Table Of ContentDEVELOPMENT AND UNDERDEVELOPMENT
A MARXIST ANALYSIS
Also by c<offrry Kay
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(with James Mott,
Development and
Underdevelopment:
A Marxist Analysis
GEOFFREY KAY
Lecturer in Economics
The City University, London
81 33.
KAY GEOFFREY
DEVELOPMENT AND
U~DERDEVELO
PMENT: A "ARXIST
~NAlYSIS
A 88004977
M
© Geoffrey Kay 1975
All rights reserved. No pan of this publication may be
reproduced or transmiued, in any form or by any means,
without permission
First edition 1975
Reprinted 1975, 1976, 1977, 1979, 1981, 1982
Published by
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TO
ROGER GENOUD
STEPHEN HYMER
ROBERT SERESWESKI
Contents
Preface lX
Introduction
1. PRODUCTION, CONSUMPTION AND SURPLUS 13
The law of social reproduction 15
1.
2. The circuit of production and consumption 19
3· The social relations of production 21
2. SURPLUS VALUE AND PROFIT 26
Commodity and value 26
1.
2. The circuit of capital 30
3· The magnitude of value 33
4· Profit 39
5· Surplus value 44
6. Wages and the circuit of labour 47
7· Real wages and the value of wages 50
3· THE ACCUMULATION OF CAPITAL 56
I. The pursuit of pure quantity 56
2. Accumulation and money 60
3· Accumulation and simple commodity production 63
4· Commodity production and capitalist production 67
5· Accumulation and the socialisation of labour 72
6. Accumulation and the socialisation of capital 75
Note: Social capital and the transition to com-
munism 82
4· PRODUCTIVE AND CIRCULATION CAPITAL 86
I. lJnequal exchange 86
2. Circulation capital in capitalist society 89
3· Circulation capital in non-capitalist society 93
5· MERCHANT CAPITAL AND UNDERDEVELOPMEl\T 96
I. The transition to industrial capitalism 98
Development and Underdevelopment: A Marxist AnalYsis
Vlll
2. British colonialism 105
3. The theory of unequal exchange 107
4. l\'lerchant capital and the development of under
development 119
6. INDUSTRIAL CAPITAL AND UNDERDEVELOPMENT 125
I. Fixed and circulating capital 130
2. The effect of turnover on the rate of profit 137
3. Turnover and employment 145
4. Accumulation and employment 148
5. The formation of the proletariat 153
7. THE ACCELERATION OF CAPITAL
I. The intensification of labour
2. Fordism
8. CRISIS AND RECOMPOSITION
I. Crisis
2. Recomposition
3· Democracy and repression
List of Works Cited
188
Index
190
Preface
Since 1968, the myth that Capital is unreadable has been ex
ploded. Marxist literature, including Marx's own writings, now
proliferate as never before. This recrudescence has a real basis
in developments during the sixties: the collapse of consensus
politics; the decomposition of the affluent society and the
failure of the Americans to win a decisive victory in Vietnam.
It also has ideological roots, for as the world has moved on
academic social science has stood still.
Economics is no exception. Faced with developments they
cannot grasp, the economists have retreated behind a veil of
obscurantism and statistics vainly hoping that by measuring
and correlating the appearance of effects they will get some
clue as to causes. As their conventional orthodoxy, nco-classical
theory, has collapsed under the weight of its own internal incon
sistencies, economists have desperately appropriated terms and
methods from the natural sciences in the hope that this guise of
science might be mistaken for the real thing. Some students
may be taken in by it, but many are bored and frustrated. Those
students who turn to economics in the hope of finding some ex
planation of the developments they sce around them: develop
ments such as rising affiuence and increasing stringency;
growing wealth and grinding poverty; not to mention urban
decay, pollution and underdevelopment -developments, in short,
which threaten the very existence of civilisation: these students
are still taught the key to analysis lies in understanding the way
an isolated individual chooses whether to buy an overcoat or
spaghetti.
The study of underdevelopment, it is true, has always
been broader than that of other problems, and even orthodox
development economists have been forced to take other so
called non-economic factors into account and reco~nise a
historical dimension. But this has only highlighted their ideo
logical prejudices. As I argue in the Introduction, orthodox
development theory was llever morc than elaborate apology for
x Del,elopment and Underdevelopment: A Marxist Anab'sis
colonialism, and for this reason quickly came under attack from
the supporters of the nationalist movements that spread so
rapidly around the underdeveloped world. This criticism was
soon generalised against an even more fundamental proposi
tion of orthodox theory, that underdevelopment was an original
condition for which capitalism could not be held responsible.
By the mid-sLxties a whole school of radical development
economists had emerged which held the opposite view. Glaring
inconsistencies in orthodox theory were brought to light and
historical studies were produced to show how important
capitalist penetration had been. But this is as far as it went.
As none of the major works produced by this school was firmly
based on the law oJvalue which Marx discovered and elaborated,
little progress could be made beyond this point. The radical
critics of orthodox development theory were so keen to prove
the ideological point that underdevelopment was the product
of capitalist exploitation, that they let the crucial issue pass
them by: capital created underdevelopment not because it ex
ploited the underdeveloped world, but because it did not
exploit it enough.
I have written this book with the intention that it should be
understandable to readers with no previous knowledge of
Marxism or economics. The opening chapters consist of an
introduction to Marx's economic thought and all the concepts
that are subsequently used in the later chapters are explained
sufficiently for even the technical sections of chapters 5 and 6,
which contain the heart of my argument to be followed. If this
work achieves its goal of comprehensibility without compromise
to the complexity of its subject, much of the credit must go to
Susan Bennett who took the time and trouble to work through
it with me on a line by line basis. I should also like to thank
Antonio Bronda, Charmian Campbell, Peter Cusack, Feruccio
Gambino, Alex Macdonald, John Merrington, Roger Murray
and lan and Beryl Tolady for their intellectual and moral
support. My colleagues at The City University cased my teach
ing load at a crucial time and Marian White and Mary Keane
worked wonders with a ragged manuscript.
GEOFFREY KA Y
The City University, London,
Decem ber 1973
Introduction
The concepts, development and underdevelopment, have only
been widely used in their present sense since the end of the
Second 'Vorld War. For most of modern history the economic
and social divisions of the world were understood as expressions
of natural differences in race and climate. Differences in income
were treated in much the same way as differences, say, in rain
fall, and as late as 1930 a senior British administrator could
blandly comment that average per capita income of £30 in
Ghana compared not unfavourably with £80 in Britain.1 In
the colonial mind the world was divided into civilised men and
natives and the gulf that divided them was considered un
bridgeable - at least in the foreseeable future. Attitudes have
now changed, and the view of the world embodied in the con
cepts of development and underdevelopment no longer holds
the division to be permanent and fixed. Underdevelopment
implies development in a way that barbarism never im
plied civilisation. The differences between an underdeveloped
country and a developed one are of degree rather than kind;
and the very use of these terms suggests that they are differ
ences that can and should be overcome. It is, to say the least, a
more positive outlook.
The immediate explanation for this radical departure in
thought is the rise of nationalism in most parts of the under
developed world after 1945. For national sovereignty can have
no real meaning unless it is joined to the idea of development
as progress towards a social and economic equality from wbch
no nation is debarred for natural reasons. National sovereignty
and development defined in this way adhere to each other as
closely as the principle of equal rights adheres to that of the
freedom of the individual. In fact they can be correctly inter
preted as a projection of these eighteenth-century principles
on to an international stage. In this sense contemporary
A. W. Cardinal, The Gold Court, 1931 (Accraj Government Printer,
I
1931).
