Global capital,uneven development and national difference: Critical reflections on the specificity of accumulation in Latin America

Introduction

A recent Special Issue in this journal devoted its pages to discuss the varied forms of capitalist development in different countries and regions across the globe. Specifically, the contributions to the Special Issue offered a critical assessment of the hegemonic ‘neo-institutionalist’ approach to the study of national diversity of capitalism, with particular focus on the ‘varieties of capitalism’ (hereafter, VoC) school (Hall & Soskice 2001), which is probably the most influential perspective within the broader ‘comparative capitalisms’ (CC) literature (Coates 2015: 14–16). The general conclusion agreed upon by most authors was that this approach suffers from several weaknesses for the purpose of a critical understanding of the undeniable national differences that exist in the global landscape of the capitalist mode of production. On the other hand, participants in the debate also tended to agree that there is a ‘rational kernel’ in the intellectual enterprise underpinning the VoC approach, which is the recognition that it is necessary to account for the self-evident differences in the contemporary forms taken by capitalism within each national or regional space of capital accumulation. However, disagreements emerged when it came to establishing the alternative approach that could offer a more solid explanation of the social processes underlying the phenomenon of national differentiation in the world market.

A further point made in the Capital & Class Special Issue was that although the original focus of the VoC perspective was on diversity in ‘advanced’ capitalist countries, it later broadened its analyses to incorporate research on other parts of the world (Ebenau 2015). ¹ As a matter of fact, one of the central themes that cropped up in most articles in a specially devoted section on zones outside the ‘core’ of the capitalist world economy was the inability of the VoC framework (and also of the broader CC literature) to offer a solid account of the particularities of development in ‘peripheral’ or ‘emergent’ countries or regions. Moreover, most contributions also tended to agree on the fundamental reasons behind the failure of ‘neo-institutional’ perspectives to shed light on the nature and dynamics of the ‘periphery’. In the first place, critics highlighted that the one-sided focus on institutions led the VoC approach to neglect the specifically capitalist character of those societies. Second, they also argued that it failed to shed light on the ways in which the global dimension of capitalist social relations shapes the structure and trajectory of those countries and regions of the world economy.

We fully concur both with this appraisal of the limitations of the neo-institutionalist approach to our understanding of the ‘periphery’ and with the main sources of those weaknesses that these critics of the VoC identified. However, we think that the radical alternative frameworks advanced in the Special Issue, based as they were on different versions of dependency theory and on the increasingly popular uneven and combined development (U&CD) perspective, did not entirely succeed in overcoming those limitations of the VoC school to make sense of the specifically capitalist and global determinations underlying the constitution of the political economy of the so-called ‘periphery’.

In this regard, the central aim and deliberately limited scope of this article is to intervene in this other ‘derivative’ debate, specifically focusing on the question of the ‘variety of capitalism’ prevailing in Latin America (which, incidentally, was one of the most widely discussed cases in the Special Issue). ² Thus, while taking on board the consensus on the pitfalls of neo-institutionalism that emerged out of the Special Issue, we intend to push the discussion forward by critically engaging with the different alternatives to the VoC approach that were set forth and show that these other perspectives also fall short of providing a convincing framework to address the problematique of national or regional particularities as posed in the debate. In a nutshell, we argue that there are two main weaknesses in all those other approaches, which underlie their inability to offer a critical alternative to the understanding of the fundamental issue at stake. In the first place, despite their self-conscious effort to transcend the ‘methodological nationalism’ characterising the VoC perspective, they nonetheless fail firmly to ground the constitution of national or regional specificities in the essentially global dynamics of the capital accumulation process. Second, and relatedly, in all cases they more or less explicitly conceive of political forms of capitalist social relations, that is, class struggle and/or the state (and its policies) as somehow autonomous from the (alienated) economic content of this historically specific mode of existence of the human-life process: the self-movement of valorisation of value.

To overcome these shortcomings, this article offers an alternative approach that builds on innovative theoretical scholarship that has emerged in the last 20–25 years under the auspices of the Centre for Research as Practical Criticism (CICP), based in Buenos Aires, Argentina, and especially the work of the independent scholar Juan Iñigo Carrera (2007a, 2013). This work, which is only just recently beginning to appear in Anglophone literatures – in part, because it has been developed outside of formal academic structures and networks – represents a thorough re-examination of Marx’s critique of political economy and its dialectical-methodical foundations (Iñigo Carrera 2006, 2014, 2015). While drawing upon Marx’s fundamental insight into the determination of capital as a materialised social relation which becomes the immediate alienated subject of the organisation of the process of social life in its immanent unity, it also moves some way beyond it so as to cast fresh light on global transformation and uneven development in recent decades. ³

Two insights from this reading of the Marxian critique of political economy are relevant for this purpose. First, we argue that the specificity of the Latin American ‘variety of capitalism’ must be grounded in the constitution and dynamics of the international division of labour which result from the underlying essential unity of the production of relative surplus value on a world scale by the global total social capital (Iñigo Carrera 2016b; Starosta 2016). In other words, we propose to grasp the emergence of national specificities as the immanent result of the global unfolding of the ‘law of value’. Second, we submit that the qualitative form of capital accumulation in Latin America that has historically consolidated out of the global process of production of relative surplus value, and which is still being reproduced in the majority of countries in this region under the contemporary configuration of the international division of labour, revolves around the appropriation of an extraordinary mass of social wealth flowing into those national spaces of valorisation under the form of ground-rent (Caligaris 2016; Iñigo Carrera 2006, 2007b). ⁴ It is this specific determination which underlies the economic and political forms that constitutes the Latin American ‘variety of capitalism’. However, the article also notes that since the late-1950s, the planetary production of relative surplus value has constituted a new, co-existing constellation of the international division of labour, which revolves around the international fragmentation of the productive subjectivity of the global collective worker of capitalist large-scale industry (Iñigo Carrera 2013: 53–90). The constitution of this so-called New International Division of Labour (NIDL) has been at the basis of the different developmental path followed by East Asian countries since the 1960s (Starosta 2016). But, in addition, the changes in Mexico and Central America in the last 30 years indicate that the qualitative specificity of their respective developmental processes has actually ‘converged’ with that of (second-tier) East and South East Asian newly industrialised countries (NICs) and ‘diverged’ from that of South American countries. Strictly speaking, then, one can no longer speak of a single Latin American ‘variety of capitalism’.

