Over the next few posts, I aim to review a number of books published in the last year on key aspects of Marxist economic theory. I start with dependency theory.
Dependency theory emerged in the 1960s and 1970s as a critique of ‘modernisation’ theory, which argued that poor countries could develop by following the same path as wealthy countries. Dependency theorists argued that this was not possible because poor countries are systematically exploited by wealthy countries. The theory was developed mainly in Latin America, when the so-called Golden Age of booming capitalist development after WW2 in the major advanced capitalist economies came to an end.
It seemed that economic development as in the ‘West’ did not apply to economies in South America, the Middle East or Africa. In 1945, Latin American countries like Argentina and Brazil had per capita incomes not so far behind that of the weaker capitalist economies of southern Europe and it was expected that under governments that looked to follow the industrial economies of the North, Latin America would prosper. That hope evaporated in the downturn in profitability and investment that ensued in the late 1960s and through the rest of the 20th century.
In his book, now published in English, Claudio Katz, a professor at the University of Buenos Aires and author of many books on economics and Latin American society, provides us with a comprehensive account of dependency theory as expounded mainly in Latin America over the last 50 years. It won the Libertador prize for Critical Thought in 2018.
I think we can start to consider dependency theory from a brief phrase that Marx wrote in his 1867 preface to Volume one of Capital. He wrote: “The country that is more developed industrially only shows, to the less developed, the image of its own future.” Marx was writing when Britain was at the pinnacle of its economic power and industrial might. Capital was an analysis of such a capitalist economy. And Marx thought capitalism would spread globally so that other rival capitalist powers would emerge – and he was right. Germany, France and, above all, the US caught up with Britain (in its own ‘image’) by the end of the 19th century.
But we now know that that it would only be a small group of industrial and commercial capitalist economies that achieved Marx’s prediction. Those powers were then able through military, financial and technological prowess to block the progress of capitalists and their workers in most of the rest of the world. Lenin wrote in 1915 that there were just a handful of countries that controlled the world’s technology, finance and resources. One hundred years later, those ‘imperialist’ economies are much the same and broadly still dominant. And thus we can talk of a dominant imperialist bloc and a ‘dependent’ rest of the world.
But ‘dependency’ can take different meanings and Katz shows us that it does with his discussion of the variants within the dependency school. Dependency theorists identify two main groups of countries in the global economic system: the core and the periphery. The core countries are wealthy countries that control the global economy. The periphery countries are poor countries that are dependent on the core countries for trade, investment and technology. Indeed, the word ‘periphery’ seems better to me than ‘dependent’. The latter could imply that the capitalist class in the periphery plays no independent role in exploiting its own working class and exploitation is totally the result of imperialist domination and foreign companies.
Where dependency theory plays a positive explanatory role is in the idea that resources flow from a “periphery” of poor and underdeveloped states to a “core” of wealthy states, enriching the latter at the expense of the former. The theory rejects the mainstream theory of ‘development economics’ upon which the international institutions of the United Nations (UNCTAD – ‘trade and development’), the World Bank and IMF stand, that all societies progress through similar stages of development and that today’s underdeveloped areas are thus in a similar situation to that of today’s developed areas at some time in the past. Therefore, the task of helping the underdeveloped areas ‘out of poverty’ is to accelerate them along this supposed common path of capitalist development, by various means such as investment, technology transfers, and closer integration into the world market. The periphery is thus described as ‘emerging’ or ‘developing’ economies.
It would be wrong to think that Marx adopted ‘development economics’ in that sense as in the quote from Capital. Then he was referring to the immediate industrial capitalist economies of his day. In his later writings, he emphasised how the most populated countries like India, Russia and China were exploited and eventually suppressed in their ability to join the leading industrial nations.
Katz concentrates his account of dependency theory on its Marxist variant, rather than the mainstream one that argues dependency can be overcome by national policies of Keynesian-type state spending, import substitution for foreign goods and financial regulation. This variant has shown to have failed in practice in taking countries like Argentina or Brazil into the top tier of capitalist economies. Instead, Marxist dependency theory argues that these countries will remain ‘dependent’ because of the huge extraction of value from labour in their economies to the imperialist bloc through trade, finance and technology.
‘Unequal exchange’ in international trade is a fundamental component of Marx’s theory of value. However, within dependency theory, differences arise on the nature of that unequal exchange: is it due to wage differences or technologically driven productivity differences? Do the imperialist countries through their multi-nationals gain surplus profits from the cheap labour of the peripheral countries or from their superior technology and lower unit costs in international trade?
Katz reckons that the most prominent of Latin American Marxist dependency theorists, Ruy Mauro Marini “had greater affinities with those who ascribed unequal exchange to differences in productivities rather than wages.” This maintained that the wage gaps were explained by disparities in the development of the productive forces rather than vice versa. “The wage is a result rather than a determinant of accumulation, arguing that wage levels in each country depend on productivity, cycles, capital stock, and the intensity of the class struggle.”
If this was Marini’s position, then I agree. My own empirical study jointly with Guglielmo Carchedi on modern imperialism finds that the transfer of value from the periphery to the core economies through unequal exchange in trade is mainly due to productivity differences and technological superiority (OCC in the graph below), and only to a lesser extent due to higher rates of exploitation in the periphery (RSV. And it is not due to lower wages per se.
However, Marini did propose the concept of super-exploitation, namely where wages in the periphery fall below the value of labour power or below the average international wage. According to Katz, “it was the central thesis of dependency theory inspired by Marini.” But Katz argues that ‘super exploitation’ cannot be the main determinant of value transfer between rich and poor countries. “It dilutes the logic of surplus value” and it suggests a Proudhonian concept of theft rather than the “objective logic of accumulation”. As Katz points out, super exploitation also exists in neoliberal imperialist economies with ‘precarious employment’ and zero-hours contracts etc.
In my view, the point is that the value transfer to the imperialist North takes place because of their superior technology and labour productivity. That enables the imperialist North to sell its goods in world markets at costs below the international average. The capitalists of the periphery try to compensate for their lower technical level and productivity by driving the wages of their workers down. So the higher rate of exploitation in the South, whether by super-exploitation or not, is a reaction to the failure to compete against the North.
Was monopoly power the main cause of the dominance of imperialist companies? Some dependency theorists claim so. However, Katz reckons that was not the case with Marini. “Marini was always closer to the Marxist thinkers like Mandel who highlighted this dynamic of differentiated competition among monopolies. He maintained greater distance from theorists like Sweezy who stressed the unrestrained ability of large firms to manage prices.” But Marini did not go so far as Shaikh who Katz argues denies “the clear existence of gigantic corporations that obtain extraordinary profits in certain markets at the expense of smaller companies.”
Katz reckons that Marini had what I would call an eclectic understanding of Marx’s value theory. “He belonged to a tradition in Marxist economics that disagreed with the approaches centered exclusively on the analysis of value in the sphere of production. That approach quantifies value only in the initial phase of surplus value creation, insistently pointing to the weight Marx put on the logic of exploitation and deducing all the contradictions of capitalism from this sphere.” Marini wanted to include “imbalances located in the sphere of demand”. Katz summed up Marini’s view on economic crises as a “multicausal approach to crisis, combining imbalances of realization with the falling rate of profit tendency”. Readers of this blog will know that as a proponent of a ‘monocausal’ analysis of crises, I think that Marini’s view leaves us without a theory of crisis at all.
That is not the only weakness in Marini’s version of dependency theory. He strongly promoted the idea of ‘sub-imperialism’, a category of countries intermediate between the dominated periphery and the imperialist core. Katz spends several chapters discussing the relevance of this category. In summary he says that “it helps to understand the hierarchical structure of contemporary capitalism” with “an apex of central powers and a base of dominated countries… in between are these subimperial powers trying to obtain regional hegemony.”
I am dubious that sub-imperialism helps us to understand contemporary capitalism. It weakens the delineation between the core imperialist bloc and the periphery of dominated countries. If every country is a ‘little bit imperialist’, if it engages in war with a neighbour over markets, resources and territory, then imperialism starts to lose its validity as a useful concept. So-called sub imperialist countries do not have sustained and huge transfers of value and resources to them from weaker economies. In our own work on imperialism and in empirical work by others, this hierarchical structure of value transfer is not revealed. India, China and Russia actually transfer much larger amounts of value to the imperialist bloc than South America. See the results of Andrea Ricci on US transfers below.
Take the BRICS, the best candidates for being ‘sub-imperialist’. There is no evidence of significantly large and long-lasting value transfers to them from weaker and/or neighbouring economies. They just don’t have the financial, technological and military superiority to obtain such transfers. Can wars between peripheral countries (eg Iran v Iraq, Azerbaijan v Armenia) be considered imperialist in any useful way? Are these not better seen as wars between weak capitalist countries for economic and political gain?
Indeed, Katz makes the point that Brazil is not sub-imperialist as Marini saw it. It has not become a rising industrial power dominating the sub-continent. The great hope of the 1990s, as promoted by mainstream development economics, that Brazil, Russia, India, China and South Africa (BRICS) would soon join the rich league by the 21st century, has proven to be a mirage. These countries remain also-rans and are still subordinated and exploited by the imperialist core. And the gap between the imperialist economies and the rest is not narrowing – on the contrary. And that includes China, which also will not join the imperialist club.
Yet Katz wants to preserve the Marini concept: “In this context, intermediate formations occupy a significant place that breaks the strict parallel between sub-imperial powers and economic semi- peripheries, as the geopolitical weight of some countries differs from the integration into globalized production achieved by others. Dependency theory is very useful for understanding that variety of situations. It explains the logic of the underdevelopment and marginalization of the periphery without limiting its analysis to global polarities, and also analyzes the bifurcations and differences between distinct intermediate formations.” I am not sure that it does.
What Katz’s comprehensive survey of 50 years of dependency theory does show is that Marx’s value theory of “productive globalization based on the exploitation of workers remodels the cleavages between center and periphery through transfers of surplus value.” And it is “the omission of that mechanism prevents the critics of dependency from understanding the logic of underdevelopment.”
