Those of you who have been following the discussion on modern imperialism on my blog will know it was kicked off by two books: one by John Smith called Imperialism in the 21st century and one by Tony Norfield called The City – London and the power of finance. The discussion on my blog was expanded at the recent workshop on Imperialism in London, where the analysis was developed among upwards of 100 participants.
Since then, John Smith has sent in a long comment on my last post on that workshop which merits some decent space and a reply.
So first, here is John’s comment.
“Sorry, I’ve been away and have only just come upon this post. It raises many questions; here I restrict myself to two of them.
- Michael repeats Lucia Pradella’s claim that, “in Volume III, Marx explains that investments in colonies, where the rates of profit were higher, are a factor that counteracts the law of the falling rate of profit.” This is not true. What we get in Volume III is not an explanation, but an extremely fleeting mention. Here is the passage to which Michael and Lucia refer:
“As far as capital invested in colonies, etc. is concerned, the reason why this can yield higher rates of profit is that the profit rate is generally higher there on account of the lower degree of development, and so too is the exploitation of labor, through the use of slaves and coolies, etc.” (Marx, Capital, vol. 3, 345)
In my book (Imperialism in the 21st Century, p244) I comment:
“Close examination of this passage reveals not one but two reasons why capital invested in colonies may return a higher than average rate of profit. Lower degree of development refers to low productivity, capital-intensity, etc., and extends to the colonies the same unequal exchange effect previously identified by Marx in trade between more and less advanced capitalist nations. It is the second part of the sentence that attracts attention. Marx says that “the profit rate is generally higher [in the colonies] … and so too is the exploitation of labor, through the use of slaves and coolies, etc.” The few words in this single sentence are the only place in the whole of Capital’s three volumes and in its fourth volume, Theories of Surplus Value, where Marx mentions the positive effect on the rate of profit in the imperialist nations of higher exploitation in subject nations.”
… to which I added this footnote:
“It is noteworthy that Marx talks about the exploitation of labor, not the rate of exploitation, and labor, not labor-power. That this might be due to the provisional, draft form of the original can be discounted—even in rough drafts, Marx is meticulous in his choice of words. It is more likely that he deliberately chose not to use the developed capitalist form of these categories, because in the colonies, at that time, the commodification of labor-power and the universalisation of the capital/wage labor relation had a way to go. This again underlines the evolutionary distance separating the past three decades from the stage of capitalist development observed and analyzed by Marx.”
- Michael says “John argues that imperialist exploitation is now predominantly ‘super-exploitation’… Other forms of exploitation under capitalism: absolute surplus value (namely through maximising the working day); or relative surplus value (namely lowering the cost in hours for maintaining the labour force in a given day); according to John, these have become secondary forms of exploitation under modern imperialism.”
I’m sure that Michael agrees that great care and precision is necessary when dealing with these concepts, and I’m therefore disappointed that Michael repeats this crude mischaracterisation of my argument – I’ve already made two attempts to correct him on this, in a previous blog comment and at the IIPPE workshop itself. I argue that the vast global shift of production to low-wage countries signifies that capitalists in North America, Europe and Japan have become very much more dependent on super-exploited workers in low-wage nations (‘super-exploited’ because their rate of exploitation is higher than in their own countries – precisely why production has shifted), and this is why, during the neoliberal era, capitalism has become more not less imperialist.
I still don’t know whether Michael agrees with this. My book further argues that shifting production to low-wage countries has become an increasingly-favoured alternative way of cutting costs and boosting profits than investing in productivity-expanding technology – which is why accelerated outsourcing coincided with a historic collapse of capital investment in the imperialist countries. I therefore argue that the substitution of relatively high-wage workers in imperialist countries with low-waged, more intensely exploited, workers in oppressed nations has become the predominant means of *increasing* the rate of exploitation. My argument therefore hinges on the *relative* importance of the three means of *increasing* surplus value, and makes no claim that one, in absolute terms, is more important than the other.
To summarise, four propositions:
- a) in Capital, Marx identified not two put three ways to increase the rate of surplus value, and that while he repeatedly emphasised the importance of the third (reducing wages below the value of labour power) each time he explained that examination of this was excluded Capital because his ‘general theory’ required the assumption that all commodities sold at their value;
- b) it is true, as Lucia argues, that in Capital Marx does not analyse a single national economy, but neither does he analyse the concrete global economy of his day (still less, obviously of our day) – the glancing reference to ‘coolie labour’ alone is proof of this. He analyses an idealised unitary economy in which all factors of production, including labour, are freely mobile (i.e. he excludes all forms of monopoly) – as is reflected in his assumption that labour power has but one value;
- c) that replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase;
- d) that this is therefore a new fact not contained in the theory of value presented in Capital. This does not mean that Marx was wrong, it means that capitalism itself has evolved, and that the general theory presented in Capital need to be critically developed to take account of this evolution.
This is very far from the last word on this topic, in fact it gets us only to the starting point of the conversation that we need to have. To avoid this debate going around in circles, I request that Michael unequivocally states his opinion on these four propositions, because I’m still not sure where he stands. In fact that I think there is a bit of fence-sitting going on (bold by MR).
And here is my reply:
John, thank you for your very comprehensive comments on the discussion that we have been having about the nature of exploitation under modern imperialism.
You suggest that I have not been clear where I stand on the key points that you raise in your book and in our discussion and I have been ‘fence-sitting’. Maybe. But sometimes it is necessary to consider all points and not immediately agree or disagree until you are convinced. An open mind, at least for a while, is not a bad thing as long as sitting on a fence does not go on too long!
But I think gradually I have formulated my views during our discussions.
John says that Marx did not just say the rate of profit is higher in the colonies due to a lower degree of development (i.e. low productivity and capital intensity) but that there was also a higher exploitation of labour. John says this means Marx did not use his categories of capital when referring to colonies because the colonies were not part of global capital at the time.
I cannot see that we can draw this conclusion. To me, Marx is saying that the rate of profit (in value) is higher in the colonies just as it is higher in less efficient, lower capital intensity capitals in a modern economy. And in the process of equalisation towards an average rate of profit, value is transferred from the inefficient to the more efficient capitals. “The rates of profit prevailing in the different branches of production are originally very different. These different rates of profit are equalized by competition to a single general rate of profit, which is the average of all these different rates of profit” (Capital III, p.158).
This theory applies to the global economy. In addition, workers in the colonies can be exploited more when they don’t receive the value of their labour power in wages or are slaves. That adds to the profitability in the colonies that can be transferred through international trade and capital flows to the imperialist economies.
I agree that capital has shifted investment into the periphery in order to take advantage of much lower wage costs there compared to the advanced economies. Who could deny that? And it is in keeping with Marx’s theoretical analysis. Also it is another way of counteracting Marx’s law of falling profitability – indeed that is the point. If that makes capitalism “more imperialist” in the neo-liberal period, fine.
But has ‘super-exploitation’ become a ‘relatively’ more important way of increasing surplus value over absolute and relative surplus value in the neoliberal period? Well, maybe. But I’m not sure what revelation or modification in the Marxist theory of imperialism this suggests.
John wants a reply to his four summarised propositions. So I’ll try and get ‘off the fence’.
John:
- a) in Capital, Marx identified not two put three ways to increase the rate of surplus value, and that while he repeatedly emphasised the importance of the third (reducing wages below the value of labour power) each time he explained that examination of this was excluded Capital because his ‘general theory’ required the assumption that all commodities sold at their value;
My reply:
Well, Marx excluded this third category of super-exploitation because the fundamental cause of exploitation is the appropriation of value by capital even when workers get paid their ‘value’. If it were just ‘super exploitation’, the theory of value would be wrong.
Marx did not say that “all commodities sold at their value”. On the contrary, commodities do not sell at their value as Smith (Adam) and Ricardo thought, but at their prices of production because of the transformation of individual values into prices of production through an average rate of profit. Indeed, that is why ‘super exploitation’ is not enough to show why profitability is higher in some capitals than others.
John
- b) it is true, as Lucia argues, that in Capital Marx does not analyse a single national economy, but neither does he analyse the concrete global economy of his day (still less, obviously of our day) – the glancing reference to ‘coolie labour’ alone is proof of this. He analyses an idealised unitary economy in which all factors of production, including labour, are freely mobile (i.e. he excludes all forms of monopoly) – as is reflected in his assumption that labour power has but one value;
My reply:
I disagree that Marx’s analysis is ‘idealised’. It starts with an abstract analysis taken from the real world with realistic assumptions (like all value comes from labour; capital accumulation leads to increased mechanisation) to which is added all the concrete parts of capitalism: from ‘capital in general’ to ‘many capitals’, from the commodity to money and to credit; from the world to many nations; from competition to monopoly. Indeed, he does not exclude ‘all forms of monopoly’. He analyses the concrete global economy of his day, often in much detail.
John
- c) that replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase;
My reply:
No, super exploitation is when wages are below the value of labour power. But the ‘value of labour power’ is different in different countries depending on the socially accepted level in each. So capital shifting investment to low wage countries from high wage countries does not prove by itself that ‘super exploitation’ is involved at all.
John
- d) that this is therefore a new fact not contained in the theory of value presented in Capital. This does not mean that Marx was wrong, it means that capitalism itself has evolved, and that the general theory presented in Capital need to be critically developed to take account of this evolution.
My reply:
Super exploitation is not part of the theory of value because, as Marx says, it is temporary and changes and is different in each country etc. In the process of production, capitalists might force a lower wage. If the value of labour power has remained the same, i.e. if the necessities of life and their production price remain the same, the lower wage can purchase less wage goods and the price of labour power (wages) falls below its value, the production price of those socially determined necessities. That is super exploitation.
But if this low wage is maintained, workers must eventually accept a lower value of labour power in the goods and services they can buy with it. In that sense, super exploitation becomes simply a higher level of (“normal”) exploitation because the value of labour power has been lowered in the class struggle. Yes, more exploitation, but not super-exploitation as a new category of capital.
Super-exploitation is not a category that explains exploitation as such. And it is not a new fact – it’s been around all the time. Is it decisive now? Not proven.
Michael Roberts Blog 
There is another concept of “super-exploitation”, which is that deriving from unequal exchange, which has always been at the heart of dependency theory and centre-periphery theory. It is that less developed economies as a whole have surplus value sucked out of them as a result of unequal exchange between them and “imperialist” states. The attraction for the Stalinists and Third Worldists who developed such theories is obvious, because it provides an ideological basis for proposing cross class alliances by workers, peasants and the national bourgeoisie in such countries against the exploiting “imperialists”.
The notion is also that because the national bourgeoisie is exploited by foreign capital, it has to force domestic wages below the value of labour-power, causing super-exploitation. Its rather like Marx’s example of a landlord who charges rent on land that does not produce average profit, and thereby pushes profit below the average, which the capitalist farmer then compensates by pushing down wages further.
But, Marx makes clear that high rates of profit in undeveloped economies is only possible on the basis of very high levels of absolute surplus value, and very low levels of living standards. Even that tends to fall apart when those economies are opened to world trade and their production has to compete with commodities produced by highly productive capitals – the low prices that break down all Chinese walls.
But, what this demonstrates is not that these less developed economies suffer from unequal exchange, from a drain of surplus value, due to “super exploitation” resulting from imperialism, but the exact opposite. If they face the price of production of their commodities falling below their individual values when competing on the global market, this is precisely because of the low organic composition of capital of their domestic production – even if some industries might be highly capitalised, that can’t change the level of over all social productivity in the economy, the state of infrastructure, roads, communications and so on – and is precisely the consequence of their lack of capitalist development.
In Capital I, in one of his prefaces, Marx makes the point about the reason for the development of political economy in Germany being retarded, was that capitalist development in Germany was retarded. He makes the same comment, paraphrased by Lenin to apply to Russia, that not only were they suffering from capitalism, but were also suffering from not enough capitalism.
What the less developed economies suffer from is the same. It is not “imperialism” – though in other respects they no doubt do also suffer from imperialism – but a lack of imperialism. What less developed economies require is more imperialism, more investment of productive-capital, to raise the level of social productivity of their economies.
That is why those economies that have attracted such investment like Korea, Singapore, Mexico and so on have been able to develop, and why some of those economies will overtake the size of the UK economy in the next decade or so, and why economies that have not attracted such foreign productive investment such as Somalia, continue to languish.
“What the less developed economies suffer from is the same. It is not “imperialism” – though in other respects they no doubt do also suffer from imperialism – but a lack of imperialism. What less developed economies require is more imperialism, more investment of productive-capital, to raise the level of social productivity of their economies.”
Boffy in a nut-shell; with the emphasis on nut.. More imperialism, sure thing.
I think John Smith is wrong, but his errors are 1000 times more revolutionary, 1000 times more accurate than Boffy’s utopian capitalist cheerleading.
If we take China as an example, then it is Chinese products who have broken down the US dams., or the British white cliffs etc.
So based on Boffy’s thesis above China is more productive than Europe, Japan and the USA in almost all commodity production. And yet Chinese wages are a fraction of the wages in the advanced world!
So based on Boffy’s logic we have a situation where China is far more productive than the USA but US workers enjoy far higher wage levels!
Whatever way you cut it, it seems Chinese workers are being royally screwed and the US workers appear to reaping the benefits!
It is also interesting to note that Boffy feels he can sum up Somalia’s problems in a single sentence.
To be fair to Marx when he needed to make an assessment of the conditions in a particular nation he not only created networks with academics and radicals in said country, he also learned the language and read everything he could on questions of land, ownership, history and current social relations.
To compare Boffy to Marx is to expose how pathetic Boffy is.
Boffy’s sycophancy and servility in the face of imperialism reminds me of the chauvinistic attitudes very common in the British labor movement, particularly those around the New labour project, who are completely infected with this British chauvinism. Not surprising given Britain’s role in colonial and imperialist history.
Boffy turns Marx on its head, for Boffy it isn’t workers of the world unite all you have to lose are your chains but instead he says, less developed workers take these chains, put them around your ankles and enjoy the subsequent benefits! Chains are your road to freedom!
I review John Smith’s book here;
http://marxandphilosophy.org.uk/reviewofbooks/reviews/2016/2290
I was willing to agree with John Smith until I read those four points. They are simply absurd. It’s an assassination of Marx’s theory. If a graduation student came with this in an exam about marxism I would fail him without blinking an eye.
Dear Virgens, either back up your wild charges with some reasoned arguments – or withdraw and apologise.
It’s important that this exchange continue. Maybe the discussion can take into consideration situations (that might be changing) such as in S. Africa and China) where there are two economies with different modes of production: one operating under modern capitalist conditions and creating “value” on the world market, and the other operating under “traditional” modes of production (e.g. S. Africa) of those of state “socialism” (e.g. China). In both, workers are super-exploited and worn out creating value for the world market, and “refreshed” back home. Also, little has been said about the role of imperialism’s monopoly of military power in maintaining situations like the above by war or the threat of war. Will China be permitted to fully develop and articulate her means of production as a competing nation in a world where profitability in the major economies has been a major problem since before world war 1? Ditto Russia. Buffy’s neo-liberal marxism seem to follow of Michael’s very convincing counter-argument…What in the world did Marx mean (in 1848!) when he called on the workers of world to unite?
“What in the world did Marx mean (in 1848!) when he called on the workers of world to unite?”
He meant that they were in *fact* divided by the world political system of nation-states, continent-countries, city-states, colonies, etc.
That is why Marx also never spoke of a “world economy”, unlike Bukharin and too many contemporary Marxists. No such real object concretely exists. Marx did speak of a “world market”, a real unity limited to the sphere of circulation, and to those capitals capable of circulating their commodity-capitals (and money capital) on the world scale.
Thank you for this discussion, I look forward to reading Smith’s book. I think Michael is quite right to point out the weak spots in the concept of super-exploitation vaguely understood as a wage differential between countries or, for that matter, betweeen sectors of the proletariat. Even more so, the notion of workers in the center indirectly exploting, or benefitting from the exploitation of, workers in the periphery, is quite misleading – not only economically inaccurate, as was discussed in the previous post on this subject, but also potilically sterile (even ideological in the sense of false consciousness, I would say).
However, I think there is a lot more to the concept of super-exploitation than has been addressed here. As Ruy Mauro Marini, in my appreciation an exponent of dependency theory that is quite serious about the labor theory of value, explains it in his Dialectic of Dependence, to say that labor power is purchased systematically below its value refers, yes, to socially accepted norms (which is what Michael’s critique refers to) but also, and crucially, to the existence of viable conditions for the reproduction of capital.
The value of labor power in this sense is not “just” about a social convention which, as Michael points out, can differ from region to region and change historically, but also one with objective economic determinations. One is, of course, the reproduction of the labor fource. In this sense, we can find multiple instances throughout the history of capitalism where populations working for the world market have been to different extents decimated due to overexploitation, often in working arrangements combining elements of wage labor and precapitalist forms of exploitation. The henequén haciendas in the early twentieth century southern Mexico described by Kenneth Turner that required a constant influx of peasants to compensate the rate of their mortality (for a time supplying the entire British naval fleet with ropes), plantations in Brazil with then-recently “liberated” black slaves providing wage labor, etc., etc.
But super-exploitation is not restricted to these cases or their present day variants. The other determinant, and this I think is the most important point in Marini’s work (also of greater generality), is whether capital can be reproduced in a region without being “hooked on” to a market that is dominated by central regions of the world economy. We are dealing with super-exploitation not just in ethical terms (can a dignified life be lived with such a wage?) but from the perspectivee of capital itself. The argument, roughly, is that the rate of exploitation in the periphery does not allow an internal market that can realize the surplus value generated there. Then capitals in the periphery have to export to the markets in the center, and are even forced to sell at prices below value (although even if we assue they sold at value, most of the rest still follows). The result is a path of capitaist development in the periphery that a) depends on its produce to be realized in the center; b) produces no technical develpmnet of its own and only minimal increases in productivity; c) intensifies absolute surplus value as opposed to relative surplus value; d) here and there continues to rely on structures of local substenance for the reproduction of the labor force, combined with wage labor. If these capitals are force to sell below their prices of production, they will tranfer these costs to the labor force, forcing down the wage level. But even if we ignore this case of unqeual exchange the rest still holds, and the result is a net transfer of value from capitals in the periphery to capitals in the center.
Super-exploitation refes to a rate of exploitation that dissallows the reproduction of capital within a region and makes it dependent on the accumulatin of capital in the central regions. But, alas, the center also depends on the periphery, and cannnot satisfy the needs of capital without it.
The relative surplus value exploited in the center depends on the super-expoitation of the priphery, because it is this that makes possible the decrease in the value of the wage basket in the center (and also cheapens elements of constant capital – a caountervailing factor to the tendential decrease in the rate of profit). To discuss in terms of “which of the two forms of surplus value is more important” is to miss out in their connection. It seems that the meaning of the famos phrase that development of the center demands the “development of underdevelopment” in the periphery is that this process of regional imbalance is no historical accident that could be corrected by a regional “alliance” between the proletariat and a “national bogeiousie” (whatever that may mean) in the periphery, but rather respods to the needs of capital and would require a global transformation. Quite the contrary to Boffy’s suggestion.
Also, to suggest “more capitalism” for the periphery is missing the point that underdevelopment is not a lack of capitalist development, but a particular kind of subdued development- one that makes possible the “normal” kind.
I tend to agree with you more than with Michael (I don’t know about Smith). But I might not be not getting what you mean well. Suppose a worker yields a value of 1, with a surplus of, say 9/10 (**ignoring raw material and other costs for simplification**). The commodity which it produces does not yield its full exchange value at the place of origin (say China). The capitalist, the owner of the mean of production, sells it to a capitalist in USA by 2/10. So, the profit of the Chinese capitalist is 1/10, the wage of the worker is 1/10 and the profit of the capitalist in USA is 8/10.
So, there is an extra layer of realization of value, which is not expressed in terms of money. It’s like China has a layer of exploitation over its capitalist class. And, likewise, it relies on the money from 1st world capitalists to build and manage the factory. There is not enough money to complete its turn over without the input of the 1st world revenue.
For the Chinese worker, there is not enough money to buy products at full price. So, in relation to a first world worker, it is superexploited, since it not only gives away the value of its commodity to the Chinese capitalist but also to the american capitalist. The Chinese will tend to have a lower standard of life than the American one. The American worker will form what it is labor aristocracy. They will exploit the Chinese by simply living there.
This won’t be measured, of course, by simpy computing the wage and value of the product for each case, since most of the wage of the american one will have part its composition the power part of the surplus of the Chinese counterpart. And the commodity produced by the Chinese will have a value much lower than its exchange price.
Dear Daniel, I’m not sure we agree after all. Let’s try to figure it out. In your example, if I understant right, you introduce a merchant capitalist who buys produce from an industrial capitalist in (say) China and realizes the commodity in (say) the US; in the process, he appropriates a part of the surplus value that the industrial capitalist exploits in China.
If there were no permanent unequal exchange and we assumed a tendential equalization of the rates of profit, we would expect the merchant and the industrial capitalist to be making roughly the same rate of profit (accounting for turnover time). The profit made by the merchant capitalist would not be profit exploited by him in production, but appropriated by him through the circulation of commodities, but which nonetheless contributes to decreasing the turnover time of the industrial capitalist, and so is “justified” from the point of view of capital. So his making a profit constitutes part of the conformation of the average rate of profit Marx introduces in Volume 3, which engenders prices of production.
So far, no unequal exchange and also no super-exploitation; the industrial and merchant capitalist could be operating indistinctly in the same country or not. There is no “second layer of exploitation”, but simply a redistribution of surplus value according to the functions different capitlas play in production-circulation.
However, you suggest that their rates of profit are not similar, but wildly divergent (1/10 as opposed to 8/10). So the merchant capitalist is able to appropriate surplus value well over and above what would correspond by an average rate of profit. This would require a permanent advantage in trade, extraordinary monopoloy power, or something to that effect.
Unequal exchange plays a role, but in a different way, in marxist dependency theory. Also, it is a secondary role. There certainly are rate of profit differentials, but not due to such awesome overarching power of merchant capital versus industrial capital!
When unequal exchange does enter the picture, it pushes down the price of commodities produced in the periphery. In turn, capitalists managing production in the periphery take advantage of and enforce a lower wage level than: a) allows an effective reproduction of the labor force in those regions with a standard of health, produtivity, etc.; and/or b) allows the formation of an “internal market” in those regions that would allow capital accumulation that is not strictly export-led. Capitals in the center benefit because: a) this allows the value of labor power in the center to go down when wag-basekt goods are imported from the periphery, thus allowing for greater relative surplus valuee; b) it cheapens the price of imported means of production, thus spurring the rate of profit in the center.
But, it is important to note, that process occurs even if the rate of profit is the same for capitals operating in the periphery and in the center. Capitalists in the periphery will tend to transfer their disadvantage due to unequal exchange to their super-exploited laborers. So, in your example, it could be something like: US capitalist: 4.5/10, China capitalist: 4.5/10; China woker: 1/10.
And if there is no unequal exchange, the China-capitalist will be selling at price of production, possibly making a higher rate of profit because he under-pays the labor force, but still will be transferring surplus-value to the US capitalist, because he has a lower organic composition of capital.
It might be more ilustrative to work out an example with an industrial capitalist operating in China and one in the US, both employing labor at different rates of exploitation.
I also think we’d find that most of the industrial capital in China is part of transnational corporations dislocating production, so that surplus value is transfered even along a chain of production managed by the corporation, and not necessarily (or not always) between different capitals (perhaps we should read Smith’s book on this?).
In any case, I think it can be very misleading to talk about a second layer of exploitation, since it makes it sound as if disadvantaged segments of the capitalist class are “eploited” by others, which is nonesense. Both exploit the proletariat, and fare differently in the global redistribution of surplus value that the world market enacts. But being unfortunate in the fair of exploitation is not the same as being exploited oneself!
By the same token, to say that a US worker “exploits” the Chinese worker simply by living there is completely upside down! The worker in the US is exploited at a higher rate because the worker in China is super-exploited. Is that labor aristocracy (whatever that might mean)? I don’t think so!
You got what I think correctly what I meant. But equalization of profits happen in the different market segments, but in here, we have a single, or a very simple, circuit in the same market segment. So, we have only one market segment, with an oligopoly, with a further caveat: if the industrialist doesn’t follow the rules of the merchant, it will bust, since this merchant owns the means to increase profit by decreasing the cost of constant capital, that is, the research centers.
And it’s not that the Chinese industrialists are exploited, since capitalists do not yield any value, but that Chinese workers are double exploited: by the Chinese capitalists and the US capitalists. The US capitalists can, thus, use the realized value in US to give workers more advantages. Of course, social inequality does not depend on this and profits will also increase by removing these social concessions, which are generated by the Chinese workers. But, indeed, whenever workers in the first world get more rights, the ones of the third world must suffer more (compare the grant of rights during the 60’s in USA against the rights of dictatorships during the same time in Latin America, or the neoliberal policies during Reagan and the fall of dictatorships and the gain of worker and political rights during the same time in the americas).
The bargain chances of the Chinese capitalists improve in case the technology investments are not so intense, for example, in agriculture (not so much the case of China, more of Brazil’s) and lower technology parts, such as print cartridges. In the latter case, they can manufacture and export such parts at lower prices and bankrupt industries elsewhere in the world. In this case, well, the quality will be lower since the time required to make sure the parts do not malfunction are not enough to produce a decent quality commodity.
But, this layer of double exploitation is the reason why even the bourgeois supported the independence thorough out the world. They wanted more bargain power, and the proletariat wanted one less intense layer of exploitation, and this is why there is such a fall in the rate of profit in the 1960’s. The need of creation of a local, even simple, industry, not even if poor, was desired. This is very well represented by the creation of OPEP in 1960 and the raise in the price of the oil starting in the 1970’s.
This kind of situation indeed puts workers against workers. It is what happens when we see the imperialist wars and the very irrational mistreatment of immigrants, no matter if they are from Mexico, North Africa or descendant of those brought by force (blacks in the Americas).
