51oeo6tryl-_sx329_bo1204203200_The Imperialism study group has been discussing John Smith’s Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis. We have been fortunate to have the author join the group and lead the discussion. Below are two email discussions on the labour aristocracy from John Smith and Walter Daum.

John Smith on labour aristocracy

Guglielmo Carchedi, Behind the Crisis (2012), p262:

“Some authors see a contraposition between the notion of labour-aristocracy as an internal segmentation within the imperialist countries (for example, unionised versus non-unionised workers, as stressed by Engels) and a different notion stressing, as in Lenin, that in a way all workers in the imperialist countries benefit from the appropriation of international value. But there is no contraposition between the two theses, once it is realised that it is not those firms that appropriate international surplus-value that pay higher wages than other firms. They simply realise higher profits. Rather, the policy of higher wages is pursued by the states in the imperialist countries which appropriate (part of) that international surplus-value from those firms (for example, through taxation) and pursue pro-labour economic policies, as for example more favourable labour- (and wage-) legislation or infrastructures. Thus, it is the whole of the working class in the imperialist countries that profits from the appropriation of international surplus-value and not only privileged and relatively small sections of it. At the same time, it is also true that labour in the imperialist countries profits in various degrees from the appropriation of international surplus-value according to each imperialist country’s class-segmentation and differently in various phases of the cycle.”

This contains some very interesting insights. Among the many discussion points here, the most important concerns the role of the state. In defending my book against the arguments of Sartesian and others, I pointed out that, despite the anti-labour offensive and attempts to roll back the state characteristic of the neoliberal era, despite the austerity regimes since the 2008 that have attempted to intensify these attacks, and despite the big holes made in the welfare state and the impoverishment and destitution of a minority, so far, of workers in the imperialist countries, Government spending on health, education & transfer payments (pensions, unemployment pay etc) rose from around 25% in 1980 to 35% in 2010 in the UK, in the US by the same degree from a lower base, while in France it has increased from 35% to 45%. Similar increases are to be observed in all other imperialist countries; data for oppressed nations is far more patchy but indicates that social expenditure consumes a much smaller fraction of a much smaller GDP. As Tony Norfield argued in The China Price and as I argued in my book, much of this social expenditure is paid for by surplus-value extracted from super-exploited Bangladeshi etc workers and appropriated by imperialist states through various types of taxes.

bangladeshi-garment-workers

Bangladeshi garment workers demonstrate at the site of the Rana Plaza garment factory building collapse

At a well-attended book launch last week in Nottingham (more than 50 people attended), when I mentioned this and said that, when we hear people argue “why should we let immigrants use our health service or send their kids to ‘our’ schools,” the correct and true response should be “because they have already paid for it,” and pointed out that this is not what any section of the British left says, from Corbyn to the so-called revolutionaries – I noticed many heads in the audience nodding their agreement.

Carchedi has something very relevant to say about this. After enumerating three ways that imperialism finances the labour aristocracy (I’ll not comment on them now for reasons of space), he says:

“Along with these changes in the sources of financing the labour-aristocracy, there correspond changes in the way in which this appropriated international surplus-value is used to constitute the economic base of the labour-aristocracy. Higher wages and better living conditions are currently certainly still highly relevant. But perhaps even more important are other relatively more recent methods, such as the financing in the imperialist countries of Keynesian policies, both civilian and military, or of the welfare-state. Such policies would be impossible, or in any case much more difficult to finance, without the appropriation of international surplus-value. But this requires the active participation not so much of the workers themselves as of their unions and political representatives whose purpose is that of controlling the working class as a whole. They are indispensable for the corruption of the working class. Of course, this all is strongly dependent upon the phase of the economic cycle.”

This opens up some very important paths for developing the analysis and theoretical concepts in my book and connecting them with the complex reality of labour aristocracy in the current stage of imperialism – including the last sentence, especially if we substitute the reference to cyclical crisis with a reference to systemic crisis, which would then lead towards the conclusion that the labour aristocracy is itself being shaken to the core and that the crisis of social democracy is terminal, leaving a dangerous vacuum and a receptivity to fascism and also increased possibilities for rebuilding a communist workers’ movement in the imperialist countries.

