Trotsky's theory

Different countries, Trotsky observed,^[9] developed and advanced to a large extent independently from each other, in ways which were quantitatively unequal (e.g. the local rate and scope of economic growth and population growth) and qualitatively different (e.g. nationally specific cultures and geographical features). In other words, countries had their own specific national history with national peculiarities.

At the same time, all the different countries did not exist in complete isolation from each other; they were also interdependent parts of a world society, a larger totality, in which they all co-existed together, in which they shared many characteristics, and in which they influenced each other through processes of cultural diffusion, trade, political relations and various “spill-over effects” from one country to another.^{[citation needed]}

Sociologically speaking, this had five main effects:

• a more backward, older or more primitive country would adopt parts of the culture of a more advanced, or more modern society, and a more advanced culture could also adopt or merge with parts of a more primitive culture – with good or bad effects.
• Cultural practices, institutions, traditions and ways of life belonging to both very old and very new epochs and phases of human history were all combined, juxtaposed and linked together in a rather unusual way, within one country.
• In turn, this meant that one could not really say that different societies all developed simply through the same sort of linear sequence of necessary developmental stages, but rather that they could adopt/utilize the results of developments reached elsewhere, without going through all the previous evolutionary stages which led up to those results. Some countries could thus "skip", "telescope" or "compress" developmental stages which other countries took hundreds of years to go through, or, very rapidly carry through a modernization process that took other countries centuries to achieve.
• Different countries could both aid or advance the socio-economic progress of other countries through trade, subsidies and contributing resources, or block and brake other countries as competitors from making progress by preventing the use of capital, technology, trading routes, labour, land or other kinds of resources. In Trotsky's theory of imperialism, the domination of one country by another does not mean that the dominated country is prevented from development altogether, but rather that it develops mainly according to the requirements of the dominating country. For example, an export industry will develop around mining and farm products in the dominated country, but the rest of the economy is not developed, so that the country's economy becomes more unevenly developed than it was before, rather than achieving balanced development. Or, a school system is set up with foreign assistance, but the schools teach only the messages that the dominating country wants to hear.^{[citation needed]}
• The main tendencies and trends occurring at the level of world society as a whole, could be also found in each separate country, where they combined with unique local trends – but this was a locally specific “mix”, so that some world trends asserted themselves more strongly or faster, others weaker and slower in each specific country. Thus, a country could be very advanced in some areas of activity, but at the same time comparatively retarded in other areas. One effect was that the response to the same events of world significance could be quite different in different countries, because the local people attached different "weightings" to experiences and therefore drew different conclusions.

According to Trotsky, the unequal and combined development of different countries had an effect on the class structure of society.^{[citation needed]}

• For example, the Russian empire in 1917 was largely a peasant society composed of many different nationalities and governed by an absolutist state headed by the Czar; popular democracy did not exist.
• A process of industrialization had begun in the main cities since Peter the Great (for example, the Putilov steel works established in Petrograd - where the February 1917 revolution began, with a strike - was the largest in the world at the time). But this urban industrialization process relied mainly on the investment of foreign capital from France, Britain and other countries, and was limited to some urban areas and regions.^{[citation needed]}
• The Russian bourgeoisie which developed under the tutelage of the Czarist state lacked much power, and was politically weak. The bourgeoisie was unable to establish political democracy. At the same time, a militant industrial working class developed in the main cities, concentrated in large factories and plants.^{[citation needed]}
• In this way, the archaic culture of primitive peasant production and a semi-feudal state combined with the culture of modern industrial society.

Trotsky believed that this would shape the unique character of the Russian revolution. Namely, the Russian bourgeoisie was politically too weak and too dependent on the Czarist state to challenge its autocratic rule, and therefore the revolution against Czarist rule would be spearheaded by the revolt of urban workers.

Thus, the political and modernizing tasks normally associated in Europe with the leadership of the rising bourgeoisie, such as fighting for popular democracy and civil rights against absolutism, land ownership reform, industrializing the country, and national self-determination for oppressed nationalities, would have to be carried out in the Russian empire under the leadership of working-class parties, in particular the Russian Social-Democratic Labor Party which had been outlawed (although there were several other socialist, nationalist and liberal parties).

In the chaos towards the end of the First World War, in which Russian soldiers fought against the imperial German army, this political assessment proved largely correct. The provisional government established by the February revolution in 1917 collapsed and the October revolution, in which the Russian Marxists played a dominant role, destroyed Czarist state power completely. Thereafter, the Russian bourgeoisie was largely expropriated; most businesses then fell under state ownership.

A new stage in Trotsky's understanding of uneven and combined development in world history was reached in his analyses of fascism and populism in Germany, France, Spain and Italy.^[10] Trotsky makes it clear, the human progress is not a linear, continuously advancing process of bourgeois modernization - progress can also be reversed or undone, and ancient cults, superstitions or barbarous traditions can be revived, even though nobody previously thought that was possible.

