Capital accumulation advantage increases or decreases exponentially with the differential in pay for equally productive labor: An equally productive worker in the poorly-paid Third World produces a unique model car, is paid $1 an hour, and produces one model car an hour. An equally productive worker in the developed world produces another unique model car, is paid $10 an hour, and also produces one model car per hour. Each equally productive worker likes, and purchases, the other’s model cars. (All true costs are labor costs [capital is stored labor] so we ignore monopoly capital costs, which go to the developed world anyway and calculate the cost of those model cars at the labor cost of production.) The $1 an hour worker must work 10 hours to buy one of the model cars of the $10 an hour worker but, with the money earned in the same 10 hours, the $10 an hour worker can buy 100 of the model cars of the $1 an hour worker. While in a homogenized market of many producers there is a 10 times differential in buying power, in direct trades between each other there is an exponential 100 times differential in retained wealth.
If the pay differential is 5 ($10 to $2), the wealth accumulation advantage is 25 to 1. If the pay differential is 2 ($10 to $5), the wealth accumulation advantage is 4 to 1. When all have access to technology and markets and pay is equal for equally-productive work, the wealth retained (and available for accumulation or consumption) by each nation is equal.
All wealth comes from resources and resources are in the countryside. Thus for 800 years the cities of the Middle Ages raided the countryside to destroy their primitive industrial capital, forcing the countryside to sell their natural resources to the city. City states fought city states over those same resources. The imperial city states evolved into imperial nations which continued to fight control of resources and trade, the source of their wealth. The imperial nations of Europe colonized the entire world and continued to battle over who would control the wealth producing process. (Chapter 2)
Military forces of the wealthy world spread all over the world are there for the same purpose as those raiding parties from the imperial cities of Europe, control resources, monopolize industrial technology and control markets-in short, controlling the rules of unequal trade.
Where are Japan’s resources? Where are South Korea’s resources? Where are Singapore’s resources? Where are Hong Kong’s resources? Where are Taiwan’s resources? Where are the resources of the old imperial nations of Europe who consume roughly 14 times the resources as lie within their borders? America, with 5 percent of the world’s people, consumes 28 percent of the world’s resources. The resources from which all wealth comes are primarily in the undeveloped world, the countryside of the developed world.