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Labor-Value Commodity Chains and the Imperialist World Economy

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Labor-Value Commodity Chains and the Imperialist World Economy BACK TO PRODUCTION: LABOR-VALUE COMMODITY CHAINS AND THE IMPERIALIST WORLD ECONOMY by INTAN SUWANDI A DISSERTATION Presented to the Department of Sociology and the Graduate School of the University of Oregon in partial fulfillment of the requirements for the degree of Doctor of Philosophy June 2017 DISSERTATION APPROVAL PAGE Student: Intan Suwandi Title: Back to Production: Labor-Value Commodity Chains and the Imperialist World Economy This dissertation has been accepted and approved in partial fulfillment of the requirements for the Doctor of Philosophy degree in the Department of Sociology by: John Bellamy Foster Chairperson Richard F. York Core Member Vallon Burris Core Member Daniel Buck Institutional Representative and Scott L. Pratt Dean of the Graduate School Original approval signatures are on file with the University of Oregon Graduate School. Degree awarded June 2017. ii © 2017 Intan Suwandi iii DISSERTATION ABSTRACT Intan Suwandi Doctor of Philosophy Department of Sociology June 2017 Title: Back to Production: Labor-Value Commodity Chains and the Imperialist World Economy. Despite the complexities and decentralization that characterize global supply chains in today’s world economy, imperialist relations of exchange continue to prevail, due to the fact that the differences between wages of North and South is greater than the difference of their productivities. This dissertation examines the global exploitation of labor that mostly occurs in the global South, as a form of such imperialist relations, particularly under the domination of multinational firms emanating primarily from the core of the system. I start by laying out the theoretical and empirical groundwork for the labor-value commodity chains framework that puts labor, along with the question of control and class, at the center of its formulation. By incorporating a calculation of cross-national variation in unit labor costs in manufacturing—a measurement that combines labor productivity with wage costs in a manner closely related to Marx’s theory of exploitation—the labor-value chains framework is a means to operationalize exploitation within the framework of the labor theory of value. Findings show that the global organization of labor-value chains is a means to extract surplus value through the iv exploitation of workers in the global South, where not only are wages low, but productivity is also high. I then show the concrete processes of how global North capital, personified in multinational corporations, captures value from the global South by applying systemic rationalization and flexible systems as mechanisms to exert control over their dependent suppliers in labor-value commodity chains. The burden of such mechanisms is borne by the workers —the direct producers of commodities—employed by these dependent suppliers. Case studies of two Indonesian companies that supply to multinationals are presented to illustrate these phenomena at the point of production. This observation further suggests that labor-value commodity chains are a form of unequal exchange and thus reveal the imperialistic characteristics of the world economy. This dissertation includes both previously published and coauthored materials. v CURRICULUM VITAE NAME OF AUTHOR: Intan Suwandi GRADUATE AND UNDERGRADUATE SCHOOLS ATTENDED: University of Oregon, Eugene Lehigh University, Bethlehem New College of Florida, Sarasota DEGREES AWARDED: Doctor of Philosophy, Sociology, 2017, University of Oregon Master of Science, Sociology, 2013, University of Oregon Master of Arts, Sociology, 2008, Lehigh University Bachelor of Arts, Sociology/Philosophy, 2006, New College of Florida AREAS OF SPECIAL INTEREST: International Political Economy Sociology of Globalization Work and Organizations Development Social Theory PROFESSIONAL EXPERIENCE: Graduate Employee, University of Oregon, 2011-2017 Instructor, University of South Florida, 2010-2011 Instructor, Northampton Community College, 2008-2010 Teaching Assistant, Lehigh University, 2006-2008 GRANTS, AWARDS, AND HONORS: John L. and Naomi Luvaas Graduate Fellowship, College of Arts and Sciences, 2016. General University Scholarship, University of Oregon, 2016. vi Wasby-Johnson Sociology Dissertation Research Award, Department of Sociology, University of Oregon, 2015. Southeast Asian Studies Award, Graduate School, University of Oregon, 2013. Charles W. Hunt Award for Excellence in Undergraduate Teaching, Department of Sociology, University of Oregon, 2013. PUBLICATIONS: Suwandi, Intan and John Bellamy Foster. 2016. “Multinational Corporations and the Globalization of Monopoly Capital: From the 1960s to the Present.” Monthly Review 68(3): 114-131. Suwandi, Intan. 