So “reintegrating the theory of value into the explanation of dependency is also vital for uncovering the hidden skeleton of present-day capitalism. There is no invisible hand that is guiding markets, nor is there a wise state institution steering the economy. The foundation of the system is competition for profits arising from exploitation, multiplying the wealth of minorities and the suffering of the majorities. The same indignation and rebelliousness that drove the study of underdevelopment in the past orients that inquiry in the present.”
Michael Roberts Blog 
In the coming years, central capitalist states will be, and are, more concerned with transferring the consequences of the crisis to their competitors and the periphery, in order to delay their collapse.
And with the rise in inter-state tensions and struggles provoked by the crisis, which have degenerated into neo-imperialist warfare in Ukraine and elsewhere.
Unfortunately this post necessarily limits the analysis of global capitalism to Katz’s purely economistic approach to marxist analysis. The result is a purely academic view of the capitalist world that has nothing to do with Marx, who was not an economist. He was a philosopher and a political activist. The world he envisioned in the absence of an overthrow of a degenerate, bankrupt capitalism is the one we actually face today.
So the Marxist theory is not a critique of political economy or modern mainstream economics then? yes, it is more than that but it is still a demolition of modern economics.
Yes. I think that’s my point.
Thank you for this great article Mr. Roberts!
There is much to go over in answering this and other posts that are surprisingly (and disappointingly) hostile to the theory of labour super-exploitation as essential to explaining modern imperialism.
I just want to respond to your most blatant misrepresentation of Marini’s contribution.
You write:
“Katx reckons that Marini had what I would call an eclectic understanding of Marx’s value theory. [NB!!] “He belonged to a tradition in Marxist economics that disagreed with the approaches centered exclusively on the analysis of value in the sphere of production. That approach quantifies value only in the initial phase of surplus value creation, insistently pointing to the weight Marx put on the logic of exploitation and deducing all the contradictions of capitalism from this sphere.” Marini wanted to include “imbalances located in the sphere of demand”. Katz summed up Marini’s view on economic crises as a “multicausal approach to crisis, combining imbalances of realization with the falling rate of profit tendency”. Readers of this blog will know that as a proponent of a ‘monocausal’ analysis of crises, I think that Marini’s view leaves us without a theory of crisis at all. [NB!!] ”
This is a ridiculous distortion of Marini.
Firstly, because methodologically Marini worked in a consciously dialectical manner precisely to get beyond both eclecticism and dogmatism, that is to develop Marx’s categories to explain the realities of Latin American dependency within the world capitalist system (Marini, 2022: 113-5; 155-6). The leading example has to be the way Marini uses the concept of labour super-exploitation as a development of and rounding out of Marx’s theory of surplus-value. (ibid: 130-2; 160-6)
Secondly, what Marini pointed out is that the crisis tendencies work differently in the subordinated economies that are, in many senses, afflicted by a permanent crisis, the so-called ‘imbalances of realisation’, that require a fuller and specific analysis of how the modes of exploitation, market realisation and capital accumulation are disconnected, which is different in the dependent economies to the imperialist ones (ibid: 137-140). Marini’s student collaborator Jaime Osorio brings out the significance of this rupture (ibid: 174-7). Roberts is completely insensitive to this difference of perspective.
Thirdly, that Marx himself pointed out is that wages below the value of labour power was a method of counteracting the tendency of the rate of profit to fall that he would not go into at that level of his analysis. The statement in Marx’s text that ‘this has nothing to do with the general analysis of capital’ (1981: 342) was, in my view, doubly misleading. Both once the colonial face of capitalism is included as part of the general analysis, and as the key to capitalism’s ‘cure’ in the crisis moment itself. Marini provides us with the tools to fill the gap left by Marx, at the general yet differentiated analysis of capitalist crisis.
There are other themes to come back to. For now, Marini’s work rewards being studied carefully and with a more generous reading than you give him. This is not eclecticism, nor dogmatism. It is taking Marxism forward as a living tradition.
Marini, Ruy Mauro (2022) The Dialectics of Dependency Monthly Review Press
Marx, Karl (1981) Capital, Volume 3 Penguin
Andy Higginbottom email: a.higginbottom@kingston.ac.uk
Addressing out of order your contention that “Marx” is wrong and that colonialism was essential to the development of capitalism both in origin and in resolution of crisis? Spain and Portugal were colonial powers yet are borderline imperialist economies whose crises somehow were not resolved by their colonial empires. The Netherlands rise predated its colonies, which did not avail to resolve its crises of competition with England in particular. Sweden and Switzerland and Canada I think are imperialist economies yet they had no colonies. Belgium’s colony was a private enterprise. The most glaring colonialist enterprise in the world today is the Zionist entity of Israel and it’s not immediately clear what kind of economic phenomenon that is. And there is even the difficulty of “imperialism” conceived as conquest of other nations, assuming you think every language should have its own army. How is it so obvious Marx needs to be abandoned?
The notion of superexploitation is an average wage insufficient to reproduce the proletariat, or at least that appears to me to be Marx’s notion of the same. Given that it is the more advanced countries where the working class has the lowest reproduction rates. In some countries population is declining absent immigration. Population however is increasing in the countries deemed to be exploited. Obviously (to me,) the emigration of some people from dependent countries to the nearest metropole can be interpreted as a response to superexploitation…except the immigrant population in the metropole are held to be superexploited there too, aren’t they? And the issue of superexploitation in the imperialist countries is still there I think. It doesn’t seem the Marxist notion of superexploitation is at all compatible with your approach, but what is that?
Also an issue is the relative importance of superexploitation. In the largest imperialist economies, despite the relative deindustrialization over recent decades, the domestic economy is still huge. Only a fraction of it is engaged with foreign trade and much, maybe most, of that is with other imperialist countries. Someone who claimed the acknowledged “usury” of check cashing outlets in deprived areas (they’re not just in urban, i.e., Black, areas by the way) was the source of the wealth of the US bourgeoisie should consider, in my opinion, the relative mass of profits, not just profit rates on transactions. Is superexploitation of foreign workers like that, an egregious abuse and a part of the machinery of oppression, yet not quite the motor of the machinery?
Dear Andy,
cc Michael,
here is the central point of “dogmatically orthodox” marxism:
” But Katz argues that ‘super exploitation’ cannot be the main determinant of value transfer between rich and poor countries. “It dilutes the logic of surplus value” and it suggests a Proudhonian concept of theft rather than the “objective logic of accumulation”. As Katz points out, super exploitation also exists in neoliberal imperialist economies with ‘precarious employment’ and zero-hours contracts etc.”
People like Michael have to accept that if we want a marxist theory of:
– the modern (imperialistic) capitalism, as an overripe and parasitic mode of production,
– of the whole history of capitalism, starting from its birth via the primitive accumulation and colonial expansion,
until today’s overripe and parasitic, imperialistic stage,
we need to extend the logic of capital, i.e., the general theory of the capitalistic mode of production, with what is no less than the negation of the basic premise of Marx’s critique:
namely that a commodity economy is an economy of formally free and equal “citizens” of the bourgeois state, who, as economic agents, can produce and sell their commodities, be them capital, labour power or products of labour, without any external coersion,
i.e., that such a mode of production consists of purely objective relations, i.e, where productive relations are mediated/appear as relations among “things”, i.e., objects, in exchange, the labour power being also reduced to such an object, capable of performing abstract labour.
People like you and me, on the other side, we also need to meet the challenge and accept that this is a very ambitious endeavor. It is no less than the critique of the …critique of political economy!
Marx critiqued classical political economy by showing that capital exploits labour EVEN IF we assume the above formal freedom and equality, EVEN IF capital doesn’t need to coerse labour in the everyday workings of the economy.
Today, we need to theorize the dominant historical tendency of the superexploitation of labour (and nature…) against all those who present capitalism as being in an eternal youth!
In that respect, reference to colonial capitalism is not enough, because, colonial capitalism doesn’t have the same place in capitalism’s history as the modern imperialistic capitalism.
Colonial capitalism can be understood as what is still “external” to the “pure” capitalism (of Marx’s general theory of capital), and what at best belongs to the historical conditions or becoming of capital via its expansion at the expense of pre-capitalistic modes of production, i.e., it can be understood still in terms similar to those of primitive accumulation, etc.
Instead, the modern international division of labour in the form of value chains, the way capital subsumes creative labour, the quasi-commodities of creative labour (see the work of the recently deceased Buzgalin https://stavrosmavroudeas.wordpress.com/2023/10/22/alexander-vladimirovich-buzgalin-in-memoriam/), etc, are all forms of negation of the basic assumptions of Marx’s capital, while being at the same time historical products of the self-development of capital into imperial capital along the basic historical laws of …Marx’s capital!
The key point here is to frame the problem in the following way:
– under what conditions/to what degree are people free to exchange the commodities?
– under what conditions/to what degree the value of labour power converges across the society?
– under what conditions/to what degree the rate of exploitation converges across the society?
– under what conditions/to what degree the rate of profit converges across the society?
– can creative labour be subsumed to capital?
– can the law of value be applied to all modern commodities?
– what is the role of the state and of non-productive, but still commodity producing, activities in the reproduction of modern monopoly capital and its power?,
….,
and then put these questions into the context of the history of capitalism, and of the historical laws derived in Marx’s capital.
It is not enough to show that (colonial) capital made use of coersion historically, or that today there are modern forms of slavery with capital being their subject, etc.
Marx struggled – against Proudhon, etc – to show that capital can be reproduced without such coersion, so that e.g., even if superexploitation is part of its reality, it does not make part of the general theory of capital (since “pure” capitalism is “orthogonal” to systematic deviations to the law of value..).
Today, we need to struggle against “dogmatically orthodox” marxists to show that modern imperial capital CANNOT be reproduced unless it resorts to the superexploitation of labour (and nature), and to other forms of coersion, oppression, inequality, etc, and that this modern, imperial capital is the only possible, historical product, of the laws of Marx’s general theory of the capitalistic mode of production!
Dear Andy
There is one point on Marini that you may have made. If Marini meant that economic crises in the periphery start with a collapse in external demand for exports because of a crisis in the imperialist centre leads to a reduction in demand for periphery exports, then you could argue that demand is a causal factor in economic crises in the periphery. But of course, the collapse in export revenues brought a sharp fall in the profitability of local capital and then an investment strike by foreign and domestic capital.
