UNEQUAL EXCHANGE AND REGIONAL DISPARITIES

Abstract

1. I N T R O D U C T I O N The notion of was given impetus by the work of Emmanuel [5] in an attempt to explain uneven econonomic development on a world scale. As the title of Emmanuel's book suggests, unequal exchange amounts to imperialism of That is, trade between the advanced sector or center and the less-developed countries or periphery of the world economy effects an asymmetrical transfer of economic value from the periphery to the center--rich countries exploit poor countries through international trade. One is tempted to contemplate whether mechanisms of this type operate at the level of interregional trade that could account for the existence of regional inequalities. This is precisely the question with which this paper is concerned. The issue of is primarily investigated at the level ofintersectoral trade within a multisectoral national economy. It is the sector and not the region that is taken as the basic unit of analysis. Sectoral disparities are in turn translated into regional inequalities by giving the economy a multiregional structure. Thus it is the spatial division of labor that translates intersectoral to interregional unevenness, and not any intrinsic attributes of space. The question of raises some fundamental problems regarding Marxian values and their transformation to prices. The traditional treatment of this transformation, as formalized by Morishima, is critically reviewed in Section 2. While mathematically rigorous, such a framework is shown to be inconsistent with the Marxian theory of value. The very idea of comparing values to prices as a criterion of is also challenged. We are thus motivated, in Section 3, to reconstruct an alternative theoretical setting by drawing on recent advances in the Marxian theory of value and Sraffa's theory of prices. The key idea here is to link the substance of value (abstract labor) to its monetary form. Based on the framework developed in Section 3, we discuss in Section 4. Sectoral and regional disparities are shown to arise from capital-intensity and wage differentials across sectors and regions. Section 5 is devoted to some concluding remarks.