The political economy of unequal exchange : A critique of the theory of Arghiri Emmanuel

This thesis is an examination of the political economy of Arghiri Emmanuel's theory of unequal exchange. Emmanuel's theory is studied both as a theory of trade and as a theory of imperialism. Emmanuel's original aim was to develop a modified labour theory of value to explain why in the course of international trade some nations grow rich at the expense of poor ones. This thesis argues that Emmanuel's theory of international exchange value failed as an attempt to extend the labour theory of value to international trade; it rests instead on a Smithian 'adding up' theory of value, where value is defined by the sum of the rewards to the factors. Further, it is argued that Emmanuel's attempt to explain the determination of the rewards to the factors in terms of physical bundles of goods is inadequate as an explanation of value. Consequently, it is shown that he is unable to account for the origins of surplus value or profit. As a result Emmanuel's conclusions regarding the formation of international values do not move beyond sophisticated neo-Mercantilism - where one nation grows richer at the expense of another by adding on to its cost of production a 'surplus upon alienation'. Thus Emmanuel's neo-Mercantilist theory of international exchange value and trade is shownto be logically consistent with his theory of Mercantile imperialism.

But it is argued this theory is inadequate as a theory of imperialism as it is merely descriptive and fails to identify the underlying determination of the transfer of surplus from one nation to another. Having established the main failures of Emmanuel's theory of unequal exchange the thesis concludes by examining its relevance to a theory of financial imperialism.