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.
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.
In 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.
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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.
- 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.
- 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.
- 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.