Book review part 1 of 2 of Teresa Hayter’s The Creation of World Poverty

Book review part 1 of 2 of Teresa Hayter’s The Creation of World Poverty

The most glaring fact about our world today is the tremendous gap between the wealthy countries and the poor countries. This division of global society is sometimes referred to as the First World versus the Third World, the global city versus the global countryside, the West versus the East, the North versus the South. In one form or another, the conflict between these populations has been the principal contradiction in the world since at least the end of World War 2. First published in 1981 as a response to the World Bank’s Brandt Report, Teresa Hayter’s The Creation of World Poverty details the origins of the great global divide. Hayter’s book is part of a large body of political economy that took off in the post-World War 2 era. Often, this political economy was influenced by Maoist and Third Worldist world views. Although there are a few moments when she loses her nerve, and ends up sitting on the fence, the politics of the work as a whole are thoroughly Third Worldist. Hayter’s book can be placed alongside the work of other economists who have reached Third Worldist or quasi-Third Worldist conclusions, such as André Gunder Frank and Samir Amin.

Inequality between First and Third World

Even though her book was originally published in 1981 and, then, republished in 1990, much of its description of the world remains more correct than not today:

“The North including Eastern Europe has a quarter of the world’s population and four fifths of its income; the South including China has four billion people — three quarters of the world’s population but living on one fifth of the world’s income.” (1)

“Wage rates in underdeveloped countries are often one twentieth to one thirtieth of those in the richer countries for the same type of work.” (2)

“According to the estimates in the World Development Report, the average adult literacy rate in 1975 in the 18 most industrialised countries was 99 per cent; in the 38 ‘low income’ countries it was estimated to be 38 per cent. Average life expectancy in 1978 was 74 years in the former group and 50 years in the latter. The proportion of children of school age in secondary schools in 1977 was, respectively 87 per cent and 24 per cent. The average daily calorie supply per head in 1977 was, respectively, 3,377 (or 131 per cent requirements) and 2,052 (or 91 per cent of requirements). The population per doctor in 1977 was 630 in the former group and 9,900 in the latter… Energy consumption per head in the former group in 1978 was 7,060 (kilograms of coal equivalent); in the later it was 161.” (3)

Little has changed since 1981. The vast inequality between the First World and Third World continues in 2010. For example, the median income worldwide is about $2.50 a day. By contrast, a rough figure for median personal income per workday for people (working and non-working) in the United States over 15 years of age is $119. In addition, there are more people earning less than $0.80 a day in India than there are people in the United States. In addition, this disparity of income is greater than these daily figures indicate because Indians often work more hours per day. (4) And, conditions are not getting better. For example, since last year, 100 million more people have slipped into hunger. The number of hungry people has recently risen drastically in the Third World. Hunger  has risen 11 percent in the past year. The number of hungry people is estimated to have reached 1.02 billion according to a recent United Nations report. (5) Hayter notes that those living in the most dire circumstances were increasing when her book was written. She comments that, excluding the  Soviet and socialist blocs, there were 700 million destitute people at the time her book was written. Almost 40 per cent of the population of developing countries was destitute. (6)

“In some countries one child in four dies before the age of five. Millions of people live in houses or huts made of corrugated iron, cardboard boxes and other ‘impermanent’ materials. They have no running water and no toilets. Electricity is a luxury. Health services are rarely within walking distance, and have to be paid for. Primary education may be available and free but often children are needed for work. There is generally no social security or unemployment pay, and many people, some 300 million according to the ILO, are without any kind of employment. Trade union rights and organisation are often minimal or non-existent and severe repression by government authorities is the rule rather than the exception.” (7)

The destitute, the wretched of the Earth, are currently a very dynamic population. Since her book was published, there has been a major demographic shift. For the first time in history, more people live in cities than not. However, the city life that exists is not that predicted by utopian futurists. This urbanization has resulted from the growth of Third World megacities with huge slum dwelling populations. The destitute have grown to enormous proportions in these slums. In many cases, the new destitute are not completely integrated or integrated at all into economic production. There are huge pools of what Karl Marx called the industrial reserve army. They are expendable people surviving on the very edges. However, their very existence ensures that there is always a pool of workers for capitalists to exploit. And, their existence as a large potential labor pool ensures that wages will be depressed to near survival or sub-survival levels in much of the Third World.  The growth of this class has accompanied the industrialization and shift in production to the Third World. Along with this comes the deindustrialization of the First World. This class, despite its idleness, plays an important role in the global economy. So large and dynamic is this new slum dwelling group, that these populations are a potential security concern for imperialists and their Third World proxies. These dispossessed classes may very well be the front line soldiers of future people’s wars in the Third World.

Hayter’s picture of the world, even though two decades old is, more accurate than the narrow conception of contemporary First Worldists Most First Worldists focus on their own population to the exclusion of the global population. They fail to realize the true size of the gap between the rich countries and poor countries. They fail to connect the status of one to the status of the other. They fail to connect the domestic situation in the imperialist countries to the global class structure. Such tunnel vision by First Worldists is chauvinist and imperialist.