………………………….

downloadIn Carchedi’s Frontiers of Political Economy, (London: Verso, 1991), a work I have not yet studied, there’s a section entitled “International (Super) Exploitation”, in which he says (p263):

“Given the transfer of technology inherent in the internationalization of production… capital (usually, oligopolies) can take high productivity, modern technology (either entire production processes or parts of them) to low wage, low skill countries… if both the length of the working day, the intensity of labour and the technique used are the same… lower wages also indicate higher exploitation…. Moreover, working conditions (length of the working day and intensity of labour) are often much worse in the low wage (dominated) countries than in the high wage (imperialist) ones. This greatly increases the rate of exploitation, sometimes reaching the limit of the physical reproduction of the working class. Of course, other considerations (tax “holidays”, export incentives, subsidized credits, duty-free imports of foreign goods for local assembly, environmental control in the imperialist countries, protectionist tariffs in the dominated countries, the “docility” of the local work force due to political repression, etc.) play a role as well but wage differentials and conditions of work are the central and by far the most important item. Unfortunately, examples abound. In the words of an Indian manufacturer-exporter of garments, due to cheap labour, “we can make garments so cheaply that foreign buyers[’] … mark-up is four to five times on their bargains, giving them a huge profit” (Sharma, 1988).”

This closely accords with analysis in my book (that I didn’t cite it is an important gap in its literature review). Most importantly, it shows how much was visible a quarter of a century ago, underlining the abdication of Marxism in the decades since then, whose most influential thinkers have failed to build on its insights.

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Walter Daum comments on Carchedi (November 28, 2016)

Some thoughts on John Smith’s last post to the study group, mostly with regard to Carchedi.

  1. The first passage that John quotes from Carchedi’s Behind the Crisis book says in part:

    “… it is not those firms that appropriate international surplus-value that pay higher wages than other firms. They simply realise higher profits. Rather, the policy of higher wages is pursued by the states in the imperialist countries which appropriate (part of) that international surplus-value from those firms (for example, through taxation) and pursue pro-labour economic policies, as for example more favourable labour- (and wage-) legislation or infrastructures.”

I’m not convinced that international surplus-value gets transferred to the Northern working classes primarily by way of the state. Of course, the imperialist states use their political and military power to enforce the appropriation of s-v from the “global South,” but that is a different aspect of the state, not its social welfare role.

Is it really true that the imperialist states “pursue pro-labour economic policies,” as Carchedi says, particularly with favorable labor and wage laws and infrastructure projects? That certainly hasn’t been the case in the U.S. for 40 years, even if it lasted longer in some European countries. The attack against the working class revved up under Carter in the late 1970s, even before Reagan. Since then, social spending has been under continuous assault. Part of the reason for Trump’s victory was his promise to create infrastructure jobs after years of neglect. One can doubt Trump’s promise, but there is no doubt about the neglect.

So Carchedi’s claim does not work for the U.S. Nor did it work in the early days of imperialist super-exploitation, when the welfare state had not yet reached post-WW2 proportions. That raises the interesting question: how does a portion of the extra s-v appropriated by directly imperialist capitalists (those who actually super-exploit the Southern workers) trickle down to Northern workers, or a layer of them? John points out that many consumer goods for the North are produced in the South, so Northern workers can be said to share in the benefits of extremely low Southern wages. That amounts to a sop offered to Northern workers by their ruling classes, who have succeeded in keeping their wage increases below the rate of inflation for several decades. (Again, I am thinking of the U.S. specifically.) But cheap consumer goods from the South is a fairly recent phenomenon; it can’t explain Lenin’s labor aristocracy theory 100 years ago.

The Carchedi passage continues:

    “Thus, it is the whole of the working class in the imperialist countries that profits from the appropriation of international surplus-value and not only privileged and relatively small sections of it. At the same time, it is also true that labour in the imperialist countries profits in various degrees from the appropriation of international surplus-value according to each imperialist country’s class-segmentation and differently in various phases of the cycle.”

I do agree with the rather abstractly worded last sentence here, namely that some workers gain (I would not say they “profit”) more from the international appropriation of surplus-value because of segmentation within the working class – referring not only to skilled vs. unskilled labor but also to discrimination because of race, nationality, gender, immigration status, etc. This does point to within-nation layers of labor aristocrats as well as the overall North/South gap.

  1. John writes:

    “… despite the anti-labour offensive and attempts to roll back the state characteristic of the neoliberal era, despite the austerity regimes since the 2008 that have attempted to intensify these attacks, and despite the big holes made in the welfare state and the impoverishment and destitution of a minority, so far, of workers in the imperialist countries, Government spending on health, education & transfer payments (pensions, unemployment pay etc) rose from around 25% in 1980 to 35% in 2010 in the UK, in the US by the same degree from a lower base …”

Are only a minority of workers in the imperialist countries impoverished? Of course, compared to conditions of workers in the South, workers in the North are doing better. But John’s figures suggest that most Northern workers are doing better than before. And that strikes me as dubious.

