Why Is The Global South Still Poor?

By Allen Myers

Republished from Red Flag.

In the years following World War Two, as numerous direct colonies won formal independence, there was a widespread belief, or at least a hope, that political independence would lead fairly rapidly to significant economic progress. No longer under the control of foreign exploiters, the ex-colonies would be free to undergo economic development like that which had occurred in the wealthy capitalist countries. With assistance from benign international institutions and former colonisers who had seen the error of their ways, the “underdeveloped” global south, renamed “developing countries”, would soon “catch up”, and the huge economic differences between countries would be overcome.

As is obvious today, it didn’t happen. In 2015, not quite 1 billion people in twelve “first world” countries had a per capita GDP of US$44,392; 6.2 billion people in 148 “third world” countries had a per capita GDP one-tenth that size. Why, and how?

The “why” is relatively easy, while the “how” requires a bit more detail and analysis. Despite the nonsensical propaganda they produced, European imperialists didn’t colonise Africa, Asia and the Americas out of noble motives. Their motive, pure and simple, was greed. When a combination of their weakening in the world war and the uprisings of colonised peoples forced them to grant political independence, that didn’t make them stop being greedy. It just made them modify their techniques of exploitation.

The underdevelopment of the global south was not some kind of natural misfortune, like a drought or poor soil or geographical isolation. It was something inflicted on the colonies by their Western colonisers—something concisely summarised 50 years ago by the Guyanese Marxist Walter Rodney in the title of his book, How Europe Underdeveloped Africa.

Of course, it was easier for imperialists to plunder the southern countries when they had direct political control over them. They could engage in what amounted to looting and piracy: forced labour or slavery, direct expropriation of land and other wealth, taxes remitted to the imperialist centres, destruction of industries that might compete against imperialist companies.

Forced to give up direct political control, the imperialists nevertheless continued exploiting the former colonies in more subtle ways. Capitalist competition, promoted as a pathway to growth, was in reality a deliberate dead end. The wealth extracted from colonies over decades or centuries had built large, technically advanced businesses in the imperialist centres. Conversely, the exploitation meant that the former colonies lacked the capital that would have been necessary to create industries that could compete with the imperialists.

No problem, declared the ideological servants of imperialism: the former colonies can borrow the capital they need in order to develop; then they can repay the loans from the profits of their new industries. One of several flaws in this argument was that many citizens of former colonies thought it a bit unfair that they should have to borrow money that had been stolen from them, and then pay interest to the thieves.

This is where international bodies such as the World Bank and the International Monetary Fund come in. They pose as independent, well-meaning sources of capital for the “developing” economies. In reality, they are, and have always been, controlled by the governments of the wealthiest imperialist countries. This ensures that loans go only to governments that don’t rock the boat—the boat that is carrying the enormous interest payments that poor countries must make to both bilateral “donors” and to the IMF/WB mafia.

These interest payments are transfers from poor countries to wealthy ones, and are a significant part of what keeps the global south poor. A 2020 study of 63 “impoverished countries” by the Jubilee Debt Campaign, based on IMF and World Bank figures, found that their external debt servicing in 1998 consumed an average 16.6 percent of government revenue. Partial debt relief for some of the most indebted countries reduced that figure to 5.5 percent by 2011, but it then started rising again, reaching 11.1 percent in 2018. The COVID pandemic will have undoubtedly raised it further. The World Bank notes of the pandemic’s impact: “Low- and middle-income countries’ external debt-to-GNI [gross national income] ratio rose to 29 percent in 2020 from 27 percent in 2019, and the debt-to-export ratio increased to 123 percent from 106 percent in 2019”.

These figures stand like an ironic commentary on the idea that “development” loans would make it possible for poor countries to build industries that increased their incomes and repaid the loans. Even if these countries were to do the impossible for a year and devote all of their export revenues—that is, every cent of export sales, not just the profits—they would still not be able to pay off their full foreign debts.

The owners of the imperialist economies of course never intended for their governments to help poor countries create industries that could compete against them; imperialist corporations are not suicidal. So “development” in the poor countries is restricted to fields that continue the transfer of wealth to the rich countries: direct imperialist investment, the profits of which of course go to the investing corporations; and natural resource extraction and industries characterised by low- or at best medium-level technology, which have correspondingly low rates of profit.

