Researchers have argued that wealthy nations rely on a large net appropriation of labour and resources from the rest of the world through unequal exchange in international trade and global commodity chains. Here we assess this empirically by measuring flows of embodied labour in the world economy from 1995–2021, accounting for skill levels, sectors and wages. We find that, in 2021, the economies of the global North net-appropriated 826 billion hours of embodied labour from the global South, across all skill levels and sectors. The wage value of this net-appropriated labour was equivalent to €16.9 trillion in Northern prices, accounting for skill level. This appropriation roughly doubles the labour that is available for Northern consumption but drains the South of productive capacity that could be used instead for local human needs and development. Unequal exchange is understood to be driven in part by systematic wage inequalities. We find Southern wages are 87–95% lower than Northern wages for work of equal skill. While Southern workers contribute 90% of the labour that powers the world economy, they receive only 21% of global income.
Imperialist appropriation in the world economy: Drain from the global South through unequal exchange, 1990–2015
Unequal exchange theory posits that economic growth in the “advanced economies” of the global North relies on a large net appropriation of resources and labour from the global South, extracted through price differentials in international trade. Past attempts to estimate the scale and value of this drain have faced a number of conceptual and empirical limitations, and have been unable to capture the upstream resources and labour embodied in traded goods. Here we use environmental input-output data and footprint analysis to quantify the physical scale of net appropriation from the South in terms of embodied resources and labour over the period 1990 to 2015. We then represent the value of appropriated resources in terms of prevailing market prices. Our results show that in 2015 the North net appropriated from the South 12 billion tons of embodied raw material equivalents, 822 million hectares of embodied land, 21 exajoules of embodied energy, and 188 million person-years of embodied labour, worth $10.8 trillion in Northern prices – enough to end extreme poverty 70 times over. Over the whole period, drain from the South totalled $242 trillion (constant 2010 USD). This drain represents a significant windfall for the global North, equivalent to a quarter of Northern GDP. For comparison, we also report drain in global average prices. Using this method, we find that the South’s losses due to unequal exchange outstrip their total aid receipts over the period by a factor of 30. Our analysis confirms that unequal exchange is a significant driver of global inequality, uneven development, and ecological breakdown.
Labor-Value Commodity Chains: The Hidden Abode of Global Production - Monthly Review
Intan Suwandi is a frequent contributor to Monthly Review. This article is adapted from her book, Value Chains: The New Economic Imperialism, winner of the 2018 Paul M. Sweezy-Paul A.... READ MORE
Global labor arbitrage
Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business are inexpensive and/or impoverished labor moves to nations with higher paying jobs.
Doughnut of social and planetary boundaries monitors a world out of balance
The doughnut-shaped framework of social and planetary boundaries (the ‘Doughnut’) provides a concise visual assessment of progress towards the goal of meeting the needs of all people within the means of the living planet1–3. Here we present a renewed Doughnut framework with a revised set of 35 indicators that monitor trends in social deprivation and ecological overshoot over the 2000–2022 period. Although global gross domestic product (GDP) has more than doubled, our median results show a modest achievement in reducing human deprivation that would have to accelerate fivefold to meet the needs of all people by 2030. Meanwhile, the increase in ecological overshoot would have to stop immediately and accelerate nearly two times faster towards planetary boundaries to safeguard Earth-system stability by 2050. Disaggregating these global findings shows that the richest 20% of nations, with 15% of the global population, contribute more than 40% of annual ecological overshoot, whereas the poorest 40% of countries, with 42% of the global population, experience more than 60% of the social shortfall. These trends and inequalities reaffirm the case for overcoming the dependence of nations on perpetual GDP growth4,5 and reorienting towards regenerative and distributive economic activity—within and between nations—that assigns priority to human needs and planetary integrity.
Wage Compression Drives Nordic Income Equality
Income inequality in the Nordic countries — Denmark, Finland, Norway, and Sweden — is substantially lower than in the United States or the United Kingdom despite similar levels of per capita income. The Gini coefficient for disposable income in Nordic countries averages 0.27, compared to 0.39 in the US and 0.36 in the UK. In Income Equality in the Nordic Countries: Myths, Facts, and Lessons (NBER Working Paper 33444), Magne Mogstad, Kjell G. Salvanes, and Gaute Torsvik analyze the underlying source of these disparities. They employ detailed microeconomic data and statistical decomposition techniques and consider distributional statistics on income, wages, working hours, education, and skills across these countries.
The myth of catch-up development: trends in core–periphery inequality from 1960 to 2023
The conventional narrative in international development holds that poorer countries are “catching up” with richer countries through the process of capitalist growth. This paper assesses this claim ...
The Divide — Jason Hickel
The Divide: A Brief Guide to Global Inequality and its Solutions Penguin Random House UK, 2017
Beyond GDP: Measuring and Valuing What Really Matters
Rethinking the UN’s “beyond GDP” agenda and the case for putting wealth at the centre
Anthropic Economic Index: Insights from Claude 3.7 Sonnet
The second update from the Anthropic Economic Index
Labor Market Adaptation to Rising Import Competition
In Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization (NBER Working Paper 33424), David Autor, David Dorn, Gordon H. Hanson, Maggie R. Jones, and Bradley Setzler examine how local labor markets and the workers in these markets adjusted to increased Chinese import competition in the first two decades of this century. They analyze comprehensive employer-employee data from the Census Bureau’s Longitudinal Employer-Household Dynamics program over the 2000–19 period. Their analysis exploits location-specific variation in the impact of growing imports from China following China’s accession to the World Trade Organization (WTO) in 2001, which is due to the heterogeneity in industry composition across local labor markets.
New Capitalism II: Compositional vs income inequality
Are all class-based societies unequal?
Capitalism, Inequality, and the Myth of Catch-Up Development
Prevailing narratives in international development hold that poorer countries can and will "catch-up" with richer countries through the process of
Coloniality of Skill Codification: A Decolonial Feminist Analysis of “Ideal Workers” in the “Future of Work” Policy Discourses
ABSTRACT Over the last decade, policy actors have produced a surge of “future of work” reports that reimagine workers through the dual logics of digitalization and human capital. Drawing on 25 policy documents (WEF, World Bank, OECD, EU, and major consultancies) and combining Bacchi and Goodwin's WPR approach with decolonial feminist theory, this paper demonstrates how these imaginaries construct an “ideal future worker” that reinscribes colonial hierarchies through a process we term the coloniality of skill codification . This concept describes the translation of embodied, historical, and relational differences (race, gender, caste, disability, age, and geopolitics) into ostensibly neutral, measurable skill categories that naturalize Global North standards and colonial hierarchy. Our analysis uncovers three interlocking mechanisms: (1) construction of workers as techno‐neoliberal skill bundles (relational human–machine codependency), (2) commodification of social difference (inclusion framed as extractable competitive advantage), and (3) technical‐statistical indexation (national human capital metrics that rank countries and workforce potential). This paper intervenes in the emerging field of Feminist AI by arguing that the policy discourses surrounding AI and automation in the workplace are actively constructing a new, insidious form of the “ideal worker” that rearticulates colonial‐gendered power structures.
The end of development economics
Some decades ago, development economists saw their approach as being distinctive compared to mainstream economics in general and better grounded in the reality of actual economies. This column argues that two trends over the last decades – the significant improvement in the average income of what were called developing countries and the homogenisation of economics methodology across the board – mean that the distinction between development economics and economics in general is increasingly untenable and indeed unnecessary.
