REVI EW
“Countries that specialize in goods of diminishing returns [lose out] to those trading in goods of increasing returns such as high-tech manufacturing.”
subordinate regions, with an increasing share captured by finance through services and expropriation opportunities. Emerging (Capitalist) Economies (ECE) are cast in a subordinate position regarding the extraction, realization and deposit of value, severely constraining the agency of their public and private agents. This subordination works across three dimensions: a) in production, where ECE firms capture less value and pay more for hedging currency risks, b) in circulation, where advanced economies use debt-led consumption and hence are a consumption target market, where interventions like tariff codes and policies lead to problems of demand (which is now even a problem for advanced economies like German car manufacturers), and c) in finance, where ECEs receive predominantly short-term, yield-seeking capital inflows. The results are chronic volatility, external vulnerability and subordination to the currencies of advanced economies, which further deepens domestic financialization (often at the expense of productive sectors). For these reasons, company incomes are often saved or deposited in global currencies in foreign or offshore accounts.
Photo: Dubo – stock.adobe.com
The last chapter is particularly interesting as it presents a theory of “ecologically unequal exchange”, explaining asymmetric transfers of non-monetary, biophysical resources and environmental damage between countries and regions. The theory refutes approaches that define ecological degradation in purely monetary terms. It provides a review of literature on methods for empirically identifying asymmetries and testing hypotheses derived from the theory. The focus is on how market exchange, when described in terms of physical resource flows rather than monetary value, reveals systematic environmental inequalities in global development. The book also provides examples of countries that have successfully implemented industrial policies to counter uneven development and establish successful economic growth.
The basis for this is always a dedicated industrial policy by the state, diversifying from supposed “comparative advantage” and investing in manufacturing while divesting from commodities. What the book glosses over, unfortunately, is the human cost of these transformations 4 . Nevertheless, the collection is an important contribution to discussions on development and the widening of viewpoints and perspectives. Multilateral development banks and international financial institutions can also find inspiration in chapters on project implementation and the delivery of instruments such as blended finance. The editors quote the German philosopher Friedrich Nietzsche: “The more eyes – different eyes – that we mobilise to observe one thing, the more complete will our concept of this thing, our objectivity, be.” Having read this book, I feel we’re approaching 20/20.
4 We recommend Horkheimer and Adorno Dialectics of Enlightenment as an additional read
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