11. In the mid 19th century Britain produced 60% of the world's tin, 50% of lead, 75% of copper: Musson, Albert E., The Growth of British Industry (London: Batsford, 1978), p. 102Google Scholar. For coal and oil, see Nef, John U., The Rise of the British Coal Industry (London: Cass, 1966), 1:188–243Google Scholar, and Regal, Rudolph August, Energieguellen der Welt (Hamburg: Hanseatische Verlagsanstalt, 1937), pp. 16, 52Google Scholar. Between 1876/80 and 1913, 32% to 40% of all world raw material exports came from Asia, Latin America, Africa, and Oceania; but only 16.3% of African raw material exports (11.9% for Asia, 13.2% for Latin America) were minerals. Agricultural raw materials dominated. Calculated from Yates, Paul Lamartine, Forty Years of Foreign Trade: A Statistical Handbook… (London: Allen & Unwin, 1959), pp. 227–40.Google Scholar

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13. Marx, Karl, Capital, chap. 24 (MEW 23:741ff).Google Scholar

14. I have demonstrated this point in Elsenhans, , “Englisches Poor Law und egalitäre Agrarreform in der Dritten Welt,” Verfassung und Recht in Übersee 13, 4 (10–12 1980), pp. 286–92.Google Scholar

15. Elaborated in my Le rôle des multinationales dans une stratégie de besoins de base, quelques notes (Budapest: IEDES, 1981), pp. 5–9.Google Scholar

16. For example, Amin, Samir, Le développement inégal (Paris: Minuit, 1973), pp. 24–27.Google Scholar

17. Habbakuk, H. J., “English Landownership, 1680–1740,” Economic History Review 10, 1 (11 1939), pp. 2–5Google Scholar, is the earliest statement of the argument.

18. Bowden, Peter, The Wool Trade in Tudor and Stuart England (London: Macmillan, 1962), p. 5CrossRefGoogle Scholar; Mené, MichelLe, L'économie médiévale (Paris: PUF, 1977), p. 11Google Scholar. Eighty percent of sheep-raising in Britain across the period was done by small peasants.

19. Tawney, Richard, The Agrarian Problem in the Sixteenth Century (London: Longmans, Green, 1912), pp. 289, 343, 348, 366Google Scholar. Mingay, Gordon E., English Landed Society in the Eighteenth Century (London: Routledge & Kegan Paul, 1963), p. 185Google Scholar, shows from the poor rates that poverty was not direst in the 18th century's enclosure regions.

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24. Wallerstein, Immanuel, The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (New York: Academic Press, 1974), p. 80.Google Scholar

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Note the passage in Damodar, Dharmanand Kosambi, An Introduction to the Study of Indian History (Bombay: Popular Book Depot, 1956)Google Scholar: “The failure of indigenous feudalism ‘from above' [in 14th century India] to develop new techniques is a basic contrast with medieval European feudalism” (p. 328).

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27. “Although after 1381 the former power structure was formally reestablished, its moral basis was broken. Serfdom rapidly disappeared totally. The attempt to raise a poll tax was not even tried. Government was changed in the 15th century. There followed a time of welfare, never seen before, for the English peasantry.” Franz, Günter, Persönlichkeit und Geschichte (Göttingen: Musterschmidt, 1977), p. 89.Google Scholar

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30. Brenner, , “Agrarian Class Structure,” pp. 67–69.Google Scholar

31. The most interesting discussion of the problem is Schöffer, I., “The Second Serfdom in Eastern Europe as a Problem of Historical Explanation,” Historical Studies 9, 3 (1959), pp. 46–61.Google Scholar

32. Moore, , Social Origins, pp 30–31Google Scholar; Lipson, Ephraim, The Economic History of England, vol. 2Google Scholar: The Age of Mercantilism (London: Black, 1931), p. 383Google Scholar, concludes that agricultural laborers were better off than small proprietors in the 18th century.

