Capitalist Economic Development in Peru: 1980–2016

Abstract

This chapter analyzes capitalist economic development in Peru over the years 1980–2016. Lust uses a critical political economy and dependency theory perspective to argue that capitalist development in Peru is a specific capitalist development and is principally determined by the global North in general and transnational Capital in particular. Peru’s role in the international division of labor is not only translated in an economic model based on the export of the country’s mineral resources, but also in the country’s economic and business structure. The Peruvian economy is an organically unified economy, although it manifests itself as an economy divided into an advanced economy and capitalist subsistence economy . Both economies are intimately tied and need each other for production and reproduction.

Appendices

Appendix 4.1: Distribution of Private Companies (LLC and Natural Persons) According to Economic Activities: 2012–2016

In the following tables only micro companies, small businesses and medium-sized and big enterprises are summed up that are considered limited liability companies or natural persons.¹ Size is measured on the basis of annual sales. Micro companies are businesses which sales do no pass the value of 577,000 soles (Tables 4.12, 4.13, 4.14, 4.15 and 4.16).²

Table 4.12 Distribution of private companies (LLC and natural persons) according to economic activities: 2012

Table 4.13 Distribution of private companies (LLC and natural persons) according to economic activities: 2013

Table 4.14 Distribution of private companies (LLC and natural persons) according to economic activities: 2014

Table 4.15 Distribution of private companies (LLC and natural persons) according to economic activities: 2015

Table 4.16 Distribution of private companies (LLC and natural persons) according to economic activities: 2016

Appendix 4.2: Calculation of the Profit Rate of Peru: 1980–2014

The profit rate is the relation between surplus value and total capital invested. The profit rate can be described as follows:

s :

surplus value

v :

variable capital

c :

constant capital (fixed and circulating)

p :

profit rate

$$p = s/\left( {c + v} \right)$$

For the calculation of the profit rate, we follow the example of Roberts (2015) in his paper “Revisiting a world rate of profit”. We have also reviewed other examples of how to calculate the profit rate such as Maito (2014) and Li et al. (2007). We not only agree with Roberts of how to calculate the profit rate, but also data are available to calculate the profit rate of Peru using the example of Roberts.

The profit rate is calculated on the basis of data provided in the Penn World Tables. It must be emphasized that only the profit rate of the formal sector is calculated. The Penn World Tables, as also the national accounts of Peru, only register official transactions. The enormous informal sector is not included. Furthermore, we should mention that data available only permit to calculate fixed constant capital.³ Hence, the explanatory power of the calculated profit rate is limited. In other words, the profit rate presented is only an approximation. The following variables are used:

• Gross GDP at constant 2005 national prices (in million 2005 US$) = Total value (tv)

• Share of labour compensation in GDP at current national prices = Share of variable capital in GDP (svgdp)

• Capital stock at constant 2005 national prices (in million 2005 US$) = Constant capital (cc).

The surplus value equals total value—variable capital. The rate of profit is tv—(svgdp × tv)/cc + (svgdp × tv) as a percentage.

Appendix 4.3: Calculation of the Rate of Exploitation of Peru: 1980–2014

The rate of exploitation expresses the relation between the surplus value and variable capital. The rate of exploitation is described as follows:

s :

surplus value

v :

variable capital

$${\text{Rate of exploitation}} = s\text{/}v\,{\text{as a percentage}}$$

The rate of exploitation is calculated on the basis of data provided in the Penn World Tables. It must be emphasized that only the rate of exploitation of the formal sector is calculated. The Penn World Tables, as also the national accounts of Peru, only register official transactions. The enormous informal sector is not included. Furthermore, we should mention that data available only permit to calculate fixed constant capital.⁴ Hence, the explanatory power of the calculated rate of exploitation is limited. In other words, the rate of exploitation presented is only an approximation. The following variables are used:

• Gross GDP at constant 2005 national prices (in million 2005 US$) = Total value (tv)

• Share of labor compensation in GDP at current national prices = Share of variable capital in GDP (svgdp)

• Capital stock at constant 2005 national prices (in million 2005 US$) = Constant capital (cc).

The surplus value equals total value—variable capital. The rate of exploitation is tv—(svgdp × tv)/(svgdp × tv) as a percentage.