Do workers in the Global North benefit from the exploitation of workers in the South?

While it has been suggested that workers in places like Britain and the US benefit from the exploitation of workers in the Global South, Charlie Post argues that imperialism has intensified exploitation across the entire global working class.

Electronics factory workers, Cikarang, Indonesia. Credit: ILO/Asrian Mirza

For well over a century, socialists around the world have debated whether or not the higher wages, more secure employment and greater access to social welfare enjoyed by at least some workers in the global North comes at the expense of their class sisters and brothers in the Global South. Are workers in the imperialist countries tied to their rulers through shared exploitation, or does imperialism intensify exploitation of workers in both zones of the capitalist world economy? The empirical and theoretical flaws in Lenin and Zinoviev’s claim that “super-profits” earned by imperialist firms in the dominated societies created a “labour aristocracy” are broadly questioned on today’s far left. However, the claim that workers in the core of the world economy benefit imperialism has not disappeared. John Smith’s 2016 book, Imperialism in the Twenty-First Century: Globalization, Super Exploitation, and Capitalism’s Final Crisis revives the argument in a new form.

For Smith, both capitalists and workers in the global North benefit from the super-exploitation of workers in the Global South. Marx identified three ways capitalists extract surplus-value from workers under capitalism: absolute surplus-value through the extension of the working day with no change in real wages, relative surplus-value through increasing the productivity of labour, and super-exploitation, where real wages are depressed below the value of the historically conditions for the reproduction of workers’ capacity to labour. In the neoliberal era, Smith claims that the viability of imperialist capitalism depends upon the super-exploitation of workers in the Global South. Wages that are purportedly below the cost of reproducing workers fuels the outsourcing of industrial production to the Global South, allowing imperialist firms to enjoy healthy profits without increasing the labour-productivity or the rate of exploitation of workers in the Global North.

There are a number of conceptual and empirical problems with Smith’s argument. Smith rejects Marx’s argument that the growth of labour productivity through capital-intensive innovation increases relative surplus value. Marx argued that as long as the rate of increase of real wages is less than the rate of increase in labour-productivity, which the existence of a reserve army of unemployed and underemployed guarantees, the intensification of work through mechanisation, “produces in the same time more value.” Smith argues that Marx’s was looking at the imperialist core in the mid-19th century, not at the contemporary dominated societies. He claims that capitalists in the Global North and South do not compete with one another because they produce different commodities, and are not compelled to increase labour productivity and relative surplus-value extraction. He also claims that capitalists in the core only exploited “their own” workers in Marx’s time, and means of subsistence were produced in their own countries. As a result, capital in the 19th century did not depend on profits from investment in the periphery.

These claims are theoretical and empirically questionable. While the societies of the Global South will not replicate the level of capitalist development in the Global North, for the most part, they are all subject to the same capitalist laws of motion. Whether capital in the core competes “head-to-head” with capital in the periphery, the introduction of new and more efficient machinery will intensify work, and raise the rate of exploitation in both zones of the world economy. It is also historically inaccurate that capitalists in the 19th century exploited only workers in their own nations, whose means of subsistence were produced locally. Not only were many industries dependent upon imported raw materials in the 19th century (e.g. cotton, textiles), but the global market in tobacco, sugar, grains and other foodstuffs was well established by the time Marx drafted the first volume of Capital.

Despite the centrality of super-exploitation to his arguments, Smith presents no comparative data on rates of surplus-value. However, Ahmet Tonak provides evidence that the average rate of exploitation in the Global South may be higher than in the Global North. Four economies in the Global North (US, Germany, Sweden, Canada) saw rates of surplus value between 202 percent and 259 percent between 1969 and 1977; while seven economies in the Global South  (Egypt, Turkey, India, South Korea, Bolivia, Panama, Puerto Rico, Malawi) experienced rates between 244 percent and 465 percent. In the early 21st century, the gap persisted, but appears to have narrowed. The rate of exploitation in the US was estimated to be 300 percent in 2001, while Turkey’s was 312 percent in 2006.

Although rates of exploitation are higher in the Global South, there is ample evidence of increasing rates of surplus value and labour productivity in the Global North. The same study that found higher rates of exploitation in the Global South, found that the rate of exploitation in the US jumped over 40 percent from 1948 to 1989, from 170 percent to 244 percent, before increasing another 18 percent from 1989 to 2001, to 225 percent. Another study documented a rise of 18 percent in the 1990s, from 258 percent to 305 percent. Kim Moody’s research demonstrates that the rapid increase in the US rate of surplus-value was the result of gains in labour productivity. Most of this increase were, as they have been through the history of capitalism, the product of labour-saving technical innovation — both directly labour-displacing machinery, and technology to monitor and surveille workers in order “squeeze the pores” out of the working day.

Most importantly, Smith fails to demonstrate that the source of higher averages rates of surplus-value in the Global South is super-exploitation — pushing wages below the historically constituted value of labour power. There is clearly evidence of both absolute and relative surplus-value extraction as the sources of the higher levels of exploitation in the Global South. Michael Roberts points to Foxconn, which combined extremely low wages (not necessarily below the value of labour power) with long hours (absolute surplus value) and the latest technology (relative surplus value). Tonak examined 500 large Turkish owned firms and six large joint ventures with foreign capital in 1996, and found that the “joint-venture firms are technologically sophisticated and able to implement managerial supervision to increase the intensity of labor.” The joint-ventures enjoyed higher rates of surplus-value than the average of 500 Turkish owned firms.  Four tobacco and car firms experienced rates of exploitation four to six times higher than the Turkish owned firms, while two other joint-venture auto manufacturers enjoyed two to three times higher rates. Nor is super-exploitation—extremely low wage work that depresses the value of labour power—absent in the contemporary Global North. Roberts has pointed to two million “Zero hour” contract workers in Britain alone, youth unemployment rates of 40-50 percent in Southern Europe, low wages that force young people to live with their parents, and growing poverty across the Global North since the 1980s as evidence of ‘super-exploitation’ in the core of the capitalist world economy.

Rather than workers in the Global North somehow sharing the benefits of the super-exploitation of workers in the South with their employers, workers in both zones of the capitalist world economy have experienced rising rates of exploitation since the 1980s. Using labour share of GDP as a proxy for the rate of surplus value, a recent study argues the moving of labour-intensive production processes to the periphery has produced an intensification of the global rate of exploitation of labour, as workers across the world are forced to compete with one another. Capitalists in the Global North have used the mere threat of “off-shoring” operations to the South to drive down wages and intensify work since the 1980s, and simultaneously benefit from mass migrations of workers from the periphery who enter the core labour markets without the minimal protections that “citizen” workers enjoy. Rather than benefiting workers in the Global North, imperialism in the late 20th and early 21st centuries has produced greater levels of exploitation of the entire global working class.

Charlie Post taught sociology in New York City for over 30 years, was active in his faculty union and is an editor of Spectre: A Marxist Journal and a member of Tempest, a revolutionary socialist collective in the US. This article draws on his “Explaining Imperialism Today”.


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