33. Gilboy, Elizabeth Waterman, “Demand as a Factor in the Industrial Revolution in England,” in Hartwell, R. M., ed., The Causes of the Industrial Revolution in England (London: Methuen, 1967), pp. 126–31Google Scholar; Hartwell, , “The Rising Standard of Living in England, 1800–1850,” Economic History Review 13, 3 (1961), p. 415CrossRefGoogle Scholar; Hartwell, , “The Standard of Living during the Industrial Revolution: A Discussion,” Economic History Review 16, 1 (1964), pp. 135–44CrossRefGoogle Scholar; Eversley, D. E. C., “The Home Market and Economic Growth in England, 1750–1780,” in Jones and Mingay, Land, Labour and Population, pp. 213–25.Google Scholar

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39. Cunningham, W., The Growth of English Industry and Commerce in Modern Times (London: Cass, 1968), p. 345Google Scholar. There is an interesting discussion of the idea of the gentleman in 17th century England in Wright, Lewis B., Middle-Class Culture in Elizabethan England (Ithaca: Cornell University Press, 1935), pp. 121–26, 19Google Scholar. See also van Klaveren, Jacob, “Fiskalismus-Merkantilismus-Korruption, Drei Aspekte der Finanz- und Wirtschaftpolitik des Ancien Régime,” Vierteljahresschrfi für Wirtschafts- und Sozialgeschichte 47, 3 (1960), p. 347.Google Scholar

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83. This, and the competitiveness of Indian textiles sold by the British East India Company on world markets, are well documented. See Ghosal, H. R., Economic Transition in the Bengal Presidency, 1793–1833 (Calcutta: K. L. Mukhopadhyay, 1966), pp. 3–8Google Scholar; Mukerjee, Radhakamal, The Economic History of India (Allahabad: Kitab Mahal, 1967), pp. 117, 121, 173Google Scholar; Jathar, Ghanesh Bhaskar and Beri, Shridhar Govind, Indian Economics: A Comprehensive and Critical Survey, 8th ed. (Madras: Oxford University Press, 1947), 1:168Google Scholar; Hossain, Hameeda, “The Alienation of Weavers: Impact of the Conflict between the Revenue and Commercial Interests of the East India Company,” Indian Economic and Social History Review 16, 3 (07–09 1979), pp. 327–29CrossRefGoogle Scholar; Chapman, S. D., The Cotton Industry in the Industrial Revolution (London: Macmillan, 1972), p. 16CrossRefGoogle Scholar; Thomas, P. J., Mercantilism and East India Trade (London: Cass, 1963), p. 39Google Scholar; Ellison, Thomas, The Cotton Trade of Great Britain … (London: E. Wilson, 1886), pp. 7–39Google Scholar. On how small were technological differences between the Indian and English textile industries, see Wadsworth, and Man, , Cotton Trade, p. 151Google Scholar; Baines, Edward, History of the Cotton Manufactures in Great Britain, 2d ed. (1835; rpt., London: Cass, 1966), p. 101Google Scholar; Alavi, Hamza, “India, Transition from Feudalism to Colonial Capitalism,” Journal of Contemporary Asia 10, 4 (1980), p. 384.CrossRefGoogle Scholar

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86. Many proclaim the characteristic feature in such tributary modes of production is unitary rural communities; but those communities were an artifact of British administrators in colonial India, because the community could be held responsible collectively for the individual tax liabilities of its members. Cf. Dumont, Louis, Religion, Politics and History in India (The Hague: Mouton, 1970), pp. 114–20Google Scholar; Krader, Lawrence, The Asiatic Mode of Production (Assen: Van Gorcum, 1975), p. 64.Google Scholar

87. On the general argument, see Rosdolsky, R., “The Distribution of the Agrarian Product in Feudalism,” Journal of Economic History 11, 3 (Summer 1951), pp. 264–65CrossRefGoogle Scholar. Cf. also Pillai, P. Panmanabha, Economic Conditions in India (London: Routledge, 1925)Google Scholar: “In summing up the economic characteristics of India in the 17th century, we notice that the predominant features were inadequate production and faulty distribution” (p. 11).

