Analytical Gains of Geopolitical Economy: Volume 30B

This introduction frames the papers in this volume with a brief critique of how and why the dominant approaches to understanding world affairs obscure our understanding of the chief developments that have marked our age, and a discussion of the resources geopolitical economy can draw on to address the resulting deficiencies of understanding. It then goes on to discuss how the papers that follow demonstrate the gains from putting the geopolitical economy framework to work. They interrogate and challenge conventional wisdom in three broad areas – the international monetary system, world trade and the requirements for successful combined development historically and today, when China’s own stunning combined development confronts other developing countries with new possibilities and constraints. The introduction closes with some necessarily brief reflections on the vast agenda for future research and discussion that remains to be tackled.

Recent research in mainstream economics, before as well as since the 2008 crisis, has stressed the importance of growing current account imbalances among countries, particularly the imbalances between the United States and some Asian countries. While some have seen in these imbalances proof of the efficient work done by liberalized financial markets, as well as a sign of the great dynamism of the US economy, others have warned about the possible threats to the global economic stability arising from potential speculation against the dollar. These latter writers see the international imbalances as a contemporary version of the Triffin Dilemma. In this paper, we argue that both views are mistaken because they both focus on net capital flows. Recent research suggests, on the contrary, the importance of international gross capital flows related to financial liberalization. However, our argument goes further in order to demonstrate that the analysis of the consequences of international gross capital flows were already at the core of the Triffin dilemma, as well as in wider debates about the inherent instability of the international monetary power of individual countries, before and after World War II.

This paper reassesses the center-periphery relationship in light of recent developments in the international monetary system and the currency hierarchy in a geopolitical economy framework. The center-periphery relationship has historically been examined in relation to the international division of labor, the pace and diffusion of technical progress associated with it, and the pattern of consumption it embodies. As conceived by structuralists and dependentistas, it is not seen as the result of the uneven and combined development of capitalism: it does not take into account the struggle between the dominant States (center), which want to reproduce the current order and the contender States (periphery) which aim to accelerate capitalist development to reduce the unevenness, and even to undermine the imperial project of dominant states. In a geopolitical economy framework, a powerful obstacle peripheral countries face in their efforts at combined development is the international monetary system, something that the theorists of the center-periphery relationship have perhaps overlooked. Because of its subordinate position in the currency hierarchy, the periphery is subject to greater external vulnerability, greater instability of exchange and interest rates, and as a result, enjoys a more restricted policy space. In this sense, the chapter shows that, beyond macroeconomic policies, the currency hierarchy in a context of high capital mobility limits a range of developmental policies of peripheral countries, reinforcing the unevenness of world economy and constraining combined development.

The purpose of this paper is to contribute to understanding modern monetary arrangements from a Marxist perspective that takes into account recent developments in the Marxist theory of world money. The paper treats the US dollar as a primus inter pares quasi-world money and challenges the argument of US hegemony by exploring the behavior of major capitalist states and selected developing countries, the BRICS, in so far as their official international reserves are concerned. The findings reveal a clear pattern in the behavior of major capitalist states in terms of the size and form of their reserves with the variations in them implying a hierarchical structure of the corresponding quasi-world moneys. The analysis focuses on developed countries and treats them individually. The merit of this approach, distinctive in the literature on international reserves, is that it reveals the above-mentioned pattern which is blurred when Japan is included. The results imply that current international monetary arrangements reflect and promote multipolarity and competition on the geopolitical scene, the evolution of which is historical.

This paper analyses the stalling of the Doha Development Agenda (DDA) and its systemic and institutional consequences through a geopolitical economy approach that integrates the French school of international economic relations and Régulation Theory. These approaches put states and their economic roles at the fore, correcting dominant free trade approaches to world trade. The paper also avoids monocausal explanations for trade talk deadlocks and aims to provide a comprehensive approach on the co-evolution of world trade patterns and its institutions. In this approach, the DDA stalemate is traced to an institution-structure mismatch in how states articulate their accumulation strategies and institutions (competition, state regulation, adhesion to international regime) to the World Trade Organization (WTO) regime occasioned by the emergence of new trade powers. This has given rise to three distinct conflicts in how member states navigate between the main parameters of the multilateral trading system (non-discrimination, reciprocity and balance of power) and their national accumulation strategies: the erosion of non-discrimination and reciprocity; the failure to build an operational compromise between development and ‘globalization’, that is, between multilateral openness and new trade and power balances; and the difficulty in reaching a compromise between historical and emerging capitalisms. The outcome of these conflicts will determine the institutional configuration of the post-Doha WTO agenda.