After the global economic crisis of 2008-9 in the centre, that spread to the periphery in the form of a collapse of commodity prices and brief growth of the 2000s in Latin America gave way to recession. In the case of Venezuela and Argentina, governments tried to avoid a slump by printing money and got hyperinflation (with Venezuela suffering most from US sanctions). In the case of Brazil and Chile, they tries to preserve the currency at the expense of a slump. The political result was also a swing to pro-IMF and pro-US governments.
This shows how the periphery is ‘dependent’ on the centre. When the US sneezes, the rest of the imperialist bloc gets a cold; the periphery gets pneumonia.
Dear Michael
Thanks for your comment which makes a fair point I agree with, although it misses any direct response to critique.
Let’s talk about crisis. I think that your analogy does not go far enough. The ‘periphery’ always has pneumonia, it is chronically sick. When the US sneezes, many people die. Their crises are not only conjunctural, they are endemically structural.
The permanent crisis of underdevelopment is the common existential starting point of the dependency view that you miss. This requires a broader definition and development of the very concept ‘crisis’. Imperialism puts the subordinated economies in different states of permanent crisis including especially in the living conditions for the vast majority of their working people.
But not only that, the way the capitalism works in the ‘periphery’ is that it struggles to function as a coherent system at all. This broad division in the capitalist world system is not natural, but it has become naturalised as a given assumption of core and periphery that is not itself explained.
Marini contributed a breakthrough Marxist diagnosis of the sickness. The Marxist dependency school began to rethink all three volumes of Capital and develop from them a profound critique of the contradictions of how capitalism works in Latin America, and by extension as a broad pattern across the Majority World (Global South, Third World).
Both Marini, and Jaffe from South Africa, pointed out that the departments of production in Capital Volume 2 Part 3 are distinct in the subordinated countries compared to the imperialist countries. There is a lack of self-reproduction of all the means of production within each the two regions, the one imports raw materials and food whilst the other imports high tech and luxury products. I think that you share these observations empirically. My point is the theoretical depth that Marini brought to the analysis should be appreciated and built on.
On crisis, we should move beyond a narrow interpretation of the significance of ‘wages below the value of labour-power’, as positioned in Capital Vol 3 Ch 15. Its role in counteracting the falling rate of profit tendency needs to be elaborated further in two directions, not just one. In the context of periodic crises, that your book explores, at the moment of crisis when more capital invested does not generate more profits. Extracting surplus-value is at this point not based on increasing productivity that brought on the crisis; but by forcing down wages alongside the devaluation of capital. The system attacks the living standards of workers to restore profitability on a new basis, thus initiating a new boom bust cycle.
But there is a second direction through which the rather abstract formulation ‘wages below the value of labour-power’ operates in reality, i.e. through space as well as time. The counter tendency defines the regional space of capitalism, outside the imperialist centres to economies with even more authoritarian and oppressive class relations, where drastically lower living standards (and shorter lives) for workers are the norm.
Marini’s work demonstrates how this unacceptable norm is reproduced both externally and internally. His formulation of labour super-exploitation is a closely argued extension of the concept of surplus-value as presented in Capital Vol 1. I argue this in more detail and so won’t repeat here. Please refer to https://monthlyreview.org/2023/04/01/superexploitation-and-the-imperialist-drive-of-capitalism-how-marinis-dialectics-of-dependency-goes-beyond-marxs-capital/
Crisis-as-permanent-condition needs be explained. Marini posits labour super-exploitation as the general, underpinning characteristic of capitalism as imperialism. Recognising this has vitally important political implications for the basis of unity of the international working class.
[CORRECTON] Dear Michael
Thanks for your comment which makes a fair point I agree with, although it misses any direct response to my critique.
Let’s talk about crisis. I think that your analogy does not go far enough. The ‘periphery’ always has pneumonia, it is chronically sick. When the US sneezes, many people die. Their crises are not only conjunctural, they are endemically structural.
The permanent crisis of underdevelopment is the common existential starting point of the dependency view that you miss. This requires a broader definition and development of the very concept ‘crisis’. Imperialism puts the subordinated economies in different states of permanent crisis including especially in the living conditions for the vast majority of their working people.
But not only that, the way the capitalism works in the ‘periphery’ is that it struggles to function as a coherent system at all. This broad division in the capitalist world system is not natural, but it has become naturalised as a given assumption of core and periphery that is not itself explained.
Marini contributed a breakthrough Marxist diagnosis of the sickness. The Marxist dependency school began to rethink all three volumes of Capital and develop from them a profound critique of the contradictions of how capitalism works in Latin America, and by extension as a broad pattern across the Majority World (Global South, Third World).
Both Marini, and Jaffe from South Africa, pointed out that the departments of production in Capital Volume 2 Part 3 are distinct in the subordinated countries compared to the imperialist countries. There is a lack of self-reproduction of all the means of production within each the two regions, the one imports raw materials and food whilst the other imports high tech and luxury products. I think that you share these observations empirically. My point is the theoretical depth that Marini brought to the analysis should be appreciated and built on.
On crisis, we should move beyond a narrow interpretation of the significance of ‘wages below the value of labour-power’, as positioned in Capital Vol 3 Ch 15. Its role in counteracting the falling rate of profit tendency needs to be elaborated further in two directions, not just one. In the context of periodic crises, that your book explores, at the moment of crisis when more capital invested does not generate more profits. Extracting surplus-value is at this point not based on increasing productivity that brought on the crisis; but by forcing down wages alongside the devaluation of capital. The system attacks the living standards of workers to restore profitability on a new basis, thus initiating a new boom bust cycle.
But there is a second direction through which the rather abstract formulation ‘wages below the value of labour-power’ operates in reality, i.e. through space as well as time. The counter tendency defines the regional space of capitalism, outside the imperialist centres to economies with even more authoritarian and oppressive class relations, where drastically lower living standards (and shorter lives) for workers are the norm.
Marini’s work demonstrates how this unacceptable norm is reproduced both externally and internally. His formulation of labour super-exploitation is a closely argued extension of the concept of surplus-value as presented in Capital Vol 1. I argue this in more detail and so won’t repeat here. Please refer to https://monthlyreview.org/2023/04/01/superexploitation-and-the-imperialist-drive-of-capitalism-how-marinis-dialectics-of-dependency-goes-beyond-marxs-capital/
Crisis-as-permanent-condition needs be explained. Marini posits labour super-exploitation as the general, underpinning characteristic of capitalism as imperialism. Recognising this has vitally important political implications for the basis of unity of the international working class.
Rodolfo Magallanes
to ahigginbottom32ca9d5ac1
“Crisis-as-permanent-condition needs be explained. Marini posits labour super-exploitation as the general, underpinning characteristic of capitalism as imperialism. Recognising this has vitally important political implications for the basis of unity of the international working class.”
I agree with this last sentence. What I don’t understand is how the centrality of superexploitation to the existence of imperialist countries, which includes all the inhabitants, somehow does *not* directly lead to the conclusion that there is no material basis for any class unity between the people of imperialist countries and the workers of the rest of the world Given the emphasis on the role of imperialist violence, it is not clear this this does *not* directly lead to the military necessity of class unity with the national bourgeoisie (absent whoever counts as a “subimperialist” I suppose) against the oppressor peoples. If the world’s problems can be solved by the extermination of a mere 350 000 000 people out of more than eight billion, which seems intrinsically unlikely to me, being in the US then would make the US army my friend. But I have no friendship for the US army, so as of now I do tend to resist the argument the US imperialists are my allies against the rest of the world.
My wants and my unseemly personal distaste for US imperialism are irrelevant to the facts, though. If my life and the lives of my loved ones are in fact trapped in a zero-sum game with the rest of humanity, that is the tragedy of life I suppose. But is it really a fact?
First of all, it’s not really a crisis till the rich people are losing money. This explains a lot about the world I think.
Second, personally being a would-be Marxist (a dismaying thought for our host, sorry) but not an anarchist, I think the development of the productive forces is in the long run a Good Thing, provided you remember that the #1 productive force is people. Their creativity and the mere existence of nature is why it’s better overall to be alive now than a primitive communist band, though I’m sure this personal opinion is bitterly contested.
Third, that means the Marxist objection to capitalism/imperialism is that the engine that once developed the productive forces has exhausted its own capacity to keep on the same way, and it is now an obstacle to further development of the productive force, which is to say, the progress of humanity. Capitalism/imperialism slowly improved life for humanity at large in the long run—the atrocities inflicted on some populations of humanity and the horrible costs in the short run notwithstanding. But then, this was true of revolution too, and revolutions also improved the lot of humanity by increasing freedom. (For the anti-Communists, freedom is not just a juridical status but material. What the government does for the people is an indispensable index of their freedom too.)
Fourth, the first calls to revise Marxism so far as I know arose in response to Marx’s immiseration thesis. The notion that the price of production of labor power (to use an awkward jargon) would tend towards the level that would reproduce the labor power implied that the lot of workers would always be limited to whatever the growth of the productive forces permitted and could be exacted from the capitalists by class struggle, both at the point of production and in the political arena. Given that this level is established by the movement of capitals; that the capitalist economy is intrinsically unstable; that random fluctuations also occur because, if nothing else, unpredictable nature; that the wildly various circumstances of persons and enterprises of all sorts equally causes changes in the local wages; that markets are never ideal and physical “capital” is not infinitely fungible; that all economic processes occur at different rates; that the powerful will use illegal and even forceful means to their advantage…for all these reasons, *it is inevitable* that some workers will receive less than full value for their labor power. They will be not just relatively immiserated in comparison to the increasingly obscene wealth and income of the propertied, but in absolute misery, life-threatening penury. European socialists who looked only at recent changes only in their countries (an egregious error, sadly partly motivated by chauvinism I think,) wanted to revise Marx because of its immiseration thesis was falsified. I think that if you look at the whole capitalist/imperialist system, both the general level of possibilities/potential for a better world have increased *and* the average lot of all humanity considered, not just the best parts (the imperialist metropoles) arbitrarily chosen as somehow the norm instead of outliers, has increasingly failed to match the potentials squandered by a bankrupt, now reactionary system. And I think the continued existence of both absolute and relative immiseration in the imperialist paradise (paradise=walled garden! not Heaven!) proves this.
