Strategic Dimensions of Neoliberal Globalization: The Exporting of Labor Force and Unequal Exchange

doi:10.4236/aasoci.2012.22017

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Advances in Applied Sociology

2012. Vol.2, No.2, 127-134

Published Online June 2012 in SciRes (http://www.SciRP.org/journal/aasoci) http://dx.doi.org/10.4236/aasoci.2012.22017

127

Strategic Dimensions of Neoliberal Globalization: The Exporting

of Labor Force and Unequal Exchange

Raúl Delgado Wise, Humberto Márquez Covarrubias

Universidad Autónoma de Zacatecas, Zacatecas, México

Email: rdwise@estudiosdeldesarrollo.net, hmarcov@gmail.com

Received March 13th, 2012; revis ed Apr i l 1 6th, 2012; accepted April 27th, 2012

In addition to environmental degradation and financial speculation, neoliberal globalization has created a

complex strategy of capital internationalization led by large multinational corporations that is driving la-

bor costs down to extreme levels. This strategy is based, on the one hand, on the establishment of global

commodity chains based on outsourcing schemes and intra-firm trade, which operate in peripheral nations

and in the form of enclaves; on the other, it employs international labor migration as a means to lower la-

bor costs in central countries. Both mechanisms comprise a new rung in the international division of labor:

the export of labor. This process has led to new forms of unequal exchange that are much more predatory

than those involved in the exchange of raw materials for industrial products. This has led to a reintegra-

tion of a subordinate periphery to the center, increasing asymmetries between countries and pushing so-

cial inequality to unprecedented levels. The purpose of this paper is to empirically and conceptually ana-

lyze these fundamental aspects of contemporary global architecture.

Keywords: Labor Export; Unequal Exchange; Uneven Development; Neoliberal Globalization; Crisis

Introduction

In the early 1970s, labor constraints were listed as one of the

main obstacles to global capital accumulation (Harvey, 2003).

The big challenge in order to overcome this obstacle was to

lower the cost of labor. The concomitant strategies employed

by large multinational corporations (MNCs) under the govern-

mental support of the world’s most powerful countries, led by

the United States and international agencies headed by the

World Bank (WB), the International Monetary Fund (IMF) and

the World Trade Organization (WTO), have triggered a pro-

found process of capitalist restructuring. That is, the so-called

neoliberal globalization, which is characterized by:

1) The internationalization of capital. The global economy’s

expansion strategy is based on a profound restructuring of the

global economic framework through the establishment of out-

sourcing and/or intra-firm trade among big corporations, the

influence of which extends across the world. This form of ex-

pansion seeks the economic reinsertion of peripheral countries

with abundant and cheap human and natural resources; here,

new export platforms operate in the form of enclaves. Currently,

between 55 million (Robinson, 2008) and 66 million workers in

the southern hemisphere (Singa Boyenge, 2007) work in this

type of plants. The operating agents behind this strategy are

large manufacturing, financial, agricultural, trade and services

corporations (Robinson, 2008).

2) Financialization. Financial capital generates speculative

strategies that channel investment funds, sovereign funds and

social surplus toward new financial instruments that offer high

profit margins in the short term but risk causing recurring crises

and massive fraud, all of which obstructs and affects the func-

tioning of the real economy (Foster & Magdoff, 2009; Bello,

2006).

3) Environmental degradation. Biodiversity, natural resources

and community and national assets are being privatized for the

benefit of big corporations who favor profits over social and

environmental costs. This results in increased environmental

exploitation, pollution, famine and disease. It is also leading to

changes in climate (global warming and more frequent and

intense extreme weather events) that endanger the symbiosis

between human society and nature (Foladori & Pierri, 2005).

4) The restructuring of innovation process. Technological

advances in computing, telecommunications, biotechnology,

new materials and nanotechnology cater to the needs of large

corporations in search of higher profits. Scientific and techno-

logical work is restructured via mechanisms such as outsourc-

ing and offshore-outsourcing, which enable these corporations

to have a mass of southern hemisphere scientists at their service

while capitalizing on benefits and transferring risks and respon-

sibilities by amassing patents. This leads to an unprecedented

commodification of scientific work under a short-term view and

with little social concern (Freeman, 2005; Lester & Piore,

2004).

