Why Do Poor Countries Stay Poor? (Unequal Exchange and Imperialism). So how does the real world and the real economy really work?

I previously wrote that Noam Chomsky, despite being a significant intellectual figure, may unintentionally serve as controlled opposition. He’s promoted in ways that silence voices like Michael Parenti, who challenge the official narratives of events such as JFK’s assassination and 9/11. Nonetheless, Chomsky’s analysis on global economic dynamics is relevant and accurate.

“17 of them, even though it’s called G15– a good part of the world. And they do have something to say, believe it or not. And you can even read it. For example, you can read it on the front page if you happen to subscribe to the leading journal in Egypt, Al-Ahram, which has an English edition so you can read it in English. What they say at the G15 meeting is that the United States and Britain– this is mostly quotes– are unwilling to enter into a dialogue with the South. “The South” is what is euphemistically called the developing world. Which direction they’re developing, you can argue about. The US and Britain are unwilling to enter into a dialogue with the South, which is always forced to make concessions in the World Trade Organization to the benefit of the rich. The true story of globalization, they continue, is that the North– that’s G7– has to make maximum benefits, and the South is only entitled to a limited margin of development. And if this margin is crossed, the Western speculators are there to take you down as quickly as they can. That’s not false. But it’s a considerable understatement that the writers surely know it. US power and violence have also been there to take you down as quickly as it can if countries tried to pursue the path of independent development, what’s called in US planning circles ‘radical nationalism’ or ‘economic nationalism’ or sometimes even ‘excessive development.’ That’s not to be permitted in the current period of globalization, for reasons I’ll get back to. You don’t have to send the Marines that often. The speculators can do the job. The G15 meeting goes on to issue a plea to Western investors. It says, we don’t want to stifle you, but we want to know who you are. And we want you to come and go in an orderly fashion. That’s precisely what the North will not accept. The demand that not be accepted is a core part of the Multilateral Agreement on Investment, which has been deflected thanks to activist pressure, which succeeded in escaping media controls, but deflected– not stopped–“

-Noam Chomsky

“I mean if anyone knows any economic history, they know that, say, 200 years ago there wasn’t much difference between what’s now the first world and what’s now the third world. Actually, India and China were the commercial and industrial centers of the world. Europe was kind of backward in most respects, but now they are very different, hugely different. How did it happen? The European states, the developed states—England, the United States, France, Germany, Japan—the one country that resisted colonialism, up to East Asia, you know, the Tigers—without exception, they radically violated principles of economic liberalism. They insisted on massive state protection and subsidy just as the US economy does today. They were very highly protectionist and interventionist. On the other hand, they forced what is now the third world to accept economic liberalism, a program that Chava wants in an extreme form, and it had predictable effects. So at the end of two hundred years of British rule, India was not the commercial and industrial center of the world anymore, from which Britain was stealing technology and so on. It was an impoverished peasant country with a mortality rate about the same as it had been two hundred years earlier and began to develop afterwards when it could follow its own principles. However, in every one of those third-world countries, there is an elite which is extremely wealthy and privileged, serves the interests of the foreign master, and they do just fine, you know. You go to the poorest country in sub-Saharan Africa, and there are people living the lavish lifestyle we dream of. So in Iraq too, under this system, there will be such people, the ones working with foreign bankers and international investors, and with Halliburton and so on, they are gonna have local managers.”

-Noam Chomsky

This reality explains the rise of BRICS, whose goal is to change the global power dynamics. In the West, we are fed an ideology that justifies the current system:

Ideology
3:15
“What about the ideology? Let’s peel back the curtain a bit. The standard narrative is that after the withdrawal of colonial troops and political administrators, those colonial patterns of extraction ceased. The world economy today is meritocratic. If your nation has strong institutions, solid markets, and works hard, it will become wealthy. Likewise, poor countries are such because they lack the above. Reality is patently different.”