Fifth, the claim that Marx needs to be revised because of immiseration thus strikes me as being just another case of wanting to revise Marx. Yes, this time it’s for opposite reasons than claimed before, but politically or philosophically speaking, it’s not clear that’s a relevant distinction. A genuine case for the centrality of superexploitation as the material basis for the lives of the workers in the imperialist countries needs to be demonstrated. The continued existence of the industrial reserve army, the insistence of Jerome Powell that wages must be cut to raise profits, seem to me to be arguments from life for Marxian political economy. But I’m not at all clear about the evidence for superprofits from superexploitation benefiting the people rather than the superexploiters. Buying off the union leaders and the aristocracy of labor, when unions are sinking lower and lower and real wages mostly keep stagnating? (The lower level workers did pull ahead somewhat during the quarantine disruption, hence Powell’s hysteria I think, but they are doing their best to make this temporary.) Ownership of private homes, when it is notorious that the newer generations are finding buying a home ever more unlikely? Economists even want to abolish the mortgage interest deduction, rather than tax capital gains!
Sorry for the length, being a very bad writer every effort to shorten merely makes everything even more disjointed and downright cryptic. Plus going back to basics—it’s the professionals like Roberts who can do the useful analysis with statistics and other facts, why we read him after all—is wordier because it is more general.
Andy, i share your opinion. The laws of motion of capitalism inthe core are not the same as in the periphery or semi-peripiphery and that is the main point of marini! And of dependency theory.
Thanks so much, for yours post. They are of very interest to understand the contemporary economy. I want to recomend my work for relating issues in here: https://dialnet.unirioja.es/servlet/articulo?codigo=8664189
Very good summary Mr. Roberts, although I’m not sure I’ve taken it all in, when we look to the BRICS as a solution, and a possible hegemon from Beijing, we’re far from the mark, on the one hand the critical global environment, and on the other the accumulation of colossal debts and even China in terms of loans exceeds the IMF.
We’ve lost count of the number of debtor countries rescheduling loans to China.
The US hegemon could only be achieved after 1945 on the condition of economic growth and a Taylorist model of accumulation, with the gigantic employment of variable capital.
This window of opportunity has now closed.
Today, apart from the hallucinatory forecasts and visions of AI, there seems to be no new mode of accumulation in the near future, which will only accelerate the irremediable decline in the rate of profitability.
China, the country of late capitalism, is confronted on the one hand with over-accumulation (an attempt to fallow during the coronal episode) and declining profitability, and will therefore be increasingly inclined to resort to fictitious capital.
Conflicts between peripheral countries are part of inter-imperialist warfare over access to resources, but obviously not exclusively. We’d rather say that central countries rely on regional antagonisms, or if they don’t exist…organize them.
“…the core economies through unequal exchange in trade is mainly due to productivity differences and technological superiority…”
The orthodox way to put it is simply to state the prices of production, which guarantee that commodities with lower profit rates receive an extra profit rate from the commodities with higher profit rates. This can be extrapolated logically to sectors, markets and, finally, nation-states.
Prices of production, plus the Tendency of the Profit Rate to Fall (lower profit rates arise from higher OCCs, thus closing the logic).
–//–
The Theory of Dependency is a major example of what people and historians of the Cold War call a form of “vulgar Marxism”. Vulgar Marxists (this is a post-1980 terminology; before, they were just called and called themselves “Marxists”) exist since Marx himself was alive, but they really reached their apex in the postwar. After the defeat of the Left with the Vietnam War in the USA, the triumph of the liberal dictatorships in Latin America and “1968” in Western Europe and, finally, after the oil crisis of 1974, they started to decline.
The list of vulgar Marxism is extensive because their ascension coincided with the great expansion of academia and other publications of the postwar. Just to give a few examples, we have the Left Margin intellectuals (France, here included Sartre’s Existentialism), Baran & Sweezy (USA), Theory of Dependency (Latin America), Althusserianism (France). All of them who claimed to be perfecting and/or even correcting Marx; all of whom — the evidence strongly indicates — did not read Marx’s complete published works.
Another feature of vulgar Marxism is that they were all closeted nationalists. There is this myth about the Cold War that it was a world where two ideologies — liberalism and Marxism-Leninism — dominated the landscape, but this is not corroborated by evidence. Nationalism was, by far, the dominant ideology of the Cold War, to the point that even the two great communist revolution of this era — Cuba and Vietnam — were explicitly nationalist. The Left Margin intellectuals were in-your-face nationalists: Les Temps Modernes was precisely created by Sartre et al with the objective of creating a new purpose for a new, now second-rate power, France; the first crisis/schism of the Left Bank intellectuals was precisely the loss of Algeria — from which Albert Camus (who was not a Marxist, but was part of this “alliance” with Sartre) never recovered. The Theory of Dependency was an extremely nationalist school of intellectuals — from which arose their main theoretical errors, including this “sub-imperialism”/“everybody is imperialist” categorization.
Their decline opened a vacuum filled by the neoliberals and the postmodernists in academia and, whatever was left was filled by a new school of Marxism called “Marxianism”, whose members preached a return to the original writings of Marx. The rise of Marxianism is the only silver lining in Western intelligentsia of the 21st Century.
–//–
Quick note on the issue of imperialism:
When Lenin wrote about it, he was clearly talking about imperialism as a phase of the breakdown of capitalism, not as an intrinsic category of the inner motions of capital. His objective was not theoricization, but to prepare the Russian people (future Soviet people) for revolution. Lenin did not consider himself as a theoretician, but was a vanguard with a very specific task (revolution).
Theorizing imperialism is a mistake. For example, to claim China is the imperial successor of the USA — that is, that a world order hegemonized by China will be the same as the old world order hegemonized by the USA, except the new toys and that everybody will have to speak Chinese — implies a circular model of historical time, which is an even more infantile and millenarianist concept of History than the old Soviet mechanicist view that the other nations would sleepwalk towards a communist revolution.
Marx predicts an event in which production based on exchange value collapses; capitalist private property is abolished; and the management of production becomes a public function. This foretold event may not immediately lead to the abolition of production for profit; on the contrary, Marx and Engels leave open the possibility that the breakdown of exchange-based production “does not eliminate the capitalist nature of the productive forces”; rather, the state becomes the national capitalist.
Where this leads next is the great unanswered question. All we know is that Marx and Engels believed that the state “topples”. Why this should happen remains, until now, unknown to labor theorists. But I suggest that it could be exactly what we call neoliberalism, the bizarre spectacle of capitalism trying to kill its own state.
Roberts’ view is typical of a kind of rigidity thinking that dominates a certain ‘school’ of contemporary Marxist analysis that sees exploitation of productive labor only as the source of all capitalist growth and instability. It rejects all analysis of what may happen to value after its initial creation into a commodity and its disruption in that part of the full circuit of capital, from initial commodification to its recommitment to reinvestment back into forms of new constant and variable capital. Much happens in that latter circuit. But Roberts’ view considers wage theft as Prouhonian error instead of secondary exploitation. And economies like Brazil and other BRICS are considered no different a form than a Mozambique and fully exploited by the capitalist core. Instead of acknowledging for various reasons that a Brazil may have become more independent from that core and hence not as exploited as a Mozambique by the core. The real world of capitalism and imperialism is not as dichotomous as Roberts and original dependency theory suggests. There are many forms between the two poles of core and periphery. Just as Marx’s view of productive vs nonproductive labor in the process of exploitation is also too dichotomous and therefore overly simplistic an analysis. Ditto trying to explain imperialism and global exploitation by reference to only production of value while ignoring the role of finance capital and the sphere of distribution and realization and disproportionality between production and finance cycles disrupting the full circuit of capital.
Jack there is no need to reply to your points. You know my answers. We disagree.
It really depends on what you’re talking about and about what your goals are.
Marx was a philosopher, and he published works on Philosophy. Das Kapital is a philosophy book, not an Economics one (“critique” is a genre of Philosophy).
On a philosophical level (that is, on a mathematical-logical level), all wealth comes from human (living) labor. That is an absolute truth.
Now, on an Economy science level, where economists want to predict which fund to invest next, which profit rate to have in x time etc. etc., this truth may not be so immediately useful. Economists may have to create additional useful categories to that so they can become practical to what they were trained and are being paid to do (e.g. counsel a billionaire which is the best portfolio to have for the next five years). But it is still a truth — so far, no logical inconsistency has ever been found in Das Kapital.
Jack,
I agree. If you distinguish between a core, a semi-periphery and a periphery the real world is becoming far more complicated. Scholars have tried to show that the laws of motion of capitalism are very different for these three categories. Yes, the role of finance capital is completely ignored which already developed during the 19th century compensating for the falling rate of profit, not to mention the role of the state with its military expenditures. What to think of the role of the mass of profit for compensating the falling rate of profit as already mentioned by Ernest Mandel for big capitals which could be related to the role of financial cycles, distribution and realization.
The common denominator between imperialism and fiat currency
There is now a common denominator between the rise of imperialism and the emergence of inconvertible fiat currency: both imperialism and fiat currency require state involvement. This means that capitalism is now in a situation of continuous capital overaccumulation, which necessarily assumes a critical role for the state in maintaining capitalist accumulation.
In the first place, the state is necessary to impose the will of one national capital on all others within the global market. There is no world market state as a whole, but only a variety of competing states, each seeking to impose its will on all the others. In the final analysis, this competition between equally sovereign states can only be resolved by force, i.e. military conflict.
Secondly, the state is necessary because it is the only authority capable of determining what legally serves as money within its borders. Since real money can no longer circulate in the form of capital, the state’s legal function of determining what will replace money comes to the fore. The state can only decide what serves as money, because commodity money no longer plays the role of capital. In other words, the inconvertible fiat money issued by the state does not express the value of raw materials; rather, it expresses their use value as capital.
