In Defence of Walter Rodney: Workers, Imperialism & Exploitation - ROAPE
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In Defence of Walter Rodney: Workers, Imperialism & Exploitation

In Defence of Walter Rodney: Workers, Imperialism & Exploitation

In a robust defence of Walter Rodney’s work, Walter Daum argues that we must recognise and celebrate Rodney’s commitment to working-class internationalism. Rodney did not regard workers in the North as ‘natural allies’ of their own exploiters. Daum explains how Rodney’s argument that African (and by extension Southern) workers were more exploited applies all the more to the world we now live in today.                                                                                                                                                        

By Walter Daum

In his response to Andy Higginbottom’s post on ‘The Revolutionary Legacy of Walter Rodney’, Chinedu Chukwudinma asserts that, contrary to Rodney, ‘Western workers … tend to be more exploited … than African workers.’ Chukwudinma is not denying that African workers are paid significantly less, his claim is that their rate of exploitation in the Marxist sense is lower. This claim is consistent with the widespread theory that workers in the imperialist countries (in brief, the North) face a higher rate of exploitation than workers in the countries dominated and exploited by imperialism (the South). The theory has been defended by a variety of Marxist theorists – Chukwudinma cites Martin Legassick and Alex Callinicos, and they in turn refer, respectively, to Geoffrey Kay and Michael Kidron.[1]

In a previous response, Cecil Gutzmore took on a broad range of Chukwudinma’s criticisms of Rodney. In this blogpost I will focus on the rate of exploitation and challenge the idea that Northern workers are more exploited. I will examine Chukwudinma’s chain of citations and show that the whole edifice rests on theoretically shaky grounds, even when the authors bring to bear passages from Marx as their authority. I will also cite several sources that provide data indicating the contrary, namely that Southern workers labor under a higher rate of exploitation.

Rodney’s Examples

To begin, let’s look briefly at Rodney’s evidence. In order to show the greater exploitation of African workers, Rodney presented several examples. One was that European colonial capitalists paid Africans less than a living wage, ‘a wage usually insufficient to keep the worker physically alive.’ In Marxist terms, this meant that African workers were paid less than the value of their labor power. This might be thought of as absolute super-exploitation.

Rodney also presented cases of workers undergoing a rate of exploitation significantly higher than capitalists pay elsewhere; that can be called relative super-exploitation. For example, in Africa, ‘when a white and a black filled the same post, the white man was sure to be paid considerably more’; he cited factors of 10 or as much as 25. On the international level, he noted a shipping company in 1955 in which ‘of the total amount spend on loading and discharging cargo moving between Africa and America,’ the American dock workers were paid five times the wages of the African workers, even though ‘it was the same amount of cargo loaded and unloaded at both ends.’[2] These examples of lower pay for the same work clearly show black and African workers subject to a higher rate of exploitation.

Chukwudinma does not mention these examples. He does quote another comparison Rodney made in the same section of his book: ‘A Scottish or German coalminer … could virtually earn in an hour what the Enugu miner was paid for a six-day week.’ Later in his post he refers back to this comparison: ‘If a high-income Scottish miner creates, relative to his earnings, a larger amount of surplus value than his lower paid Nigerian counterpart, he’s more exploited.’ But that is a big ‘if,’ assuming without evidence that the Scottish miner does produce so much value. And even if it appears true on the surface, the real amount of surplus value the hypothetical Scottish worker creates can be very different (see the section on productivity below).

Chukwudinma not only disagrees with Rodney’s analysis, he draws a political lesson from it, namely that Rodney must believe that the greater exploitation of African workers means that their exploitation is in the class interest of Western workers. He writes: ‘Rodney concludes that colonialism was in the interest of all classes in the West and white workers were natural allies of the capitalist class in their support for the racist colonial project.’

