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p The problem of foreign markets has an essential place in study of the deep-lying patterns of capitalism as a world system. Karl Marx, analysing their role in the formation and evolution of the capitalist mode of production, and of the international division of labour corresponding to it, wrote: ’Capitalist production does not exist at all without foreign commerce.’  [235•1  Today’s international division of labour, which links various countries together in a single organism and converts capitalist society into a world socio-economic system, was built up by capital on the basis of large-scale machine industry. The whole long history of the development of the productive forces of capitalism is directly dependent on expansion of its international economic connections. Largescale machine industry

p produced world history for the first time, insofar as it made all civilised nations and every individual member of them dependent for the satisfaction of their wants on the whole world, thus destroying the former natural exclusiveness of separate nations.  [235•2 

p The rapid growth of manufacturing in a few industrial centres of capitalism in the nineteenth century also largely determined the formation of a wide gulf between them and the rest of the world, predominantly colonial and semicolonial countries. It was in that period, when factory industry entered the stage of largo-scalo industry, that

p a new and international division of labour, a division suited to the requirements of the chief centres of modern industry [sprang] up, and [converted] one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial field.  [235•3 

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p The summary tables of international statistics indicate that the tendency toward internationalisation of production continued to grow during the transition of capitalism to the monopoly stage of its development, and with the marked sharpening of ils deep contradictions, although its effect was more and more interrupted by wars and overproduction crises. In the last quarter of the nineteenth century, for instance, the physical volume of international trade in manufactured goods rose roughly by 50 to 100 per cent, while it increased by more than 120 per cent again between 1900 and 1938.  [236•1 

p After World War II this trend was markedly intensified. In 1948 international trade in manufactures within today’s capitalist world economy was almost a quarter above the 1938 level (in constant prices). In the following decades it rose to a qualitatively new level. In 1960-79 alone its physical volume (in constant 1970 prices) rose by more than 250 per cent. This growth, of course, reflected real shifts in the internationalising of industrial production, on which we shall touch below. Here we would simply draw attention to the fact that this postwar growth in turn had a distinct tendency to accelerate in the long term right up to the crisis of the mid-70s, despite considerable cyclic fluctuations. As a result, the annual growth rates of exports of manufactures from all capitalist and developing countries taken together were almost 8 per cent in the 60s and 70s. The lion’s share of these exports (around nine-tenths) came from the first group of countries as early as at the turn of the 40s and 50s.   [236•2 

p Consequently, the conclusions from a survey of the postwar results of the internationalising of manufacturing over the whole world capitalist economy may primarily concern those features of it that were caused by shifts in the main industrial centres.

p A most important of these peculiarities, in the light of the facts adduced above, is the, as a rule, stable rise in the growth rates of international trade in industrial goods above 237 their production rates in the world capitalist economy. That means that a bigger and bigger part of this output leaves the national boundaries, stimulating development of the international division of labour. On the whole for the period of the 50s, 60s, and 70s, the ratio of the growth rates of these two indicators is estimated at nearly 2.5 : 1 in favour of the international trade in manufactures.  [237•1 

p Estimates of this sort, however, still do not yield any kind of full picture of the scale of capital’s internationalising of social production itself in today’s conditions. The most important indicator for this process is the ’export quota’, which expresses the ratio of the exports of goods of any kind to the world market and the total production of them within a country or group of countries.

The range of the fluctuations of this quota in the national production of separate countries is very considerable. The methods of calculating it are extremely varied, so that a composite comparison of the long-term dynamics of its changes by industries is greatly complicated, the more so because of the development of inflationary chaos, constant fluctuations of commodity prices and of the exchange rates of national curiencies on the world capitalist market. Special difficulties arise when we are calculating aggregate indicators for various groups of countries; nevertheless the data published by the UN statistical service makes it possible to make an aggregate estimate of this dynamics in manufacturing (see Table 25).