5) Labor precarization. One of the main forces behind the

new capitalist architecture is the cheapening of labor costs.

Massive oversupply of labor from underdeveloped countries in

Africa, Latin America, Asia and the former communist bloc

supports this dynamic. This leads to the increasing transnation-

alization, differentiation and precarization of labor markets. As

a result, new divisions within the working class are fostered

through the introduction of national, racial and cultural labor

hierarchies that enable large corporations to enjoy havens of

cheap and flexible labor (Harvey, 2007; Schierup, Hansen, &

Castles, 2006).

6) The new migration dynamics. While migration is a his-

torical process that has always exhibited certain continuities, it

is changing drastically in the context of neoliberal globalization,

127

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

acquiring a new profile and dynamic. On the one hand, it is

characterized by: a) strong pressure to emigrate in the main

sending areas given the absence of job opportunities, and b) the

increased vulnerability of these new labor migrants, who are

subjected to extremely exploitative conditions. On the other,

new migration patterns mainly flow from the southern to the

northern hemisphere (82 million) and within the south (74 mil-

lion), with a significant degree of internal migration (750 mil-

lion). All of this reconfigures the map of labor in a context of

precariousness and turns migration into a key element of the

capitalist restructuring process as a whole (UN, 2004, 2006 and

2010; Delgado, Wise & Márquez, 2007 and 2009).

In short, the restructuring process that characterizes capitalist

neoliberal globalization has nothing to do with a “free market”

ideology but a growing monopolization of production, services

and global trade, accompanied by progressive labor exploitation

and environmental degradation; taken together, these comprise

an exploitative, parasitic, rentier-based and predatory phase of

global capitalism (Petras & Veltmeyer, 2000; Stiglitz, 2002).

Starting from these fundamental issues, the purpose of this

study is to examine two essential features of neoliberal globali-

zation: the export of labor and unequal exchange. As we shall

see in the following sections, they are both linked to the dy-

namics of uneven development that characterize contemporary

capitalism and are the basis for its poor, inconsistent and un-

sustainable performance.

Notes on the Performance of Contemporary

Capitalism

The following data and indicators highlight the unique pat-

tern that characterizes neoliberal globalization and are also

intended to expand theoretical and conceptual perceptions of its

nature. We are primarily interested in drawing attention to some

core aspects of its performance, mainly in the field of produc-

tion living aside the financial and environmental aspects. We do

not seek to deny or dismiss the ingrained dialectic relationship

between the latter two dimensions and the first but unravel what

happens in the field of the so-called “real economy” by using

the method of political economy, placing special emphasis on

the transformations taking place in capital/labor interactions.

The Massive Overs u pply of Labor1

With the incorporation of the former Soviet Union, China

and India to the global capitalist market, labor supply for the

system essentially doubled, increasing from 1.46 to 3 billion

(Freeman, 2005). To this we must add the violent and over-

whelming liberalization of the labor force that has taken place

in peripheral economies as a result of structural adjustment

programs which, as discussed below, have served to dismantle

these economies and promote their asymmetric and subordi-

nated reintegration into neoliberal globalization.

The Growing Precarization of Labor

Massive labor oversupply has led to a drastic shift in dyna-

mics and labor market performance. Instead of an upwards

“win-win” convergence between the wages earned in developed

and underdeveloped (or peripheral) nations and as stipulated by

neoliberal precepts, we are experiencing the exact opposite: a

process of increasing economic polarization between countries

accompanied by progressive deterioration and a downward

convergence in the living and working conditions of the entire

working class. It is enough to point out that, currently: 1) 1530

million workers (just over half of the world’s labor force) work

in conditions of vulnerability that include no job security or

access to minimum labor rights, and 2) 630 million workers

(one in every four) earn less than $1.25 dollars per day, which

places them a conte x t of extreme poverty (ILO, 2011).

The Increase in South-North and South-South Labor

Migration

Given the massive oversupply of labor and the growing dete-

rioration of living and working conditions for the bulk of the

working class, migration—particularly that from peripheral to

central countries—has become a necessity and not merely an

option for family subsistence. For this reason, it is increasingly

turning it into forced displacement.

