Again on "Third World" productivity + industrialization
We measured the exploitation rate, or an approximate
measure of it, using averages of entire regions on gross capital formation,
compensations and real GDP for two regions: Africa and North America &
Europe (we need to keep working to include the rest of the regions). Gross
capital formation and compensations (wages) came in decimal percentage form, so
we adjusted to obtain nominal and absolute figures through average real GDP,
and then we measured the surplus against compensations, just like surplus value
against variable capital. We did this for both 1990 and 2019, to coincide with
our previous
work. This investigation is ongoing. What I’m trying to do
is to explain, from marxism itself, the fact that there are so many phenomena
contradicting classical or orthodox tenets of marxism: the “Third World”
turning industrial, the “Third World” having bigger growth rates on severales
variables across the economy, and among those facts, the higher productivity
rates from emergent and peripheral societies acknowledged by Michael Roberts
and pointed out by others, etc. I believe this phenomena do not contradict
marxism, but only their classical and orthodox tenets. I believe, quite the
opposite, that these phenomena should be
explained from within marxism, and that Marx’s tools are not only very able to
provide explanations, but that their explanations of these historical changes,
are actually better in understanding them.
The surplus obtained is not exactly surplus value to
me, since I would be a bit more severe and harsh, even with myself: it’s
precisely a measure of profit against variable capital, since we would need to
use gross capital formation for profit and capital stock for surplus value (or
in other words: we would need to use gross capital formation as constant
capital advanced, and capital stock as constant capital consumed, although
those as well might not be exactly the same as advanced and consumed). The word 'surplus' gets thrown around much easily, and any excedent is considered both profits and surplus value, which I consider to be incorrect. But in order to calculate all this information by myself and without resources, I have to sacrifice this difference to what amounts to calculating the exploitation rate dividing this 'surplus' into variable capital (compensations and wages). This is
to clear up the results, since it doesn’t make sense to obtain a continental or
regional figure for exploitation rates which are, obviously, multiple across
different economies, if it’s not an average or part of an averaging process as well. I
say this in order to come upfront with the measures we have made, and let everyone be clear this is just a heuristic
exercise. Instead of a ‘grandiose’ claim or a ‘pretentious’ big headline on the
subject, and instead of hiding this empirical differences under the term 'surplus' as lots of marxists do, we want to provide and have the serious intent on contributing to the
discussion and ongoing research.
Average exploitation
rate
This goes parallel to our other previous analyses
regarding the inversion of productivity growth rates and other growth rates,
between high income and middle/low income countries, or between advanced and
peripheral countries, (please consult them on the link already written above, its both Adam Smith in Beijing texts, data which contradicts classical imperialism, or which contradicts the dull common places which all marxists repeat but have no empirical basis, our review of Robert's text, and the last one on capital intensive investment being bigger in Africa, all of them with their proper data), etc. These findings have several consequences:
-
they explain how advanced countries
and peripheral countries have switched places in terms of producing through the
exploitation rate, or producing through productivity. It’s the peripheral
economies which have more productivity now, producing through productivity in
the sense of augmenting gross capital formation and innovation way more than
high income countries.
-
it shows that even if there’s a
historical fall in the profit rate, this doesn’t mean the generalization of
externalities or liabilities through the world market, even less a breakdown of
capitalism, but the sustenance of capitalist production through a contracted
reproduction: the emergent and low income countries innovate more and spend
more on capital-intensive processes now than the advanced economies, but they
innovate and augment gross capital formation, in the context of a generalized
fall in world’s gross capital formation in general, which is the contraction of
reproduction and accumulation itself. All countries have reacted to the
historical fall in the profit rate, specially in the form of neoliberalism. But
this hasn’t meant externalities and liabilities only. For peripheral, emergent
and low income societies, this has meant a backwards opportunity: since
advanced countries were obliged to stop their reproduction and accumulation
because of the profit rate falling, emergent and low income countries have had
the opportunity and advantage over the advanced countries, of being way more
backwards, and because of that, having a wider margin of manouver because of
their higher profit and exploitation rates (documented by Amsden, and others).
