Metropolis-satellite chain in clothing, export of jute from Bangladesh
Soma Dhar |
Dec. 31, 2021, 9:49 p.m.
Metropolis Satellite Chain is a theory presented by Andre Gundar Frank in his book “Capitalism and Underdevelopment in Latin America” ââin 1967. Frank says that capitalism is a monopoly exchange and exploitation and a transfer of surplus from the satellites to the metropolitan capitalist centers. The method is finally called Center Periphery theory.
The truth behind this theory was Karl Marx’s definition of capitalism. Marx designated capitalism as a mode of production, which produces development with high inequalities. According to Marx, capitalism began in 1701. He called the period 700-1800, until the 19th century, feudalism. Frank does not agree with his thought. He says capitalism started in 1501 from the 16th century. He described capitalism as mercantile capitalism. Europeans established colonies by occupying different countries because of mercantile capitalism.
In 1701, the journey of competitive industrial capitalism began and colonialism emerged. Its wingspan was 1701-1945. The importance of capitalism is the acquisition of a country for trade and commerce. These spawn additional business opportunities which means uneven occupation. Frank postulates this unequal transaction as a monopoly exchange. The duration of monopoly capitalism was from 1870 to the present day. He expressed it this way-
Monopoly capitalism> Financial capital (MNC)> State monopoly capital (imperialism) or new imperialism or ultra imperialism.
Indeed, during industrial capitalism, the capitalist system is involved throughout the world by the Metropolitan Capitalist Centers. Frank referred to this practice as the world capitalist system that Marx did not assert in his theory.
Underdeveloped countries are stimulated by capitalism, included in a capitalist system later, broadcast by a channel, articulated Frank. The channel presented by Frank is as follows:
Metropolitan Capitalist Center> Regional Center> National Center> Local Industries> Middle Men> Landowners> Producers (Peasants, Workers).
AG Frank presented the alliance for the domination of the dependency of developed and underdeveloped countries through the Metropolis Satellite channel. He described Western Europe and Latin American countries as a metropolis, which means center, and other countries as a satellite, which means periphery.
The chain is a symbol of domination-dependence. This relationship flourished with the exploitation of the colonial period. Frank points out that rich countries dominate underdeveloped countries. The economic situation of the underdeveloped countries is an outgrowth of the world capitalist system. The growing state of one country is called the underdeveloped or distorted state of development of other countries. Frank called this the development of underdevelopment. Frank blamed the metropolitan satellite structure of the world capitalist system for causing the development of underdevelopment. The metropolis operates the satellite. The satellite is cut off from the inherent investment funds, so its growth decreases. A state of dependence weakens satellite development, which creates a local ruling class, a âLumpen bourgeoisieâ that supports a strategy of underdevelopment.
Examples of Metropolis satellite channel: Classic examples of Metropolis satellite channel are the export of garments and the export of jute from Bangladesh. The conundrum now is how the chain operates in the clothing industry and the jute industry.
In Clothing export – Metropolitan Capitalists Center> Regional suppliers> Buying house / port or capital> BGMEA executives> Clothing owners> Clothing workers
In Jute Export- Metropolitan Center> Regional Center> Port or Capital> Local Center> Intermediaries and local traders> Landowner> Peasants or sharecroppers
Peripheral farmers in these two sectors are employed in jute or ready-to-wear factories because they do not own them. For example, in the jute yield, the plethora collected is called the expropriation of the surplus and the appropriation of the surplus. The farmers produce jute in the field, but they are not the owner, just the shareholders. The vendors sell a jute maund but get no more than Tk 500-600. Because those who buy jute from farmers are agents. They pocket 600-1200 Tk per maund in the wholesale warehouse. Then it is shipped to the center of the metropolis of Dalton in the United States or to Dundee in Scotland via the seaport from the river port of a district town. The amount received is 3000 Tk from them, and the winnings are 1000 Tk. In the jute sector, Dundee is the metropolitan center. The determined price is 2000 Tk, but the actual price was 500 Tk. The same condition is in the clothing sector. Here the owner pays a worker a low wage. No country has such a cheap labor force as in Bangladesh.