Under these circumstances, the amount of migrants (mostly

from the periphery) has grown considerably over the past three

and a half decades, from 84 million in 1975 to 214 million in

2010 (see Figure 1). Moreover and in the name of “national

security,” migrants are increasingly subject to exploitative con-

ditions, extreme vulnerability and social exclusion (Delgado

Wise, Márquez, & Puentes, 2009).

The North-South flow of remittances has been increasing at

an even more significant rate, rising from 57 billion dollars in

1995 to 325 billion dollars in 2010 (World Bank, 2010) (see

Figure 2). This has led to the reintegration of a subordinated

periphery to the center, increasing asymmetries between coun-

tries and pushing social inequality to unprecedented levels.

Some international organizations like the WB and the Inter-

American Development Bank (IDB) disregard the actual nature

of remittances (i.e., a fraction of reduced wages earned in des-

tination countries) and twist reality while envisioning these

funds as a supposedly inexhaustible source of resources for the

development of sending countries. This is, obviously, a great

myth or, as stated by Devesh Kapur (2004), a new development

mantra that distorts reality and masks the emergence of new

Population

years

1The noti on o f l abor o ver sup p ly co nt raven es o rt hod ox co n cept s o f “ bal ance”

between supply and demand. Our use of the “over” prefix has a double pur-

pose: f irst, it emphasi zes the fact that contemporar y capitalism is ch aracter-

ized by a labor o verpopula tion or re serve la bor army of en ormous propor tions

(absolute overpopulation, in Marxist terms) and, second, that this over-

crowding is due to cha nges in the institut ional framework as sociated with new

business strategies, which are part of the ongoing process of capital interna-

tionalization and are based on cheapening labor costs.

Source: CONAPO (Consejo Nacional de Población) and World Bank,

2010.

Figure 1.

International migrants worldwide.

128

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

Source: World Bank.

Figure 2.

Remittances in the world (millio n US dollars).

forms of unequal exchange.

Growing Social Inequalities

Although, between 1990 and 2007, employment across the

world grew by 30%, this growth could not meet the increasing

and overwhelming demand for jobs. It also led to a very un-

equal distribution of labor supply, particularly along the North-

South horizon. This resulted in a marked differentiation and

precarization of labor markets, with profound implications in

terms of social inequality. This grew in an unprecedented man-

ner on varying levels and degrees and was accompanied by a

shrinking middle class and the progressive dismantling of the

welfare state. We must take into consideration that a report

issued by the International Labour Organization (ILO, 2008)

reveals that, in 51 of the 73 countries with available data, the

share of wages in gross domestic product (GDP) decreased

significantly between 1990 and 2007. The biggest drops were in

Latin America and the Caribbean (13%), followed by Asia and

the Asian Pacific (10%) and, finally, the more advanced econo-

mies (9%). This, in turn, resulted in a drop in income distribu-

tion (measured by the Gini coefficient) in approximately two

thirds of studied countries.

The U.S. case is paradigmatic in this context: household

inequality, as measured by the Gini coefficient, underwent a

significant increase over the neoliberal period (see Figure 3).

Moreover, in 2009 and according to data from the U.S. Census

Bureau, the highest income quintile of U.S. households ac-

counted for 50.3% of revenue, while the lowest only comprised

3.4%. These are historic levels of inequality and even exceed

those of the 1920s.

The Relative Decrease in Developed Countries’

Capacity for Innovation

In spite of what appeared to be a constant in the history of

capitalism, the rate of innovation capacity in developed coun-

tries declined from 0.876 in 1995 to 0.869 in 2001 (see Table

1).

This phenomenon, which entails significant changes in the

patterns and role played by productive force development in the

dynamics of capitalist accumulation, is associated to the re-

structuring of innovation process mentioned in the preceding

paragraph. This restructuring is spurred by cheap labor costs in

Table 1.

Innovation capability index*.

1995 2001

Developed countries 0.876 0.869

New EU members 0.665 0.707

Southeast Europe an d CIS 0.602 0.584

Southeast and East Asia 0.492 0.518

Latin Am erica and the Caribbean0.375 0.360

Southern As ia 0.223 0.215

Sub-Saharan Africa 0.157 0.160

Source: UNCTAD, 2005; *This index combines indicators of technological activity

(R & D personnel, patents and scientific publications) with human capital indicators

mainly related to ed ucation levels.

