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ResponseG iovan ni Arrighi, Beverly J. Silver, and Ben jam in D . B rew er

I n her comment on our article, Alice Amsden provides plenty of evidence in.support of her and our own claim that over the last forty years there has beena remarkable industrial convergence between North and South, but she dis-misses our central claim that this industrial convergence has been associatedwith a lack of income convergence between North and South. We shall firstfocus on Amsden 's contentions with which we have no dispute and then turn toher dismissal of our central claim.We have no problem whatsoever with the data shown in Amsden 's four tables.As Amsden notes, they demonstrate "convergence in manufacturing value added(MVA)" (33). The combination, shown in our article, of a constant North-SouthGNP per capita ratio and an increase in the Southern relative to the Northernpopulation in itself implies an increase in the South's share of global valueadded. Moreover, if--as our data show--the manufacturing share of GDP hasbeen rising in the South and declin ing rapidly in the North, it follows logicallythat the South's share of MVA must have grown even more rapidly than theSouth's share of world value added. Amsden's first table thus comes as nosurprise to us since it simply makes explicit what was already implicit in ourdata.Amsden's second table shows that since 1975 the Southern share of worldmanufactured exports increased considerably faster than the Southern share ofworld MVA. In our article we made neither explicit nor implicit reference tothis important tendency. Nevertheless as we shall see in discussing Amsden'sdismissal of our central claim, the tendency in question is not only compatiblewith, but strengthens, our argument concerning the forces that have reproducedthe North-South income divide despite the closing of the industrial divide.Amsden's third table neither strengthens nor weakens our argument. It sim-ply details the sectoral distribution of the increase in the Southern share ofworld MVA shown in her first table and implicit in our data. The data providedare insufficient to assess the validity of Amsden's double contention that "thegrowth of manufacturing employment has meant the emergence of jobs thatpay better--some much better--than alternatives in agriculture and services,"(34) and that "sweatshops in [the textile and garment] industries remain lo-cated primarily in developed countries" (34). Nevertheless, neither statementStudies in Comparative International Development, Spr ing 2003, Vol . 38 , No. 1 , pp . 39-42.

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is inconsistent with our arguments concerning the reproduction of the North-South income divide.Finally, Amsden 's fourth table shows that even her best performing group ofSouthern countries- -what she calls "the re st"--out performed Northern coun-tries in the rate of growth of MVA to a far greater extent than they did in therate of growth of MVA per employee. Thus, including Japan in the Northernaverage, the rate of growth of the Rest's MVA between 1960 and 1995 was onaverage 119 percent higher than that of Northern countries, but the rate ofgrowth of its MVA per employee was only 27 percent higher (calculated fromAmsden 's Table 4). It follows that, even within manufacturing and leaving outof consideration most of the worst performing Southern countries, strong North-South convergence in the degree of industrialization has been associated witha considerably weaker convergence in value-added (i.e., income) per capita.This observation in no way contradicts our claim that strong North-South in-dustrial convergence has been associated with virtually no convergence in to -ta l value added per capita. It simply tells us that if we were to focus exclusivelyon "the rest" and on manufacturing, the discrepancy between industrial andincome convergence would be smaller than it is for calculations that includeall Southern countries and all sources of income, as done in our article.In sum, none of the evidence that Amsden provides in her commentary con-tradicts our thesis. In part, it restates in a different form the evidence on North-South industrial convergence that we presented in our article; and in part, itprovides evidence that we did not present but is perfectly compatible with ourclaims. On what grounds, then, does she dismiss our contention that North-South industrial convergence has not been associated with North-South in-come convergence? The dismissal is based on three grounds: conceptual,empirical, and theoretical.Conceptually, Amsden inexplicably denies validity of our interests in valueadded/income generated outside manufacturing. Why, she asks, are Arrighi,Silver, and Brewer looking at "income, which includes not just the value addedby manufacturing but also the value added by services, agriculture, etc.? Thenon-convergence they observe in income may have nothing to do with manu-facturing per se but, rather, with differences in the growth rates of the servicesectors and agricultural sectors of North and South" (33). As we just noted indiscussing Amsden's fourth table, the non-convergence we observe does havesomething to do with manufactur ing, because even within manufacturing, strongNorth-South industrial convergence has been associated with a considerablyweaker income convergence. Nevertheless, the non-convergence we observehas indeed primari ly to do, not just with differences in the growth rates of theservice and agricultural sectors of North and South, but also with differencesin the overall growth of manufacturing relative to other activities.Suffice it to mention that the share of MVA in total value added for theworld as a whole has declined from 28 percent in 1960 to 24.5 percent in 1980to 20.5 percent in 1998 (calculated from the same sources as our Tables 1 and2). The South has thus been catching up with the North in a declin ing sphere ofeconomic activity. Moreover, as Amsden's second table shows, this growingparticipation of the South in a declining sphere of economic activity has been

