Jack Rasmus is an author of many books on the global economy, a broadcaster and an economic advisor to America’s Green Party. In his new book, Systemic fragility in the global economy, Rasmus proposes a radical thesis that the world economy is engulfed in a ‘systemic fragility’ not seen before.
As is evident to most commentators, the world economy has made the weakest recovery after a slump in post-1945 history. And the last slump was an ‘epic recession’, as Rasmus named it in his previous book, Epic Recession: prelude to global depression. It was also truly global, spreading to Asia, Latin America and Africa, much more than even the Great Depression of the 1930s.
It is this phenomenon that Rasmus wants to explain in his new book. Rasmus cites nine fundamental economic trends that underlie what he considers caused this growing fragility. Basically, they consist of a massive injection of liquidity (money and debt) starting with central banks worldwide and spreading as debt through the financial system, households and government. “In short, key variables of liquidity injection, debt, a shift to financial asset investing, a slowdown in real asset investment, disinflation and deflation in goods and services trends, financial system restructuring, labour market restructuring, and declining effectiveness of central bank monetary policy and government fiscal policies on historical multipliers and interest rate elasticities all together constitute the major trends underlying the long run deepening of fragility within the system” (from Rasmus’ summary of his book in The European Financial Review, February-March 2016, pp 13-20 – EFR from now on). These trends now interact with each other, creating a new systemic fragility in modern capitalism.
Rasmus reckons that mainstream economic theory has completely failed to account for this fragility; or forecast any crises like the Great Recession; or explain the ensuing depression. As a result, their policy responses: a monetary policy of low interest rates or ‘quantitative easing’; and/or fiscal macro-management, have dismally failed to revive the world economy. Indeed, they may have retarded it. “The conceptual toolbox of contemporary economic analysis is deficient. Anomalies in the global economy today abound and multiply, with insufficient explanation. Systemic Fragility is offered as an alternative conceptual framework for explaining how real and financial variables mutually determine each other and lead to instability and is the outcome of dynamic interaction within and between three fragility forms – financial, consumption, and government.” (EFR).
But Rasmus is not only damning about mainstream economics. He maintains that heterodox theories of crises in the post-1970s world economy have also been found wanting. The followers of Keynes and Marx come in for criticism. The Keynesians are at fault because they have lost the essence of Keynes’ insight into the instability and uncertainty found in a monetary and financially-dominated economy.
Even Hyman Minsky, whose ground-breaking work in the 1980s on the role of debt in creating financial fragility would seem to pretty close to Rasmus’ own thinking, did not fully grasp the nature of the modern financial economy. “Minsky variables are incomplete. Level of debt alone is insufficient. Cash flow is too narrow a concept. And T&C is far more complex today than it was a quarter century ago. The dynamic interactions – i.e. the feedback effects enabled by transmission mechanisms – intensify the overall fragility effect. Moreover, the intensity due to interactions or ‘feedback effects’ varies with the phase and condition of the business cycle”. (EFR). For my view on Minsky, see here.
The Marxists (called the ‘Mechanical Marxists’ by Rasmus) also fall short because they see crises as originating in the ‘real economy’, in production through weakening profitability. They fail to see that crises now originate in the financial/credit sector and flow into production, not vice versa. “Marxists should focus more on investment, aka capital accumulation, and not on the determinants of investment. Investment/capital accumulation is the crux of Marx’s analysis, not the FROP.” (EFR) Indeed, modern Marxists have fallen behind Marx himself, who in his later years began to argue that the credit/financial system was key to crises rather than the level or movement of the profitability of capital in production.
As a ‘Mechanical Marxist’ myself, I would beg to differ. In my view, Marx did not change from his view that the law of the tendency of the rate of profit to fall was “the most important law of political economy”, contrary to the views of German Marxist Michael Heinrich, which Rasmus seems to accept.
Moreover, Rasmus reckons that Marx’s law of value is now an inadequate foundation for understanding the workings of modern capitalism. The ‘mechanical’ Marxist law of the tendency of the rate of profit to fall is out of date, or only ‘half-correct’, as a cause of crises because of “fundamental structural changes that have occurred in the global financial system and in labour markets in the 21st century.” (EFR) Marx’s law of profitability does not incorporate financial instability and the expansion of debt. So it cannot be a full and coherent explanation of crises in the 21st century – and indeed of the current long depression.
