You might ask, how can we empirically verify that unequal exchange has occurred ? Of course, economists who think in the spirit of Marx don't just want theory or moral diatribes, they want empirical evidence. Well, there are at least six good indicators of unequal exchange in price terms:
(1) the terms of trade. This refers to the relative prices of goods and services traded on international markets, specifically the weighted average of a nation's export prices relative to its import prices, as indicated by the ratio of the export price index to the import price index measured relative to a base year. Using this type of calculation, it could be established in New Zealand where I lived for two decades that, for example, in the 1960s and later 1970s and 1980s, a farmer had to produce an increasing number of sheep and cows to buy one tractor (I am just using an illustrative example here). In other words, he had to produce more of the same product to obtain another product through trade. (2) Accounting analysis of product unit values, i.e. the composition of the various costs included in the final market price of a commodity (the price to the final consumer who uses or consumes the product). If for example it is found that an increasing fraction of that sale price represents costs other than direct production and transport costs, but instead profit, interest and rent income, then unequal exchange in trade has increased. But because of the "creative" gross and net income & expenditure accounting it is done, this is often not easy, since various incomes and expenditures are included under headings which make it difficult to understand what the costs were actually for, or what activity gave rise to the incomes. (3) The change in the shares of net income between social classes and class fractions. If the discrepancy between the gross and net incomes of one social class, relative to another social class, increases, then a transfer of claims to wealth is occurring. This could be due to less income generated in production, or to income transferred in exchange (trading), or to taxation. We can compare also the actual average labour hours put in by one social class, the the net income accruing to that social class. (4) The trend in the cost structure of production of a country as a whole, or particular sectors, which refers to the amount of capital expenditures not directly related to the actual production of a product, i.e. costs incurred in addition to materials, equipment and labour (interest payments, incidental expenses, insurance, taxes, rents and the like). (5) The contribution to net output and investment by the FIRE sector (Finance, Banking, Real Estate, Insurance, Renting and Leasing), and the expenditure on capital goods by type by different sectors. (6) The proportion of net profits, net rents, net interest payments and net property income transferred to other nations or obtained from other nations. Generally speaking, Marxists do not do this research, a few do, but not many. They prefer moral diatribes and theories, claiming that you cannot measure Marx's value categories. But that is why people do not believe them. A credible argument must be based on the facts of experience, and the role of socialist economists is to provide them. Jurriaan