To substantiate all these arguments, the article is structured as follows. The next section briefly reviews the main lines of criticism of the VoC that were put forward in the symposium and then moves to a more detailed appraisal of the other approaches that were presented as theoretical alternatives to neo-institutionalism. Upon uncovering the weaknesses of these radical approaches for the development of a solid explanation of the constitution and dynamics of the qualitative specificity of the developmental process in Latin America (or, more broadly, in the ‘periphery’), the third section unfolds our own alternative approach to global uneven development based on our reading of the Marxian critique of political economy. This will allow us to delineate in greater depth the constitution and particular features of national spaces of valorisation with specifically limited qualitative potentialities (e.g. most Latin American countries), out the dynamics of the essentially global process of production of relative surplus value. Finally, the final section illustrates the more concrete implications of this perspective with the examination of the recent trajectory of the automotive sector in Argentina. This will allow us to bring to light the peculiarities of the form of accumulation of capital revolving around the appropriation of a portion of ground-rent (in a country which is paradigmatic of this modality of accumulation) through the observation of the immediate empirical manifestations of this form of valorisation of capital (in a sector of social production which, in turn, is emblematic of the limited potentialities of the industrialisation process to which the former gives rise). In addition, this brief ‘sectoral case study’ will serve to highlight more starkly the shortcomings of many of the other radical approaches to the study of Latin America.

Beyond the VoC approach? The limits of alternative critical approaches to the specificity of capital accumulation in ‘peripheral’ regions

The radical perspectives brought together in the Special Issue of this journal point to several weaknesses in the VoC approach to Latin America. Most of the critiques focus on its neo-institutional foundations, although some of them mention concrete problematic issues concerning the analysis of Latin America by VoC scholars. In the first place, as Coates (2014: 21–24) points out, even within the CC literature it is increasingly acknowledged that the VoC approach pays scarce attention to the determinations of that whose varieties it aim to explain, that is, capitalism as an economic system. In this sense, some scholars have argued that the excessive emphasis on institutions led the VoC approach to ‘reify’ the different institutional arrangements as the only causes of national variation (Fernández & Alfaro 2011: 71; Taylor 2014: 131). Coates (2014: 24–25), however, goes further in his critique and observes that it is not simply a matter of complementing institutional with economic analysis, but a question of bringing the laws and tendencies of capitalism back into the heart of the explanation of differentiated national development.

This point dovetails with a second line of criticism made by several participants in the Special Issue: the underlying ‘methodological nationalism’ which characterises the VoC framework and institutionalism more generally. A first aspect of this is that the VoC approach is overly focused on the nation-state as a regulatory institution, losing sight of the growing role of supranational structures of regulation, such as bilateral or regional trade agreements, which limit state capacities for autonomous policy formulation and making (Ebenau 2012: 213–214). Similarly and with specific reference to Latin American countries, it has been argued that the VoC approach one-sidedly reduces the explanation of the behaviour of TNCs’ subsidiaries to a function of the national institutional framework in which they operate, thereby overlooking their contextualisation within the global strategies of TNCs (Ebenau 2012: 211–212). Still, the farther-reaching criticism centres on the undertheorisation of the global economy. In effect, as noted by Taylor (2014), the VoC approach conceives of the world economy as ‘as an aggregate of distinct national models’ (p. 132), which leads these scholars to overlook the (hierarchical) interconnections between the diverse economies which form the global structure of capitalism (see also Ebenau 2014; Hardy 2014; Jessop 2014).

Finally, most critics have also taken issue with the VoC approach’s ‘firm-centrism’. In effect, this excessive focus on the firm, which derives from a general framework initially devised for the comparative analysis of advanced countries, fails to capture the central role of the state in the organisation of capitalism in Latin America (Fernández & Alfaro 2011: 80–84; Sánchez-Ancochea 2009). In a similar vein, the VoC approach is usually blind to the part played by working class resistance to transnational corporations’ (TNCs’) strategies, especially in the Argentine case (Fishwick 2014). Still, we think that the more problematic issue with the VoC’s firm-centrism raised by critics lies elsewhere and is essentially methodological: the one-sided explanation based on ‘agency’ at the expense of ‘structure’. More concretely, the argument of these scholars go, VoC’s virtually exclusive focus on business strategies and forms of corporate governance does not allow it to comprehend the functioning of capitalism as a broader set of ‘institutions’ (or rather, social relations) which actually shape those strategies (Jessop 2014: 49–54).

In sum, although most critics recognise the merits of the VoC approach for drawing scholarly attention to the importance of national or regional particularities in the world economy, they also tend to agree that at bottom, the key weakness of the approach is that in its efforts to bring variety to light, it has neglected (or, at least, downplayed) the capitalist character of those societies in which those varied institutions that constitute their specificity are found. As Coates (2014) eloquently puts it,

We cannot move from understanding to explanation without completing the epistemological rupture with the new institutionalism; without going from idealism to materialism, and without going from Weber to Marx. (p. 25)

We could not agree more with this. Hence, in the rest of this section, we turn to the critical examination of the major alternative approaches to the study of ‘peripheral societies’ that were put forward in the Special Issue of Capital & Class, to assess the extent to which they live up to Coates’ demand to ‘move from understanding to explanation’ in the study of the specificity of Latin America in the global political economy of capitalism.

In broad terms, the Special Issue contained three main alternative perspectives for the critical study of the specificity of capitalism in ‘peripheral’ regions. The first one is that of Weiss, whose main thrust revolves around the recovery of ideas from the monthly review dependency school centred in turn on Baran and Sweezy’s concept of ‘economic surplus’. According to Weiss (2014: 160), this latter concept allows us to avoid the reification of institutions’ characteristic of the VoC approach (i.e. the divorce of institutions from the relations of production which constitute their ‘historical context’). In this sense, this author argues that institutional variety is always limited by the structural necessity to search for profits that define capitalism as a mode of production (Weiss 2014: 158). Thus, it follows that this first line of argumentation actually consists in downplaying the importance of the phenomenon of capitalist diversity rather than offering an alternative account of it. In the second place, Weiss (2014) points out that the content of institutional difference is not given by the need to resolve coordination problems of collective action, as VoC scholars would have it, but by the result of the class struggle over the distribution of the economic surplus (p. 162). However, despite this alternative conceptualisation of the content of institutions, Weiss does not seem to offer any source of national or regional capitalist diversity other than institutional variety itself. Put differently, Weiss’ proposal comes down to the explanation of national specificities in terms of the different outcomes of the politically determined modes of distribution of the ‘economic surplus’. However, it is to be noted that according to this approach, those national specificities do not imply any qualitative difference in the economic content itself of the valorisation and accumulation of capital. Variety, Weiss (2014) concludes, is simply defined as ‘the historically conditioned and socially contested utilisation of economic surplus’ (p. 165).