Let us remind ourselves that John Smith’s coin has two sides. In his attempt to pin Michael Roberts, he avoids one side. Here it is, in the conclusion of Smith’s book that begins, “The vast wave of outsourcing of production processes to low-wage countries…was a strategic response to the twin crises of declining profitability and overproduction that resurfaced in the 1970s …, a course that was conditioned by the imperialists’ reluctance to reverse the expensive concessions that have helped convert the workers of the ‘Global North’ into passive bystanders, or even accomplices, to their subjugation of the rest of the world.” (p. 313)
Reluctance – what world is this?! The U.S. imperialists showed no reluctance to attack trade unions and New Deal programs, and I was under the impression that from Ms. Thatcher on, the British imperialists showed no reluctance to attack trade unions and social programs.
Charles has copied a comment he made to Michael’s review of my book. I replied to him then, but it clearly didn’t register with him. Here is what I said:
I do not say enough in my book about wage repression, speedups, attacks on social programs etc in the imperialist countries for what I mean by ‘reluctance’ to be sufficiently clear. What I mean is best expressed by this, whose omission from the conclusion is unfortunate:
“Despite the intensification of the labour process, increased labour productivity, real wage compression, and the expanded super-exploitation of immigrant workers, capitalists in the imperialist countries were unable to savagely cut domestic production costs to anything like the extent needed; despite all their efforts they have not yet succeeded in reversing the expensive post-World War II welfare reforms conceded to the working class in the imperialist countries, as Fidel Castro said, ‘out of fear of revolution, out of fear of socialism.’” (http://www.mediafire.com/view/?hesj1vceutyyomc, p27)
The extra surplus value which capitalists in the USA, UK etc have succeeded in extracting from their own working classes through wage repression, speedups and austerity in recent decades is far from sufficient to satisfy their voracious hunger, hence their imperialist impulse. And they have satisfied their imperial impulse and found a bountiful source of extra surplus value by outsourcing production to countries where wages are a fraction of those paid to and defended by their domestic workers. The ruling class offensive in the imperialist countries has been most intense in the United States, whose capitalists are the most aggressive; the results are reflected in the near-zero growth in the median real wage since the late 1970s. With growing wage inequality, this means that many workers have suffered declines over this period, and US workers have less of a social wage to cushion them. In the UK, from mid-1980s to the onset of the global crisis most workers experienced a steady advance in real wages, despite Thatcher’s onslaught on unions.
To assess workers’ conditions in imperialist countries, we must account for the social wage as well as money wages. One important matter not discussed in the book is the absolute and relative size of the social wage in rich and poor countries. Despite often savage cuts on many areas of social spending, government social expenditure (a proxy for the social wage) has continued to rise as a proportion of GDP (and even more so in absolute terms) in all imperialist countries. Government spending on health, education & transfer payments (pensions, unemployment pay etc) rose from around 25% in 1980 to 35% in 2010 in the UK, in the US it has risen by the same degree from a lower base, in France it has increased from 35% to 45%. (data: World Development Indicators, OECDStat).
This is definitely not what the rulers intended! It is further evidence that our rulers were reluctant to mount a generalised assault on our wages and living standards because they feared generalised resistance. The onset of the global crisis means that they now have no choice, and so the assault on wages and the social wage in the imperialist countries is set to intensify.
Smith: “I replied to him [Charles A] then, but it clearly didn’t register with him.” It certainly did register, and a re-read here registers the same conclusion: Smith publishes a book that pits workers internationally against each other, then he admits in an obscure thread of comments that he is wrong – whilst attempting to maintain his overall view. As the saying goes, you can’t have your cake and eat it, too.
It seems to me that workers are set against each other internationally. See the support for imperialist actions. It’s not Smith’s fault. That’s shooting the messenger.
“John
c) that replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase;
My reply:
No, super exploitation is when wages are below the value of labour power. But the ‘value of labour power’ is different in different countries depending on the socially accepted level in each. So capital shifting investment to low wage countries from high wage countries does not prove by itself that ‘super exploitation’ is involved at all.”
I would like to partly disagree with Michael here in his disagreement with John on the point cited above.
It is true that super-exploitation has been around all the time but let’s look at two things: first, the value of labor-power is different between countries (I think John agrees with that) but what John suggested by using the concept of wage arbitrage should be confined to the analysis of production (i.e. productive capital) in the context of international production networks (i.e. means of production and labor-power from Marx’s circuits of capital) not to the whole circuit M-C … P … C’-M’; this is because the realization of surplus-value into profits (C’-M’) doesn’t happen where production (P) happens; second, John mentioned that many western corporations invest very little capital (c+v) into production, so it is hard to talk about shifting (productive) investments from a high wage country to a low wage one.
I see the process of international production as an ‘international Taylorization’ of production to take advantage of wage differentials which can be planned at a microeconomic (enterprise) levels but things change when it comes to the realization in the market of what has been produced. I think that shifting or rather downloading the burden of production on low wage countries (buying cheaper labor-power as a cheap input) represents a form of super-exploitation regardless of the different ‘socially accepted’ standards of living.
I agree with Michael that the concept of super-exploitation cannot explain exploitation itself but it can stand as a counter-tendency for the falling rate of profit; or a method of busting unions in the higher wage countries and forcing them to become lower wage countries; or militarism and geopolitical games, etc.
P.S. John’s super-exploitation usage is about international production (inside “the hidden abodes of production” which are now all over the world) and not exchange or trade. Internationalization of production is often confused with trade or exchange due to the dominance of the neoclassical economics which makes even relations of production (wage relations) into ‘harmonious’ exchange relations.
“I agree with Michael that the concept of super-exploitation cannot explain exploitation itself but it can stand as a counter-tendency for the falling rate of profit; or a method of busting unions in the higher wage countries and forcing them to become lower wage countries; or militarism and geopolitical games, etc.”
But, as Marx points out, it is not necessary that the rate of profit be falling in one place, for capital to be invested in another. All that is required is the potential for making a yet higher rate of profit somewhere else. In fact, not even the rate of profit may be decisive here. If I have £1 million of capital to invest, I might be able to invest £100,000 at location A, where there is a 50% rate of return which will, thereby bring me £50,000 of profit. But, I may be able to invest the whole £1 million in location B, where the rate of profit is only 10%, but will thereby bring me £100,000 of profit.
Much of this discussion is based upon Ricardian rather than Marxist ideas, that is where it does not just represent a fall back to pre-Smithian, Mercantilist concepts of unequal exchange. That’s not surprising given the legacy of ideas from Ricardian socialism in the labour movement. The question is why does capital continue to be invested mostly in already developed economies, rather than in less developed economies? Why is it that capital when it is invested in less developed economies tends to be invested in a small number of newly industrialising economies, where, in fact, wages are higher than in the poorest countries of the globe.
The concentration on wages is a total distraction. As Marx put it in a critique of Ricardo in that regard.
“Ricardo concludes quite wrongly, that because “there can be no rise in the value of labour without a fall of profits”, there can be no rise of profits without a fall in the value of labour. The first law refers to surplus-value. But since profit equals the proportion of surplus-value to the total capital advanced, profit can rise though the value of labour remains the same, if the value of constant capital falls. Altogether Ricardo mixes up surplus-value and profit. Hence he arrives at erroneous laws on profit and the rate of profit.”
(Theories of Surplus Value, Chapter X)
As Marx points out if wages rise, then profits fall. It may well be the case that in response to the rise in wages, capital responds by introducing labour-saving technology that raises productivity, raises the rate of surplus value, and profit, and may subsequently, by creating a relative surplus population also lead to wages falling, but that is not the immediate effect of the rise of wages, whereas the fall in profits is.
However, as Marx points out, profits can rise for several reasons without wages falling. Irrespective of whether wages previously rose, capital will over time introduce more efficient methods of production, which raises relative surplus value. It will, as he says above also reduce the value of constant capital, so that even if the mass of surplus value remained constant the rate of profit would rise as against this lower value of constant capital employed.
Moreover, in this section Marx goes into some detail on the effect that such investment has on the rate of turnover, and subsequent effect on the rate of profit. Everyone considers the effect of different organic compositions of capital when examining the transformation problem, but few pay attention to the fact that Marx gave equal weight to the effect of different rates of turnover of capital in that process.
In Chapter X, Marx examines that in relation to Ricardo’s arguments where he confuses the proportion of fixed capital to wages for the organic composition, and also sets out various confused arguments in this relation in connection with the durability of that fixed capital. He seeks to show that it is the ratio of fixed capital, its durability, and changes in wages which explain the variation of values from prices.
Marx points out that just as a capital that has a lower than average organic composition, will have prices of production lower than the value of its output, and vice versa, those capitals that have a higher rate of turnover of their circulating capital relative to the average rate of turnover of the social capital, will also have lower prices of production than the values of their output.
Put another way, economies that become more productive, and thereby also increase the rate of turnover of their capital, thereby also increase their rate of profit, to the extent that they sell their output into the global market, because their prices of production are thereby reduced below those of their global competitors. If they sell at these global prices, they therefore, accrue surplus profits equal to the difference between their national price of production, and the global price of production. These variations in individual national prices of production, and rates of profit are not evened out as a consequence of international trade, and so the more advanced country continues to obtain the benefit of the higher rate of profit, despite having higher wages. As Marx puts it in opposition to Ricardo,
“In itself, the assumption that variations in the price of wages in England, for instance, would alter the cost-price of gold in California where wages have not risen, is utterly absurd. The levelling out of values by labour-time and even less the levelling out of cost-prices by a general rate of profit does not take place in this direct form between different countries.”
(ibid)
The higher mass and rate of profit of the more developed economy in that case, has nothing to do with any super-exploitation, any more than the higher profits of a firm that introduces a new machine ahead of its competitors, or a farmer who has the benefit of more fertile land makes higher profits due to super exploitation.
The focus on lower wages is a distraction, because as Marx described, most of the countries that had very low wages could not compete with Britain during the 19th century, because its competitiveness came from this high level of capital investment that massively raised productivity, increased the rate of surplus value, at the same time as lifting living standards, and massively raised the rate of turnover of capital, which brings about a further rise in the general annual rate of profit. The low wages and living standards conversely in much of the globe are a consequence of a lack of capital investment, and low levels of productivity. They are not the consequence of super exploitation but under exploitation, of a lack of investment that reduces the value of labour, allowing living standards to rise, whilst also increasing the rate of surplus value, and capital accumulation. Its why Marx talks about the historic mission of capital being to undertake this rapid accumulation of capital, without which socialism is impossible.
As Warren put it, in this way Imperialism acts as the pioneer of capitalism, and sets in train the process of modernisation, industrialisation, and capital accumulation that Marx and Engels and their followers recognised as the fundamental requirement for the transition to socialism.
How many ways of increasing surplus value?
In my view Marx correctly identified no less than six (arguably seven) dimensions available to capital of increasing surplus value, but he gives them a different theoretical status in Capital’s three volumes, as published.
I have also tested this several times in group work. Although group would be better because all the possibilities are more readily discovered, you can try this exercise for yourself. Before reading on see how many different ways you can think that capital could increase its surplus value? (for the time being we consider capital as represented by a single capital). Done it? … Compare your results with mine below.
Marx’s analysis in Vol 1 focuses on individual capitals’ drive to increase the surplus value appropriated from the labourers, but it follows that if there is increase in a dimension, then that dimension is part of the constitutive existence of surplus value, and if so then arguably of value. For example, the working day has to have a duration for value and surplus value to be produced at all, even before we consider how capital increases surplus value by extending further the length of the working day. Likewise the workers’ labour has to have a degree of skill and work at a certain intensity for value and surplus value to be produced at all. Each of the dimensions is constitutive of the production surplus value as such, and value as produced in the capitalist mode of production.
In the presentation in Capital Volume 1 chapters 16 and 17 Marx culminates his attention on three of the dimensions in various combinations: the duration of the working day, the productivity of labour, and the intensity of labour. As well as productivity of labour due to use of tools and machines, Marx also gives extensive consideration to the productivity of labour due to cooperation in the labour process and the division of labour prior to machine production – this is often overlooked in commentaries. So that’s three dimensions (arguably four when we separate out productivity due to division of labour from productivity due to machinery) initially covered by the concepts absolute surplus value and relative surplus value, as generally understood.
What are the other three dimensions by which capital can increase surplus value?
Skilled labour – that Marx recognises and firmly puts to own side, increasing labour’s skill would increase its productivity, the debate then is the value of the skilled or complex labour power in relation to the value it produces.
Extractive labour – Marx analyses this quite fully in Capital 3 and TSV2, probably the most neglected part of his contribution. The effect of labour working on more or less fertile soils, or better veins of rock, is to produce more use values for a given expenditure of labour (and employment of machines). Thus extractive labour’s productivity is enhanced in a similar (not same) way to labour rendered more productive by machinery. This is a special configuration, not all labour is extractive. But then not all labour uses machines.
Super-exploited labour – labour paid for its labour power at a rate lower than the social norm (or not paid at all for it). This is a qualitative as well as quantitative distinction, concerning oppressive social relations reproduced by capitalism. For example, the women, youth and children of Vol 1, Ch 10. Yet, in Ch 11, the theoretical consolidation of Ch 10, Marx normalises the rate of surplus value. That’s the real point under debate. Whilst this short cut could be justified in terms of simplifying the variables, it is not justifiable in recognising the need to fully conceptualise the capitalist mode of production as reproducing oppression through differentiated exploitation. For example, the relegation of super-exploitation is not justified when we consider the second pillar, cotton slavery, and the role of enslaved African Americans in producing value and surplus value.
These seven dimensions can in some respects be grouped under absolute value and relative surplus value, but labour super-exploitation has elements of both, is necessarily combined with them, and is yet clearly distinct. It speaks to a mode of exploitation where labour power as a commodity is cheaper, usually manifest as lower wages, because it consumes less use values, and not because the labour producing those use values is more productive, as with relative surplus value. This super-exploited labour employed in turn creates cheaper commodities, as distinct from lower value commodities. The commodities are cheaper but of no less value, as distinct from being cheaper because of lower value, a difference between socially necessary labour and ‘socially necessary’ paid labour. It would appear that labour super-exploitation effects surplus value without changing value.
As always, there are tensions in Capital, for Marx’s thought reproduces real contradictions, which he presents through different planes of abstraction to arrive at a new conceptutal determination. There needs to be plane of abstraction that latches on to labour super-exploitation as its determination. In Volume 2 Marx notes that driving down the variable capital exchanged for labour power is indeed a driver for capital, and he does recognise this in the opening and closing of his exposition of the general law of accumulation, in the counteracting tendencies to the fall in the rate of profit and elsewhere but nowhere do these considerations enter into the determination of the core theoretical category of surplus value and its accumulation that drives these very laws as an internal relation and not just an external result.
For example, in the transformation schema leading to the formation of a general rate of profit in Volume 3 Chapter 9 Marx is explicit about his methodology of one country, and with that a single rate of surplus value. My argument is that Marx’s conversion of simple value into price of production needs to be further modified to take into account variations in the rate of exploitation as well as variations in the organic composition of capital (relative surplus value), and the two in their interaction. Marx himself provides further modifications to the conversion in the course of Volume 3 (as Tony Norfield has pointed out), but not this one, a theoretical incompleteness.
Labour super-exploitation poses a problem that northcentric Marxism has yet to overcome. It needs to climb the fence and not just look over at the other side, but listen to Marxists from the other side.
The concept of surplus value is incomplete without labour super-exploitation and its contradictions. Our analysis of contemporary capitalism is woefully inadequate without developing this to explain major dynamics in the world capitalist system. John’s book takes the analysis forward considerably. He rightly acknowledges Brazilian Marxist Ruy Mauro Marini as a seminal source informing this debate on labour super-exploitation.
Unfortunately little of Marini’s work has been available in English, readers can try your Spanish at http://www.marini-escritos.unam.mx/ ; there is a summary of his views in Cristobal Kay (2010) Latin American theories of development and underdevelopment; and there are now articles by Ronald Chilcote and Amanda Latimer (both in Latin American Perspectives) Adrian Sotelo (Critical Sociology) and Jaime Osorio (Social Justice) and my introductory summary (to be found with other articles on Academia).
Marini’s super-exploitation of labour thesis was attacked by Cardoso, but it never went away as a reference point for the revolutionary interpretation of Marxism in Latin America, and today its influence is returning even more. One of the debates has moved on to the super-exploitation of nature.
There are many other points that could be answered in the John/Michael exchange, that would take us on a significant intellectual journey that deserves a fuller publication, so I will leave it there for now.
What a brilliant antidote to Boffy’s inane drivel.
Your point about how Marxists in the developed world have addressed the imperialist question is an important one.
Dear Michael, I greatly appreciate the space and attention you are giving to these issues in your blog, and I agree that “sometimes it is necessary to consider all points and not immediately agree or disagree until you are convinced” – indeed, sometimes it’s necessary to climb up the fence in order to get a good view, or as a necessary stage to get to the other side of it!
I apologise for the length of this comment, which is justified by the number of inaccuracies and misrepresentations in Michael’s reply to my original post; and by my reproduction of Michael’s exact words, which I have done to save the reader from having to scroll up to ensure that I am not misrepresenting anything that Michael says.
MR: “John says that Marx did not just say the rate of profit is higher in the colonies due to a lower degree of development (i.e. low productivity and capital intensity) but that there was also a higher exploitation of labour. John says this means Marx did not use his categories of capital when referring to colonies because the colonies were not part of global capital at the time…”
I certainly do NOT argue that ‘colonies were not part of global capital’ – slavery and other forms of forced labour were (and are) just as much part of ‘global capital’ as the most advanced production techniques. Instead I argue that, in the words of my original post, “in the colonies, at that time, the commodification of labor-power and the universalisation of the capital/wage labor relation had a way to go. This again underlines the evolutionary distance separating the past three decades from the stage of capitalist development observed and analyzed by Marx.” I further argue that, in Marx’s time, and also in Lenin’s, the relation between imperialist and oppressed nations was a relation between capitalist and precapitalist societies, and that in the latter the capital/labour relation had yet to become prevalent – in contrast to today’s world, which is why, as I argue in the book, “what’s so special about global labour arbitrage is that it takes place entirely within the orbit of the capital-labour relation.” In other words, in the above passage Michael is knocking down a straw man which bears no resemblance to my argument.
MR: “…To me, Marx is saying that the rate of profit (in value) is higher in the colonies just as it is higher in less efficient, lower capital intensity capitals in a modern economy. And in the process of equalisation towards an average rate of profit, value is transferred from the inefficient to the more efficient capitals… In addition, workers in the colonies can be exploited more when they don’t receive the value of their labour power in wages or are slaves.”
What follows ‘in addition’ is crucial – as Michael implicitly accepts, surplus value extracted from slaves and super-exploited workers in the colonies is in addition to, i.e. cannot be reduced, to the redistribution of value between capitals of high and low intensity. He therefore contradicts himself –the prevalence of slavery, forced labour in various forms means it that the imperialist relation between oppressor nations and the colonies cannot be ‘just as’ it is between more and less developed capitalist countries. It contains something ‘in addition to this.
It is important to remind ourselves exactly what Marx said in the crucial passage under discussion: “the profit rate is generally higher [in the colonies] … and so too is the exploitation of labor, through the use of slaves and coolies, etc.” I stated in my original post that “The[se] few words in this single sentence – “so too is the exploitation of labor, through the use of slaves and coolies, etc.” – are the only place in the whole of Capital’s three volumes and in its fourth volume, Theories of Surplus Value, where Marx mentions the positive effect on the rate of profit in the imperialist nations of higher exploitation in subject nations.” If I am wrong about this, Michael or another of my critics should be able to demonstrate this without difficulty.
The above passage by Michael raises another important question (pointed out to me by Walter Daum), where he says “in the process of equalisation towards an average rate of profit…” This ignores Marx’s comment made in a footnote to the passage under discussion “…unless monopoly stands in the way.” It is incontestable that different forms of monopoly play a critical role in the contemporary accumulation of capital in imperialist nations. How much the super-profits from super-exploitation are shared with other capitals in the imperialist nations is one issue posed by this; how much these super-profits are shared with capitals on a global scale, equalising the rate of profit across the global economy is another. Neither of these issues are discussed in Capital – just this footnote!
MR: “I agree that capital has shifted investment into the periphery in order to take advantage of much lower wage costs there compared to the advanced economies… Also it is another way of counteracting Marx’s law of falling profitability – indeed that is the point. If that makes capitalism “more imperialist” in the neo-liberal period, fine…”
That’s great; I hope we can further enlarge this important area of agreement between us!
MR: “…But has ‘super-exploitation’ become a ‘relatively’ more important way of increasing surplus value over absolute and relative surplus value in the neoliberal period? Well, maybe.”
Still clinging to the fence, I see! – but that’s much better than categorically rejecting this possibility, as do our euro-Marxist friends. To decide which side of the fence to come down on you need to decide whether the huge wage differentials reflect, albeit in a highly mediated way, different rates of exploitation. It is incontestable that wage differentials reflect different values of labour-power, since a) the size of the basket of consumption goods is so vastly different between imperialist and low-wage countries, and b) so much of the basket of goods consumed by workers in the former were produced by workers in the latter. I.m.o. this alone is enough to settle the matter, since, to the very large extent to which workers in the two groups of countries are employed in the production of different commodities, productivity differences are irrelevant – since the productivity of one seamstress or shipbuilder may be more or less than that of another seamstress or shipbuilder, but there is no way to compare the productivity of a seamstress working with average intensity and technique and a shipbuilder working with average intensity and technique.
The value of labour-power, of course, provides only the denominator in the calculation of the rate of exploitation; the numerator is provided by surplus labour, i.e. the difference between the length of the working day and the quantity of labour-time embodied in the workers’ consumption goods (i.e. the value of labour power expressed in labour-time). As I argue in my book, the euro-Marxist argument – that the quantity of value generated in a given amount of time is a function of the organic composition of the capital which employs them – contradicts the very basis of Marx’s theory of value, yet it is only on these grounds that denial of the reality of higher rates of exploitation in low-wage countries can be sustained. Even on the grounds of bourgeois, ‘value-added’ measures of productivity (on which the euro-Marxist thesis ultimately rests), higher rates of exploitation must prevail in low-wage countries (or at least, in the export-oriented sectors of production in those countries) – since if wage differentials merely tracked productivity differentials then capitalists would have no incentive to shift production to these countries. The euro-Marxists get around this by arguing that FDI flows are primarily between imperialist countries (although they are averse to using the term imperialist to describe economic relations between rich and poor countries); yet, as I also show in my book, this conflates two very different processes – the concentration of imperialist capitals (non-financial and financial) and the fragmentation of production along the global value chains. Furthermore, it entirely ignores arm’s-length outsourcing, and in any case, in recent years, aggregate N-S FDI flows have exceeded N-N flows.
Now I move on to consider his reply to my four propositions, and I have to conclude that he has climbed down from the fence – but on the wrong side.
1.
I argued that “in Capital, Marx identified not two put three ways to increase the rate of surplus value, and that while he repeatedly emphasised the importance of the third (reducing wages below the value of labour power) each time he explained that examination of this was excluded from Capital because his ‘general theory’ required the assumption that all commodities sold at their value”
MR replied: “Well, Marx excluded this third category of super-exploitation because the fundamental cause of exploitation is the appropriation of value by capital even when workers get paid their ‘value’. If it were just ‘super exploitation’, the theory of value would be wrong…”
First, we are talking not about ‘categories of super exploitation’ but ‘different ways to increase the rate of surplus value’ – here is another straw man in the process of its construction! Leaving this to one side, the first sentence in the above passage is incorrect, as can be seen from the following passages from Capital. Marx excluded this third way to increase the rate of surplus value because he assumed equality between workers, i.e. he assumed that unimpeded competition between them would lead to equalisation of wages, and he made this assumption in order to pursue his quest for a ‘general theory of capitalist production’. The reality of national oppression and of the violent suppression of international labour mobility require us to relax this assumption. As for the second sentence, nowhere do I say it is ‘just super exploitation’; this is the straw man, now fully stuffed with straw.
“The duration of the surplus labor … [could be extended] only by pushing the wage of the worker down below the value of his labor-power…. Despite the important part which this method plays in practice, we are excluded from considering it here by our assumption that all commodities, including labor-power, are bought and sold at their full value.” Capital, vol. 1, 430–31, Penguin edition.
“I assume that commodities are sold at their value, [and] that the price of labour-power occasionally rises above its value, but never sinks below it.” Capital, vol. 1, 655.
“Like many other things that might be brought in, [‘The Reduction of Wages Below their Value’ – one of six counteracting factors that mitigate the tendency of the rate of profit to fall – JS] has nothing to do with the general analysis of capital… but has its place in an account of competition, which is not dealt with in this work. It is nonetheless one of the most important factors in stemming the tendency for the rate of profit to fall.” Capital, vol. 3, 342
“important as the study of frictions [impeding equalization of wages – JS] is… they are still accidental and inessential as far as the general investigation of capitalist production is concerned and can therefore be ignored. . . . It is assumed throughout that actual conditions correspond to their concept.” Capital, vol. 3, 241–42
“The distinction between rates of surplus-value in different countries and hence between different national levels of exploitation of labour are completely outside the scope of our present investigation.” Capital, vol. 3, 242
MR: “…Marx did not say that “all commodities sold at their value”. On the contrary, commodities do not sell at their value as Smith (Adam) and Ricardo thought, but at their prices of production because of the transformation of individual values into prices of production through an average rate of profit. Indeed, that is why ‘super exploitation’ is not enough to show why profitability is higher in some capitals than others.”
As can be seen from the above quotes, in volume 1 of capital Marx did assume that all commodities are sold at their value. Michael is, however, correct to point out that in volume 3 Marx relaxes this assumption, explaining how the formation of an average rate of profit between capitals with different organic compositions causes the prices of individual commodities to move away from the quantity of socially-necessary labour time required for their production. The argument in my book fully accounts for this, as Michael, who has read the book, should know. However, last sentence in the above quote from Michael’s reply implies that I argue that profitability is higher in some capitals than others because of super exploitation. This does not resemble anything that I have argued; it is yet another straw man.
