ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Abstract Generalisations

plained and the accumulation process is examined. The expository device used in Chapters 1 to 4 and the numerical examples in terms of which the pro- cesses and relationships arc brought out are indeed commendable. The substantive part, of the book is in Chapter 5, "Merchant Capital and Underdevelopment" and Chapter 6, "Industrial Capital and Underdevelopment". The thesis is that underdevelopment arose from the fact that in the countries which are now underdeveloped capitalism did not, till about the third decade of the twentieth century go beyond the stage of merchant capitalism. Merchant capitalism destroyed pre-capitalist structures, but was essentially dependent on them and hence could not bring about any radical change in production relations. But when the process of Industrialisation was started it was forced to operate in the conditions of underdevelopment. Hence industrialisation was only partial in the sensethat it offered employment only to a limited section of the proletariat. Here are the key passages The crisis of merchant capital can be posed in different terms... On the one hand it tried to secure profits for itself, on the other profits for industrial capital. So long as the rate of exploitation in the underdeveloped world increased, and the profits at the disposal of merchant capital went up, the contradiction between these two forms could be held in check. But as the rate of exploitation ceased to grow merchant capital faced a crisis. Initially it sponsored an increase in productivity by encouraging commodity production, and with it an extension of the division of labour; but subsequently it was unable from its situation in the sphere of circulation to increase it any further. As its profits dwindled merchant capital began to lose the last remnants of independence and was forced to act simply as the agent of industrial capital. But even here it ceased to serve either its own interests or those of industrial capital. To survive as capital it was forced to act as productive capital openly. At the same time productive capital which had previously restricted its activities to the developed world, finding its rate of profit from the underdeveloped countries ceasing to grow if not actually decline, was obliged to intervene directly. The result was a new phase in the history of underdevelopment: the inception of a capitalist mode of production proper in the underdeveloped world. ''But capital could not wipe out its own history and begin as though nothing had happened previously: it was forced , to operate in the conditions of un-

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