This is the second of three or four synopses of parts of the opening chapter of John Smith’s Imperialism in the 21st Century (New York, Monthly Review Press, 2016). The synopsis and commentary below is written by Phil Duncan.
Much garment production has been relocated from the United States and other First World countries to the Third World in the past several decades, Bangla Desh becoming especially important. Wages there are extremely low, but also local capitalists are way down the global power chain – they get some of the surplus-value sweated out of the garment workers but most of it ends up in the coffers of major Western companies such as big retailers.
John notes that to a certain extent the wage-labour/capital relationship has become one between First World capital and Third World labour. Even then much of what is extracted in value terms from countries like Bangla Desh is hidden and appears instead as part of the GDP of the imperialist countries. This makes it look as if First World workers produce way more wealth than they do and Third World workers look as if they produce less than they do. This appearance is taken as good coin by more superficial left analyses (in the imperialist countries); thus many First World leftists argue that First World workers are better off simply because they are more productive than workers in the oppressed countries.
The chief beneficiaries of the super-exploitation of Third World workers are, in addition to big retail chains and stores, commercial firms and outfits producing the services which the retailers need (advertising, security, banking). But there is another set of crucial beneficiaries: imperialist governments. They rake in vast amounts of wealth through tariffs and taxes. Part of this massive wealth taken by these governments is then used to subsidise health, education, social welfare and other government services in the imperialist heartlands. Super-exploitation of the Third World enables the ruling classes of the West to buy class peace at home and, through the financing of services in the West, provides the material basis for First World workers ‘buying into’ the capitalist system ideologically. (It also means that workers in the West can spend a smaller part of their pay on various imported goods.) There is little room for such illusions about the capitalist system in the super-exploited Third World!
John cites work by our friend Tony Norfield on ‘the China price’, a term that actually refers to Third World production not just production in China. Tony notes the division of money from a t-shirt that is made in Bangla Desh and sold in Germany. Only about a fifth of the actual retail price stays in Bangla Desh to be divided between Bangla Deshi capitalists and workers (and government). Most of that final price counts towards the GDP of Germany, even though no part of the value has been produced by workers in Germany. In Germany, the four-fifths of that final price is divided between the German retailers, transporters, advertisers etc, with almost 19% going to the German state. But the state’s take is even higher in reality because it also gathers taxes on wages and profits within Germany.
In the case of the US meanwhile, just the tariffs charged by the government on apparel from Bangla Desh exceeds the total wages of the Bangla Deshi workers who make the garments!
Bangla Deshi garment factories employ four million people, predominantly (85%) female. (A future piece will look at the feminisation of the industrial working class in the Third World.) Bangla Desh is especially attractive for outsourcing because it has the lowest factory wages in the world. The state has significant repressive forces at its disposal ranging from regular cops to local right-wing militias to the Industrial Police. While there are only about 50 factory inspectors in the country, there are 2,900 industrial police with the sole task of repressing workers.
John notes, “Low wages make big mark-ups possible.” A replica football shirt made in East Asia for 5 pounds sterling is sold in Britain for 35 pounds sterling. A 700% mark-up is not unusual. Indeed, a Hermes polo shirt can have an 1,800% mark-up.
While capitalists in countries like Bangla Desh certainly make profits, imperialism ensures the vast bulk of profits end up in the Western powers. Meanwhile wages can be driven down below the value of labour-power in the Third World and workers there forced to live below subsistence. Chunks of the Western left ignore this and some even deny the existence of imperialism’s super-exploitation of the Third World and the role this buys in ensuring class peace in the West.
Western capitalists, meanwhile, are not necessarily content to just drive down the price of Third World labour-power below its value. They also try to slash other costs, including health and safety. And so we have the continuous round of factory fires, collapses and other disasters that kill thousands of Third World workers but appear to be the fault only of people in the Third World themselves.
John looks at the recent attempts by Western governments and corporations to make it appear they are ‘ethical’ and trying to improve pay and conditions. He shows these are tokenistic and ineffective. Moreover, they often involve protectionist policies which worsen the conditions of people in Bangla Desh. It is western companies and regimes who are primarily responsible for shit conditions in garment (and other) factories in places like Bangla Desh, and they are left unscathed.