Another way of putting this is that the values of commodities as capital are completely incompatible with their values as simple commodities. The problem could be overcome by reducing working hours and gradually emancipating society from labor. This is in fact what Keynes proposed in 1930 (see page 5 of his essay) and was supported by many other authors at the time. But this ignores the fact that capital is only interested in production for profit, and has absolutely no interest in ending the contradiction between the value of goods and their prices.
Far from wishing to put an end to the contradiction between value and price, capitalist production for profit requires that the contradiction between value and price be constantly widened. This growing contradiction has two obvious expressions: firstly, as the value of raw materials falls, their market price rises (inflation). Secondly, as less labor is needed to produce commodities, the total labor force employed must increase; this implies a growing expenditure of labor that produces nothing because it is superfluous to capital investment.
Could you write more about this permanent overaccumulation and its relation to fiat money? It is very rare to find something about this ussue.
Humorously oversimplified.
Given that fiat currency is not a commodity currency but an equivalent containing at best a residual value, nor a quantity of crystallized labor, but a simple accounting token, any simplification given, there is an over-accumulation of capital, for the following reason, cannot be profitably reinvested in production, -This is why the economic locomotives cede their capital to the State (which imposes its Fiat currency with ICBMs) against interest, the principal never being repaid.
If you don’t want to open the window and look down, you can always have recourse to a future value, or a little stay in Las Vegas.
Guerrera, thanks for replying!
Just makes me wonder: but is fiat money is the problem in capitalism?
The contradiction between value (SNLT) and profitability has its expression, among other things, in the falling rate of profit: the less SNLT, the less value, profitability falls. The answer to this is supposed to be a form of money that is no longer a commodity (i.e. has no SNLT), and therefore also (to use E. Mandel’s phrase) “permanent inflationary tendency”. But since fiat money is a response to the falling rate of profit – if commodity money continued to exist, there would be no this another mechanism to neutralise the downward trend in the rate of profit – does it not lead to a certain, relative stabilisation? Since we have had money completely detached from commodities (the end of Breton Woods), crises have been mere recessions, and the current “great depression” bears no resemblance at all – in terms of its socio-economic and political effects – to the depression of the 1930s. Whereas in the 1930s inflationary pressures impoverished society in an absolute way (and not, as today, relative) thanks to the link between commodity money and value (SNLT), the situation is now the opposite. Moreover, capitalism has allowed non-productive labour to develop so widely that we even have the ultra-rich living only from non-productive labour and not from the possession of capital (vide celebrities).
A contradiction between value and price emerges (labour value falls, price rises), but as we can see it is much less problematic than the previous contradiction: between value, money as a representative of value, and falling profitability. For, so far, this is not the biggest problem: the rate of profit is falling in productive sectors, but not in non-productive labour sectors, where an increasing amount of fiat-generated money is invested. I realise that this could be considered a form of crisis of the mode of production, but on the other hand it is also a strong tendency against the crisis of capitalism. Otherwise, we would have not a stagnant growth of GDP per capita (although, like everything in capitalism, this is uneven, as some professional sectors successively increase their incomes and some countries have improved their position in social division of labour, Central-Eastern Europe for instance), but a successive decline, as in the days when inflation only served capitalist monopolies looting the population through the price system (1930s in Europe). This anti-crisis role of fiat money in capitalism is not understood, of course, by the Austrian school of economics, which fights the modern state without understanding how capitalism works and why it is not a simple commodity economy but an extended accumulation of capital. And despite this not understanding, political formations closer and closer to this school are gaining mass support (most recently: Argentina, previously Ecuador with its “anarcho-capitalist” currency in the form of Bitcoin). “Vulgar economicy everywhere”, as Engels said!
Revolutionary Marxism must come to grips with this paradox and explain it in a meaningful way to the working class, otherwise it will reel and fade away. Which is, in fact, what is happening now. And if we further accept that capitalism does not have to be based on super-exploitation, i.e. the undervaluing of labour wages, which was the historical premise for the socialist movement and for the communist movement centred in the pre-Stalinist Comintern, then the question of progressive socialist annticapitalism started to wanish. Well, unless it is for ecological reasons, but here one can easily move to the position of rolling back productive forces against capitalism rather than towards a ‘higher’ system – socialism based on the working class.
An Eastern European Marxist
If the state can constantly put more money into circulation, it can simultaneously reduce the purchasing power of wages. This has profound political implications: “full employment” is achieved by reducing the purchasing power of wages. The demand for full employment has now been effectively transformed into a demand for wage cuts. With this mechanism in place, the state can prevent the emergence of a vast population of unemployed and hungry workers, which could threaten capitalism, while reducing wages to subsidize profits.
In a Keynesian economy of full employment, increasing employment – that is, steadily increasing the total number of hours worked by the working class – is the means by which wages are reduced. If the overall value of wages paid to the working class remains constant, the average value of the wage paid to each worker decreases as the total number of workers increases. This effect has nothing to do with the currency in which wages are denominated. Currency has no value, and its rise or fall has no impact on the real value of wages.
The real value of the two-hour wage can be shared between two workers simply by having the state create additional worthless money and use that money to hire an unemployed worker to dig holes in the ground and then fill them. Where one worker was previously paid $20, two workers now receive $40, but no new value is created and, more importantly, no additional value is paid: the total value paid for the labor power of the two workers is still two hours. Before the split, the real wage was represented by $20; but after the split, the same two hours are now represented by $40. The workers each receive $20 for their labor and consider themselves lucky to have a job. They have no idea that all that has happened is that one worker’s real wage is now split between two workers. Each now receives only half the value of their labor power, but as this wage is paid in a worthless currency, their nominal wage has not changed.
This ingenious scam to maintain full employment was first explained by Keynes in Chapter 2 of his General Theory in 1936. Keynes’ explanation of how his scam worked can be found in Section III. Workers, Keynes declared, “do not resist reductions in real wages, which are associated with an increase in aggregate employment and leave relative nominal wages unchanged” .
Simply put, workers who had jobs wouldn’t complain about inflation. Since this was true, there was nothing to stop the state from inflating the purchasing power of wages to maintain full employment.
An Eastern European Marxist
Marx’s theory predicted that the conditions of capitalist production would eventually violate the conditions of commodity production, leading to the collapse of production based on exchange value. Simply put, at a certain stage in the development of the forces of production, production for profit cannot continue on the assumption that -labor power is sold at its value-. This event is also at the root of the Marxist prediction that capital would drive the working class into abject poverty, i.e. the impoverishment thesis. Finally, the fall in wages below the value of labor power also constitutes what Marx calls “one of the most important factors which restrain the tendency of the rate of profit to fall”. (Majuscule, V3, c14)
You say: ‘‘Unequal exchange’ in international trade is a fundamental component of Marx’s theory of value. ‘
I find that a remarkable claim given that there is no treatment of unequal exchange in Capital I and given too, that the whole thrust of the book is a polemic against other socialists who claimed that profit arose out of unequal exchange.
Paul I think you misunderstand me. Value comes from labour (labour power). But value (or more precisely) surplus value can be transferred from the less technically developed capitals to the more developed through exchange on the market – ie unequal exchange of value through trade. Unequal exchange in this sense is in Volume 3 in the transformation of values into prices of production. But I dont need to tell you this of all people.
There is very little evidence to support the hypothesis of profit rate equalisation within national economies, let alone at a world scale so the relevance of vol 3 to international trade is unclear.
to Paul Cockshott
If movements of capital are not in search of equal profit rates, then presumably it is directed by the principle “buy cheap, sell dear,” a state of affairs largely due to inevitable and incurable market ignorance, monetary shenanigans by financiers and chance. International trade is according to this more like the stock market than anything else. And it implies imperialism is an optional policy for vested interests but victims can successfully fight it with capital controls, wage cutting and economic autarky of some kind. Going nuclear on volume 3 of Capital has pretty dramatic consequences.
Offering a simple labor theory of value where prices really are proportional to abstract socially necessary labor time without movements of capital forgets the “socially necessary” part is determined by the movements of capital, where inefficient or “bad” labor (more productive of use values that can be realize profits) ultimately lowers profits, while efficient or “good” labor becomes the standard…because capital moves toward what generally is the more profitable use of labor power. At least, it seems to me that without such transfers of capital (money, physical, “human”) “socially necessary” is *not* a real world process, but a phrase.
Also, I suspect the problem of the heterogeneity of labor power, not just in skill and intensity but in location, mobility and reproducibility (not all labor power is free reproducible) become even more of an issue without a market or custom to determine exchange value of labor power. All such problems are multiplied—maybe exponentiated!—by the multiplicity of currencies in international trade. And I suspect that an “economy” that is effectively a random congeries of different local labor systems is only questionably an economy at all. And if it’s the currency that binds the social production process together, then it’s a question whether Marxism has anything to offer at all, besides positive feelings about labor, something shared by many liberals and verbally at least, conservatives. Going nuclear on volume 3 I think really does have serious implications.
If the thought was supposed to be that movement of capital to equalize profit rates is imperfect at achieving this, then the relevance of volume 3 I think is proportional to degree to which prices deviate from the simple labor theory of value. (I have a vague memory of Classical Econophysics estimating 50%? Probably wrong, sorry.)
This is in no sense Michael Roberts’ opinion.
In any hypothetical market socialism that I know of, absent central planning, capital investment for economic growth either is self-financed by the socialist enterprise by sales on the socialist market *or* by some sort of cooperative bank/banking system. In the first case, differentials in productivity will be self-reinforcing, producing unequal development. Yugoslavia with its approaches to a market socialism suffered so far as I can tell from this, reviving and magnifying the old national divisions so key to the breakup of Yugoslavia and the demolition of its market socialism. (No doubt not the real market socialism, but it is routine to deny socialism has ever been truly tried anywhere anytime, no?) And this is true I think because any fair exchange of products on the socialist market will nonetheless be inherently unequal in the same sense unequal exchange between imperialist countries. So, yes, unequal exchange as a real phenomenon refutes market socialism, therefore denying it is real is essential.