Rudolf Hilferding's theory

This article or section possibly contains synthesis of material which does not verifiably mention or relate to the main topic. (August 2021)

Around the time that Trotsky settled in Vienna as a journalist in exile, after escaping from Siberia a second time, the Austro-Marxist Rudolf Hilferding wrote his famous book Finance Capital (first published in 1910) in which Hilferding mentions an idea very similar to Trotsky's. The passage occurs in chapter 22 on "the export of capital and the struggle for economic territory". It has never been proved whether Hilferding was influenced in any way by what Trotsky had written, although it is known they corresponded with each other,^[11] but Hilferding's own analysis of "the latest phase of capitalist development" certainly influenced a whole generation of socialist leaders.^[12] In any case similar notions were widespread among socialists throughout Central, Eastern, and Southeastern Europe at this time. Among other things, Hilferding states:

The export of capital, especially since it has assumed the form of industrial and finance capital, has enormously accelerated the overthrow of all the old social relations, and the involvement of the whole world in capitalism. Capitalist development did not take place independently in each individual country, but instead capitalist relations of production and exploitation were imported along with capital from abroad, and indeed imported at the level already attained in the most advanced country. Just as a newly established industry today does not develop from handicraft beginnings and techniques into a modern giant concern, but is established from the outset as an advanced capitalist enterprise, so capitalism is now imported into a new country in its most advanced form and exerts its revolutionary effects far more strongly and in a much shorter time than was the case, for instance, in the capitalist development of Holland and England.^[13]

Hilferding's insight was rarely noticed by English-speaking Marxists.^[14] His book Finance Capital, which went out of print several times, was never translated into English until 1981 (i.e. 70 years later). After the publication of Lenin's classic interpretation of imperialism as the highest (and final) stage of capitalism in 1917, most Marxist writers based their analyses of imperialism on Lenin's book. Even though, on several occasions throughout the book, Lenin cites Hilferding approvingly, by the time that Hilferding became Finance Minister in Germany in 1923, the Leninists regarded him as a reformist renegade, and his analyses were no longer trusted or taken seriously.^[15]

Economic geography

Geography has produced influential scholarship on the idea of uneven development. Geography started to lean left politically before the 1970s^[16] resulting in a particular interest in questions of inequality and uneven development (UD). UD has since become somewhat of a homegrown theory in Geography as geographers have worked to explain what causes inequality within different scales of space, locally, nationally and internationally. Key scholars in this field include Doreen Massey, Neil Smith and David Harvey.

Uneven development results from the "spatially and temporally uneven processes and outcomes that are characteristic, and functional to capitalism".^[17]

• Much of neoclassical economic theory holds that features of unevenness, such as income inequality, equalizes as a result of capital diffusion throughout the open market.
• Proponents argue that investment liberalization allows foreign capital to invest in capital-poor countries, yielding the highest rates of return, and that global integration promotes competitive advantage.
• Neoclassical theory contends that newly globalized, liberalized and capitalized developing countries have the added advantage over developed countries in that they are able to draw on existing markets, capital flow regimes and technologies.^[18]

This has the effect of placing all countries on an even playing field. The result is a global economy in equilibrium, or in other words, convergence. As such, in the neoclassical view, uneven development is merely an interim stage of economic development that can be erased by the free market.^[19]

Marxist geographers, on the other hand, assert that uneven development is persistently produced and reproduced by capital diffusion, and therefore, is an inherent and permanent feature of capitalism.^[20] Unlike the neoliberal contention of the erasure of disparities towards convergence, Marxists maintain that capital accumulation depends on differential economic climates for its regeneration. Harvey states that accumulation "is the engine which powers growth under the capitalist mode of production. The capitalist system is therefore highly dynamic and inevitably expansionary".^[21] The dynamism of capitalism is due to its persistent search for competitive advantage and consequently, its movement away from oversaturated economies towards new spaces from which it can extract greater profit. For instance, developed economies are characterized by high land rents and wages, and unionized labour, translating into high costs of production and lower gains. By contrast, developing economies have abundant pliable labour, and low rents and wages.^[22] As such, it is favourable for capital investments to move into the latter economy from the former in the interest of gaining greater rates of return. Kiely argues that capital diffusion throughout the global market remains a highly uneven process marked by reversals of comparative advantage and by cycles of investment and disinvestment, having the effect of elevating some spaces while simultaneously marginalizing others.^[23]

Differential economic environments have material effects on the ground. Processes of capital accumulation through space and time create new geographic landscapes shaped by crisis, deindustrialization and capital flight on the one hand, and influxes of capital and industrialization on the other. Capitalism not only reshuffles core-periphery relations, but rather, as Smith claims, it also penetrates all geographic scales.^[24] At the urban scale, differential rent gaps trigger investment and disinvestment in particular neighborhoods driving gentrification.^[25][26] On the global scale, integrated economies provoke time-space compression enabling enhanced communication and capital mobility. Smith argues that the subsequent erosion of the nation scale as the primary agent created a pivotal link between the global and urban scales. Since the 1990s, the increasingly integrated global economy has given greater importance to the role of the city. Indeed, world city building has become the geographical force of capitalism. New spaces of accumulation in Asia, Latin America and Africa are gaining competitive advantage as new centres of command and control and of surplus capital.^[27]

Other elements of neoliberal thought such as reducing the "left arm" of the state including welfare and support for the poor create even bigger inequalities between residents of the same areas, also resulting in uneven development.