Capitalists in the global south are confined to the least productive, and therefore least profitable, fields. As a result, much of the value created in the south is transferred to the imperialist countries in the course of trade: the poor countries import overpriced goods and sell their own products for less than their real value. The amounts of money transferred in this way, called “unequal exchange” by economists, are staggering. 

A recent article in the journal New Political Economy attempts to quantify the sum for the years 1960-2018. The authors write: “Over the whole period, drain from the South totalled $62 trillion (constant 2011 dollars) ... Appropriation through unequal exchange represents up to 7% of Northern GDP and 9% of Southern GDP”. That is not a typo: the global south was deprived of $62 trillion. Such value transfers are the underlying cause of situations such as the current disaster in Sri Lanka.

If imperialist corporations seem to have arranged everything for their own benefit, it must be recognised that they can’t do it all on their own. Even in the time of direct colonies, to maintain control, the colonisers needed collaborators within the colonial population. After political independence, imperialism still required a social layer that would cooperate to keep the system ticking over profitably.

It found the components of that layer among local capitalists, large landowners and would-be capitalists. In some cases, they might have come from among the open collaborators. In others, they came out of the movements for independence, from those leaders whose visions didn’t go beyond a change of personnel at the top.

Because of the huge sums of value appropriated by the global north, the capitalists of the global south generally cannot compete with the major imperialist industries. Aside from situations of natural monopoly (oil, for example), capitalists in the poor countries have to rely on low-profit areas such as manufacturing consumer goods that northern capitalists have abandoned or assembling electronics for high-tech imperialist companies. In these labour-intensive industries, the poverty and low wages of the south allow them to compete, and they are driven to maintain those low wages as a matter of their own survival.

So, while southern capitalists might sometimes feel that they are oppressed by imperialism and, if they have the opportunity, might put some pressure on imperialist corporations for improved terms of their collaboration, they know well that they share class interests with the imperialists and have a common enemy in the working class. If Marx called competing capitalists a “band of warring brothers”, we might call imperialists and southern capitalists a “band of squabbling big brothers, little brothers and occasional distant cousins”.

This is why southern capitalists are never reliable allies of working people and poor farmers in any struggle against imperialism. It is why the possibility of a radical popular movement forming government in a third world country always arouses the threat of imperialist intervention against it, to ensure that the country’s capitalists remain in charge.

The Real Reason Why Socrates Was Killed and Why Class Society Must Whitewash His Death

By Carlos Garrido

Republished from Midwestern Marx.

The killing of Socrates left a stain on the fabric of Athenian society, a stain it nearly expanded 80 years later with similar threats of impiety towards an Aristotle determined not to let Athens “sin twice against philosophy.”[i] This original sin against philosophy has been immortalized in philosophy classrooms for millenniums to come – turning for philosophy the figure of Socrates what for Christian theology is the figure of Jesus. A variety of interpretations concerning the reasons for his sentencing have since arose. The most dominant, though, is that Socrates was killed because of impiety. This interpretation asserts that Socrates was corrupting the youth by shifting them away from the God’s of the state and towards new divinities and spiritualities. This hegemonic reading of his death relies almost exclusively on a reading of Socrates as solely a challenger of the existing forms of religious mysticism in Athens. This essay argues that this interpretation is synechdochal – it takes the part at the top layer to constitute the whole (as if one could explain pizza merely by talking about the cheese). Instead, the death of Socrates is political – he is killed because he challenges the valuative system necessary for the smooth reproduction of the existing social relations in Athens. This challenge, of course, includes the religious dimension, but is not reducible to it. Instead, as Plato has Socrates’ character assert in the Apology, the religious accusation – spearheaded by Meletus – will not be what brings about his destruction. 

Our access to the trial of Socrates (399 BCE) is limited to Plato’s Apology of Socrates and Xenophon’s Apology of Socrates to the Jury. Out of these two, Plato’s has remained the most read, in part because Xenophon was not in Athens the day of the trial (making his source secondary), and in part because of the immense prominence of Plato in the history of philosophy. To understand the death sentence, we must thus turn to Plato’s Apology.