Source: U.S. Census Bureau. http://www.census.gov/hhes/www/income/data/historical/inequality/taba2.pdf.

Figure 3.

United States: Household income inequality measured by the Gini coefficient.

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

scientific/technological activities, where the incorporation of

skilled and highly qualified workforce from the periphery plays

an increasingly important role, either via immigration or through

the establishment of outsourcing platforms in peripheral coun-

tries (i.e., offshore outsourcing).

The Low Rates of Economic Growth

In contrast to post-war annual rates of economic growth

(GDP), which globally averaged 5.8%, growth fell throughout

the neoliberal period to 3.5%, 3.2%, 2.9% and 2.6% in the

1973-1980, 1980-1990, 1990-2000 and 2000-2009 periods, re-

spectively (see Figure 4).

It must be added that, toward the end of the first decade of

this century, a general crisis of global capitalism broke out.

Centered in the United States, this crisis has affected multiple

aspects of the current system (Márquez, 2009 and 2010):

 Financial. Financial capital overflow produces bubbles that

affect the socioeconomic fabric and lead to a global eco-

nomic depression (Foster & Magdoff, 2009; Bello, 2006).

 Overproduction. Excess capital circulating the global eco-

nomy that cannot find conditions for implementation in the

field of production due to falling profit margins and a de-

cline in effective demand (mainly because of wage and in-

come containment for the bulk of the population) creates a

crisis of overproduction (Bello, 2006).

 Environmental. The degradation of natural resources, cli-

mate change and the commodification of the environment

contribute to the destruction of nature. This manifests itself

as a structural rupture in the material bases for the produc-

tion a n d rep rod uct io n of hu man l if e (F ola dor i & Pier ri, 2005).

 Social. Growing social inequality, the dismantling of the

welfare state and the breakdown of systems of subsistence

accentuate poverty, unemployment, violence, insecurity and

labor precariousness, adding pressure to migrate (Harvey,

2007; Schierup, Hansen, & Castles, 2006).

This crisis challenges the prevailing style of globalization

and, in a more profound way, the global systemic order: the

current system is devastating the main sources of wealth, work

and nature itself, all of which have been overexploited and de-

graded to the point they threaten the fabric of civilization itself.

Uneven Development and the Exporting of

Labor Force

It is clear that the nature of contemporary capitalism has been

Source: World Bank.

Figure 4.

World economy growth rates.

inaccurately represented and distorted by a bland and apolo-

getic notion of globalization that condones the increase in in-

ternational flows of capital, information, technology and work-

force. Beyond this partial and limited vision, which rests on

blind faith in a supposedly free and self-regulating market as a

route to achieving a just and equitable society, the past three

and a half decades have been characterized by a project of

capitalist expansion that has had severe consequences in terms

of development and social justice. The concept of uneven de-

velopment, framed by the notion of imperialism, is particularly

useful for describing and analyzing this situation given that it

refers to the historical process of economic, social and political

polarization between regions, nations and classes derived from

the dynamics of capital accumulation, the international division

of labor and different modes of class conflict. One of the most

conspicuous outcomes of this process is the unprecedented

expansion of social inequalities that characterizes contemporary

capitalism and has resulted in an excessive concentration of

capital, power and wealth in the hands of a few while the ma-

jority of the population has seen a progressive downgrading in

their living and working conditions. This process is also evident,

on a spatial level and with different emphases,2 in the expan-

sion and deepening of the asymmetries between the main de-

veloped countries and most peripheral or underdeveloped na-

tions.

We do not wish to characterize capitalist development as a

simple dichotomous process, or offer a Manichean view of its

superficial aspects. On the contrary, we seek to unravel the

nature of the process of uneven development that characterizes

contemporary capitalism, which is marked by the introduction

of extreme forms of elitist appropriation of the economic sur-

plus, both in the periphery and the advanced industrial nations

of the center. In this sense, the massive influx of cheap, flexible

and disorganized labor from the periphery constitutes a crucial

aspect in the strategy of capital internationalization.

