8 Impotent Capital
8.1 Ground Rent in South America
Purcell
While the exploitation of domestic working class forms the quantitative bulk of surplus value appropriated by capital, it is inflows of extraordinary profits paid by capital and workers consuming raw materials in the form of ground rent which is the foundation for the specific qualitative modality taken by the valorisation of capital in South America. An important upshot of this insight is that labour does not need to operate at the world average levels of productivity. The transfer of ground rent from the rent-bearing sector, via state policies, permits the ‘normal’ valorisation of capital at the world average market rate of profit in the otherwise backward spaces of the national economy. As a result, capital does not follow its world historical necessity to develop the forces of production while still valorising at the average rate of profit through the appropriation of ground rent. This is the tragedy of capitalism and development in South America which renders capital impotent, restricting valorisation to the small scale of internal markets and negating the historical potential of the South American working class.
The limited development potentialities of these national territories is rooted in the global inflow of extraordinarily large masses of social wealth in the form of differential ground rent. This explains why capital has not had to reckon with landed property (as happened in South Korea, for example) as a barrier for its accumulation. Instead, capital has been able to valorise at the average world market rate of profit by appropriating a portion of ground rent and leaving another portion that reproduces the landlords as a class. So, far from simply being a source of cheap raw materials extracted by global capital – where the numerous accounts of neo-extractivism start and finish – these national spaces are determined as sources of ground rent recovery by global industrial capital. Especially when fragments of global industrial capital locate a portion of manufacturing in the domestic market for the valorisation of technologically obsolete capital in world market terms. The extent to which various centre-periphery frameworks have incorporated ground rent in their analysis, as many of the authors show, has been limited in methodological and theoretical terms. Subsumed under nebulous concepts like ‘unequal exchange’ or more recently ‘extractivism’, ground rent is rendered indistinguishable from other forms of ‘economic rent’ extraction through finance, digital platforms, institutional organisation, and the like.
nderstanding the limits to development as principally the outcome of unequal power relations between nations and firms is politically and intellectually untenable to inform working class organisation and action. With the return of the national question as a strategic horizon for the contemporary left, these political conclusions may read as counterintuitive, if not outright scandalous – especially for those who maintain that combatting super-exploitation is imperative for national liberation and anti-imperialist strategies. To avoid confusion, the point is not that economic domination as a set of empirically observable power relations does not exist – as any return to the archive will attest – but that these observations can only remain at the level of surface appearance if the problem of development is extrapolated into the realm of political theory. This can be detected in the current revival of national liberation for autonomous development through appeals to the politics of socialist neo-republicanism as the revolutionary basis of leftist projects.
This critical and practical unfolding of the general determinations of capital is based on a commitment to the Marxian critique of political economy. To be clear, this has nothing to do with what Marx did or did not say in Capital but is a political and intellectual project to reproduce the concrete by means of thought from the vantage point of the valorisation of capital in South America. Unequivocally, this requires understanding the accumulation and appropriation of ground rent as the concrete form which reproduces the South American working class. In other words, this is about method and the necessary relation of theory and practice. Far from a dry mathematical treatise common in the positivist canon of Marxian economics concerned with magnitudes of value, this is a unique dialectical approach which squares the circle between qualitative social form analysis and rigorous quantitative analyses of the formation of the general rate of profit. Indeed, this is a methodologically minded text designed to inform conscious international political action of the working class beyond the confines of leftist national projects restricted to the small scale of domestic markets.