Staff Writer Jack Ford examines how the unequal transfer of wealth from the Global South to the Global North underpins global inequality and has fuelled the rise of reactionary politics in the West.
2019 – Seated before a crowd of the world’s wealthiest, co-founder of Microsoft and international philanthropist Bill Gates presents a graph of extreme poverty. Standing triumphant before the World Economic Forum – the beating heart of the neoliberal world system – the graph claimed that the share of people in extreme poverty had fallen from 94% to 10% over the last two centuries. Gates is one in a long tradition of neoliberal figures to champion a narrative of grand progress – Steven Pinker, Hans Rosling, The World Bank itself, to name a few others.
This narrative neglects the implausibly low nature of the global poverty line, a widening wealth disparity despite the fall in proportionate poverty, and the immense contributions of one nation – China. Without the inclusion of China, the proportion of global populations in poverty remains stagnant around 60% – why has this gulf not closed? Why has the gap between the poor and the rich widened, particularly between Global North and Global South?
2018 – Among a crowd of cheering patrons, voters, and fans, Alexandria Ocasio-Cortez stands stunned before a large projection of official primary election results – “I cannot put this into words.” The elevation of AOC to Congress, following her shock primary win, led to the formation of ‘The Squad’ in the US – a progressive populist wing of the Democratic Party. AOC ran on the platform of universal healthcare, a ‘Green New Deal’, and the expansion of affordable housing, among numerous other policy prescriptions.
The promise of social democracy is clearly enticing for American voters, embodied in the ascendancy of figures like AOC, Bernie Sanders, Ilhan Omar, Zohran Mamdani, and Ro Khanna. However, its effectiveness and ultimate systemic implications need to be brought into question. What is the aim of the social democratic mode of governance, especially when viewed on a global scale? Why have left reformist movements in the West ultimately become more influential than marginal left revolutionary ones?
2025 – President Trump stands upon a podium before a huge American flag. It’s ‘Liberation Day’, and the president wields a poster-board that reads ‘Reciprocal Tariffs’: a cornerstone of his second administration’s protectionist economic policy. The upswell in Western far-right populism has become one of the most pronounced political trends of the 21st century.
Across the globe, from Trump to Le Pen to Weidel, influential political figures have called for re-shoring, economic nationalism, and protectionism – a far cry from the neoliberal globalisation and ‘free trade’ promised at the dawn of the millennium. Call it ‘right populism’, ‘post-fascism’, or ‘fascism’: the impact of this trend is undeniable. What is the impetus behind this movement? Why have Western politicians begun to call for evermore nationalistic economic policies?
The global divide between rich and poor, the nature of Western social democracy, and the rise of the far right: these disparate trends are not unrelated, but symptoms of the economic mechanism of Unequal Exchange. First coined by Arghiri Emmanuel, the process at its most basic level involves the structural transfer of wealth from Global South to Global North, due to differences in the level of wages. Unequal Exchange has numerous social and political implications that underpin the nature of the contemporary state of global affairs.
Trade: Unequal Exchange
Before we can begin to understand our situation, we must first understand the theory. This theoretical basis is derived primarily from Torkil Lauesen’s ‘Unequal Exchange – Past, Present, and Future.‘ Much of the statistics used in this article are from studies explored in the work.
Unequal Exchange exists in the Marxian economic framework: the value of a good is determined by the socially necessary labour put into it – the labour-time required to produce a good under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. Meanwhile its price, as ever, is determined by market dynamics (supply and demand, the presence of monopolies, etc.). This framework is naturally controversial, however I believe it can provide much economic insight.
Two conflicting forces exist in the global market: the transnational mobility of capital – machinery, money, technology, and the immobility of labour – fixed nationally, and resulting from historical circumstances.
Capital mobility is due to both neoliberal globalisation and technological advancements (the internet, cargo ships, refrigeration etc.). The immobility of labour, owing to the enforcement of national borders, means that wages globally cannot equalise, and are instead the result of historical circumstance, ultimately remnants of colonial core-periphery exploitation, or class struggle for better standards of living.
In this global system, wages act as a predetermined variable – differing globally, and the key result is that lower subsistence wages can be paid in the Global South for the same work done in the Global North. On average, wages are 15 times higher in North than South.