The neoliberal structural adjustment policies promoted by the

IMF and the WB in collusion with the WTO are expressly de-

signed to promote this strategy and create a triple effect in pe-

ripheral economies: 1) the dismantling of the domestic market-

oriented economic structures and their rearticulation into the

international market; 2) the restructuring of the labor market in

order to generate a growing and overwhelming surplus popula-

tion; and 3) an outflow of surplus labor through labor migration

(Delgado Wise & Márquez, 2007). This process promotes the

reinsertion of the periphery into the sphere of global capital in

two complementary ways:

1) The establishment, expansion and deepening of global

commodity chains by transferring parts of the production pro-

cess to peripheral regions with an abundance of cheap labor.3

Essentially, this is a strategy of international expansion carried

out by large MNCs and based on operational outsourcing and

intra-firm trade, which triggers a peculiar activity in peripheral

economies: the indirect or disembodied export of workforce.

We characterize this type of export thusly because the main

component of the exported goods is the value of the producing

2There are important exceptions to this trend, including state-led industriali-

zation processes in various Asian countries that deviate from the measures

promoted by the Washington Consensus (Cypher & Dietz, 2009). Similarly,

we have the short-term impacts of the recent commodity boom.

3Although w e do us e t he c once pt of glo bal c omm odity chains c oined by G ary

Gereffi (2001), we do not share his optimistic view regarding the scope and

implications of globali zation.

130

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

labor as a result of the enormous volume of imported supplies

associated with production links abroad. This, in addition to

reducing the local impact of manufacturing operations to mea-

ger wage earnings (and, in the best of cases, a limited multiplier

effect by way of consumption) leads to the configuration of

new enclave economies operating as appendages in global

commodity chains. Add to this the fact that the supply of im-

ported materials is often made via foreign operations or through

tax-exempt or subsidized manufacturing or assembly contracts

(outsourcing) that are free from any liability regarding labor

rights and potential environmental damage. All of this results in

a significant lowering of the production costs for large MNCs,

which gain unrestricted access to the periphery’s abundant and

available supply of cheap labor (Delgado Wise & Márquez,

2006; Cypher & Delgado Wise, 2010).

2) The movement of surplus population from the periphery to

developed regions via labor migration constitutes a second

strategy. This movement, characterized as direct export of labor,

does not only cover the structural deficits in labor demand suf-

fered by developed economies, which have an aging population

and an inadequate supply of domestic labor force to meet the

labor demand; it simultaneously increases job competition in

various sectors of the receiving economies and triggers a down-

ward trend in wages for the entire working class. Importantly,

this process does not derive from a simple game of supply and

demand in the labor market, but is part of a deliberate business

strategy.4

Thus, the direct and indirect export of labor plays a key role

in the neoliberal plan. It delineates the contours of a new inter-

national division of labor that implies an asymmetric model

based on the reintegration of peripheral nations to the global

capitalist system. It constitutes, in essence, a higher phase in the

commoditization of the workforce available in the international

market, leading to a progressive reduction in the quality of the

living and working conditions for the majority of the employed

population and their dependents. As we shall see in the next

section, this translates into a progressive devaluation and chea-

pening of the labor force and the emergence of extreme labor

exploitation or superexploitation. These conditions are not m erely

specific to the periphery, as suggested by Marini in his theories

regarding underdevelopment and dependence (1973); they ex-

pand to central nations through labor migration which, as we

already pointed out, acquires the character of forced displace-

ment.

As mentioned before, the new global architecture includes an

exorbitant flow of financial/speculative capital and environ-

mental destruction,5 which intensify the contradictions inherent

to the system and emphasize its bias toward expansion and the

deepening of both the geopolitical and geo-economic imba-

lances that include social inequality.