2.
I argued that that “in Capital Marx does not analyse a single national economy, but neither does he analyse the concrete global economy of his day (still less, obviously of our day) – the glancing reference to ‘coolie labour’ alone is proof of this. He analyses an idealised unitary economy in which all factors of production, including labour, are freely mobile (i.e. he excludes all forms of monopoly) – as is reflected in his assumption that labour power has but one value;”
MR’s reply:
“I disagree that Marx’s analysis is ‘idealised’. It starts with an abstract analysis taken from the real world with realistic assumptions (like all value comes from labour; capital accumulation leads to increased mechanisation) to which is added all the concrete parts of capitalism: from ‘capital in general’ to ‘many capitals’, from the commodity to money and to credit; from the world to many nations; from competition to monopoly. Indeed, he does not exclude ‘all forms of monopoly’. He analyses the concrete global economy of his day, often in much detail.”
As can be seen from the passages from Capital cited above, Michael makes claims about Marx’s great work which directly contradict what Marx himself said about it. If it is true that Capital included ‘all the concrete parts of capitalism’ and ‘all forms of monopoly’ in its theoretical concepts then no further critical development of these concepts is necessary; all we need to do is interpret the holy text. Yet it is widely acknowledged by Marxists that Capital is an unfinished work and that many further volumes were planned, including one on ‘world trade’. I concede that I was wrong to say that Marx ‘excludes all forms of monopoly’ – in the discussion of ground rent in volume 3 Marx begins a discussion of some specific forms of monopoly. But nowhere, including in volume 3, does Marx integrate into his theoretical concepts any forms of monopoly in the labour market; these he considers to be ‘accidental frictions’ which are ‘inessential as far as the general investigation of capitalist production is concerned and can therefore be ignored’. I argue that acknowledgement of and analysis of these ‘frictions’ is absolutely essential to a Marxist theory of contemporary imperialism. Along with the euro-Marxists he has joined on the wrong side of the fence, Michael wishes to continue to ignore them.
3.
I argued that “replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase.”
MR’s reply:
“No, super exploitation is when wages are below the value of labour power. But the ‘value of labour power’ is different in different countries depending on the socially accepted level in each. So capital shifting investment to low wage countries from high wage countries does not prove by itself that ‘super exploitation’ is involved at all.”
Marx made passing reference to national differences in the value of labour power and the rate of exploitation, but he excluded them from his ‘general theory’ for the reasons he gave in the quotes cited above. Premised on the assumptions necessary for his ‘general theory’ he offered a narrow definition of super exploitation – when wages are forced below the value of labour power. I offer the outlines of an alternative definition, one that is adequate to the outstanding task of developing a value theory of contemporary imperialism: super-exploitation is a rate of exploitation that is higher than the global average. Michael hides behind the narrow definition in order to dismiss facts which do not fit into it. Furthermore, Michael’s argument is incoherent: the value of labour power is closely related to the rate of exploitation, as discussed above, and if the value of labour power differs between countries (i.e. is much higher in imperialist countries than in low-wage nations) it cannot be denied that, in principle, the rate of exploitation may also vary between countries. The fact that the value of labour power is much lower in low-wage nations strongly implies that the rate of exploitation is higher in those nations. True, it does not prove that this is the case: Michael’s suggestion that I argue that the global shift of production by itself proves the existence of super-exploitation is a gross simplification of my argument, yet another straw man.
4.
I argued “that this is therefore a new fact not contained in the theory of value presented in Capital. This does not mean that Marx was wrong, it means that capitalism itself has evolved, and that the general theory presented in Capital need to be critically developed to take account of this evolution.
MR’s reply:
“Super exploitation is not part of the theory of value because, as Marx says, it is temporary and changes and is different in each country etc….”
So Michael says. But where does Marx say this? What Marx did say was “The distinction between rates of surplus-value in different countries and hence between different national levels of exploitation of labour are completely outside the scope of our present investigation.”
MR: “…In the process of production, capitalists might force a lower wage… That is super exploitation. But if this low wage is maintained, workers must eventually accept a lower value of labour power [and] super exploitation becomes simply a higher level of (“normal”) exploitation because the value of labour power has been lowered in the class struggle. Yes, more exploitation, but not super-exploitation as a new category of capital.”
Encouragingly, Michael finishes by making a huge concession to my argument. Military dictatorship, imperialist wars, state terror, the gigantic reserve army of labour corralled by immigration controls, all of this enables capitalists to force down the value of labour power in oppressed nations to a much greater degree than in the imperialist countries, leading to ‘more exploitation’, i.e. higher rates of exploitation than in the imperialist countries. So we agree, after all! Not so fast. He has climbed back up the fence, that’s all, and he covers his tracks with two more straw men.
MR: “Super-exploitation is not a category that explains exploitation as such. And it is not a new fact – it’s been around all the time. Is it decisive now? Not proven.”
The first sentence is nonsense and does not in any way resemble my argument – another straw man. And I don’t argue that super-exploitation is, in itself, a new fact; what I argue is that, thanks to neoliberal reforms that removed barriers to the free flow of capital and commodities but increased barriers to the free flow of labour, and thanks, too, to the revolutions in information and transportation technologies, capital in the imperialist countries has massively increased its extraction of surplus value from super-exploited labour in low-wage countries. This is a new fact that is not contained in Marx’s general theory of capitalism. Attempts to use Marx’s Capital to deny this reality is not Marxism, it is a perversion of Marxism. So, Michael, get down off the fence when you are good and ready to, just make sure you get down on the right side!
John – it is still hurting on the fence a bit. But when I have a moment, I shall try and reply to your latest long comment and some others. Hopefully, readers are not yet finding the discussion stale and we can still all learn a little more. I am.
If any given worker in the developing world requires less to live on than any given worker in the advanced world and the worker in the developing world works considerably more hours than the worker in the advanced world then surely the worker in the developing world is being more exploited because the difference between necessary and surplus labour must be significantly more for the worker in the developing world?
I am not saying that our wealth is dependent on their poverty or anything like that but from experience this idea is certainly a very important one, which capitalism promotes due to the realities of competition etc and in Britain at least can go a long way to explaining the political consciousness of the masses in the UK.
The way to counter this is not to say that super exploitation is a myth but to point out that by improving their living standards we actually contribute to improving ours (in the long run) and we also point out that capitalism, instead of recognising this reality, retards it by playing workers off against each other and promoting all sorts of backward ideas.
Edgar,
“If any given worker in the developing world requires less to live on than any given worker in the advanced world and the worker in the developing world works considerably more hours than the worker in the advanced world then surely the worker in the developing world is being more exploited because the difference between necessary and surplus labour must be significantly more for the worker in the developing world?”
Marx shows why this argument is wrong, in Capital III. Let’s indicate production by workers as standard commodity units. Let’s assume workers in both countries work the same number of hours – 10.
The workers in advanced country A in 10 hours produce 1,000 standard commodity units, or 100 per hour. They consume 200 of the units produced. That means surplus production is 800, which constitutes the surplus product. Looked at another way, 80% of their working day is surplus labour, 20% necessary labour. The rate of exploitation is 4:1 or 400%.
In undeveloped country B, the workers produce just 100 standard commodity units during the day. Of these they only consume 80 units, or less than half the standard of living of the workers in country A. That leaves a surplus product of 20 commodity units. The ratio of surplus labour to necessary labour is 20:80 or 25%. The rate of exploitation of workers in the advanced country is 16 times greater than the exploitation of the workers in the undeveloped economy, yet the standard of living of workers in the advanced country is more than twice as high as that of workers in the latter.
As Marx points out, as the productivity of a country rises compared to that of other countries as a consequence of investment in additional capital, and of higher forms of technology, so it turns the labour of its workers into the equivalent of complex labour in relation to that of workers in other countries, so this relation set out above becomes even greater in terms of an international comparison of the value of the competing commodities.
Unlike Smith or Ricardo, Marx does not have an embodied labour theory of value, but a labour theory of value based upon socially necessary labour. Marx’s critique of the embodied labour theory of value of Ricardo can be found in Theories of Surplus Value Chapter X. For Marx the value of commodities is constantly changing, because it is based upon this socially necessary labour, which moreover, cannot be embodied in the commodity as Smith and Ricardo believed, i.e. the historic cost of producing the commodity in terms of the concrete labour actually used in its production, because the labour which is the measure of value, is abstract labour, and the amount of it currently required to reproduce commodities, is constantly changing, as productivity and conditions change.
The consequence of the rising productivity is that the rate of surplus value rises. Along with it goes rises in living standards, and as marx sets out in the Grundrisse and elsewhere, in part the rising living standards are themselves a necessary consequence of the rising productivity. But, living standards do not rise by the same amount as the rise in the rate of surplus value, so both profits and living standards rise.
This was the point that Carey did not understand, as Marx set out in Capital I.
“In an “Essay on the Rate of Wages,” one of his first economic writings, H. Carey tries to prove that the wages of the different nations are directly proportional to the degree of productiveness of the national working-days, in order to draw from this international relation the conclusion that wages everywhere rise and fall in proportion to the productiveness of labour. The whole of our analysis of the production of surplus-value shows the absurdity of this conclusion, even if Carey himself had proved his premises instead of, after his usual uncritical and superficial fashion, shuffling to and fro a confused mass of statistical materials. The best of it is that he does not assert that things actually are as they ought to be according to his theory. For State intervention has falsified the natural economic relations. The different national wages must be reckoned, therefore, as if that part of each that goes to the State in the form of taxes, came to the labourer himself. Ought not Mr. Carey to consider further whether those “State expenses” are not the “natural” fruits of capitalistic development?”
Viewed in terms of abstract labour the exploitation of the worker in the developed economy becomes even greater, considered in terms of value rather than product, because the value of the product of an hour’s labour in the developed economy becomes that much greater than that of the product of an hour’s labour in the undeveloped economy. That is why, for example, the product of an hour’s labour of a computer games programmer in California exchanges for say the product of 1,000 hours of labour by an Angolan farmer.
Even though the former has a much higher living standard, the proportion of the value they create, measured in abstract labour, that is left over as surplus value is many times that of the Angolan farmer. Moreover, as Marx points out, its impossible to make direct comparisons of wages between countries without taking all of the other conditions into consideration. A large part of the determination of wages continues to be national.
For example, is their any reason why someone working in a coffee shop in New York should have real wages many times that of someone making coffee in a shop in Bangladesh? In terms of the labour performed, no. But, in New York there are thousands of very highly paid workers, working in high value jobs, and they have lots of money to spend buying very expensive coffee, which means that the coffee shop owner can make large profits, even though they pay much higher wages to their workers than does the coffee shop in Bangladesh.
The New York coffee drinkers are not going to go to Bangladesh for their morning coffee, and without a free movement of global labour, the Bangladeshi workers are not going to come to be Baristas in New York. The same is true of somewhere like China. It has had rapid development and capital accumulation. On the back of it, Chinese wages and living standards have risen massively. They have also risen sharply compared to other undeveloped economies that have not enjoyed the benefits of capitalist development. But wages have not risen in China yet to the level they are at in the US, because three is a large quantity of low value production, and a large available potential labour supply.
Its why developed economies try to shift low value, mature production to newly industrialising economies, and to keep the high value production at home. But, its also why newly industrialising economies like Singapore, and Korea tried as soon as possible to discourage such low value industries, and to promote development higher up the value chain.
Boffy, the problem is I am talking about equivalent workers.
So for example, a factory worker in the UK who produced shirts needed a certain standard of living and worked 8 hours per day.
But then the UK factory worker was made employed because shirt production moved abroad.
The new factory worker who did exactly what the UK worker did, i.e. make shirts, needs less to live on but works more hours.
Either the new worker is super exploited or the UK worker was, well, what can we call it, under exploited?
Given that the production of shirts has become more productive it still appears that factory workers producing shirts still get less than workers in the West did.
Edgar,
I think you answered your own question. You say the worker in the UK became unemployed. Why because the worker employed elsewhere, using the same capital and so on, produces the shirt cheaper.
In fact, its unlikely that the two situations will be exactly the same, because production does not take place in isolation. The shirt factory in country B, has to buy electricity, the cost of transporting materials may not be the same and so on.
But, taking all that into consideration, and then making all of the necessary adjustments for calculating the price of production for shirts in country B, affected by the average rate of profit in country B, the result is that the socially necessary labour-time required for its production in B is less than in A.
If we assume, as you say that they are using the same capital and so on, so the same amount of labour is being used then the conclusion must be that in relation to this particular production, the workers in A were being under-exploited, the rate of surplus value was too low, and so the rate of profit was low.
The reason they may have been under-exploited in that particular case comes back to the point made earlier that wage rates are not immediately determined at an international level, but by national factors.
You say under exploited, I say potato!
The reason I would go for super exploitation is that capitalists saw the opportunity to make higher profits by moving production to take advantage of a fresh supply of factory fodder who could not only be paid peanuts but would also not be constrained by legislation, such as and safety at work.
This rapacious need to exploit labour to the greatest degree without any thought for the welfare of that labour is a defining characteristic of capitalism. This is a downside of the system that actually retards development and prompts conflict.
If you accept, as you say above, that wages are not a technical result but one based on ‘national factors then you would have to agree that only prolonged and painful struggle by workers can bring the capitalists to their senses.
This is why your view that all being equal the UK worker was under exploited is such an objectionable one, in that it disregards that prolonged and painful struggle by workers for better conditions. It also fails to acknowledge that forcing workers to work such long hours in appalling conditions is actually counter productive as Marx argued in the debates about the factory acts and the length of the working day debates.
Your comments sound like they could have come straight from the mouth of the manufacturers who claimed the super exploitation of labour was the prerequisite for the wealth of the nation!
Edgar,
But once again you answered your own point. You say,
“It also fails to acknowledge that forcing workers to work such long hours in appalling conditions is actually counter productive as Marx argued in the debates about the factory acts and the length of the working day debates.”
That is correct, which is why, as Marx describes, its not just workers that struggled for limitations of the working day etc. The normal working day, as Marx analyses is not some arbitrary length, but is itself conditioned by physical limits. One is the actual length of day, the other the minimum time workers require to recuperate their powers and so on. Another factor is the intensity of work. Go beyond those, and labour-power is worn out more quickly, and the value of labour-power rises, which thereby reduces the amount of surplus value produced.
That is why the capitalist state, acting in the interests of capital in general overrides the individual interests of “many capitals”, and sets limits so as to ensure the future supply of labour-power. Its why it interferes, as Marx says in what workers should and should not consume etc. – for example with Temperance, and why it eventually establishes a welfare state to produce the labour-power that capital requires that is reasonably healthy and long-lived, educated to the required standard, and socialised.
As Marx says in that regard, “Factory legislation … is, as we have seen, just as much the necessary product of modern industry as cotton yarn, self-actors and the electric telegraph” (Capital Vol 1, chapter 15).
Engels makes the same point.
““Thus the development of production on the basis of the capitalistic system has of itself sufficed – at least in the leading industries, for in the more unimportant branches this is far from being the case – to do away with all those minor grievances which aggravated the workman’s fate during its earlier stages.”
Lenin provides the same kind of analysis in “The Development of Capitalism in Russia”, where he shows that the worst conditions for workers were in the very small handicraft businesses; better conditions existed in the manufactories, where handicraft was conducted on a larger scale; and the best wages and conditions existed in the large capitalistic businesses.
Why do you think so many Chinese peasants want to go to the cities? Its because the wages and conditions in the large businesses there pay far higher wages, and have better conditions than anything they could obtain in the countryside. Why do you think that wages and living standards have risen so sharply in China? Its because of the rapid accumulation of capital.
The idea of super exploitation implies one of two conditions. Either it refers to the situation that dependency and centre-periphery theory always posited, which is that a less developed economy suffers a drain of surplus value due to unequal exchange, which was traditionally linked with the phoney idea of “the development of underdevelopment”, or else it means that workers are paid below the value of labour-power.
But, the workers in the kind of large scale capitalist enterprises you are describing – because that is what you said you were talking about, and not workers being employed in back street sweatshops – are generally paid above the value of labour-power in that particular country.
In your first paragraph, you go back to your original argument about high profits stemming from low wages, but Marx and Engels showed that for developed capitalism low wages are less and less a significant factor compared to the rise in relative surplus value, that stems from rapidly rising productivity, on the back of rapid technological development.
In fact, in Capital III, Chapter 11, Marx shows that within a closed economy, where wages rise generally, and the average rate of profit falls, the consequence of this is that the price of production of the generally large capitals (High organic composition) falls, that of the average capitals remains constant, whilst that of the generally smaller capitals (low organic composition rises).
And, of course, the only way that the price of production for the larger capitals can fall, and that of the smaller capitals can rise, is if capital migrates from the latter to the former, so that the supply of those commodities produced by the big capital rises, and its price falls, and vice versa. In fact, as a result of this further concentration of capital, the big capitals may make even larger profits, even as the average rate of profit falls, because more capital is then employed in these sectors, and their output rises.
I did not say that wages are not a technical result. They are a technical result within the confines of the national economy. As Marx and Engels describe in detail, wages are the phenomenal form of the value of labour-power, as a commodity, and that value is as objectively determined as that of any other commodity. But, the reason that wages are determined nationally I set out previously. Wages are not set just in one particular business, but across a national economy, because there is not complete freedom of movement of global labour. If 90% of the workforce is employed in low value production, and receives low wages, that will impact the wages that workers can obtain in the remaining 10% of businesses.
As Engels put it,
“The history of these unions is a long series of defeats of the working men, interrupted by a few isolated victories. All these efforts naturally cannot alter the economic law, according to which wages are determined by the relation between supply and demand in the labour market. Hence the unions remain powerless against all great forces which influence this relation. In a commercial crisis the union itself must reduce wages or dissolve wholly; and in a time of considerable increase in the demand for labour, it cannot fix the rate of wages higher than would be reached spontaneously by the competition of the capitalists among themselves.”
You say,
“This is why your view that all being equal the UK worker was under exploited is such an objectionable one, in that it disregards that prolonged and painful struggle by workers for better conditions.”
But that is a subjectivist, moralistic conception of exploitation, and not Marx’s scientific definition of exploitation.
In Capital I, Marx describes the much lower wages, and much worse conditions that existed for workers in Europe than for those in Britain. But, Capital did not flood to take advantage of these poor exploited wretches, just because they had low wages, and poor conditions. It continued to accumulate in British factories precisely because despite the higher wages and better conditions, the British workers produced more profit – were more exploited – and their output was still more competitive than that of less developed economies.
In a world of prices of production, surplus value, is in any case being shunted from one part of the economy to another all the time. Its only when monopolistic conditions arise that such movement does not occur. Take agriculture, as Marx shows in his analysis both of the accumulation opf capital in the Middle Ages, and his analysis of rent.
The organic composition of capital in agriculture is low. It produces a lot of surplus value for the capital employed and so has a high rate of profit compared to industry. But, Marx indicates in Theories of Surplus Value, in the Middle Ages, as the towns developed, and industries made profits, although each business in the town had to pay higher prices, to compensate for the higher profits of other businesses, so each of those businesses, in turn benefitted from higher prices to cover their own higher profits. Within the towns this cancels out, but when taking the trade of the town against the country the town as a whole benefits. He quotes Adam Smith,
““In consequence of such regulations” [i.e., regulations made by the guilds], “indeed, each class” (within the town corporate) “was obliged to buy the goods they had occasion for from every other within the town, somewhat dearer than they otherwise might have done. But, in recompense, they were enabled to sell their own just as much dearer; so that, so far it was as broad as long, as they say; and in the dealings of the different classes within the town with one another, none of them were losers by these regulations. But in their dealings with the country they were all great gainers; and in these latter dealings consists the whole trade which supports and enriches every town.”
And in his analysis of rent, Marx makes the point that across industry, it is always the case that some spheres make surplus profits. Commodities would exchange at their values, were it not for capitalist competition. But, precisely because higher profits can be made in some areas than in others, capital moves to where the surplus profit exists. As a consequence of this investment of capital, the supply of commodities in those spheres increases, and the prices of those commodities then falls beneath its exchange value, until it reaches the price of production, where only the average profit is obtained. In new spheres of production, commodities generally sell at their exchange value (modified because of their own costs of production) precisely because such investment of capital has not yet occurred, to push down the price from the exchange value to the price of production.
But, Marx then shows, in agriculture, what is different is precisely the limitation on the investment of such additional capital, because of the monopoly ownership of land by landlords. However, Marx shows that were it not for such land ownership, the surplus profits produced in agriculture, arising from the low organic composition of capital, would be automatically distributed within the rest of the economy, as part of the formation of an average rate of profit.
But, Marx nowhere suggests that such transfer of surplus value from less developed, low organic composition spheres of production, towards more developed higher organic composition spheres represents any kind of super-exploitation of the former in favour of the latter!
Not enough time to respond more fully to this at the moment but I would take issue with the idea that wage determination is a national phenomenon.
Also I am referring to type of worker not type of business. So for example coal miners in the UK have been replaced by Coal miners in places where labour standards are considerably lower. Both sets of workers were doing equivalent work but the developing world worker is currently doing it for less and for longer. And because for whatever reasons the struggles for better terms and conditions have yet to be realised this means just as 1840 UK workers were,so workers in the developing world are being super exploited, or maybe we should call it stupidity exploited, the problem with using stupid rather than super is that it doesn’t really convey the lust for wealth and power that the system promotes. Of course the workers in developing nations don’t just have to deal with the boss they also have the whole imperialist order to contend with! As ultimately do we all, but until that levels out I would prefer to be a worker here than a worker there. The record level of migration and upheaval and refugees suggest those in the developing world would agree and don’t share your Shangri-la vision of super exploitation.
Asking if workers in the advanced nations benefit from imperialism is like asking if the thieves pet benefits from their master robbing pet food from the local store! The answer is yes but they are still the masters pet!
So the differences in convential “value added” as registered by exchange accounts between countries are due to the difference between simple and complex labor? This is some remarkably simplistic vision of capitalist development, and a roundabout way of trying to back it up with quotes from Marx.
It’s one thing to talk of how technical innovations and productivity enable the creation of extraordinary surplus value explioted by vanguard capitalists and the regions where those may be concentrated, but it’s quite another to explain the entirety of the international division of labor and the differentials in rates of exploitation, and how the spread of capital geographically exploits these to its advantage, as if they were mere reflections of differences in productivity- that is the ideological explanation of mainstream economic theory, but with an apparent “marxist” flare.
Value is indeed “socially necessary” labor that has to be validated in exchange and cannnot be reduced simply to “expended man-hours”. But that doesn’t mean we are to conflate the superficial appearance of “labor in the Sounth being less productive” (therefore being paid less) with a serious attempt to understand how value chains actually operate.
“But, the workers in the kind of large scale capitalist enterprises you are describing – because that is what you said you were talking about, and not workers being employed in back street sweatshops – are generally paid above the value of labour-power in that particular country.”
Really? Try looking at the working conditions at FOXCON in China and Ciudad Juarez, Mexico. They are directly linked to production in global commmodity chains of “large capitalist enterprises”. Just as an example.
Ricardo,
I think you are confusing absolute wage levels in developing economies with relative wage rates between different types of business within such economies, and their comparison with absolute wage levels in developed economies.
The situation in that regard is no different in developing economies than it is and has been in developed economies. Stalinists and Third Worldists have always tried to present this Sismondist/Narodnik myth of economic romanticism, as Lenin described it, about it being the big monopolies that “super-exploit” people, but the fact has always been that it is the larger businesses that enjoy lower individual prices of production, arising from economies of scale, and on the back of which they produce surplus profits.
Its on the back of that that these large companies can afford to pay higher wages and provide better conditions. As Engels put it,
“The largest manufacturers, formerly the leaders of the war against the working-class, were now the foremost to preach peace and harmony. And for a very good reason. The fact is that all these concessions to justice and philanthropy were nothing else but means to accelerate the concentration of capital in the hands of the few, for whom the niggardly extra extortions of former years had lost all importance and had become actual nuisances; and to crush all the quicker and all the safer their smaller competitors, who could not make both ends meet without such perquisites.”
(Engels – The Condition of The Working Class in England)
The Stalinists purveyed the myth about the larger enterprises being the ones that paid lower wages and so on, because they sought to build cross class alliances with the petit-bourgeois small business owners around reactionary demands such as the “anti-monopoly alliance.”
As Marx points out in Theories of Surplus Value, Chapter X, the fact is that as development proceeds, and capitals expand, wages rise, but the share of labour costs within the price of production of each individual commodity declines, as productivity rises, and output expands rapidly.
No one is suggesting that the wages of workers at Foxconn are compatible with the wages of workers at some large electronics company in Britain or the US, the point is how do those wages compare with the average wage/income of workers/peasant producers in China?
No doubt its possible to find examples where some large company in China or elsewhere is paying lower wages than the average, but generally that is not the case, for all the reasons that Marx and Engels, and Lenin describe.
Moreover, even in terms of comparisons between wages in China and in the rest of the developed world that gap is narrowing as this recent Economist article describes.
As David Pilling put it in the FT, the authorities are reflecting in their statements a basic reality. He says,
“The years of an endless supply of cheap labour, on which the first three decades of China’s economic lift-off was built, are coming to an end. That is partly demographic. Because of China’s one child policy, the supply of workers under 40 has dwindled by as much as a fifth. Fewer workers means more bargaining power.”
When Britain’s Industrial Revolution took place, it required peasants first to be forced from the land. But, once industrialisation occurs, and industrial capital can start to be expanded across the globe, it is the much higher living standards – not compared with existing developed economies, but compared to existing peasant conditions – which draws people from the countryside into the towns in search of these much better conditions, and prospects.
Even in Britain, it didn’t take long for that to occur. Marx explains in Capital that one reason for the sharp rise in agricultural wages between 1849 and 1859, was an increasing shortage of agricultural labour, and one reason for that shortage was that workers were flooding into the towns and cities where much better wages could be had, particularly as large amounts of labour was used in railway construction.