Gutzmore questions this conclusion ‘Where in his work does Walter Rodney ever say that “white workers” were the “natural allies of the capitalist class?”’ Chukwudinma does not give a specific citation but it may be that he had in mind this paragraph:

European workers have paid a great price for the few material benefits which accrued to them as crumbs from the colonial table. The class in power controls the dissemination of information. The capitalists misinformed and miseducated workers in the metropoles to the point where they became allies in colonial exploitation. In accepting to be led like sheep, European workers were perpetuating their own enslavement to the capitalists. They ceased to seek political power and contented themselves with bargaining for small wage increases, which were usually counterbalanced by increased costs of living. They ceased to be creative and allowed bourgeois cultural decadence to overtake them all. They failed to exercise any independent judgement on the great issues of war and peace, and therefore ended up by slaughtering not only colonial peoples but also themselves.[3]

Rodney does say here that European workers ‘became allies in colonial exploitation,’ but this passage cannot be read as saying that they were ‘natural allies’ of their own exploiters, in the sense that such an alliance was inherently in their class interest. It clearly wasn’t, in Rodney’s view, since they ‘ended up by slaughtering …also themselves.’ Chukwudinma misreads Rodney and thereby in effect denies Rodney’s commitment to working-class internationalism.

The FDI Flow Argument

To argue that Rodney’s claim of higher African exploitation is false, Chukwudinma offers two reasons. I take the second one first since it requires a briefer discussion. It is based on the destinations of imperialist foreign investment. Chukwudinma writes:

Rodney’s affirmation that African workers are more exploited than Western ones does not match the patterns of capital investment between rich and poor countries. The World Bank figures showed that two-thirds of all Foreign Direct Investment (FDI) went to developed countries of North America, Europe and Japan between 1965 and 1983. … These figures indicated that the Western capitalist class sought higher profits by investing in their own advanced economies where workers were skilled and productive.

The destination of FDI is a very indirect indicator of the rate of exploitation. Yes, where investment goes does in good part reflect where higher profits are to be made, and higher rates of exploitation would contribute to that. But there are other factors, for example, transport costs and the development of superstructure. FDI, moreover, is not a complete guide to productive investment abroad. Other components are loans to foreign governments and producers and outsourcing of production to foreign firms (which amounts to the investment of circulating rather than fixed capital). Perhaps most important, when one imperialist firm invests in another in a different imperialist country, the profits it obtains are not necessarily produced by Northern labor – the invested-in firm is likely to draw surplus value from its own imperialist investments in the South. So FDI directed to the North could in reality yield profits made by exploiting workers in the South.

Let’s also note that even though Chukwudinma is claiming that Northern workers are the more exploited today, not just when Rodney was writing, he is using data that is well out of date. The pattern of foreign investment has changed. United Nations figures show that in 2018, the FDI inflows of ‘developing economies’ exceeded that of ‘developed economies.’ [4]This shift should be obvious by now: imperialism has depended for decades on globalized industrial super-exploitation, so that today a large majority of the world’s industrial workers are in the Global South.

Chukwudinma appears to have taken his 1965-to-1983 FDI argument directly from a 1992 article by Callinicos which he looks to for theoretical support.[5]In a subsequent work Callinicos updated his data on FDI flows to range from 1992 to 2006, and he made the same claim: ‘the figures are indicative of the judgments of relative profitability made by those controlling internationally mobile capital: these continue massively to favour the advanced economies.’ [6] But this assessment has been refuted by John Smith, who pointed out among other things that 1) over two-thirds of the FDI between Northern countries is aimed at mergers and acquisitions (changes in titles of ownership rather than new investment); and 2) that rates of return on FDI are over twice as high in the South as in the North.[7]All the more reason to question the link between FDI flows and relative rates of exploitation.

Productivity Illusions

Chukwudinma’s other justification for rejecting Rodney’s case is a common productivity argument:

The first reason why Rodney’s argument does not hold true … is because he fails to account for the differentials in productivity. The higher wages for Western workers reflect their higher productivity and they have a greater cost for their reproduction than African workers. Western workers therefore tend to be more exploited because their larger output (or productivity) means that their capitalist employers extract more surplus value.

There are several problems here. One is that ‘larger output’ need not reflect greater surplus value or greater exploitation. Recall that in Marx’s terms the output that workers produce in a given period of time can be subdivided into the three components, c + v + s, where c stands for the constant capital consumed (e.g., materials, energy, a fraction of fixed capital costs), v represents wage costs, and s is the surplus value that the capitalists take as their profit. As technology advances, the relative weight of the c component increases. But the formula for the rate of exploitation, s/v, does not involve c. The larger output per worker creates the illusion that the workers are producing more surplus value and therefore that they are more exploited – whereas they are mainly adding larger quantities of constant capital to their output and adding more use-value.

