Imperialism: Another Michael Roberts in Debate with one John Smith

“Getting off the fence on modern imperialism” .… at MICHAEL ROBERTS’ BLOG = https://thenextrecession.wordpress.com/2016/07/19/getting-off-the-fence-on-modern-imperialism/

So first, here is John’s comment.

“Sorry, I’ve been away and have only just come upon this post. It raises many questions; here I restrict myself to two of them.

1. Michael repeats Lucia Pradella’s claim that, “in Volume III, Marx explains that investments in colonies, where the rates of profit were higher, are a factor that counteracts the law of the falling rate of profit.” This is not true. What we get in Volume III is not an explanation, but an extremely fleeting mention. Here is the passage to which Michael and Lucia refer:

“As far as capital invested in colonies, etc. is concerned, the reason why this can yield higher rates of profit is that the profit rate is generally higher there on account of the lower degree of development, and so too is the exploitation of labor, through the use of slaves and coolies, etc.” (Marx, Capital, vol. 3, 345)

In my book (Imperialism in the 21st Century, p244) I comment:
“Close examination of this passage reveals not one but two reasons why capital invested in colonies may return a higher than average rate of profit. Lower degree of development refers to low productivity, capital-intensity, etc., and extends to the colonies the same unequal exchange effect previously identified by Marx in trade between more and less advanced capitalist nations. It is the second part of the sentence that attracts attention. Marx says that “the profit rate is generally higher [in the colonies] … and so too is the exploitation of labor, through the use of slaves and coolies, etc.” The few words in this single sentence are the only place in the whole of Capital’s three volumes and in its fourth volume, Theories of Surplus Value, where Marx mentions the positive effect on the rate of profit in the imperialist nations of higher exploitation in subject nations.”
… to which I added this footnote:

“It is noteworthy that Marx talks about the exploitation of labor, not the rate of exploitation, and labor, not labor-power. That this might be due to the provisional, draft form of the original can be discounted—even in rough drafts, Marx is meticulous in his choice of words. It is more likely that he deliberately chose not to use the developed capitalist form of these categories, because in the colonies, at that time, the commodification of labor-power and the universalisation of the capital/wage labor relation had a way to go. This again underlines the evolutionary distance separating the past three decades from the stage of capitalist development observed and analyzed by Marx.”

2. Michael says “John argues that imperialist exploitation is now predominantly ‘super-exploitation’… Other forms of exploitation under capitalism: absolute surplus value (namely through maximising the working day); or relative surplus value (namely lowering the cost in hours for maintaining the labour force in a given day); according to John, these have become secondary forms of exploitation under modern imperialism.”

I’m sure that Michael agrees that great care and precision is necessary when dealing with these concepts, and I’m therefore disappointed that Michael repeats this crude mischaracterisation of my argument – I’ve already made two attempts to correct him on this, in a previous blog comment and at the IIPPE workshop itself. I argue that the vast global shift of production to low-wage countries signifies that capitalists in North America, Europe and Japan have become very much more dependent on super-exploited workers in low-wage nations (‘super-exploited’ because their rate of exploitation is higher than in their own countries – precisely why production has shifted), and this is why, during the neoliberal era, capitalism has become more not less imperialist.

I still don’t know whether Michael agrees with this. My book further argues that shifting production to low-wage countries has become an increasingly-favoured alternative way of cutting costs and boosting profits than investing in productivity-expanding technology – which is why accelerated outsourcing coincided with a historic collapse of capital investment in the imperialist countries. I therefore argue that the substitution of relatively high-wage workers in imperialist countries with low-waged, more intensely exploited, workers in oppressed nations has become the predominant means of *increasing* the rate of exploitation. My argument therefore hinges on the *relative* importance of the three means of *increasing* surplus value, and makes no claim that one, in absolute terms, is more important than the other.

To summarise, four propositions:

1. a) in Capital, Marx identified not two put three ways to increase the rate of surplus value, and that while he repeatedly emphasised the importance of the third (reducing wages below the value of labour power) each time he explained that examination of this was excluded Capital because his ‘general theory’ required the assumption that all commodities sold at their value;
2. b) it is true, as Lucia argues, that in Capital Marx does not analyse a single national economy, but neither does he analyse the concrete global economy of his day (still less, obviously of our day) – the glancing reference to ‘coolie labour’ alone is proof of this. He analyses an idealised unitary economy in which all factors of production, including labour, are freely mobile (i.e. he excludes all forms of monopoly) – as is reflected in his assumption that labour power has but one value;
3. c) that replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase;
4. d) that this is therefore a new fact not contained in the theory of value presented in Capital. This does not mean that Marx was wrong, it means that capitalism itself has evolved, and that the general theory presented in Capital need to be critically developed to take account of this evolution.

This is very far from the last word on this topic, in fact it gets us only to the starting point of the conversation that we need to have. To avoid this debate going around in circles, I request that Michael unequivocally states his opinion on these four propositions, because I’m still not sure where he stands. In fact that I think there is a bit of fence-sitting going on (bold by MR).

And here is my reply:

John, thank you for your very comprehensive comments on the discussion that we have been having about the nature of exploitation under modern imperialism.

