Skip to Content

"Superexploitation"

26 posts / 0 new
Last post
Hud955
Hud955's picture
Offline
Joined: 20/10/2011

I've also been asked this.  

"if it holds true that there is no difference between the exploitation of the first world and the third aside from their relative development and productivity, what is it that causes work that is of equal quality and technology in both locations to be valued so differently?"

I can make a couple of guesses of what is happening, but I have no evidence to back them up. 
 

robbo203
Online
Joined: 06/11/2011

Hud955 wrote:

I've also been asked this.  

"if it holds true that there is no difference between the exploitation of the first world and the third aside from their relative development and productivity, what is it that causes work that is of equal quality and technology in both locations to be valued so differently?"

I can make a couple of guesses of what is happening, but I have no evidence to back them up. 
 

 

Perhaps the simple arithmetic of the supply and demand for labour has a lot to do with this.  There are a lot more workers chasing fewer jobs in the so called Third World and levels of underemployment are signficantly higher too.  

 

The erosion of peasant subsistence agriculture is fuelling massive rural urban migration and the urban economy simply cannot generate enough jobs to accomodate this influx. Also, many of these countries are still going through the demographic transition. Birth rates are starting to decline as one might expect but death rates have dropped faster, so rapid population growth is also an aggravating factor in the short term. 

 

In China, for example, export oriented  industrialisation was initially fuelled by cheap abundant labour and the rise of China as an economic power house has been accompanied by a swtich from extensive to intensive growth based on increased mechanisation and rising labour productivity as wages increased and population growth diminished following the implementation of the one child policy in 1979.  In the race to the bottom corporations are looking elsewhere for abundant supplies of cheap labour - places like Vietnam for example.

Hud955
Hud955's picture
Offline
Joined: 20/10/2011

Thanks for the useful examples, Robin.  I get that. 

The problem I have however, is that writers like Zac Cope use this fact to feed into their superprofits argument.    And in this part of his argument perhaps he is correct.   Producers in the global north can use market, and particularly labour, arbitrage to trade with "third world" producers on very unfavourable terms.    Marx dealt with that and outlined the mechanism clearly.  And these days monopolistic practices also have an effect. 

robbo203
Online
Joined: 06/11/2011

Hud955 wrote:

Thanks for the useful examples, Robin.  I get that. 

The problem I have however, is that writers like Zac Cope use this fact to feed into their superprofits argument.    And in this part of his argument perhaps he is correct.   Producers in the global north can use market, and particularly labour, arbitrage to trade with "third world" producers on very unfavourable terms.    Marx dealt with that and outlined the mechanism clearly.  And these days monopolistic practices also have an effect. 

 

Richard, 

 

I recommend  you read Charlie Post on this subject of superprofits and the supposedly "bribed" labour aristocracy in the so called First World

As far as capitalists based in the First World are concerned, the proportion of total capital invested abroad - and even more so, in the Third World - is actually remarkably small by comparison with what is invested at "home".  According to Post:


Imperialist investment, particularly in the global South, represents a tiny portion of global capitalist investment. Foreign direct investment makes up only 5% of total world investment - that is to say, 95% of total capitalist investment takes place within the boundaries of each industrialized country.  Of that five percent of total global investment that is foreign direct investment, nearly three-quarters flow from one industrialized country - one part of the global North - to another. Thus only 1.25% of total world investment flows from the global North to the global South. It is not surprising that the global South accounts for only 20% of global manufacturing output, mostly in labor-intensive industries such as clothing, shoes, auto parts and simple electronics. ("The Labor Aristocracy Myth" , International Viewpoint Online magazine : IV381 - September 2006

 

 

These figures are a little dated and describe the situation  prior to 2000; they dont fully take into account the rapid growth, since then, of transnational corporate investment in China, in particular.  However, even if we update the figures, the overall picture still remains essentially the same: only a tiny fraction of global investment flows takes - or ever took -  the form of Direct Foreign Investment (FDI) by the global North in the global South

 

 

Even if we allow that the rate of profit in theThird World was significantly higher, on average than what  was obtained in the First World at the time Lenin was writing (and despite capitalisms tendency for profits rates to equalise) - thereby justifying use of the term, "superprofits" -   the total mass of profit accruing from FDIs in the Third World would still have been, and continues to be, comparatively small - at least compared to the total return on investments domestically or even elsewhere in the First World itself.  (This is to say nothing of capital flows in the other direction - from the Third world to First).  The evidence suggests that around that time - in the period leading up to the First World War - in the case of Britain (then the world's leading capitalist power), not only was  total FDI a small fraction of total domestic investment, but would also tend to vary in proportion to the latter.  In other words,  FDI would be high when domestic investment was high and low when the latter was low  (Lance E Davis and Robert A Huttenback, Mammon and the Pursuit of Empire, Cambridge 1986, p.39).  

