98/YOUR MONEY OR YOUR LIFE!
In 1972, Ernest Mandel and a handful of other economists
highlighted this deteriorating state of affairs. In his book Late
Capitalism, Mandel writes:
The share of the underdeveloped countries in world trade declines- instead of growing or remaining constant - and the decline is
rapid. All private and public transfers of capital from the metro
politan countries cannot keep pace with the flow of values in the
opposite direction, and the countries of the so-called Third World
consequently suffer relative impoverishment in their transactions
with the imperialist countries. Obviously this impoverishment
cannot be accompanied by a growing share in world trade, i.e. by
a growing share in international purchasing power.
The Third World's rapidly declining share in world trade - from
approximately 32 per cent in 1950 to approximately 17 per cent
in 19 70 - naturally does not in any way imply that there has been
an absolute decline in the dependence of imperialist countries on
certain strategic raw materials .... But within the framework of the
capitalist world economy the contradiction between the use value
and exchange value of commodities is expressed in the fact that the
increased dependence of imperialism on the raw materials
exported by the colonial countries is accompanied by a relative
decline in the prices paid for these raw materials and a relative
decline in their value. (Mandel, 1978)
According to Augustin Papic, former member of the UN's
North-South Commission, the invisible transfer of wealth from the
South to the North - due to the deterioration in the terms of trade -
could total some S200 billion per year. That is, as much or more than
what is paid out annually in debt-service payments.
In late 1997, the Southeast Asian crisis provoked a general fall in
the prices of raw materials. It is difficult to predict how long this trend
will last. It will largely depend on the duration of the crisis in the region
and on whether it spreads outside the region (thereby causing global
deflation). The raw materials most severely hit have been copper, zinc,
nickel, aluminium, gold, platinum, oil and pulp for paper.
The deterioration of the terms of trade is a sign of the unequal
character of global trade. The most industrialised countries are in an
advantageous position in their trading relations with the South. A
study of France's foreign trade provides recent confirmation of this