In our view, this approach fails to achieve a complete break with the institutionalist paradigm for at least two reasons. In the first place, similarly to the VoC framework, it still locates the explanation of capitalist diversity in the institutional configuration of different countries or regions. In effect, institutions are the only social forms that ‘vary’: the modalities of the valorisation and accumulation of capital that constitute the general content of the capitalist mode of production remain essentially the same in all ‘national societies’. In the second place, in confining variation to a distributive conflict over the ‘surplus’, this perspective necessarily conceives of variety as a contingent feature of national or regional spaces of valorisation of capital, since all ‘structural’ economic determinations of the latter are seen as invariant by definition.

Ebenau (2012, 2014) offered a further alternative to the VoC approach to the study of the specificity of ‘peripheral’ societies in the world market, which also draws from the tradition of dependency theory. However, in this case the main intellectual source is the Latin American school of dependency theory and centres on Cardoso and Faletto’s analysis of the impact of external factors (grounded in each country’s form of insertion in the world economy) on domestic class relations (Ebenau 2012: 219). On this basis, Ebenau highlights that there are certain structural factors – which originate in the dynamics of ‘central’ or ‘dominant’ countries – that condition the class struggle in ‘dependent’ countries and, a fortiori, their national processes of capital accumulation. These factors include, among others, the specialisation of dependent economies in the export of primary products, the hegemonic role of TNCs in the leading sectors of the local productive structure and the subordination of national capitals to the strategies of TNCs.

Now, a first critical point to make against this recovery of Cardoso and Faletto’s contribution is that this ‘sociological’ version of ‘dependency theory’ focused on the class struggle as the essential explanatory factor of the Latin American specificity had already been challenged within the same theoretical tradition by its so-called Marxist current, that is, that derived from Ruy Mauro Marini’s (1978, 2008) work. Although Ebenau does refer in passing to the works of Marini (Arinci et al. 2015: 193; Ebenau 2014: 110), he does not seem sufficiently aware of the crucial differences that set the latter apart from Cardoso and Faletto’s more widely acknowledged ‘sociological’ take on dependency theory. Fundamentally, Marini (1978) perceptively noted that the version of dependency theory that ‘pays lip service to the class struggle […] will never allow us to understand why the working class in advanced capitalist countries has managed to unfold its struggle with better outcomes than that of dependent capitalist economies’ (p. 71, our translation). The reason for this inability resides in the fact that this approach invokes the class struggle as a self-grounded ‘deus ex machina’ which ‘allows to explain everything’ (Marini 1978: 68). In contrast, Marini’s (1978) alternative perspective consists in identifying the reasons that ‘explain the class struggle’, that is, it investigates ‘the material conditions in which the class struggle takes place’ (p. 68).

Moreover, Marini (2008) insightfully attempts to extend this essentially correct immanent nexus between economic content and political forms of the capital relation to the sphere of uneven international relations, thereby rejecting those ‘politicist’ explanations of national differences based on ‘diplomatic and military pressure by industrialised nations’ (pp. 119–120). Unfortunately, in this latter endeavour, Marini’s own attempt at a Marxian explanation of global uneven development is not entirely successful. In effect, when accounting for the specificity of capital accumulation in Latin America, Marini conceives of the latter as residing in a particular, nationally embedded method of production of surplus-value based on the ‘super-exploitation’ of labour, which, in turn, emerges as an ‘adaptation mechanism’ through which dependent economies react to the outflows of surplus-value that result from the ‘unequal exchange’ relations that they establish in international circulation with advanced capitalist countries (Marini 1978: 172–179, 2008: 124–127). In other words, for Marini the production of surplus-value is an attribute of each ‘national total social capital’, with its specificity determined by the dominant (i.e. essential but not necessarily exclusive) mechanism of exploitation of the working class. Latin American ‘total social capitals’ develop their own nationally based methods of production of surplus-value (super-exploitation) as a ‘functionally determined’ consequence of the methods originally developed in advanced countries (technical progress). In contrast, we shall argue in the next section that the production of surplus-value is an attribute of the global total social capital, whose immanent unity or content obtains at the level of the world market, but which becomes self-differentiated into qualitatively specific national forms. Thus, despite his valuable best efforts to ground the qualitative differentiation of the world market in the economic determinations of the unfolding of the ‘law of value’ on a global scale, even Marini ultimately fails to transcend the ‘methodological nationalism’ that characterises dependency theory as a whole.

In this sense, a common flaw of all versions of dependency theory lies in their conceptualisation of the essentially global unity of the process of capital accumulation. Specifically, in all cases, ranging from its different original formulations up to its contemporary revivals such as those in the Special Issue, dependency approaches ultimately explain the developmental course of each particular country in terms of the interaction between ‘internal factors’ and ‘external constraints’. As we argue below, this approach cannot but represent the inner connection between global content and national form in its apparent exteriority. We shall come back to the general methodological limitation of this conception later on, when discussing the shortcomings of the U&CD approach. For the moment, let us examine its more concrete implications through a critical engagement with Ebenau’s substantive argument on the limits to the recent ‘centre-left’ politico-economic experience in Argentina that started in 2003 and which has just come to an end in 2015 (a national instance of the broader so-called ‘Pink Tide’ that prevailed in many countries of the Southern Cone throughout that period).