In the U.S., Trump’s victory is indicative. His voters were not majority working-class – their average income was higher than the national average, although not as high as for other Republicans. But white workers in the “Rust Belt” states (the industrial Midwest) switched to Trump to an extent big enough to swing the vote there. Not all were hard-core racists, since many had voted for Obama before, and for Sanders earlier this year. Still, their vote for Trump represented a poisonous mix of racism and economic worries, a willingness to accept or at least tolerate Trump’s rancid racism and immigrant-bashing. Economically, they may not be exactly destitute but they are desperate.

Worse off are Black and Latino workers by and large, who make up a growing fraction of the U.S. working class. Their unemployment and low-wage rates are higher. Think of the urban rebellions in Ferguson and Baltimore: these were triggered by police killings of unarmed Black men, but those cities had been simmering for years under the pressure of joblessness, urban decay and all the whiplashings of racism, all pointing to a bleak future for the young especially.

Taking all this into account, it may still be a minority of workers who face destitution, but it is a large minority.

  1. John quotes wording from Carchedi’s “Frontiers” book that shows how super-exploitation occurs in Southern countries. It begins:

“Given the transfer of technology inherent in the internationalization of production… capital (usually, oligopolies) can take high productivity, modern technology (either entire production processes or parts of them) to low wage, low skill countries… if both the length of the working day, the intensity of labour and the technique used are the same… lower wages also indicate higher exploitation….”

This argument is based on the transfer of technology and assumes that productivity levels are more or less the same, North and South – in which case relative wages do reflect who is the more exploited. But earlier in the same chapter, Carchedi argues:

“Different national real wages are often taken to be a measure of the super-exploitation of the workers in the low-wage countries. But if we assume different national levels of technology in the production of wage goods, this is not necessarily the case. Actually, the contrary may be true.”

His argument for this claim – that high-wage workers may be the more exploited – does not rest on actual data but on a hypothetical example (granted, Marx invented many such examples; they can be useful) in which “a high technology country, A, and a low technology country, B” produce the same commodity and “A has both higher wages and a higher rate of exploitation.” But his example, when you work it out, is nonsensical: it assumes implicitly that neither country uses constant capital! So how can there be such a thing as high technology?

In a previous comment to the group I pointed to a remark in Carchedi’s “Behind the Crisis” that suggests the same notion about which workers are the most exploited.

“The extra surplus-value that accrues to the imperialist countries derives not so much from the repatriation of profits made in the dependent countries as from the appropriation of international value through the innovators’ higher productivity.”

He doesn’t actually explain this conclusion, as far as I can make out, but it possibly depends on Marx’s solution to the transformation “problem,” which is often relied on by those who John calls Euro-Marxists (and others) to argue that Marx’s laws of motion of capitalism need no adjustment in the face of monopoly and imperialism. According to Marx’s transformation solution, higher productivity firms (with higher organic competition) obtain higher profits than they produce because of the tendency of rates of profit to equalize. However, the equalization tendency has to be modified in the epoch of imperialism, because of both the existence of monopolies and the predominance of international offshoring of production – both of which inhibit the weaker and non-globalized firms from getting their proportionate share of internationally-produced surplus-value. In any case, this explanation of extra surplus-value says that it is appropriated by the imperialist capitalists through the process of exchange, not the extraction of additional surplus-value through super-exploitation in production.

There is a lot of sharp and provocative thinking in Carchedi’s books – all the more reason to dispute what looks to be wrong.