 

If the "superprofits" thesis was correct we would not have expected this to happen:  the level of FDI would have remained high, or even have risen,  irrespective of whether domestic investment was high or low - if only because the returns of FDI according to theory of superprofits would have been greater than in the case of domestic investment.  So a lower return on domestic investment would have encouraged capitalists to divert more of their capital abroad, or at least maintain the same level of investment there,  but that is not what seemingly happened.

 

Moreover, if the  "booty" of imperialism that Lenin had talked about was comparatively small (judging by the extent of FDI, and the small proportion of this FDI going to the Third World itself) , then that portion of this booty which, he surmised, was diverted to the labour aristoracy in the form of bribes,  must therefore have been, correspondingly, absolutely minuscule.  Post  remarks that  "Foreign profits as a percentage of total U.S. wages rose above 5% only in 1997, 2000 and 2002, and rose slightly over 6% in 2003" (ibid).  Bearing in mind that a sizeable chunk of these "foreign profits" derives from investment in other industrialised countries,  one has to ask what proportion of the remaining foreign profits made in the Third World itself would it take to make a discernable difference - to buy off the labour aristocracy  through offering a bribe and thereby ensure their loyalty and class collaboration?

 

On the face of it , it would hardly seem worth the effort from the standpoint of the "imperialist powers" themselves. The "crumbs" falling from the "imperialists' banquet table" would have been  barely noticeable if they existed at all.  Certainly there is no way the alleged bribes that the Lenin's labour aristocacy was supposedly  in receipt  of could account for wage differentials within the working class.  Other factors have to be invoked to account  for that and which fundamentally call into question the very claim that the labour aristocracy is literally bribed.  

 

Also as mentioned earlier, countries in Europe that lacked colonies and engaged in little in the way of FDI tended to have more marked wage differentials compared with countries like Britain and France - as Tony Ciff noted.  This is the exact opposite of what we would expect to be the case if Lenins Labour arisocracy myth held any water

 

Hud955
Hud955's picture
Offline
Joined: 20/10/2011

Hi Robin.  I am actually half way through the Post article now. 

I also need to read Zac Cope.  The guy I am discussing this with on the 'A spectre is haunting facebook'  page has simply responded that Post does not address Cope's argument..  He knows I haven't read Cope, so that may just be a brush off.  I'll have to check it out.  Sigh!  I've got myself into this discussion so will now have to follow through.  And this was going to be my month for reading light  fiction and watching Dr Who.  :-) 

Thanks for your input, though.  There is some useful stuff there.

Marcos
Offline
Joined: 23/04/2017

There is another person who has written a lot about the third world and his name is Eugene Gogol, he is a Marxist Humanist, he is the nephew of Raya Dunayeskaya. His main field of investigation and research is Latin America. He is from the USA. I stick myself with the book of Marini known as Dialectic of Dependency because he lives in the third world, and he knows the situation pretty well.

There are many new argumentations who look like brand new, or innovation, but they are all based on oid ideas, and in this particular case,  they are all based on Lenin concept of Imperialism and the Colonial Question. If Lenin was wrong the others writers are wrong too. All these writers can make thousands of econometric calculation to prove their case, but the fundamental idea is wrong, they are as wrong as any person who departs from the expreriences of the. Soviet Union to prove his/her case.

The reality is that all human being around the world, living in the First World, in the Second World, or the Third World are exploited by the capitalist class, anad the so callec capitalist nationalist class belong to the past, they are all inter-related

 

 

 

 

 

 

 

 

 

 

 

Young Master Smeet
Offline
Joined: 15/11/2011

JUst reading Varoufakis' stuff on the 'Global Minotaur':

https://en.wikipedia.org/wiki/The_Global_Minotaur

Far from exporting capital (per the classic Leninist MOdel), the US actually impots capital, as well as goods and services, relying on countries (Germany, Japan, China) with tradining surpluses to reinvest their capital in the US, and thus make the deficits sustainable (this was pre-2008).

On the article, it does indeed fail to take into account the differencebetween prices and values.

Take coffee, for instance, the EU (unless things have changed since I last checked) imposes tarriffs on ground coffee, but not on beans.  This means the value adding task of grinding for the EU market can only happen in the EU, essentially.