According to Ebenau, this ‘neo-developmentalist’ project, which he identifies theoretically with the work of authors like Bresser-Pereira (2010) and Boschi and Gaitán (2009), and politically with the three ‘Kirchnerist’ administrations, clashed with two kinds of obstacle. The first one is the ‘structurally problematic competitive position of Argentinian firms’ in the context of the world market. As a result, these firms are unable to compete neither with China’s (or even Brazil’s) low wages nor with advanced countries’ high productivity (Ebenau 2014: 109). In other words, and here Ebenau invokes a classic insight of dependency theory, it is quite simply impossible for all countries to attain ‘autonomous development’. In effect, in the context of ‘over-accumulation on a world scale […] the success of some producers will necessarily come at the cost of others, be they already established or aspiring competitors’ (Ebenau 2014: 106). The successful progressive ‘high road’ to world market integration proposed by the neo-developmental political project is therefore highly improbable (if not quite simply impossible). In the second place, Ebenau also points to internal factors hindering autonomous national development. Fundamentally, Ebenau (2014) highlights the refusal of support to the strategy of ‘industrial upgrading’ by the domestic bourgeoisie (especially, the agrarian faction), who opted for a clear-cut strategy of ‘dependent development’ on the basis of a peripheral form of world market integration driven by the export of primary products (p. 110). Likewise, the project eventually failed to maintain the support of the workers’ movement and other popular groups that it had enjoyed during its earlier years.

In our view, this empirical analysis replicates the more general theoretical shortcomings of the dependency approach mentioned above, and which derived from its conception of the world market as an externally related aggregate of national economies. Thus, it does not suffice simply to empirically describe the ‘structural external constraints’ confronted by recent centre-left administrations in Latin America to comprehend their limited potentialities for social transformation. This leaves us unarmed to explain the qualitative form of participation of these countries in the global process of accumulation, which underpins the immanent impotence to challenge and overcome those apparently external factors which are seen as hindering ‘from outside’ the national development project. To put it in more concrete terms, this account fails to explain, for instance, why wages in Argentina are not as low as in other ‘peripheral regions’ or the productivity of labour lags so far behind that of ‘developed’ countries. It just takes those phenomena as given empirical ‘facts’. Similarly, it does not suffice to indicate the subjective ‘preferences’ of bourgeois factions, who for some unexplained reason are depicted as inclined towards profiting from ‘commodity rents’ (Ebenau 2014: 110) instead of supporting the state-led industrialisation project. ⁵ A proper ‘critical-materialist’ account needs to explain why the Argentine bourgeoisie adopted this ‘accumulation strategy’, which, in turn, should be grounded in the globally determined forms taken by the capital accumulation process in this particular national space of valorization. ⁶

Finally, let us now examine the third alternative approach to the understanding of national differences in global capitalism put forward in the Special Issue (Hardy 2014; Taylor 2014). In contrast to the previous two cases, it does not draw inspiration from any variant of dependency theory but from Trotsky’s analysis of U&CD. In its original formulation in the History of the Russian Revolution (Trotsky 2008), this perspective attempted to grasp capitalist development in ‘backward’ countries on the basis of the ‘combination’ of ‘archaic’ elements from domestic relations of production with those assimilated from more advanced capitalist countries. In Trotsky’s view, this allowed ‘backward’ countries to skip ‘a whole series of intermediate stages’ in their attempt at catching up with advanced countries. Yet, Hardy (2014) notes that

although Trotsky argued that an understanding of the ‘whip of external necessity’ has to be rooted in the inner workings of capitalism explained by Marx’s law of value, he did not offer an explanation of the drivers or causes of unevenness. (p. 145)

To complete this explanation, Hardy (2014) thus points to capital’s ‘essential contradiction between a constant tendency for differentiation rooted in the division of labour and the organisation of production, and the opposite tendency towards universalisation reflected in the tendency towards the equalisation of the rate of profit’. However, this explanation of unevenness generated by each firm’s aim at realising extra profit that leads to ‘technological and institutional change as well as contestation by workers’ (Hardy 2014: 146) is still rather abstract and falls short of explaining ‘the division of labour […] between countries’. In other words, as Hardy (2014: 146) remarks, ‘this raises a key question regarding the theorisation of the relationship between national sate formations and the interdependence of the global market’. ⁷

In order to address this further instance of U&CD, Hardy follows Barker’s (2006) extended notion of ‘combined development’. According to this view,

‘national peculiarities […] are a product of the world system as it is inflected within each separate state’, so that ‘each country is […] shaped simultaneously by the development of social relations within its borders as well as by multiple forms of economic, political, military and cultural traffic across those same borders’. (Hardy, 2014: 148)

Thus, Hardy (2014) concludes ‘the world economy and nation-states are not dichotomous entities’, but are

mutually constitutive in a process whereby nation-states are constrained and shaped by the parameters of accumulation processes in the global economy, but at the same time the strategies of states and capital reshape the accumulation processes in the global economy and forge a new set of parameters and dynamics. (pp. 148–149)

We find two main problems with the U&CD approach. In the first place, although it highlights the need to consider the ‘world system’ and the ‘law of value’ to understand national processes of accumulation, we think that the relations between them are ultimately represented in external terms. This is most evidently clear in Trotsky’s ‘classic’ formulation, insofar as it conceives of national peculiarities on the basis of the ‘combination’ of given differences that had been generated by the universal law of unevenness and which pre-exist their articulation. Aware of this weakness, Hardy’s reformulation proposes the inversion of the order between the ‘uneven’ and ‘combined’ aspects of capitalist development, that is, she relabels the theory as ‘combined and uneven development’. However, in our view, this theoretical strategy does not suffice to eliminate the exteriority between the global and national dimensions of the unfolding of the law of value. In effect, we have seen that even in its revised version as C&UD, this approach still conceives of the relation between the global unity of the capital accumulation process and national differences as resulting from the interaction (or mutual constitution, in Hardy’s words) of elements (i.e. ‘world economy’ and ‘nation states’). And no matter how much two distinct elements influence, complement and transform each other through their interaction, they can only do so from an ‘ontologically’ prior and irreducibly self-contained existence. This point obviously has broader methodological underpinnings which exceed the scope of this article. But, as argued in great length elsewhere (Starosta 2015: 76–116), suffice it to note that this essentially ‘Engelsian’ view of dialectical relations as ‘unity of opposites’ still fails to capture the movement of affirmation through self-negation which constitutes the inner, immanent unity between the content and form of real phenomena. In contrast, we shall see below that the key question resides in explaining why and how the immanently global unity of capital accumulation (the content) becomes self-differentiated in national spaces of valorisation of qualitatively ‘varied’ kinds (the form), as it subsumes under its movement of formally boundless self-expansion the materially diverse determinations of different territories and human productive forces across the globe, thereby engendering historically changing constellations of the international division of labour.

