Delinking

Description

Jason Hickel:

“What is delinking, and how can it be achieved?

Delinking was best described by the Egyptian economist Samir Amin. He started from the observation that the capitalist world economy is characterised by a stark division of labour between the imperial core (often glossed as the global North) and the periphery (the global South).

In this system, the core states seek to monopolise the most profitable forms of production and establish control over global commodity chains, while preventing sovereign development in the periphery to maintain it as a subordinate supplier of cheap labour. Southern labour and resources are roped into producing things like sweatshop goods and plantation commodities for the core, at compressed market prices, rather than producing for local human needs and national development.

Amin pointed out that this system is characterised by large core-periphery price disparities and therefore unequal exchange in international trade. The South is made dependent on imports of technologies and producer goods from the core at monopoly prices, and to pay for this they have to export massive quantities of artificially cheapened commodities and manufactured goods, thus generating a net-transfer of value from the periphery to the core. This enriches the core but drains the periphery of resources necessary for development.

This system produces and perpetuates poverty and underdevelopment in the South. There is nothing inevitable about poverty; it is an effect of imperialist dynamics in the world economy. The global South has extraordinary productive capacities; massive labour power, land, factories and resources. The problem is they do not have sovereign control over production."

(https://jasonhickel.substack.com/p/what-is-delinking)

Characteristics

Jason Hickel:

"To address this problem, Amin called for a process of delinking, which for him contains two key elements:

1) Delink from exploitation by the imperial core.

Southern states should end dependence on imports from the core, and end dependence on imperial capital and core currencies, in order to build economic sovereignty and mitigate unequal exchange. Note that Amin was not calling for autarky or isolation; on the contrary, he actively encouraged South-South cooperation and trade as a tactic for overcoming imperial dependencies.

2) Delink from the capitalist law of value.

Under capitalism, production is organised around whatever is most profitable to capital (largely, foreign capital). In the South, capital prefers to exploit cheap labour in global supply chains than to invest in technological innovation and industrial upgrading. This inhibits development. Southern governments must overcome this and align production to a new law of value: human needs and national development."

(https://jasonhickel.substack.com/p/what-is-delinking)

Discussion

How can delinking be achieved in the 21st century?

Jason Hickel:

Some basic principles include the following:

A first step is to reduce imports from the core. This can be achieved by reducing unnecessary imports (luxury goods, etc), while substituting necessary imports where possible with domestic production, or through South-South trade, ideally using swap lines to trade goods outside the US dollar or Euro. Taking this step reduces pressure for exports to the core (and reduces the need for core currencies), and therefore reduces exposure to unequal exchange.

These options are increasingly available to Southern countries now because of China. China has broken many of the core’s technological monopolies and provides an alternative source from which Southern states can obtain imports, on much fairer terms. (Indeed this is one of the main reasons for the core’s increasingly aggressive posture toward China). China’s BRI has also created infrastructure that can enable greater South-South trade.

A second step is to use industrial policy and planning to overcome the inertia of capital and guide investment and production toward developing a sovereign industrial base, escaping from subordinate positions in global commodity chains, and building the infrastructure necessary to meet human needs.

Toward this end, governments can nationalise key resource deposits and the major export industries to gain public control over foreign currency earnings, while taxing the foreign currency earnings of private exporters. This way foreign currency can be used strategically, to focus on purchasing the technologies and producer goods that are most necessary for overcoming dependencies and developing sovereign national industries.

Finally, public finance can be leveraged for public works. Southern states that issue their own national currency can use it to fund any project that can be financed in that currency, without needing to rely on foreign capital. They can establish a public job guarantee to train and employ people in necessary activities such as building housing, sanitation systems, schools and hospitals, without waiting for capital to decide these are worth doing.

Of course, this only scratches the surface. Every country faces its own unique challenges, there is no one-size-fits-all solution for delinking. But steps like these can help enable Southern countries to reclaim their productive capacities and escape from dynamics of unequal exchange.

Some of these moves may be prevented by IMF structural adjustment programmes or conditions imposed by foreign creditors, which generally seek to preclude Southern states from using industrial and fiscal policy. If so, governments may need to default on relevant external debts, and – as Thomas Sankara argued – they should do this collectively wherever possible, so as to maximise their bargaining power.”

(https://jasonhickel.substack.com/p/what-is-delinking)

As the world grows more interconnected, possibilities for delinking become more challenging

Ingrid Harvold Kvangraven:

"Amin was among the first to attempt to measure unequal exchange empirically. Many have followed in his footsteps since, such as Jason Hickel, Dylan Sullivan and Huzaifa Zoomkawala, whose research in 2021 found that the Global North appropriated around $62 trillion from the Global South between 1960 and 2018 (constant 2011 US dollars). Exploring a range of different methods for calculating unequal exchange, Hickel et al find that, regardless of the method, the intensity of exploitation and the scale of unequal exchange has been increasing significantly since the 1980s and ’90s.

Amin also devoted a significant amount of time to thinking about ways to change an unjust system. He was heavily involved in activism, and developed some theoretical concepts to effect political change. The most well known is Amin’s idea of ‘delinking’ – on which he published a book. Delinking: Towards a Polycentric World (1990) provides an assessment of possible ways forward for a sovereign state in the periphery. In Delinking, Amin argues that the specific conditions that allowed for the advancement of capitalism in Western Europe in the 19th century are not possible to reproduce elsewhere. So, he proposed a new model of industrialisation shaped by the renewal of non-capitalist forms of peasant agriculture, which he thought would imply delinking from the imperatives of globalised capitalism.

It is important to note that delinking is often widely misunderstood to mean autarky, or a system of self-sufficiency and limited trade. But this is a misrepresentation. Delinking does not require cutting all ties to the rest of the global economy, but rather the refusal to submit national-development strategies to the imperatives of globalisation. It aims to compel a political economy suited to its needs, rather than simply going along with having to unilaterally adjust to the needs of the global system. To this goal of greater sovereignty, a county would develop its own productive systems and prioritise the needs of the people rather than the demands on international capital.

In my interview with him before he died, Amin emphasised the importance of the specific political economic reality of any given country to understand and situate the possibilities for delinking. At that time, with an odd amount of precision, Amin estimated that ‘if you can reach 70 per cent delinking, you’ll have done a great job’. He pointed out that a strong country that is, for historical reasons, relatively stable and with a certain amount of military and economic power will have more leverage to delink. So, while China may be able to achieve 70 per cent delinking, a small country such as Senegal will struggle to achieve the same amount of independence.

Delinking entails rejecting calls to adjust to a country’s comparative advantage and other forms of catering to foreign interests. This is, of course, easier said than done. Amin noted that it would both require strong domestic support for such a national project and strong South-South cooperation as an alternative to the exploitative economic relations between the core and the periphery. Other aspects of delinking would involve investments in long-term projects, such as infrastructure, with the goal of improving the quality of living for most people in the country, rather than maximising short-term consumption or profit.

Several scholars have more recently studied historical development trajectories in relation to the question of delinking. For example, in 2020 Francesco Macheda and Roberto Nadalini applied the considerations to try to understand China’s development trajectory, while in 2021 Francisco Pérez applied it to understand economic development in East Asia. However, as the world grows more interconnected, possibilities for delinking become more challenging."

(https://aeon.co/essays/if-you-want-decolonisation-go-to-the-economics-of-samir-amin)