If you doubt that there can be huge differences in terms of complex as against simply labour, just look at how much a computes game sells for, and how much actual labour (living and dead) goes into its production, and look at how much say, a kilo of wheat sells for, and the labour that actually goes into its production. Look even within a developed economy at how much profit a computer games company makes, despite paying high wages to its workers, compared to say a company producing everyday ceramics, which pays its workers very little.
Then add on top of that the difference between the overall level of social productivity in a less developed economy with that of a developed economy, and the consequence of that for the level of wages in the economy, and the average rate of profit within the economy.
“But, once industrialisation occurs, and industrial capital can start to be expanded across the globe, it is the much higher living standards – not compared with existing developed economies, but compared to existing peasant conditions – which draws people from the countryside into the towns in search of these much better conditions, and prospects.”
Complete, utter, total, reactionary bullshit from Boffy. It is the destruction of the direct producer, the subsistence producer NOW as it was THEN that drives the urban migrations of the 19th, 20th, 21st centuries. In Africa; FROM Africa to Europe; in ASIA; in Central America; FROM Central America to the US.
In El Salvador, there was this thing called a civil war; in Mexico, there was the destruction of the historical inalienability of the ejido, the NAFTA agreements, and most currently, and hideously, the “war on drugs.”
In Africa, there was the destruction of subsistence fishing based economies by the ‘bottom scrubbing” trawlers of the European fishing fleet; and civil wars; and the roll back of advances made in countries like Senegal.
Why is this committed apologist for capitalism, Boffy, allowed to spew his nonsense here?
“Why is this committed apologist for capitalism, Boffy, allowed to spew his nonsense here?”
It may be apologetic nonsense but i will defend his right to say it!
Boffy,
These child-eating “Stalinists and Third-Worldists”, whoever on Earth they may be, have made quite an impression on you!
I don’t know why you insist in forcing the argument into a “big capital” versus “small capital” issue. Sure, attacking a position that pretends to resolve expoitation by previledging smaller capital units with a more “local” standing over larger “monopolistic” units sounds like something Lenin would do. And for good reason. But that’s missing the point entirely.
I don’t think anybody is arguing that it’s not possible to increase real wages through productivity increases while at the same time increasing surplus value (and the rate of exploitation). Yes, it’s happened in different stages in the history of capitalism. The point is that a) this hasn’t been a homogeneous process; in fact the need to increase relative surplus value in the indistrualizing regions has induced and depended on super-exploitationin in non-industrializing regions; and b) today capital is exploiting geographical differences, as ever, to increase the rate of profit, but without meaningful increases in the productivity of labor, rather with a generalized downward push on the wage-level.
If China has managed to build a pole of industrialization in it’s own country, this does not contradict the dinamics between center and periphery: it simlpy means there is a new indistrial pole (with its own perphery, even within the same country). Yes, it may mean a sector of the proletariat in the industrial pole will have higher wages. No, it does not mean that all the proletariat that is working for the value-chains involved will have wages higher than average, or even higher than before.
“No doubt its possible to find examples where some large company in China or elsewhere is paying lower wages than the average, but generally that is not the case, for all the reasons that Marx and Engels, and Lenin describe.”
That’s pure fantasy. We’re not talking about isolated examples, but of a general tendency worldwide. Ever had a look at the trend in wage levels in the US? I think Michael has posted something on this. In Mexico the labor time a person on minimum wage has to work to aquire the basic personal food supply came from 4 hours 15 minutes in 1987 to 23 hours 38 minutes in 2016, during a period marked by free trade agreements with the US and the impleementation of the neoliberal program: http://cam.economia.unam.mx/reporte-investigacion-123-mexico-mas-miseria-precarizacion-del-trabajo/ . Mexico is hardly an exception in this regard.
Yes, complex and simple labor engender differences in value per labor expended, but they clearly do not account for wage level differentials accross the globe. It’s enough to compare the difference in wage level for labor of the same skill (even the same job) in different regions to realize this.
Surely, Marx, Engels and Lenin did not “describe” reasons so that we could ignore what is in front of our noses?
Ricardo,
“These child-eating “Stalinists and Third-Worldists”, whoever on Earth they may be, have made quite an impression on you!”
Absolutely. I perhaps have the advantage over you in that respect given that I was studying in depth all of these issues, and taking part in the debates surrounding them back in the early 1980’s, when it was well accepted that the origin of dependency theory and centre-periphery theory came from within Stalinism and Third Worldism, and was tied to the political interests of the Soviet bureaucracy, and its attempts to build alliances with Third Worldist regimes, as part of its global strategic ambitions.
The reason I phrased it in terms of big capital versus small capital is precisely because if we are talk about large scale productive capital investment whether by foreign multinationals or by domestic capital, in a developing economy it makes sense to examine what these different types of capital historically represent, and the fact is that large enterprises have always on average paid higher wages, and provided better conditions for workers.
The points you made in that regard did not deal with that issue, because you were were talking about movements of minimum wages, not even average wages. The point is again made in relation to the situation of the standard of living of peasants and rural workers as opposed to that of workers in the cities – who are often employed in these larger businesses.
Its that which encourages peasants and rural workers to want to move to the towns in search of those better conditions. In fact, the authorities have tried to prevent the migration to the towns being too great. The China Labour Bulletin says,
“Probably the most important factor in wealth inequality in China today is the urban-rural divide: Not simply because of the substantial income gap between rural and urban households but also because nearly all of China’s best healthcare, education, cultural and social services are located in urban areas. Whereas urban residents have reasonably unfettered access to such services, rural residents often have to pay excessive fees on top of the cost of travelling to and staying in the city that provides the services. Although smaller and, to some extent, medium-sized cities have begun to relax their administrative barriers to rural migration, making these cities a more viable option for migrant workers, there are no signs that major cities like Beijing, Shanghai and Guangzhou will make it easier for migrants to gain access to their jealously guarded social welfare, healthcare and education systems.”
That is just a repetition of the point that marx makes in Capital I, describing the way that agricultural labour in Britain was attracted into the cities in search of higher wages and better conditions, which in turn caused agricultural wages to rise, which in turn caused capitalist farmers to seek to introduce labour saving technologies, to create a relative surplus population, and thereby reduce wages once more.
“Between 1849 and 1859, a rise of wages practically insignificant, though accompanied by falling prices of corn, took place in the English agricultural districts. In Wiltshire, e.g., the weekly wages rose from 7s. to 8s.; in Dorsetshire from 7s. or 8s., to 9s., &c. This was the result of an unusual exodus of the agricultural surplus population caused by the demands of war, the vast extension of railroads, factories, mines, &c. The lower the wages, the higher is the proportion in which ever so insignificant a rise of them expresses itself. If the weekly wage, e.g., is 20s. and it rises to 22s., that is a rise of 10 per cent.; but if it is only 7s. and it rises to 9s., that is a rise of 28 4/7 per cent., which sounds very fine. Everywhere the farmers were howling, and the London Economist, with reference to these starvation-wages, prattled quite seriously of “a general and substantial advance.” What did the farmers do now? Did they wait until, in consequence of this brilliant remuneration, the agricultural labourers had so increased and multiplied that their wages must fall again, as prescribed by the dogmatic economic brain? They introduced more machinery, and in a moment the labourers were redundant again in a proportion satisfactory even to the farmers. There was now “more capital” laid out in agriculture than before, and in a more productive form. With this the demand for labour fell, not only relatively, but absolutely.”
(Actually not in a moment as Marx suggests, because it took ten years for this machinery to fully do the job, and create a relative surplus population large enough one more to depress agricultural wages.)
The fact that China has industrialised to such an extent, and it is not just China, but all of the other Asian Tigers, assorted Latin American countries, and now a range of African Lion economies that are growing rapidly does undermine the argument of dependency theory, and of centre-periphery theory, and particularly of the idea of “the development of underdevelopment” precisely because those theories back in the 1970’s and 80’s insisted that no such industrialisation and development could occur, precisely because of the subordinated, super-exploited state of these countries!
Indeed, logically, if they are being super-exploited, and surplus value is being drained from them, no such development should occur, they should at least be stagnant if not going backwards! These are countries that were very poor, and had very little capacity to produce surplus value so as to accumulate and grow. If they were being super-exploited, so that what little surplus value they might be able to produce was being drained from them to go to the metropolitan centres, then accumulation should have been absolutely impossible, and capital should if anything have been contracting.
It was always a totally ludicrous notion that the explanation for the growth and wealth of the developed capitalist economies was some endless cup of plenty in the developing economies, that somehow kept being filled up so that more surplus value could be once again drained out of it, rather than the truth that even Adam Smith recognised, and that Marx developed, which is that the wealth of nations comes from the accumulation of capital, which in turn is derived from the production of surplus value on an ever expanding scale.
And it is that which enables wages to rise even as profits rise, as a result of the increase in production, so that the share of wages in the value of the commodity falls, even as wages rise.
“it was well accepted that the origin of dependency theory and centre-periphery theory came from within Stalinism and Third Worldism”
Jajaja… it was “well accepted”? Some “advantage” you have going on there…
Boffy, either you haven’t understood at all what dependency theory is all about, or else we’re talking about two different things. But this is already going round in circles, so I’ll leave it there. Good luck with that.
Boffy: “Probably the most important factor in wealth inequality in China today is the urban-rural divide: Not simply because of the substantial income gap between rural and urban households but also because nearly all of China’s best healthcare, education, cultural and social services are located in urban areas. Whereas urban residents have reasonably unfettered access to such services, rural residents often have to pay excessive fees on top of the cost of travelling to and staying in the city that provides the services. Although smaller and, to some extent, medium-sized cities have begun to relax their administrative barriers to rural migration, making these cities a more viable option for migrant workers, there are no signs that major cities like Beijing, Shanghai and Guangzhou will make it easier for migrants to gain access to their jealously guarded social welfare, healthcare and education systems.”
Nobody but Boffy could both miss, and make, the point of the argument that refutes itself– namely that the Chinese hukou system, that ties individuals to the area of their birth, is used to deny benefits to migrant workers; and in fact, that this has been very important to the “cheap labor policy” as first formulated by Deng and others in keeping down the “social wage.”
The movement of young people, particularly young women into the factory work forces of the Guangdong is a movement from rural to urban not based simply on the “attractiveness” of the urban wage– but on the backward condition of Chinese agricultural production, where the average plot size is (still?) less than hectare, and the modernization of China requires the expulsion of the rural population from its ties to the land. This isn’t being accomplished in China without resistance, protest, and those eternal tools of accumulation, swindle and the use of force by local party organizations which see in the sale and securitization of land, a cash flow.
Whereas Marx had anything but an idealized analysis of capital, Boffy only has an idealized advert for capital accumulation.
Edgar,
“The way to counter this is not to say that super exploitation is a myth but to point out that by improving their living standards we actually contribute to improving ours (in the long run) and we also point out that capitalism, instead of recognising this reality, retards it by playing workers off against each other and promoting all sorts of backward ideas.”
The idea that “we” improve “their” living standards comes over as a bit patronising to “them”. Their living standards rise as a consequence of capital accumulation and rises in productivity. Often that arises as a result of foreign direct investment, but usually it requires some domestic investment and capital accumulation first, to create the necessary infrastructure. Some of that could have arisen from colonialism, for example, Marx’s description of the revolutionising role it played in India, but a lot of the capital accumulation in China has been the work of Chinese capitalists, and workers and peasants turning themselves into capitalists, not foreigners. Imperialism simply puts rocket boosters under such development, by making large amounts of productive-capital available quickly.
As Geoffrey Kay pointed out a long time ago now, the immediate consequences of that are not what neoclassical theory would predict. Effective imperialist investment, tends to be an investment in industries that are already mature, that have a high organic composition and only require unskilled labour, which is why locating them in low wage economies is more profitable, provided the necessary infrastructure exists. But, the consequence of that, particularly where it replaces domestic production, is to cause unemployment to rise. Contrary to neoclassical theory, instead of low wages encouraging labour to substitute for capital, the opposite happens, as new highly productive capital is introduced, that requires relatively little labour.
Capital as a consequence of competition certainly does set workers against each other, but modern capitalism also tends to seek to rationalise and control such competition and antagonism. Its one reason for companies seeking to introduce single union agreements so that negotiations are conducted on a collective basis and minimising disruption.
In fact, I’m not at all convinced about the idea that capitalism encourages “all sorts of backward ideas.” As Marx points out in the Grundrisse, in discussing the Civilising Mission of Capital, it has actually done the opposite. The roots of backward ideas tend to be from pre-capitalist modes of production. The US Marxist sociologist Oliver Cromwell Cox, argued that the roots of racism lie in the fact that early capitalism/mercantilism had to reconcile its ideology of liberty and equality, with the holding of millions of colonial slaves.
But imperialism, based on industrial capital, as opposed to colonialism based on mercantilism, has an incentive to overthrow those old colonial regimes, and to open up the potential for exploiting large masses of global labour as free wage labour. It has no objective requirement for those old ideas of racism, sexism and so on. Indeed, it has an incentive to develop societies based on secularism and “liberal” democracy, as most suited to its needs.
Its why the greatest breeding ground for backward ideas is all of those undeveloped areas of the globe. Its not the US that prevents women from driving, but the feudal monarchy of Saudi Arabia, for example.
“In fact, I’m not at all convinced about the idea that capitalism encourages “all sorts of backward ideas.” As Marx points out in the Grundrisse, in discussing the Civilising Mission of Capital, it has actually done the opposite. The roots of backward ideas tend to be from pre-capitalist modes of production. The US Marxist sociologist Oliver Cromwell Cox, argued that the roots of racism lie in the fact that early capitalism/mercantilism had to reconcile its ideology of liberty and equality, with the holding of millions of colonial slaves.”
Clearly, Donald Trump gets all his backward ideas from pre-capitalist economic formations, as do Roger Ailes, Rupert Murdoch, Boris Johnson, Farage, Le Pen, Ted Cruz etc etc ad infinitum, ad nauseum.
See just as the problem with “less developed” countries is an insufficiency of imperialism, not enough capitalism, the problem in advanced countries is not enough capitalism.
“Its not the US that prevents women from driving, but the feudal monarchy of Saudi Arabia, for example.”
Given the imminent, present and real danger to the environment of the Earth through climate change, recently highlighted by scientists as worse than expected, wouldn’t preventing everyone from driving, except maybe the disabled, be the most forward looking solution.?
So in this regard isn’t it the US who have the most backward ideas?
Quite correct Sartesian. One way Marx defined ‘Barbarian’ nations was in its ‘obstinate hatred of foreigners’.
On that basis I think the US and certainly the UK qualify!
Oh, there’s way more than that that qualifies US and UK capitalism as barbarian. Way more.
A word on value “transfer.” Of course such transfer exists. That, value transfer, is precisely what markets do. Call it distribution, allotment, etc.– it means the transfer of value among capitals.
The questions, among many, are: does that transfer a) mean the “super-exploitation” of labor power in specific areas of production, and specific geographic areas b) is labor power in those specific areas compensated below its value– below the time necessary for its actual reproduction c) if so is that super-exploitation imposed on those sectors areas by the “more advanced” geographic areas and sectors d) does the super-exploitation amount to a reduction in living standards for certain areas in relation to what living standards were/are prior to the “hook up” with advanced capitalism through the world markets e) is the value transferred used to “buy off” “placate” workers in advanced capitalist areas such that workers are “participants” in super exploitation and/or exploitation of labor power in the advanced countries is mitigated in both long and short run .
Sartesian, in relation to your A to E,
A – yes
B – yes. This will become apparent through worker struggle. As I said to Boffy above super exploitation may help individual capitalists in the short term but as the struggles in 19th century Britain show it actually undermines development in the long term.
C – yes. This is why the struggles of those in the developing world are and will be more violent, retarded, prolonged and painful than even the past and present struggles of workers in the advanced world.
D – difficult to answer as this process involves forcing people off the land etc. So the answer to this depends on what you decide to compare and from what date. Some people will claim their is an easy measure one way or another!
E-yes. But this reality proceeds current imperialist relations and has been a reality from time immemorial. How well you have done from this relationship depends how high up the food chain you are, as with all things!
Edgar,
The only thing that becomes obvious from workers struggles, as Marx and Engels state clearly is the fact that so long as labour-power is sold as a commodity, workers and capitalists will haggle over the price, just as the buyers and sellers of any commodity haggle over the price. The underlying reality, as opposed to this superficial appearance is that wages are a manifestation of the value of labour-power, which is determined by objective laws.
The fact of imperialist investment of productive-capital in less developed areas, as Marx describes in Theories of Surplus Value, is to raise the demand for labour-power, and thereby to create the basis for a rise in wages.
The Chinese peasants, Indian peasants and so on do not go into the towns and cities because they have been forced off the land, but because the potential to obtain much higher standards of living exists in the towns compared to the country. There are undoubtedly instances of peasants being forced from the land – for example, the relocations in China for the Three Gorges Dam, the removal of peoples from the Amazonian rain forests, for forest clearing to establish farmland and so on, but the reasons for these land clearances are to make possible these specific developments, not to force peasants to take low paid jobs in the cities!
Nor is productive investment being foisted on countries like Singapore, Malaysia, South Korea, Taiwan, Brazil and so on by more powerful “imperialists states” so that they can super-exploit the workers of those countries. Companies will certainly seek to make as much profit as they can, but the reality is that the governments of those above countries are desperate to encourage foreign capital to invest in their economies, just as desperate as is say Scotland or England, because it is by that means that greater economic growth can occur.
But, if we examine what Marx has to say about such processes of development it is this. If we take some sphere of production, and this could be say shirt production in India, capital will move to where the rate of profit is highest. Whether that is in India or in England will depend on a range of factors, of which the actual level of wages will tend to be a minor one.
Far more important is the level of infrastructure within the particular economy, the potential to extract high levels of relative surplus value through high levels of productivity, the value of constant capital to be employed, and so on. But, let us say that all of these other factors are equal between one country and another, and the only difference is the level of wages.
In that case, if a firm in country A produces shirts, and a firm in country B produces shirts, and they sell them on the world market at a given market price, then obviously the firm in B where wages are lower will make a higher rate of profit.
If c is 1000 in both cases, and v is 200 in A, but 100 in B, and the selling price of the output is 1500, A will make a profit of 300, equal to 25%, whilst B will make a profit of 400 equal to 36.36%. But, in that case, as with the formation of an average rate of profit in general, capital will tend to move to B. The workers producing shirts in A will lose their jobs, as capital migrates. But, as Marx describes, the consequence then is that as capital migrates to B, in search of these higher profits, the price of shirts will tend to fall, as the supply of shirts rises.
If the average rate of profit is 25%, capital will continue to flow into shirt production in B, reducing shirt prices until only a 25% rate of profit can be obtained. Moreover, in the process, this will increase the demand for shirt producing labour-power in B, which will tend to cause wages for those workers to rise. The additional employment and wages, plus the additional demand for energy for the shirt factory, for transport to move materials and finished products and so on, will not only lead to further capital accumulation in B, and a further rise in demand for workers in B in these other industries, but it will also lead to the production of additional surplus value in these other industries, which then leads to additional capital accumulation.
If you take some form of production in Britain that has a low organic composition of capital, and a high rate of profit, capital will flow into this area, so that the price of production is below the value of the commodity. A portion of the surplus value produced in this sphere is not realised in this sphere. For example, say the sphere is cotton spinning. The price of production of spun yarn will be lower than its exchange value. The weaver, who may have a higher than average composition of capital, thereby buys yarn beneath its value, and in so doing obtains a portion of the surplus value produced by, but not realised by the spinner.
So, would you then claim that the spinner is being super-exploited, and that the weaver is super exploiting the spinner, and that weavers are being bought off by this super exploitation of spinners?
“The Chinese peasants, Indian peasants and so on do not go into the towns and cities because they have been forced off the land, but because the potential to obtain much higher standards of living exists in the towns compared to the country.”
There are no limits to Boffy’s ignorance.
If Boffy had been editing capital he would have purged it of all references to distressed working conditions and instead would have replaced the endless tales of child labor and extreme exploitation with a story of how happy all the workers were to be living in the wonder of capitalism, so much better than when they were forced to live off the land.
Of course today workers in China are faced with the same condition so painstakingly described by Marx in all their heartbreaking detail. For Boffy the stories of abuse and extreme exploitation are no story at all, so the story of mass suicides at the Foxconn plant is a Stalinist plot, the story of riots at the Zhengzhou factory in Henan, Third worldist conspiracy etc etc.
Boffy will regale us with stories of how Chinese workers have won 50% pay increases, he forgets to mention that this takes their hourly compensation to nearly $2, and moreover this doesn’t pay for social insurance!!
All the hardships that the super exploited are going through are hidden in Boffy, swept under the carpet and instead we are fed the story that all in rosy in the garden and that the Chinese workers have never had it so good.
Boffy is the poster boy for British chauvinism. To call it Marxism would be a perversion too far.
This is indeed a long debate. Nevertheless I will try to add some points.
1. Superexploitation. I think John Smith draws the longest straw of the main protagonists, if for no other reason than that he tries to explain theoretically some screamingly obvious facts: large tracts of the Global South live in abject poverty, be they industrial workers, agricultural workers/subsistence farmers or unemployed/informal sector people. And this is not something that just goes away. Rather it takes ever-newer forms. The World Bank in its wisdom has determined that less than 2 dollars of income per day per capita constitutes absolute poverty all over the world although we all know that in the west abject destitution has a somewhat higher threshold.
Obviously superexploitation relates to getting paid less than what it costs in the society in which workers live to conduct a life, which will allow them and their families to survive and reproduce themselves in halfway decent conditions. And this includes being able to pay for housing, (clean) water and some form of modern energy. None of the protagonists of this debare would be able to survive one night in the slums of say Dhaka (where I have never been, but I have been in a lot of similar places). Having to live under such conditions even while having a job that is enrolled in global capitalism makes a worker superexploited.
2. But missing in the debate is ground rent and the relations Marx described – not only coolies and slaves in the cotton fields but also poor peasants of Ireland – where he referred to minining and agriculture. Even Marini links his theory of the interconnectedness of Brazil and UK through the fact that it was the agricultural products of Brazil (sugar, tobacco, coffee) which could be had cheaply by the British working class which made them feel better off even though their salaries did not improve that much. Marini thinks this was the spur of the push for relative surplus value in the UK. Similarly with mining, which was conducted and to some extent still is under abhorrent conditions and yielding barely a living (as Higginbottom has pointed out, in South African gold and platinum mines to this dag, remember Marikana). This form of superexploitation was connected with rent goods and must be linked with rent because, otherwise the whole world would have been dragged down. And to Michael Roberts: the exploiters could do it because many of the workers had and to this day still have some connectedness to small-scale agriculture which sustained their livelihood. In other words: agricultural work in Brazil could give rent to land owners and profit to middlemen in Brazil plus give cheap goods when landing in the UK. Note that only sugar had significant European production competition, tobacco: not really. To this must be added other (semi) tropical goods like cotton and rubber. And where Europe produced the same raw material it would tend later on to keep the higher chains of the production (sugar refining).
3. Superexploitation in global value chains today. Here I think the logic is a little different. There is no doubt that value is transferred. If textile workers in Bangladesh work as productively and certainly as intensively as this could be done anywhere in the world albeit probably with somewhat oldfashioned equipment, the value produced and transferred is extra surplus value. In addition the goods are cheap for consumers of the west after having paid for all the intermediary chains and can thus make workers feel a little better off with stagnant wages (although this is counteracted by high costs of housing). It is significant that the low-capital intensity textile industry has by and large disappeared from the west – Zara and US sweatshops excepted. But US sweatshops also live off superexploited workers who tend to have no legal status. Why has it disappeared? Not because the rate of profit in the west has fallen, this is a post festum fact, but because it is better to preserve industries where maximum surplus value can be extracted. Because Michael Roberts: you do not account for the large tracts of unproductive workers we harness and feed in the west and they should be fed and nourished, this panel of discussants included. Productive and unproductive work is counted indifferently in all your statistics as producers of (surplus) value. Yes, they may be part of the profit averaging process but does that necessarily imply having contributed the surplus value that is evened out in the ‘transformation’ to production prices? Or just living off of it?
4. I am not convinced that there is a tendency to form one world rate of profit. It takes more proof than available. At the very superficial level, Exxon Mobil’s profits are different from BP’s and they are within the same (rent extracting) business.
5. We also need some more about the role of finance.
I believe Andrew Kliman highlighted the shortcomings of Third Worldist theory adequately when he wrote, in response to someone inquiring about “value transfers” between the Global South to the North:
“I don’t like the ‘value transfer’ metaphor (which isn’t Marx’s, BTW). Nothing is actually transferred. The total value is simply distributed different among the industries and enterprises than it would have been distributed if their products sold at their actual values.
“Clearly, companies in the technologically advanced countries receive more value per hour worked by their workers than do companies in the technologically backward countries. But that largely reflects differences in productivity.
“And if it reflects differences in productivity, it’s not an ‘unequal exchange’ of value, because the real value of a commodity, according to Marx’s theory, isn’t based on the amount of work actually done, but on the amount of work that is socially necessary. As a consequence, workers in the technologically advanced countries PRODUCE more value per hour worked than do workers in the technologically backward countries. So, if productivity in the US is 100 times that of India, for instance, and US companies receive 100 times as much value as Indian companies (or self-employed people) receive per hour worked, there’s no ‘unequal exchange of value.’
That said, I think there are differences in value received per hour worked over and above differences due to unequal productivity. For instance, as I indicate in endnote 5 to chap. 9 of my book on the Great Recession, in 2007, my estimates indicate that ‘Chinese labor productivity was about 8.3 percent of the U.S. level. Taken together, this figure and the 4.2 percent relative hourly compensation figure suggest that unit labor costs (compensation per unit of output) in China were about half as great as in the U.S.’ What this implies is that, even after we adjust for differences in productivity, the hourly compensation received by Chines workers was only half that received by US workers. So the former were more exploited.”