This leads us to what we consider the second major weakness of the UC&D/CU&D approach to the study of ‘peripheral societies’. In our view, and in a nutshell, this approach does not really constitute a theory proper but rather a description of the differentiated concrete forms taken by the establishment of the unity of capitalist development at the level of the world market (Rioux 2015). It thus still falls short of ‘moving from understanding to explanation’ as demanded by Coates in the passage cited above. In other words, it is self-evident that there is ‘unevenness’ in the world market (e.g. that there are more or less ‘advanced’/’backward’ or ‘rich’/’poor’ countries) and that there also is ‘combination’ (i.e. that each country assimilates ‘elements’ that had their origin in another national territory). The question is to account for the reason to be or ground of those particular ‘differences and combinations’, whose ‘amalgam’ determines national variation according to this approach. In this sense, the first task that a proper ‘theory of capitalist differentiation’ should undertake is the identification of which are the differences that actually matter for the emergence of qualitatively specific potentialities in the diverse concrete national forms taken by the global accumulation process.

According to our own alternative to the VoC approach based on the Marxian critique of political economy, the key to the comprehension of relevant forms of national differentiation resides in focusing on the historical dynamics of the production of relative surplus value by the global total social capital on a planetary scale. And this requires that we elucidate which territorially embedded qualitative differences acquire ‘world-historical’ significance from the point of view of their participation in the global process of relative surplus-value production. More concretely, we argue that the explanation of uneven development cannot take as point of departure already constituted national differences (whether institutional or class-based) in their apparently irreducible singularity, in order to thence proceed to their ‘classification’ as a national or regional ‘variety of capitalism’. Instead, it must attempt to account for the specificity of each territorially or jurisdictionally demarcated space of valorisation, as it emerges out of the configuration of the capital-determined international division of labour. In the next section, we elaborate further on this approach and flesh out its implications for the study of the Latin American ‘variety of capitalism’.

Uneven global capital accumulation and the role of Latin America in the international division of labour ⁸

The historical specificity of capitalist production derives from the private and independent form taken by human labour. In this form of the human-life process, the social character of labour is represented as an objective attribute of its product, namely, the value-form, which determines useful objects as commodities (Marx 1976: 132). Social relations thus take the alienated form of powers of the product of labour, and human beings become determined as personifications of those objectified forms of social mediation; in its simplest form, as ‘representatives of […] commodities’ (Marx 1976: 178–179).

This indirect form in which the unity of social labour is established is fully developed when it becomes capital. Subsumed under the capital-form, the production of surplus value – in short, the formally boundless quantitative progression of the reified ‘social nexus’ – becomes the content of social life (Marx 1976: 251–257). In this more concrete form as self-valorising value, the materialised social relation does not simply formally mediate the material life process of human beings, but actually becomes inverted into the very alienated subject of the process of social reproduction and its expansion in its unity: the material metabolism of society takes the inverted form of the accumulation of the total social capital (Marx 1976: 763). In other words, in capitalist society the process of human metabolism is characterised by an automatism subject to laws, whose motion obviously takes shape through the conscious action of individuals, but whose general unity is unconsciously established ‘behind theirs backs’. The ‘law of value’ is the succinct term that refers to the unity of the determinate forms of movement assumed by this alienated mode of existence of social life in all its concrete complexity.

In the process of renewal of the conditions for its self-valorisation, the total social capital produces and reproduces commodity owners as members of antagonistic social classes (Marx 1976: 723–724, 1978: 185). In its simplest determination, the class struggle is thus the most general direct social relation between collective personifications of commodities (thereby determined as a political form of social relations), which mediates the reproduction of the indirect relations of capitalist production through the generalised commodity form (thereby determined as the economic form of social relations; Iñigo Carrera 2013; Kicillof & Starosta 2007). Although a necessary form taken by the reproduction of the total social capital, the antagonistic character of the class relation disrupts the fluidity of the former’s valorisation. The establishment of the general unity of social labour must therefore take shape through a further objectified form of social mediation, the state, which confronts commodity owners (the personifications of money-as-capital and of the commodity labour-power), as an apparently external power with the authority and capacity to establish the overall direct regulation of their antagonistic social relations (Iñigo Carrera 2012). The state thus develops as the most concrete political form that embodies the direct organisation of the unity of the conditions of social reproduction in its alienated capital-form. That is, the state is the concrete form of the essentially indirect social relations through the valorisation of capital. By virtue of this content, the state becomes the general political representative of the total social capital. In brief, capitalist social relations exist as differentiated into economic forms (the autonomised movement of capital-commodities on the market) and political forms (class struggle and the state). The latter, far from enjoying ‘autonomy’ (relative or otherwise), are the necessary mode of realisation of the contradictory content of the economic mode of existence of capitalist social relations. In other words, class struggle and state policies are not to be conceived of as independent, self-subsisting factors that externally modify or influence the workings of the law of value. Instead, they need to be grasped as necessary modes of motion through which the law of value further unfolds beyond the strictly economic forms immediately springing from the indirect nature of the social relations of capitalist production.

Now, as an expression of its inherently self-expansive nature, this fetishised social relation is global in content and national only in form (Clarke 2001; Iñigo Carrera 2013: 144–145; Marx 1973: 277–278). This means that it is the self-valorisation of value on a global scale, or global accumulation on the level of total social capital, that constitutes the immanent end in the world market (Smith 2006: 193). It follows from this that neither class antagonism nor its expression in the concrete form of state policies or ‘domestic institutions’ determines the modality and course of accumulation within each national space of valorisation. Instead, those nationally differentiated political and institutional forms mediate the unfolding of the underlying formal and material unity of the inherently contradictory dynamics of the accumulation of the total social capital at the global scale. Moreover, the immanent content of these global dynamics is not one of ‘imperialism’ or ‘dependency’ (i.e. a direct political relation between states, another mediating form), but determined by the production of (relative) surplus value on a world scale. ⁹

This eminently unconscious and crisis-ridden social process gives rise to changing constellations of the international division of labour and, as a consequence, to evolving developmental potentialities for each national space that mediates the production of relative surplus value by the total social capital across the globe. The latter is, in sum, the general economic content that is realised in the political form of state policies (domestic and foreign) and class conflict, albeit ‘behind the backs’ of the antagonistic actions of the personifications involved (i.e. social classes and their diverse political organisations, political elites and/or state managers).