Second, there is a connection between productivity and exploitation, but it is not the seemingly obvious one that the productivity of workers in a given firm or sector determines their rate of exploitation. For Marx, the rate of surplus value can be increased in the relative sense by cheapening the cost of labor power; that is, by cheapening the goods that workers buy to reproduce their labor power. This is accomplished by raising the productivity of labor in the wage-good industries and those industries that feed into them. So, workers’ wages and rates of exploitation need not reflect the productivity of the sector they work in.

Underlying all this is the further problem is that productivity means the quantity of output compared to the amount of labor employed in producing it; greater productivity means that more commodities are produced in the same number of labor hours or fewer. In use-value terms, the workers who work with the most advanced equipment are more productive: they produce more goods per hour. But productivity in this sense cannot be compared between different sectors of industry, since the use-values of different commodities are incommensurable.[8] Moreover, capitalists are concerned about use-value only as a means for expanding exchange value. So official statistics measure the output created or added in terms of monetary value. This looks suspiciously like the c + v + s formula, with the c removed in the case of value added. But the resemblance is deceptive, it is based on looking only at the first volume of Marx’s Capital.

When Chukwudinma says that Western (or Northern) ‘capitalist employers extract more surplus value,’ he implies that the extra surplus value comes from the labor of their own Northern workers. But that can be seen to be wrong if we look at the third volume of Capital. While the value added in a given line of production may equal v + s, in reality the surplus value captured by a firm is rarely equivalent to the value it creates. First, to the extent that the tendency for rates of profit to equalize is operative – that is, when capital is free to flow between firms and across borders – then the surplus value captured will be approximately proportional to the size of the firm’s investment. So, the most capital-intensive sectors will capture a portion of the surplus value created in the labor-intensive industries. Marx ironically called this process of proportionate sharing of surplus value ‘capitalist communism.’

However, in the imperialist era the dominant firms do not share surplus value ‘communistically’ or proportionately. They have monopoly advantages (e.g., in technology, market access and state support), and therefore can obtain higher profit rates by extracting a disproportionate share of surplus value. So, the ‘value added’ by a given firm represents not the value created by the workers it employs directly but a share of the world’s total surplus value reflective of the firm’s size and its monopoly power.

Apple’s use of Foxconn and other companies to manufacture components for and assemble its iStuff is a well-known example. Apple’s profits are in part derived not from the workers it employs directly but mainly from surplus value created by workers employed by companies down the value chain; those companies’ profit share is lower, and their productive labor is overwhelmingly in the South. Aside from its own suppliers, Apple’s monopoly of technology and markets means that through unequal exchange it captures a fraction of the surplus value created by productive workers all over the world economy – again, primarily in the global South.[9]

The Citation Chain

With a clearer understanding of productivity, we can now look at the theorists whose work Chukwudinma rests on. He cites Martin Legassick as his authority for the claim that the operation of capitalism’s laws of motion, ‘the constant transformation of productive forces,’ is what ‘enhances Western workers’ productivity, wages and their exploitation.’ Here is Legassick’s argument:

For Marx, the constant revolutionizing of the forces of production in the process of capitalist accumulation leads to the concentration of the ownership of ever more “dead labor” (instruments of production) in ever fewer hands, reproducing ever greater inequalities of wealth and power. This is by no means incompatible with, or negated by, the fact that such revolutionizing of the forces of production can be associated with higher real wages or higher living standards for the working class. Indeed to affirm that higher living standards may well be associated with a higher technical rate of exploitation is essential to any systematic understanding of Marx’s analysis.[10]

We will see below (in discussing citations from Marx) under what conditions higher working-class living standards are associated with a higher rate of exploitation. Just because the association ‘may well’ exist does not mean that it does in any concrete situation, in particular in comparing North and South. Legassick provides no actual data or further explanation showing a higher rate of exploitation in the North. He passes the buck to Geoffrey Kay, who reasons as follows:

[H]ighly paid workers will almost invariably be the most exploited. Some of the reasons for this are fairly obvious. A lowly paid worker barely able to make ends meet, illiterate, poorly housed, unhealthy and poorly equipped is much less productive than a highly paid worker who is educated, well-fed and well-equipped. It takes him much longer to produce the equivalent of his wage, and therefore the proportion of the working day he is able to give away free is much lower. The more productive highly paid worker, on the other hand, produces his wage in a much shorter time and is therefore able to perform much more surplus labor. By implication, therefore, the affluent workers of the developed countries are much more exploited than the badly paid workers of the underdeveloped world.[11]

This passage reads as if it’s making a case for employers, that low-paid workers deserve what they get. But it is a poor case. For one thing, it reproduces the fallacy that workers’ own productivity is what determines their rate of exploitation, not the productivity of the wage-good workers who supply their needs. For the sake of argument let’s assume that the two productivities are the same. But even so, plenty of workers, North and South, are literate and reasonably healthy while still being lowly paid. In any case, whether the ‘lowly paid … and poorly equipped’ worker takes much longer to produce the equivalent of his wage depends on just how low his wage is and how poorly equipped he is. If he (or very likely she) is half as productive as the highly paid worker but gets one-tenth the wage, then she produces the value of her labor power in much less time. Kay implicitly assumes that the wage gap is less than the productivity gap, not the other way around, without offering evidence. But such an assumption is unwarranted. The wage gap between the imperialist and imperialized countries is enormous, and we will show below that the productivity gap is comparatively small and decreasing.

Here is Chukwudinma’s other reference to Marxist authority:

Rodney focuses on the difference in wage levels between African and European workers to prove that the former was more exploited for the benefit of the latter. However, a real understanding of who is more exploited cannot be achieved by comparing income figures. As the radical theorist Alex Callinicos explains, Marx’s theory of exploitation examines the ‘relationship between the wages that workers receive representing the value of their labor power and the amounts of surplus value they produced for their employers.

We have already seen that Rodney did not focus solely on comparative income figures. In the examples cited at the beginning of this post, he compared the wages of African and European (or North American) workers who were doing the same labor and therefore producing the same amount of value – so that since the Africans were paid less, the surplus value extracted from them was greater, not less, than that extracted from the Europeans. As for Callinicos, his wording as quoted, simply restates Marx’s formula for the rate of exploitation as the ratio between surplus value extracted and variable capital invested, namely s/v. The question is, how much surplus value is produced? To answer this Callinicos continues:

A highly paid worker may well be more exploited than a low paid worker because the former produces, relative to his wages, a larger amount of surplus value than the latter does. There is indeed reason to believe that the generally higher wages paid to Western workers reflect the greater costs of their reproduction; but the expenditure in particular on education and training which forms part of these costs creates a more highly skilled workforce which is therefore more productive and more exploited than its Third World counterparts.[12]

Again, we see the assumption that more productive means more exploited. Callinicos’s ‘reason to believe’ that Western workers are more exploited is footnoted to Michael Kidron, the economic theorist of the International Socialist Tendency in its early days. Writing in 1974, Kidron used British and Indian data from the 1960’s to claim that British productivity was over 4 times Indian but average British wages were about 2 times Indian. Accordingly, he concluded that ‘the cost of a unit of labour-power of similar quality is less in Britain than it is in India.’[13]

Kidron’s calculations were based on economy-wide measures of productivity, not specifically those in the consumer goods industries (and those feeding into them) – which is what affects the value of labor power and therefore the rate of exploitation. Let’s again assume, nevertheless, that Kidron’s measure is close enough and look into the nuts and bolts of his argument. First, Kidron’s wage ratio was calculated not according to official rates of exchange (which made British wages 7 times Indian) but according to the ratio of average income to a ‘government recognized subsistence minimum.’ In Britain, that ratio was about 5.2/1; in India, about 2.7/1. (Thus, Kidron got his British/Indian wage ratio of about 2.) But this is misleading. For the investing imperialist, the relevant wage ratio is based on actual rates of exchange, since that is what the capitalist pays. So, on Kidron’s data, the British workers’ productivity advantage (4/1) is less than their wage advantage (7/1), for the same output the Indian workers are paid 4/7 of the rate of their British counterparts. For imperialist purposes Indian workers were more exploited.[14]

