No.235365
(vidrel:) It is often claimed by Marxists that workers in the ‘periphery’ countries earn such paltry wages as they do due to an alleged deficiency in ‘productivity’. Critics of the theory of unequal exchange as a mechanism of imperialist value transfer suggest that since the productivity of developing country labour is much lower than that of developed country labour, the backward industries of the global South produce goods and services that are correspondingly less valuable than those of the far more advanced industry of the global North. As such, productivity differentials either reduce or completely negate the inequality inherent in exchange based on divergent wage levels. Indeed, this point has recently been made quite forcefully in the following terms: ‘[Global labour arbitrage] is a shift of work from the hands of those who create more value to those who create less.’ Although it is obvious that it would scarcely be profitable for corporations to shift production to areas where workers are only a fraction as productive as those in their home countries, we are compelled to take such logic seriously. There are several points to make against this view commonly held by socialists in the global North at least, where it functions as tacit justification for prioritising the demands of the world’s richest (‘most exploited’) workers.
First, measuring productivity according to the market value generated by each unit of labour (whether in terms of labour time or of cost) is highly problematic. In denying the elementary truth that international wage differentials typically reflect divergent rates of exploitation Finger, for instance, declares that ‘the value-enhancing ability of an hour of social labor is intrinsically linked to the quantity of social resources sacrificed to attain and preserve those skills’. In other words, metropolitan workers are said to produce more (surplus) value because their costs of reproduction, that is, their wages, are higher. As John Smith has noted, were this true ‘capitalists could increase the quantity of surplus value extracted from a workforce simply by paying them higher wages!’ Similarly, as Jedlicki argues, ‘value-added’ data already incorporates those wage and capital differentials which Western ‘socialists’ justify in the name of superior metropolitan ‘productivity’. In doing so, ‘a demonstration is carried out by using as proof what constitutes, precisely, the object of demonstration’.
Second, one hour of average socially necessary labour time (what Marx called ‘abstract labour’) expended in a capital-intensive industry is the same as one hour expended in a labour-intensive industry. It is not the amount of capital at a worker’s disposal that renders her more or less productive of value, but the amount of abstract labour that she contributes to the capitalist production process as a whole. As Marx writes:
>Productive power has reference, of course, only to labour of some useful concrete form … Useful labour becomes, therefore, a more or less abundant source of products, in proportion to the rise or fall of its productiveness. On the other hand, no change in this productiveness affects the labour represented by value … However then productive power may vary, the same labour [of equal skill and intensity], exercised during equal amounts of time, always yields equal amounts of value. But it will yield, during equal periods of time, different quantities of value in use; more, if the productive power rise, fewer, if it fall. The same change in productive power, which increases the fruitfulness of labour, and, in consequence, the quantity of use-values produced by that labour, will diminish the total value of this increased quantity of use-values, provided such change shorten the total labour time necessary for their production; and vice versa.
Contrary to what some critics of unequal exchange imply, the higher physical productivity of labour, ceteris paribus, tends to reduce, not increase the per capita value of its output. Moreover, as Emmanuel argues, in the absence of political and/or trade union pressure being brought to bear on the labour market, technological progress tends to lower the value of labour-power (wages). As such, productivity increases are not necessarily correlated with wage increases, as can be observed by comparing the ‘relatively small differences in productivity between centre and periphery [with wage differences between the two] and the fact that sometimes Third World workers are even more productive than workers from the centre … ’. Historically, productivity increased rapidly in the earlier years of the industrial revolution in Britain, but wage levels tended not to rise in tandem. The growth of monopoly, however, has afforded increasing wages for a section of the working class having a modicum of social and/or economic capital at its disposal.
Relatedly, surplus value is not the difference between the price of labour-power and the final price of its product as is suggested by socialists who argue that metropolitan workers are the most exploited worldwide. Rather, it is the difference between the labour time required to produce the materials required for the worker’s reproduction compared with the labour time he or she actually expends as a wage-earner. A negative rate of surplus value can and does apply in some regions of the world where workers are able to purchase with their wages more abstract labour than they themselves contribute with their labour-power. We will examine the extent to which this is the case below. For now, it is necessary to understand that (1) a high proportion of the goods consumed by metropolitan workers are the product of highly exploited global South labour, and (2) a high proportion of the capital used in the production of consumer goods industries in the core countries is the accumulated or ‘dead’ labour of these same highly exploited workers. Addressing the first of these issues, Smith writes:
>The Euro-Marxist argument that higher productivity in the North means that higher wages are consistent with higher rates of exploitation has been negated by a simple fact: as we know from the labels, the consumption goods consumed by workers in the North are no longer produced solely or mainly in the North; to an ever-greater extent, they are produced by low-wage labour in the Global South. Their productivity, their wages significantly substantially determine the value of the basket of consumption goods that reproduces labour-power in imperialist countries.