Two elements are linked to the metropolitan satellite channel. They are:
1. Expropriation of the surplus
2. Allocation of surpluses
Those who survive at the lowest level of the chain are small or peripheral producers or laborers or farmers because they have no property. Their purchased surplus from production goes through the highest level. That is to say the landowners or traders who subsist in the center of the village. The plethora that goes from the lower level to the upper level is called surplus expropriation. The maxim of any producer is to harvest this surplus. Of this surplus, they keep a part for their personal use, which is called appropriation of the surplus. And the residual part is transported by trade to the city center which exists on the upper level. In this way, the surplus is collected in the centers of the metropolises of the rich countries. The main issue is the drain of resources from the periphery to the core. At each stage, some capitalists exploit the lower level using monopoly power. In every capitalist system there is development at the international, national and local levels, but underdevelopment occurs more. In this case, the imperialist metropolis forms the satellite, an immature state by exploitation, where the administrative body creates local compradores who own the interest of a metropolis.
The main mechanism for expropriation and appropriation of the surplus is:
1. International trade
2. Foreign Direct Investment
3. Foreign aid
Typical examples of metropolitan satellite channels are the RMG industry and the jute industry. These are the two main export products of Bangladesh. Bangladesh’s export earnings in 1981-82 amounted to $ 752 million, or $ 75.2 million, representing the lowest export earnings for Bangladesh. But in 2015-16, export earnings were $ 33.07 billion, or $ 3307 crore, or 45 times the 1981-82 figure. Of the export earnings, $ 27 billion came from clothing and knitwear. Bangladesh’s total merchandise exports reached US $ 39.34 billion in 2019. This is the highest level in ten years, nearly double the figure for 2010. Much of these exports are clothing and textiles. The government has declared an export revenue target of $ 51 billion, propelling 12.37 percent year-on-year growth for fiscal year 2021-2022.
According to data from the Export Promotion Bureau (EPB), Bangladesh’s export earnings from jute and jute articles grew 8.10% to $ 882.35 million in the fiscal year. 20 against 816.27 million dollars in fiscal year 19. The jute and jute articles sector has become the second largest source of exports after the RMG sector.
International trade is moderate in Bangladesh for jute, and FDI has not increased significantly due to the degradation. In 2020, the FDI for Vietnam was $ 20 billion, but the FDI for Bangladesh was only $ 2.56 billion. Only RMG is the sector in Bangladesh where the country has the advantage of cheap labor.
Globally, the Metropolis satellite channel operates like multinational corporations. They apply to a regional center. We stay at the national center. There, BGMEA members work on labor subcontracts. Landowners organize a suitable surplus of landless peasants. Then, the intermediaries proceed to the appropriation. The BGMEA then appropriates the surplus from them by providing subcontracts to the landowners. Then the national centers get it from the BGMEA. But the regional centers complete the surplus ownership of the national centers. and the Metropolitan pole proceeds to the appropriation of the regional pole. Thus, the expropriation and appropriation of surpluses are carried out through the metropolitan poles. This practice is called a chain.
Frank accepted the chain as a token in this theory. In 1945, the colonial countries gained their independence from the colonialists. But Frank said: “We are always made dependent by this chain, as if we were emancipated from colonialism”. This chain means that the Third World is never free from burglary and capital flight. If this chain breaks down in one way or another, then the capitalist system will also break down. It’s hard to break the chain. Some countries like China, Korea, India, Iran, Brazil, Argentina, South Africa and Russia can break this channel. Bangladesh decides to break this chain. PRAN, PHP Group, Nasir Group, Square, Apex are trying to free themselves from principal-agent relationship commerce. We have to be freed from domination-dependence, that is, freed from addiction to break this chain.
Soma Dhar is a PhD candidate in the Department of Economics, Chittagong University, Bangladesh
E-mail: [emailÂ protected]