8 Impotent Capital
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.