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91. Social systems were authoritarian wherever Europeans arrived in today's Third World countries. Cf. Verlinden, Charles, Les origines de la civilisation atlantique (Neufchatel: Baconnière, 1966), p. 65.Google Scholar

92. Surplus was primarily extracted from India's rulers: see Moreland, W. H., India at the Death of Akbar: An Economic Study (Delhi: Atam Ram, 1962), p. 65Google Scholar; Maddison, Angus, Class Structure and Economic Growth: India and Pakistan since the Moghuls (London: Allen & Unwin, 1971), p. 13Google Scholar. Nevertheless, the most convincing argument is the reorientation of Indian industrial production to mass consumption goods after the British conquest: see Ghosal, , Economic Transition, p. 23Google Scholar; Hossain, , “Alienation of Weavers,” p. 345Google Scholar; Komarov, E. N. and Grasche, W. I., “Einige Angaben über die gesellschaftliche Arbeitsteilung und die ökonomische Struktur des Handwerks in Indien,” in Ruben, Walter, ed., Die ökonomische undsoziale Entwicklung Indiens: Sowjetische Beiträge zur indischen Geschichte (Berlin: Akademie-Verlag, 1961), 2:152Google Scholar; Davey, Brian, The Economic Development of India (Nottingham: Spokesman, 1975), pp. 40–83.Google Scholar

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95. See on this point the literature cited in Elsenhans, , Abhängiger Kapitalismus, p. 124, fn. 17.Google Scholar

96. Benachenhou, Abdellatif, “Le renversement de la problématique ricardienne des coûts comparés dans la théorie économique contemporaine,” Revue algérienne des sciences juridiques, économiques et politiques 8, 4 (12 1971), p. 925Google Scholar. For the same argument about Poland's 17th and 18th century grain exports, see Kula, Witold, Theorie économique du système féodal (The Hague: Mouton, 1970), p. 96CrossRefGoogle Scholar; about the U.S. South, Huertas, Thomas, “Damnifying Growth in the Antebellum South,” Journal of Economic History 39, 1 (03 1979), p. 95CrossRefGoogle Scholar; about Portugal, , Silva, José Gentil da, “L'autoconsommation au Portugal,” Annales E.S.C. 24, 2 (03–04 1969), p. 254.Google Scholar

97. Caporaso, James A., “Introduction: Dependence and Dependency in the Global System,” International Organization 32, 1 (Winter 1978), p. 2.Google Scholar

98. On Hong Kong, see Hsia, Ronald and Chan, Larry, “Industrialisation and Income Distribution in Hong Kong,” International Labour Review 117, 4 (07–09 1978), p. 476Google Scholar. See also Lee, Eddy, “Egalitarian Peasant Farming and Rural Development: The Case of South Korea,” World Development 7, 4–6 (04–06 1979), p. 513.CrossRefGoogle Scholar

99. Chudson, Walter A. and Wells, Louis T., Acquisition of Technology from Multinational Corporations by Developing Countries (New York: United Nations, 1974), pp. 6–15Google Scholar; Pack, Howard, “The Substitution of Labor for Capital in Kenyan Manufacturing,” Economic Journal 86 (03 1976), p. 56CrossRefGoogle Scholar. The most important evidence is the high content of second-hand technology in transnational' Third World production, which is often criticized: Salama, Pierre, “Specificités de l'internationalisation du capital en Amérique latine,” Tiers Monde 19 (04–06 1978), p. 293.CrossRefGoogle Scholar

100. The explanation is that bureaucrats and engineers prefer the most modern technology: Hawrylyshyn, Oli, “Capital-Intensity Biases in Developing Country Technology Choice,” Journal of Development Economics 5, 3 (09 1978), pp. 217–23CrossRefGoogle Scholar; Hawrylyshyn, , “Non-Economic Biases towards Capital-Intensive Techniques in Less Developed Countries,” Zeitschrift für Nationalökonomie 37, 1–2 (1977), pp. 123–49CrossRefGoogle Scholar. The preference, however, may be due to corruption: see Winston, Gordon C., “The Appeal of Inappropriate Technologies,” World Development 7, 8–9 (08–09 1979), p. 840CrossRefGoogle Scholar. On the inefficiency of state enterprises in the Third World, see Elsenhans, , Abhängiger Kapitalismus, p. 103, In. 125Google Scholar; p. 154, fn. 130; pp. 204–6, fns. 53, 56, 59, 61.

