Unequal exchange

by Rikard Warlenius

The global exchange of commodities and money through trade appear as balanced when we measure it in money, but this conceals very unequal exchanges of labour time, raw materials, and energy and an unequal distribution of Earth’s capacity to absorb environmental waste such as carbon dioxide. These uneven net flows of labour and natural resources and appropriation of sink capacities are what the notion of Ecologically unequal exchange (EUE) conceptualizes, and a common assumption is that they contribute to ecological and human exploitation in peripheral areas as well as to the maintaining of an unjust world order.

Unequal exchange: an academic theory with deep rootlets

The concept has deep rootlets in political economy and ecology. Unequal exchange—basically the notion that more labour is exchanged for less labour through international trade—was discussed by for instance the political economists David Ricardo and Karl Marx in the 19th century, and was later further developed by the Austro-Marxist Otto Bauer, the dependency theorist Arghiri Emmanuel, world system analyst Samir Amin, and neo-Marxist Ernest Mandel, to mention some of the more important contributors. Explanations for why unequal exchange happen vary, from viewing different levels of productivity or wages as the cause to associating unequal exchange with—in more Marxist phrasing—the organic composition of capital. This has to do with the distribution of capital, divided into two categories, in an economy: on the one hand constant capital—investments such as machinery and buildings—and on the other hand variable capital—mainly paid as wages for labour. In advanced, highly industrialized economies, the share of constant capital is normally higher than in ‘developing’ economies. Investments in machines, for instance, substitute for labour and thus less labour is needed to create a certain amount of value. In other words, if a lot of labour time goes into commodity production in one area, like Africa, and much less goes into production in another area, like Western Europe, an exchange of commodities from those two areas is likely give rise to unequal net flows of labour time. The commodity produced in Africa is likely to embody more labour time per unit of value (e.g. dollar) than the European.

Biophysical resources with high exergy (energy with high ability to perform work) are extracted in the peripheries of the world system and exported to the cores, where they are dissipated/consumed.

Ecologically unequal exchange: theoretical developments and critical discussions

Starting in the 1980s, the concept of unequal exchange was further broadened to include not only unequal exchange of labour but also of natural resources—matter and energy. A pioneering study was Stephen Bunker’s (1985) Underdeveloping the Amazon, in which theories of unequal exchange were first applied to ecological extraction. Alf Hornborg (1998) coined the concept ecologically unequal exchange and in a series of articles and books gave it theoretical depth by combining world system analysis with thermodynamic concepts from physics. Biophysical resources with high exergy (energy with high ability to perform work) are extracted in the peripheries of the world system and exported to the cores, where they are dissipated/consumed either directly or as inputs to industrial products. From an economic point of view, these final products (cars, cell phones, washing machines …) are considered as more valuable than the input, but from a thermodynamic perspective they are actually of less value. The raw materials have high exergy, with great potentials, that becomes dissipated as it is turned into finished products. The deterioration will then continue as the product is used, worn and finally thrown away. What is more, the low exergy final products are often returned to the peripheries together with waste. According to Hornborg, industrial production is nothing but a displacement of labour, matter, and environmental loads: he regards technology as a mystification of appropriation. The world-economic cores extract labour and high-exergy matter from the peripheries, and spit back waste.

Hornborg has developed a way of assessing and measuring EUE: time-space appropriation (Hornborg 2006). To understand the industrial revolution in England, he quantified the unequal exchange of labour time and hectare yields in the trade exchange of raw cotton and manufactured garments between England and its former North-American slave colonies in the mid 19th century. The result strengthened the idea that England’s superiority was not mainly technological, but rather an effect of its ability to appropriate land and labour from its (former) colonies. Another study has used the same methodological approach to test the global-historical theory that the early modern world system was Sinocentric or polycentric, rather than Eurocentric, and the results seemed to confirm this (Warlenius 2016a). EUE has also been operationalized and applied on more recent statistical data, mainly by the American sociologists Andrew Jorgensen (e.g. 2009) and James Rice, strengthening hypotheses that unequal exchanges maintain a world divided in cores and peripheries.