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Arrighi, S i l v e r , a n d B r e w e r 41

a c c o m p a n i e d b y a n e v e n f a s te r g r o w t h o f it s m a n u f a c t u r e d e x p o rt s . It f o ll o w st h a t m a n u f a c t u r i n g h a s n o t j u s t b e e n a d e c l i n i n g s p h e r e o f e c o n o m i c a c t i vi ty .I t h a s a l s o b e e n a s p h e r e i n w h i c h t h e v e r y s u c c e s s o f S o u t h e r n i n d u s tr i a li z a ti o nh a s i n t e n s i f i e d c o m p e t i t i v e p r e s s u re s a n d s h a rp l y r e d u c e d r e t u rn s ( t h a t i s , v a l u ea d d e d p e r c a p i t a ) r e l a ti v e t o o t h e r s p h e re s o f a c t iv i ty . U n d e r t h e s e c i r c u m s t a n c e s ,w e a rg u e , i n d u s t r i a l c o n v e rg e n c e (d u e p r i m a r i l y t o N o r t h e rn d e - i n d u s t r i a l i z a t i o na n d s e c o n d a r i l y t o S o u t h e r n i n d u s t r i a l i z a t i o n ) h a s b e e n a k e y m e c h a n i s m i n t h er e p r o d u c ti o n o f t h e N o r t h - S o u t h i n c o m e d i v id e . M a n u f a c t u r i n g m a y i n d e e d h a v eb e e n hi st o ri c al ly , a s A m s d e n c l a i m s , " a t t h e h e a r t o f m o d e r n e c o n o m i c g r o w t h "( 3 2) . B u t w h e t h e r o r n o t th a t w a s t h e c a s e p r io r t o g e n e r a l i z e d i n d u s t r i a li z a t io ni n t h e S o u t h , t h e e m p i r i c a l e v i d e n c e p r e s e n t e d i n o u r a r t i c l e s h o w s t h a t o v e rt h e l a st f o r t y y e a r s m a n u f a c t u r i n g h a s n o t p l a y e d a n y s u c h r o le .A m s d e n , h o w e v e r , a l s o r e j e c t s t h i s e m p i r i c a l e v i d e n c e o n t h e g r o u n d s t h a ts h e f in d s i t h a r d t o b e l i e v e t h a t b o t h i n t h e p e r i o d 1 9 6 0 - 1 9 8 0 a n d i n t h e p e r i o d1 9 8 0 - 1 9 9 8 n o n e o f t h e v a ri a b il i t y a m o n g c o u n t r ie s i n i n c o m e p e r f o r m a n c e w a sp r e d i c t e d b y v a r i a b il i ty i n t h e ir i n d u s t r ia l i z at i o n p e r f o r m a n c e ( a d j u s t e d R -s q u a r e d = 0 ). I n h e r v i e w , t h e p r o b a b i li t y o f o b t a i n in g a n a d j u s t e d R - s q u a r ee q u a l t o z e r o " i s i t se l f c l o s e to z e r o b e c a u s e m o s t v a r i a b l e s s h o w s o m e r e la -t i o n s h i p " ( 3 4 ) . T h e r e a s o n w h y w e o b t a i n e d a n a d j u s t e d R - s q u a r e e q u a l t oz e r o , t h e r e f o r e , " i s m o r e l i k e l y t o l i e i n a b u g i n [ o u r ] p r o g r a m t h a n i n t h ea b s e n c e o f a r e la t i o n s h i p b e t w e e n i n d u s t r i a l iz a t i o n a n d i n c o m e " ( 3 4 ) .W e d o n o t k n o w w h a t l o g i c l e a d s A m s d e n t o t h i n k t h a t t h e p r o b a b i l i t y o fo b t a i n i n g a n a d j u s t e d R - s q u a r e e q u a l t o z e r o i s i t s e l f c l o s e t o z e r o . In r e a l it y ,o b t a i n i n g a n a d j u s t e d R - s q u a r e e q u a l t o z e r o o r l e s s i s n o t u n u s u a l . A c o l -l e a g u e o f o u r s w h o r u n s f a r m o r e r e g r e s s i o n s t h a n w e d o h a s a d r a w e r f u l l o fr e g r e s s i o n s t h a t o b t a i n e d t h a t r e s u l t . N e v e r t h e l e s s , t o b e o n t h e s a f e s i d e w e r e -r a n a ll o u r r e g r e s s i o n s i n S P S S - - t h e y w e r e o r i g i n a l l y r u n in S T A T A . A s i tt u r n s o u t, w e o b t a i n e d e x a c t l y th e s a m e r e su l ts . W e a r e t h e r e f o r e c o n f i d e n tt h a t t h e r e a s o n w h y w e o r i g i n a l l y g o t a n a d j u s t e d R - s q u a r e e q u a l t o z e r o d o e sn o t l i e i n a b u g i n o u r p r o g r a m b u t i n th e a b s e n c e o f a s t a t is t i c a l ly s i g n i f i c a n tr e l a t io n s h i p b e t w e e n i n d u s t r i a l iz a t i o n a n d i n c o m e p e r f o r m a n c e . S i n c e i n t h ea r t ic l e w e p r o v i d e b o t h t h e li st o f c o u n t r i e s i n c l u d e d i n t h e r e g r e s s io n s a n d t h es o u r c e s o f t h e d a t a ( e a s i ly a v a i l a b l e W o r l d B a n k d a t a s et s ), i n t e r e s te d r e a d e r sc a n o f c o u r s e c h e c k f o r t h e m s e l v e s t h e c o r r e c t n e s s o f o u r c a l c u l a ti o n s .U n f o r t u n a t e l y , e v e n i f t h e c a l c u l a t i o n s a r e c o r r e c t , A m s d e n s e e m s i n c l i n e dt o re j e c t o u r fi n d i n g s o n t h e o r e t i c al g r o u n d s , b e c a u s e i n h e r v i e w w e " p r e s e n tn o p e r s u a s i v e t h e o r y t o s u g g e s t w h y i t s h o u l d b e s o " ( 3 2 ) . A n d t o t h e e x t e n tt h at w e d o , o u r v i e w o f t h e w o r l d e c o n o m y is " a k i n t o th a t o f o l d d e p e n d e n c yt h e o r i s ts " ( 3 2 ) w h o r u l e d o u t th e p o s s ib i l it y t h a t s o m e u n d e r d e v e l o p e d c o u n -t r i e s c o u l d " b e a t t h e s y s t e m . " T w o i s s u e s a r e i n v o l v e d h e r e . O n e i s w h e t h e re m p i r i c a l l y o b s e r v e d p a t t e r n s t h a t f a l s i f y e x is t i n g t h e o r i e s s h o u l d b e r e j e c t e ds i m p l y b e c a u s e t h e r e a r e n o a l t e r n a ti v e t h e o r i e s t h a t c a n p e r s u a s i v e l y e x p l a i nt h o s e p a t t e r n s . T h e o t h e r i ss u e i s w h a t , i f a n y t h i n g , o u r e x p l a n a t i o n s o f t h eo b s e r v e d d i s c r e p a n c y b e t w e e n i n d u st r ia l c o n v e r g e n c e an d i n c o m e n o n - c o n -v e r g e n c e h a v e in c o m m o n w i t h d e p e n d e n c y t h e o ri es .O n t h e f i r s t i s s u e , o u r i n c l i n a t i o n i s t o r e j e c t t h e f a l s i f i e d t h e o r i e s a n d t h e ns e e k s o m e p l a u s i b le e x p l a n a t i o n o f th e o b s e r v e d p a t te r n s . I f o t h e r s d o n o t f i n d