For the maximisation of profits – the natural goal of capitalist enterprise – prices of production are adjusted: Southern goods are sold cheaply in the North, while Northern goods are sold more expensively in the South, generating at once super-profits, alongside a flow of cheap goods northwards.
When we speak of ‘cheaper’, and ‘more expensively’, we are referring to ‘cheaper than the value (socially necessary labour)’ of the good: a high wage country receives more value from a low wage country than it gives in return. A single hour of high wage labour can therefore buy many more hours of low wage labour. Global South nations, formerly exploited, still bear the economic realities of their birth: often lacking in industrial base and overly dependent on exporting agricultural products, they rely on importing Northern goods for growth (and are thereby subject to high Northern prices).
This dynamic creates a value drain from Global South to Global North. In 2021 the Global North imported 906 billion labour hours, and exported 80 billion in return – an overall net drain of ~826 billion hours. An individual example may make this dynamic clearer. In an estimate by Prof. Donald Clelland (cited by Torkil Lauesen), drawing on wage data between 2010-2020, a US worker at federal minimum wage needed to work less than 8% of the hours worked by a Chinese migrant worker to purchase an iPad or iPhone (a calculated 70-82 hours against roughly 907-1089 hours).
The higher living standard and development of the Global North is not merely a result of ‘higher productivity’ – in reality workers doing the same tasks with similar skills and equipment are paid at ratios up to fifty to one between zones, while wage gaps persist across every skill level and sector: 85-91% lower in agriculture for any given skill level, 93-98% in mining, 89-94% in manufacturing, and 83-90% in services, even as Global South workers ‘consistently render more labour per worker than their Global North counterparts’, and ‘while Southern workers contribute 90% of the labour that powers the world economy, they receive only 21% of global income.’
High Northern living standards, and the modern consumer society are wholly dependent on this value drain – a consistent supply of cheap Southern goods providing an ‘imperial rent’ as foundation. Meanwhile, this loss of value plunges the South into a perpetual crisis of underdevelopment, and elevates the North into a state of overdevelopment.
Treats: The Imperial Mode of Living
One of the profound practical implications from this economic phenomenon is how it changes the manner in which those in the Global North live.
Described as ‘The Imperial Mode of Living’ by theorists Brand and Wissen, it implies a ‘hierarchy on a global scale’ – a ‘labour aristocracy’, where on aggregate those in the Global North exist at the expense of those in the Global South – even as the Northern working class is subject to a degree of exploitation, they stand as beneficiaries of the value drain described by Unequal Exchange. ‘Everyday infrastructures of life’, from food to energy to transport, endure to a great extent due to the material transfer of value from South to North – dependent on it, while detached from the violent exploitation inherent in its provision.
This is not to disparage the deep history of successful class struggles in the Global North, themselves yielding real victories for the working class, however in the form of a transient social democracy (social safety net, benefits, shortened work week etc.) ultimately afforded through the exploitation of the Global South. Essentially, Unequal Exchange forges a ‘National Pact’ in the Global North between the antagonistic classes involved in struggle – a higher quality of life is brought about not through systemic change, but through plunder of the Global South.
The Imperial Mode of Living also aids in our conception of contemporary Western left movements within electoral and outside electoral bodies – figures like Mamdani, AOC, and Sanders. There is an absent desire for systemic change within electoral bodies – the most ‘radical’ seeking merely an expanded social safety net, and little more – a greater volume of ‘treats’ – a reformist politics of domestic redistribution, without altering the basis of exploitation.
There is nothing exceptional about the extent to which Western governments ‘crack down’ on leftist movements, historical movements endured the same pressures, rather the material base interest for revolution is absent, thanks to the aforementioned ‘National Pact’, which provides a constant flow of cheap southern goods to enable modern consumer society – perpetuating exploitation without substantive systemic change.
Though a powerful explanatory tool, this Imperial Mode of Living alone cannot elucidate the stagnation and slow decline in the quality of living in the Global North in recent years, as at the foundation of the National Pact, is its purpose not to perpetually increase standards of living? To answer this question, we must turn to the development of neoliberalism, multi-polarity, and the slow withering of Northern monopoly.