Part of that process will be that the price of production for raw coffee will be below its value, some of that additioanl value will be realised in the grinding process (for simplicity's sake, lets assume that the price of production, plus average profit, is therefore above the value added by grinding).

The workers in both countries will have sold their labour power at the going market rate, i.e. at its full price.  It is the capitalists who take the extra surplus value as their profit.  The only way in which workers in the advanced country can benefit from such as trade is if some of the value in the coffee isn't realised as price at any stage, and thus reaches the end consumer.

Hud955
Hud955's picture
Offline
Joined: 20/10/2011

The importing of capital is interesting.  Thanks YMS.  It stands beside's one of Post's claims.  He asserts that 95% of capital from the "first world" is invested in its home country, that 3.75% is invested in other "first world" countries, and that a mere 1.25% is invested in the "third world".  I find that very surprising, but if true and I haven't missed something obvious,  the Leninist argument, as subtle and convoluted as it may be, falls flat on its face.

Every time I think I am getting to grips with this argument on facebook, it seems to metamorphose into something else (As is the nature of the beast.)  It began as an argument that "first world" welfare services (and other aspects of the social wage) are funded from "third world" labour.  Easy enough to deal with.  Then by means of an abstract argument based on labour-time it argued that workers in the "global north"  (the terminology morphed as well at this point.)  directly consumed the labour of workers in the "global south".  It is now arguing that surplus value transferred from the "global south" to the "global north" by market and labour arbitrage and by other means is used by employers in the "global north" to bribe workers of the "labour aristocracy" with higher wages and better conditions.  I haven't yet come across anyone providing  'evidence' of this, but I still haven't finished reading Zac Cope whom, it is claimed, reveals all.  (I'm not sure I will finish it.  I have a limited boredom threshold for dense economic arguments.)

I think Robin's comment earlier was pertinent.  The ultimate achievement of this debate is simply to divide the global working class and is really of interest only to those arguing from a national perspective.

Thanks for the background Marcos. That too is useful. 

robbo203
Online
Joined: 06/11/2011

Hud955 wrote:
  Then by means of an abstract argument based on labour-time it argued that workers in the "global north"  (the terminology morphed as well at this point.)  directly consumed the labour of workers in the "global south".  

Just one small point,  Rchard, that might be worth emphasising in your debate with this guy...

 

There is no question that in the productive sector of the global north, workers are clearly exploited. I earlier gave an example .  While average hourly cost of employing factory workers in America was $23.32, these same workers produced on average an hourly output of $73.45    So they produce far more than they get back in return and the economic surplus is then distributed in all sorts of ways.

 

One of these ways is ultimately  to finance the unproductive sector of the economy.  Does that mean that workers in the unproductive sector are "exploiting" workers in the productive sector?  Of course not.  The idea is absurd.  In Marx's time there were apparently about one million domestic female servants  in England.    By the logic of these Maoist Third Worldist types, the scullery maid in a stately home was exploiting her sister who worked as a factory hand in a textile mill!

 

Of course the make up of the unproductive sector is very different today than it was in Marx's time.  Rather than being focussed on the personal consumption needs of the capitalists,  it has developed much more directly out of the commercial and other needs of the productive sector  itself.  The salaries of bank workers, for example, are ultimately financed out of surplus value but that hardly puts these workers in an exploitatitve relationship  vis=a-vis workers in the productive sector. 

 

Capitalism needs banks as much as it needs the productive sector to generate the surplus value (from which the banks take a cut in the form of interest payments) for capital accummulation and so needs to employ workers to work  in both the unproductive and productive sectors of the economy.  Exploitation occurs at the level of the working class as a whole whatever sector they work in.  That is why you cannot really separate productive and unproductive workers along the lines that one is exploited and the other not -  for much the same reason that you cannot have  a properly functioning productive sector in a  modern capitalist without a whole host of unproductive activities coexisting alongside it.  These latter provide for  the necessary conditions under which the realisation of surplus value can occur

Young Master Smeet
Offline
Joined: 15/11/2011

The bottom line is capitalism rewards capital, and profits flow towards teh greatest concentrations of capital (often denuding the smaller piles of the stuff).

The most that can be said is that an increasing concentration of capital in a country will drive up demand for labour, if transport links or political boundaries do not allow other workers to enter into the market.  Even then, that is a gain from the exploiter, not an exploitation of the foreign worker.

Login or register to post comments