Emergence of New Forms of Unequal Exchange

The concept of unequal exchange is crucial to the strategic

and structural transfer of surplus across global commodity

chains, which is also at the base of the periphery’s asymmetric

reintegration into neoliberal globalization. Despite the central

role once played by this concept to explain the dynamics of

uneven development and unravel the nature of the link between

developed and underdeveloped, peripheral or dependent nations

(e.g., the theories of the Economic Commission for Latin

America—CEPAL6—and dependency theorists7) it has yet to

be included in analyses of contemporary capitalism. It is im-

portant to note that the bulk of the discussion of unequal ex-

change has been and remains limited to the analysis of the in-

ternational division of labor that characterizes the periphery as

a supplier of raw materials and developed countries as suppliers

of industrial products. While this division remains in force for a

significant number of peripheral countries, it has ceased to ex-

clusively define North-South relations. Some newly industria-

lized peripheral countries (mainly in the Asian region) increas-

ingly serve as suppliers of industrial goods.8 More important is

the fact that this classic form of unequal exchange has incorpo-

rated a new and increasingly central one: direct or indirect labor

force export.9

To undertake an analysis of this kind, it should first be noted

that mechanisms of unequal exchange involve much more un-

favorable terms for the periphery than those implicit in the ex-

change of raw materials for manufactured goods. On the one

hand, the indirect export of labor force associated to peripheral

nations’ role as appendages to global commodity chains in-

volves a net transfer of profits. This is an extreme form of un-

equal exchange, since it involves extracting almost all the eco-

nomic surplus generated by the workforce employed in the

manufacturing and assembly plants.10 This export enclave me-

chanism inhibits any prospect of economic growth and deve-

lopment arising from export operations made (under the guise

of manufacturing exports) by the peripheral nation. In fact, their

actual contribution to the national accumulation process is li-

6The Prebisch-Singer hypothesis regarding the worsening nature of trade

conditions in the e arly 1950s was particu larly important in th e development o

ECLAC theories (Prebisch, 1986). Celso Furtado’s work was also very in-

fluential (Mallorquin, 2007; Bresser-Pereira, 2007).

7Beyond the heated Marxist debates of the 1970s and 1980s (Samir Amin, et

al., 1971; Crític as de la Econom ía of Polític a, 1979), t here is no doubt t hat the

pioneering w ri tin gs o f E mm a nue l (197 3 , origi na lly p ubl ished in 1969) o n the

nature of unequal exchange had a strong influence on dependency theorists.

There ar e, howe ver, many varia nts of depe ndency anal ysis and t he theore tical

work on unequal exchange offers analytical perspectives that require further

development must be adapted to the realities of contemporary capitalism

(Brewer, 1980, 208- 2 32; Munck 2000).

8In his famous writings following his hypothesis (with Raul Prebisch) about

the deteriorating terms of trade, Hans Singer (1975) anticipated such a situa-

tion when he sought to go beyond a simple analysis of changes in relative

rices between two classes goods and considered the problem of different

production structures between the center and the periphery, placing an em-

phasis on technica l progress.

9As noted above, an estimated 55 to 66 million laborers work in assembly

lants locate d in the pe riphe ry while 70 million southe rn la b orers w ork in th e

developed North.

10Under the proprietary nature of intra-firm activities, closely associated to

surreptitious outsourcing activities, the magnitude of these transfers can be

easily concealed in company accounts and an exact m easurement is therefore

nearly impossible.

4A clear example is the restructuring of manufacturing in the United States

through assembly or manufacturing operations and intra-firm trade, which

have moved significant parts of the production process abroad. This has

severely a ffected domestic em ployment, manife sting in the loss of a lmost four

million jobs i n this sect or between 1994 and 2008. In a ddition to thi s measure,

which giv es corporati ons access t o foreig n paradis es of cheap labor, th ere is

an ongoin g trend to r eplace nati ve worker s with immigr ant labor force (e.g.,

Mexican migrants). Their wages are, on average, half of those earned by

natives (Delgado Wise, Marquez, & Rodriguez, 2009).

5Natural biosphere resources have been increasingly incorpo rated into capi-

talist marke t logi c. Sinc e the goa l is to maxim ize profit i n t he shorte st am oun t

of time possible, these resources are being depleted. Many scientists and

institutions have called attention to serious phenomena such as global

warming, climate change and the loss of biodiversity, which generate sub-

stantial imbalances in natural/social relationships, to the extent that they now

threaten the reproduction of human life on the planet.

