Is Catching Up Possible? The Example of Central and Eastern Europe

In the age of "transnational monopoly capitalism," the hierarchy of nations along the axial division of labor has become more sophisticated and rigid than ever. In the global cycles of capital accumulation, the price of the competitiveness of the center is paid by the periphery. This burden-transferring maintains the gap between the center and peripheries and becomes increasingly significant in times of crises. This is illustrated by the example of the Central and Eastern European EU-member states, where the transnational corporations (TNCs) enjoy higher rates of profit and exploitation, and correspondingly, lower unit labor costs and wage shares. The increase of GDP in the region has been creamed off by the TNCs through repatriation of profits. The more a (semi-) peripheral country is integrated into the hierarchic system of global accumulation of capital, the less its catching up is likely. It seems that catching up is only possible beyond capitalism.