A crucial strategy for transformation in the 21st century
Jason Hickel is a Professor at the Institute for Environmental Science and Technology (ICTA-UAB) at the Autonomous University of Barcelona, and Visiting Professor at the London School of Economics and Political Science
Cross-posted from Jason’s substack
The concept of delinking has gained traction recently among some political movements in the global South, including with an international conference in Mexico on this topic that took place last month.
What is delinking, and how can it be achieved?
Delinking was best described by the Egyptian economist Samir Amin. He started from the observation that the capitalist world economy is characterised by a stark division of labour between the imperial core (often glossed as the global North) and the periphery (the global South).
In this system, the core states seek to monopolise the most profitable forms of production and establish control over global commodity chains, while preventing sovereign development in the periphery to maintain it as a subordinate supplier of cheap labour. Southern labour and resources are roped into producing things like sweatshop goods and plantation commodities for the core, at compressed market prices, rather than producing for local human needs and national development.
Amin pointed out that this system is characterised by large core-periphery price disparities and therefore unequal exchange in international trade. The South is made dependent on imports of technologies and producer goods from the core at monopoly prices, and to pay for this they have to export massive quantities of artificially cheapened commodities and manufactured goods, thus generating a net-transfer of value from the periphery to the core. This enriches the core but drains the periphery of resources necessary for development.
This system produces and perpetuates poverty and underdevelopment in the South. There is nothing inevitable about poverty; it is an effect of imperialist dynamics in the world economy. The global South has extraordinary productive capacities; massive labour power, land, factories and resources. The problem is they do not have sovereign control over production.
To address this problem, Amin called for a process of delinking, which for him contains two key elements:
1) Delink from exploitation by the imperial core. Southern states should end dependence on imports from the core, and end dependence on imperial capital and core currencies, in order to build economic sovereignty and mitigate unequal exchange. Note that Amin was not calling for autarky or isolation; on the contrary, he actively encouraged South-South cooperation and trade as a tactic for overcoming imperial dependencies.
2) Delink from the capitalist law of value. Under capitalism, production is organised around whatever is most profitable to capital (largely, foreign capital). In the South, capital prefers to exploit cheap labour in global supply chains than to invest in technological innovation and industrial upgrading. This inhibits development. Southern governments must overcome this and align production to a new law of value: human needs and national development.
How can delinking be achieved in the 21st century? Some basic principles include the following:
A first step is to reduce imports from the core. This can be achieved by reducing unnecessary imports (luxury goods, etc), while substituting necessary imports where possible with domestic production, or through South-South trade, ideally using swap lines to trade goods outside the US dollar or Euro. Taking this step reduces pressure for exports to the core (and reduces the need for core currencies), and therefore reduces exposure to unequal exchange.
These options are increasingly available to Southern countries now because of China. China has broken many of the core’s technological monopolies and provides an alternative source from which Southern states can obtain imports, on much fairer terms. (Indeed this is one of the main reasons for the core’s increasingly aggressive posture toward China). China’s BRI has also created infrastructure that can enable greater South-South trade.
A second step is to use industrial policy and planning to overcome the inertia of capital and guide investment and production toward developing a sovereign industrial base, escaping from subordinate positions in global commodity chains, and building the infrastructure necessary to meet human needs.
Toward this end, governments can nationalise key resource deposits and the major export industries to gain public control over foreign currency earnings, while taxing the foreign currency earnings of private exporters. This way foreign currency can be used strategically, to focus on purchasing the technologies and producer goods that are most necessary for overcoming dependencies and developing sovereign national industries.
Finally, public finance can be leveraged for public works. Southern states that issue their own national currency can use it to fund any project that can be financed in that currency, without needing to rely on foreign capital. They can establish a public job guarantee to train and employ people in necessary activities such as building housing, sanitation systems, schools and hospitals, without waiting for capital to decide these are worth doing.
Of course, this only scratches the surface. Every country faces its own unique challenges, there is no one-size-fits-all solution for delinking. But steps like these can help enable Southern countries to reclaim their productive capacities and escape from dynamics of unequal exchange.
Some of these moves may be prevented by IMF structural adjustment programmes or conditions imposed by foreign creditors, which generally seek to preclude Southern states from using industrial and fiscal policy. If so, governments may need to default on relevant external debts, and – as Thomas Sankara argued – they should do this collectively wherever possible, so as to maximise their bargaining power.
Of course, there will be backlash. The core states will impose higher borrowing costs and possibly sanctions. But these pressures can be mitigated precisely to the extent that governments are able to reduce their dependence on imports from the core. Increased public control over foreign currency, together with capital controls, can help prevent any balance of payments crisis. And new Southern institutions like the New Development Bank and the Asian Infrastructure Investment Bank may provide alternative sources of finance.
A final consideration is defense. We cannot underestimate the extent to which the core states are willing to use violence, even genocidal violence, against any national liberation project, in order to maintain peripheral subordination. We have seen this play out many times in the past decades. Therefore it is necessary to establish regional defense alliances wherever possible, as Burkina Faso, Mali and Niger have done with the Alliance of Sahel States.
A process of delinking along these lines can be extremely powerful. It can enable Southern states to escape imperialist exploitation, overcome underdevelopment, meet human needs, and undertake ecological transition. Freedom and dignity for the global majority requires a process of delinking. This will also be the process by which the core-periphery structure of the world economy will ultimately be dismantled and a non-polar world can be established.
*For more on what a delinking programme can look like, see: “Proposals for unilateral decolonization and economic sovereignty”
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