The fact that there is an inherent unfairness built into international trade has long been recognised. Economists and political theorists have written about the phenomenon since at least the beginning of the 19th century. But perhaps the definitive work on the subject, and the book which gave the concept a name, would be Arghiri Emmanuel’s Unequal Exchange, published in 1969, and recently reissued as a revised and updated version, by Monthly Review Press.
Unequal exchange: one side is “always defrauded”
When two nations, or companies within nations, or even different sections of the same company based in different nations agree on a trade, such a trade is always cast as a benefit to both nations but, as Karl Marx described it (in Grundrisse), “…both gain, but one is always defrauded.”
Typically, a manufacturer will choose to have material goods made in countries where the average wage rate is low and then seek to sell them in high wage economies. The justification for the discrepancy is that the cost of living is lower in the former and, therefore, wages need not be as high as in the latter. This may be true with respect to certain commodities, such as locally grown food, but it is not true for commodities priced on international markets such as oil, steel, wheat and many other staple foodstuffs and raw materials. The argument is often advanced that even low-paid work is better than no work at all, and there is obviously truth in this.
Unequal exchange is how the rich get rich
Since the end of the second world war, the number of international hyper-wealthy individuals has increased enormously, at the same time as the gap between the richest and poorest has widened to extents not seen since the days of slavery and empire. Forbes Magazine in the USA declares that there are now a record 3428 billionaires in the world, and that the collective net worth of all billionaires has risen from $1tn in the year 2000 to over $20tn last year.
In this country, Sir Jim Ratcliffe (who recently made a number of offensive remarks about immigration – since modified) has a variable fortune (according to the Sunday Times rich list), listed at £17bn for 2025. (The irony of the fact that Ratcliffe is himself an immigrant – to Monaco, where residence allows him to dodge UK taxation – seems to be lost on him.)
The excess wealth accrued and accumulated by him and similar individuals in the global north must come from somewhere; in economic academic terms, one would refer to ‘labour-value’, ‘use-value’, ‘exchange-value’ and ‘acquisition-value’, but in simpler terms, the rich get rich by under paying at the point of manufacture – often in the global south – and overcharging at the point of sale – in the global north.
This economic exploitation has been made easier by the rise of the newest and latest iteration of capitalism, neoliberalism, which has as its core philosophy (as most famously espoused by Ronald Reagan and his friend Margaret Thatcher) the commodification of every aspect of existence. Anything and everything can be bought and sold, nothing is exempt and the world is there for entrepreneurs to exploit for its resources to whatever extent they desire.
Unequal exchange creates migrants
In high-wage countries, governments have much more scope than in low-wage countries for taking taxation revenues which can be devoted to infrastructure projects, such as building schools, hospitals, roads, railways and houses etc.
In low-wage countries, where the workers work usually longer hours for meagre subsistence pay, there is no scope for finance ministers to gather such revenues, and so the general quality of life in the country continues to be depressed – artificially and unnecessarily.
The difference between the two is really quite small; it would probably take only a relatively small sum to enable a typical country of the global south to begin the process of public works. From such a starting point of offering a few well-paid jobs, tax revenues would begin to increase incrementally, allowing government spending on the kinds of things we take for granted here.
Young, ambitious people in the global south need – and have the right to – a life of fulfilment and development. But, since many global south countries cannot currently provide these, then clearly the incentive to embark on long and dangerous journeys to the global north will be strong.
Creating a fairer exchange
If we follow this line of thinking, then one possible approach to tackling the perceived ‘problem’ of immigration would be to provide the means to kick-start the economies of the global south.
In this regard, the likes of Sir Jim Ratcliffe and the other 3427 global billionaires have it in their power to bring about radical changes. For a start, perhaps they might be required to pay back the surpluses they know they have extracted and start paying global north wages to their global south workers. Or to contribute their statutory tax share to their home-nation exchequer so that nations like the UK could restore their seriously eroded levels of overseas aid. After all, just how much of their collective $20tn, likely extracted from the global south, do they really need, and how much could they give away without really noticing any difference to the lifestyles they think they deserve?
Migration: a complex issue that requires radical thinking
Such voluntary transfers of large sums are, of course, highly unlikely, but the issue of migration is complex and requires this kind of radical thinking. If billionaires are resistant to change, then perhaps the governments of the global north need collectively to consider a taxation on wealth, with the proceeds being earmarked for distribution in the global south. They could start by declaring that maintaining citizenship should be dependent on the paying of taxes at their own national rates, irrespective of where in the world individuals choose to live.
Economic initiatives like this will not end the urge to migrate – far from it; war and climate change are also massively significant. But for the many who now see no alternative to long and dangerous journeys north, tackling the push factors of poverty and hopelessness would help to create the very real alternative of productive and fulfilling lives where they were born.
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