101. Palma, , “Dependency,” pp. 889–910Google Scholar. Lall, Sanjaya, “Is Dependency a Useful Concept in Analyzing Underdevelopment?”, World Development 3, 11–12 (11–12 1975), argues that “undesirable effects of dependent growth are general aspects of capitalist growth” (p. 808)CrossRefGoogle Scholar. See also Ramos, Joseph, “A Heterodoxical Interpretation to the Employment Problem in Latin America,” World Development 2, 7 (07 1974), pp. 47–58CrossRefGoogle Scholar, and Schoeller, Wolfgang, Weltmarkt und Reproduktion des Kapitals (Frankfurt: Europäische Verlagsanstalt, 1976), p. 266.Google Scholar

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103. Bequele, Assefa and Freeman, David H., “Employment and Basic Needs: An Overview,” International Labour Review 118, 3 (05–06 1979), p. 316Google Scholar; Sabolo, Yves, “Industrialisation, Exports and Employment,” International Labour Review 119, 4 (07–09 1980), p. 484Google Scholar. Third World unemployment in the year 2000 will be about 700 million: Dritter Bericht zur Entwicktungspolitik der Bundesregierung (Bonn: Bundesministerium für Wirtschaftliche Zusammenarbeit, Entwicklungspolitik, November 1977), p. 9.Google Scholar

104. Emmanuel, , Technologie appropriée, p. 52Google Scholar. Drucker's, Peter F. views that multinationals are interested in the multiplier effects of their investment is correct but politically irrelevant: see his “Multinationals and Developing Countries: Myths and Realities,” Foreign Affairs 53, 1 (10 1974), p. 136.CrossRefGoogle Scholar

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106. Lehmann, David, “Political Incorporation versus Political Stability: The Case of the Chilean Agrarian Reform, 1965–1970,” Journal of Development Studies 7, 4 (07 1971), argues in a parallel fashion: “There are many reasons why Latin American capital ought, in their own ‘purely’ economic interests, to favor such an egalitarian small peasant reform, but there seems to be one powerful reason for their resistance to it: to bring about a substantial change in agrarian structures involves a social and political mobilization of the peasantry which would, they think, eventually threaten urban and industrial property rights and this reason is not without foundation” (p. 373)CrossRefGoogle Scholar. I show that expatriate capital may be more inclined to take such risks than locally based capital in my Frankreichs Algerienkrieg, 1954–1962 (Munich: Hanser, 1974), p. 624.Google Scholar

107. The argument is that capitalist enterprises need markets for capital-intensively produced products: Cardoso, Fernando Henrique, “Brasilien, Die Widersprüche der assozierten Entwicklung,” in Sonntag, Heinz Rudolph, ed., Latinamerika: Faschismus oder Revolution (Berlin: Rotbuch Verlag, 1974), p. 53Google Scholar; RIO Report, Reshaping the International Order: A Report of the Club of Rome (New York: Dutton, 1976), p. 40.Google Scholar

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109. Shams, Rasul, “Employment Policies in Developing Countries,” Intereconomics, 12 1976, p. 339CrossRefGoogle Scholar. Cf. Stewart, Frances, “Technology and Employment in LDCs,” World Development 2, 3 (03 1974), pp. 40–45CrossRefGoogle Scholar. For further literature, see Elsenhans, , Abhängiger Kapitalismus, p. 109, fn. 135Google Scholar. Graciela Chichilnisky does not contradict my assertion because she does not consider one aspect of growth from foreign direct investment—expanding internal markets: “Terms of Trade and Domestic Distribution: Export-Led Growth with Abundant Labor,” Journal of Development Economics 7, 4 (December 1979), pp. 178–79.Google Scholar