Furthermore, Kidron’s British to Indian productivity ratio of 4.44 was based on averaging industries with high and low levels of industrialization. If we consider that a capitalist deciding whether to shift production Southward would be looking at the more capital-intensive sectors, there the productivity ratio (based on the data Kidron cited) was 2.24, a much lower advantage for Britain. Of course, by now these numbers are a half-century old, but even using Kidron’s data the argument fails.[15]

Claiming Marx’s Authority

The citation chains from Chukwudinma to Legassick to Kay, and from Callinicos to Kidron, yield only one actual calculation of comparative rates of exploitation, Kidron’s – and an unconvincing one. The authors nevertheless believe they are marching in Marx’s footsteps. Kay in particular believes he has Marx on his side: ‘There is every indication that Marx took a higher rate of exploitation in the developed countries for granted.’ To show this, Kay cites two passages from Capital. But these passages are subject to misinterpretation, resting on the illusion that the imperialized countries are on the same historical growth path as their oppressors.

First, from Capital, Vol. I, Chapter 22, comparing a more advanced country with a more backward one:

[I]t will be found frequently that the daily or weekly wage in the first nation is higher than in the second, while the relative price of labor, i.e., the price of labor as compared both with the surplus value and the value of the product, stands higher in the second than the first.

This says that the second, more backward, country can have a higher ratio of the price of labor v to surplus value s. And if the ratio v/s is higher, its reciprocal, the rate of exploitation s/v, is lower. Indeed, Marx taught that productivity advances as capitalism develops, in particular in the industries that produce wage goods. So, the labor time necessary to produce the value of the workers’ labor power, v, goes down; the surplus s produced in the rest of the working day goes up and thus the rate of exploitation rises. Exploitation can rise without lowering the workers’ standard of living – it can even be raised, since some margin for improvement may be available from the higher productivity achieved.

This reasoning makes sense in its context of the gradually increasing productivity among similar capitalist countries, where a more backward country can be thought of as looking like a more advanced one at an earlier stage. In his preface to Capital Volume 1, Marx famously wrote: ‘The country that is more developed industrially only shows, to the less developed, the image of its own future.’ This was undoubtedly intended to apply to the European countries following the industrializing path pioneered by Britain, but it is not a global recipe. It does not apply to colonial or semi-colonial industrial labor in the epoch of imperialism, since in this case the backward country is not at an earlier stage of development of a soon-to-be advanced country. Its workers are not being paid according to standards that US or European workers had at some point in the recent past nor is their pay rising to reach the standards of the imperialist countries.

The second passage that Kay cites is from Capital Volume III, Chapter 8, a numerical example in which Marx compares hypothetical European and Asian countries. In this the worker in the Asian country –  ‘where little machinery, etc., is used, and where a given quantity of labor-power consumes relatively little raw material productively in a given time’ – faces a lower rate of exploitation but yields a higher rate of profit because of the very low investment in constant capital. Marx’s calculation is perfectly valid given its assumptions. But in the modern world not only is the cost of the labor power of oppressed-country workers far lower than that of imperialist-country workers. And as we will see, the super-exploited workers in the South are often using machinery whose productivity is not so far below that in the North.

Walter Rodney also invoked Marx and his theory but with greater insight into how imperialism functions. Here is one telling example of imperialist exploitation at a distance:

Karl Marx, in clarifying how capitalists appropriated part of the surplus of each worker, used the example of cotton. He explained that the value of the manufactured cotton included the value of the labour that went into growing the raw cotton, plus part of the value of the labour that made the spindles, plus the labour that went into the actual manufacture. From an African viewpoint, the first conclusion to be drawn is that the peasant working on African soil was being exploited by the industrialist who used African raw material in Europe or America. [16]

This interpretation of Marx accords with the analysis of the distribution of surplus value presented above in the discussion of productivity. Rodney continues:

It has been observed that …  a cotton peasant in Chad … needed to work 50 days to earn what is needed to buy three metres of the cloth made from his own cotton in France. Yet, the French textile worker (using modern spindles) ran off three metres of cloth in a matter of minutes! … [T]here must be factors in the capitalist/colonialist system which permitted the great disparity in the relative value of labour in Chad and France. In the first the Chad peasant was defrauded through trade so that he sold cheap and bought dear, and therefore received a minute proportion of the value that he created with his labour. This was possible not because of mysterious “market forces” as bourgeois economists would like us to believe, but because of political power being vested entirely in the hands of the colonialists. It was a consequence of monopolistic domination, both economically and politically.