In the second case, presumably some sort of socialist market bank/system will play fair. But it is entirely unclear how such a bank/system will allocate capital in the absence of a free market in money capital (not to dwell on the issue of how credit is managed, though the only likely solutions basically involve a return to the gold standard?) If it is on productivity (practically speaking, the “profitability” of the socialist enterprises) then it continues the unequal development. If it is at random, then it is inherently inefficient, no? Also, of course, it’s distributions of credit might well be aimed at preserving petty bourgeois properties that will inevitably continue and emerge in socialist markets to meet new needs, rather than establishing new enterprises. Statutory requirements to favor cooperatives will meet radical problems in bankruptcies (a problematic notion in market socialism, so far as I can tell, but “bankruptcy” is a legal resolution of real world economic straits, hence unavoidable.) And the notion that credit will simply be distributed according to precedent combines “planning” with total inflexibility! Forbidding change does not seem a feasible plan. Again, if unequal exchange is a real thing, it will prove an insuperable obstacle to the long-term prospects of a socialist market economy.
But on the political side, such schemes for market socialism point to reforms of the credit system. Instead of a Money Trust (the old phrase used in the US political scene) rigging the economy, anti-trust, not expropriation of capital and planning, that is, management of the economy by the people who don’t own capital, is the great need. And in fact, the old anti-democratic process of revolution is to be actively opposed as itself the obstacle.
My opinion, I don’t speak for Michael Roberts who I’m sure disagrees.
Definitely not. Investment derives from the social or common fund driven by planning based on consumption preferences, what I call consumer led planning. Companies using their own surpluses to invest are acting blindly, there would be duplication and waste and we may as well go back to the market.
to ucanbpolitical
Inasmuch as my comment was about socialist markets, I’m not sure that assuming away the hypothetical socialist market resolves the issues I tried to raise. The social or common fund imagined as being without a center, or possibly as some sort of set of algorithms that transforms polls into allocations of funds, is also a system that cannot be directed by mere governments. Not being an anarchist, I see this as also being immune to democratic control. Of course the usual belief is that a central government planning is in itself anti-democratic, if not outright totalitarian. Usual anti-Communist politics then apply, I suppose.
Further, in an advanced economy, consumers and producers are a dialectical entity. Much “consumption” is of intermediate goods, which is to say, production. (No, I suppose saying anything is two different things at the same time in some imaginary static universe of eternal entities is absurd. But the same thing being at different moments in a process of change two things that superficially appear to be opposite, is *not.*) Cooperative socialist firms would necessarily be part of the consumers doing the planning, leading to the problem of choosing: Do “successful” firms direct more intermediate goods for their consumption, accentuating unequal development yet again. Or does the common fund redirect expanded production towards other socialist enterprises on something like a per capita basis maybe, number of employees….except this raises issues of reproducing inefficiencies. In the long run, strangling productive forces is *not* a service to the people.
Consumer preference as the choice between goods at different prices being the only correct way to measure consumer preferences, or at least much more reliable than costless and unconsidered opinion polls is also an issue. One could I suppose imagine current prices in capitalist economies as reflecting consumer preferences and begin with that information but it seems like a way of perpetuating old bourgeois irrationalities to me.
If one tries to survey only what might be called final consumers, individuals in their capacities as atomized individuals, that leaves the intermediate “consumption” of production goods and services uncertain, if not outright chaotic? Worse in the long run I think, individual consumption choices are basically made from a menu. *Writing* the menu is not the same thing at all I believe, and it is entirely unclear to me how this is to be done without centralization. I personally think a central authority that carries out majority will and that materially benefits the majority of the population rather than redistributing from the majority to the minority qualifies as democratic. But much of the appeal of market socialism seems to me to be the wishing away of any central authority as inherently democratic. Perhaps this overestimates the influence of anarchism, but to me, libertarianism, not just the partisan political kind but the economic and philosophical libertarianism is the most popular and powerful part of the anarchist trend.
Would consumer preferences support a space program that aimed to ultimately be in a position to divert any asteroids or comets that threatened to strike the earth? If you want to stay down to earth, how does consumer preference in socialist markets handle consumption of churches, or other recreational drugs? How does it handle production of contraceptive services?
In Volumes 1 and 2 Marx treats all exchanges as equal, hence abstracted. In Volume 3 he moves to the concrete where capitals differ as in reality. Exchange is therefore no longer equal but unequal as in terms of market value and prices of production.
How do you evaluate Brenner’s critique of dependency theory? Does Katz’ book deal with this?
The funny part is that Michael’s graph tends towards OCC and RSV each explaining almost 50% of international value transfers, the tendency being for RSV role to become more prominent than OCC’s…
The tendency for RSV to increase its role over OCC coincides with the capitalist crisis of the ’70s, and the start of the neoliberal globalization or better said, imperialistic internationalization of production strategy of monopoly capital.
Please consider also that the period of 1950 – 1970 was an abnormally sucessful period for capital accumulation in the imperialist stage of capitalism (20th century), due to the huge destructions of two World Wars in a period of ~30 years.
Therefore, Michael’s data speak for the centrality of superexploitation over – let’s say – relative surplus value for imperial capital…!
Fully agreed. During the reading, I saw the same tendency in Michael’s graph: rising RSV against OCC. This is a strong argument for super-exploitation thesis.
A rising rate of surplus value (RSV) does not imply super-exploitation per se.
“RSV” if I understood correctly, means relative surplus value. The assumption this is identical to “superexploitation” is not justified so far as I can tell. How much? is essential to a scientific analysis, so essential you can almost say that if you don’t ask the question, you’re not even being scientific, even in the simple sense of being methodical, trying to be complete.
It means the rate of surplus value. And that can rise without any super-exploitation ie wages below the value of labour power. Indeed, a rising rate of surplus value generally rises through rising productivity of labour and a fall in the share of wages in national income.
I made a long comment above about the nature of the debate between what I call “dogmatically orthodox” marxists, and what I would call “non-dogmatically orthodox” or genuinely revolutionary ones (because only scientific truth is revolutionary!)! 🙂
I am glad that I have an opportunity here to exemplify this distinction on this example, and I accept the risk of being accused for “vulgar” marxism!
Marx’s capital starts with the commodity, and passes over to capital and to labour exploitation, the laws of surplus value, etc, under the assumption that commodities are sold at their values (at least as a tendency, and to the degree that we assume a unified market where free competition eventually prevails over all kinds of “frictions” and “obstacles”), including the commodity of labour power.
As I wrote above, the underlying assumption is that assumption is due to another one, about a unified society (no state borders segmenting it), where all commodity producers, oweners, sellers and buyers, are formally equal and free.
However, if we relax the above assumptions, and, instead, assume systematic power deviations both between capital and labour (how else can we think of 50+ years of neoliberal strategy in both developed and developing countries?..), among capitals (monopoly vs non-monopoly), as well as
among labour powers and their human bearers (how else can we think of anti-immmigration laws, racism, etc?) then we can allow commodities to be systematically sold/bought above/below their values, including the commodity of labour power (of course for all other commodities but the labour power, we are referring here to prices above/below their prices of production).
Then, unlike in Marx’s Capital, a rise in the rate of surplus value can be also due to systematically lower wages.
In that respect, we can define superexploitation in 3 ways:
– Relative to time: when in a given society/country/economy, real wages fall along a long period of time, as it is the case for the last decades, one way or another,
– Relative to space: when wages, and other exploitation factors (labour intensity, etc, as well as the length of the working day, although this has to be excluded here if we want to distinguish absolute surplus value), differ systematically among countries. What is important to note here is that wages can vary for structural, objective reasons, i.e., due to the different levels of development in each country, which affect no only productivity or the OCC, but also the average “quality” of the commodity labour power, and, therefore, its average cost, as well as for reasons of different conditions of class struggle across countries (oppresion against syndicalism, high levels of unemployment, etc), both of these factors being part of the “moral and historical” element of the value of labour power.
– Absolute concept: from the perspective of the total world labourer, the practice of lowering the value of labour power, or, raising other factors of exploitation (mentioned above), no matter if this happens in historical time within the same society/country/economy, or by moving capitalistic production to another country/economy. Here, the “total” labourer can be approximated statistically (e.g., the average labour power and average conditions of exploitation at the world’s scale), or a more thorough analysis can identify e.g., the minimum value of labour power capable of performing each kind of labour with the average productivity. Then, all wages above (below) that value would mean a lower (higher) exploitation rate, respectively.
Now, to what degree the rising RSV in Michael’s graph is an indication of rising productivity or of rising exploitation due to the other factors (mentioned above, including the depreciation of labour power), is an issue to be dealt with careful empirical research.
However, from a more approximate, “political” perspective, we can – easily – consider the following:
– I have been following Michael’s articles on the so-called “productivity paradox”, of stagnating productivity increases in most developed economies, which Michael attributes mostly to diminishing productive investments due to the low levels of profitability. I tend to agree with him, but I would like to add to this that many of the modern technologies and (non?)productive activities either do not aim at productivity increases at all, or are not so suitable to be subsumed to capital (i.e., several services, e.g., to what degree and how you can increase the “productivity” of doctors and teachers?..). So, could it really be that RSV increases due to higher productivity in the developing world? Moreover, such an increase would act in the opposite direction to the one Michael’s data indicate. If I am not mistaken, OCC is higher in developed countries, whether RSV is higher in developing ones. Otherwise, we the graph wouldn’t be about value transfers, but about differences in value production. @Michael please correct me on this if this is not the case.
– On the other hand, we have all witnessed the imperialistic internationalization of production along international value chains, and how several developing countries have become the “factories” of the world. We can assume that industrial production in those countries has a productivity on average lower than the one at similar factories (if any left…) in the developed countries, but AT THE SAME TIME, not so low that would diminish any OTHER benefits of such historical movement, the major of which, is the …low wages… (together with other diminishing costs, such as those related to the protection of the natural environment…).