More recently, attempts have been made to widen the concept to not only encompass the effects of international trade, but of the entire global social metabolism—that is, of societies’ use of natural resources and ecosystems as both source and sink—of which the latter is seldom formally traded. Warlenius (2016b) launched the concept of unequal sink appropriation as a part of the wider notion of EUE and measured how unequally the global carbon sinks, which should be regarded as a ‘common good’, have been distributed historically. In the same article, EUE is linked to another important concept used by the environmental justice movement: ecological debt. Net flows of e.g. natural resources and other commodities, as well as waste and sink appropriation, are referred to as ecologically unequal exchange, while the cumulative stock resulting from these flows are ecological debt. In a similar way, continuous carbon sink appropriation builds up climate debt.

The often quantitative and methodological focus of the concept—its emphasis on the practice of measuring flows of resources—has provoked a critique about EUE being under-theorized. Brolin (2007) advocates a stronger connection to Emmanuel’s theory on unequal exchange, Warlenius (2017) has suggested to employ the Marxist economic geographer David Harvey’s historical-geographical materialism and the concept of uneven development, while Holleman and Foster (2014) suggest a footing on the ecologist Howard Odum’s emergy approach (which basically means to translate all productive inputs—labour, matter and energy—into a unit used to measure energy (e.g. kWh), and use this total “emergy” as a measure of value of a product). Hornborg (2015) has, on the other hand, criticized this latter approach for mixing apples and pears in its attempt to define an objective measure of value: value is culturally produced—people hold different things to be valuable depending on their shared cultural believes—while emergy (as well as land or labour that are the foundation of other materialist theories of value) is physics.

Several of the demands of the environmental justice movements that are related to ecological or climate debt are also relevant to address ecologically unequal exchange.

From academia to political movements

While it was the environmental/climate justice movement that developed the concepts of ecological debt and climate debt and these concepts have generated several policy proposals, the background of (ecologically) unequal exchange is academic and used for analysis rather than politics. Yet, linking these concepts together is also a way of building a bridge between environmental justice as academic tradition and as political praxis. Several of the demands of the environmental justice movements that are related to ecological or climate debt, such as the famous outcomes from the 2010 World People’s Conference on Climate Change and the Rights of Mother Earth, are also relevant to address EUE. These include ways of acknowledging the debt as well as repaying it: by reversing unequal net flows through radical emission cuts in high-emitting advanced economies; by compensating peripheral countries in the global South for adaptation costs; through sharing of technologies; and through reparations—concrete transfer of financial resources. Although such global redistribution would mainly be the result of changing balances of power, solid theories and data on past inequalities could encourage struggles for environmental justice.

Further resources

As previously discussed, central texts in the development of theories on ecologically unequal exchange include Bunker (1985), Hornborg (1998 & 2006), Holleman & Foster (2014), and Warlenius (2016b). Brolin (2007) is an encompassing history over the development of the concept unequal exchange, including EUE. Other—much briefer—introductions to the concept are Hornborg’s (2017) chapter in The Routledge handbook of ecological economics and an entry in the online EJOLT glossary. For the latest empirical support for EUE, see this article by Christian Dorninger and colleagues (2021).

References

Brolin, J (2007): The bias of the world. Theories of unequal exchange. Diss. Lund: Human Ecology Division. Online at: https://lup.lub.lu.se/search/ws/files/4378178/26725.pdf

Bunker, S (1985): Underdeveloping the Amazon: Extraction, unequal exchange, and the failure of the modern state. Chicago: University of Chicago Press.

Dorninger, C et al (2021): “Global patterns of ecologically unequal exchange: Implications for sustainability in the 21st century”. Ecological Economics 179 (pre-print).

Holleman, H & Foster, J (2014): “The theory of unequal ecological exchange: a Marx-Odum dialectic”. Journal of Peasant Studies 41(2) 199-233.

Hornborg, A (1998): “Towards an ecological theory of unequal exchange: articulating world system theory and ecological economics”. Ecological Economics 25(1) 127-136.

Hornborg, A (2006): “Footprints in the cotton fields: The industrial revolution as time-space appropriation and environmental load displacement”. Ecological Economics 59: 74-81.

Hornborg, A (2015): “Why economics needs to be distinguished from physics, and why economists need to talk to physicists: a response to Foster and Holleman”. Journal of Peasant Studies 42(1) 187-192.