Kliman’s analysis of Chinese and American manufacturing indicates that the former do often endure a higher rate of exploitation, but the latter are NOT living off of surplus value produced in the Third World. The bottom line is productivity is simply higher in the centers of capital than in the periphery.
“So, if productivity in the US is 100 times that of India, for instance, and US companies receive 100 times as much value as Indian companies (or self-employed people) receive per hour worked, there’s no ‘unequal exchange of value.”
I think this is not correct, not because it is mathematically correct (it is really correct) according to the law of value, but because production is simply off loaded to third world countries. Besides, it is not correct to compare the same industries, for 2 main reasons:
1. The thirld world takes part in the same line of production, though distributed in different countries. And what is offloaded is not automatized, like assembling, so most of value added are in the 3rd countries. So, though, for example, 100 units can be produced by 1 person in a first world, it requires 100 people to assemble those same units, so thee value added in the 1st country is around 1% of the total value. It might happen that all industry productivity is just sent to the third world, so that both production advantage and vast availability of manufactured can be used in advantage.
2.The first world merely realizes value and that is so because that they develop the technology which improves productivity, that is, they make technology. They can keep the third world in check because of that, and make unfavorable conditions in trade for development of technology in the 3rd world, save for special coditions, like fighting against socialism, ideologically, which is the case of South Korea and Taiwan.
Workers A in country A produce 1 ton of steel in one hour.
What is the value of the steel (ignoring,as Marx often does, differences in constant capital values)? 1 hour.
Workers B in country A produce 1/4 ton of steel in one hour.
What is the value of the 500 pounds of steel. 1 hour
You cannot produce more value in an hour than an hour.
The difference becomes in the socially necessary time of reproduction. If the 1 hr/ton process is not yet the “normal” time of reproduction, then capital A claims the value accruing to capital B and drives B out of the market. Value is lost, gained, and in fact distributed by the market but not created in this process. The “super surplus value” accruing in the reduced time of production spent on reproducing the wage ceases to “be extra.” And the boost to profits disappears; as the tendency of the rate of profit to decline reexerts itself.
Auto workers in the US receive approximately $46/hr in wages and benefits per hour of production, and produce X number of autos per hour.
Auto workers in Mexico receive approximately $13/hr in wages and benefits and produce the same number X autos per hour.
Where is the greater surplus value extracted? Clearly in Mexico. That hasn’t exactly benefited US auto workers has it?
That’s where the issue is.
In essence, John Smith argues a) workers in the advanced countries do benefit and when Charles A challenges that responds b) the “benefit,” such that it is, is embodied in the fact that despite the obvious attacks on living standards, wages, and working conditions in the advanced countries, things would be worse for the workers in those countries, save the “super-exploitation” of labor in the “global south.”
Sartesian, Charles A recons that John Smith has already conceived the point beyond repair. Do you think that’s the case?
conceived > conceded, of course. I’ve got to stop doing this at the end of the day.
I honestly don’t know. I haven’t finished reading the book.
FWIW, to regard Marx’s critique of capital as a critique of an “idealized” version of capital is pretty preposterous, given the effort Marx went to expose and explain the sources of accumulation in child labor, women’s labor, the increases of the working day, the dispossession of the direct producers, etc.
More FWIW– That Marx uses a model of capital that abstracts, or distills, the essence of the capital RELATION, the condition of labor under capitalism, is a given. The point of such abstraction, however, is to show that exchange, on its own terms, on its own criteria, cannot account for the expansion of value. That expansion must be in the condition of labor, the relations between classes. Marx himself is always clear that “economics” is nothing but the fundamental relation of classes. The law of value is not, and could not be, the dominant law of production, the determinant of the distribution of social labor time, without, or prior to the constitution of labor power itself as a value, and value producing. So……….
So the question is, does Mr. Smith think the level, degree, and allocation of “super-exploitation” has fundamentally altered the relations between classes a) globally and/or b) locally?
Anyway, maybe I’ll be more clear when I finish his book…and then again maybe not.
One thing’s for certain– the notion that imperialism produces “modernization” and modernization is a “boon” to the poor, to the agricultural and urban workers in “less developed” countries is pure hogwash. It’s was hogwash enough for Marx to critically reexamine his former “endorsement” of the future of India under capitalism; it was hogwash before that when Engels endorsed the “progress” that the US expropriation of the territory of Mexico would bring–unless one considers Texas as a slave state progress — in the 1846 war; it was hogwash when Portugal, Belgium, France, and the UK all piled into Africa; it’s been recognized as hogwash even before a certain Marxist put forward an analysis of uneven and combined development which showed how the bourgeoisie accommodated themselves to the “pre-capitalist” property formations and that capital was incapable of accomplishing the tasks so blithely and mindlessly called a “bourgeois revolution.”
“Reluctance” (used by John Smith and Charles A above) is an ambiguous word, because reluctance is not based on ability to bribe – if you’ll excuse my reintroduction of that ill-fated term – but on fear of the consequences of not bribing.
So to me, again, the question is whether capitalists without the wealth extracted from the South would have been forced by some law inherent in capitalism, that is, beyond the volition of any capitalist actor in his capacity as a capitalist, to wage more intensive class war and sooner than has been the case. John Smith’s last sentence, where talk of reluctance has been replaced with the more appropriate notion of capitalists being compelled, seems to express that view:
“The onset of the global crisis means that they now have no choice, and so the assault on wages and the social wage in the imperialist countries is set to intensify.”
That is, the assault is set to intensify *in spite of* any capitalist reluctance.
“…whether capitalists without the wealth extracted from the South would have been forced … to wage more intensive class war and sooner than has been the case.” The question about sooner is upside down. Median earnings of U.S. workers peaked in 1973, many years before modern globalized production became a significant factor.
There was wealth extraction before the modern globalised era. And the decline or stagnation in wages doesn’t tell us whether they would have declined even further without that wealth extraction – assuming for argument’s sake that wages is the only measure here.
Nevertheless Claus, it is clearly the case that the “flight” of capital to the “global South” has been accompanied by a reduction in “benefits” to the working class in the “advanced” areas, a reduction in the numbers holding “good jobs” in “advanced” areas, the increase in poverty numbers (certainly in the US, and Japan, not certain about western Europe);; it’s also clear that the flight, the hooking up of the “global South” to the advanced capital value chains has precipitated, over time, a rise in wages– in China and Brazil for example, and that rise has triggered responses ranging from outright attack on wages and workers, to reductions in benefits, to automation to capital flight toward– I don’t know what you’d call it– the “more south global South”??– by the ruling classes in the “global south” (China’s mines in Zambia, anyone? Shooting striking miners); and it’s clear that basing an argument on speculation, like the argument “the decline or stagnation in wages doesn’t tell us whether they would have declined even more” is at best irrelevant to the issue, and in reality, simply proves the opposite argument– that the conflict and antagonisms of capitalism are unsolvable over time by “super-exploitation;” that “super-exploitation changes exactly nothing in the fundamental class relations.
In response to Claus. As I said earlier, taking my country as Brazil the backyard of US until China came around, wages and working conditions improved when US decreased. Workers organized strikes that ended the dictatorship right when US was cracking down on US workers. Civil rights in US were going strong while the dictatorship, supported by US, was being installed here. In the 30s, even amid a fascit dictatorship, workers in Brazil got far more concessions than in US. In the 90’s, service sector got stronger while in Brazil, started going heavily privatizations on key sectors such as energy, mining.
There is a certain opposition when it comes to the intensity of class struggle between these 2 countries. It’s probably the same in Latin America. Of course, wages here are much smaller than there, but not as bad as in China.
So, indeed, there is a sort of opposition between working classes between center and periphery, which is caused by alienation. During the cold war, ti was the red scare that caused all these troubles, that is, support for hawkish policies by a considerable part of US population. In any case, there was all kinds of excuses by imperialists to antagonize even the immediate interests of workers, like the scare of mass of mass destruction in the invasion of Iraq or support of the opposition in Libya.
“and it’s clear that basing an argument on speculation…”
Yes, if you find only speculation in John Smith’s book. But of course we agree that super exploitation doesn’t fundamentally change anything, since the world is finite after all. I think that’s why it’s called a bribe. The idea is not to change class relations, but to preserve them by changing class consciousness.
Call it value appropriated.
The above comment by Michael A. repeats arguments that others have tried to deconstruct throughout this discussion, just adding Kliman as authority. No there is no such correspondence in differences in productivity as demonstrated by John Smith by the tools in the kit of comparison of numbers. To add also that an argument in Marx is that all sectors do not have the same organic composition and this over time, not just like Ricardo postulated, on a temporary basis.
Having read through the whole debate twice and some of the posts three or four times, though in my heart I greatly sympathised with Smith’s arguments, I must confess that I am still sitting uncomfortably on that fence, among other reasons for those adduced by William Robinson in his ”Global Capitalism and the Crisis of Humanity,” particularly Ch1 ”Global Capital and Global Labour” and Ch3 ”Beyond the Theory of Imperialism.” Robinson argues for the rise of a Transnational Capitalist Class. He argues it is wrong to define globalisation in terms of trade rather than productive relations. ”Social and class relations become embedded in institutions and networks that are trans- or supranational.” ”Global capitalism is not reducible to a collection of discrete national economies, national capitals and national circuits of accumulation connected through an international market.” Rather, the globalisation of production has involved the fragmentation and decentralisation of of complex production processes and their functional integration into vast chains of production and distribution. Of IBM’s 329,000 employees 43,000 work in India; while the Indian Tata Group is the biggest single manufacturer in the UK. ”The class relations of global capitalism are now so deeply internalised within every nation-state that the classical image of imperialism as a relation of external denomination is outdated.”
What we really need I feel is a fundamental analysis of how the World Market modifies the law of value, which Marx himself intended. It is really astonishing that some Marxists will still have recourse to Lenin’s ”Imperialism”, which was hardly adequate even in its own day. I quote from section 8, ”Parasitism and the Decay of Capitalism”: ”As far as Scotland ….is concerned, it is said that it lives ‘on its past and Andrew Carnegie.’ ” And this at a time(1913) when Glasgow produced one third of Britain’s locomotives and the Clyde 23% of the world’s shipping tonnage!
As Robinson observes, we need to develop new concepts to explain new developments, as indeed in all sciences.
To simply write off super exploitation because Marx said different nations have different levels of socially accepted living standards is a monstrosity.All Marx said was that in any given time and space it was a given. He never said it was acceptable. So in China the current wage levels are a given but there are tremendous struggles taking place over the wage level. The standard of living in China is only acceptable to the people who are exploiting that Labour!
So yes the standard of living in China is a given, just as it is in the USA or elsewhere but in China that standard of living is an affront and in stark contract to the given wage level in the USA, for example.
We might say the given level in China has all the hallmarks of super exploitation.
The question then becomes is this super exploitation a progressive development or not. I think you would have to conclude that it is because it brings the world to the point where capitalism has nowhere left to go, except forward to socialism or backward to hell.
Super exploitation is a fact of life of capitalism and no amount of moaning about it will change that. I contend that capitalism cannot function properly without it. It was always going to happen.
All we can do politically is support workers who suffer from super exploitation in their struggles and work like hell to get first world workers to support them too. This is the difficult bit because first world workers believe that by helping super exploited workers they would be digging their own graves!!!
We then have to imagine what the world would look like if socialism became a reality in the first world. Would super exploitation exist under these conditions? How would the development proceed? Would it be any different from capitalism and if yes then how.
Finally to try to argue that the staggering levels of wage differentials can be explained by productivity not only fail to understand that we are talking about individual companies and not just nations but also that the differences in productivity nowhere near resemble the differences in wage levels. Who are the Euro-Marxists trying to fool here?
Staying at the level of observable facts , it is clear that monopoly-arising from patent, brand or other causes- coupled with very low wages in China or similar areas has led to very high rates of profit for the likes of Apple, Intel, etc. The dynamism of capitalists in pulling off this feat was amazing but the contradictions of this period-social, environmental, political- are intensifying and the capitalists are talking of( secular) stagnation, i.e problems with capital accumulation. Much that we all love Marx’s analysis in terms of value, the observable good old Price and a little bit of Sraffa’s parallel between these two, clearly points in the direction of John’s invoking of superexploitation. And with transnational monopolies, talk of unequal exchange( between MNC’s!) is not very fruitful.
Imperialism versus capitalism?
This is an extremely important issue for all Marxists. I see two fundamentally different positions:
1. The position that the explanations and laws found by Karl Marx to understand and to criticize capitalism are still valid and can be used in total and should be used to understand the economics of modern capitalism. That is particularly true of the tendency of a falling rate of profit by growing capital at the corporate level and at the level of the national economy.
2. The position that the “age of imperialism” began a new era. This made parts of the Marxian critique of capital obsolete, in particular the tendency of the falling rate of profit by growing capital. This new epoch brought “new forms of exploitation”. (Foreign trade, financial capital, government, consumers, etc.) – all neglected by Marx.
I am a representative of the first position.
With best wishes
W. Buchenberg
In German:
Das ist eine eminent wichtige Fragestellung für alle Marxisten. Ich sehe da zwei fundamental verschiedene Positionen:
1. Die Position, dass die von Marx festgestellten Gesetzmäßigkeiten weiterhin gültig sind und in Summe herangezogen werden können und herangezogen werden müssen, um die Ökonomie des modernen Kapitalismus zu verstehen. Besonders gilt das für die Tendenz der fallenden Profitrate bei Wachstum des konstanten Kapitals auf Unternehmensebene wie auf der Ebene der Volkswirtschaft.
2. Die Position, dass mit dem „Zeitalter des Imperialismus“ eine neue Epoche begonnen hat, die Teile der Marxschen Kapitalkritik obsolet gemacht hat, insbesondere die Tendenz der fallenden Profitrate bei Wachstum des Kapitals bis hin zu „neuen Ausbeutungsformen“. (Außenhandel, Finanzkapital, Staat, Konsumenten etc.).
Ich bin entschieden ein Vertreter der ersten Position.
Wal Buchenberg
Dear Wal and all
surely the point is to steer a course between dogmatism (your first position) and eclecticism (your second position).
This is what Marini did in applying Marx’s concepts to the position of the working class in nineteenth century Latin America, that was supplying raw materials and food as cheap commodities to industrial Britain. We have to allow for further development of Marx’s concepts. Labour super-exploitation has to be incorporated into the theory of value and surplus value, which in turn requires a critical development of those concepts as Marx left them to us.
This is what Lenin did in 1915/16 amidst war where the fundamental contradictions of capital accumulation were expressed as war between imperialist, capitalist states over colonial expansion.
Dialectics is not just a mantra, but the very method that we should apply to change in a changing world.
This is what we have to do. We have to understand capitalism as imperialism, and imperialism as capitalism. Marx, Lenin, Marini and us.
I have described the two existing positions, not judging them.
I note that you are rating my position as “dogmatic”.
So you flee from the necessity and from the possibility of any discussion with me.
To say Marx neglected colonialism or imperialism and the world market generally isn’t a position but a fact admitted by Marx himself.
The history of the left over the last century has been one that revolves around this issue. You could call it the chauvinists v the anti imperialists. An example being Rosa Luxemburg’s opposition to the first world war and the SPD’s support for it or British Labor movements support for colonialism vs the radical lefts opposition to it.
The fact Marx had so little to say allows certain rogues on both sides to claim they are speaking for Marx (see Boffy as an example of both a rogue and a falsifier of Marx). According to Boffy capitalism doesn’t so much come into the world dripping in blood but instead rises up like a beacon of hope that peasants flock to. Sort of like Stonehenge. The British labour movement, more than most, is infected with this kind of chauvinistic attitude. The British imagine that by their actions they are bringing prosperity, happiness and joy to a world that is the white mans burden.
In order to get a sense of what is actually happening, what the true development is, you cannot call upon euro-Marxists you have instead to listen to those Marxists who actually spring from the developing world.
Boffy literally doesn’t know what he is talking about and 300 or 400 words paraphrasing what Marx said in 1848 don’t change that fact.
Unlike Marx Boffy has not made connections with radicals living in these nations, or studied each area. he is simply making this stuff up as he goes along. A huge problem with many euro-Marxists is that they think they are experts in every subject under the sun. They think theory can be applied to everything, superimposed upon every area at any point in history. This avoids the need to actually study the thing you are describing. Euro Marxism is a poverty of method.
Sorry, I have the impression that in the eyes of the followers of the theory of imperialism the UK is still a world power and not a second-rate, indebted country without economic perspective.
W. B.
Wal,
Britain is still a world power of sorts. Just ask the devastated people of Iraq, Syria and Libya. The beast still has teeth.
Read the book, but late to this:
Don’t think it’s a question of “coming down from the fence on one side or another”. This is not an irreconcilable contradiction in theory.
Dependency theory and the development of underdevelopment, in its *non-dogmatic form*, CAN be reconciled with the theory of uneven and combined development. What dependency theory needs to do is come down decisively for the possibility of the “development of underdevelopment” within the imperialist countries themselves. This is tantamount to a form of uneven development within those same countries. Conversely a form of combined development is possible for underdeveloped countries who take a certain path, e.g. China. That path must be absolutely state-capitalist, apparently. These countries become new potential entrants to the imperialist club.
I think the dogmatic form put forward by A G Frank is an artifact of a quite exceptional era in capitalist history: the immediate postwar “Golden Age”. At the time it was assumed that the postwar signified an entirely new and permanent plateau in capitalist development in the imperialist countries. This assumption was clearly falsified by the end of the 1970’s even as imperialist capital was about to embark upon the most aggressive export of productive capital in its entire history, for the exploitation (no super-exploitation required, NB) of low wage labor in underdeveloped countries over the next 3+ decades. One would think that this would translated into an even higher level of development for the imperialist club and its working classes, on the backs of the even wider, and more “capital-intensive” (higher OCC) capitalist exploitation of the low wage underdeveloped world.
But that is not what happened in the imperialist countries. John Smith’s ambiguous comments on the capitalist class offensive against workers in imperialist countries show that he has not quite reconciled this contradiction. OTOH, it is correct that the Reagan-Thatcher counterrevolution has not swept away the New Deal postwar social compact tout court in the imperialist countries. “They” have indeed proceeded quite carefully here. OTOH, we are told that the most “progress” has been made in the USA, due to an unexplained “aggressiveness” of US capitalists. This too is true.
How to resolve this in synthesis? Only within an application of UCD to imperialist countries. In the case of the USA, it has been within the traditional sectors of US worker privilege – the skilled echelons employed in mining, transport and construction – that privileged private wages + social wage have been preserved. These workers get to buy an iPhone and play Pokemon Go. Industrial manufacturing workers, however, have been entirely 86’ed from the deal, with the fervent hope being that these die off from bad food, drugs and alcohol before they can collect their main social wage, social security and medicare. (Apparently meeting with success, if the rising incident of early deaths among “white workers” that briefly scandalized the liberal racists – cuz this is “white people” at stake, you know – is any indication). The average US manufacturing wage now hovers just above that demanded by the $15/hour movement.
The US working class as a whole, IOW, has returned to the conditions before the New Deal, in the sharply uneven conditions between manufacturing and other productive sectors of capitalist production.
Non-productive wage labor is not considered here. In an imperialist country the “marginally employed” as well as many “self-employed” are really a form of the reserve army of labor, Lazarus layers arisen from the dead like the beloved zombie movies try to tell us. Epoch of capitalist decay.
Finally, Smith’s transfer of value *does* occur, just not in the way he theorizes it. The transfer is hinged upon an *imperialist production price* set on the basis of the privileged wages and the OCC of the working class and capital of the metropolitan country. Note that when Apple produces its iPhone commodity via Foxcomm or whoever in China, it produces a *commodity-capital* that bears surplus value from the beginning to the end of its turnover. So clearly a transfer of (surplus) value is occurring even without superexploitation. Since as reflected in their much lower wages, Chinese Foxcom workers are not accustomed to the latest iPhone as part of their standard of living, an extra surplus value is generated for transfer to the US, to be realized in price by privileged US workers. US workers consume the extra surplus value as a normal part of the value of their labor power, and in exchange give up the “normal” surplus value prevalent in the production of whatever commodity is made and sold in the metropolitan country.
This I call the surplus profits of the commercial arbitrage of different labor regimes. Conversely, Apple would not export productive capital to China – another form of circulation, of capital in its (money) commodity form – unless it could capture this form of surplus-profit.
So sorry Bukharin, Lenin was right: we do not live in a One World State Capitalist Economy.
“So sorry Bukharin, Lenin was right: we do not live in a One World State Capitalist Economy”
But do we live in a world of “oppressor countries” and “oppressed countries”? Exploiter countries and exploited countries?
For the record… or to reignite the debate
S. Artesian, Michael Roberts and other commentators fear that acknowledgement of higher rates of exploitation in export-oriented industries in low-wage countries opens the door to the view that the struggle for socialism is impossible in imperialist countries because workers there, or many of them, have a material interest in maintaining imperialism.
S. Artesian asked five questions, the first and the last are: does transfer of value from low-wage countries to capitals in “advanced countries”…. a) mean the “super-exploitation” of labor power in specific areas of production, and specific geographic areas… e) is the value transferred used to “buy off” “placate” workers in advanced capitalist areas such that workers are “participants” in super exploitation and/or exploitation of labor power in the advanced countries is mitigated in both long and short run?”
My answer to both questions is yes: the prevalence of super-exploitation (i.e. higher rates of exploitation than endured by workers in Europe & N America) in export-oriented industries in low-wage countries is a palpable fact, we need a theory to explain this but to recognise its existence we need only a pair of unblinkered eyes; and yes, the imperialists have consciously sought to bribe their own workers with crumbs from their table. As Ernest Bevin, Foreign Secretary in the post-war Labour government, stated to the British Parliament in 1946, “I am not prepared to sacrifice the British Empire because I know that if the British Empire fell…it would mean the standard of living of our constituents would fall considerably,” and, to the same assembly in 1947, “British interests in the Middle East contributed substantially… to the wage packets of the workpeople of this country.”
But, no! This does not mean that socialist revolution is impossible in imperialist countries – because the crisis of capitalism (analysed in ‘All roads lead into the crisis’, the final chapter of Imperialism in the 21st Century) is so profound that the imperialists are now obliged to reverse the expensive concessions which were necessary to placate the working class and remove radical social change from the political agenda, and because immigration of workers from oppressed nations has greatly strengthened the working class in the imperialist nations. This conclusion is consistent with the Platform of the Communist International, adopted at its first congress in 1919:
“In the largest “civilised” nations, capital… bribed its wage slaves at the expense of the plundered colonial peoples, thereby forging common interests between exploiter and exploited with respect to the oppressed colonies—the yellow, black, and red colonial peoples—and shackling the European and American working class to the imperialist ‘fatherland’. But continuous bribery, the very technique that made the working class patriotic and enslaved it psychologically, was transformed by the war into its opposite. Physical annihilation and utter enslavement of the proletariat; enormous hardship, suffering, and degradation; worldwide famine—these were the final payoff for the ‘civil peace’.”
Imperialism in the 21st Century zeroes in on the greatest transformation of modern times, the global shift of production to low-wage countries. Inevitably, there are many gaps and many questions are begged to which it offers no answers. It does not include a study of conditions within imperialist countries, necessary for firm conclusions to be drawn on the contradictory position of workers there. Neither does the book say much about other forms of large-scale imperialist value-extraction – the ongoing plunder of miners and mineral resources, the wealth harvested from the multitude of farmers and plantation workers producing food for export; the hundreds of billions of dollars siphoned off each year by the servicing of external debt and rapidly-growing domestic debt (i.e. debt issued in national currency, as opposed to hard currency external debt). A complete picture of contemporary imperialism requires all of these elements.
I addressed the prospects for revolution in imperialist countries perhaps most sharply in the conclusion to my article in International Socialism Journal 140 (‘Southern labour—“Peripheral” no longer: A reply to Jane Hardy’ http://www.isj.org.uk/index.php4?id=922&issue=140):
“Capitalism’s imperialist outsourcing fix allowed capitalists in Europe, North America and Japan to restore profitability while postponing a head-on confrontation with workers. The beginning of the “great stagnation” shows the 25-year respite from crisis is now over. Imperialist governments have started to tear up the social contract and revolution is once again on the agenda in imperialist countries, while wave upon wave of strikes involving tens of millions of factory workers, agricultural labourers and miners, from South Africa to Indonesia to Bangladesh to China, are signs that the imperialist fix brings with it new contradictions. (…)
“Capitalism now confronts its greatest ever crisis, one that will end, in the words of the Communist Manifesto, “either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.” But the massive reinforcements to the global working class, overwhelmingly youthful and highly female, in all corners of the earth, is a cause for us to rejoice and our enemies to despair… Along with the increased presence of migrant workers and of women in the working classes in imperialist countries, the transformations of the past decades have dramatically changed the face of the world working class, which now much more closely resembles the face of humanity, and they improve its prospects of prevailing in coming battles. No longer is the working class primarily white, male, and located in imperialist countries….
“Acknowledging the existence of higher rates of exploitation in low-wage nations [does not] mean “pitting the interests of workers in the core capitalist economies and developing countries against one another”. It is capitalism itself that pits workers into competition with each other. Marx pointed out many times that, as a purely economic movement, workers are at a huge disadvantage—we must sell our labour power or starve; we are forced to compete for work with those who have none. The onset of capitalism’s greatest crisis means that the workers’ movement can fight defensive battles but can only advance, anywhere, by fusing the economic struggle with the struggle for political power, by beginning the process of converting itself into a revolutionary political movement, by gathering around itself all oppressed, exploited and marginalised peoples.
“Neoliberal globalisation’s transformations have sharpened competition between workers north and south, and reveal ever more clearly that “national” solutions proposed by labour leaders in imperialist countries strengthen xenophobia and lead towards fascism. If US and European workers do not wish to compete with their sisters and brothers in Mexico, China etc, they must join with them in the struggle to abolish the racial hierarchy of nations and the tremendous disparities associated with it, and to achieve an authentic globalisation—a world without borders—in which no one has more right to a job, an education or a life than anyone else. The path of socialism is nothing else than the struggle to eradicate the gigantic differences in living standards and life chances that violate the principle of equality between proletarians. As Malcolm X said, “Freedom for everybody, or freedom for nobody.”