China’s unprecedented emergence as an economic and political power has created a new geopolitical economy for semi-industrialised and developing economies in Southeast Asia. This paper examines China’s trade relationships with Thailand and Indonesia using the concepts of uneven and combined development (UCD) and unequal exchange. The mass of surplus value obtained through China’s trade with the developed economies has flowed into the considerable expansion in China’s imports from developing countries since 2000. China has maintained a consistent trade deficit with the latter. While the developing countries concerned have benefitted from this set of relationships, the extent to which they have done so has been determined by national strategies. In countries like Thailand – where manufacturing capital and a significant working class has emerged – exports expanded on the basis of mutually advantageous technologically and skills intensive goods. These are produced with a similar organic composition of capital as in China. The result has been a further consolidation of the hegemony of manufacturing capital. Indonesia, however, has a political system and economy long dominated by resource exploitation linked fractions of capital. The result has been a surge in primary goods exports. The current commodity price cycle has meant these goods exchange at prices above their value. The current looming price correction, however, may have negative repercussions. In the meantime, the concentration in raw materials exports is helping to prevent the emergence of a circuit of productive capital in manufacturing. The evidence from these contrasting cases suggests that the degree to which developing economies can benefit from China’s own historically unparalleled combined development remains highly contingent on the strength of the combined development possibilities and efforts within these other national social formations. Above all, there is the degree to which manufacturing sectors of capital can obtain hegemony.

The aim of this paper is to analyse the recent changes in the role played by Africa as a traditional natural resources supplier for the world economy in a multipolar context. We highlight, on the one hand, how Africa remains a prominent supplier of critical minerals needed for information and communication technologies (ICT), including platinum, vanadium, coltan, chromium, manganese, zirconium, etc., and how the boomerang effect results in Africa also importing electronic waste. On the other hand, we show how the BRICS’ growth model, based on a very intensive use of natural resources acquired through international trade, is now being fuelled by Africa too. BRICS countries (especially China and India) are making foreign direct investments in Africa using their state companies to ensure the supply of natural resources under favourable economic terms. Thus, Africa appears as a disputed territory between the old domination of the advanced capitalist countries and emerging powers like the BRICS. However, this should not mask the fact that the European Union and North America are still the dominant foreign powers in the continent. Finally, we discuss which scenarios are open to further this multipolar moment, particularly in the wake of the great crisis.

We aim to analyze the early trajectory of Argentine industry from the perspective of uneven and combined development. Argentine integration into the world market based on the export of agricultural goods had not neglected industrial development. At first, Argentine industry benefited from its late emergence and rapidly followed the path of leading countries’ manufactures. But initial advantage soon turned into a liability. The emergence of large-scale industry required expanded markets that were already occupied by older and stronger competitors. The 1930 crisis and the impact of the Second World War aggravated this problem. Attempts to remedy the situation – an export-led industrialization scheme and an internal-market-oriented economy – failed successively. We study this process through the analysis of Argentine industrial chambers’ journals, reports from the United States Department of Foreign Trade and Argentine official government documents. We find that the export-led industrialization project failed because of the weakness of Argentine industries and not because of economic nationalism. That was the outcome of the previous failure of liberal projects and of the international constraints imposed by the Second World War and its aftermath. During this later period of internal-market-oriented economy, the gap between Argentine and international productivity widened. This paper presents an innovative interpretation that transcends liberal and nationalistic explanations and serves as a case study of the implications of uneven and combined development.

This paper documents the EU integration process using the uneven and combined development framework. Because capitalist social relations are territorially defined and politically built, unevenness between countries is not unconnected with that within countries and both involve antagonism between capital and labor. This is manifest in the ‘state form’ of the EU and its anti-democratic tendencies: public institutions at the community level play a major role in reinforcing unevenness in favour of leading countries, in both the productive and financial spheres.