Hornborg, A (2017): “Political ecology and unequal exchange”. Routledge handbook of ecological economics. Ed: CL Spash. Abingdon and New York: Routledge. 39-47.

Jorgensen, AK (2009) “The sociology of unequal exchange in ecological context: a panel study of lower‐income countries, 1975–2000”, Sociological Forum 24(1) 22-46.

Rice, J (2007): “Ecological unequal exchange: consumption, equity, and unsustainable structural relationships within the global economy”, International Journal of Comparative Sociology 48(1) 43-72.

Warlenius, R (2016a): “Core and periphery in the early modern world system: A time-space appropriation assessment”. In Jarrick, A, Myrdal, J, & Wallenberg Bondesson, M (eds.): Methods in world history: A critical approach. Lund: Nordic Academic Press.

Warlenius, R (2016b): “Linking ecological debt and ecologically unequal exchange: Stocks, flows, and unequal sink appropriation”. Journal of Political Ecology 23: 364-380

Warlenius, R (2017): Asymmetries. Conceptualizing environmental inequalities as ecological debt and ecologically unequal exchange. Diss. Lund: Human Ecology Divison. Online at: https://lup.lub.lu.se/search/ws/files/19721188/Asymmetries_Introductory_chapter.pdf

Rikard Warlenius is a senior lecturer in Human Ecology at the School of Global Studies, University of Gothenburg. His PhD dissertation (2017) focused on concepts such as Ecologically unequal exchange and Ecological debt. Currently, he is doing research on urban grassroots initiatives for climate transition in Gothenburg and Berlin.

Who owns the Green New Deal?

“A reindeer stands in silent protest in front of a hydro power plant” on Indigenous Sámi land in northern Scandinavia. Image: Tobias Herrmann CC BY-NC 2.0

by Geoff Garver

Green New Deal? People, we have a problem

You go into your Wall Street investment bank and ask, “What’s a hot investment these days?”  Your super sharp investment advisor says, “Farmland in Africa! People have to eat, right? And there are more and more people. Put your money in African farmland and you’ll double your money in no time!”  She doesn’t say a word about what makes that land unique and special or about the people and other beings that live, or lived, there.

That’s a big problem. It’s a remote ownership problem. In fact, it’s a whole bunch of justice problems related to the hard-wired legacies of colonialism that come together as a multi-faceted problem about remote ownership of land and resources. In a nutshell, remote owners or rights holders often cause serious harm to far away ecosystems they know and care little about, and grave injustice to the people and other life that know those ecosystems most intimately and depend on them. 

So, what about this Green New Deal (GND)? Is it merely the old wine of capitalist growth-driven development in a new bottle, or is it a recipe for socio-political and socio-ecological transformation that will right past wrongs and reshuffle political power in favor of historically disempowered people? Any Green New Deal (GND) framed as a “just transition” has to address problems of remote ownership and empower place-based governance.

Open questions about the remote ownership problem in AOC’s GND

Some say the GND in H.R. 109 introduced by Rep. Ocasio-Cortez and others is merely a shift to green or climate colonialism, by which the greening—via decarbonization and other means—of wealthy, developed countries in a growth-driven, capitalist, and globalized world will worsen injustice in developing countries. This injustice includes not only increased exposure to environmental harms and health risks from extraction of materials needed for green technologies but also ongoing wealth inequality and social and cultural upheaval as the wealth-building potential of extracted resources (jobs, profits, etc.) is mostly exported along with them. 

The GND risks continuation of the crushing of long-standing place-based governance systems.

At the heart of this injustice are international companies and their stockholders and other remote owners—land and resource grabbers—that exert enormous political power from the local to the global scale. The GND risks continuation of the crushing of long-standing place-based governance systems, permanent displacement of people with the most intimate knowledge of local ecosystems and devastation of ecosystems and the life they support, all typical of land and resource grabbing around the world.  A particular concern is that land use reform is essential to success of the GND, yet the GND does not directly confront the hard wiring of the property rights regimes that must be addressed. Another is that the GND was conceived and announced with virtually no inclusion of Indigenous voices and that unless this lack of inclusion and the superficiality of references to Indigenous ideas is overcome, the GND could maintain “broken structures that perpetuate disconnection and individualism.”