Historic Origins of Inequality

Hayter shows that the traditional bourgeois explanations for the origins of inequality are false. Such explanations are grounded in racist and imperialist assumptions: inequality is a result of the natural superiority of Europeans; is a result of weather, according to such a view, hot weather makes one lazy; is a result of the superior Protestant work ethic of Northern Europe; etc. Similar chauvinist explanations are offered by First Worldists. In order to justify the continued standard of living of the First World working class, First Worldists refuse to look at the origins of the great wealth enjoyed by the populations of the imperialist countries. Hayter makes the point that reality matters, that history matters. To ignore the real history of the formation of global inequality is to accept the racist, imperialist narrative.

Hayter points out that Europe arrived late on the world scene. One theme of Marco Polo’s work was how advanced China was compared to Europe at the time. As late as 1793, the Emperor of China informed King George II that China had everything it needed and had no use for English products. In 1498, in India, Raja of Malabar sent a message to the King of Portugal saying much the same thing. Europe was a backwater. The accumulation of wealth in Europe and North America, including their technological and industrial advance, are relatively recent. In the nineteenth century, with the industrial revolution, the great advance in British, then other European, North American and later Japanese wealth and productive capacity occurred. Hayter points out that the rise of what Fredrich Engels called the bourgeoisified working class and Vladimir Lenin called the labor aristocracy is a recent phenomenon:

“[S]tandards of living for working people in Europe were precarious at the beginning of the twentieth century.. But throughout the last two centuries there have been slow gains in the strength and organisation of the European and North American working class, against the vigorous resistance of the state and employers, and it cannot be denied that their situation now is in comparably better than it was in the nineteenth century, and than it is still for workers and peasants elsewhere.” (8)

Hayter links the change in the global position of the West to many factors. Five centuries ago, European expansion began overseas. Trade, plunder, slavery, and piracy in the “New World” filled the coffers of Europe. Much of what passes for “free trade” is really plunder. This influx of wealth provided some of the primitive accumulation of capital that would help speed up capitalist development in Britain, then elsewhere. In other words, the infusion of wealth from the New World propelled capitalism forward where capitalism existed in Europe. Those countries where capitalism developed first could take full advantage of the infusion of capital. Spain, although having a larger influx of plundered wealth from the Aztec and Inca civilizations, could not take full advantage of the infusion of wealth since Spain lagged behind other countries in terms of capitalist development. Hayter points out that capitalism reaches its fully developed form in Britain in the nineteenth century. However,  the beginnings of the factory system were seen as early as the sixteenth century. As early as the seventeenth and eighteenth centuries, agriculture in Britain became increasingly capitalist. Capitalism resulted in a massive expansion of productive capacity and technological innovation. Production became more social and scientific. The idle were drafted, often against their will, into production. Goods could now be produced on a mass scale, and for much cheaper.  Capitalism resulted in a higher output per producer. (9) Hayter’s explanation correctly combines elements of those who point to the role of the infusion of capital from the New World and those, such as Robert Brenner and Ellen Meiksins Wood, who point to capitalism’s roots in agrarian Britain.

Hayter’s book is an excellent introduction for those researching the origins of inequality between countries in the modern period. Even though Hayter wavers in her Third Worldism from time to time, her book is undeniably Third Worldist in its overall conclusions. The gross inequality that characterizes our world is not natural. It has a long history that is well described by Hayter. The ascendancy of First World and the poverty of the Third World is not a mystery. The development of the European and other First World countries is directly linked to the underdevelopment of the Third World. Hayter’s The Creation of World Poverty helps us understand this connection in its complexity. Hayter’s book also serves as an introduction to much of the literature of dependency theory, unequal exchange, etc.  To better understand the world is to better be able to change it. If the proletariat of the Third World is to succeed in its historic mission, its leadership must bring the most advanced science to bear in making revolution. Science is key to revitalizing the Global People’s War of the Leading Light.


  1. Hayter, Teresa. The Creation of World Poverty. Third World First. Great Britain: 1990. p. 16
    2. Hayter, p. 18
    3. Hayter, pp. 17-18
    4. Amerikkkans rich, Indians poor, so-called “ICM” deaf and dumb. Monkey Smashes Heaven. August 19, 2007.
    5. One billion go hungry.. socialism is better than capitalism. Monkey Smashes Heaven. June 28, 2009.
    6. Hayter, p. 18
    7. Hayter, p. 18
    8. Hayter, pp. 27-29
    9. Hayter, pp. 33-35
    10. Hayter, pp. 37-39
    11. Hayter, p. 38
    12. Hayter, p. 38
    13. Hayter, p. 48
    14. Hayter, p. 20
    15. Hayter, p. 52
    16. Hayter, p. 53
    17. Hayter, p. 57
    18. Hayter, p. 57
    19. Hayter, p. 54
    20. Hayter, p. 69
    21. Hayter, p. 67
    22. Hayter, pp. 59-63
    23. Hayter, p. 64
    24. Hayter, p. 97
    25. Hayter, p. 107
    26. Hayter, p. 66
    27. Hayter, p. 67
    28. Hayter, p. 68

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