Abstract
The chapter examines the development of CEE countries within the context of the global accumulation of capital. After describing the global economy as the hierarchy of the core and peripheral-type economies, the chapter assesses the development of the global corporate network and the role CEE countries play within this. With the help of statistical data, the distribution of incomes between the regions and social classes of Europe is analysed. The rates of profit of foreign direct investments and the profit per wages ratio are higher in the CEE countries than in the core countries of the EU. The emerging conclusion is that the region lacks the ability to accumulate enough capital because of a quasi-monopoly of transnational capital which adds a continual drain upon a substantial part of the value added from the region.
The research in this chapter was supported by the Hungarian Scientific Research Fund (OTKA Grant No 104210K).
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Notes
- 1.
The United States is ruled by “[t]he owners and managers of large income-producing properties; i.e., the owners of corporations, banks, other financial institutions, and agri-businesses. But they have plenty of help from the managers and experts they hire” (Domhoff s.a.). For more details see also Domhoff (2013, Chapter 3).
- 2.
On the basis of its high GDP per capita, Ireland could have been classified as core since the end of the 1990s, but because of the dependence of its economy on FDI, which is also reflected by the huge and growing difference between its GDP and GNP, the country’s position in the global economy is really an “integrated semi periphery”. Inward FDI stock reached 173.3% of the Irish GDP in 2013 (UNCTAD 2014, Annex table 07). The GNP equalled 89.1% of the Irish GDP in 1995, and this ratio decreased to 81.2–84.4% in the period between 2011 and 2013 (CSO Ireland Databases 2014, T02).
- 3.
Also recently labelled as the PIGS countries (Portugal, Ireland, Greece and Spain) or PIIGS (PIGS plus Italy).
- 4.
Typically peripheries which have large internal markets are exceptions, because these countries are relatively less dependent on foreign relations. One example is Poland, the largest CEE country, which’s GDP did not decrease even in the deepest years of the recent crisis.
- 5.
European Strategic Programme for Research and Development in Information Technology.
- 6.
See http://www.ert.eu/members for more details.
- 7.
The ERT Secretariat was moved to Brussels in 1988. “With its roots now put down in Brussels, ERT rapidly became an established interlocutor of senior policy-makers in the European institutions and in the national capitals of the Member States. […] Personal contacts became increasingly important. Wisse Dekker [chairman of the ERT between May 1988 and April 1992 – the author] established a warm relationship with European Commission President Jacques Delors while individual Working Groups were always in touch with their relevant Commissioners. During Wisse Dekker’s chairmanship ERT met several past, present or future Prime Ministers: Giuliano Amato (Italy), Pierre Bérégevoy (France), Ingvar Carlsson (Sweden), Edith Cresson (France), Charles Haughey (Ireland), Ruud Lubbers (Netherlands), Michel Rocard (France) and Jacques Santer (Luxembourg). In late 1988, senior Commission officials asked ERT for a more systematic dialogue with the business world on the 1992 programme. This was readily agreed and Wisse Dekker established the practice of high-level meetings between the Single Market Support Committee (IMSC), of which he was chairman until 1991, and the Member State government occupying the six-month rotating Presidency of the Council. These twice-yearly encounters have continued since the winding up of the IMSC in 1991, enabling ERT to urge its priorities at the highest political levels” (ERT 2010: 30–31).
- 8.
See http://www.hebc.hu/en/ for more details.
- 9.
See http://www.ert.eu/members for more details.
- 10.
Poland, Hungary, Slovenia, Slovak Republic and Czech Republic.
- 11.
Albania, Bosnia and Herzegovina, Bulgaria, Estonia, Croatia, Latvia, Lithuania, Moldavia, Romania, Russia, Serbia and Montenegro, Slovak Republic, Ukraine and Belarus.
- 12.
Calculations of the author based on data from the Bureau of Economic Analysis (2015).
- 13.
See the database at http://data.wiiw.ac.at/foreign-direct-investment.html.
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Artner, A. (2017). Inequalities of Accumulation: The Case of Central and Eastern Europe. In: Szent-Iványi, B. (eds) Foreign Direct Investment in Central and Eastern Europe. Studies in Economic Transition. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-40496-7_7
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