The Apology is one of Plato’s early works and the second in the chronology of dialogues concerning Socrates’ final days: Euthyphro (pre-trial), Apology (trial), Crito (imprisonment), and Phaedo (pre-death). Out of the Apology arise some of the most prominent pronouncements in philosophy’s history; viz., “I am better off than he is - for he knows nothing, and thinks that he knows. I neither know nor think that I know” and “the life which is unexamined is not worth living.” Philosophy must thank this dialogue for the plethora of masterful idioms it has given us, but this dialogue must condemn philosophy for its unphilosophical castration of the radical meaning behind Socrates’ death.

In the dialogue Socrates divides his accusers into two groups – the old and the new. He affirms from the start that the more dangerous are the former, for they have been around long enough to socialize people into dogmatically believing their resentful defamation of Socrates. These old accusers, who Socrates states have “took possession of your minds with their falsehoods,” center their accusations around the following:

Socrates is an evil-doer, and a curious person, who searches into things under the earth and in heaven, and he makes the worse appear the better cause; and he teaches the aforesaid doctrines to others.

Before Socrates explains what they specifically mean by this inversion of making the “worse appear the better,”  he goes through the story of how he came to make so many enemies in Athens. To do this he tells us of his friend Chaerephon’s trip to Delphi where he asks the Pythian Prophetess’ whether there was anyone wiser than Socrates – to which they respond, “there was no man wiser.” The humble but inquisitive Socrates sought out to prove he could not have been the wisest. He spoke to politicians, poets, and artisans and found each time that his superior wisdom lied in his modesty – insofar as he knew he did not know, he knew more than those who claimed they knew, but who proved themselves ignorant after being questioned. Thus, he concluded that,

Although I do not suppose that either of us knows anything really beautiful and good, I am better off than he is - for he knows nothing, and thinks that he knows. I neither know nor think that I know.

This continual questioning, which he considered his philosophical duty to the Gods, earned him the admiration of the youth who enjoyed watching his method at work and eventually took it upon themselves to do the same. But it also earned him the opposite of youthful admiration – the resentment of those socially-conceived-of wise men who were left in the puzzling states of aporia. His inquisitive quest, guided by an egalitarian pedagogy which freely (as opposed to the charging of the Sophists) taught everyone, “whether he be rich or poor,” earned him the admiration of many and the condemnation of those few who benefitted from having their unquestioned ‘knowledge’ remain unquestioned.

After explaining how his enemies arose, without yet addressing what the old accusations referred to by saying he made the “worse appear the better cause,” he addresses the accusation of Meletus, which spearheads the group of the new accusers. It is Meletus who condemns Socrates from the religious standpoint – first by claiming he shifts people away from the God’s of the state into “some other new divinities or spiritual agencies,” then, in contradiction with himself, by claiming that Socrates is a “complete atheist.” Caught in the web of the Socratic method, Socrates catches the “ingenious contradiction” behind Meletus’ accusations, noting that he might as well had shown up to the trial claiming that “Socrates is guilty of not believing in the gods, and yet of believing in them,” for, after a simple process of questioning, this is ultimately what Meletus’ charges amount to. Socrates thus asserts with confidence that his destruction will not be because of Meletus, Anytus, or any of these new accusers focusing on his atheism. Those which will bring about his destruction, those which from the start he asserted to be more dangerous, are those leaders of Athenian society whose hegemonic conception of the good, just, and virtuous he questioned into trembling.

Having annulled the reason for his death being the atheism charges of Meletus and the new enemies, what insight does he give us into the charges of the old, who claim he made the “worse appear the better cause?” He says,

Why do you who are a citizen of the great and mighty and wise city of Athens, care so much about laying up the greatest amount of money and honor and reputation, and so little about wisdom and truth and the greatest improvement of the soul, which you never regard or heed at all? Are you not ashamed of this?