Table 25 Estimate of the Export Quota of Manufacturing ($ billions, in 1970 prices) 1938 1948 1958 1968 1973 1978 Production¹ 135 205 330 625 840 935 Exports² 24 28 58 150 240 323 Ratio P/E (percentage) 17.5 13.4 17.6 24.0 28.6 34.5 Notes: 1—excluding food and beverages; calculated on the basis of purchaser’s value; 2—excluding food and beverages; in f.o.b. prices.

p Sources

p UN Yearbook of National Accounts Statistics, Statistical Yearbook, Monthly Bulletin of Statistics for the appropriate years.

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p Because of their extremely general character, and the differences iu the methods of calculating them, comparisons of the volume of production and exports are very approximate, and most likely reflect their comparative dynamics rathei than their size. Nevertheless the estimates obtained have considerable significance when we are analysing the main trends characterising the postwar internationalising of capitalist industrial production on a world scale. The figures in Table 25 show the marked inequality of its development over recent decades in manufacturing.

p World War II greatly disrupted capitalism’s historical system of international commercial and economic relations. The proportion of manufactures coming onto the world market fell very markedly, although the physical volume of international trade in industrial goods, and especially their volume of production, was already much above the 1938 level in 1948. Hence it follows that the growth of production in capitalist manufacturing industries was oriented mainly on satisfying the home demand accumulated during the war. The export quota of manufacturing later gradually began to rise, but right to the end of the 50s it remained lower than before the war. True, in real terms the export market’s capacity for manufactures rose several times over. The physical volume of world trade in industrial goods was three times the prewar level in 1960. The volume of production rose similarly.

p In succeeding years, however, substantial shifts occurred in the evolution of this process. There was an unprecedented jump as regards the internationalising of manufacturing. While its export quota had been around a fifth at the start of the 60s and more than a quarter at the end of them, it had exceeded a third by the end of the 70s. An even greater part of the output of industrial items will supposedly be oriented on foreign markets in the ^ future.

p The quantitative changes considered undoubtedly cover qualitative shifts in the structure of the international capitalist division of labour. Study of them and of their underlying causes in turn calls for comprehensive analysis of the specific nature, role, and place of the separate leading industries and main groups of countries in the present system of world capitalist division of labour. Such an analysis is the object of the next chapters. Here, however, we must stress the value of those factors that ultimately underlie 239 the shifts noted in Table 25. An even more influential role is played by the objective" economic consequences of the contemporary scientific and technical revolution, which has primarily affected certain leading manufacturing industries and is fo’stering rapid expansion of their market. As Lenin stressed,

Technical progress must entail the specialisation of different parts of production, their socialisation, and, consequently, the expansion of the market.  [239•1 

These consequences have led since the war to a particularly rapid growth on a monopoly basis of international specialisation and co-operation of manufacturing in capitalism’s industrial centres.  [239•2 

p The qualitatively new phenomena in the internationalising of manufacturing are also determined by new phenomena in the concentration of production and capital associated with the marked activation of industrial monopoly corporations’ international operations. The following facts, for example, indicate the scale of their activity. In the quarter of a century 1951-75 alone, the 180 biggest U.S. transnational corporations operating in the manufacturing industries founded or acquired nearly 14,000 branches or subsidiaries abroad (around 9,300 in other capitalist countries and more than 4,500 in developing countries). The value of the output of the overseas branches of American and British monopoly concerns was several times greater than the total exports of the USA and Great Britain in the late 70s. In the early 70s, on the whole, the volume of international intra-corporation deliveries of transnationals and multinationals exceeded 30 per cent of the total trade on the world capitalist market.  [239•3  Most of those who are studying this problem, moreover, are more or less unanimous that in the long run one must expect 240 in particular a considerable strengthening of the influence and role of international industrial corporations in world business relations.  [240•1 

