-Unequal Exchange-: The North’s Lie That the South Believed

Whenever the topic of international trade arises, the same claims resurface about “unequal exchange” between the advanced and underdeveloped regions of the contemporary global capitalist system. Accusations are hurled at the world market — not as an organized framework for distributing goods, but as a mechanism through which the peoples of the North plunder the surplus value created by the peoples of the South. This argument rests on a single, recurring assumption: that the law of value — the mechanism regulating commodity exchange based on equal quantities of socially necessary labor — is suspended´-or-neutralized the moment a commodity moves from its local context to the global market. Some French-influenced theories have even asserted that political economy has failed to provide a scientific explanation for global exchange because the latter is not governed by any determinate economic law! Thus, the entire problem is reduced, while the source of confusion lies not in international relations but in the very concept itself: the concept of value. Matters grow more complicated as this characterization gradually solidifies into intellectual dogma, parroted by the activists of Porto Alegre and the peddlers of victimhood narratives — without any serious attempt to examine the theoretical premises on which it is built´-or-to interrogate the concept at its scientific root. The point overlooked in most discussions — and deliberately evaded in favor of ideological presuppositions — is that value is not measured in money, nor is it superficially expressed in prices. Rather, it is determined by the quantity of socially necessary energy expended in producing a commodity: the energy embodied in living labor, the labor stored in means of production, and the uncompensated surplus labor. Value is not what is paid, but what is expended. This is the objective foundation of the law of value. Any reading that divorces value from price is a reading deceived by appearances, reproducing the very illusions against which political economy itself warned. What I wish to assert unequivocally is that so-called “unequal exchange” is, in reality, entirely equal when judged by the true measure of value: socially necessary energy. What appears as disparity arises from the distorted monetary expression of that value, due to historical differences in monetary flows — not from a flaw in the market´-or-a deviation in the law of value. The market, when its movement is not structurally distorted by interventions, neither plunders nor bestows-;- it merely reveals the actual energy expended in production. The imbalance, therefore, lies not in exchange but in the illusory metric by which we measure it! Before simplifying with an example, we must clarify a fundamental point about the dominant measure of value in political economy. When political economy states, while measuring value, that “the value of a pen equals five hours of necessary labor,” it means the pen was produced in a specific number of hours — but it does not thereby tell us the pen’s value! Similarly, when it claims that exchanging one gram of gold (produced in seven hours of labor) for nine grams of silver means the nine grams of silver now equal seven hours of labor, it inverts logic. The correct approach is first to determine the value of gold using a proper scientific measure (which political economy never achieved), then the value of silver, and only then proceed to exchange. Likewise, when political economy asserts that a quarter of a loaf measures the value of a pound, it tells us nothing about the value of the loaf´-or-the pound. Just as we might say one gram of gold measures fifteen grams of silver, we thereby learn the exchange value of gold relative to silver — but not the value of either. Hence, we must revisit the fallacies of value measurement deeply rooted in political economy, which ultimately forced it to resort to the market, opening the floodgates to market theories presented as the sole scientific truth — theories that not only failed to solve the system’s problems but could not even explain its crises. In our view, value — as the quantity of labor embodied in a product — must be measured by the necessary caloric expenditure during production. This is the correct measure of value, not the hour. An hour, as a unit of measurement, quantifies time, whereas value is not time but human effort embodied in a product over time. Having clarified our stance on the prevailing measure of value and its correction, we can now illustrate the illusions of “unequal exchange.” Suppose Egypt produces one meter of fabric with an energy value of 100 calories, and France produces the same meter with the same energy value. The real value of both commodities is identical. Yet if Egypt prices this meter at one gram of gold, while France prices it at five grams, we encounter a superficial paradox: two commodities of equal value sold at radically different prices. This leads many to conclude that Egypt sells cheaply and loses, while France sells