Again I would disagree. Marx’s law of profitability explains the role of credit and debt in a capitalist economy. Credit is clearly essential to investment and the accumulation of capital but, if expanded to compensate for falling profitability and to postpone a slump in production, it becomes a monster that can magnify the eventual collapse. Yes, financial fragility has increased in the last 30 years, but precisely because of the difficulties for global capital to sustain profitability in the productive sectors in the latter part of the 20th century.
According to Rasmus, Marx’s formula for capital accumulation M-C-M’ should be extended because the financial sector now generates extra profit (M-C-MM’) through value created by the financial sector. “Marx in Vol. 3 raises the notion of secondary exploitation that occurs after production in the sphere of circulation. So when I raise that, it’s really in agreement with Marx. Marxists have to broaden their notion of exploitation”.(EFR) But, in my view, this would mean leaving Marx’s value theory, which distinguishes between productive and unproductive labour. And that would be a step back in understanding capitalism. Profits from exchange are fictitious profits. They are real for the finance capitalists, but fictitious for the economy as a whole because they are a simple redistribution of profits from the productive value-creating sector.
Rasmus’ view is similar to David Harvey’s concept of the ‘secondary or realisation’ part of the circuit of capital as being key to crises. I have criticised this view in detail here and here and here. If we look for the causes of crises in the ‘secondary circuit’ of the financial sector (or in a ‘financialised’ capitalist sector), we shall miss the fundamental contradictions of the capitalist mode of production.
Is Rasmus right that the cause of modern capitalist crises is to be found in a ‘systemic financial fragility’? Or are the mechanical Marxists right that the cause of crises is still to be found in the contradictions within productive capital? There is a correlation between financial crises and profitability. But as Rasmus says, “A correlation exists in the data, but what is the direction of causation? One could just as clearly argue that the acceleration of finance forms of capital is a causation of the decline of profitability from real production”. (EFR).
To help decide, we need to look at the evidence. Rasmus provides the reader with a comprehensive account of the ‘financialisation’ of the major capitalist economies in the neo-liberal period after the crisis of the 1970s. But his account is descriptive rather than empirical. And it is difficult to test the validity of any theory, especially a new one, if there are no data to back it up. Moreover, there is plenty of empirical evidence to back the contrary view of the mechanical Marxists that it is profitability that drives productive investment and it is collapsing productive investment that causes slumps.
At the end of the book, Rasmus presents three important equations for this theory of systemic fragility. These equations could be filled in with data to test his argument. But, as Rasmus says, at the moment, his theory of systemic fragility is not a finished product but very much a work in progress. In the meantime, the book is certainly a thought-provoking contribution to an understanding of the fragility of modern capitalism. It’s a ‘must read’ in a year that is generating a whole new range of radical and Marxist books on capitalism and its laws of motion.
Michael Roberts Blog 
“According to Rasmus, Marx’s formula for capital accumulation M-C-M’ should be extended because the financial sector now generates extra profit (M-C-MM’) through value created by the financial sector. ‘Marx in Vol. 3 raises the notion of secondary exploitation that occurs after production in the sphere of circulation. So when I raise that, it’s really in agreement with Marx. Marxists have to broaden their notion of exploitation’ ”
I had a similar exchange with Rasmus years ago, and when I asked him to explain how the financial sector generates additional profit, he simply said that I should be patient, it will be explained in his forthcoming book.
So before I rush out and buy this book, and thus prove his theory right by buying it, does he demonstrate that? Additional profit being generated, not distributed, by the financial sector?
“Moreover, Rasmus reckons that Marx’s law of value is now an inadequate foundation for understanding the workings of modern capitalism.”
In other words, this book is useless.
“According to Rasmus, Marx’s formula for capital accumulation M-C-M’ should be extended because the financial sector now generates extra profit (M-C-MM’) through value created by the financial sector. “Marx in Vol. 3 raises the notion of secondary exploitation that occurs after production in the sphere of circulation. So when I raise that, it’s really in agreement with Marx. Marxists have to broaden their notion of exploitation”.(EFR)”
WTF?!
If I’m not mistaken, unproductive fictitious capital can distribute and share but not acquire profit. Financial capital shares profit with productive capital by means of credit/debt, etc. If there is any value created by financial sector, it would be the “surplus value” created by non-productive accountants, quants, and other professionals. As financial profit is not self-produced but parasitically obtained, financial “surplus value” must be likewise attributed.
Workers’ real median earnings in the U.S. peaked in 1973; they have been stagnant and down ever since then. The phenomena grouped under the name of financialization took off in the 1980s. After 43 years, it should be clear that a stitching of episodic “explanations” misses the mark. The only interesting question about theories of financial causation is why they are so popular on the left.
