Territorial inequality: the wealth of regions and the lies of nationalism

27 May, 2021

Industrial ruins are becoming more common as territorial inequality rise.
Industrial ruins are becoming more common as territorial inequality rise.

Income distribution data in Europe show increasingly worrying patterns of territorial inequality apparently condemning whole regions to rural depopulation and massive and eternal unemployment. Local nationalisms and regionalisms use these differences to justify their aspirations. But neither the cause of the problems resides in a territorial conflict nor does the solution lie in gaining “levels of statehood” or “a voice in the capital city”.

Table of Contents

The wealth of the regions

In Spain, according to the report presented this week by the national statistics institute INE, nine of the ten cities with the highest average income per inhabitant are located in the area of Madrid and Barcelona, the other being Getxo, the upper-class neighborhood of Bilbao. On the other hand, of the 50 towns with the lowest income per capita, 38 are in Andalusia, 4 in Tenerife, 4 in Alicante, 3 in Murcia and 1 in Ciudad Real. The geographic correlation is clear and so is the territorial inequality.

In Italy the North-South differences are well known and glaring, before the current crisis, the average income in Lombardy was already 2.3 times higher than in Calabria. In Greece territorial inequality is no less serious: almost half of the population is already concentrated between Athens and Thessaloniki. In Portugal, again, it is the metropolitan regions of Porto and Lisbon that concentrate the highest average incomes.

It is not a mystique of North versus South, if we extend our scope of territorial inequality to the EU as a whole it becomes much clearer: it is not so much a magical two-dimensional axis, but rather the proximity to the great industrial center of the continent, modulated by historical factors such as the time of integration of each country into the European market or the effect of capital status.

But what lies beneath the territorial inequality? One need only compare the map of GDP per capita of the regions (left), with that of the distribution of labor productivity in terms of profit, which amounts to a measure of the degree of concentration of capital in each territory (right).

A permanently accelerated process

Impact of the euro by country on per capita incomes. The single currency tends to accelerate the effects of accumulation in terms of territorial inequality.
Impact of the euro by country on per capita incomes. The single currency tends to accelerate the effects of accumulation in terms of territorial inequality.

What drives the wealth of regions is none other than the density of capital invested in them. This different intensity is the result of capital accumulation. Accumulation is necessarily a process of concentration and centralization of new investments in those applications which are already more profitable, which geographically tends to produce territorial inequality and sustained and accumulated regional income differences over time.

The less industrially competitive regions increasingly occupy a subordinate position and receive less capital, with the result that the income differential tends to worsen. Moreover, the concentration of capital in industry and advanced services goes hand in hand with the impossibility of agriculture to keep up the pace of capital absorption. The result is a permanently accelerating trend of rural depopulation… which increases with each investment cycle the tendency to uneven capital allocation by reducing the size of the local market and the profitable uses of capital

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And in the case of Europe, to the main causes of territorial inequality must be added the euro effect, which, as we see in the table above, amplifies regional inequalities in terms of per capita income among countries.

Within each state, public services and internal transfers, and now in the European Union the recovery funds, seek to alleviate territorial inequality through spending policies. But to the extent that the internal redistribution of states is incapable of maintaining even the territorial concentration of capital within non-destabilizing margins, the European funds, macroeconomically insignificant and temporarily limited, are even less likely to.

The lies about territorial inequality told by nationalism, regionalism and the states

Abandoned villages and rural depopulation are the other face of territorial inequality.
Abandoned villages and rural depopulation are the other face of territorial inequality.

In the face of this panorama, both central states and the peripheral nationalisms and regionalisms propose a poisoned solution to territorial inequality.

In regions like Andalusia we are peddled that having our own voice in national parliaments and being able to shape governments is a way to increase the volume of intra-state redistribution of income in order to keep regional accumulation afloat. In regions like Catalonia, we are told to lower the tax contribution to zero through independence so that accumulation may accelerate. In between, all kinds of combinations with their inevitable side dishes of localist xenophobia, victimhood and cultural essentialism.

The states, for their part, peddle solutions to the demographic challenge that in the end consist of buttressing the profitability of investments in depopulated areas while the Green Deal modifies the agrarian structure in order to overcome the resistance of small property to be concentrated to provide room for new capital. In other words, they promote strategies against depopulation which are actually recapitalization strategies whose end result can only be to shrink labor power and thus the population needed for production.

The basic problem persists in either scenario: if large states lack the capacity to reverse the effect of accumulation on their own national capitals, small ones are even less able to do so. Transfers are palliatives that can slow down the speed of capital concentration inherent in accumulation, but they cannot subvert it. Moreover, were they able to do so – within each state or in the EU as a whole – they would only raise the problem to a higher level: Europe as a whole would lose foci of concentration and would be left behind in the global competition to attract capital vis-à-vis China and the US.

There is no national or regional solution to territorial inequality, it is necessary to break out of the logic of accumulation

"Walking City", a project by "de-urbanist" Iakov Chernikhov, inspired by Engels' "Anti-Düring" in 1930. The "de-urbanists" attempted a "transitional urbanism" opposed to the logic of value. Their texts were banned and most of them were slaughtered by Stalinism.
“Walking City”, a project by “de-urbanist” Iakov Chernikhov, inspired by Engels’ “Anti-Düring” in 1930. The “de-urbanists” attempted a “transitional urbanism” opposed to the logic of value. Their texts were banned and most of them were slaughtered by Stalinism.

Territorial inequality and widening income gaps between countries and territories are not irremediable. They can be addressed. As soon as we get rid of the logic of accumulation the necessity of industrial hyperconcentration will disappear, the distribution of production in the territory will reverse its logic and the reduction of the need for labor power in agriculture and the countryside takes on an opposite social meaning to the constant impoverishment of agricultural laborers and the destruction of the natural environment.

What is absurd is to consider as a solution any proposal leaving intact the mechanisms which cause the problem it intends to solve. The cause of inequalities between productive branches and territories is the accumulation of capital. And this is no local, regional, national or European mechanism. It is a global one, it constitutes the basis of capitalism as a universal mode of production. Taking sides for this or that national or regional capital in the competition generated by accumulation can only reinforce it. Neither the system nor its results will be overcome in this way.

The regionalist or nationalist alternative to territorial inequality is merely pouring gasoline onto the fire. Nationalism and regionalism of any nation or region can only aggravate the effects and delay overcoming the causes. It will not be the nation or territories which will bring us closer to any solution. Only that which radically denies the foundations of accumulation by affirming universal human needs can overcome accumulation.