So they innovate by upgrading part of their constant capital, but without changing the fact that they’re
reducing accumulation just as much as advanced countries. The fall in the
profit rate has stopped expanded reproduction in a direction of growth, and
instead have forced the whole international and multinational bourgeoise, to
scale back reproduction and accumulation. But… it turns out that since
backwards societies had a higher labour component comparatively, this scaling
back of accumulation (through unemployment, wage reductions, etc) has made them
mobilize more labour than the Triad, and because of that, having more
productivity even within contraction. So innovation in the “Third World” turns
out to be more productive, and slashing costs both in terms of overused fixed
capital and the labour component, plus innovating and taking up gross capitalf
formation investment, instead of decreasing productivity, has made it grow
bigger in those regions. A more backwards constant capital but accompanied by
innovation nonetheless, and with a bigger share of relative labour, and also a
bigger mass of labour in absolute terms, makes them grow more and bigger than
advanced countries with more advanced constant capital but a bigger organic
composition and smaller labour share, precisely because of the same thing.
Capitalism feeds off of backwardness, and not of futuristic cutting edge
advancements: the contracted reproduction means backward economies can have
advantages over advanced economies, because the advanced economies cannot
expand reproduction anymore, since they are in the front line of innovation and
advancement, and that only leaves backwards societies with the chance to be the
focus of biggest growth in terms of valorization.
-
So multinational capitalism is
industrializing the “Third World”, and it’s doing so because these backwards
regions of the world market, are better to extract higher and much bigger
profits, than their own nations and societies. The de-industrialization of the
United States is the industrialization of the other parts of the world. There’s
a whole mobilization going from advanced countries towards peripheral
countries, in order to extract bigger exploitation rates, and bigger profit
rates. We used to argue, with Utsa Patnaik herself, that if profit rates and exploitation rates where bigger in peripheral economies, there was a paradox in the fact that advanced countries didn't invest capital-intensive processes in the peripheries, even though they had bigger exploitation and profit rates. It was the eternal paradox of modernization theory and developmentalism. But now we see, the passage from monopoly capital to late capitalism and multinational toyotism and neoliberalism, was precisely this advanced encroaching of multinational capital into peripheral societies itself. It was just a slower and more massive historical event and process unfolding. Why didn't it unfold earlier? Because the productivity of the Triad was enough to beat peripheries relatively and absolutely, until the fall in the profit rate. Then, relatively, peripheries turned out to be a better place for the valorization of capital.
-
This goes against classical
imperialism, and goes against dependentists or three-worlds theories. The
contracted reproduction due to the historical fall in the profit rate, doesn’t
mean everyone starts having externalities and liabilities, as in a permanent
ongoing crisis, and even less, that this externalities and liabilities are
somehow inherent and static between the so called “First World” and “Third
World”. It also means opportunities for competitors, because “Third World”
societies are also part of the imperialist chain of finance capital. The
historical fall in the profit rate might make some think that, if it creates
poverty and crises in advanced countries, it will create even more poverty and
crises in peripheral economies, but at least in relationship to these variables
observed, and not the totality of measures(!!!), it turns out to be the opposite. It means backwards regions
surpassing advanced ones, it means stopping the advancement of high income
societies from North America & Europe, and their devolution into poverty,
inequality and exploitation to levels only comparable to the “Third World”
itself, while peripheral and colonial regions turn out to be high tech
producers of the world, and having growth figures much, much superior to the
Triad.
-
This doesn’t mean there’s a boom.
The overall and general trend, besides the historical fall in the profit rate,
is Mandel’s contracted reproduction. The concessions made to the working class
by welfare states and the post-war boom, turning into neoliberalism and toyotism, and this
onslaught of poverty, inequality and exploitation even in the most advanced
cities of the world from Paris to New York, has been met with the opposite tendency of seizing this
contraction, to extract even more value and profits from peripheral and
backwards societies, reaching industrialization while also having poverty, unemployment, inequality and exploitation.
We shouldn’t then, confuse the industrialization of the “Third World”, with the
attainment of concessions just like in the post-war boom. Just like this industrialization
isn’t in the form of british primitive accumulation, it perhaps won’t even mean
the expansion of republics and democracies in a manchesterian capitalist free
market. Why? Because of the Prussian way or the second non-revolutionary way of
passage from pre-capitalism to capitalism in chapter XX of Vol.III: merchant
capital in peripheral societies, turning into industrial capital, and still
dependent on multinational production and the export sector, just like East
Asia and the Pacific itself. In other words: middle income and low income
economies, are not experiencing a boom, they’re experiencing being most
benefited from a backwards situation, where they end up having more benefits
relatively, but not necessarily in absolute terms. It’s their comparative
positions in relationship with the Triad, which is making emergent societies
seem to be better positioned or at least able to be real competitors and aspiring imperialists, but this is only relative and comparatively,
while having the same contraction and the same deterioration of accumulation
and reproduction that the other regions and countries suffer.