You suggest that I have not been clear where I stand on the key points that you raise in your book and in our discussion and I have been ‘fence-sitting’.  Maybe.  But sometimes it is necessary to consider all points and not immediately agree or disagree until you are convinced.  An open mind, at least for a while, is not a bad thing as long as sitting on a fence does not go on too long!

But I think gradually I have formulated my views during our discussions.

John says that Marx did not just say the rate of profit is higher in the colonies due to a lower degree of development (i.e. low productivity and capital intensity) but that there was also a higher exploitation of labour.  John says this means Marx did not use his categories of capital when referring to colonies because the colonies were not part of global capital at the time.

I cannot see that we can draw this conclusion.  To me, Marx is saying that the rate of profit (in value) is higher in the colonies just as it is higher in less efficient, lower capital intensity capitals in a modern economy.  And in the process of equalisation towards an average rate of profit, value is transferred from the inefficient to the more efficient capitals.  “The rates of profit prevailing in the different branches of production are originally very different. These different rates of profit are equalized by competition to a single general rate of profit, which is the average of all these different rates of profit” (Capital III, p.158).

This theory applies to the global economy.  In addition, workers in the colonies can be exploited more when they don’t receive the value of their labour power in wages or are slaves.  That adds to the profitability in the colonies that can be transferred through international trade and capital flows to the imperialist economies.

I agree that capital has shifted investment into the periphery in order to take advantage of much lower wage costs there compared to the advanced economies. Who could deny that? And it is in keeping with Marx’s theoretical analysis.  Also it is another way of counteracting Marx’s law of falling profitability – indeed that is the point.  If that makes capitalism “more imperialist” in the neo-liberal period, fine.

But has ‘super-exploitation’ become a ‘relatively’ more important way of increasing surplus value over absolute and relative surplus value in the neoliberal period?  Well, maybe.  But I’m not sure what revelation or modification in the Marxist theory of imperialism this suggests.

John wants a reply to his four summarised propositions.  So I’ll try and get ‘off the fence’.

John:

1. a) in Capital, Marx identified not two put three ways to increase the rate of surplus value, and that while he repeatedly emphasised the importance of the third (reducing wages below the value of labour power) each time he explained that examination of this was excluded Capital because his ‘general theory’ required the assumption that all commodities sold at their value;

My reply:

Well, Marx excluded this third category of super-exploitation because the fundamental cause of exploitation is the appropriation of value by capital even when workers get paid their ‘value’.  If it were just ‘super exploitation’, the theory of value would be wrong.

Marx did not say that “all commodities sold at their value”.  On the contrary, commodities do not sell at their value as Smith (Adam) and Ricardo thought, but at their prices of production because of the transformation of individual values into prices of production through an average rate of profit.  Indeed, that is why ‘super exploitation’ is not enough to show why profitability is higher in some capitals than others.

John

1. b) it is true, as Lucia argues, that in Capital Marx does not analyse a single national economy, but neither does he analyse the concrete global economy of his day (still less, obviously of our day) – the glancing reference to ‘coolie labour’ alone is proof of this. He analyses an idealised unitary economy in which all factors of production, including labour, are freely mobile (i.e. he excludes all forms of monopoly) – as is reflected in his assumption that labour power has but one value;

My reply:

I disagree that Marx’s analysis is ‘idealised’.  It starts with an abstract analysis taken from the real world with realistic assumptions (like all value comes from labour; capital accumulation leads to increased mechanisation) to which is added all the concrete parts of capitalism: from ‘capital in general’ to ‘many capitals’, from the commodity to money and to credit; from the world to many nations; from competition to monopoly.  Indeed, he does not exclude ‘all forms of monopoly’.  He analyses the concrete global economy of his day, often in much detail.

John

1. c) that replacing labour power of higher value in imperialist countries with labour power of lower value in Bangladesh, China etc is tantamount to, i.e. has the same effect on the rate of exploitation as, the reduction of wages below the value of labour power and therefore corresponds to the third form of surplus value increase;

My reply:

No, super exploitation is when wages are below the value of labour power.  But the ‘value of labour power’ is different in different countries depending on the socially accepted level in each.  So capital shifting investment to low wage countries from high wage countries does not prove by itself that ‘super exploitation’ is involved at all.

John

1. d) that this is therefore a new fact not contained in the theory of value presented in Capital. This does not mean that Marx was wrong, it means that capitalism itself has evolved, and that the general theory presented in Capital need to be critically developed to take account of this evolution.

My reply:

Super exploitation is not part of the theory of value because, as Marx says, it is temporary and changes and is different in each country etc.  In the process of production, capitalists might force a lower wage. If the value of labour power has remained the same, i.e. if the necessities of life and their production price remain the same, the lower wage can purchase less wage goods and the price of labour power (wages) falls below its value, the production price of those socially determined necessities.  That is super exploitation.

But if this low wage is maintained, workers must eventually accept a lower value of labour power in the goods and services they can buy with it.  In that sense, super exploitation becomes simply a higher level of (“normal”) exploitation because the value of labour power has been lowered in the class struggle.  Yes, more exploitation, but not super-exploitation as a new category of capital.

Super-exploitation is not a category that explains exploitation as such. And it is not a new fact – it’s been around all the time.  Is it decisive now?  Not proven.