Excuses about Productivity
11:00
“A common objection is the claim of efficiency or labor form differences between the North and South that explains the differences seen above. Supposedly, Southern production now spans every part of global commodity chains, from manual labor to managerial, engineering, logistical, IT, and other roles. Despite this, and I quote, wage disparities are nonetheless so extreme that highly skilled labor performed in the South may even receive lower pay than ‘unskilled’ labor performed in the North. The paper itself goes into depth about how measuring productivity by prices, which is the usual justification among other things, is fallacious. But regardless, real productivity differences are minimal if they exist at all and can’t explain wage inequalities on their own. Furthermore, the gap between unit labor costs in northern and southern economies demonstrates that the difference in wages is greater than the difference in productivity. In other words, wage inequalities exist not because Southern workers are less productive, but because they are more intensively exploited and often subject to rigid systems of labor control and discipline designed to maximize extraction. This is pretty much the major reason why Northern firms offshore production to the South in the first place—because labor is cheaper per unit of physical output.”

I worked in international cooperation at Amazon in Poland, where I had access to international productivity data. For example, the myth of German efficiency is debunked when you realize that German workers achieve only two-thirds of the productivity of Polish workers, they also were work fewer hours, not working weekends or night shifts, and yet earning more than twice as much. Amazon rates productivity based on packages per hour of labor, so if Western workers were genuinely more efficient, this would be reflected in the data. This is just one example, but many others exist.

A better example of an unequal exchange, in my opinion, is the World Bank, the BIS, and the IMF and GMO. I wrote before about an example from an article in The Guardian similar to this one:

India’s farmer suicides: are deaths linked to GM cotton? – in pictures

More than 270,000 Indian cotton farmers have killed themselves since 1995. Are the high price of GM seeds a factor?

A better example of Unequal Exchange is seen in institutions like the World Bank, BIS, and IMF, and in policies surrounding GMOs. I once wrote about a Guardian article that highlighted the issue of farmer suicides in India due to the high cost of GM seeds. GMO is a perfect example of how Western companies exploit poor farmers worldwide. By creating seeds that produce plants without seeds, these companies force farmers to buy new seeds every year, effectively taxing the poorest farmers. If a farmer refuses to grow GMO crops, financial institutions like the IMF, which control the money flow, will deny them loans unless they comply by lending money to poor countries and allowing that money to only be spent on farming GMO. This system is disguised as an effort to combat global hunger by promoting supposedly more efficient GMO seeds, while in reality, it’s a means of exploiting the poorest people.

But if you ask someone in the West what GMO is, you will hear it’s unhealthy, and that’s the issue—not that we use that stuff to tax the poorest farmers around the world. More than 270,000 Indian cotton farmers have killed themselves since 1995. Campaigners say a contributing factor may be the high price of genetically modified seeds flooding the market, which is piling pressure on poorly paid growers, forcing many into a cycle of unmanageable debt. This is happening all around the world. Yet, the issue with GMO, as most people see it, is that it’s unhealthy to consume.

We disguise our exploitation of the world as aid, a point well described in the video I shared:

Neocolonialism is the real world we live in, a world hidden behind a world created by propaganda in which most of the population live.(fragments from work of Matt Kennard, Michael Parenti)

Most people are oblivious to how the world really works, believing the West is a force for good while, in reality, it operates as an empire of exploitation and oppression.

"Faith is something very different from belief. Belief is the systematic taking of unanalyzed words much too seriously. Paul’s words, Mohammed’s words, Marx’s words, Hitler’s words—people take them too seriously, and what happens? What happens is the senseless ambivalence of history—sadism versus duty, or (incomparably worse) sadism as duty; devotion counterbalanced by organized paranoia; sisters of charity selflessly tending the victims of their own church’s inquisitors and crusaders. Faith, on the contrary, can never be taken too seriously. For Faith is the empirically justified confidence in our capacity to know who in fact we are, to forget the belief-intoxicated Manichee in Good Being.”

― Aldous Huxley, Island

Just like "sisters of charity selflessly tending the victims of their own church’s inquisitors and crusaders," so now stupid Westerners travel to Africa to help poor people in Africa who are victims of those Western states and rulers. While not understanding that those poor people are their state and rulers' victims, because they don’t understand anything and simply have faith in what they are told.