Imperialism & the Globalisation of Production The Earth at Night— Reverse image of satellite photos* “Instead of the conservative motto, ‘a fair day’s wage for a fair day’s work!’ [...] the revolutionary watchword, ‘abolition of the wages * system!” PhD thesis John Smith, University of Sheffield, July 2010 *Karl Marx, 1865, Value, Price and Profit 1 Please contact the author with any comments, criticisms etc, at [email protected] Word Count footnotes Abstract 300 Chapter 1 18952 4635 Chapter 2 15054 3118 Chapter 3 16298 2874 Chapter 4 8747 1623 Chapter 5 11560 1352 Chapter 6 8042 1417 Chapter 7 12307 2347 Conclusion 4110 1326 Total 95370 18692 2 Contents Glossary 6 Figures and Tables 6 Acknowledgements 9 Abstract 11 Chapter 1— Globalisation and ‘New’ Imperialism 13 1.1 Neoliberal globalisation and the persistence of the North-South divide 14 Core concepts.....................................................................................................15 Theoretical development of concepts: Neoliberal globalisation—a new stage in capitalism's imperialist development.........................................................................................20 Thesis scope and research strategy ............................................................................25 1.2 Making exploitation invisible ...................................................................................29 Exploitation and super-exploitation...........................................................................31 What is the economists’ theoretical justification for excluding exploitation? .........................34 The GDP illusion .................................................................................................37 1.3 Marxist theories of imperialism and ‘new imperialism’ ...................................................41 Marx, Lenin and the globalisation of capitalist production ...............................................42 Dependency theory and its demise............................................................................48 Theories of ‘new imperialism’ .................................................................................51 1.4 Overview of thesis structure ...................................................................................59 Chapter 2—Offshoring, outsourcing and the ‘global labour arbitrage’ 63 2.1 The globalisation of production processes...................................................................64 2.2 Antecedents of global outsourcing.............................................................................67 2.3 The global South—peripheral no longer .....................................................................70 The extreme asymmetry of N-S FDI..........................................................................72 Manufacturing FDI vs services FDI............................................................................76 Mergers and acquisitions vs ‘greenfield’ FDI................................................................76 TNC employment, North and South .........................................................................79 Asymmetric ‘market structures’—monopolistic ‘lead firms’ in the North, cut-throat competition in the South .......................................................................................81 2.4 Services outsourcing .............................................................................................83 2.5 Living labour centre stage.......................................................................................87 Outsourcing and the reproduction of 3labour power in Triad nations............................................. 2.6 ‘Global labour arbitrage’—key driver of the globalisation of production processes ................92 ‘Global labour arbitrage’— a useful term, or euphemistic jargon? .....................................96 2.7 Neo-Marxists and the ‘Global Labour Arbitrage’...........................................................98 2.8 Global labour arbitrage in a broader perspective ......................................................... 102 Chapter 3—Southern labour, peripheral no longer 105 3.1 Southern labour in chains 107 The suppression of free labour mobility and the making of the Global South....................... 107 The growth of the southern workforce and its proletarianisation ..................................... 112 3.2 The informal economy: capitalism’s ‘relative surplus population’ .................................... 119 Informal employment as % of non-agricultural employment .......................................... 122 Informalisation and social retrogression.................................................................... 123 ‘Flexibilisation’ ................................................................................................. 126 The informal economy and capitalism’s ‘relative surplus population’................................ 127 3.3 The ‘feminisation’ of labour and the proletarianisation of women 130 ‘A perfect fit’ ................................................................................................... 131 ‘De-feminisation’............................................................................................... 133 Gender pay gap—as wide as ever ........................................................................... 136 Feminism and class analysis................................................................................... 137 3.4 Industrial employment vs. employment in agriculture and services .................................. 140 The southwards shift in the industrial working class..................................................... 140 Export-oriented industrialisation: widely spread or narrowly concentrated? ....................... 143 Export Processing Zones (EPZs) ............................................................................ 146 Non-traditional agro-exports ................................................................................ 150 Chapter 4—Wage trends in the era of globalisation 154 4.1 Global wages – data issues .................................................................................... 156 4.2 Global wage trends in the neoliberal era ................................................................... 160 4.3 Falling labour share of GDP .................................................................................. 166 4.4 Growing wage inequality ..................................................................................... 175 4.5 Wages in times of crisis ....................................................................................... 177 Conclusion............................................................................................................ 180 Chapter 5—The Productivity Paradox and the Purchasing Power Anomaly 183 5.1 ‘Real wages’ and Purchasing Power Parity ................................................................ 184 The purchasing power anomaly and the 4North-South divide .............................................................. Purchasing Power Parity pitfalls .............................................................................189 Marxist political economists on PPP........................................................................194 5.2 Why do market exchange rates undervalue ‘soft’ currencies?..........................................202 The Purchasing Power Parity hypothesis...................................................................202 The productivity paradox .....................................................................................206 Productivity and ‘unit labour cost’..........................................................................209 Chapter 6—Mysteries of Outsourcing 217 6.1 Interpreting GDP, trade data.................................................................................218 6.2 The South’s increasing share of world exports of manufactures .......................................222 6.3 Slow growth in the South’s share of global MVA .........................................................226 MVA’s decline, financialisation’s rise.......................................................................231 6.4 Outsourcing outpacing offshoring ...........................................................................233 The mysteries of outsourcing.................................................................................237 Chapter 7 The GDP illusion 241 7.1 What is ‘GDP’? .................................................................................................242 7.2 GDP, ‘value-added’ and the theory of the firm ...........................................................246 7.3 The ‘value-chain’ concept.....................................................................................249 7.4 Value chains and value theory ................................................................................254 7.5 Three elements of the GDP illusion.........................................................................261 Productive and non-productive labour. ....................................................................263 International differences in technology and organic composition......................................265 International differences in the rate of exploitation. .....................................................268 7.6 GDP in the era of globalised production...................................................................270