Some cautiously, others more enthusiastically, see the GND as an opportunity to end and provide restitution for these injustices.  The openings for transformative change to scale back land and resource grabbing and empower place-based governance systems, including Indigenous ones, are signaled in support for “community-driven projects and strategies” to deal with pollution and climate change; locally-appropriate ecosystem restoration; and free, prior and informed consent of Indigenous communities with respect to matters of concern to them.  For these openings to fulfill their potential, justice activist Syed Hussan argues that the GND must foster “just transition in the broadest sense” and not just deal with displaced workers in fossil fuel industries and other discrete issues that decarbonizing the economy will entail.

Where to look for answers to remote ownership problems

The good news is that worthwhile ideas about how the GND can confront problems of remote ownership and promote locally-tailored place-based governance systems are already out there. Here are some of these sources of inspiration.

The degrowth movement. Degrowth is a forceful challenge to the growth-insistent sustainable development model, and a more hopeful approach to long-term perpetuation of a mutually enhancing human-Earth relationship. Degrowth combines a commitment to respecting ecologically-based limits with a commitment to developing a comprehensive, practicable approach to building thriving human communities based on conviviality and human solidarity without consumerism or material and energy excess. The reforms associated with degrowth “emphasize redistribution (of work and leisure, natural resources and wealth), social security and gradual decentralization and relocalization of the economy, as a way to reduce throughput and manage a stable adaption to a smaller economy.” Giorgos Kallis’s nine principles of degrowth should be useful in making sure the GND adequately confronts remote ownership problems: 1) End to exploitation; 2) Direct democracy; 3) Localized production; 4) Sharing and the commons; 5) Provision of relational goods, through friendship, love, healthy relationships, kinship, good citizenry; 6) Unproductive expenditures geared to communal activities, such as festivals, games and the arts; 7) Care, and treating humans and other life as ends, not means; 8) Diversity; and 9) Decommodification of land, labor and value.

The G20.  What?!? Well, it’s useful to understand the key ideas of the global political apparatus that must be overcome for the GND to lead to radical social, political and ecological transformation.  At annual meetings, the G20 typically agree on the need to “further collective actions toward achieving strong, sustainable and balanced growth to raise the prosperity of our people.” The means to do so generally involve supporting global trade and investment (much of which is tied to remote ownership) and the role of the World Trade Organization as a means to create jobs and maintain growth, with weak or marginal actions or aspirations to address inequalities, corruption, climate change and environmental harm.  The G20 supports the United Nation’s Sustainable Development Goals, with emphasis on sustainable, inclusive economic growth. A truly progressive GND should look past the SDGs!

The EJ AtlasThe Environmental Justice Atlas documents real cases of how remote owners have created social and environmental conflict.  These compelling narratives are a rich resource for understanding in detail the problem of remote ownership and the power dynamics that must be confronted and reshuffled in order to overcome them. 

Indigenous ways of thinking and being. In many Indigenous worldviews, attachment to place, founded on respect for all life and for deep appreciation of a reciprocal relationship with the Earth and its life community, is key to a more hopeful vision of the human-Earth relationship. Indigenous activist Eriel Deranger writes, “It is Indigenous communities, locally, nationally and internationally, that continue to push for an actualization of instilling deeper spiritual connections to Mother Earth to help us relearn what systems of colonization, capitalism, and extractivism have severed.” Connecting or reconnecting to the places that nourish our bodies and souls is at the heart of the long-term promise of a GND done well. In Braiding Sweetgrass, Robin Wall Kimmerer writes that “[f]or the sake of the peoples and the land, the urgent work of the Second Man may be to set aside the ways of the colonist and become indigenous to place.” But, inviting settler societies to become indigenous to place—and an invitation from Indigenous holders of knowledge of a place is essential—does not mean letting them “take what little is left.” Attaching to a place by carefully and respectfully seeking to become indigenous to it requires humility above all, and it requires direct experience with wise teachers, not merely book knowledge.

Indigenous peoples and other social groups that have been historically disadvantaged by colonization and land and resource grabbing must play a central role in developing and carrying out the GND.

Six mutually reinforcing proposals on remote ownership and place-based governance for the GND

First, Indigenous peoples and other social groups that have been historically disadvantaged by colonization and land and resource grabbing must play a central role in developing and carrying out the GND. Including Indigenous notions of justice, decolonization and self-determination through meaningful inclusion of Indigenous communities in decisions that affect them, which requires adequate time and resources, is essential.