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Comments
  1. Some thoughts on this.
    1. ‘Labour aristocracy’ is probably the wrong term here. There was, historically, an intermediate layer of skilled workers who, by controlling access to their trade, managed to bid up the price of their labour higher than the norm. This was the ‘labour aristocracy’. It was effectively wiped out by technological innovation, and then displaced by the new unionism of the 1880s.
    2. I fear their is some imprecision in the question as set out above. The simple way to start looking at the question is to ask who is exploited, who is exploiter. To take the US working class as an example, they produce goods to the value of $18 trillion each year, and take home wages of around 44 per cent of that. They are exploited. They are not exploiting anyone else. Until that point that there is a transfer of income in their favour in excess of 54 per cent of $18 trillion that will remain the case. Return on US Foreign investments abroad is around $50 billion (http://www.nber.org/papers/w13313.pdf). That is a lot, but it is not enough to subsidise US workers, whose pay comes out of their own output.
    3. To read off the surface of income inequality a relationship of exploitation would be wrong. American workers are much more highly paid than workers in other part of the world. That is not because they are living off the efforts of people in other parts of the world. It is because their labour is, by virtue of technological investments, more productive (not a moral, but a material assessment). Think of it this way: black workers in the US are more highly paid that white workers in Italy, and much more so than workers in Slovakia. Would it follow that black workers in the US were enjoying the benefits of the super-exploitation of Italians. Surely not. To fix on income differentials is to remain caught at the level of appearances and to fail to see the underlying social relations.
    4. The point that the more highly paid workers are more exploited seems counterintuitive, but it is true. US workers’ productivity means a far greater share of their output falls to the capitalist class, whereas economies on a lower technological base produce less surplus value. Exploitation here is a ratio. In absolute amounts the US workers are far better off than their Mexican counterparts. But US capital is in a stronger position relative to US labour because it takes a greater share of their product.
    5. Similarly, the large state expenditures in the developed countries is not paid for primarily from exploitation of the developing world, but from the exploitation of their own workforces.

  2. daphna says:

    While the US GDP is said to be $18 trillion, whether that is all produced by the US working class can be debated. John Smith argues that with the global outsourcing of production there is a ‘GDP illusion’. This is particularly so with arms-length outsourcing e.g. Foxconn producing iPhones, nokia products, intel motherboards etc This type of arms-length outsourcing is being favoured increasingly by TNCs over FDI. Some of this flow of value from Southern producers to Northern capitalists appears as the GDP of the imperialist countries.

    Arms-length outsourcing not only gives imperialist companies access to cheaper labour, they get to avoid the cost of pollution, or having to get their hands dirty with suppression of trade unions and mass layoffs when it suits in times of crisis.

    With so much manufacturing moving from the North to the South over the past 2 to 3 decades, and now with 80 percent of the industrial workers of the world residing outside the imperialist countries, it’s hard to ignore that a significant portion of imperialist profits are sourced in distant production processes. Much of this production is not technically inferior to production in the imperialist home country.

    • What you call outsourcing would show up in the national accounts as returns on foreign investment. As set out above those are important, but still a tiny fraction of overall output.

      • Phil F says:

        John Smith notes, “supposed international differences inb labor productivity are used by mainstream economists and neoliberal apologists to explain and justify global wage differentials. This standard view, an ideological belief with little basis in empirical data, gives rise to a series of paradoxes and absurdities, for instance that the ‘productivity’ of Bangla Deshi garment workers is a tiny fraction of the European and North American workers who place the finished goods on shop shelves.”

        Moreover, we are not even talking about wages alone. We are talking about the whole array of things the imperialists use to buy class peace in their own lands. They have these on offer because they are not only exploiting their own working classes but the great mass of humanity in the Third World too.

        Because Third World ruling classes lose to the imperialists some of the surplus-value produced by their own working classes, they simply don’t have the material basis for providing welfare states etc and buying class peace.

  3. Walter Daum says:

    Replying to point 4 of James Heartfield’s Dec 3 comments: he says that U.S. workers are more exploited than workers in lower-tech economies, because “US workers’ productivity means a far greater share of their output falls to the capitalist class …”

    Even if capitalists get a greater share of the output of more productive workers (whether in the U.S. or not), that does not determine the rate of exploitation of those workers.

    Recall that the value of the commodities that a productive worker produces in, say, one working day, can be subdivided into three components, c + v + s. Here c represents the component of constant capital (materials, energy, a fraction of the value of the machinery used, etc.) that enters into the value of the commodities being produced; v represents the cost of wages, and s is the surplus-value appropriated by the capitalists as profit.

    As technology advances, the relative weight of the c component increases. So the value of the worker’s output, c + v + s, increases as compared with v alone. Hence the increasing labor productivity: the value of output increases with respect to the amount of labor. And of course the use-value produced by the worker also increases: with greater productivity, more commodities are produced in the same time period.

    But note that the increased productivity is largely due to the rising constant capital component, c, whereas the rate of exploitation is the amount of surplus value produced divided by the wage, or s/v; this formula does not involve the value of c. So increased productivity in a given sphere does not in itself mean that the rate of exploitation there has increased. The rate of exploitation only increases if the working day is increased, or if the time it takes to produce the workers’ wage goods is decreased by raising productivity in that sector (or in sectors that contribute to wage goods), or if labor is super-exploited.