Expanding on the last few sentences: socialism is the name for a society in transition from capitalism to communism, in which the working class has replaced the dictatorship of capital with the dictatorship of the proletariat and uses this political power to expropriate the exploiters and submit the means of production to the conscious control of the producers. To Marxists nothing about this should be controversial, nor that this is necessarily an international process, a global class struggle. However, I charge my euro-Marxist critics, and those still sitting on the fence, with ignoring the implications of this. Like them, I was won to the socialist movement because it actively opposes all social hierarchies and forms of oppression which violate equality between workers. Whatever one thinks about international differences in the rate of exploitation, it is indisputable that the gravest violation of equality between workers arises from the imperialist division of the world – does anyone seriously dispute this? Overcoming the horrendous legacy of imperialism is a central task of the socialist revolution, and is one of many reasons why we should learn from and be inspired by Cuba’s unparalleled record of internationalism. When Cuba’s Public Health Minister Roberto Morales was asked why his small island had sent more doctors to fight Ebola than the rest of the world, he answered that Cuba’s solidarity “is carried out under the principle that we don’t give what we have left over; we share what we have.” This is proletarian internationalism in practice, it is exactly what Malcolm X meant when he said ‘freedom for everybody, or freedom for nobody’, and the euro-Marxists’ virulent hostility to the Cuban revolution and its communist leaders is entirely consistent with their renunciation of Lenin and their denunciation of the idea that imperialism, if it still has any contemporary relevance at all, has anything to do with subjugation and plunder.
John,
I also asked b, c, d. I also asked “So the question is, does Mr. Smith think the level, degree, and allocation of “super-exploitation” has fundamentally altered the relations between classes a) globally and/or b) locally?”
I also put a challenge out there to “redo” or show the “real rates of surplus value” that you think accrue to industries– and that show that the differences in rates of surplus value are in fact determined by the difference in wages.
For example, US manufacturing in NAICS class 31-33 had, in 2013, by my calculations a s/v ratio of 4.29, based on an hourly wage + 30% for benefits of about $33/hr.(stats from the US Annual Survey of Manufacturers).
US Petroleum extraction, with a compensation of about $63/hr in 2013 had an s/v of about 16 (with a rate of profit about 1/3 that of US manufacturing in general).
The issue really isn’t if my numbers are correct; the issue is what are the real numbers. Let’s say everything I know about US industrial production is wrong. Everything you know about global production is right: What are the real rates of surplus value in the US? What are the real rates of surplus value in Brazil, or Vietnam, or Zambia, or China.
I have no disagreement that auto workers in Mexico paid $13 dollars an hour making autos for a major international automaker are more exploited than there North American counterparts. However, there is no evidence that the higher wage for the North American workers depends on that lower wage for the workers in Mexico. Indeed the whole course of the auto industry workers in the US is that compensation, benefits, employment, work rules have all been under attack, and that attack involves the “flight of capital.”
Things might have been worse for NA workers if there was no flight of capital, no “super-exploitation” of the South? That’s speculation, not analysis, plus “what might have been” doesn’t count. What has occurred in the conditions of the working class since 1979 simply does not confirm a value transfer “bribing” workers.
And then there’s this: Posun Steel, most efficient steel maker in the world– average wage for worker is $18/hour. Average time of production for 1 ton of cold rolled steel– 1 hour; China– steel worker wage $3.25 per hour; average time of production for 1 ton of steel approximately 30 hours. Where are the greater rates of surplus value being extracted? I think it’s fair to ignore the differences in constant capital. Marx does exactly that in many places, or “sets” it at zero, and moreover if the organic composition doesn’t matter– if increased productivity is irrelevant, then indeed we can ignore differences in “c.”
I think there’s much to be explored here, including Marx’s obvious ambiguity about the impact of machinery on the amplification of relative surplus value.
Sartesian,
” However, there is no evidence that the higher wage for the North American workers depends on that lower wage for the workers in Mexico.”. Not only is there “no evidence”, but quite que opposite is true! Dislocation of productoin enables wages to be pushed downwards accross the board, in the US and in Mexico and elsewhere. Even keynesians will recognize this! And in fact superexploitation (or an increased absolute surplus value) in the periphery enables a higher relative surplus in the center – it doesn’t better the lot of the workers in industrialized countries (!). So I guess you’re right on that?
And how you can assess difference in productivity while ignoring differences in constant capital, and claim to follow Marx on that escapes me!
Cheers
The difference in productivity is too large. It sounds like we are talking about different types or quality of steel. For example, desktop computer chips are much cheaper than those for servers, given that the latter must be tested extensively. The military grade chip is much, much more expensive, sometimes by 1000x, due their reliability. So, what is used is generally older generation chips. Those that are used to explore other planets, are even more expensive, given that they must stand even harsher conditions and radiation levels of a nuclear war. In this case, the special steel is only accounts for a small part of the market.
In case the type of steel is the same, well, a machine that yields 1/30 of the output must be really, really, devalued, so the constant capital must be really smaller and the rate of profit tends to be much higher. It could also be that China is having losses to keep jobs. It’s somewhat similar to subsidizing agriculture in Europe or US.
Ricardo: “And how you can assess difference in productivity while ignoring differences in constant capital, and claim to follow Marx on that escapes me!”
1. Because the differences in productivity are already manifested in the time production.
2. Because Marx does exactly that in various examples he uses in volume 1 of Capital (and in other manuscripts. From Chapter 9 of Volume 1 :
“From what has gone before, we know that surplus-value is purely the result of a variation in the value of v, of that portion of the capital which is transformed into labour-power; consequently, v + s = v + v’, or v plus an increment of v. But the fact that it is v alone that varies, and the conditions of that variation, are obscured by the circumstance that in consequence of the increase in the variable component of the capital, there is also an increase in the sum total of the advanced capital. It was originally £500 and becomes £590. Therefore in order that our investigation may lead to accurate results, we must make abstraction from that portion of the value of the product, in which constant capital alone appears, and consequently must equate the constant capital to zero or make c = 0. This is merely an application of a mathematical rule, employed whenever we operate with constant and variable magnitudes, related to each other by the symbols of addition and subtraction only.”
Semyorka:
1. “The difference in productivity is too large.” OK then, reduce that ratio. In 2007, I believe, a comparison of China’s Baosteel’s time of production per ton in its advanced plants to that of Japan’s Nippon Steel of Japan was made. That ratio was 8:1 with China being the 8.
2. We’re not talking specialty steels. We’re talking cold rolled steel.
3. Agriculture in the US and in Europe is not subsidized to “maintain jobs.” The portions of the population engaged in agricultural activity in the US and the advanced countries of the EU is below 4%. Subsidies are provided, and in the US they mostly go to the largest, most profitable firms, for the benefit of the owners.
4. regardless of how little or much the devaluation of the constant capital, where is the greater rate of surplus value? Korea, with wages at $18/hr, or China at $3.25 hour?
And I repeat the challenge: What are the “real” rates of surplus value extracted in US industries, and how can we explain those differences in rates where in fact greater rates and masses of surplus value are extracted in industries (petroleum, chemicals etc.) with much higher technical, and value, compositions of capital?
Sartesian,
“Agriculture in the US and in Europe is not subsidized to “maintain jobs.” The portions of the population engaged in agricultural activity in the US and the advanced countries of the EU is below 4%. Subsidies are provided, and in the US they mostly go to the largest, most profitable firms, for the benefit of the owners”
Exactly.
With regards to the quote from Capital, It’s not discussing differences in levels in productivity! Yes, constant capital is abstracted from in differetnt places, but not where the process being discussed is the difference in levels of productivity (I’m pretty sure?), precisely because increases in productivity arise from technical innovations spurred by capital accumulation, which alter the organic composition of capital.
And with regards to your challenge, I think it raises an interesting issue. It’s one thing to compare steel production in x and y country and asses the producticity of labour in terms of the product that each of them produces, the necessary labour time in each and so on. But it’s difficult if both form part of a value chain so that commodity produced in x enters production in y. In that case, if we take the market value of the product of worker in x and substract the neccessary labour time, it may seem like this yields a lower rate of exploitation than the one in y, because y is more productive and produces a greater market value and has a shorter necessary labour time. But this could also be due to the value transfer being discussed in michael’s post and throughout plenty of comments. That is, value produced in x is transferred to the capitalist in y and makes the labor of worker in y seem more productive than the one in x. But we’re not comparing the rate of production of similar use-values. We’re comparing the rate of market values in each stage of a single industrial process. And in that case how do we say which is more productive? Reducing value to market price? Aren’t both work-hours in x and y socially necessary labour time in the production of the same commodity?
It does seem to have a difference in quality and type of cold rolled steel: https://en.wikipedia.org/wiki/Cold-formed_steel#Common_section_profiles_and_applications
You have to consider also the value variable capital in the formation of the final product and how frequently the machines are updated. The advanced capital will be quite higher if that is more technology applied and if the rotation period is smaller, that means smaller surplus. The variable capital usually comes from periphery countries (which is why they were colonized in the first place).
And you seem to consider that the number of workers is the same in both industries or at least inversely proportional to the productivity.
“With regards to the quote from Capital, It’s not discussing differences in levels in productivity! Yes, constant capital is abstracted from in differetnt places, but not where the process being discussed is the difference in levels of productivity (I’m pretty sure?), precisely because increases in productivity arise from technical innovations spurred by capital accumulation, which alter the organic composition of capital.”
We can make certain reasonable assumptions about the differences in “c”– if we need to; but we don’t need to. We are dealing with an argument that says essentially, the lower the wage, the higher the rate of surplus value, regardless of the ratio of c:v. The issue is s:v, and a greater or less ratio of c:v, is “subsumed” more or less in the ratio of surplus value to the variable capital.
“But it’s difficult if both form part of a value chain so that commodity produced in x enters production in y. In that case, if we take the market value of the product of worker in x and substract the neccessary labour time, it may seem like this yields a lower rate of exploitation than the one in y, because y is more productive and produces a greater market value and has a shorter necessary labour time. But this could also be due to the value transfer being discussed in michael’s post and throughout plenty of comments.”
That too is similar to Mr. Smith’s argument. But– the reduced production times for steel production in S. Korea and Japan precede China’s entry into the world markets, precedes the expansion of China’s steel production capacity, and if anyone has any evidence that China’s steel production enters the global value chain to make steel production in any of the advanced countries, and makes that production seem more productive, I’d love to see it. In this case the “y,” steel production at Korea’s Posun or at Japan’s Nippon Steel, isn’t “producing greater market value.” It is extracting greater rates of surplus value despite the significantly higher wage compared to the wage paid to China’s steel workers.
Yep, that’s fine. You’re going back to the case where two capitals are producing the same use value and it is clear which is more productive. I don’t intend to deny this exists! But it doesn’t address the issue of measuring the rate of surplus value in different stages of a commidity chain.
Sartesian: “does Mr. Smith think the level, degree, and allocation of “super-exploitation” has fundamentally altered the relations between classes a) globally and/or b) locally?”
To avoid a semantic discussion about what ‘fundamentally’ means, let’s substitute this with ‘profoundly’ – in which case, my answer is yes to both a) and b) – but this is true of the entire imperialist epoch, i.e. from the closing decades of the 19th century, as Marx and Engels and of course Lenin and his comrades recognised. Social democracy, which Lenin renamed social imperialism, has in one form or another dominated the labour movement in the imperialist countries and is, in its essence, a counterrevolutionary alliance between capital and labour, secured by bribery, as the Platform of the Communist International quoted in my earlier post explains, and as is vividly illustrated by the quotes from Ernest Bevin. A related question is how this has been further modified by neoliberal globalisation. As I have emphasised in previous posts, this is a highly contradictory process. The combination of increased mobility of capital and militarised borders restricting the mobility of labour has significantly shifted the balance of class forces in favour of the former, increasing capitalists’ ability not only to rule but to divide and rule, conceding higher wages, social security etc to most workers in imperialist countries to pacify them and ensure there will be no serious domestic resistance to the razor wire, napalm, military coups and death squads they can then unleash against the working people of oppressed nations.
“I also put a challenge out there to “redo” or show the “real rates of surplus value” that you think accrue to industries– and that show that the differences in rates of surplus value are in fact determined by the difference in wages. For example, US manufacturing in NAICS class 31-33 had, in 2013, by my calculations a s/v ratio of 4.29, based on an hourly wage + 30% for benefits of about $33/hr.(stats from the US Annual Survey of Manufacturers).”
I respect your extensive knowledge of Marx’s theory of value, so I am amazed you think you can calculate the rate of surplus value from ‘value-added’ data supplied by the Bureau of Labour Statistics. What, I wonder, do you calculate the rate of surplus value to be in NAICS 52 (finance and insurance)? From a Marxist standpoint this question is absurd, since no value whatsoever is generated in this sector; I ask it in order to reveal the absurdity of your calculations. I’m not sure it will ever be possible to make a reasonably accurate calculation of country-level or sector-level rates of surplus value – this would require, amongst other things, vast knowledge not only of the quantities of intermediate inputs consumed in production but also the conditions of their production. Maybe we could work out approximate magnitudes, but before we get there we need to considerably refine our concepts and methodologies. This is why my book is overwhelmingly concerned with qualitative relations and is not so brave or so foolish as to attempt to calculate what it is incalculable.
“I have no disagreement that auto workers in Mexico paid $13 dollars an hour making autos for a major international automaker are more exploited than there North American counterparts. However, there is no evidence that the higher wage for the North American workers depends on that lower wage for the workers in Mexico. Indeed the whole course of the auto industry workers in the US is that compensation, benefits, employment, work rules have all been under attack, and that attack involves the “flight of capital.”
I’m glad you agree that Mexican car workers ‘are more exploited’ (I take this to mean ‘are subject to a higher rate of exploitation’, i.e., according to my definition, super-exploitation) than their North American counterparts. All you have to do now is to generalise this insight to all other instances of outsourcing motivated by capitalist hunger for cheap labour. However, it is a gross simplification of my argument to suggest that the higher North American wages depend on lower wages in Mexico. Speed-ups and wage repression in the USA has helped to restore the profitability of the US auto industry, so too has the outsourcing of more and more production tasks to Mexico and other low-wage countries. Without the enormous contribution of the latter, US auto bosses would have been impelled to mount a far more aggressive attack on North American wages – or go under.
“Things might have been worse for NA workers if there was no flight of capital, no “super-exploitation” of the South? That’s speculation, not analysis….”
So you say. But if you read my book with your eyes open you will see that there is a great deal of analysis supporting my conclusions. You may disagree with the analysis, but I cannot accept that you dismiss my arguments as worthless speculation.
“Posun Steel, most efficient steel maker in the world– average wage for worker is $18/hour. Average time of production for 1 ton of cold rolled steel– 1 hour; China– steel worker wage $3.25 per hour; average time of production for 1 ton of steel approximately 30 hours. Where are the greater rates of surplus value being extracted? I think it’s fair to ignore the differences in constant capital. Marx does exactly that in many places, or “sets” it at zero, and moreover if the organic composition doesn’t matter– if increased productivity is irrelevant, then indeed we can ignore differences in “c.”
First of all, your example is a special case – my book cites a great deal of evidence that, by and large, imperialist countries and low-wage countries produce and export different commodities. This is of great significance, as I will explain shortly. Considering your special case, let’s begin with some assumptions that we can later relax: a) that workers in more productive and less productive steel mills are all paid the same wage, b) that they all work with the same intensity, and c) the market price of steel is determined by the average socially-necessary labour time required for its production (this assumption also excludes value transfers into the steel industry from branches of the economy with lower organic composition of capital). In this case, all of the labour expended in both steel mills enters into the calculation of the socially-necessary average, the capitalist owners of the more productive steel mill will reap surplus profit, and the owners of the less productive will reap below-average profits. Should the latter be forced into bankruptcy, the average socially-necessary labour time to produce a ton of steel would fall, and with it its price and the surplus profits of the surviving capitalist.
What’s going on here? First, the steel sector as a whole generates more value than would be the case if all steel mills were as productive as our more advanced steel mill (because the total quantity of socially-necessary labour expended in the sector is higher), and, assuming the organic composition of capital in the steel sector is the average for the entire economy, the steel sector will also appropriate (i.e. capture) more value in the same proportion. Second, the owner of the more productive mill will capture a disproportionate share of this value, at the expense of the less-productive mill owner. The big question is this: do the workers in the more advanced mill generate more value per hour or day than those in the less advanced mill?
In the sole reference in Capital to the difference between the individual value of a commodity and its social value (vol. 1, p435), Marx says: “The exceptionally productive labour operates as intensified labour; it creates in equal periods of time greater values than average social labour of the same kind.” I understand Marx’s statement that “exceptionally productive labour operates as intensified labour” to mean that the effect, from the point of view of this individual capitalist, is *as if* his workers were working more intensively than average; the two cases are analogous, but not identical, and the differences between them are important. Since value is a social relation not a thing, what matters in the calculation of the rate of surplus value is the social value of the commodities produced, not their individual value, yet it must be remembered that the social value is determined not exclusively by the productivity of labour in the more advanced steel mill but by the average productivity of labour in the steel sector as a whole, and that the higher rate of surplus value in Posun Steel depends on the survival of less-productive steel mills, or, as Marx says in the continuation of the above quote, “this extra surplus value vanishes as soon as the new method of production is generalised, for then the difference between the individual value of the cheapened commodity and it social value vanishes.”
So, Sartesian is right – on the basis of his figures, there is indeed a higher rate of surplus value in Posun Steel than in Chinese steel mills, even though exploitation in the latter may be more brutal and, to the extent that heavy manual labour is replaced by machine-minding, its labour more intense. And I was wrong to argue, in my book (p241), that “the more productive capitalists’ extra profits derive not from their own more productive workers but from surplus labor extracted from workers employed by technologically deficient capitals” – in other words, I ascribed these extra profits to value transfers from less productive capitals rather than to the higher pace of value generation within the more productive firm. I also agree with Sartesian that, to compare the rate of exploitation in one steel mill and another, we can ignore ‘c’ – the equation for the rate of exploitation contains just two variables – ‘s’ divided by ‘v’. However, Sartesian is wrong on one very important point: we cannot know the absolute level of exploitation in either steel mill, since the price of steel reflects its price of production, not its social value – these will only coincide if the average organic composition of capital in the steel sector is no more nor less than the average for the entire global economy. To the extent that steel production is more capital-intensive than the economy-wide average, its price of production is higher than its social value, and the difference is made up of value transfers from sectors with lower organic composition.
It follows from the foregoing that ‘c’ (i.e. organic composition) is irrelevant when considering differences in the rate of surplus value between different capitals producing identical commodities, but becomes extremely relevant when considering differences in the rate of surplus value between capitals producing different commodities. It also follows that the opposite is true of productivity – when considering the rates of surplus value between different steel mills, the difference between labour productivity in one mill and the average across the steel sector is crucial, but it is irrelevant when considering rates of surplus value between different sectors, since now we are no longer comparing individual values with social values, we are comparing one social value with another.
On the face of it, the above quote from Marx appears to contradict his statement (vol. 1, p137) that “variations in productivity have no impact whatever on the labor itself represented in value… The same labor, therefore, performed for the same length of time, always yields the same amount of value, independently of any variations in productivity.” The contradiction between Marx’s two statements is only apparent because, in the first of these quotes, Marx focuses on firm-specific levels of productivity while in the second of these quotes he abstracts from this. The different rates of surplus value Marx talks about in the first quote deal exclusively with productivity differences between individual firms in a given sector, i.e. between firms producing identical commodities but in different amounts of time.
This matters a lot, because the steel sector is a special case. In general, as stated above, trade between imperialist nations is in similar goods, while, in contrast, trade between imperialist and developing nations are in different goods. To illustrate the difference between the special case and the typical case, let us now imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.
To take another step towards real life, let us now assume that the steelworkers have a powerful union that forces their employers to pay higher wages than those paid to the hamburger flippers. Their rate of surplus value will now be lower than in the fast-food sector, and if the steel bosses succeed in passing on this higher labour costs by increasing the price of steel, value-transfers from the rest of the economy will increase. Substitute imperialist economies for steel mills and export-oriented industries in low-wage countries for the fast-food sector, and readers will see why I insist that nothing about contemporary relations between imperialist and low-wage economies can be understood unless we introduce the concept of superexploitation.
John,
Very interesting and thought-provoking post. Lots to deal with here. It will take me a little time to organize a response
I buy toners for my printer, made in China, for 10% of the price of another one made in China, but with a trademark on it. The difference is in quality. Don’t you really think that the steel also has the same issue of quality the yield is higher? There are many types of rolled steel, the yield in output could also be that the material needs longer working. Even though the output is lower, so the quality is higher, or higher than it apparently is judging by the price. So, it could be that the Chinese worker is really more exploited.
For example, 98% of all chips produced in the world are micocontrolers, that is, control functions of daily products, like freezers, cars, and so on. So, it might be that you are comparing different market sectors, even though they look like the same if you say they are of microchip production.
“For example, 98% of all chips produced in the world are micocontrolers, that is, control functions of daily products, like freezers, cars, and so on. So, it might be that you are comparing different market sectors,”
These are numbers provided by various studies of production times for the same types of steel– cold rolled, hot rolled, etc. The numbers are for more than just Korea and China, so I don’t think the data is being manipulated in the manner you suggest.
John,
A little bit of the prelims– to hash out:
1. “profoundly”– OK, I’ll accept that. Which means, I think, that we agree that capital is accumulated through the exploitation of labor-power, and we’re not talking about any of the “popular” “explanations” re primitive accumulation, or looting, etc.
2. Having accepted profoundly, I don’t know how unique this “profound” difference is now with the movement of capital to the “global South” compared to the previous history of capitalism. That is to say, internally and externally, capitalism has always availed itself of “super-exploitation”– the case of the construction of railroads in the US post Civil War– with the ultra-exploitation of African-Americans in the South; of Asian-origin laborers in California and the West; and with the acquiescence of the “white” European-origin working class, where even its resistance was expressed through racism, bigotry, etc.
3. Nor am I sure that what you analyze is “profoundly,” qualitatively distinct from intra-national distinctions in wage rates; lower wages for example for women; of Hispanics; the importation of migrant labor subjected to systematically greater abuse, oppression, attacks etc.
4. All that being said, what I do agree with is the inadequacy of the notion that difference in wages in different countries, in different sectors, and even within a sector but connected with different jobs is thoroughly or “profoundly” explained by references to the costs of the reproduction of that labor power. In my studies of Marx, I find it apparent he uses the “labor compensated at its value” as an abstraction based precisely on the notions that labor is compelled to present itself as a commodity in the market, (having only a value in exchange to the laborer) AND the fact that Marx’s critique begins with, maintains, the notion that all commodities exchange at their actual values– he maintains that argument until he shows how capital’s own laws for the allocation of the total surplus value force, mandate an “adjustment” to value, i.e. prices of production– while the total social value remains the same.
5. So yes, Marx presumes and maintains labor is compensated at its value, at the costs of its reproduction as that is the, more or less, “default” case for a critique capitalism, and that is the only way to make an intelligible critique of the earlier theories of surplus value.
6. All that being said, compensating labor at its value, at its costs of reproduction, is a “fuzzy” notion, as clearly, the costs of reproduction are elastic, mutable, and can be driven down by a number of methods which still allow the working class to reproduce itself, i.e. reproduce itself sufficiently for the needs of capital at any particular moment. The concern of capital for the reproduction of the working class; the NEED of capital for the reproduction of the working class is like everything else, a question of ratios, proportions, relations. X% of the working class needs to achieve compensation that allows itself to reproduce and provide additional Y% of workers within Z years. And in order to do that, there is a corollary that practically screams out : “1-x% do not have to be compensated at that rate.” More on this later, but it’s readily apparent even within a single industry, a single sector, a single country. Auto workers made more than steel workers (in equivalent, unskilled “production” work). Railroad conductors make more than maintenance of way workers, and in fact railroad conductors performing the simplest labor are compensated more highly than maintenance of way workers (including signal personnel) operating the most complex machinery.
7. I’ve gone back and read just about everything I have that Marx wrote on a) relative surplus value and b) the impact of machinery c) the productivity of labor….and I don’t think Marx has “apparent contradictions” in his treatment of the interrelationship of these three factors, I think he has real, repeated, explicit contradictions in his treatment of these, where at one point he restricts the improvements in relative surplus value to solely reduction in the value of labor power through reducing the costs of necessities; and then several chapters, or years, later and before, he explicitly states “Machinery increases relative surplus value.” So I’m in the middle of trying to hash that out. And to be fair, and nothing pains me more than having to be fair, I have to acknowledge the impact of your arguments in making me review and rethink this. Anyway that’s for much later, after much more work.
8. I tried reading a book once with my eyes closed, but then I could never remember where I was when I went back to it after an interruption. Hence, I’m read all my books with eyes open.
9. I do not use statistics from the US BLS for calculations of rates of surplus value. I use the US Dept. of Commerce Economic Census, Annual Survey of Manufactures. I use the following categories from the survey: year: number of production workers: annual production hours: annual wages of production workers– plus I do a calculation to account for benefits, based on the percentage of total salaries an industry pays out additionally in benefits–; total costs of materials used in production (including shipping); total additional costs (includes depreciation); and…..total value of shipments for the year. I know it’s an approximation, but what actually counts here is the trend; as well as the differences between sectors– say between chemical production and food production.
10. “To take another step towards real life, let us now assume that the steelworkers have a powerful union that forces their employers to pay higher wages than those paid to the hamburger flippers. Their rate of surplus value will now be lower than in the fast-food sector, and if the steel bosses succeed in passing on this higher labour costs by increasing the price of steel, value-transfers from the rest of the economy will increase. Substitute imperialist economies for steel mills and export-oriented industries in low-wage countries for the fast-food sector, and readers will see why I insist that nothing about contemporary relations between imperialist and low-wage economies can be understood unless we introduce the concept of superexploitation.”