2015. “No Reconciliation without Truth: An Interview with Tan Swie Ling on the 1965 Mass Killings in Indonesia.” Monthly Review 67(7): 14-30. Suwandi, Intan. 2015. “Behind the Veil of Globalization.” Monthly Review 67(3): 37-53. vii ACKNOWLEDGMENTS Sampurasun. This dissertation is a product of many years of research and learning that would not happen without the help, support, and guidance of many individuals. To begin, I thank my adviser and mentor of six years, John Bellamy Foster—the main reason I pursued my study here at the University of Oregon. My interest in Marxist political economy started a long time ago, but it was under his mentorship that this interest could manifest into a meaningful learning experience and, later, writings. He has taught me so many things, not only in the academic sense, but also in other aspects. From him I learned perseverance in pursuing knowledge. And he always encouraged me to do more than I thought I could. To him I owe a debt of gratitude. I also thank my other committee members. Two of them are my mentors from the Department of Sociology: Richard York and Val Burris. Richard has supported my research in many ways since the beginning. His encouragement have also made it possible for me to overcome difficulties during my graduate study, and his pedagogical excellence will forever be an inspiration. Val’s extensive knowledge of theories and methods, along with his feedback on my earlier work on this dissertation, has been very important to the development of my research. I also thank Daniel Buck, my outside committee member from the Geography/Asian Studies Department, from whom I learned a lot about the current situation in China, and who provided me a chance to closely revisit Capital in one of his geography seminars. I thank R. Jamil Jonna, who, along with John Bellamy Foster, coauthored our paper that I used as a basis for the chapter on labor-value commodity chains. Jamil has made our goal of providing an empirical groundwork for this theory possible. I also thank the individuals who helped me during my fieldwork in Indonesia. These were the people without whom the fieldwork would not succeed. Thanks to them, I was given access to the companies and was able to learn what I intended to learn, plus other things. The study was supported in part by the Southeast Asian Studies Award and the Wasby-Johnson viii Sociology Dissertation Research Award. I thank the generous sponsors who have provided such funding. I thank my friends at the department. I do not have many, but the ones I have are invaluable. Thank you, Tongyu, Cade, Ryan, Brian, and Shihchi. Without you folks, I would not have survived the mean and lonely world of graduate school. I also thank the authors and colleagues at Monthly Review—from whom I learned many, many things that have influenced the development of my thinking in a significant way. I thank the people whose friendship has been central to my life, those whose love has kept me going all these years: Louie, Sirry, Abhi, Vania, Yuping, Tri, and Stefanie. I also thank my family here in Eugene: Ben and Leslie Lee, Carrie Ann Naumoff, Theresa Koford, and Kim Donahey. Without them, Eugene is nothing but a wet and dreary place. Most importantly, I thank my family: Mama, my sister Irma, and brothers Iman and Iwan, my nieces and nephews, as well as my uncle Pancha. Their support is everything. And I thank my partner in life, Eli, who has always been there without fail. He is a partner in every sense of the word. Not only is he a loving husband, but also a skilled editor, and a brilliant discussion partner. He was the first one who read this dissertation, and without him, the process of writing this would have been painful. (And I thank my cat, Lu Xun, who sat next to me, or on my lap, every single night I stayed up to work on my dissertation. Even Eli could not do that.) Last but not least, I dedicate this dissertation to my dad, who passed away in July 2016. It was not easy for me to finish this work in the middle of an overwhelming grief, but I managed to do it because I knew that he would have wanted me to continue. If he were alive, he would be the one who called me and asked how the writing was going. He was the most important person in my life. He was my best friend. He was the first person from whom I learned about Marx. He was the one to whom I turned every time I needed to talk—about my studies, my fieldwork, the new things I learned, my plans and my thoughts. He was there every step of the way. He is here on every page. And he will be there in every path I take in the future. Hatur nuhun, Papa. I will forever be grateful. ix To Papa x TABLE OF CONTENTS Chapter Page I. INTRODUCTION .................................................................................................... 1 Globalized Production in the World Economy ...................................
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