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

mited to meager wage earnings that take advantage of huge

income differences between countries and, in the best of cases,

a small multiplier effect by way of consumption. Moreover, the

installation and operation of assembly plants in peripheral

countries is accompanied, as noted earlier, by subsidies and tax

exemptions that affect the social capital of the host country and

generate collateral damage that includes the narrowing, differ-

rentiation and precarization of labor markets, along with envi-

ronmental degradation. Another aspect of indirect labor export

that has become particularly important nowadays is the creation

of complex scientific/technological developments in the pe-

riphery that are linked to the restructuring of innovation sys-

tems in some of the more developed countries. Under subcon-

tracting schemes, intangible goods of even greater strategic

importance than the net profit from manufacturing and assem-

bly plants are transferred abroad. By this we mean the transfer

of the capacity for development and progress, which takes the

form of competitive advantage and an ability to generate ex-

traordinary profits.

On the other hand, the direct export of workforce via labor

migration involves the transfer of anticipated future benefits

arising from expenditures on the training and social reproduc-

tion of the migrants. These costs, as demonstrated in the case of

Mexico, the world’s major migrant sending nation, are not

compensated by the flow of remittances (Delgado Wise, Már-

quez, & Rodríguez, 2009). In demographic terms and for pe-

ripheral countries that are located in an advanced stage of

demographic transition, this transfer means the export of their

demographic dividend (i.e., the productive age population that

maintains children and older adults). In a deeper sense, this

shift implies the loss of the most important resource for the

accumulation of capital in the country of origin: its workforce.

The export of highly skilled labor force exacerbates the prob-

lem, seriously reducing the country of origin’s capacity for

self-beneficial innovation and the promotion of intensive tech-

nological development projects.

Analyzing these new forms of unequal exchange is a theo-

retical, methodological and empirical challenge that requires

changes in the perception and characterization of the conven-

tional categories used to interpret contemporary capitalism.

However, while recognizing the significant contributions of

ECLAC to the understanding of this phenomenon (especially

regarding the central role given to technical progress), it is im-

portant to add that Marxist theories of unequal exchange (in the

strict and general sense) provide a solid and fertile conceptual

ground for theorizing the emerging forms of unequal exchange

involved in the labor export. On the one hand and strictly

speaking, unequal exchange centers on wage differentials aris-

ing from population mobility barriers (which, in more precise

terms, relate to differential rates of surplus value) and, on the

other and in a broad sense, it adds those emanating from vari-

ous organic capital compositions, (i.e., differentials in scien-

tific/technological progress in the involved countries). We must

take into account the fact that the internationalization of capital

seeks to cheapen labor costs through global commodity chains

(including those involving highly qualified workforce) and

maximize the transfer of surplus between peripheral and de-

veloped countries precisely by deepening wage differentials.

This line of reasoning could be extended to an analysis and

conceptualization of the unequal exchange relationships in-

volved in international labor migration.

It must be added that, in addition to the material and human

losses suffered by countries of origin, which are not compen-

sated by remittance flow, direct export of labor also entails

invaluable costs and risks for migrants and their families. We

should not forget that the migration flows that distinguish neo-

liberal globalization assume the character of forced migration

(i.e., the movement of people who are literally are forced from

their territory given the lack of employment opportunities and

forms of family support in their places of origin). The journey

entails many risks and dangers, particularly for the most vul-

nerable groups, including permanently precarious working

conditions and social exclusion in places of destination.

Everything that has been said up to this point shows that the

view promoted by some international agencies, which relegate

development responsibilities in places and nations of origin to

migrants is not only an absurd distortion of reality but an at-

tempt to conceal the system of unequal exchange embodied by

neoliberal globalization. Among the assumptions that fuel this

political-ideological view we are told that: 1) migration is a

source of development for the sending country, with migrants

as the agents and remittances as a driving force; 2) migration

has its own self-generated dynamic and does not obey structural

causes; 3) migration represents a burden on the host country

and remittances a leakage of its resources; 4) migrants are re-

sponsible for the deteriorating employment and living condi-

tions in the host society, and 5) migration is a poverty-fighting

strategy that economically empowers the poor (Delgado Wise,

Márquez, & Rodríguez, 2009).