This passage gets at the pith of his death sentence – he questions the values of accumulating money, power, and status which dominated an Athens whose ‘democracy’ had just recently been restored (403 BCE) after the previous year’s defeat in the Peloponnesian War (404 BCE). This ‘democracy,’ which was limited to adult male citizens, created splits between the citizens, women, children, foreigners, slaves, and semi-free laborers. Nonetheless, the citizen group was not homogenous – sharp class distinctions existed between the periokoi – small landowners who made up the overwhelming majority in the citizen group; the new wealthy business class which partook in “manufacturing, trade, and commerce” (basically an emerging bourgeois class); and the aristoi – a traditional aristocracy which owned most of the land and held most of the political offices.

The existing ruling ideas, determined by the interests and struggle of the aristocracy and emerging bourgeois class, considered the accumulation of money, power, and status to be morally good. These values, integral to the reproduction of the existing social relations of Athens, were being brought under question by Socrates. Socrates was conversing indiscriminately with all – demonstrating to rich, poor, citizen and non-citizen, that the life which pursues wealth, power, and status cannot bring about anything but a shallow ephemeral satisfaction. In contrast, Socrates would postulate that only a life dedicated to the improvement of the soul via the cultivation of virtue can bring about genuine meaning to human life. This is a complete transvaluation of values – the normative goodness in the prioritization of wealth, power, and status has been overturned by an anthropocentric conception of development, that is, a conception of growth centered around humans, not things.

Socrates, then, is not just killed because he questions religion – this is but one factor of many. Instead, Socrates is killed because he leaves nothing unexamined; because he questions the hegemonic values of Athenian society into demonstrating their shamefulness, and in-so-doing proposes a qualitatively new way of theoretically and practically approaching human life. He does not call for a revolutionary overthrow of the aristocracy and for the subsequent installation of a worker’s city-state in Athens, but he does question the root values which allow the Athenian aristocracy to sustain its position of power. Socrates was killed because, as Cornel West says of Jesus, he was “ running out the money changers.”

With this understanding of Socrates’ death sentence, we can also understand why it must be misunderstood. Socrates’ condemnation of Athenian society, if understood properly, would not limit itself to critiquing Athenian society. Instead, it would provide a general condemnation of the money-power driven social values that arise when human societies come into social forms of existence mediated by class antagonisms. Socrates is taught to have been killed for atheism because in a secularized world as ours doing so castrates his radical ethos. If we teach the real reason why Socrates died, we are giving people a profound moral argument, from one of the greatest minds in history, against a capitalist ethos which sustains intensified and modernized forms of the values Socrates condemns.  

In modern bourgeois society we are socialized into conceiving of ourselves as monadic individuals separated from nature, community, and our own bodies. There is an ego trapped in our body destined to find its “authentic” self in bourgeois society via the holy trinity of accumulating wealth, brand name commodities, or social media followers. Society provides little to no avenues for an enduring meaningful life – for, human life itself is affirmed only in the inhuman, in inanimate objects. Only in the ownership of lifeless objects does today value arise in human life. The magazine and newspaper stands do not put on their front covers the thousands of preventable deaths that take place around the world because of how the relations of production in capitalism necessarily turn into vastly unequal forms of distributions. Instead, the deaths of the rich and famous are the ones on the covers. Those lives had money, and thus they had meaning, the others did not have the former, and thus neither the latter.

Today Socrates is perhaps even more relevant than in 399 BCE Athenian society. As humanity goes through its most profound crisis of meaning, a philosophical attitude centered on the prioritization of cultivating human virtue, on the movement away from the forms of life which treat life itself as a means, significant only in its relation to commodities (whether as producer, i.e., commodified labor power or as consumer), is of dire necessity. Today we must affirm this Socratic transvaluation of values and sustain his unbreakable principled commitment to doing what is right, even when it implies death. The death of Socrates must be resurrected, for it was a revolutionary death at the hands of a state challenged by the counter-hegemony a 70-year-old was creating. Today the Socratic spirit belongs to the revolutionaries, not to a petty-bourgeois academia which has participated in the generational castration of the meaning  of a revolutionary martyr’s death.

  Notes

[i] Louise Ropes Loomis, “Introduction,” In Aristotle: On Man in the Universe. (Classics Club, 1971)., p. X.