In short, I think it can be easily shown that:
– productivity differentials are lower than wages’ differentials among industries of the same kind, between developing and developed countries,
– that, generally speaking, developed and developing countries hardly compete on the same commodities, and therefore, talking about “productivity” already doesn’t make justice to what international value chains really are…,
– at the same time, many studies (see Thomas Rotta’s for instance, that Michael has presented in a previous post), show the rise of non-productive activities, and their major share in developed countries economies, which even more speaks for an international division of labour in which developed and developing countries do not compete in terms of “producitivity”…
– finally, there is growing empirical evidence from research like the one by John Smith etc, that documents in detail the superexploitation of workers in developing countries (including women, children, unofficial “black” labour, even modern forms of slavery).
So, I wonder what Michael means with the world “generally” when he writes that:
“Indeed, a rising rate of surplus value generally rises through rising productivity of labour”
If by “generally” we mean, in Marx’s general theory of the capitalistic mode of production, in Marx’s Capital, yes, I agree with him.
But, in Capital, the line of reasoning STARTS from commodities been sold at their values, to END up with absolute and relative surplus value as the only two “general” modes of exploitation.
Here, we cannot use this reasoning to go backwards from data on RSVs differentials back to productivity differentials as the only or main or “general” cause, without empirical research that really speaks for it. Logically, this is a tautology, since what is to be proven, is already assumed. And empirically, I don’t think it can be proven. On the contrary…
In the end of the day, we need a concept that explains “what makes capitalists drop investement on …robots, in order to invest on producing abroad”?
This concept could not be central in Marx’s Capital, but it has to be central for modern Imperial Capital!
Chat GPT 4.0 replys: The text “50 years of dependency theory” from Michael Roberts’ Blog does indeed mention Anwar Shaikh in relation to Marxist theory. Here is the relevant excerpt from the document:
“Shaikh, in his recent book, Capitalism, argues that the law of value operates internationally through the competition of capitals across borders. This leads to an equalisation of profit rates (at least tendency) and thus a transfer of value from less productive (usually poorer) countries to more productive (usually richer) countries. This is unequal exchange but not due to super-exploitation (lower wages in the poorer countries) but due to the technological superiority and higher productivity in the richer countries.”
In this context, Michael Roberts is discussing Anwar Shaikh’s contribution to the understanding of how the law of value operates in the international sphere. Shaikh’s perspective, as outlined by Roberts, emphasizes that the transfer of value from poorer to richer countries is primarily due to differences in productivity and technological advancement, rather than wage disparities. This aligns with Roberts’ own empirical work with Guglielmo Carchedi, where they found that the transfer of value in international trade is mainly due to productivity differences, with a lesser role played by higher rates of exploitation in the periphery.
Roberts’ contribution in this text, in relation to Marxist theory and Shaikh’s work, is to highlight the importance of understanding the mechanisms of value transfer in the global capitalist system. He emphasizes the role of productivity and technological differences in shaping the unequal exchange between countries, challenging the notion that wage disparities (super-exploitation) are the primary drivers of this process. This perspective contributes to the broader Marxist analysis of global capitalism and its inherent inequalities.
“There is no evidence of significantly large and long-lasting value transfers to them [the BRICS countries] from weaker and/or neighbouring economies.” This statement is myopic regarding China. Copper miners in the Congo find the Chinese bosses as exploitive as Western bosses. And the volume of Chinese trade and investment in weaker economies is growing.
A while ago, Drs Roberts and Carchedi attempted to gauge whether a country is on the giving or receiving end of Imperialism by calculating in aggregate whether the country is extracting surplus value from other countries through trade, or having its own value extracted.
While that post in this blog was very controversial about the method Drs Roberts and Carchedi advocated (at least judging by the comments), what struck me is that China was at the very threshold between exploiter and exploited. As I remember, in writing the post Dr Roberts argued that China couldn’t be said to be imperialist because in aggregate it can’t be said to be extractive (or extracted, for that matter).
But that’s only aggregate analysis. What it means when you increase granularity is that you have those Chinese bosses exploiting Congolese workers, and Apple getting their chip designs produced on the cheap via exploitation of Chinese workers of Terry Gou’s Foxconn. So the two cancel each other out.
If I’ve understood this right, then we can debate whether this is a case in which aggregate analysis obfuscates a distinction that should be clarified instead: i.e., that there’s a difference between a country extracting surplus value from others but having that offset by its own surplus value being extracted, and a country (like Cuba) simply not extracting surplus value from anyone, nor having its own extracted. Both would lie on the same threshold in Carchedi-Roberts analysis.
Personally, I think that for the purposes of understanding how a country’s transition from one mode of production (capitalism) to another (socialism) is faring, granular is more illuminating than aggregate: after all, if China is extracting surplus value from others, who’s to say that will keep straddling that threshold, and not move completely from the exploited side (where it probably started) to the exploiter’s? That would act as a countertendency to any transition to socialism, in my view.
However, in terms of whether a country is on the winning or losing side of capitalism, I think the aggregate analysis is informative enough, even though that serves as poor solace to the Congolese workers (or Foxconn’s, for that matter). As an instantaneous shot of China right now, it can’t be said to be imperialist, full stop. Nothing is known about whether it will or won’t be in the future. It’s true, but perhaps it’s also trivial.
The matter remains whether a country at or near the threshold operates differently from both a fully exploited and a fully exploitative country. If they would, then I suppose the idea of sub-imperialism would have at least some descriptive power.
Then again, Dr Roberts in this post used a different dataset that shows China remains fully into the exploited side, so maybe I was the one who understood something wrong.
Interesting points but I think most of the empirical data even at a ‘granular’ or sector level suggests that China is well behind the US in technical superiority in most sectors and in so far as it has a lead over other peripheral countries, this has not led to any significant transfers of value (so far?)
I agree with Michael here.
Surplus value transfers can only be a percentage (usually not a large one) of the surplus value produced.
Therefore, for surplus value transfers to be large, surplus value production has to be large already large. How much surplus value is produced in Africa is one question, and then how much of it is really transferred to China (and not to US or EU…), is the next question…
But, I also agree with DGE that if China moved up to being an exploitative country, this would have counter-revolutionary consequences.
I doubt, though, that there is enough “space” in the world for another imperialist power, and, particularly, one of the size of China.
China rise to an imperialist power would mean:
– probably a great war with existing imperialist powers, which humanity would probably not survive!,
– the development of capitalism elsewhere in the worlds, such as in Africa, other countries of Asia, or Latin America, for surplus value production to move to, so that China transfers it in an imperialistic manner,.
– the conversion of China to a country that produces and consumes more like the current developed countries…
I don’t think that the natural environment can afford an Africa like today’s China, and a China like today’s US or EU…
There is just not enough world for so many (sub)imperialists! 🙂
“”True, China has a significant capitalist sector, namely one characterised by capitalist property relations, but the bulk of the Chinese economy is still State-owned and characterised by centralised direction which prevents it from having the self- drivenness (or “spontaneity”) that marks capitalism. One may critique many aspects of Chinese economy and society, but calling it “capitalist” and hence engaged in imperialist activities on a par with western metropolitan economies, is a travesty. It is not only analytically wrong but leads to praxis that is palpably against the interests of both the working classes in the metropolis and the working people in the Global South.”
The above quote is excerpted from a piece by Prabhat Patnaik in Monthly Review (take note VK) about the reactionary nature of many Western Marxists, who actually support imperialist crimes in places like Ukaine and Palestine, viewing the US and China as equally “imperialist”.
Patnaik, it is sad to note, makes baldly false statements. For example, “the bulk of the Chinese economy is still State-owned” (peoplesdemocracy.in/2023/1105_pd/western-left-and-us-china-contradiction)
Nope. A table from the China Statistical Yearbook, 2021 ( http://www.stats.gov.cn/sj/ndsj/2022/html/E04-05.jpg ) shows that only one-third of urban workers are employed in state-owned firms. The state percentage of business revenues and of business assets is just as small ( http://www.stats.gov.cn/sj/ndsj/2022/html/E13-01.jpg ). Patnaik cites no evidence for his statements, while official statistics directly contradict them.
All exchange can be said to be “unequal” in that the basis for the “equality,” the commerce of exchange value, is based upon and reproduces the inequality of the exchange between laborers and capital- where capital “exchanges” value equal to the reproduction of the laborers in order to expropriate the greater values the laborers produce in the working day.
Marx “disregards” super-exploitation of labor power not because it doesn’t exist but because it is a “subset” of the overall mechanism of accumulation, which in theory exists and can continue without such super-exploitation, and therefore can exist and reproduce, in theory, without unequal exchange.
That is the basis for the exchange of values in the abstract, as parcels, quanta if you will of value.
Yet for exchange to realize, to sort, to distribute, to allocate that totality of value it must do so in a practical world, where the system of accumulation has to offset continuously its immanent tendencies to self-devaluation as the new value aggrandized in production continuously is expelled, and replaced disproportionately, in the production process. This conflict, “contradiction” is manifested and resolved in the markets in the deviation of prices from values. Commodities in theory exchange at their values, at the socially necessary labor time for their reproduction, but the realization of the “socially necessary” can only be achieved because commodities exchange at their prices.
Now the value of labor power is mutable, plastic, deformable, and to argue at one and the same time that super-exploitation, where laborers are compensated at a rate below the value necessary for their reproduction while at the same time arguing that growth of the laboring class has shifted to the “global South,” that the proletariat and value production are expanding in precisely those areas of super-exploitation is a conundrum that has not been resolved by the advocates of theories of super-exploitation and the “global South.”
Which should get us to at least one critical point: the value of labor power, the rate of its compensation, is not only plastic, but the result of the social conflict between laborers and capital, showing us again what Marx’s critique of capital has established from its earliest days: Political economy is about obscuring the condition of labor, the actual relation of classes. “Economic analysis” necessarily has to lead us to class struggle.
Indeed.
”
“Marx “disregards” super-exploitation of labor power not because it doesn’t exist but because it is a “subset” of the overall mechanism of accumulation, which in theory exists and can continue without such super-exploitation, and therefore can exist and reproduce, in theory, without unequal exchange.
That is the basis for the exchange of values in the abstract, as parcels, quanta if you will of value.”
”
Marx’s method is not about purely analytical “empty” abstractions, but for “real abstractions” from actual historical processes and relationships.