That– why they are so popular on the left– is easy. Because if finance can create value, then there is no specific class relation that is the key to the relations of capital, and the prospects of its overthrow. No need to worry about the working class; no need for the working class. We”ll just “occupy” ourselves to socialism.
It’s all about globalization and financialization, mashed together. Bernie Sanders said so at the Vatican: “We need a political analysis as well as a moral and anthropological analysis to understand what has happened since 1991. We can say that with unregulated globalization, a world market economy built on speculative finance burst through the legal, political, and moral constraints that had once served to protect the common good.”
Sanders’ theory is sufficient to motivate the reforms he stands for.
Thanks, Michael, for your commentary on my recent book. In the hope of stimulating some further commentary by others, let me add the following clarifications, to my book and your foregoing review:
First, I’m not a proponent, as you know, of those who maintain the falling rate of profit is false or that value theory is not correct. It is, but in so far as Marx saw it the FROP relates to productive vs. nonproductive labor, as you yourself note.
But it’s not a question of the FROP and real production declining, and resulting causally in financial instability, any more than it is the opposite causality or financial instability creating a FROP. It’s really about the relationship between the two, real and financial instability. The direction of causality is not linear from the real side, i.e. from profit falling, nor from the financial side, i.e. from financial forces causing the FROP. The causality is multi-directional–the FROP may and does cause financial instability but vice-versa as well. That’s why crises today can’t be understood without a theory of how financial cycles interact with real cycles, and do so simultaneously. My equations in the appendix of my book are designed to reflect ‘simultaneous equations’, although they are yet to be worked out fully as such, as you yourself note in your review. And of course they then need to be tested with the data.
I have been long intrigued by Marx’s multiple approaches to trying to understand capitalist crises. There’s the traditional FROP crisis explanation, that you so thoroughly and accurately present.
But there are also two other origins of crises in Marx: disproportionality crises and realization crises.A new Marxist theory of capitalism must somehow integrate all the three, in my opinion. Marx discusses disproportionality but only within the productive process–i.e. Depts I and II. But what about disproportionality between the process of real production and the process of circulation of capital, i.e. where exchange values and financial variables play such a dominant role?
Similarly, Marx’s discussion of ‘realization of value’ crises also remains underdeveloped, in my opinion. Goods produced by productive labor are not always sold and thus not ‘realized’ in value terms. That disrupts the full circuit of capital and the time delay results in crises. The ‘time’ dimension in Marx is also not fully developed.
I believe the analysis of value and its transformations in the post-production process, that is the ‘circuit of capital’ after production where capital assumes multiple forms, is disrupted by financial forces. Even value in the form of primary exploitation of productive labor (and thus the basis of the FROP) gets disrupted in the ‘exchange’ value side of the full circuit of capital, i.e. post production of value. Value distributed as wages in the production process may be increased by means of ‘secondary exploitation’ in the exchange and financial side of the circuit (and as I argue in my Ch. 13, ‘tertiary’ forms of exploitation as well).
Analysis in the exchange-financial side of capital’s reproduction, where financial variables hold sway, is a potential area for further Marxist analysis–as is the entire circuit of capital after production as well. This is where financial values play such a key role. I don’t believe that calling them simply ‘fetish’ forms of capital, and then saying they have no effect on the full reproduction cycle of capital, is the right perspective. Fetish forms are not simply determinants of productive capital; they in turn may function as determining variables affecting the total reproduction of capital cycle. As such, they can contribute, precipitate, and even fundamentally provoke crises of capitalism.
Here’s a related point why I also differ with your giving primary causation to the FROP. Given that profits determine today, at most, a fifth or fourth of investment and therefore capital accumulation, it is necessary to consider the other determinants of investment and that means debt and equity finance, and government subsidized finance, etc. And if so doing, it leads to the necessity to consider financial asset as well as real asset investment. It is capital accumulation that Marx is centrally focused on, not a particular means of financing capital accumulation–i.e. profits.
Having said all that, as you know, I am not in the camp that argues that financialization determines real production and profits, any more than I am in the camp that views production and profits as ultimately driving financialization. It is a mutually causal and interdependent relationship. So what is that relationship, is the key question. Not having read Michael Heinrich, I’m not sure if that’s how he views it as well. Ditto for Harvey. But will have to take a look at what they have to say, obviously.