Now, as is recognised by virtually all accounts of the history of capitalist development in South America, and more broadly Latin America, the original subsumption of these territories to the global accumulation of capital was based on the production of agricultural (and/or mining) commodities for the world market (Furtado 1976; Marini 2008). As Marx (1976) remarks in Capital, the establishment of this ‘classic’ modality of the international division of labour was determined by the production of relative surplus through the system of machinery of large-scale industry (pp. 579–580). In effect, the exceptional natural conditions prevailing in many of these territories allowed for a greater productivity of agricultural or mining labour, thereby resulting in the cheapening of means of subsistence and a lower value of labour-power. However, this form of subsumption of Latin American territories into the global circuits of accumulation was ridden with a contradiction: if, on one hand, the total social capital enhanced its valorisation by reducing the value of labour-power, on the other hand, this was partly offset by the drain of surplus value, otherwise available for capital’s appropriation, flowing into the pockets of domestic landowners in the form of ground-rent. ¹⁰ Moreover, to the extent that primary commodities produced in the region have been consumed overseas, ground-rent has constituted a continuous international inflow of social wealth.

Capital was thus driven to overcome this barrier to its accumulation capacity by reshaping those spaces of valorisation in order to recover part of that surplus value, through the establishment of an ‘antagonistic association’ with local landowners over the appropriation of ground-rent. From being simply a source of cheap raw materials and means of subsistence, those territories also became determined as sources of ground-rent recovery for global industrial capital. The developmental trajectory of these countries has been determined by the historical course of this modality of capital accumulation, not only throughout the so-called agro-export stage but also during the so-called import substituting industrialisation (ISI) phase and, in South America, until contemporary times (Iñigo Carrera, 2013: 145–158).

As Caligaris (2016) points out, insofar as ‘the political representation of the global total social capital by the state is mediated by the national form taken by the accumulation process’, the total social capital’s recovery of ground-rent ‘must take shape, first of all, in the appropriation of ground-rent by the national total social capital of “resource rich” countries through its own national state’ (p. 66). This political mediation has been necessary in order to block the ‘spontaneous’ course of ground-rent towards landowners through a wide array of state policies that intervene in the circulation of ground rent–bearing commodities and divert its flow towards industrial capital. ¹¹ Thus, the transfer of ground-rent has been achieved through different policy mechanisms (overvalued exchange rates, export and import taxes, direct state regulation of staple food and raw material prices, etc.), which resulted in the establishment of specific domestic conditions for the circulation of capital within those national territories. ¹² Consequently, its appropriation could only be done by industrial capitals operating within those countries and whose circuit realised its final phase (i.e. the sale of commodities) almost exclusively on protected domestic markets of a very limited size vis-à-vis world market norms (Grinberg & Starosta 2009: 769ff). Although this has meant that individual capitals could not reach the scale needed for profitably utilising advanced technological conditions, they have compensated the resulting higher production costs with the appropriation of a portion of ground-rent. In this way, they have valorised at the average rate of profit despite their restricted magnitude and backward technologies. This abundant extraordinary mass of social wealth has systematically complemented the surplus-value extracted from the domestic working class to the point of marking the very specificity of the accumulation process in those national spaces.

The modality of the accumulation of capital based on the appropriation of ground-rent in Latin American–protected markets has been very attractive for domestic capitals which, with the exception of those producing ground rent–bearing commodities, were not competitive enough to sustain their expanded reproduction by producing for the world market. But additionally and fundamentally, those markets have proved especially profitable for industrial capitals of foreign origin (i.e. TNCs), which established there from the mid-to-late-1950s onwards. Unlike the internationalisation strategy of TNCs in East Asia (the establishment of ‘world market’ factories, whether directly or through original equipment manufacturer (OEM) arrangements), foreign capitals in Latin America operated with the smaller scale that those domestic markets required and, given their protected nature, actually made possible. In this way, TNCs in Latin America managed to valorise obsolete fixed capital and accumulate without spending a portion of surplus value in the active development of the productive forces of social labour. However, the other side of this same coin is that the scale of Latin American processes of capital accumulation continued to be structurally dependent on the highly cyclical evolution of the magnitude of ground-rent available for appropriation (hence the widespread ‘political and institutional instability’ characterising many Latin American countries).

This also explains the noticeable lack of dynamism of capital accumulation in the region since the mid-to-late-1970s, which was momentarily and only partially reverted during the recent ‘primary commodities boom’ that seems to be just coming to an end: ¹³ in effect, the mass of ground-rent, especially of agrarian origin, has been, on average, growing at a slower pace than its requirement by industrial capital in Latin American national spaces of accumulation. As a consequence, the process of capital accumulation in the Latin American countries slowed down or entered into deep crisis. In this context, and in order to compensate for the slowly growing ground-rent in sustaining industrial capital’s profitability, these national processes of capital accumulation have resorted to other sources of extraordinary social wealth such as the payment of labour-power below its value and the massive inflow of global fictitious capital in the form of mounting foreign debts (the latter made available as a result of the expansion of international liquidity deriving from the long-standing crisis of global overproduction).

Now, since at least the late-1950s, the planetary production of relative surplus value by the total social capital has led to the emergence and gradual development and expansion of a novel configuration of the international division of labour, which has not simply displaced but co-exists alongside the ‘classic’ modality just sketched out. Premised on the concrete material forms taken by the further automation of the capitalist labour process and advances in means of transport and communication, the so-called NIDL has revolved around the international fragmentation of the collective productive subjectivity of the working class (Iñigo Carrera 2013: 66ff; Starosta 2016: 84–96). More specifically, the constitution of the NIDL has been the outcome of the transformation of the modes of existence of the global collective labourer brought about by the leap forward in the process of computerisation and robotisation of the production processes of large-scale industry, especially since the ‘microelectronics revolution’.