Marx experienced the rise and maturation of the capitalistic mode of production, and had to fight against Proudhon and the classical political economists, and reveal how capitalism oppresses and exploits even if we assume the exchange of equivalents to be the underlying historical tendency, i.e., that the development of the capitalistic mode of production tends towards the creation of a unified market, where competition eventually runs over “frictions” and “obstacles” of a variable nature, but eventually coming from the past, and in a unified society, of formally equal and free individuals or “citizens”.
Whenever Marx needs to justify e.g., that the value of labour power tends to be the same across an economy, or that the rate of exploitations also tends to be the same across an economy, his arguments always make reference to competition in the market. I am translating below from Capital in Greek, but I am sure you can easily find the following in English as well:
– The value of labour power:
Vol. I Chap. 4. The conversion of money into capital. Paragraph on the Value of labour power:
“Like the value of any other commodity, the value of labor power is determined by the labor time necessary for the production, and therefore for the reproduction, of that particular species. […] For its maintenance the living individual needs a certain amount of means of maintenance. Thus the labour time necessary for the production of labour power is broken down into the labour time necessary for the production of these means of maintenance, or the value of labour power is the value of the means of maintenance necessary for the maintenance of its possessor. […] The amount of the means of maintenance must […] be sufficient to maintain the working person in his normal state of life. […] the very extent of the so-called necessary necessities, as well as the manner of their satisfaction, is a historical product, and therefore depends in large part on the degree of civilization of a country, and among other things essentially on the conditions and therefore the habits and requirements of life in which the class of free workers was formed. Thus, unlike other commodities, the determination of the value of labour power contains a historical and moral element. However, in a certain country and for a certain period, the average sum of the necessary means of subsistence is given.”
Within a few lines Marx establishes both the unity of the value of labour power in a given society and historical conjecture, but also the dependence of this value on the ‘historical and moral element’, and its connection with the political condition of the ‘freedom’ of the working class. All these conditions differ in the international market, and in conditions of superexploitation and oppression of a large part of the international working class in the modern imperialist stage of capitalism.
– About skilled labour power and its relationship with complex labour:
Vol. I Chap. 5. The production of absolute surplus value. Par. 2. The valorisation process:
“The labor which, in comparison with socially average labor, is valid as superior compound labor, is the manifestation of a labor power into which greater training costs are put, which costs more labor time to produce, and which therefore has greater value than mere labor power.”
Chap. 1. The commodity. Par. 2. The dual character of labour contained in commodities:
“[…] It is true that simple average labour changes its character in different countries and times, but it is fixed in a given society. Complex labour means only labour simple, elevated in power, or better, simple labour multiplied in such a way that a smaller quantity of complex labour is equal to a larger quantity of simple labour. Experience shows that this reduction is constantly taking place. A commodity may be the product of the most complex labour, but its value equates it with the product of simple labour, and therefore it expresses only a certain amount of simple labour. The various proportions in which the various kinds of labour are reduced to simple labour as their metric unit are determined by a social process behind the backs of the producers, and therefore seem to them to have been established by habit. For the sake of simplification we shall henceforth regard each kind of labour power as directly simple labour power, and thus we shall be relieved of the trouble of making the relevant reduction in each separate case.”
We note in these two passages that Marx connects the complexity and value of labour power with the complexity and value of the labour it performs, and the value of labour power with the value it produces. However, this proportionality, and therefore the reduction of complex quantities to simple ones, depends on objective social processes, which impose a uniform rule for the measure of productivity for each kind of labour, but also on the operation of the free market, and of competition for the comparability of different tasks, and their valuation by an equally uniform measure.
– The rate of exploitation:
Volume III. , Ch. 8. Different composition of capital in different branches of production and difference in profit rates resulting from this fact, pp. 179-180:
“In this chapter we now assume, that the degree of exploitation of labour, and therefore also the rate of surplus-value and the duration of the working day, are of the same magnitude, are on the same level in all the spheres of production into which social labour is divided in a given country. Of many differences in the exploitation of labour in the various spheres of production, A. Smith has already shown at length, that they are equalized by all sorts of real or prejudicially admitted grounds of compensation, and therefore, these differences are not taken into account in the investigation of general relations, because they are only apparent and diminishing differences. Other differences, e.g. in the amount of the wage of labour, are largely based on the difference between simple and complex labour, which we have already mentioned at the beginning of Book I, […] and, although they make the lot of the workers in the various spheres of production very dissimilar, they do not affect the degree of exploitation of labour in these various spheres at all. If, for example, the work of a goldsmith is more highly paid than that of a day labourer, the overtime of the goldsmith produces, however, a correspondingly greater surplus value than the overtime of the day labourer. And even if the equation of the wages of labour and the length of the working day, and therefore of the rate of surplus value, between the various spheres of production, and even between the various capital investments in the same sphere of production, is hindered by many local obstacles, nevertheless, with the progress of capitalist production and the subordination of all economic relations to this mode of production, this equation is increasingly taking place. Important as it is to study such frictions for any special work on the wage of labour, they must not, however, be taken into account in a general investigation of capitalist production, for they are incidental and non-essential. In such a general investigation it is generally always presupposed that the actual relations correspond to their meaning, or, which is the same thing, the actual relations will only be exhibited in so far as they express their own general type.”
Vol III, note 15, Chap. 10. Equating the general rate of profit with competition. Market prices and market values. Additional profit.
“The fact that capital, setting in motion unequal quantities of living labour, produces unequal amounts of surplus-value, implies, at least to some extent, that the degree of exploitation of labour, or the rate of surplus-value, remain the same, or that the differences here present are equalized by virtue of real or imaginary (conventional) grounds of equalization. This presupposes competition between workers and equalisation of differences by the uninterrupted passes of workers from one sphere of production to another. Such a general rate of surplus value – as a tendency, as is the case with all economic laws – is presupposed for the sake of theoretical simplicity. It is true, however, that it is a real condition of the capitalist mode of production, although its formation is more or less stumbled over by practical obstacles, which cause more or less considerable local differences, such as, for example, the local legislation for the sharecroppers in England. In theory, however, it is presupposed that the laws of the capitalist mode of production are developed in a pure way. In reality there is always only approximation, but this approximation is the greater the more developed the capitalist mode of production is, and the more it has been cleared up by intermingling with the remnants of older economic formations.”
[…]
“The perpetual equalisation of the constantly arising inequalities takes place the faster: 1) the more mobile capital is, i.e., the more easily it can be transferred from one sphere to another and from one place to another; 2) the faster labour power can be thrown from one sphere to another and from one local centre of production to another.
The first point presupposes complete freedom of trade within society and the setting aside of all monopolies except natural monopolies, i.e. monopolies arising from the capitalist mode of production itself, It presupposes still the development of the credit system, which concentrates the scattered mass of available social capital and contrasts it with the separate capitalists – it presupposes, finally, the subordination of the various spheres of production to capitalists. This last was already included in our presupposition when we admitted that it is a question of the conversion of values into production prices in all spheres in which production is exercised in a capitalist manner. This very equation, however, stumbles into greater obstacles when numerous and massive spheres of production, exercised in a non-capitalist manner (e.g. agriculture exercised by small farmers), intrude among and become entangled with capitalist enterprises. Finally, the first point presupposes a high population density,.
The second presupposes the abolition of all laws which prevent workers from moving from one sphere of production to another or from one local centre of production to any other. The indifference of the worker as to the content of his work. The reduction of labour in all spheres of production as far as possible to mere labour. The freeing of the workers from all occupational prejudice. Finally and in particular it presupposes the subordination of the worker to the capitalist mode of production. The further development of the subject belongs to the special study of competition.”
Similary for the rate of profit, the convergence to a general rate of profit is conditioned on competition and the dissipation of any monopolies (apart from the monopoly of the land that leads to land rents of course…)
In all cases, Marx makes reference to specific social processes and to historical tendencies.
Let’s just do the same today please…!
Today’s capital cannot reproduce itself without superexploitation, without monopolies, without unequal exchange, etc, because of its overaccumulation, its very high OCC, because it cannot produce enough surplus value to valuate itself, and thus, it has to convert the fund of labour power, to a fund for its own accumulation.
I am copying from Chapter 14 Causes that react, in ‘Chapter C’, note 15, where the countervailing trends in the fall in the average rate of profit are recorded:
“II. Compression of the wage of labour below the value of labour power.
We mention this incident here only empirically, for indeed, like many others that could be mentioned here, it has nothing to do with the general analysis of capital, but belongs to the study of competition, which is not dealt with in this work. And yet it is one of the most important causes, which restrain the tendency of the rate of profit to fall.”
What was a side effect in Marx’s time, one that could be excluded from the general theory of Capital, this is not the case today. Or to repeat Marx’s words from above:
“Important as it is to study such frictions for any special work on the wage of labour, they must not, however, be taken into account in a general investigation of capitalist production, for they are incidental and non-essential. In such a general investigation it is generally always presupposed that the actual relations correspond to their meaning, or, which is the same thing, the actual relations will only be exhibited in so far as they express their own general type”
What is essential or incidental today? What processes and social relationships “express Capital’s general type”?..
Is the transferring of industrial production to the developing countries an “incidental” phenomenon that withers out with historical time? Is the international division of labour (“goldsmiths” in the North, simple labour in the south) a coincidence?
One way to resolve this issue regarding the degree of exploitation is to contrast intra production relations with inter production relations. By intra we mean within and inter we mean between. The best example of intra is the global car industry. Here we can measure wages against productivity. With adjusted productivities around the world we find a four fold variation in wages with German workers at the top. Thus workers in Brazil, China and Mexico suffer higher rates of exploitation which previously yielded higher profit margins in these countries.
The issue of inter is more complex as relations vary from joint ventures, to contract manufacturing to the dominant customer being located in the imperialist countries. Setting aside the vexing question of productivities and skills, it is clear that above average rates of exploitation exist in the dependent countries to the extent that it used to and still does impact the reproduction of labour power there. How else do we account for the 400 million brain stunted Indians out of a global total of at least 700 million.
Our inheritances from capitalism include these tragedies which will and only can be resolved by a communist society. The issue of birth control is set aside.