If you look at my chapter 17 on Marx in the book, and read it in relation to my chapter 13, on ‘labor market restructuring’, which is about the production process, you’ll see I do not reject FROP but attempt to integrate it into a bigger picture. It is investment and capital accumulation that defines that bigger picture, not just one of several means by which to finance investment (eg. profits). Labor exploitation is assuming new forms, and consequently becoming more intense–both relative and absolute.
In my concluding chapter 19, and the equations appendix, all the variables are mutually interdependent–not all equally so, of course, and over time and different stages of the business cycle, the interdependencies fluctuate. Putting that in empirical terms to test the theoretical hypotheses is, as you note, the next step. Right now is its unproven theory, but I’m convinced of the direction being taken.
Anyway, those are some of my clarifications to your otherwise reasoned commentary. To sum up my main points: it’s not profits but multiple forms that finance investment. Production does not drive financialization any more than the opposite; it’s a mutual determination process. Capital accumulation and investment is the key variable. The full circuit of capital must be addressed to understand capitalist crises. Realization and disproportionality analyses are undeveloped ground of Marxist analysis. Perhaps a ‘theory of everything’, to borrow from physics, is the way to develop Marxist analysis in the 21st century. Labor exploitation has shifted relatively to the exchange of value circuit more, while intensifying at the same time in the production process. Capitalism has evolved significantly since 1867, and so too must value theory a la Marx.
If readers are interested more in my perspective, I welcome them to visit my website, http://www.kyklosproductions.com, and select the ‘books’ tab to read some free chapters from my book, ‘Systemic Fragility in the Global Economy’.
Jack
Yeah, but……..
How does finance create additional value?
Here is the only remark I could find to “secondary exploitation” made by Marx. It is in chapter 36 of Volume 3– on pre-capitalist exploitation:
“We have seen that merchant’s capital and interest-bearing capital are the oldest forms of capital. But it is in the nature of things that interest-bearing capital assumes in popular conception the form of capital par excellence. In merchant’s capital there takes place the work of the middleman, no matter whether considered as cheating, labour, or anything else. But in the case of interest-bearing capital the self-reproducing character of capital, the self-expanding value, the production of surplus value, appears purely as an occult property. This accounts for the fact that even some political economists, particularly in countries where industrial capital is not yet fully developed, as in France, cling to interest-bearing capital as the fundamental form of capital and regard ground-rent, for example, merely as a modified form of it, since the loan-form also predominates here. In this way, the internal organisation of the capitalist mode of production is completely misunderstood, and the fact is entirely overlooked that land, like capital, is loaned only to capitalists. Of course, means of production in kind, such as machines and business offices, can also be loaned instead of money. But they then represent a definite sum of money, and the fact that in addition to interest a part is paid for wear and tear is due to their use-value, i.e., the specific natural form of these elements of capital. The decisive factor here is again whether they are loaned to direct producers, which would presuppose the non-existence of the capitalist mode of production-at least in the sphere in which this occurs — or whether they are loaned to industrial capitalists, which is precisely the assumption based upon the capitalist mode of production. It is still more irrelevant and meaningless to drag the lending of houses, etc., for individual use into this discussion. That the working-class is also swindled in this form, and to an enormous extent, is self evident; but this is also done by the retail dealer, who sells means of subsistence to the worker. This is secondary exploitation, which runs parallel to the primary exploitation taking place in the production process itself. The distinction between selling and loaning is quite immaterial in this case and merely formal, and, as already indicated, (Present edition: pp. 345-50. — Ed.) cannot appear as essential to anyone, unless he be wholly unfamiliar with the actual nature of the problem.”
“That the working class is also swindled in this form… is self-evident.”
This, “secondary exploitation,” produces no new value, but is only a re-appropriation of the variable capital; i.e. the reproduction of the labor power itself.
“This distinction between selling and loaning is quite immaterial in this case and merely formal and cannot appear as essential to anyone, unless he be wholly unfamiliar with the actual nature of the problem.”
Indeed. We might as well be claiming that markets produce value in the very process of exchange.
Thanks for this further explanation. I am interested to know what part, if any, you think greed (of financial institutions, large corporations and governments) plays in creating or contributing to systemic fragility. Apologies in advance if you’ve addressed this elsewhere.
The trouble with Rasmus’s analysis as presented by you and repeated in his own comment here, is that he seems to think systemic fragility is something new and strange in capitalism. In other words, without all the extraneous distortions introduced by individual capitalists or institutions, ie without flawed economic or political measures, the system would chug along nicely all stable and even-keeled. This indicates that he adheres to some kind of equilibrium model for capitalism.