But if we are going to take another step towards real life then we have to look at what has actually happened to the workers in the “advanced” industry during the period “globalization,” the movement of capital to the south: In the US employment in steel, for example, has dropped some 90% in the industry, muscling through price increases has not been possible throughout this entire period.
We have increases in poverty rates in the US, declines of wages from previous highs, attacks on living standards, and real declines appearing in life expectancy. What once might have appeared as a “profound” alteration of the class condition, leading to a equally profound improvement, does not appear to beget a profound improvement now. And that BTW is the distinction between “profound” and “fundamental” or essential. That mechanism you describe if it is fundamental to the accumulation of capital you should be continuously producing profound benefits to the workers in advanced countries. It does not.
Sartesian, I didn’t talk about manipulation. It’s just that I am claiming that you might not had made your research properly.
I thank John for reopening the debate, but I fear he has not added anything in the way of theoretical clarification. I doubt that anyone questions the horrendous legacy of imperialism; the problem is how far such a concept enables one to understand capitalism in its global stage. Robinson points out ”Global Capitalism” Pp 116-117 that prison labour in the U.S. is paid $0.23 up to $1.15 per hour, and that private corporations are now able to co-invest with the public company Unicor to produce for the open market in textiles, electronics etc. If a Korean corporation invests here does it follow that Korean workers benefit from this higher exploitation?
It is absurd of John to identify renunciation of Lenin with virulent hostility to the Cuban revolution. Leninism is part of the problem. Stalinism is Leninism reductum ad absurdum. As Engels argued, the modern state can be nothing but the bourgeois state and the Leninist concept of the ‘dictatorship of the proletariat’ is merely the bourgeois state in pseudo-proletarian drag. That is why socialist revolutions so easily fail. Trotsky analysed some of the defects of Leninism in his ‘Our Political Tasks’ of 1904. Seventy years later Mao was writing that the bourgeoisie in China sat in the Central Committee of The Communist Party and he was not sure what the ‘dictatorship of the proletariat’ meant. Given Raul Castro’s praise for China’s capitalist reforms and the furore around the latest Cuban Party Congress ,I would not hold out great hope for Cuba’s socialist advance. What is clear however is that we do not have another seventy years left. Having been put on a scientific basis by Marx and Engels, socialism has to generate new concepts and the terminology that explicates them, as the great Russian Marxist Bogdanov argued. ( imprisoned briefly by Lenin after the Bolshevik revolution!)
I should have written ‘so the the Leninist concept of the dictatorship etc’
I agree with Sartesian that John Smith’s post of 5th August is very interesting and thought provoking. What is clear is that the concept of exploitation has to be rigorously scientific, and Marxists must consequently identify how the law of value is modified under globalisation. Samir Amin made an early start here and has introduced the concept of imperial or monopoly rent. I must confess however that personally I have not always been able to follow his arguments in ”The Law of Worldwide Value”, not least because of the maths involved. I hope John will continue with this very important debate. In particular if he might address Robinson’s arguments that transnational corporations are now the hegemonic fraction of worldwide capitalism in most countries, so that we are seeing the crystallisation of a transnational capitalist class.
Second, by John’s arguments should not China be accounted an imperialist power (cf Alden, ”China in Africa” 2007 ; Bond, “Looting Africa” 2006) ?
Looking through his Ch 8 “Imperialism and the Law of Value” I see
I need to read his book again much more carefully. I feel that his and Robinson’s analyses are not always empirically so divergent, though I do tend to agree with Robinson in his Ch 3 ”Beyond the Theory of Imperialism” that now “The North-South or core-periphery is complicated by capitalist globalisation. The fundamental social contradiction in global society is between subordinate and dominant classes in a transnational setting.”
Before I respond to your questions on William Robinson and his ‘transnational capitalist class’ theory, some other matters. I’ll not respond to your provocations – the equation of Leninism with Stalinism, the rubbishing of the Cuban revolution, the citing of Engels in support of anarchism etc – except to say that anyone with a rebel heart is drawn to Cuba, and is inspired by its unparalleled internationalism – and by its staying-power, which its enemies (including yourself) serially underestimate.
< by John’s arguments should not China be accounted an imperialist power…?
China defies a single-word definition. Yes, there are imperialist aspects to its resource-seeking behaviour in Africa and the outsourcing by Chinese capitalists to Myanmar, Cambodia and other even lower-wage locations, yet, overall, China continues to be defined by its role as a cheap labour assembly platform and source of super-profits for TNCs based in imperialist countries. There are plenty of signs that China is straining to move beyond this, and I’m sure it plutocrats and bureaucrats dream of, and are planning for, China’s emergence as a global imperial power – a path that needs to world war, since, just as in Lenin’s day, the incumbent imperialists will not make space for a new, rising power.
< prison labour in the U.S. is paid $0.23 up to $1.15 per hour… If a Korean corporation invests here does it follow that Korean workers benefit from this higher exploitation?
I have several answers to this: a) the Korean capitalists will seek to keep all of these extra profits for themselves and will most likely be successful – so, probably not; b) on what scientific grounds do we exclude this possibility out of hand? Refusing to countenance something because one finds it to be unpalatable or because it conflicts with one’s prejudices is bad science and, unfortunately, rife; c) if they were to lavish some of the proceeds on a sumptuous New Year party for their Korean employees, or to plug a hole in their pension fund which would otherwise have led to retired workers going hungry, then yes.
< In particular if he might address Robinson’s arguments that transnational corporations are now the hegemonic fraction of worldwide capitalism in most countries, so that we are seeing the crystallisation of a transnational capitalist class.
Robinson believes that “global class formation involves the increasing division of the world into a global bourgeoisie and a global proletariat, even though global labour remains highly stratified along old and new social hierarchies that cut across national boundaries” (A Theory of Global Capitalism, p42). I.m.o. the first part of this sentence is one-sided and exaggerated, while the second half dogmatically refuses to acknowledge any ‘old or new’ stratifications or social hierarchies that run along national boundaries. ‘Global bourgeoisie’ signifies that inter-imperialist rivalries have been transcended and imply the emergence of a transnational state (“globalisation involves a supersession of the nation-state”, p45). I don’t think either of these is true. Neither is there any sign whatsoever that we are moving towards the replacement of the dollar, yen, euro and pound sterling by SDRs (Special Drawing Rights, a form of international money created by the IMF based on a basket of hard currencies) – this alone poses a very large question mark over the whole TCC thesis. But let’s suppose that hyper-globalisation has actually produced this qualitative change, that inter-imperialist rivalries have been transcended.
This still leaves the enormous gulf between the now-merged imperialist countries and the nations in Africa Asia and Latin America that they exploit and oppress, in other words, the imperialist division of the world. About this, his ‘theory of global capitalism’ is deeply unsatisfactory: “the rise of TNCs and transnational capitalist groups in the Third World belies the notion that the TCC is strictly a northern bourgeoisie recolonising the periphery. But this does not mean that North-South asymmetries are unimportant. I cannot take up this matter here other than… to note that the new social hierarchies and forms of inequality emerging under the globalisation of increasingly organised and dispersed transnationally” (p73) so, North-South ‘asymmetries’ are not unimportant! But they are not important enough to be included, or even to be listed, in his ‘theory of global capitalism’!
Robinson’s 2008 work, Latin America and Global Capitalism, is well worth reading for its excellent empirical research and analysis, in particular its study of migration in the Americas. There is, however, a real disconnection between this empirical research and analysis and the TCC theory which this book promotes. He notes that “capital and goods move freely across national borders in the new global economy; labour, however, cannot” (p204), contradicting what he said on the previous page: “National labour pools are merging into a single global labour pool that services global capitalism. The transnational circulation of capital induces the transnational circulation of labour.” The reinforcement of territorial national borders against the free movement of labour means ‘a single global labour pool’ is a mirage, posing a severe challenge to the whole ‘transnationalisation of capitalism’ thesis. In order to sustain his argument, Robinson argues that “[n]ational boundaries are not barriers to transnational migration” (p314) – as if labour flows freely around the ‘global pool’! Yet elsewhere he makes a lot of sense: “Capitalist employers and their states use immigration controls, in Robinson’s own words “to sustain a vast exploitable labour pool that exists under precarious conditions, that does not enjoy the civil, political, and labour rights of citizens, that faces language barriers and a hostile cultural and ideological environment, and that is flexible and disposable through deportation”(p42) – in other words, to enforce a racial hierarchy that impedes the emergence of a transnational proletariat.
These and other insights allow Robinson to recognise the continued existence of super-exploitation and its heightened importance of contemporary capitalism; on the other hand he refuses to accept that this has a territorial North-South dimension, allowing him to argue that capitalism has now become transnationalised and deterritorialised and that the concept of imperialism has become outdated: “the class relations of global capitalism are now so deeply internalised within every nation state that the classical image of imperialism as a relation of external domination is outdated […]. The end of the extensive enlargement of capitalism is the end of the imperialist era of world capitalism”(p42). This is a very weak argument. Who could disagree that the ‘classical image’ is ‘outdated’? But instead of updating it he throws it in the dustbin, aware that if we now have, on a global scale, one capitalist class oppressing one working class, no notion of imperialism is possible.
There’s a typo in the quote from p73 of W Robinson’s A Theory of Global Capitalism. The last sentence should read:
“… the new social hierarchies and forms of inequality emerging under globalisation are increasingly organised and dispersed transnationally”
I have just finished reading John’s book in its entirety, and honestly I think it’s a shame that the discussion, for whatever reason, has focused on supposed “benefits” of the “super-exploitation” of labor in the Global South.
The strength of this book, the truly remarkable strength of this book is in its exposition and exposure how truly vicious, malign, brutal the aggrandizement of labor is in the developing countries under the dictatorship of the world markets.
FWIW, Chapter 4, the sections on “flexibiliization” of labor, and the exploitation of women, are concise, exact, brilliant.
I maintain all my previous disagreements with John– clearly this level of exploitation has not benefited workers in advance countries, clearly there is a historical basis for wage differentials– but there is no denying the ruthlessness of the globalization process, the benefit affords to the capitalists of TNCs, and the ideological obfuscation that surrounds the standard, and non-standard economists’ interpretations of the relations between advanced and less developed capitalist countries and production sectors.
And I think it is of critical importance to expose the ideological justification for wage differentials as being expressions of greater, or more varied, or more extensive needs accruing to workers of the advanced countries. It’s not the “greater needs”– just as it isn’t “bribery” or greater profitability that determines that wage– it has been the level of organization of the working class– and/or its level of disorganization– which is why the attack on wages is so integral in both advanced and less advanced countries.
Dear Sartesian, and others – I’m sorry for yet another interruption; I had to drop everything to meet a massive and overdue deadline. Here I will respond to Sartesian’s 10 points (or rather, to those of them which have something substantial to say) and to his most recent post; in the very near future I will reply to the important questions posed by jlowrie.
< …internally and externally, capitalism has always availed itself of “super-exploitation”…
Why the quotation marks? I suggest you take a deep breath and get rid of them. Their retention implies that you dispute the validity of the concept.
<Nor am I sure that what you analyze is “profoundly,” qualitatively distinct from intra-national distinctions in wage rates; lower wages for example for women; of Hispanics; the importation of migrant labor subjected to systematically greater abuse, oppression, attacks etc.
Cross-border wage differentials are several orders of magnitude greater than intra-national wage differentials made possible by the double oppression of women and migrant workers, significant as these are. Presumably, you do not deny that the latter are subject to higher rates of exploitation on account of their double oppression. Why are you so resistant to applying this to, e.g., Bangladeshi garment workers or workers on Foxconn’s assembly lines?
<I do agree with… the inadequacy of the notion that difference in wages in different countries, in different sectors, and even within a sector but connected with different jobs is thoroughly or “profoundly” explained by references to the costs of the reproduction of that labor power.
Well, the notion you describe is tautological: one might just as well try to explain differences in the costs of the reproduction of labour power by reference to wage differences between countries. What are the principal factors that this stupid notion leaves out? Three come to mind. 1) Productivity differences (I don’t deny this is a factor, but I insist that we must reject bourgeois definitions of productivity, i.e. value-added/labour-time; and, to the considerable extent that firms in imperialist and low-wage nations do not directly compete with each other, productivity differences are irrelevant). 2) the profoundly, qualitatively more severe conditions in the labour market in low-wage countries, where wages are dragged down not only by massive unemployment and underemployment but by the almost complete absence of social security which further amplifies competition for jobs. 3) the much harsher labour regimes in low-wage countries – surely I do not need to justify this assertion! Your argument only stands up if we ignore the second and third of these. To admit the significance of either of them logically requires acceptance of the higher average rates of exploitation which they enable.
<I do not use statistics from the US BLS for calculations of rates of surplus value. I use the US Dept. of Commerce Economic Census, Annual Survey of Manufactures… I know it’s an approximation, but what actually counts here is the trend; as well as the differences between sectors– say between chemical production and food production.
BLS, US Dept of Commerce – same difference, but thanks for the clarification. More importantly, your calculations are not even approximations. To make an approximation of value generation in a particular sector, we would need to know (inter alia) the difference between the organic composition of capital in that sector and the average organic composition of the total social capital it is part of – and this total social capital is global, not national! – and also make an adjustment for value transfers between productive and non-productive sectors of the economy. Since you do neither of these things, your calculations conflate value added (the substance of the US Govt data) with the Marxist concept of value. In other words, your calculations are bourgeois economics – which is exactly where you and so many other learned Marxists end up when you seek to “prove” that the rate of exploitation in export-oriented industries in low-wage countries is no higher than in imperialist economies.
Your 10 points evade core arguments in my last post. For instance, you passed over the following paragraph without objection – does this mean you agree? Or is your silence a tacit admission that you have no valid argument against it?:
“let us imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.”
Your tenth point reproduces the paragraph which follows the above but does not respond to it. So here are its first two sentences again:
“To take another step towards real life, let us now assume that the steelworkers have a powerful union that forces their employers to pay higher wages than those paid to the hamburger flippers. Their rate of surplus value will now be lower than in the fast-food sector, and if the steel bosses succeed in passing on this higher labour costs by increasing the price of steel, value-transfers from the rest of the economy will increase…”
Which bit of this do you disagree with? Instead of making clear where you stand, you launch off yet again trying to teach me that workers in the US are under attack, something I have never disputed with, before ending with this:
<That mechanism you describe if it is fundamental to the accumulation of capital you should be continuously producing profound benefits to the workers in advanced countries. It does not.
Since, in your most recent post, you say you’ve finished reading my book, you will know that, in the final chapter, I argue that shifting production to low-wage countries was crucial to the ability of capitalists in imperialist countries to escape from the crises of the 1970s (do you agree with this, yes or no?), and that, but for this global shift, capitalism in its imperialist heartlands would have been plunged much sooner back into systemic crisis. Instead of engaging with my actual argument, you insist on talking about ‘profound benefits to the workers in advanced countries’… and then, in your latest post, you say “I think it’s a shame that the discussion, for whatever reason, has focused on supposed “benefits” of the “super-exploitation” of labor in the Global South” – !!
I have tried to focus the discussion on the existence of higher rates of exploitation in the export-oriented industries of the global South. The truth or otherwise of this must be established before we can formulate valid questions about the economic and political implications of this for workers in the imperialist countries, let alone answer these questions. It is you and other imperialism-deniers who insist on shifting the discussion “to the supposed ‘benefits’ of the ‘super-exploitation’ of labour in the Global South” – because, so it seems to me, you want a theory that fits your predetermined conclusions.
Finally, thank you for your commendation of my book. As you say, it gives centre-stage to the massive reinforcements of our class in low-wage countries. Yet I still think you bestow faint praise – the most important strengths of the book (apart from its empirical and theoretical analysis of superexploitation, which you definitely don't commend) are to be found in the penultimate chapter, ‘The GDP illusion’, which explains how supposedly objective data on trade, GDP and productivity which are uncritically used by bourgeois and Marxist theorists alike are thoroughly contaminated by bourgeois ideology; and in the last chapter, ‘All roads lead into the crisis’, I explain the fundamental connection between financialisation and the outsourcing of production, and why this connection is key to understanding the origin, nature and dynamics of the ongoing global crisis. Apart from some careless comments from Michael concerning the last of these, these important innovations have attracted no attention, ‘for whatever reason’….
” I argue that shifting production to low-wage countries was crucial to the ability of capitalists in imperialist countries to escape from the crises of the 1970s (do you agree with this, yes or no?), and that, but for this global shift, capitalism in its imperialist heartlands would have been plunged much sooner back into systemic crisis.”
No, I don’t agree. First, and foremost, what precipitated and constituted the “crises” of the 1970s? If, according to your argument, we can’t even make an approximation of the rate of profit, how do we even explain the source of the “crisis”?
What was the cause of the crisis? And how did the bourgeoisie respond?
That– shifting production to low-wage countries was not the immediate response of capitalists. The immediate response by the capitalists in the advanced countries, particularly the US and the UK was to attack living and working standards in their home countries; to break unions; to reduce the labor share; to break strikes; to strip and liquidate assets in the “home” country.
Both the importation of immigrant labor and the export of capital follows that “home made” “home grown” attack on “home labor.”
I think there is a “whole” to the bourgeoisie’s response to the definite, measurable peaking and subsequent decline in the rate of profit in or around 1970, and the whole begins with the attack on labor, an attack that begins in 1973 as is heralded by two events announcing the bourgeoisie’s offensive: the Pinochet coup in Chile, and the OPEC price spike.
. Would it have been possible for capital to “shift production to low-wage countries” without that attack? I certainly don’t think so. But the attack itself is not the whole story. The whole story includes the attack; includes asset stripping; includes the oscillations in the price of oil to “recycle” petro-profits into US capitalism; includes the collapse of the former Soviet Union, and the destruction of living standards there; the first invasion of Iraq; the application of digital command and control technologies to production, the movement of capital “offshore” to find cheap labor supplies, and cheaper intermediate inputs, the overproduction and subsequent deterioration of the rate of profit post 1998; the driving back of wages in the US for production workers from the year 2000 post-1973 highs; the draconian restrictions on capital spending 2001-2005, where replacement rates for fixed assets fell below 1, the second Iraq war; the ongoing shift of production to low-wage counties is both a product of and accompanies all these factors.
As for this “Your tenth point reproduces the paragraph which follows the above but does not respond to it. So here are its first two sentences again:
“To take another step towards real life, let us now assume that the steelworkers have a powerful union that forces their employers to pay higher wages than those paid to the hamburger flippers. Their rate of surplus value will now be lower than in the fast-food sector, and if the steel bosses succeed in passing on this higher labour costs by increasing the price of steel, value-transfers from the rest of the economy will increase…Which bit of this do you disagree with?”
All of it; in that it doesn’t correspond to the actuality of what has occurred in the steel industry (in the US) since 1973. “If the steel bosses succeed in the passing on…” That’s not what happened with the steel industry in the US. The steel industry disemployed 90% of its labor force. The steel industry reduced the time of production of a ton of steel by some 80%. The steel industry reduced its fixed asset base.
That the steel industry “transferred valued” from the fast food industry is in fact what more technically intensive capitals do with less technically intensive capitals and, in fact, has nothing to do with wage rates, or is that rage wates? I get confused, sometimes.
There is an industry that did in fact drive through its price increases to transfer value from sectors to itself– but not because of the higher wage rate it afforded workers– and that industry is the petroleum (upstream) industry– extraction and production. There the higher wage rates has had zippo to do with falling or rising masses of surplus value. There prices have been driven by 1) the size of the capital deployed in production and 2) the attempt to offset the lower profit rate of the more technically intense industry, to produce an equalization of profit rates among capitals.
So do you think the oscillations of oil prices, the spikes in 1973, 1979, 1990, 1999, 2003-2007, 2011-2014 benefited the working class as a class in the US? In the world?
Finally, I reemphasize that if we can’t calculate even a proxy for the rate of profit, then we cannot develop an actual apprehension on how capital creates, overcomes, and reposits the obstacles to accumulation, and everything said about super-exploitation becomes irrelevant.
Here’s two questions from my last post that you’ve not answered. I’m trying to fathom how you rationalise your hostility to any notion of imperialism and how you square this with your self-identification as a Marxist, so I’d appreciate an answer:
Cross-border wage differentials are several orders of magnitude greater than intra-national wage differentials made possible by the double oppression of women and migrant workers, significant as these are. Presumably, you do not deny that the latter are subject to higher rates of exploitation on account of their double oppression. Why are you so resistant to applying this to, e.g., Bangladeshi garment workers or workers on Foxconn’s assembly lines?
Your 10 points evade core arguments in my last post. For instance, you passed over the following paragraph without objection ….:
“let us imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.”
One more disagreement on the subject of steel and hamburgers:
““To take another step towards real life, let us now assume that the steelworkers have a powerful union that forces their employers to pay higher wages than those paid to the hamburger flippers. Their rate of surplus value will now be lower than in the fast-food sector, and if the steel bosses succeed in passing on this higher labour costs by increasing the price of steel, value-transfers from the rest of the economy will increase…Which bit of this do you disagree with?”
Even if the scenario plays out as you suggest, you have not made a case for super-exploitation. The increased wage of the steel workers is based on class struggle, not the lower wage of the hamburger workers in the food trucks. In addition, the steel workers with a higher wage may, or may not, spend more money at the food trucks– hamburger workers wages remain the same. The owner of the hamburger truck may or may not raise prices. Hamburger worker wages may remain the same, or they might even increase, depending on their level of organization.
Steel manufacturers force through a price increase? How does this impact the owner of the hamburger truck in the car park? When he, or she, buys a new truck? Maybe, maybe not. The steel manufacturer may, and most likely will, seek out new technology to increase the productivity of labor, providing a greater output, and a reduced labor cost per unit, and for the aggregate. So the price of steel may decline.
In any case, there is no causal relation between the steel workers’ wages and the wages of the hamburger workers.
Come on John, you asked me directly if I agreed or disagreed with the assertion that imperialism pulled itself out of its systemic crisis by the super-exploitation of labor in low wage countries, and I answered that directly, and in detail.
You asked me what part of the the fable of steel workers and hamburger flippers I disagreed with, and I answered that directly and in detail.
Now instead of dealing with those replies to those direct questions you assert I’m ducking “core issues.” What core issues? That in fact the workers in advanced capitalism have not benefited from the shift to low wage countries? Well, since 1979 poverty rates have nearly doubled in the US, and that increase isn’t made up of the bourgeoisie.
I have never denied that Bangladeshi garment workers are horribly exploited, immiserated far below average levels in the US. But don’t tell me that that level of impoverishment, and because Wal-Mart makes a big mark-up on the tee shirts, BENEFITS the workers at Wal-Mart who have jobs with wages that do not support the basic needs of their families, who have to seek supplemental assistance like food stamps, whose work schedules are manipulated to keep them perpetually the “working poor,” who are as often as not, cheated out of overtime payments etc. But that is exactly what you are saying in the opening pages of your book.
Oh the workers have jobs? Oh at least the Wal-Mart buildings don’t collapse on them? Sure thing, but that’s not the result of the super-exploitation of workers in low wage countries.
And indeed, similar incidents have occurred in the US, with workers being locked inside factories with fire exits disabled during raging fires, and I’m not talking about the Triangle Shirtwaist fire. I’m talking about women in a chicken processing plant in North Carolina within that last 15 years.
What other core issues concern you? That the world isn’t divided into “oppressed” and “oppressor” countries? It isn’t. Is Bolivia an “oppressed country”? Even though it leases out its military, as does Brazil, as does Argentina, as does Chile to support the occupation of Haiti?
Or is it that I don’t accept Lenin’s Imperialism as being a incisive, materialist critique of imperialism. Well, it isn’t. the book is full of mistakes (unproductive agriculture in the advanced countries being just one of them).
No, I don’t deny imperialism existed and exists– but I do not agree that that changes the class relations, the condition of labor, fundamental to capitalism, to accumulation.
I am not, your description to the contrary notwithstanding, a “learned” person. I’m not an academic, don’t hold any degrees, don’t lecture, as a guest or otherwise, at any universities. If in my ignorance, I have calculated rates of surplus value incorrectly, rates of profit without basis, then the challenge I put to you months ago– to provide accurate calculations of rates of surplus value and rates of profit– for anywhere or any sector still stands.
If you can’t do that, if you can’t show how the rates of surplus value and rates of profit have not fluctuated over time as I or others have described them, then really, what exactly are you telling us, or anyone, about the prospects for the overthrow of capitalism?
<I have never denied that Bangladeshi garment workers are horribly exploited, immiserated far below average levels in the US.
Of course, only a fool would deny this. Yet we still don’t know whether, by ‘horribly exploited’, you mean ‘subject to a higher rate of exploitation’ than generally prevails in the USA and other imperialist countries. And if this is so (of course it is so!), then, by extension, this applies to the rest of the several hundreds of million workers in export-oriented industries producing intermediate inputs for imperialist TNCs and consumption goods for workers in imperialist countries.
<You asked me what part of the the fable of steel workers and hamburger flippers I disagreed with, and I answered that directly
But you haven’t said where you stand on this:
“let us imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.”
So, do we agree at least on this?
<I don’t deny imperialism existed and exists– but I do not agree that that changes the class relations, the condition of labor, fundamental to capitalism, to accumulation.
So, imperialism exists, but this does not affect class relations in any significant way, nor does it affect the ‘condition of labour’ or the accumulation of capital, and anyway it is not fundamental to capitalism. Sound like a denial to me.