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o u r e x p l a n a t i o n p l a u s i b l e , t h e y s h o u l d p r o p o s e m o r e p l a u s i b l e o n e s . R e i t e r a t -i n g t h e o l d i d e a th a t m a n u f a c t u r i n g c o n t i n u e s t o b e a t t h e h e a rt o f m o d e r ne c o n o m i c g r o w t h f l ie s i n th e f a c e o f th e f a c t s a n d w i l l n o t d o.

A s f o r th e s e c o n d i s su e , t h e f a c t t h a t w e o b s e r v e a p a t t e rn o f n o n - c o n v e r -g e n c e s i m i la r t o w h a t d e p e n d e n c y t h e o r is t s m i g h t h a v e p r e d i c t e d d o e s n o t m e a nt h a t w e s u b s c r i b e t o t h e ir c o n c e p t u a l i z a t i o n s a n d i n t e rp r e t a ti o n s o f d e v e l o p -m e n t a n d u n d e r d e v e l o p m e n t . F o r o n e t hi ng , d e p e n d e n c y t h e o r i s ts w e r e a s p r o n ea s A n a s d e n t o id e n t i f y d e v e l o p m e n t w i t h i n d u s t r i a li z a t i o n , s o t h a t o u r c r i t iq u ea p p l i e s a s m u c h t o t h e m a s i t d o e s t o A m s d e n . M o r e o v e r , i n o u r e x p l a n a t io n o fi n c o m e n o n - c o n v e r g e n c e t h e re is h a rd l y a tr a c e o f t h e n o t i o n t h a t " d e p e n d e n c e "c o n s t i t u t e s a h i n d r a n c e t o d e v e l o p m e n t . I n a n y e v e n t , a s w e u n d e r s c o r e i n t h ea r t ic l e 's c o n c l u d i n g s e c ti o n , w e s e e th e s y s t e m o f w o r l d c a p i t a li s m n o t o n l y a ss o m e t h i n g t h a t i n d i v i d ua l S o u t h e r n c o u n t r i e s c a n b e a t , b u t a s a h i g h l y u n s t a b l es t ru c t u r e t h a t m a y w e l l b e i n t h e m i d s t o f f u n d a m e n t a l t r a n s f o rm a t i o n , i n n os m a l l p a r t a s a r e s u l t o f S o u t h e r n a g e n c y .