Historically, the emergence of geographically dispersed ‘chains of production of surplus-value’ started with the relocation of simple manual labour processes while concentrating its increasingly more complex parts in advanced capitalist countries. This is the particular initial manifestation of the NIDL that Fröbel et al. (1980) rightly (though one-sidedly) captured in the late-1970s without being able to uncover its general content. Thus, the emergence of the NIDL has been originally guided by capital’s search for not only relatively low wages but also domestic working classes whose specific productive attributes included the habituation to ‘intensive, collective and disciplined labour’ (Iñigo Carrera 2013: 66) under harsh conditions. However, as a result of its own immanent tendencies, the simplest original form of the NIDL has evolved into a more complex constellation, whereby capital searches worldwide for the most profitable combinations of relative cost and qualities/disciplines resulting from the variegated past histories of the different national fragments of the working class. Each national sphere of accumulation that actively participates in the NIDL therefore tends to concentrate a certain type of labour-power of distinctive ‘material and moral’ productive attributes of a determinate complexity, which are spatially dispersed but collectively exploited by capital as a whole in the least costly possible manner. Note, additionally, that this point applies to intellectual labour as well. Insofar as the latter also becomes relatively simplified, the exploitation of the consequently less complex forms of intellectual labour-power can also be relocated to countries where capital finds those kinds of workers more cheaply and with a more compliant subjectivity, as the current literature on ‘offshoring of innovation’ and ‘creative labour’ illustrates (Ernst 2005; Huws 2014). ¹⁴

Although this more recent global restructuring of the international of labour had its most emblematic expression in the ‘late industrialisation’ experience of East Asia since the 1960s (Grinberg 2016; Iñigo Carrera 2013: 66ff), it also had a profound impact in Latin America; paradigmatically in Mexico after the ‘debt crisis’ of the early-1980s and, more recently, in Central America and the Caribbean Basin. ¹⁵ Thus, despite the similar developmental trajectory of Mexico vis-à-vis Argentina and Brazil until the 1980s, in the past three decades the former country has transformed the specificity of its capital accumulation process. More concretely, it has become a source of relatively cheap and disciplined simple labour-power for industrial capital in general, which exploits it in the material conditions (of scale and technology) needed for competitive world market production (whether directly in Mexico through the maquilas regime, or mediatedly through the international migration of workers into the United States). Hence, the contrast with Argentina and Brazil, where capital continued to find it more profitable to valorise on the basis of the appropriation of a portion of ground-rent, because the specific kind of labour-power it needed either was not there or was not cheap enough, and/or because the mass of ground-rent was large enough to offset the benefits of a ‘structural transformation’ in the other direction by providing the source of extraordinary social wealth sustaining those profitable protected domestic markets.

In sum, we think that this approach can help overcome the limitations inherent in the ‘methodological nationalism’ of other perspectives by providing a basis for the study of VoC both across and within regions, which is grounded in the intrinsically global nature of capital accumulation. In the next section, we sketch out a brief illustration of the usefulness of this approach through the discussion of the recent trajectory of the automotive industry in Argentina.

Capital accumulation through ground-rent appropriation: the case of the Argentine automotive industry ¹⁶

Throughout its six decades of existence since the installation of the first manufacturing plants in the mid-1950s, the Argentine automotive industry has been characterised by its small scale, the use of internationally backward technology and the relatively low productivity of labour. In effect, even after the so-called ‘restructuring’ of the 1990s, when a wave of investment gave way to a recovery and expansion of the industry that allowed it to overcome the prolonged crisis of the 1970s and 1980s, the scale and productivity gap with respect to ‘world market’ norms remained on the same levels as it had been in the 1960s. What is more, due to the high levels of local fragmentation of capital in contrast with the strong global tendency towards its centralisation, the gap actually widened when considered at the level of individual plants. Yet, despite these persisting features in the productive structure of the industry, the main automotive TNCs have not only maintained their direct manufacturing operations in the country but also have actually obtained equal or even higher rates of profits than those existing in the sector at the global level (Pinazo 2015; Sourrouille 1980). This obviously connects with our previous argument about the existence of a specific extraordinary source of valorisation of industrial capital in South America, which allows its normal reproduction despite its uncompetitive material conditions.

As a matter of fact, the prevailing approaches to this issue in the specialised literature resonate with the discussion of ‘dependentista’ perspectives in the second section of this article (Ebenau 2012; Weiss 2014). On one hand, the more widespread ‘sociological’ perspective has focused on the oligopolistic and/or speculative behaviour of TNCs, which would have allowed them – together with state policies – to focus their valorisation strategy on the imposition of abnormally high prices, thereby perpetuating the inefficiency of the sector (Jenkins 1984; Nofal 1989; Sourrouille 1980). On the other hand, more ‘radical’ views – and in particular those related to the Marxist strand of dependency theory – have placed greater emphasis on low domestic wages in relation to those in the more industrialised countries (Cimillo et al. 1973; Pinazo 2015). We think, however, that both analyses have focused only on the superficial manifestations of the valorisation of TNCs and have failed to identify the precise sources of social wealth which the latter appropriate via high prices and low wages.

Let us begin with the question of internal prices, which the vast majority of scholars tend to see as consistently higher than international ones, both before and after the ‘restructuring’ of the 1990s (Arza & López 2008; Jenkins 1984: 46; Llach et al. 1997; Sourrouille 1980: 81). Without disputing the veracity of this fact, it is often overlooked that throughout the history of the Argentine automotive industry, there has been sufficient solvent demand to validate domestic prices that were recurrently set above global prices of production. In other words, one must explain the sources of this exceptional purchasing power on the part of Argentine consumers relative to those of other countries. A first source of this higher solvent demand may be found in the specific market destination of automotive production. In effect, a part of the industry’s output is absorbed as means of production and/or for the transport of agricultural commodities. And in order for agrarian capital to yield the normal rate of profit, the consequently greater costs incurred in the purchase of those dearer automotive means of production must be transferred ‘upstream’ towards the rent of the landowning class. Consequently, the social wealth that flows to TNCs via the sale of their product at commercial prices superior to those of production is, in the corresponding proportion, a part of the agrarian ground-rent whose appropriation determines the specificity of capital accumulation in Argentina. Furthermore, another share of the industry’s output has been certainly destined for the luxury personal consumption of landowners. As is evident, the source of this purchasing power is also ground-rent.

But agrarian ground-rent also generated growing demand for automotive vehicles in general (and not only for those directly consumed by agrarian capital and landowners). It did so because one of the normal courses followed by agrarian ground-rent in Argentina has been its primary appropriation by the national state through the mechanisms mentioned in the previous section (e.g. high export and import taxes) and its subsequent conversion into public spending. ¹⁷ In this way, agrarian rent augmented the demand for industrial commodities in general, including of course that for the automotive industry. Consequently, the overpricing of vehicles destined for general domestic consumption (including some sectors of the working class) was also sustained, in the corresponding part, by agrarian ground-rent.

