Who’s got it bigger? – on Roberts and Carchedi’s contribution, and the way the ‘imperialism in the XXI century’ discussion is being handled

The problem with the measures presented by Roberts and Carchedi is that they don’t reflect value appropriation at the level of the productive process. There’s no mention of profit rates being higher in the periphery, nor of exploitation rates, nor productivity. Profit, interest and rent measured as income doesn’t measure the proportions between this income and accumulation or constant capital, etc. FDI flows measure the countries which receive or send flows outside, but not who appropriates its value at the level of organic compositions in competition: the outflows from the 'South' are assumed to be repatriations to multinationals, while outflows from the 'North' are assumed to be investment. But peripheries increasingly form part of FDI, and their outflows are also part of internal multinational transfers, just like it is said about subsidiaries and multinationals later on the text. Unequal exchange cannot determinate value appropriation at the productive process level either because it’s just the export sector (a marginal sector of the economy) which in no way can transfer value to internal markets, and so the value appropriation in those economies, plus it’s a Ricardian paradigm which contradicts Marx. Finally, subsidiaries take a bigger share of profits through value-chains, and this cannot be considered as staying in the central multinational even if it's internal value flow through the multinational processes, etc. I’ll try to write a more formal commentary on this aspects, but I’ll wait for more entries on behalf of the authors, which I believe go way beyond this. For example, the part on the labor component compared to constant capital being bigger in the peripheries than in the "imperialist" countries is correct, but this is not shown in the data, since it means a bigger profit rate in the peripheries. That would be another aspect to tackle (for our own work tackling precisely this element pointed out by Roberts and Carchedi, we direct you to the following link. The labor component being bigger than the constant capital component in the peripheries produces a higher rate of profit in the so called Third World, and explains this very same development of higher productivity in "emergent" countries as opposed to the classical Triad. It shows, precisely, an inversion of productive roles between the Triad and their neo-colonies, and an inversion of different historical forms of expanded reproduction).

The same happens with the data from Casanova and Miroux, where you can see the following: the first three companies from China ranked by revenue on 2015 by Fortune, all have slightly less revenues than the first three from the West (which are not only from the US, but also from Netherlands, so we’re even comparing multiple societies against the Chinese, which is an advantage for the classical position), with both respectively earning 1214,86 billion dollars in total profits, and 1299,59 billion dollars. Here the West prevails. But look at the relationship between those revenues and the profit margin: China’s biggest company at the moment, SINOPECT GROUP has a smaller profit margin or “rate” than a company like Netherland’s Royal Duth Shell, but since revenues are bigger for the Chinese, then the smaller profit margin actually means way more profits than the Dutch: 14378 billion dollars for Shell compared to 44681 billion dollars for SINOPECT (3% and 1% profit margins respectively).*

But this is even too old, lets go for a more actualized look, like this analysis we made ourselves on our page: "According to the last Fortune 500 ranking, and analyzing the top 10 of companies all around the world, US companies surpass China's companies in terms of absolute profits and profit margins ("profit rate"). But this is just an appearance. Total or absolute revenues generated by chinese companies surpass US companies (1,001,864 dollars versus 986,843 dollars respectively), which means that even if the profit margin is similar or inferior in chinese margins, we're talking about a smaller margin with respect to an even bigger absolute magnitude or quantity (if 5% profit margins for two companies are equal, but one produces 100 dollars and the other 1000 dollars, the exact same 5% margin is completely heterogenous). And the same happens if we compare revenues with total assets (returns on assets), where China more than doubles US companies in absolute and relative terms: they have assets worth for 13,625,956 dollars versus just 5,879,129 dollars respectively, and that produces a return on assets of 0,077% against 0,038% in China and the US respectively. On top of all of this, US total amount of companies in the Fortune 500 as a whole keeps descending, while China's and emergent countries' companies ascend and substitute those US companies."