If Rasmus had read Capital 2 closely (which his remarks on the significance of the time factor make me doubt) then he would note that Marx’s examples regarding proportionality between sectors clearly demonstrate that any equilibrium attained within the capitalist system is at best a fleeting, transitory phenomenon. Most of the time the system is lurching wildly from one unbalanced extreme to another.
Further, Capital 3 demonstrates just how totally dominant credit and Big Finance had become within the capitalist mode of production even in Marx’s day. Dominant enough for him to repeat several times that capitalism in the era of finance capital was abolishing itself within its own framework.
So, given that Marx deals thoroughly with systemic fragility (inevitable crises) and the financial juggernaut (basically the whole of Book 3), there is little point in trying to go beyond him in terms of theoretical categories. Time to hone Occam’s razor yet again.
Our task as Marxists is more to keep up with the empirical development of this unstable and dying system in its death agony, using the categories developed by Marx. Lenin does this in Imperialism, which he subtitled “the ultimate stage of capitalism” (“ultimate” being a better translation here for наивысший than highest, which is ambiguous and implies that higher stages might later be attained, which Lenin, basing himself on Marx, didn’t hold). For both Marx and Lenin, capitalism was dying as an historical mode of production, and socialism was in the process of being born. Capitalism had nowhere to go, as a developing socio-economic organism. It had reached maturity and was going to seed, so to say.
What we are witnessing today is the greater and greater stress to which the political and social defences of capitalist relations of production are being subjected. Without enormously expensive and wasteful military and ideological repression capitalism would disappear tomorrow. It would uncross its legs, release socialism from its gory womb, shrivel up and crumble into dust.
The role of the state as the defender of profit is crystal clear. It’s too bad Marx was never in a position to write the book of Capital devoted to the State that he had in his original plan. Lenin wrote about the State and Revolution, but Marx’s own work would have nipped a lot of unnecessary conjecture and confusion in the bud. So much of both the prolonged death agony and the sickening violence of human history after October 1917 is blatantly due to the interference of the bourgeois state in society and the economy to defend the dying Dragon of the capitalist system with its profits for the few and exploitation of the many.
To seek some magic internal economic explanation for capitalist instability and brutality (like super-inequality, super-exploitation or a multiplication of Ms) is just an excuse for not getting to grips with the role of the bourgeois state in maintaining the rate of profit for the capitalist class. To change the economy, we first have to change the state. Only when we have a world economy dominated by socialist workers’ states will we have the preconditions in which a new historical stage of human society, the socialist mode of production, will be able to mature.
(Dixi et salvavi animam meam, as Marx muttered to himself occasionally. I have spoken and saved my soul…)
Both Marx and particularly Engels began to see the increasing role of finance as having a dynamic of its own, with its own forms of crises etc. So while system fragility is not new to capitalism the nature of it now would require Marx to make revisions to his analysis. Both Marx and Engels always said that their theory needed to be updated to the latest historical conditions.
And despite the fragility we still have a capitalist system and to me there seems no end in sight.
Jack Rasmus said:
“But there are also two other origins of crises in Marx: disproportionality crises and realization crises.A new Marxist theory of capitalism must somehow integrate all the three”
I am sure Jack will be aware that integrating disproportionality and realization crises with falling profit rate has been a long acknowledge issue within Marxism. Ernest Mandel certainly addressed this issue long ago.
“At the end of the book, Rasmus presents three important equations for this theory of systemic fragility. These equations could be filled in with data to test his argument. But, as Rasmus says, at the moment, his theory of systemic fragility is not a finished product but very much a work in progress.”
The question is, though, even with the equations and the data, what does this theory explain about the reproduction of capital that Marx’s analysis does not?
The whole point of Marx’s critique of capital is that in the end, as at the beginning, it demonstrates that capital is a social relation, a relation between classes, and that “economics” as such only exists as an expression of the classes in struggle. The point of labor-power organized as a commodity is that laborers are historically necessary to capitalism, they are its determinant and its negation. They reproduce it, and therefore they are the class to overthrow it.
Marx’s critique is supposed to be revolutionary– identifying the condition for the overthrow of capital in the development, the accumulation of capital itself. So exactly what data and what equations is going to supplant that element of Marx? Or provide a different path to the overthrow?