Rodney’s understanding of Marx allowed him to see that the laws of motion of capital, derived under the initial assumptions that the rates of exploitation and profit tend to be the same everywhere, have to be modified in order to deal with capitalist colonialism and imperialism. Marxists today face the task of working out just how the laws of motion operate in the present phase of imperialism based on industrial super-exploitation.

Evidence that Southern Workers are More Exploited

Now for some of the factual evidence on relative rates of exploitation in the academic and business literature. First in chronological order, Martin Landsberg observed in 1979 that, according to a US government report comparing the US to several ‘third-world’ countries:

For electronics assembly, foreign productivity was, on average, almost 90% of US levels, and for many other products it was found to be even higher than in the US. Productivity tended to be higher because management, design and even technology might be identical to that used in the DCC [developed capitalist country]. In addition, labor problems – unions, strikes, absenteeism – are kept down by the fear of starvation, repressive labor legislation or armed force.[17]

A narrow productivity together with a high wage gap between North and South is evidence of a greater rate of exploitation in the South.

Another study by Alice Amsden explicitly calculated and compared rates of surplus value (i.e., rate of exploitation) between advanced capitalist countries and ‘less developed countries’ (LDCs). It concluded:

The major finding is that rates of surplus value in the manufacturing sector of LDCs far exceed rates of surplus value in the manufacturing sector of advanced capitalist countries.[18]

In her calculations, taken over the period from 1969 to 1977, the average rate of surplus value in a selection of over a dozen advanced (mostly imperialist) economies was 2.09, whereas in Latin America it was 5.86, in Africa 3.36, in the Middle East 3.22, and in Asia, 4.26. She explains in part,

The extraordinarily high rates of surplus value in countries which are now described as semi-industrialised may be hypothesised to stem from a combination of advanced technology and wage levels that are still abysmal. By contrast, the lower rates of surplus value in other LDCs may arise because of a lesser absorption of modern technology which contributes both directly and indirectly to lower productivity: through minimal inputs of physical capital and modern techniques in the production of both consumer and producer goods, which give rise to impoverished absolute standards of consumption, which in turn render workers physically incapable of producing much in a short amount of time.

But even the lower rates of surplus value in the poorest countries are greater than in the dominant countries.

In short, the rate of surplus value may be highest in countries at intermediate levels of per capita income because capitalism is at its most uneven: the unity of labour lags behind the development of the productive forces while the unemployment of labour races ahead of it. At lower levels of per capita income, both the lesser development of the productive forces and the concomitant failure to forge a disciplined labour force result in a lower s/v. In countries at the highest level of per capita income and the highest level of the labour movement’s strength, the wage effect triumphs over the productivity effect and s/v is lower still.

Along the same lines, an article in the US journal Business Week from 1999 presented a table comparing wages and productivity in apparel manufacturing in selected countries:

                             SEEKING LOW-COST LABOR

          Apparel manufacturing in 1998, in U.S. dollars [19]

Country Productivity

Index

Hourly Compensation

(wages & benefits, $U.S.)

United States 100 $8.00
Dominican Republic 70 $1.15
Malaysia 65 $1.15
Mexico 70 $0.85
Guatemala 70 $0.65
Thailand 65 $0.65
Indonesia 50 $0.15

The article does not supply the figures that these numbers are based on, but the table is enough to make a comparison. In the Dominican Republic, for example, the wage is about one-seventh of the US wage, so the capitalists’ wage advantage is much greater than the 70% productivity disadvantage, the workers get 21% of US pay for the same output. Overall, for the same output the workers in these countries are paid from 22% (Malaysia) to 3.8% (Indonesia) of what US workers get. It’s not even close.

A similar calculation by Timothy Kerswell computes average labor productivity in the automobile industries of nine countries by dividing each country’s annual value added per worker by the annual wage in years from 2000 to 2003. This gives, for example, the figures 8.69 for Mexico and 4.99 for India, compared to 4.28 for the US and 1.58 for Germany. Mexico’s value added is roughly one-half that of the US, but its wage is roughly one-fifth.[20] Again, the wage gap exceeds the productivity gap.

