Case Study

Neo-Marxists and the global capitalist economy

Neo-Marxists see the global capitalist system as being structured along both a vertical and horizontal axis. Relations between states are structured hierarchically (vertically) between those which are wealthy and powerful – the core – and those which are poor and without much influence – the periphery. There is also a horizontal structure of class relationships, namely the relationship which exists between elites in both core and periphery countries. Elites in both the rich ‘North’ and poor ‘South’, share fundamental interests in supporting this system because they actually benefit from the exploitation of other less wealthy social groups.

The economies of Asia, Africa and Latin America are on the margins of the global economic system and dependent on the capitalist countries of Western Europe and North America at the centre. Trade relations and capital flows between the core and periphery of the global economy are asymmetrical, shifting the economic surplus to the core and undermining the resource base of the periphery. Broadly speaking, countries in the periphery produce primary products like raw materials – cotton or coffee beans – not manufactured goods like motor vehicles or electronic goods. This degree of ‘specialisation’ or division of labour perpetuates inequalities. Surplus flows out of the periphery to the core. Peripheral countries (the Global South or Third World) are not ‘catching up’ with the core because of their dependence on, and exploitation by, the core (West or Global North) of the international capitalist economy. Economic growth and development in the periphery is sluggish due to a lack of technology and investment, which again is a consequence of their dependence on the core.

For neo-Marxists, the unjust structure and associated hierarchy of international relations implies a global system designed to perpetuate the dominance of the rich and powerful countries. To change things, it would be necessary for the countries of the Global South to work together – but over time we have seen that this goal has not been fulfilled due to the real or perceived differences in national interests of such countries.