Thus, the existence of ground-rent was, directly or with the mediation of state policies, a source of growing demand for automotive vehicles. This explains the setting of domestic sale prices above international prices of production. Without this extraordinary source of social wealth that validated those relatively high prices, the fixing of protectionist measures – at the national or regional level – would simply have contracted the consumption of vehicles, instead of expanding it as happened in Argentina in every one of the expansive phases of the industry.

As mentioned above, the second main response offered in the literature to the question of the sources of the valorisation of automotive capital in Argentina is linked to the payment of internationally low wages. Usually, the ‘advantage’ derived from the hiring of cheap labour-power is interpreted simply as a reduction in costs (Barbero & Motta 2007; Santarcángelo & Perrone 2012), without identifying the reasons for the existing wage levels nor, furthermore, the source of the ‘advantage’ in question. Dependency theory, for its part, just asserts that this amounts to the ‘over-exploitation’ of labour-power; that is, that the specific source of profit in the ‘periphery’ lies in the ‘abnormal’ modality of extraction of surplus labour from workers (i.e. the sustained payment of labour-power below its value) vis-à-vis the forms of exploitation prevailing in ‘advanced’ countries (Cimillo et al. 1973: 55–56, 95–97; Pinazo 2015: 151–153; see also Marini 1979 for the Brazilian case). We think, however, that the question of the conditions of the purchase and exploitation of labour-power deserves a deeper analysis.

The crucial point in this regard is that the existence of lower wages does not necessarily involve a greater exploitation of labour-power. If we rule out the possibility that reduced wages could be attributable to a lower value of labour-power, which seems unlikely at least in Argentina, it must be noted that they could be explained either by a reduction in the number of use-values consumed by wage-workers or by the cheapening of ‘wage-goods’. However, only the former case would be an instance of the purchase of labour-power below its value or, in ‘dependentista’ parlance, of ‘over-exploitation’. In order to clarify which of these two possible situations has tended to prevail in Argentina, it is necessary to make a comparative analysis of both money-wages and consumption levels of Argentine automotive workers.

Now, there is no doubt that money-wages of Argentine autoworkers have been consistently lower than those prevailing in the United States, which could be taken as an indicator of normal wage levels for these relatively skilled workers at a global scale (i.e. those corresponding, on average, to the full value of this type of labour-power). ¹⁸ In effect, in monetary terms, the Argentine automotive wage has been less than a third of its US counterpart between 1960 and 2013 (at purchasing power parity exchange rates). This means that to put an automotive worker into production, TNCs must disburse as much as three times less variable capital than they would have to if they had to hire labour-power in the socially normal conditions of exploitation of labour-power prevailing at the global level. Nevertheless, the comparison of real wages shows that the Argentine automotive worker was capable of consuming almost two-thirds of the levels of consumption reached by a US worker. In other words, the Argentine worker’s ability to consume was much closer to that of the American’s than is indicated by the value of her or his wage. The explanation for this situation resides in the domestic prices of wage goods for the working class. In effect, within the Argentine space of capital accumulation, agrarian commodities circulate more cheaply than in the world market. Given that the domestic sale of these commodities below their normal price of production is only possible because of the existence of agrarian ground-rent, the cheapening of labour-power constitutes a vehicle for the appropriation of this rent by industrial capital and, in our case, by automotive capital. In brief, the process of appropriation of ground-rent by industrial capital explains to large extent the relative cheapness of labour-power in Argentina. Note, in this sense, that this cheapness does not derive from the ‘historical and moral’ element of the value of labour-power of national fragments of the global working class, which had formed a latent relative surplus population composed of formerly free peasants who were nonetheless subordinated to a centrally and hierarchically structured tributary system of exploitation (Iñigo Carrera 2013: 66), as happened in Korea and other East Asian countries (Grinberg 2016).

To conclude, the preceding analysis shows that the fundamental basis for the valorisation of industrial capital in Argentina has been the appropriation of a portion of the agrarian ground-rent that flowed into the country, both through the purchase of cheapened labour-power and through selling at prices that have been set above those of production. In this way, automotive TNCs have compensated for the backward technical conditions in which they have operated. In this context, other sources of extraordinary profits that did exist, such as the ‘over-exploitation’ of workers highlighted by Marxist ‘dependentistas’, acted as secondary or complementary forms of compensation for those backward material conditions of valorisation, rather than as the essential defining determination of the specific modality of accumulation of automotive capital in Argentina.

Conclusion

In a nutshell, our overview and appraisal of the various critical approaches presented in the Capital & Class Special Issue on ‘capitalist diversity’ allow to draw the conclusion that regardless of the undeniable theoretico-political differences among them, they nonetheless share a two-fold common ground. On one hand, they conceive of political forms (antagonistic class relations, the nation-state and public policies, international relations between states) as involving, to a lesser or greater extent, an element of autonomy with regard to the economic content of the accumulation of capital. On the other hand, and analogously, they tend to conceive of the configuration and developmental potentialities of national spaces of valorisation as involving at least some degree autonomy from the global dynamics of the ‘law of value’.

In contrast, we think that to fully transcend the shortcomings of the neo-institutional VoC-CC literature rightly and accurately identified by the ‘critical political economy’ frameworks discussed above, it is necessary to leave behind the aforementioned two-fold notion of autonomy that implicitly or explicitly informs those perspectives. And this means taking the immanent unity of the capitalist world market as the starting point of the investigation and, as a consequence, grasping changing patterns of national or regional differentiation as concrete forms that mediate the unfolding of the contradictory dynamics of the essentially global production of relative surplus value by the total social capital. In turn, the specific political forms prevailing in each country are thus revealed as expressions of the movement of the economic forms taken by global capital accumulation in each national space of valorisation. In our view, these two insights are grounded in one of the most potent scientific discoveries of Marx’s critique of political economy, namely, that capital is neither simply a thing (for example, the instruments of production) nor a productive unit or legal entity (such as a firm), or a social grouping sharing common characteristics and interests (e.g. ‘business’ or ‘the bourgeoisie’). In its general determination as self-valorising value, capital becomes ‘the all-dominating economic power of bourgeois society’ (Marx 1973: 107), whose ‘substratum’ is the ‘world market […] in which production is posited as a totality together with all of its moments’ (p. 227).