<If… I have calculated rates of surplus value incorrectly, rates of profit without basis…
If?? I pointed out that your calculations conflate value with value-added and are therefore useless. ‘If’ implicitly concedes this, but the debate could move forward if you were to make this explicit. As for your challenge to me to do my own calculations… As I said in my reply to your 10 points, given that all available data on output, productivity et cetera measures value-added, not value, to calculate how much value is generated in a particular sector of the economy we would need to know how the organic composition of capital in this sector differs from its average across the economy of which it is a part, and we would also have to account for value transfers from productive to non-productive sectors of the economy. And that is only for starters. We would also need to know a great deal about the other sectors of the economy that supply this sector with intermediate inputs, since, as I argue in the ‘GDP illusion’, part of the value generated in low-wage sectors appears in the value-added supposedly generated in higher-wage sectors. In other words, calculation of value generation, and therefore of rates of surplus value, is practically impossible. Calculation of sectoral rates of profit is a different matter, since (depending on exactly how we define the rate of profit) what matters here is the total mass of value captured by capitalists in this sector, irrespective of where it is generated. Yet this is still an incredibly challenging task that requires the resolution of a series of analytical and theoretical issues; e.g., what Marxists mean by the rate of profit is very different from the various definitions used by bourgeois economists. There is, as you know, a huge literature and lively debate among Marxists about the trajectory of the rate of profit (in which Michael Roberts is a prominent voice). I need to study this debate much more closely, but I approach it with considerable scepticism, since it generally takes no account of imperialism, super-exploitation, value-transfers from low wage nations etc., and for this reason I’ve focused my attention on addressing the analytical and theoretical issues posed by this.
1. Is it your argument that rates of surplus value, and as a consequence rates of profit, cannot be calculated because the calculations omits “value transfers” from low-wage countries that are embedded in the import into advanced countries of intermediate inputs to production?
If your answer is “yes”– then I think you are way wrong. You might as well be arguing that rates of surplus value and profit cannot be calculated for the spinning and textile industry in Manchester in the 19th century because no adjustment is made for the super-exploitation of slaves in the US South, or the agricultural laborers in Egypt– the only input that “matters” is price, and price doesn’t capture the intensity of super-exploitation.
If you argue that productivity of labor and the application of machinery to production cannot raise the rate of surplus, cannot increase relative surplus value, if the increase “c” leaves unchanged the time necessary for labor power to reproduce itself, then the cost of your inputs from super-exploited labor is, by your own argument, irrelevant; has absolutely no bearing on the rate of surplus value in the advanced countries.
2. “So, imperialism exists, but this does not affect class relations in any significant way, nor does it affect the ‘condition of labour’ or the accumulation of capital, and anyway it is not fundamental to capitalism. Sound like a denial to me.” That’s because you’re editing what I wrote. I wrote that imperialism does not change the condition of labor that is fundamental capitalism– the exploitation of wage labor. Imperialism does not make certain nations with all their inhabitants “oppressor nations,” and certain nations with all their inhabitants “oppressed nations.” Imperialism does not alter the essential source of accumulation in the organization of labor as wage-labor. “Can we at least agree on that?”
3. I brought up the example of steel production, and labor-time for production in South Korea, China, and the US. Where is the labor most intensely exploited? Ah, you say,… but steel is a “special case.” Well that’s very convenient, but steel can’t be a special case in my example, and then be a paradigm case in your world of steel workers and hamburger flippers, particularly when the illustrations you provide for your fable have nothing to do with the actual changes in the industry.
Re this: “let us imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.”-
Given the uniform value of labor power, the issue is how long it takes the workers in any mill, or food truck, to reproduce value equivalent to the wage. If “productivity” according to your argument, is irrelevant to the reproduction of the equivalent value of the wage,( and IMO Marx is ambiguous on this point throughout Capital and his other writings), if different rates of productivity only serve to alter price and distribute the total social surplus value, then if the steel workers and the hamburger flippers reproduce the value equivalent in the same time, then the rates of surplus value is identical IF the working periods are the same.
But so what?
You want to argue that if the steel workers push through a wage increase, that that will require a reduction in the wage afforded to the hamburger flippers? Not so. Doesn’t work that way, hasn’t worked that way.
The “core issue” that is really at stake here is your claim that workers in advanced countries benefit from the outsourcing, when evidence you cite in your own book refutes that notion.
That’s the same “core issue” that the epigones of Leninism have raised in various iterations for a century. And it’s been used to explain everything from racism of some sectors of the working class to the “necessity” for supporting “national bourgeoisie”– and it’s helped to get us exactly where we are today– wading through the detritus of a thousand defeats of class struggle.
That’s the core issue to me.
However, I will write something more extensive on your book and let you know when and where it gets posted.
4. “I need to study this debate much more closely, but I approach it with considerable scepticism, since it generally takes no account of imperialism, super-exploitation, value-transfers from low wage nations etc., and for this reason I’ve focused my attention on addressing the analytical and theoretical issues posed by this.”
Good, but you seem to have already rejected the possibility of even approximating a calculation of the rate of surplus value, or profit, without showing how imperialism or super-exploitation actually impact the surplus value extracted from workers in “high wage” countries.
< Is it your argument that rates of surplus value, and as a consequence rates of profit, cannot be calculated because the calculations omits “value transfers” from low-wage countries that are embedded in the import into advanced countries of intermediate inputs to production?
Yes. To use value-added data to calculate the rate of surplus value in a sector or an individual firm, account must be made of all value transfers that cause price to depart from value, wherever they come from, whether that be from other sectors with lower organic composition or from those with higher than average rates of exploitation (i.e. superexploitation, according to my definition). I don’t say this is impossible, just very difficult.
< You might as well be arguing that rates of surplus value and profit cannot be calculated for the spinning and textile industry in Manchester in the 19th century because no adjustment is made for the super-exploitation of slaves in the US South, or the agricultural laborers in Egypt.
Yes, I do argue this. Do you seriously deny that Manchester’s cotton capitalists did not capture surplus value from, and therefore derive a part of their profits from, slave labour? If the aim is to calculate the actual rates of surplus value and profit (as opposed to a heuristic exercise aimed at establishing a general theory) then of course the contribution of US slaves and Egyptian peons to Manchester capitalist profits must be accounted for.
<…the only input that “matters” is price
Touché! Bourgeois economics in a nutshell!
<If you argue that productivity of labor and the application of machinery to production cannot raise the rate of surplus, cannot increase relative surplus value, if the increase “c” leaves unchanged the time necessary for labor power to reproduce itself, then the cost of your inputs from super-exploited labor is, by your own argument, irrelevant; has absolutely no bearing on the rate of surplus value in the advanced countries.
Yes, you are correct, except for two important qualifications: first, consumer goods produced by super-exploited labour are intermediate inputs in the production of the commodity labour-power in the imperialist countries, and it is obvious to everybody in the world except for you that this will lower the value of labour-power there – unless these workers succeed in increasing consumption levels, thereby mitigating the fall in the value of their labour-power. Which of course I am 1000% in favour of – I support the struggles of workers everywhere and anywhere in their attempts to capture a greater share of the value they produce. But there is a big difference between economic struggles aimed at improving workers’ position within the capitalist system and revolutionary struggles aimed at overthrowing it. Trade unions, according to Karl Marx, “must now learn to act deliberately as organising centres of the working class in the broad interest of its complete emancipation. They must aid every social and political movement tending in that direction… They must look carefully after the interests of the worst-paid trades… They must convince the world at large that their efforts, far from being narrow and selfish, aim at the emancipation of the downtrodden millions." (Trade Unions: Their Past, Present, and Future, 1866).
< [quoting me:]“So, imperialism exists, but this does not affect class relations in any significant way, nor does it affect the ‘condition of labour’ or the accumulation of capital, and anyway it is not fundamental to capitalism. Sound like a denial to me.” That’s because you’re editing what I wrote. I wrote that imperialism does not change the condition of labor that is fundamental capitalism– the exploitation of wage labor. Imperialism does not make certain nations with all their inhabitants “oppressor nations,” and certain nations with all their inhabitants “oppressed nations.” Imperialism does not alter the essential source of accumulation in the organization of labor as wage-labor. “Can we at least agree on that?”
I apologise. My misreading of your statement was not deliberate. I just did not imagine that you were making such a banal point – of course we can agree that imperialism does not supplant the exploitation of wage labour with something else. Indeed, the essence of the theory I advance in my book (based on key insights provided by my comrade Andy Higginbottom) is that imperialism is now internal to the capital/labour relationship, unlike in the days of Marx and Lenin when modern class relations had only established themselves within the imperialist countries and when primitive accumulation and unequal exchange between capitalism and pre-capitalist societies had a far greater weight than today’s super-exploitation of wage labour.
“Imperialism does not make certain nations with all their inhabitants “oppressor nations,” and certain nations with all their inhabitants “oppressed nations.” It is incredibly tiresome that, no matter how often I explain that decolonisation has emancipated the national bourgeoisie in the oppressed nations but not the people, you insist on caricaturing my argument. I presume that you do not deny that Black workers and women workers are doubly oppressed – as workers, and also on account of their gender and skin colour – and that they are subject to a higher rate of exploitation on account of this. Yet you obstinately refused to apply the same principle to workers in Brazil, Bangladesh etc.
<steel can’t be a special case in my example, and then be a paradigm case in your world of steel workers and hamburger flippers.
You are clutching at straws. The example of steel production versus fast-food production allows us to consider how capitalists in different sectors with different organic compositions relate to each other, and how this fundamentally differs from the relation between two individual capitals in direct competition with each other.
<Re this: “let us imagine that, in the car park of our two steel mills, two hamburger-flippers are employed to provide steelworkers with their lunch, and that both steel mills and both hamburger-flippers operate with the average level of productivity for their respective branches of production. Assuming uniform wages among hamburger-flippers and steelworkers (i.e. a uniform value of labour power), the rate of surplus value in all four firms is identical – since in none of them is the productivity of labour higher or lower than the average in their respective sectors.”-
Given the uniform value of labor power, the issue is how long it takes the workers in any mill, or food truck, to reproduce value equivalent to the wage.
<If “productivity” according to your argument, is irrelevant to the reproduction of the equivalent value of the wage…
Yes, that’s my argument, so long as we are talking about average socially-necessary labour time and so long as we are not talking about the productivity of workers producing workers’ consumption goods.
<…( and IMO Marx is ambiguous on this point throughout Capital and his other writings)
The supposedly ambiguities that you cling to like a drowning man clinging to a piece of flotsam are entirely explained by the different levels of abstraction at which Marx is working, and by shorthand references that assume the reader’s knowledge of concepts previously established. If it is true that Marx is ambiguous on such a crucial question, there’s not much left of his theory of value.
<if different rates of productivity only serve to alter price and distribute the total social surplus value, then if the steel workers and the hamburger flippers reproduce the value equivalent in the same time, then the rates of surplus value is identical IF the working periods are the same.
Excellent! In other words, we agree that, except the special case where one individual capital has a productivity edge over another, “variations in productivity have no impact whatever on the labor itself represented in value… The same labor, therefore, performed for the same length of time, always yields the same amount of value, independently of any variations in productivity.” (vol. 1, p137)
<But so what?
It means that you and the rest of the euro-Marxists are wrong, that’s all. It means that the rate of exploitation is independent of the organic composition of capital, that workers in capital-intensive sectors per se are NOT subject to a higher rate of exploitation than those in labour-intensive sectors, and that the vast gulf in wages between imperialist and low-wage nations is powerful evidence of different rates of surplus value.
<You want to argue that if the steel workers push through a wage increase, that that will require a reduction in the wage afforded to the hamburger flippers?
No, this would reduce the profits of the steel bosses, that’s all. If they preserve their profits by imposing higher steel prices on the rest of the economy then class struggle will determine who pays the price, other capitalists or other workers.
<The “core issue” that is really at stake here is your claim that workers in advanced countries benefit from outsourcing…
Yes. ‘Benefit’ should be seen as a relative term, not an absolute term. Super-exploitation in Africa, Asia and Latin America helps to sustain living standards and mitigate the intensity of exploitation in imperialist countries – but these are relative and transient benefits, while the negative effects (reinforcement of bourgeois power, consolidation of the counterrevolutionary bloc between labour and capital in imperialist countries, growth of xenophobia and racism and much else) are vastly greater.
John,
I’ll answer (I hope) your points in the longer piece I’m developing on your book.
For now, I’ll point out how you tend to distort arguments. For example, I say
You respond:
Of course I never said or implied that Manchester’s cotton capitalist captured surplus value from and derived part of their profits from slave labour. I said your argument means that rates of surplus value and profit cannot be calculated for Manchester, as Marx and Engels did calculate, because their methodology utilized the equivalence of price with value of the cotton.
The issue is how that surplus value is absorbed, captured, and it can only be done through exchange. That’s the whole point of exchange value, and markets. That’s how it gets done. Through the exchange, the price mechanism. The manufacturers could have simply seized the cotton, thereby reducing their cost, and increasing their profit, but they didn’t. They paid for it, they paid the owners, not the producers of the cotton, as the bourgeoisie always do. That’s how the surplus value gets circulated into production, and how it a)disappears at every “stage” b) reappears in every product. Through cost; through value expressed in its monetary form, price. Your claim to making a fundamental distinction between value and “value added” boils down to the difference between value and price– value and value expressed in monetary terms. If that’s the dominant mode of accumulation, then we have a condition that defies the very basis of Marx’s analysis that– in the long run and over the full network of capital’s exchanges value and price converge; total prices are a reliable proxy for total values.
For some reason, the paragraphs I copied and posted from John’s post didn’t reappear in mine. So here they are:
I said: You might as well be arguing that rates of surplus value and profit cannot be calculated for the spinning and textile industry in Manchester in the 19th century because no adjustment is made for the super-exploitation of slaves in the US South, or the agricultural laborers in Egypt.”
John replies:
“Yes, I do argue this. Do you seriously deny that Manchester’s cotton capitalists did not capture surplus value from, and therefore derive a part of their profits from, slave labour? ”
Of course, I never denied any such thing. The issue is HOW the capture is effected.
and for the record– I do not think wage-rate differentials are the result of different productivities of labor; nor do I think such differentials automatically define different rates of exploitation.
Labor-power employed in coal production in the US is exploited at a greater rate, level, than coal production in China, or India.
Here’s part 1, if anyone is interested:
http://thewolfatthedoor.blogspot.com/2016/08/hands-down-part-1.html
John Smith Says:
August 23, 2016 at 11:21 pm
Before I respond to your questions on William Robinson and his ‘transnational capitalist class’ theory, some other matters. I’ll not respond to your provocations – the equation of Leninism with Stalinism, the rubbishing of the Cuban revolution, the citing of Engels in support of anarchism etc – except to say that anyone with a rebel heart is drawn to Cuba, and is inspired by its unparalleled internationalism – and by its staying-power, which its enemies (including yourself) serially underestimate.
Well, John, ”provocations” sounds very ”Stalinist” and I confess that I wish I had not provoked them, for we surely wish this site to focus on the analysis of capitalism. But, anyway,
i) I do not equate Stalinism with Leninism. I say Stalinism is Leninism reductum ad absurdum,quite a distinct thesis.
2) I do not support anarchism. I suggest that the Leninist concept of the dictatorship of the proletariat is seriously flawed and is more Platonic than Marxist.
3) Where do I rubbish the Cuban Revolution? It is John himself who rubbishes revolutions. For example, on page 214 of his book he rubbishes the Chinese revolution, writing that Mao Zedung leadership ”abandoned the the fight for land reform… and dissolved
the Red Army into the Kuomingtang forces.” I fear John must have got this from reading Trotsky rather than from studying the history of the Chinese revolution for himself. No, John, it never happened, and the revolution triumphed, much to the chagrin it seems of the Trotskyists/Stalinists. If John is seeking a rubbishing of the Cuban revolution he would do better to cite his fellow Trotskyists at The Worldwide Socialist Web who a couple of years ago wrote to the effect that the current economic problems in Cuba were due to the ”Castroites”’ failure to develop the forces of production in a scientific manner. Now who could be against such a development? Why do these Trotskyists keep such a mystery to themselves?
4) As a regular visitor to Cuba, on my next visit I must announce to my Cuban friends that I have been denounced as ” an enemy of the Cuban revolution”!
John Smith, if he knows anything about Cuba, is bound to be aware that there is widespread discontent. One of the bewildering experiences over the years has been to meet no few numbers of citizens who assert that Cuba is ”the worst place in the world for the people”! On my last visit I ran into a Cuban who told me that he would even consider emigrating to Honduras!
Now there are those in the leadership of the Party, playing on such discontent, who are, to use Maoist language,” seeking the capitalist road” and playing up the supposed benefits of Chinese style capitalism. The distinguished Cuban historian Esteban Morales pointed out that it was not US supported lackeys who threatened the revolution but corruption at the top of the party, for which pains his party membership was suspended!
There is a bitter joke one of my Cuban friends told me:
”Leninism is the transition stage between capitalism and capitalism”!
Please accept my apologies. I should have bitten my tongue. I pointed to Cuba’s unparalleled internationalism, you responded with some scathing comments, and I over-reacted. I’m happy to discuss Leninism, the Cuban revolution and its current situation, but this isn’t the place.
Now getting back to imperialism, I think we all agree that John Smith has written an excellent expose of the effects of capitalism on the people of less developed capitalist countries. Personally, I am only too willing to accept that my own comfortable standard of living owes much to the horrendous oppression in what used to be called ”The Third World” ; but the concept of exploitation has to be rigorously scientific and cannot allow of any sentimentalism, otherwise the bourgeoisie will seize on any weak points to dismiss the whole notion of exploitation and argue that globalisation is a positive benefit, and that what we need is more of it.
The strong points in Robinson’s “Global Capitalism and the Crisis of Humanity” are to be found I believe in his Chapters 1 and 3 ; the rest is in my opinion much weaker. ( If anybody is in contact with him it would be excellent to have his comments).
What would I feel be most helpful in clarifying some of the issues would be were John able to deal with Robinson’s following theses:
”If we mean by imperialism the relentless pressures for outward expansion of capitalism and the distinct political,military, and cultural mechanisms that facilitate that expansion and the appropriation of surpluses it generates, then it is a structural imperative build into capitalism. It is not a policy of particular state management ( p 126).
”In addition to its centrality in facilitating the transnational integration of capitals, the newly integrated financial system allows for incredibly increased intersectoral mobility of capital and hence plays a major role in blurring the boundaries between industrial, commercial and money capital” (p22)
”When we study these companies (i.e. global corporations ) we find that the only thing ‘American’ or ‘European’ about them may be their legal domicile or their country of original establishment”. (p28)
”British and US elites no longer need to build up a labour aristocracy ” (p36)
”There is nothing in Brics politics and proposals that have stood in any significant contradiction to global capitalism (p 37)
”Given the fact that the variable capital is transnational and the constant capital is transnational, the relations of production-regardless of the nationality or cultural affinity of the worker- are transnational as well.” (p49)
”We are witness less to a US imperialism per se than to a global imperialism. We face an empire of global capitalism, headquartered for evident historical reasons, in Washington.” ( p122)
<What would I feel be most helpful in clarifying some of the issues would be were John able to deal with Robinson’s following theses [from Robinson’s “Global Capitalism and the Crisis of Humanity”]:
Thank you for raising these very interesting questions; apologies for keeping you waiting for my attempt at answering them.
”If we mean by imperialism the relentless pressures for outward expansion of capitalism and the distinct political,military, and cultural mechanisms that facilitate that expansion and the appropriation of surpluses it generates, then it is a structural imperative build into capitalism. It is not a policy of particular state management" (p126).
I agree with the essential point here, that imperialism is not an optional policy but a ‘structural imperative build into capitalism’ – the question is, how does this structural imperative manifest itself in the current phase of capitalist development?
”In addition to its centrality in facilitating the transnational integration of capitals, the newly integrated financial system allows for incredibly increased intersectoral mobility of capital and hence plays a major role in blurring the boundaries between industrial, commercial and money capital” (p22)
There’s not the space here to carefully unpack the complex issues raised by this quote. What strikes me is the absence of any sense that this is a deeply contradictory process which, far from transcending inter-imperialist rivalries, raises them to a new extreme. For example – there is no global auto industry, there are German, Japanese, US car industries, locked in competition with each other, each relying on their respective states and monetary authorities to advance their interests at the expense of their rivals, a zero-or negative-sum game in this time of ‘secular stagnation’.
”When we study these companies (i.e. global corporations ) we find that the only thing ‘American’ or ‘European’ about them may be their legal domicile or their country of original establishment”. (p28)
I radically disagree – both ownership and management of TNCs, with very few exceptions, are overwhelmingly concentrated among citizens of one or another country – mostly imperialist countries, since (despite the rise of southern TNCs) most TNCs are owned and controlled by North American or European or Japanese capitalists. These capitalists critically rely on exercising state power to protect their interests, and that means their US, German, Japanese etc states (the EU is not a state, it is an unstable alliance of rival imperialist states dominated by France and Germany) – the current confrontation between the EU and the USA over Apple’s tax avoidance vividly illustrates this.
”British and US elites no longer need to build up a labour aristocracy” (p36)
On the contrary, they need it more than ever, especially in a time of crisis. To say otherwise is to say that the imperialist ruling classes no longer need to manufacture support for their rule, that they are ready to dispense with the charade of bourgeois democracy. The fact is, the 1% need the support and protection of a much more substantial fraction of the citizenry, not just the petty bourgeois but also the more privileged layers of the working class. The quote, and the rest of the book, leaves open whether or not a labour aristocracy exists; the quote implies that it doesn’t. This, in my opinion, is harmful and reactionary, protecting a crucial prop of capitalist rule from criticism. Robinson himself offers no reasoning for his assertion. He immediately follows it not with an argument but with this irrelevance: “The fact is that the Mexican multibillionaire Carlos Slim, one of the richest men in the world, has inconceivably more social power than the mass of U.S. workers, as do the Middle Eastern and Chinese elites that control sovereign wealth funds, and so on.”
”There is nothing in Brics politics and proposals that have stood in any significant contradiction to global capitalism (p 37)
Remove ‘global’ from this and I’d agree with it. But ‘global capitalism’, for Robinson, means transnational, deterritorialised capitalism, and I don’t agree with that. Robinson makes the statement in response to a criticism by William K. Tabb, whom he quotes as saying "[BRICS] and other counters to U.S. hegemony are numerous and intended to increase leverage against the global hegemon. They are hardly fraternal divisions within some transnational capitalist class but instances of traditionally understood rivalries based on national interests." I agree with Tabb on this.
”Given the fact that the variable capital is transnational and the constant capital is transnational, the relations of production-regardless of the nationality or cultural affinity of the worker- are transnational as well.” (p49)
All stages in the origin and development of capitalism must be understood as a global process, but it is false to suppose that the only alternative to methodological nationalism is Robinson’s transnational capitalist class theory. I’ve already responded to Robinson’s notion that ‘constant capital is transnational’; still more problematic is the notion of a transnational working class, by which Robinson means that different national pools of labour have merged into a single global labour-pool, which flies in the face of the reality of militarised borders and deepening restrictions on the international mobility of labour-power.
”We are witness less to a US imperialism per se than to a global imperialism. We face an empire of global capitalism, headquartered for evident historical reasons, in Washington.” ( p122)
It is interesting that he cites Washington, not New York, where the United Nations is headquartered. The US state represents the interests of US capitalists, not of a non-existent transnational capitalist class. The global crisis, still in its early stages, provides the definitive test of the TCC thesis. The failure of the WTO trade negotiations and probable failure of TTIP offers little support for the TCC thesis, while QE and negative interest rates, a prime motive for which is competitive currency depreciation, strongly indicates that inter-imperialist rivalries are sharpening and are set to explode.
Hello, John, apologies accepted. I absolutely agree that this is not the place for such debates. I shall avoid them here forthwith!
I do appreciate that the above is a tall order, but the large number of comments occasioned by your book suggests that most socialists discern that with globalisation capitalism has entered its final stage, the analysis of which is fundamental to our understanding of how to avoid a global cataclysm.
I thank John for continuing to address these questions, the overwhelming importance of which was brought home to me yesterday, when I read online that parts of Nigeria are facing severe famine. Now, given its huge natural resources, Nigeria ought to be a very rich country. My immediate reaction was: ‘result of colonialism and imperialism’; but imagine my horror in reading the comments that followed, almost all to the effect that the country had gone to the dogs since independence.
Here are the issues on which I, and no doubt others, seek further clarification.
1) It seems contradictory to exclude China from a list of imperial states, if its actions in Africa are anything to go by.
Why designate Japan as imperialist and not South Korea etc.?
2) It would seem better to talk of oligopoly capitalism rather than monopoly capitalism.
How are inter-capitalist TNC rivalries and inter-state imperialist rivalries articulated?
3) re ‘ownership and management of TNCs’ : I think for the future you need to produce concrete evidence for your position. Robinson does this. He points out TNCs both use but also bypass central states. What I find unsatisfactory is the limited range of explanatory power of his basic thesis. The US/French takeover of Libya for example is most simply explained as imperialist aggression and this can easily be empirically demonstrated. So for me at any rate there is a great deal here still not clear. Perhaps a way forward would be to examine how far companies are dominated by the preponderance of senior executives whose citizenship is that of the their company’s place of origin or legal domicile, Blackstone for example. Anyway, I doubt any Japanese TNCs conform to Robinson’s thesis, but I may be wrong.
3) re ‘labour aristocracy’: This seems to me to be an ill-advised thesis, and one difficult to sustain.
I can see the new ‘middle class’ in India and China that has arisen with globalisation, with whose success they clearly identify. If any group can clearly be designated as a ‘labour aristocracy’ it can. It has a clear self-consciousness of itself and a hatred of those below, particularly the peasantry.
On the other hand, it is difficult to determine who in Japan might be designated as members of a labour aristocracy. Even in the largest Japanese companies young workers are paid less and old workers more, or that used to be the case. The senior executives are all in their fifties. I am afraid the concept is inapplicable to Japan at any rate.
Finally, I wonder if the old distinction between a national bourgeoisie and a comprador bourgeoisie is still valid. How exactly do we evaluate the Nigerian bourgeoisie under Globalisation? It is surely inadequate to see it as a national bourgeoisie locked in combat with imperialism? Who if anyone of economic importance is fighting imperialism in Nigeria? If we agree that imperialism is a structural imperative of capitalism, then it may well be claimed that in every country a stratum of the bourgeoisie acts as agents of international capital, which is dominated by the leading capitalist states.