Let us understand whether we are talking about value creation or value transfer. In the realm of distribution an element of new value is created. Here we think of the siting and preserving of the use values already produced. So alongside the transfer of value to distribution (the realm of merchant capital) via discounted prices, the final selling price of the commodities that exit distribution will on average have a market value higher than when they exited production. With regard to finance two aspects are important. In so far as finance serves to provide money capital to industrialists to continue or increase production, or to merchants to circulate commodities Marx’s formula for financial capital – M.M.C.M*M* – holds good. In so far as the financial sector engages with the household sector, mainly the capitalist class, to oversee or speculate with their accumulated cash, then the formula M.M applies. Here there is no scintilla of added value. We should never forget that the basis of all crisis occurs at two levels. Firstly where sale does not coincide with payment, where credit money is provided, allowing a time interval of sufficient length for the link between the two to shatter. Marx deals with this in detail in Volume 1 in the section of Money as Means of Payment. The second is when money is paid but the surplus money is not spent or lent to production or circulation. Here we think of the profits, rents, interest, royalties and dividends which lie unspent. This money, regardless of whose pocket it sits in, is a crystalisation of social value and it does not have a use by date. It accumulates until much of it is wiped out by a speculative crisis. So what we have today is these huge cash surpluses building up on the one hand. On the other the banks have lost their main customer – the large global corporation who if not financially self-sufficient are able to by pass the banks and go directly to the wholesale market. This was the setting for the 2008 crash when banks had been forced into the retail market primarily housing mortgages, which by 2007 accounted for two thirds of global lending. Is the financial system so fragile. We are passing through the largest crash in the price of commodities world wide, both hards and softs, whose total loss far exceeds that lost in the 2008 housing crash. And yet no financial crisis. Interesting. One factor is the size of corporations, the other of state entities. Some may even speak of the resilience of the financial system. And here comes the main point. To bring the whole thing down, which will happen soon, there has to be a crisis of profitability. If the perception grows for example, that the downturn in profits in the USA is to endure, then such a crisis will take place. To sum up. The money the speculators own is real, it emanated from production beginning in 1996 with globalisation gaining traction. The horses these punters bet on are also real, they are the results of production notably revenue and profits. So there is an interaction between industry and finance. The difference is that industry is the detonator and finance the catalyst, it begins in production (most times) and is accelerated by finance.
The capitalist pays the worker a wage and then all sorts of vultures appear to attempt to get as much of this wage as possible. The vultures being the state, the banks, the retailers, the finance companies, the commodity producers etc etc. The wage level should cover such attacks by the vultures.
But if it doesn’t we get into a debt problem, a debt bubble grows.
The complication comes when we factor into the equation super exploitation, how much are workers in the West paid above the value of their labour power, speaking in capitalist terms? Or more to the point does super exploitation of both nations and individuals allow developed societies to go beyond the usual laws concerning the wage level? If so the attacks by the vultures partly reflect this reality.
We also have the problem of wage stickiness compared to price stickiness etc. Along with productivity levels.
So is exploitation in the developed nations primarily on the basis of surplus value extraction, super exploitation of the developing nations, buying high selling low, monopoly power, accumulation by dispossession, rentier, or some other form of secondary exploitation or a mixture of all?
Are the developed nations moving away from the conditions described by Marx? And if so is the move permanent, temporary or cyclical?
In this respect I see a need for a ‘theory of everything’.
No one has yet shown that workers in the “advanced countries” are paid, as a class, above the value of the labor-power, above the cost of its reproduction.
You can only begin to answer this question indirectly, this is the difficulty.
You can’t point to any particular empirical evidence and say, here is the proof. You need to develop an argument and let people decide if they agree or not. So a subjective argument but one based on objective conditions.
I think Marxists should be able to have an opinion on whether workers are in reality paid above, below or at the value of labour power.
I think Marx’s assertion that the value of labour power is a given in any nation at any moment is time is now antiquated because the world is more connected then ever, as we move to world markets, world rate of profits, world wage levels. But we are somewhere in the middle of this process and therefore while the notion of a given level of the value of labour power by nation is somewhat antiquated the world rate of profit etc are too premature.
Now of course the value of labour power in say Britain can be compared with say Bangladesh, but what that level is can be affected by each other. So the value of labour power in one nation can be a factor in the value of labour power in another nation. This is how I see it anyway.
On a separate note, my review of John Smith’s book
http://marxandphilosophy.org.uk/reviewofbooks/reviews/2016/2290
I think most of the responses of the orthodox marxists here confirm Jack Ramus analyses. Living in 1863 with quotes from Marx is not the way 21e century capitalism dominated by huge transnational corporations (banks included) should be analysed. The concept of ‘multinational finance capital’ which refers to the integration of several fractions of international capital will do the trick.