Non-Equivalent Exchange: The Social Construction of Inequality in the World Economy

Desires for increased equity and democracy in the world system are commendable and widespread. But they will remain just that – desires – unless we confront the structural inequalities that make the realization of genuine equity and justice extremely difficult. That there are such inequalities in the global workplace is transparently clear. What is much less transparent are the mechanisms that systemically work to construct these inequalities – concretely shaped by states' positions within the world economy. This paper examines the vast inequalities in the world system and demonstrates that they are socially constructed and systemically entrenched through mechanisms of “non-equivalent exchange.” The paper will first statistically measure those inequalities, resulting in a revision of contemporary approaches to mapping the world economy. Second, it will explain the concept “non-equivalent exchange” as a mechanism for surplus transfer within the world system first mooted by Evgenii Preobrazhenskii in his pathbreaking 1926 book, The New Economics. Preobrazhenskii like so many others would be caught up in the web of Stalin’s Great Terror, and he was never again in a position to pursue his 1926 insights. The concept was, however, picked up by others. Importantly, Ranjit Sau developed a concrete methodology for measuring this non-equivalent exchange, and the paper will develop and deploy a revised and expanded version of Sau’s methodology, using contemporary data sources, to empirically measure the transfer of surplus from the Global South to the Global North.