    An additional point: the wage gap between the imperialist and imperialized countries is enormous, while the productivity gap is comparatively small, and it is decreasing. So even if we chose to measure exploitation by means of productivity, when comparing, say, the U.S. to Mexico, the wage gap exceeds the productivity gap. The worker in an oppressed country is paid so little that it takes many fewer hours to reproduce his or her real wage.

    Moreover, since the rate of exploitation depends essentially on the productivity of the wage-good sectors, and since many wage-goods used by the workers of the North are produced in the South (a point stressed by John Smith), the North-South difference in exploitation is determined heavily by the difference in wages, not by local productivity.

  4. sartesian says:

    John Smith states: “In defending my book against the arguments of Sartesian and others, I pointed out that, despite the anti-labour offensive and attempts to roll back the state characteristic of the neoliberal era, despite the austerity regimes since the 2008 that have attempted to intensify these attacks, and despite the big holes made in the welfare state and the impoverishment and destitution of a minority, so far, of workers in the imperialist countries, Government spending on health, education & transfer payments (pensions, unemployment pay etc) rose from around 25% in 1980 to 35% in 2010 in the UK, in the US by the same degree from a lower base, while in France it has increased from 35% to 45%. ”

    Transfer payments are supposed to tell us what? that a) workers in the advanced capitalist countries are better off than they were in 1980? or 1970? or b) that the increase in such transfer payments has been directed TO the workers? or c) the the number of workers retiring and the increased payments AREN”T DUE to the aging of the population, but due to super-exploitation in the “global south” or d)that the increased gross amount dedicated to unemployment compensation MEANS the workers are better off, and “living better” due to the exploitation of labor power in less developed countries?

    I think the answers to those questions would make for an interesting discussion.

    Here are some more questions:

    Have real wages in the US surpassed their previous post WW2 highs (recorded, IIRC, in 1973)? Yes or no? Have poverty rates in the US increased since the low established in 1979? Yes or no? Have real wages in the US even broken above the level recorded in 2000, before the 2001 recession, yes or no? I think the answers are no, yes, no.

    And you know what? So does John Smith in his book:

    “Global Wage Trends in the Neoliberal Era”: Thus the share of national income received by the bottom 90 percent of wage-earners (84 percent of the United States economically active population) earned 42 percent of the total payroll in 1980 and just 28 percent in 2011. Thus the share of national income received by the bottom 90 percent of US employees has declined….by a staggering 33 percent.

    According to the ILO’s World of Work Report 2011, since the early 1990s the “share of domestic income that goes to labor…declined in nearly three-quarters of the 69 countries with available information,” This decline is generally more pronounced in emerging and developing countries than in advanced ones.”

    The decline is more pronounced in developing countries, but the decline is pretty much universal. OK, I agree with that. Poor times are always harder on poorer people.

    In essence John advances an argument that says,– “ummh, yes conditions have worsened for workers in the advanced countries since ________[fill in the date], but they are less worse than they would have been if “globalization” and “super-exploitation” of labor in the less developed countries didn’t take place.”

    That isn’t historical materialism; that’s speculation.

  5. sartesian says:

    Walter writes: “An additional point: the wage gap between the imperialist and imperialized countries is enormous, while the productivity gap is comparatively small, and it is decreasing. So even if we chose to measure exploitation by means of productivity, when comparing, say, the U.S. to Mexico, the wage gap exceeds the productivity gap. The worker in an oppressed country is paid so little that it takes many fewer hours to reproduce his or her real wage.”

    I’m not sure that holds on all levels. I don’t think that holds on a “macro” level– the most macro level being agriculture, the relations between city and countryside. The gap in agricultural productivity between the advanced countries, and the “emerging market” countries is pretty dramatic– and really can be judged by the percentage of population still engaged in rural production.

    In specific industries, with the migration of capital, there is no doubt that productivity rates– output per hour– converge; but those are precisely specific industries– if that were the general condition, there wouldn’t be “emerging market” countries, after all. They would have emerged. Moreover, as John Smith makes clear in his book, the bulk of the outsourced work to developing countries is of the “labor intensive” sort, where low wages can in fact “compensate” (pardon the expression) and overtake technical applications– until profits begin to decline, and then, either the capital moves on down the wage chain, or automates and displaces workers, or both– as in China.

    Now to be sure, the developing countries want to move “up the value chain,” and “improving productivity” is seen as the “magic bullet” to accomplish that; but capitalism being what it is, the magic bullet is a blank.