Fascism: The Body of Reaction
The primary contradiction in the contemporary world exists between developing nations and developed nations: the beginnings of multipolarity. This contradiction is evidenced nowhere more poignantly than in China. China’s immense growth to the second largest economy globally has shrunk the average wage disparity between itself and the Global North to a ratio of 6:1 in 2025 – naturally decreasing the value transfer, ‘reducing its exposure to unequal exchange‘.
Moreover, as its global prominence increases, we see a rise in South-South trade, via institutions like BRICS+, and policies like ‘win-win’ (‘gongying’) diplomacy – a verifiably less unequal trade, without the influence of larger wage disparities. China is not the only Southern nation engaged in this process of ‘de-linking’ from the North, however it is the most prominent example, particularly owing to the aforementioned poverty alleviation figures. South-South trade, and multipolarity stands to destabilise value extraction, and thereby the Imperial Mode of Living. BRICS+ is not an anti-capitalist institution – rather, it is anti-hegemonic, and hence it works toward a greater degree of equality in the global economic system, through a number of processes: ‘de-dollarisation’, and South-South trade to name two.
The origins of this contradiction are numerous, however neoliberal globalisation has played an enormous role, alongside independent Global South struggle for sovereignty itself. At the outset of the period of neoliberal hegemony, the driving contradiction was between a uni-polar American system – globalising production, and nation states in North and South attempting to nationalise production. Now, it has more rigidly formed around ‘US against multi-polar’ lines.
American and European capital, having offshored productive capacity to the Global South, has aided in the globalisation of production and consumption, and hence has also borne the very resistance to its continued extraction: neoliberal globalisation – the maintenance of these extractive value chains is untenable – unaccepted by the Global South.
Now, as consequence, we see waves of Northern reaction, embodied at their most open, in the actions of the Second Trump administration: economic blockades, sanctions, tariffs, and the advent of a Trade War between the US and China, all while angling for a potential confrontation with BRICS+. Through the lens of Unequal Exchange, this economic protectionism is an attempt to reassert exploitation – tariffs employed so that the North can once again take hegemony as a producer of high technology goods, and the South remains subservient (producing ‘low value-added’ goods), maintaining the centuries-old dynamic of Unequal Exchange. A Global North ‘fascism’, founded upon a load-bearing (and often ignored) economic interest to maintain their extractive way of life, which uses an ideological and irrational xenophobia as a cudgel.
What is also evident is that the rigid ‘National Pact’ is tolerant toward ‘treats’, and intolerant of anti-imperialist movements – already we see initially anti-imperialist elements of the Western electoral left metabolised and moved rightward by the nature of large electoral parties themselves.
What Next?
So, what is to be done by progressives in the Global North if social democracy does little to change systemic exploitation, and there exists only a slowly growing appetite for more radical change? My answer to this dilemma may seem a little reductive, however, it is to materially support, above all, organised anti-imperialist and anti-hegemonic struggle in the Global South, whether it be through financial, protest-based, or any other peaceful means.
Discontentment toward stagnant or declining standards of living in the Global North needs to be channelled primarily towards anti-imperialism, not social democracy or fascist reaction. In regard to an attempted ‘fascist’ restoration of historical Unequal Exchange: significant parts of the South have economically developed to a point beyond recapture, and such a recapture would deliver the working classes of the Global North war, repression, and secondary (wholly speculative) crumbs of value extraction. It is in the ultimate material interest of those in the Global North to pursue anti-imperialism.
Already we have seen there is definitely appetite for such struggle in the Pro-Palestine and Anti-Zionist protests in the West. Anti-imperialism must be emphasised over the pursuit of ‘treats’ – in supporting anti-imperialism we can begin to dismantle these untenable exploitative value chains from Global South to Global North, and hence begin to develop a more equitable, and more tenable global system – attempting to resolve the primary contradiction between North and South. Future articles will be more dedicated to the concept of ‘what is to be done?’ in the Global North in more detail.
Naturally, the article format constrains an exploration of this scope, and I wished to include much more – passages on the ecological character of Unequal Exchange, or its gendered character to name two. This is why I recommend reading Torkil Lauesen’s work ‘Unequal Exchange – Past, Present, and Future’. I may in future return to write articles on the particulars of each section, however this book explains things in a much deeper way than I ever could.
Despite the controversial nature of this article, I urge you to consider its theoretical base and the explanatory power of the theory of Unequal Exchange, because it may provide some clarity when viewing the chaos of our material world.
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