Plus, on top of all of this, we go here: this goes to the heart of the argument, since Roberts and Carchedi simply look for absolute figures which are bigger than the others (or John Smith, who does the same in his Imperialism in the XXI century), and so maintain with this quantitative figures, that imperialism in the classic sense, is alright and well. Lenin prevails from death itself. There’s no need to actualize anything. Even John Smith himself defined how GDP is value-added, and so, it’s just total profits before their distribution into corporate profits, interests and rent. With this admission in hand from Smith (GDP is really profit, but we need to demystify its appearance in order to reach the substance of value appropriation according to value/organic compositions, etc), we can now reach the conclusion that is not even just GDP which is appariential, but also absolute figures which are not comparatively or relatively juxtaposed in order to reach for the actual difference between total profits (“revenues”), profits (corporate profits) and their value appropriation: that is, their relationship to constant capital. Which is precisely the difference between our analysis of Casanova and Miroux in the recent past, and the Fortune 500 now: we don’t take absolute numbers at face value. There are more mediations and determinations which are needed to conclude value appropriation, including the complicated solution to the paradox about heterogeneous exchange rates and purchasing power in different societies, which are not at all fixed by using a common denominator.

But that’s only the numbers: what about the qualitative and even also quantitative aspects of the developments detailed here? Nothing in the text suggests the asymmetry between core and peripheries is ending, and at the same time, what we propose is a destabilization or disequilibrium in the positions both core and periphery economies are facing between each other: peripheries are absorbing the same characteristics of central or metropolitan countries, just as much as East Asia now has all the characteristics of an industrial center of the world, instead of the Triad. Central American conglomerates and corporations opened up to sell a bunch of their stocks in the last decade, for example. Some even sold 100% of their stocks, but some others just allowed for some portfolio investment (of 30%). The 30% of a Central American conglomerate is now owned by Triad’s multinationals, of course. It is a deepening of ‘dependence’ in the sense that it means a penetration of Triad’s capitals in the Third World. But what about the qualitative leap or change for these conglomerates and corporations, since 30% of their stocks correspond not to smaller Central American capitals and profits, but actually to the Triad’s multinational 100% assets? These Central American conglomerates and companies now have at their disposal, even while delivering 30% of their stocks, the totality of that multinationals assets. If they directly control the rest of 70% of stocks, their 30% means a partnership with a Triad multinational which doesn’t have majority control, and at the same time, will invest through that 30% much bigger sums of capital than the ones that the very same 30% represented in the hands of Central American businessman. They become active investors with control over multinational assets. This goes way beyond a simple spill over, qualitatively. It cannot be represented in absolute numbers, because there’s an economic relationship here, and not just a quantitative relationship, changing in the world market, and in the relationship between the Triad and the so called Third World.

So of course, what do we do with this ‘capital as a relationship’ elements which are changing the economic international division of labor in the capitalist world market? Can this analysis be substituted by absolute numbers? Where’s Mandel’s project in nowadays Marxism?

Finally, in the case of unequal exchange, we already advanced a critique here: even Arghiri Emmanuel’s unequal exchange, supposedly rooted on labour-time, is Ricardian. Not only export and import prices are not the same as value appropriation, but less hours doesn’t mean less value, as if labor and value corresponded to each other in this way. Actually, this contradicts Capital vol. I elaborations on relative surplus value and productivity of labor: you can diminish necessary labor, which would mean less hours, and this doesn’t mean a disadvantage but actually the opposite: it means more surplus value appropriation, a bigger exploitation rate, and the capacity to diminish unitary prices turning their exports more competitive, and extracting more value through lower labor/export prices figures, turning Emmanuel's contribution into the complete opposite as the one developed by Marx. From Emmanuel’s perspective, there wouldn’t be any chance for productivity of labor or relative surplus value to work as it does in vol. I! It would mean a lowering of prices and their respective labor, and a supposedly worsening of terms of trade (which, as we already said, don’t explain anything beyond the export sector), and in reality is much more productive and means a bigger value appropriation for the respective economy. If GDP is total profits for a society, as Smith affirms and concedes, then GDP figures for emergent countries are way more precise to analyze the value produced in a society (although it is still an appariential figure and measure!), and as we all know, these figures are superior for peripheries now than for central countries, and have been this way through the majority of this century. GDP figures turn us once again to this conundrum, which needs to be solved, and which even if we have advanced it’s criticism and point in the right direction through that conundrum, is still not solved on the part of marxism (quite understandable, since not even Marx developed a theory of the world market, which he left unfinished). 

* Comparing the profit margin to revenues, and not to total capital advanced, of course. Compared to total capital advanced it would give us the same figures already presented in the paper, but profits instead of revenues also gives us as a result an advantage from Shell over SINOPEC in absolute terms, which is not the same as relative terms: Shell has biggest profits, but as a matter of fact, the smaller profit margin and absolute profits for SINOPEC are appariential, precisely because of the measuring we did above on this very same text. This gets us back to here.