In addition to being unilateral and biased, this concept is a

contradiction in terms: it is precisely underdeveloped condi-

tions (and, in particular, the dynamics of neoliberal globaliza-

tion) that increase underdevelopment and North-South asym-

metries, leading to labor emigration and the new migration

dynamics. In short, this is a distortion of reality that seeks to

create the illusion that migrants and remittances (presented as

an endless flow of monetary resources) can and should become

a force for development in countries of origin.11

The contributions made by immigrants to the host economy

and society are often bypassed. Instead of publicly acknow-

ledging these contributions, the states of receiving countries

(which serve the interests of the ruling class and large corpora-

tions) utilize a discriminatory discourse that presents immi-

grants as a social burden and criminalizes them, to the point

that they are presented as a risk to national security. In a similar

vein, migrants become the civilian population’s favorite scape-

goats and are blamed for the evils caused by neoliberal globa-

lization: the dismantling of the welfare state, the decline of the

middle class, falling wages, and unemployment, among others.

The stigmatization of the migrant workforce effectively de-

values it and has a domino effect across the whole of the work-

ing class in host societies.

Finally, it is important to note that, in the context of this

ideological construction, the strategic/structural causes of forced

migration are ignored, as are those behind labor export and

associated unequal exchange patterns.

Concluding Remarks

Throughout this paper we have attempted to provide empiri-

cal and conceptual elements that can unravel crucial aspects of

11This does not seek to bypass the contributions made by migrants and their

organizations to development in communities and places of origin, which

involve great sacrifices. We want to emphasize how this essentially consti-

tutes a salary transfer that, in its very nature, is a product of the unequal trade

relations that characterize contemporary capita lism (Márquez, 2007).

132

R. DELGADO WISE, H. MÁRQUEZ COVARRUBIAS

neoliberal globalization. This is just preliminary work and it

merits further development in at least three strategic are as:

 First, the critical reconstruction of the field of development

studies. The prevalence of so-called single thought,12 which

rests on the idea that the free market is the mechanism that

efficiently allocates resources and generates schemes of

economic convergence between countries and their peoples,

has clearly failed. In this sense, we must rethink the deve-

lopment of peripheral countries from new theoretical and

political perspectives that adapt Latin American critical

thought and the experiences of other regions to contempo-

rary reality. These ideas should promote profound changes

in the structural, political and institutional framework of pe-

ripheral countries, moving toward a new global architecture

that reduces social inequalities, asymmetries between coun-

tries, and establishes a harmonious relationship with the en-

vironment.

 Second, the need for further theoretical, conceptual and

empirical analysis regarding the nature of neoliberal glo-

balization. As this paper shows, neoliberal globalization

constitutes an exploitative, parasitic rentier-based and pre-

datory mode of capitalist expansion that departs from the

pathways of the “progressive” historical development of

capitalism. Instead of relying on the development of pro-

ductive forces as the engine of the accumulation process, it

bases itself on opportunities created by large MNCs to

make very high profits in a quick and easy way: labor

overexploitation (which takes advantage of the massive

oversupply of workforce in the periphery and former so-

cialist countries), financial speculation, and the irrational

exploitation of natural resources. All of this requires build-

ing new analytical categories that can unravel the complex

process of capital internationalization that has been under-

way for the past three and a half decades. Among other

things, we must dissect the dynamics of uneven develop-

ment that characterize the current phase of imperialist

domination—specifically: 1) geographical dispersion/con-

centration of capital along a North-South axis, which is

generated by the MNCs outsourcing of production pro-

cesses to peripheral regions (Sassen, 2007);13 2) the retro-

gressive development dynamics that unfold in the periphery

as a result of labor export and its dual character;14 3) the

characte ristic s of the new i nternational division of labor and

emerging forms of unequal exchange, as well as associated

forms of informal and precarious employment. This, in turn,

requires the construction of new indicators capable of cap-

turing this reality and demystifying dominant conceptions

regarding the character and nature of contemporary capita-

lism.15

 Third, the construction of an agent of social transformation.

The globalization project led by the United States has a li-

mited number of beneficiaries to a small capitalist elite and

has already lost its popularity given the overwhelming mass

of excluded and worldwide causalities. This has triggered

the need for a drastic change in the economic, political, so-

cial, cultural and environmental fabric. However, this de-

gree of social transformation is not feasible without the par-

ticipation of organized civil society, both in the form of

movements and struggles carried out by a diversity of

agents. Building an agent of transformation calls not only

for an alternative kind of development that is theoretically

and empirically grounded, but also for channels of dialogue,

the sharing of experiences, and the need to reconcile inter-

ests and visions and build partnerships, both across South-

South and South-North axes.

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