110. Effective state control has long been observed: Lewis, Cleona, America's Stake in International Investments (Washington: Brookings, 1938), p. 507Google Scholar; Penrose, Edith, “Profit-Sharing between Producing Countries and Oil Companies in the Middle East,” Economic Journal 69 (06 1959), p. 253CrossRefGoogle Scholar; Penrose, , “The State and Multinational Enterprises in Less-Developed Countries,” in Dunning, John H., ed., The Multinational Enterprise (London: Allen & Unwin, 1971), p. 231Google Scholar; U.N., Transnational Corporations, p. 7Google Scholar; Emerson, , “Transnational Corporations,” p. 68Google Scholar. Even critics of the power of the transnationals admit that state control of transnational affiliates is increasing: Newfarmer, Richard S. and Mueller, Willard F., Multinational Corporations in Brazil and Mexico (Washington, D.C.: USGPO, 1975), p. 100Google Scholar; Fajnzylber, Fernando and Tarragdó, Trinidad MartínezLas empresas transnacionales (Mexico City: Fundo de Cultura Económica, 1976), p. 132.Google Scholar

111. Hirschman, Albeit mentions the importance of opportunity costs of production, to which level foreign investors can be taxed in host countries: “Beyond Asymmetry: Critical Notes on Myself as a Young Man and Some Other Old Friends,” International Organization 32, 1 (Winter 1978), p. 49CrossRefGoogle Scholar. Cf. Theodore Moran, “Multinational Corporations and Dependency,” Ibid., p. 100; Waltz, Kenneth, “The Myth of National Independence,” in Kindleberger, Charles P., ed., Power and Money (London: Macmillan, 1970), p. 212.Google Scholar

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116. Frieden, Jeff even argues that to maintain legitimacy governments have to increase their indebtedness for industrialization and that commercial banks are the source for such funds: “Third World Indebted Industrialization,” International Organization 35, 3 (Summer 1981)CrossRefGoogle Scholar. I would add that governments will not go bankrupt and will not be forced to pay back (e.g., the banks' behavior vis-à-vis Argentina in the 1982 Falklands War). But banks must get their money back. This is possible if raw materials rents are appropriated; debt is then passed over to consumers in Western industrialized countries. Thus commercial banks may become an ally for increasing Third World raw material prices, just as oil companies and the U.S. government have favored predictably rising oil prices since the early 1970s. Cf. Elsenhans, , Erdöl für Europa (Hamburg: Hoffmann & Campe, 1974), pp. 18–22.Google Scholar

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119. The following argument is based on Elsenhans, , “Agrarverfassung, Akkumulationsprozess und Demokratisierung,” in Elsenhans, , ed,. Agrarreform in der Dritten Welt (Frankfurt: Campus, 1979), esp. pp. 512–69.Google Scholar

120. One unit of income transferred from the rich to the poor diminishes the rich's food grain demand by 0.02 units and increases the poor's food grain demand by 0.59 units. There is no income transfer without an increase in agricultural production: Mellor, John W., “Food Price Policy and Income Distribution in Low-Income Countries,” Economic Development and Cultural Change 27, 1 (10 1978), pp. 24–25.CrossRefGoogle Scholar

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123. Cf. Robinson, Warren C., “Types of Disguised Rural Unemployment and Some Policy Implications,” Oxford Economic Papers 21, 4 (11 1969), p. 383CrossRefGoogle Scholar; Rawski, Thomas G., “Economic Growth and Employment in China,” World Development 4, 8–9 (08–09 1976), p. 777.Google Scholar

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125. If marginal labor produces less than it consumes, total product increases but surplus does not. See Elsenhans, , “Agrarverfassung,” pp. 553, 559–61.Google Scholar

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136. Yields per hectare increased from 1972/3 to 1977/8 (in %) thus:

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150. Cf. Elsenhans, , Abhängiger Kapitalismus, p. 55, fn. 5Google Scholar. See also Deubner, Christian, “Zur Internationalisierung der westdeutschen Bekleidungsindustrie,” WSI-Mitteilungen 32, 1 (1979), pp. 34–45.Google Scholar

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