I'm a baby leftist and still learning. You keep using this phrase. I'm sure I live in it but I'd like to know what Hexbears define as the imperial core.

  • infuziSporg [e/em/eir]
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    1 year ago

    Here's an answer that's simple once you grasp one concept: Trade mispricing.

    One company (remember that Capital Has A Nationality) is based in a wealthy home country and operating in a resource-rich, money-poor country and also in a tax-haven country. They mine cobalt with their subsidiary in the money-poor country. They operate at a low cost in the money-poor country, and sell their product at a low price to their tax-haven subsidiary. In the home country, they buy the cobalt at a high price from the tax-haven subsidiary and refine it and produce electronics which they sell at high prices. The tax-haven subsidiary buys low and sells high. Normally this profit would be subject to enormous taxes, but in that country the corporate taxes are extremely low. So the proceeds, which would otherwise be made by the government of the host country and especially the government of the money-poor country, are instead kept by the company and distributed to shareholders. A pittance is paid out to the government of the tax-haven, but enough to justify the lenient policy.

    Since the 1500s, governments have been making efforts to secure secondary and tertiary industries rather than simple resource extraction.

    Another example of this kind of economic discrepancy is when name-brand shirts are produced cheaply in one country, sold wholesale to another country, where they are instantly marked up for retail. The majority of the price (and the taxes) goes to shareholders of the company and the government of the destination country. But the workers in the country of production, though they are the single indispensable factor in the shirt's existence, get a minuscule percentage of what the shirt sells for.

    If a country has headquarters of multinational companies that are incorporated within its laws, it is an imperial country. When you see a number of such countries that are closely aligned economically, militarily, and politically, and they control the majority of the world's trade, that is the imperial core.