Among other factors speeding up the internationalising of manufacturing it is also important to allow for the new phenomena in the postwar economic progress of the developing countries. Although, as we have noted, their share of world capitalist exports of industrial goods remains comparatively low, the rates of their exports of them on the world capitalist market are quite impressive (see Fig. 16). At the same time, and this is the main point, the trend considered above toward an acceleration of the general rates of these countries’ economic development has led to their having become, in the postwar period, a big and growing market for the manufactures of capitalism’s industrial centres. In 1979 they imported industrial wares and equipment valued at more than $ 220 billion, including $ 191.5 billion from the developed capitalist countries.  [240•2 

Fig. 16 Main directions of the trade in industrial goods between capitalist and developing countries * (in billions of dollars in current prices f.o.b.) EXPORTS 54,0^ 37.5 191.5 3.5 1.0 1960 12.5 3.5 37.0 89.0 31.5 1970 1979 D - DEVELOPING COUNTRIES 223.0 C - CAPITALIST COUNTRIES * Excluding trade in food products. Sources: UN Monthly Bulletin of Statistics, July 1981, p. XCIV. 241

p The decisive tread in the postwar trade in manufactures is the reciprocal trade of the developed capitalist countries. No small role was also played in the indices of the scale of growth, of course, by the intensifying inflationary processes. In 19(58-79, for instance, the price index for machinery in the reciprocal trade of these countries rose by 235 per cent, and that for other industrial wares (except chemicals) by 185 per cent. Even when we exclude the effect of inflation, however, it proves that the physical volume of the trade between these countries rose in these years by factors of 5.8 and 6.6 respectively for these commodity groups.

p On the whole the proportion of exports of manufactures between developed countries in their total exports of same was three-quarters in the late 70s, whereas it had been more than two-thirds in the early 50s.  [241•1  For comparison’s sake, we would note that this indicator was less than one-half at the turn of the century.  [241•2  The postwar extension of their reciprocal trade was ultimately due to the long-term features considered above of the internationalising of the manufacturing industries in these decades, which very graphically confirms the truth of Marx’s well-known idea that

p the general foundation (if all industries comes to bo genoral exchange itself, the world market, and hence the totality of the activities, intercourse, needs, etc. of which it is made up.  [241•3 

p There was a marked increase in the role of developing countries as importers of manufactures in the postwar period, 242 but relatively speaking the significance of these markets still lias a clear tendency to diminish because of the more rapid growth of the trade in industrial goods between the developed countries. This trend, moreover, which reflects the deep contradictions of the world capitalist economy, is by no means a notable feature of the postwar period but has a historically longer-term character.  [242•1 

p At the same time it would hardly be right to confirm the inevitability, from these facts, of an intensificalion of this trend in the future. In today’s situation prospects are opening up before developing countries of more favourable opportunities for consolidating their position on the world market. The successes of the anti-imperialist struggle of the oil producing and certain other primary commodity producing countries for economic independence (foreign trade included) are evidence of that. In addition, there has been a certain strengthening of the position of a number of developing countries both as importers and exporters of industrial goods on the world capitalist market. In the period 1968 to 1979 the physical volume of their exports of industrial wares rose on the whole by a factor of 4.8, while imports of machinery and equipment from capitalist countries correspondingly rose by a factor of 3.7.  [242•2  The proportion of manufactures entering world trade from developing countries also rose a bit in those years.  [242•3 

Scientific and technical progress in the modern world capitalist economy, however, mainly benefits monopoly capital, and its fruits are harvested primarily by the monopolies of the leading capitalist countries. As a result the marked imbalance between the development of individual countries and regions historically inherent in capitalism, 243 especially between their various light and heavy industries is increasmg further. The revolutionary transformations in science and engineering that have taken place in the postwar decades, by further accelerating the essentially progressive Intel-nationalisation of social production, are at the same time thereby leading to a further sharpening as well of the socio-economic contradictions of the development of capitalism’s industrial foundation.