dearly and profits. But this overlooks the crucial point: the monetary expression of value is determined not only by the necessary labor expended but also by the quantity of money available in the market — the monetary and historical context of each economy. France and other nations that accumulated gold and silver through centuries of plunder and colonialism injected those riches into their economies, causing a general rise in prices. Economies without such monetary liquidity maintained lower prices — not because their commodities were less valuable, but because the monetary expression of value remained constrained. The role of excess money is not to raise prices but to enable the system’s inherent tendency toward price inflation, shifting exchange from the law of value to crisis-generating trade. This explains the difference between capitalist profit (realized under the general law of value and reinvested in expanded social reproduction) and speculative profit (derived from trading commodities above their social value, fueling chronic price inflation). Left unmanipulated, the market does not favor higher social value but seeks the commodity with the lowest social value. Buyers in the global market will thus gravitate toward the cheaper Egyptian fabric, acquiring 100 meters for 100 grams of gold, whereas the French fabric demands 500 grams for the same value. The producer who expresses value at a lower price dominates the market — not because they are poor, but because they align more closely with the principle of value. However, this example assumes neglecting a key application of the law of value: a single commodity cannot have two values. Gold, like all commodities, cannot be more valuable in one country and less in another. The prevailing production method always applies. If 1,000 calories in Egypt are expressed as 100 grams of gold, 100 meters of fabric,´-or-100 pairs of shoes — while in France, due to historical metal inflows, 1,000 calories equal 1,000 grams of gold, 100 meters of fabric,´-or-100 pairs of shoes — then by the law of value (accounting for dominant production methods), the exchange value of a calorie in both France and Egypt becomes 1 gram of gold. Consequently, Egypt’s fabric would no longer trade at 1 gram per meter but at 10 grams, and shoes at 10 grams per pair. If Egypt imported 100 meters from France, it would pay 1,000 grams — just as a domestic buyer would. Exchange, thus calibrated, is equal. Should France seek Egyptian shoes, it would pay 1,000 grams, mirroring its domestic price. If Egypt, due to economic policy, froze its internal exchange ratios (partially suspending the law of value), pricing fabric at 1 gram domestically while France priced it at 10 grams, Egypt would outcompete France, flooding the global market. France’s only recourse would be to raise productivity — producing, say, 2,000 meters per 1,000 calories — lowering the exchange value per meter to 0.5 grams and regaining competitiveness. This is pure application of the law of value. Once Egypt adopts the new method, producing 2,000 meters for 1,000 calories, the price per meter drops to 0.05 grams, forcing France to innovate further to stay competitive. This dynamic troubled the plunderers. Post-colonialism, international financial institutions systematically dismantled the competitive edge of former colonies. Forcing underdeveloped nations — through debt entrapment and floated exchange rates — to inflate prices deepened their dependence. As prices rose without proportional income growth, poverty surged, rendering basic needs unaffordable despite their unchanged value. Societies, unable to sustain social reproduction, grew further subjugated to the political will of the capitalist core. Thus, the question shifts from “Why is exchange unequal?” to “Why do we misread it?” Exchange, understood through socially necessary energy — not monetary payment — reveals a law-governed order beneath surface chaos. So-called “unequal exchange” is, at its core, exchange governed by the law of value — distorted by flawed metrics and our projection of real-world inequities onto theory. Money does not equal truth-;- price is not value. Those who conflate them see the market as a specter and exchange as a trap. But when read through embodied value — not money — exchange reveals its deep coherence with economic laws. “Unequal exchange” reflects not a flawed law but our flawed measure. The defect lies not in the market but in us — when we mistake money for value’s mirror and justice for what is paid, not what is expended. Defending “fair” exchange thus begins not with condemning capitalism´-or-glorifying victimhood, but with redefining value itself — stripping away its monetary mask to expose its latent energy: not as hours counted, but as quantifiable social effort, historically distributed in unbalanced yet law-bound patterns. Reconstructing value theory is no intellectual luxury but a necessity to understand how exchange works, not how it appears.

Rate the article
Bad	1	2	3	4	5	6	7	8	9	10	Very good
Result : 100%							Participated in the vote : 1