but it also embodies the materials and labour deployed in China and Bolivia to produce those parts, which existing methods cannot capture.
!- limitations : of previous methods to calculate drain / unequal exchange - hidden costs of prior methods contributed large uncertainty
Using a modified version of Köhler’s method, recent research has found that in 2015 drain from the South through unequal exchange amounted to $2.1 trillion (constant 2011 dollars), represented in Northern prices (Hickel et al., 2021). Köhler’s proxy approach is limited in several respects, however. It relies on PPP figures that do not adequately account for the comparatively high prices of Northern exports; it relies on GDP figures that are affected by the low prices of imports from the South; and it compares Southern exports to prices across whole economies, rather than to those of only traded goods. All of this leads to underestimating the scale of drain (see Hickel et al., 2021).
!- comment : recent history of calculating unequal exchange - The authors, particularly Hickel have tried to estimate the drain in the past using other techniques but the recent technique of EORA I/O tables proves to be the most accurate to date, revealing a true and larger figure that previous estimates