Friday, September 02, 2016

Hands Down, Part 2

The Parable of the T-shirt (also available here)

Mr. Smith starts his explorations into Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism's Final Crisis (Monthly Review Press, 2016) with the story of a T-shirt, a story taken from the pages of Tony Norfield's The China Price:
In The China Price Tony Norfield recounts the story of a T-shirt made in Bangladesh and sold in Germany for €4.95 by the Swedish retailer Hennes & Mauritz (H&M).  H&M pays the Bangladeshi manufacturer €1.35 for each T-shirt, 28 percent of the final sale price, 40¢of which covers the cost of 400g of cotton raw material imported form the United States; shipping to Hamburg adds another 6¢ per shirt.  Thus €0.95 of the final sale price remains in Bangladesh, to be shared between the factory owner, the workers, the suppliers of inputs and services and the Bangladeshi government, expanding Bangladesh'a GDP by this amount.  The remaining €3.54 counts toward the GDP of Germany, the country where the T-shirt is consumed, and is broken down as follows: €2.05 provides for the costs and profits of German transporters, wholesalers, retailers, advertisers, etc., (some of which will revert to the state through various taxes); H&M makes a 60¢ profit per shirt; the German state captures 79¢ through VAT at 19 percent; 16¢ covers sundry "other items."  Thus in Norfield's words, " a large chunk of the revenue from the selling prices goes to the state in taxes and to a wide range of workers, executives, landlords, and businesses in Germany.  The cheap T-shirts, and a wide range of other imported goods, are both affordable for consumers and an important source of income for the states and for all the people in the richer countries." 
Short version? Astounding news-- merchandisers buy low to sell high.

First things first:  "to be shared between the factory owner, the workers, the suppliers of inputs..."  Shared?  Between the factory owner and the workers?  Capitalists don't share profits with workers, not in Bangladesh, not in Germany, not in China, not in the US.  They don't "share" even when they call compensation "profit sharing."

Capitalists appropriate surplus value, unpaid labor-time, from workers.  Arguing that capitalists "share" profit from workers with workers is like arguing that muggers "share" profits from mugging with their victims when they leave one victim $2.75 for a single-ride Metrocard.

Capitalists may appropriate a larger or smaller portion of the surplus value, a portion dependent upon the level of organization of the working class, market conditions, but the appropriation is always an appropriation, an equal exchange that is in fact, unequal.  "Sharing" is the mythology flogged by the bourgeoisie to veil the relations between the value of labor-power and the value that labor-power produces.

Second short version?  Advanced capitalist countries have developed extensive networks of transportation, communication, marketing, advertising not just for the purposes of  realizing the value embedded in the goods, but to actually hype the  the goods even, especially, above their value. Another shocker.

Mr. Smith citing Mr. Norfield explains:
...low wages in Bangladesh help explain "why the richer countries can have lots of shop assistants, delivery drivers, managers and administrators, accountants, advertising and a wide range of welfare payments and much else besides."
Really?  The richer countries had lots of shop assistants, delivery drivers, managers, administrators, accountants and an ever wider range of welfare payments before Bangladesh became a contract producer for H&M; before China gained full membership in the WTO in 2001; before the MFA (Multi-Fiber Agreement, or Multi-Fibre Accordance) expired in 2005 and China doubled its portion of global clothing exports.

Smith/Norfield continues:
...oppression of workers in the poorer countries is a direct economic benefit for the mass of people in the richer countries.
Fecking brilliant, ain't it?

Let's start with the cotton. Workers in the United States, utilizing hand and machinery, pick and process the cotton. These workers are paid X wages, articulated as an hourly rate paid for the entire working day Y.  In reality, the workers reproduce the value equivalent to X in  Y minus Z hours, the remaining time being surplus time, surplus value, belonging to the owner of the means of production, the property, that becomes the cotton.   The cotton workers are paid lower wages than other workers.

That cotton gets loaded into a truck, operated by a truck driver who makes a greater hourly rate than the cotton workers, but still reproduces the value of his own wage in less than the complete time of working day, yielding the employer of the driver a surplus value.

The truck is driven to a port, where the cotton in bales, maybe in containers, is unloaded from the truck by cranes manned by crane operators who definitely get paid more than the truck driver or the cotton workers, but again reproduce a value equivalent to that wage in less than the full working day.

The container containing the cotton bales is loaded onto a container ship, built in the shipyards of South Korea, by workers receiving an hourly wage lower than the crane operator but above that of the cotton workers.  The shipyard workers still reproduce the value of their own wage in less than the entire working day, week, month, year.

The ship is owned by Maersk, carries 12,000 containers and is crewed by a staff of....14 including approximately 7 officers.  Get that? 12,000/14/7.  And a few more numbers: length, 366 meters; beam, 49 meters; crew, still 14. By the way, container fleet size, measured in deadweight tons (dwt) has increased by a factor of 15 in the last 35 years.