Second, the GND should empower communities like those included in the EJ Atlas to develop strong place-based governance systems and communities of solidarity and mutual care in order to resist the social and environmental conflicts they face, often because of remote ownership. This means providing them with a determinative role in decisions affecting them directly and indirectly. It also means developing a global/international scope and strategy so remote ownership problems in one place aren’t just displaced elsewhere. Also, we should look for opportunities to scale up and out from local remote ownership problems that are avoided or justly resolved.

Third, the GND should end corporate giveaways that are tied to remote ownership problems and exclude carbon markets, offsets or emissions trading regimes, and geoengineering—all of which typically pose remote ownership problems. Instead, the Climate Justice Alliance is fighting for a GND that shifts “from global systems of production and consumption that are energy intensive and fossil fuel dependent to more localized systems that are sustainable, resilient and regenerative.”

Fourth, stocks and other investment instruments in land and resource grabbing ventures that cause social and environmental conflict and harm in faraway places should be prohibited. This may require profound restructuring, dismantling or abolition of the financial and corporate structures that allow for these kinds of investments. At the least, it would entail deep rethinking of the metaphor of corporate personhood

Fifth, the GND should explicitly reject economic growth as a rationale and driving objective. It should oppose perpetual economic growth and promote communities committed to solidarity, maximal sharing and minimal use of materials and energy.

Sixth, the GND should place limits on wealth, which would help minimize or end the remote ownership problem. The most obvious way to do this is through progressive income taxation or a tax on wealth. For this to be effective, there of course also has to be collaboration between communities worldwide against tax evasion, with the aim of abolishing tax havens. A more radical transformation would be to target the globalized currency system which makes it possible for Wall Street investors to buy African farmland with US dollars in the first place. Or, the international community could finally adopt taxes on financial transactions; already implemented in some countries, this could be expanded to more countries and international transactions.

Some tough questions to test these proposals

If the GND is a step toward post-capitalist societies where remote owners, if they still exist, are no longer able to adversely affect far away ecosystems and people, it nonetheless is starting off in a globalized capitalist economy. As John Bellamy Foster has written, “We have to go against the logic of the system while living within it.” Making the proposals above work will not be easy. It will require people power through mass organizing and consciousness building. And it will mean confronting some tough questions. Here are a few. 

Does the GND inevitably imply ongoing wealth and resource extraction in the global South to benefit the global North? If so, what are the implications for remote ownership and place-based governance? If not, what mechanisms are needed to minimize or end wealth and resource extraction in the global South to benefit the global North?

How can the GND address remote ownership in the form of ownership of financial stocks or other financial investments—keeping in mind how many people are counting on this type of investment for their retirement and long-term care?

What are some good examples that could be duplicated or scaled up of place-based governance systems that maintain fairness among humans and between humans and other life across generations? How should duplication and scaling up account for the unique features of different places and avoid one-size-fits-all approaches?

Can the GND adequately address, as Deranger puts it, the “intertwined roles of capitalism, consumerism, militarism and colonialism as foundations to the current crisis” if it remains “driven by White ENGOs, those with the resources and power, and mainstream political parties”?

Is re-establishing traditional labor protections and increasing unionization a long-term solution, or does it risk locking in an us-them worker-owner power dynamic—where the owners are often also remote owners and land and resource grabbers—that other alternatives could overcome?  What about more locally-committed, place-based employee-owned businesses or cooperatives?

Final thought

Questions like these need to be asked in relation to every single aspect of GND proposals in the advanced capitalist countries. Political organizers and activists should think about how to balance such critical questions with the visionary rhetoric that makes the GND so popular—all the while keeping in mind that the strength of a GND vision should be judged on the basis not only of its policy designs but also its ability to inspire and unite broad movement building for climate justice. Grappling with entrenched problems of remote ownership is one way to take a focused approach to building momentum for this movement.

Dr. Geoff Garver is an adjunct professor at Concordia and McGill Universities in Montreal and coordinates research on law and governance at McGill University for the Leadership for the Ecozoic initiative. He is on the steering committee of the Ecological Law and Governance Association and the board of the Quaker Institute for the Future and is active in the international degrowth movement.