Perhaps the most interesting study is one that both exhibits and refutes the misreading of Marx. The authors assert, according to their understanding of Marxist theory and in the spirit of the citation chain discussed above, that ‘the higher productivity in developed countries should produce a clearly superior surplus value rate compared to underdeveloped countries.’ But they report that their empirical studies reveal the opposite: ‘underdeveloped countries show higher surplus-value rates than developed countries.’ For example, the ‘surplus-value rate in the United States was lower than that of Mexico between 1960 and 1987 … . The ratio between both rates remained 2 to 1 until 1982. This ratio increased to 3 to 1 in the following years until 1987.’[21] These authors’ own investigation refuted the assumption they shared with Chukwudinma and the authorities he relies on.

Conclusion

These calculations illustrate the general rule that while productivity may be lower in the South on average, that gap is outmatched by much lower wages. Rodney’s argument that African (and by extension Southern) workers were more exploited applies all the more to the world we now live in. That is the main reason imperialist capitalists have so dramatically shifted the direction of industrial investment Southward. Northern capital oversees both the extraction of extra surplus value from Southern labor and its systematic transfer to Northern coffers. Indeed, the super-exploitation of Southern industrial labor is a predominant characteristic of imperialism in the twenty-first century. Although the trend has been developing for decades, it was overlooked or denied by many Marxist observers but not by Walter Rodney. It is no ‘concession to Africa nationalism,’ as Chukwudinma believes, nor a deviation from Marxism, to point this out.

Thanks to John Smith, Andy Higginbottom and Jim Smith for comments on earlier drafts and related matters.

Walter Daum is the author of The Life and Death of Stalinism: a Resurrection of Marxist Theory (1990) and articles on Marxist economic analysis. He taught mathematics at the City College of New York for 35 years.

Featured Photograph: Abdi Latif Dahir, ‘West Africa loses over $2 billion to illegal fishing because governments don’t talk to each other’ (8 May 2017).

Notes

[1] In addition to these writers there are, for example, Charles Bettelheim, ‘Theoretical Comments,’ Appendix I, pp. 301-302, in Arghiri Emmanuel, Unequal Exchange (1972); and Ernest Mandel, Late Capitalism (1975), pp. 354-355. The idea seems to trace back to Henryk Grossman, who wrote: ‘If we look at the sphere of production it follows that the economically backward countries have a higher rate of profit, due to their lower organic composition of capital, than the advanced countries. This is despite the fact that the rate of surplus value is much higher in the advanced countries and increases even more with the general development of capitalism and the productivity of labor.’ The Law of Accumulation and Breakdown of the Capitalist System, pp 169-170 in the printed book (1929;1992) or p 105 online here.

[2] Rodney, How Europe Underdeveloped Africa (2018, originally published in 1972). The above quotations are from pp. 176-178.

[3] Rodney, pp. 242-243.

[4]Developing country flows managed to hold steady (rising by 2%), which helped push flows to the developing world to more than half (54%) of global flows, from 46% in 2017 and just over a third before the financial crisis.’

[5] Alex Callinicos ‘Race and ClassInternational Socialism 2 : 55, Summer 1992.

[6] Callinicos, Imperialism and Global Political Economy (2009), pp. 199, 201.

[7] John Smith, Imperialism in the Twenty-First Century (2016), pp. 71-72; 77-78.

[8] ‘While, therefore, with reference to use value, the labor contained in a commodity counts only qualitatively, with reference to value it counts only quantitatively, and must first be reduced to human labor pure and simple. In the former case, it is a question of How and What, in the latter of How much? How long a time?’ Marx, Capital Volume I, Chapter 1, section 2.

[9] These problems were overlooked in a work that errs in the opposite direction from those discussed here, overestimating the rate of exploitation of the workers in China who assemble Apple’s iPhones: ‘The Rate of Exploitation (The Case of the iPhone),’ by Tricontinental: Institute for Social Research Notebook No 2. The huge amount of surplus-value that Apple commands is derived not just from the workers employed by Apple and its suppliers – and many are indeed brutally and relentlessly super-exploited – but also from workers all over the world.

[10] Legassick, ‘Perspectives on African ‘Underdevelopment’,’ Journal of African History, Vol. 17, No. 3 (1976), p. 437. Legassick’s claim about the rate of exploitation was challenged by Higginbottom, above citation.