In light of this, it is notable that even the small numbers of writers who are critical of value transfer view it largely or solely as enriching capitalists, but not most workers in the global North. Broadly speaking, they see superprofits but not superwages. The mobility of productive capital, however, ensures that profit rates tend to be equalised internationally, with the consequent transfer of surplus value between countries. This tendency for the rate of profit to be equalised means that workers in the advanced countries benefit from unequal exchange. As Emmanuel writes, ‘super-profits can only be temporary. Super wages, however, become automatically in the long run, the normal level of wages’.
The third point against critics of alleged lower ‘periphery’ productivity is that the export industries of the Third World are not typically based on primitive production techniques, but on technological endowments similar to those of analogous sectors of metropolitan industry. More importantly, capital is mobile internationally and is therefore capable of levelling intra-industry technological differences across countries even if it does not in fact do so. International technology transfer is principally dictated by profitability criteria under circumstances wherein the extremely low price of labour-power has been used as a substitute for capital investment internationally. Thus a massive increase in the employment of cheap labour over the past four decades has coincided with decreasing investments in fixed capital. In sum, technological wherewithal is dependent not on what is necessary for the production of a given quantity of use values, but on what is optimal for the valorisation of capital. The introduction of labour-saving technology to the production process is foremost conditional, then, upon the prospective maximisation of profits.
>It may be technically efficient to use a labour-intensive method of producing things, because although mechanisation saves on labour it involves using more of the other input, namely machines. Setting aside technically inefficient production methods, the real question is which of the possible technically efficient methods will give most profits: the more mechanised or the more labour-intensive one? A simple example shows how this question must be answered. Street cleaners can clean the streets more quickly if they are all equipped with vacuum cleaners. But this will not necessarily be profitable. If the vacuum cleaners are very expensive, it may cost less to use a more labour-intensive method. If the machines are cheap enough, then it pays to become more mechanised.
Fourth, evidence for the alleged productivity gap which opponents of the theory of unequal exchange have traditionally posited as responsible for global wage divergence is highly suspect; in value terms, transfer pricing makes it extremely difficult to measure productivity in the different operations of one enterprise.
>The enterprise’s ability to set arbitrary prices for transfers of semi-finished goods within the same firm means that relative productivity between different branches of the firm will take on an arbitrary value. As in a single plant where, say, production line workers are paid different wages from cleaning workers, productivity (and hence the notion of exploitation) is indivisible.
In Amin’s understanding of the concept, unequal exchange is ‘the exchange of products whose production involves wage differentials greater than those of productivity’. However, where productivity differentials may realistically be said to apply, and bracketing the first two points raised above, these are not necessarily greater than wage differentials and, therefore, trade between low-wage and high-wage countries involves a transfer of additional surplus value from the former to the latter.
Fifth, the less developed countries have neither the government budgets, nor the industrial infrastructure in place to produce technological innovations which might compete with those of the developed countries. Multinational corporations based in the developed countries have a monopoly of advanced technology for which the firms and countries of the less developed world must pay to use, and they thereby obtain a corresponding productivity gain.
Sixth, the final prices of goods produced in the ‘periphery’ using cheap labour and sold in the imperialist countries are inflated by the costs of advertising, marketing, retail, insurance and security. When added to the cost price, these enormous capital outlays make it appear that metropolitan workers employed in these sectors are producing huge quantities of additional value per unit of labour time, that is, that they are exceptionally productive compared to the ‘peripheral’ workers who actually manufacture a product or its vital inputs. In fact, no additional value is added to many products during these later phases of its circulation, but geographical and inter-sectoral price structures allow the redistribution of value created at the point of production. In sum, countries are exploited within the capitalist world economy by means of unequal exchange in the sphere of circulation, that is, in the difference between the selling prices of national producers and those of multinational corporations (monopolies).
Seventh, some critics assume that labour cannot exploit labour. As Finger writes: ‘Although from a formal standpoint, an unequal exchange of hours takes place in the exchange of commodities of equal physiological labour through unequal prices, skilled labour does not exploit unskilled labour.’16 Superficially, this statement is correct; to exploit labour, one would first have to hire labour. Nonetheless, some strata of the working class clearly do benefit from the exploitation of other strata. Leaving aside the extent and spread of shareholding, home ownership, and savings in the form of deposit accounts and pension funds amongst the ‘working class’ – all of which constitute capital from which profits may be drawn – some sections of the same actively pursue political agendas that maintain and extend a parasitic relationship between themselves and oppressed workers. This agency may itself be described as exploitative. That is to say, where some workers seek to retain whatever bourgeois status their occupation, income and conditions of work afford them through alliance with imperialist, racist and/or patriarchal political forces responsible for the low-wage position of oppressed workers, they may justly be said to actively exploit said workers.