So clearly in our daisy chain of sequential, and layered, exploitation, the lower wage rates paid to the cotton workers are essential to the entire network that circulates the capital.  All additional steps simply "pile on" and participate in the distribution of the surplus-value extracted from the cotton workers, even that labor of the shipyard workers in South Korea, who wouldn't have any jobs if it wasn't for the lower wages of the cotton workers, not to mention the still lower wage rates for the Bangladeshi workers.

Right?  Not right?  Nonsense, you say?

So do I.

That, the above, is clearly nonsense, but no less clear, and no more nonsense than Smith/Norfield's conclusion.  The point being that production of the t-shirts in Bangladesh, like the production of soybeans in Brazil, machine tools in Germany, cotton in the US, automobiles in France, is a circuit of capital that is itself part of, and made up of, other linked, continuous, but discreet circuits.  The production of any one of these commodities can be made to appear as supporting a network of communications and transportation offering services and products the total price of which far exceeds the value generated in the "original" or "base" commodity, but that fee, those prices, for those services and products do not constitute increased or intensified -exploitation of the labor power of the workers  producing the original commodity.

The owner of the truck(s) is exploiting the labor, and capturing a portion of the surplus value thrown into the entire circuit of capital, which includes the surplus value created by the truck driver(s). The port is capturing a portion of the surplus value thrown into the entire circuit of capital by the cotton producers, the truck drivers, the crane operators, and that thrown into the circuit by the shipping line crews.    All this is accomplished through exchange and by price.  Price not only represents the value of the service of the object in monetary terms, but also represents the size, efficiency, development, of the capital.

So...for example, if the trucking company raises its price for hauling the baled cotton to port, that is an attempt to change the distribution, the allocation, of the available surplus value.  The price increase does not amount to additional exploitation of the cotton workers.  The owners of the cotton enterprise may attempt to offset that additional cost by increasing the exploitation of the workers, but nothing in that additional exploitation, as nothing in the hauling rate increase, amounts to a "benefit" to the truck drivers, or the crane operators, or the port's drayage employees, or the ship's crew.

The careful reader of the Smith/Norfield parable will notice that in the advanced countries, the various players (state, executives, advertisers, retail merchandisers) are all sharing, not in the profit of the Bangladesh based t-shirt manufacturer, but in the mark-up of the t-shirt price when it reaches Germany.   That mark-up is based, in part, on the value accruing to the commodities through the labor performed in parts of the circulation process.

The mark-up is also a form of arbitrage of  the individual value, the necessary time to produce these particular t-shirts  in relation to the socially necessary time to reproduce the general commodity "t-shirts." The t-shirts are sold above their value, the labor time of production, embedded in them, but below the social value, the time necessary to produce t-shirts.

While we're on the subject of surplus-value and exploitation, it's a bit of a gob-smack that in discussing the exploitation of the Bangladeshi factory workers, Mr. Smith doesn't take the time to give us an indicator of how great the magnitude and rate of surplus value, how intense the exploitation really is. He gives us some numbers that I think we can use, but he doesn't make the effort to tease out an index to the exploitation.

I took a shot at it, believing that we can get an indication of those magnitudes and rates, establish a calculus- an approximation by accepting price as a proxy for value.

So let's see, according to Smith/Norfield, the worker at the factory earns €1.36 per day (just about the initial price of the t-shirt), for a 12 hour day, producing 250 shirts per hour, or 3000 shirts per working day.  At  €1.35 per shirt, the value of the wage is reproduced in 14.4 seconds.  Now 40 cents of each shirt price represents the cotton, and although we don't know the cost of the inputs like electricity, machinery, maintaining the work place, security to intimidate the workers, etc. we can ignore that cost completely (as Marx does in Capital, setting it to zero), or select an amount arbitrarily.  I'll arbitrarily assign a cost  equal to the price of the cotton to represent all other input costs, another 40 cents per shirt.

In a workday, then 3000 shirts are produced at a cost of €2401.36 but with a value of €4050.  The mass of surplus value appropriated is €1646.64, and the rate a cool 1212: 1.

Now Mr. Smith calls this rate, or something like this rate, "super-exploitation." I do not disagree. I think the identification of super-rates of surplus value extraction is a critical component to apprehending, and overthrowing, the domination of capital, the accumulation of human time as the property of others.

I think the identification of super rates of surplus value extraction forces us to review what and why Marx did not grapple with super-exploitation in the abstract in his theoretical expositions of surplus value in Capital, while Marx most certainly did produce examples of super rates of surplus value extraction in his practical discussions of the demands imposed by valorization process.

I think we need to understand why  Marx's "default" condition, was the condition where labor power was compensated at its value, at its cost of reproduction, and why the actual compensation of labor always, like the price of all commodities, oscillates, deviates from its value.

I do not agree that this super-exploitation amounts to a "benefit" to workers in advanced countries; or that capitalists in the advanced countries "share" the profits of super-exploitation with workers.

Part 3 to come.

September 2, 2016

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