[11] Kay, Development and Underdevelopment, A Marxist Analysis (1975), pp. 53-54. Later in his book Kay is a bit less certain: ‘In terms of value it is more than likely that wages in the developed countries are lower than those in the underdeveloped countries.’ (p. 116.)

[12] Callinicos, ‘Race and Class,’ cited above.

[13] Kidron, ‘Black Reformism: The Theory of Unequal Exchange,’ in Capitalism and Theory (1974), pp.99-103.

[14] A more recent calculation says that the UK/India unskilled wage gap is over 9 to 1; see Milanovic, ‘Global Inequality: From Class to Location, from Proletarians to Migrants,’ Global Policy, May 2012.

[15] Kidron justified the higher wages of British workers: ‘If there is one outstanding difference between the two [British and Indian workers] it lies in the different degrees to which they are culturally enriched. The average British worker can be expected to read and drive; he or she will normally be able to handle a wide range of tools and concepts and respond to a wide range of stimuli on the basis of knowledge rather than from personal experience. The Indian worker will not.’ As with Kay, this reads as patronizing and chauvinist. Needless to say, Indian (and other Southern) workers can handle concepts and be ‘culturally enriched’ – and yet be paid poorly.

[16] Rodney, above citation, pp. 266-267.

[17] Landsberg, ‘Export-Led Industrialization in the Third World: Manufacturing Imperialism,’ Review of Radical Political Economics, 11:4 (Winter 1979).

[18] Amsden, ‘An international comparison of the rate of surplus value in manufacturing industry,’ Cambridge Journal of Economics (1981).

[19] Business Week, May 3, 1999, p. 190.

[20] Kerswell, ‘Productivity and wages: what grows for workers without power and institutions,’ Social Change, 43(4), 2013.

[21]Differences in Surplus value Rates between Developed and Underdeveloped Countries’ by B. Gloria Martinez Gonzalez and Alejandro Valle Baeza, Marxism 21 (2011).

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1Comment
  • david seddon
    Posted at 06:43h, 29 June Reply

    Daum is right to emphasise Rodney’s internationalism and also the validity of his argument that ‘Northern’ capitalist investment is able to gain greater profits from the exploitation of workers in the South than in the North. In this context, and also that of the recent ‘Black Lives Matter’ and the ‘Rhodes Must Fall’ movements, I would like to celebrate the increasing linking of theoretical analysis with political activism in the advancement of international socialism.

    I would also like to remind readers of one person who has exemplified this tradition and has consistently spoken and acted in solidarity with progressive movements in the South, Jeremy Corbyn.

    In the late 1960s, at around the age of 19, Jeremy Corbyn spent two years doing Voluntary Service Overseas (VSO) in Kingston, Jamaica as a geography teacher and youth worker. There he witnessed the growing popular resistance to the government of Hugh Shearer, which culminated in protests in October 1968 after the Guyanese historian and political activist, Walter Rodney, was permanently barred from visiting the island. He subsequently travelled through Latin America in 1969 and 1970, visiting Brazil, Argentina, Uruguay and Chile. Whilst in Brazil he participated in a student demonstration in São Paulo against the Brazilian military government. He also attended a May Day march in Santiago, where the atmosphere around Salvador Allende’s Popular Unity alliance which swept to power in the Chilean elections of 1970 made an impression on him: “[I] noticed something very different from anything I had experienced… What Popular Unity and Allende had done was weld together the folk tradition, the song tradition, the artistic tradition and the intellectual tradition”.
    Much later, when asked, while leader of the Labour Party, about Jamaican demands for reparations he recognised that ‘the wealth of this country, the UK, came from Jamaica… The wealth of the City of London came from there. We owe a lot to the Jamaican people’.
    At a time when we look back at the legacy of Walter Rodney, and insist, as a matter of urgent priority, that ‘Black Lives Matter’ and that ‘Rhodes Must Fall’, we should also recognize that there have been white anti-imperialists who, when in positions of influence, have made their position on international solidarity very clear. Jeremy Corbyn was one of these.

    Source: Review by Adom Getachew in the London Review of Books, 21 May 2020, of Insurgent Empire: Anti Colonial Resistance and British Dissent, by Priyamvada Gopal, Verso, June 2019, pp. 25-28

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