Tuesday, September 06, 2016

Hands Down, Part 3

Really-Not really (also available here)

Smith: In 2013, the tariffs charged by the U.S. government on its apparel imports from Bangladesh alone exceeded the total wages received by the workers who made these goods. The states uses this money, as we know, to finance foreign wars, health care, and Social Security,...

TWR:  Not really. 1) The tariff imposed on these imported goods has nothing to do with increased exploitation of workers in Bangladesh.  In fact, it was the opposite, the easing of tariffs under the MFA, and the final incorporation of the world garment trade under the provisions of the general agreements that facilitated the outsourcing of garment production, and in 2005, the relentless pressure put on workers everywhere by the ending of quotas on China's portion of this trade. Mr. Smith never mentions the MFA, or the subsumption of the fabric and garment sectors under the general agreements, a remarkable omission for anyone trying to apprehend the forces unleashed in the outsourcing process.  2) Tariffs are irrelevant, absolutely meaningless, as a source of revenue in the US.  Tariffs as a percentage of government revenues has declined steadily since 1914. Today, tariffs represent about 1 percent of total government receipts.  The tariffs imposed on garments from Bangladesh amount to 1/4000th of US government receipts.  3)Social Security in the US is not financed by tariff receipts.  Social Security is exclusively funded by the payroll tax and deductions from workers, and interest received on the US government securities in which that money is invested.

Smith:  Just thirty of the 13, 920 US workers [of Apple] were production workers (receiving on average $47,640 per year) 7,789 were "retail and other non-professional workers (average wages $25,580)....

TWR:   Really? A worker in the US with an income level of $25,580, supporting 3 other family members has just enough income to be almost not-poor.  This is the great benefit outsourcing has bestowed upon hundreds of thousands in the "advanced" countries-- the chance to be "retooled" as retail workers rather than production workers, earning half the money, and almost not-poor.

Smith:  From the early 1960s, while the emerging retail giants were pioneering the outsourcing of toys, clothing, and other consumption goods, prominent electronics firms such as Cisco, Sun Microsystems, and AT&T were unleashing what was soon to become a torrent of outsourcing by hightech industry.

TWR: Not really.  Sun and Cisco couldn't unleash anything from the early 1960s.  They didn't exist. Sun and Cisco were founded in 1982 and 1984 respectively.  Sun, headquartered in California, had two production centers for building its SPARC workstations, one in Scotland and one in Oregon.

Smith: Unlike simple commodity producers who sell in order to buy, merchants buy in order to sell.  Their aim is not to acquire something they need.  But to acquire money....

TWR: Really?  Can someone point out an example of a simple commodity producer, or a system of simple commodity production?  Marx did not use those terms, referring instead to simple commodity exchange.  What is simple commodity production?  How and when does simple commodity production exist as a dominant mode of production?  Were the social organizations of the Incas and Aztecs "simple commodity production"?  How about the feudal orders with their extensive grain trading networks?  Simple commodity production?  And this "selling to buy" vs. "buying to sell" is just a tad one-sided don't you think?  The merchant also sells in order to buy, unless of course he or she makes enough in one circuit to withdraw from all future circuits, but then, if that were to be the mode of accumulation for all merchants, the system wouldn't really be a system would it?  It would be a "one-off" where accumulation basically disappeared.  The merchant may or may not do any number of things.  The simple commodity producer may or may not exist (I vote for the latter).   But the capitalist always expropriates the labor-power of others.  The capitalist does this through the "mediation," the relations of.......property, the means of production as private property that not only can, but must command that labor power to valorize production. That's the critical distinction.

Smith:  In contrast, "the rate of productivity growth in US manufacturing increased in the mid-1990s, greatly outpacing that in the services sector and accounting for most of the overall productivity growth in the US economy.....

#TWR:  Really.  Word.  Let's keep this in mind as we move on.

Smith:  "In the case of the United States...offshore outsourcing of jobs is the functional equivalent of 'imported productivity,' as the global labor arbitrage substitutes foreign labor content for domestic labor input."

TWR:  Well, that didn't last long, did it?  Would love an example, wouldn't you?  I mean first and foremost, we need to forget all about imported t-shirts, and coffee, and I-phones, which are marketed by retailers, and thus the make-ups, and mark-ups of these items have no impact on productivity in manufacturing or industry.

Secondly, the cost of the inputs of intermediate goods to production itself, say the production of automobiles, cannot have any impact on the productivity of labor, if we define productivity as the greater output of articles, use-values, per unit of labor-power.  If improvements in productivity, in the mass of goods per hour/day/week, leave unchanged the total accumulated new value, then the cost of the intermediate inputs cannot have any impact on productivity.

If an automaker spins off as a separate entity, a "supplier," and a brigade of workers into a separate company to do the work "out of house" that used to be done in house, then in fact the automaker can show a reduction in hours needed to produce each automobile, but the total hours embodied in each automobile remain the same.

If it now takes an automaker in the US 23 hours, on average to produce, an automobile as it does, (down from 27 in 2004 as it was), and a portion of that improvement in output is due to a component that was made in-house requiring 1 hour is now outsourced and falls off the automakers production time accounting, that change makes no difference to the value of the automobile, and it does not alter the improvement in productivity the manufacturer experiences.  The auto manufacturer still requires less living labor to animate the accumulated capital in the means of production and produce a greater number of automobiles.

It makes no difference to "productivity" if the seat cushions are produced in China by workers making the equivalent of $2 per hour, of if they are produced in Canada by workers making $26 per hour.  It, the cost,  makes a difference in  the value of the product, not to how quickly the worker installs the seat cushion, or how quickly the worker reproduces the value equivalent to his/her wage.

Mr. Smith takes great pains to show how wages are not dependent upon productivity....until it comes time to assess, realistically, how gains in productivity has been made in the advanced countries, and then he tells us that the "productivity is imported."

Smith: Competition between firms in imperialist and developing countries does exist.  Even in the garment sector.....

TWR:  Really.  Let's keep that in mind, too

Smith:  The integration of the Global South into the imperialist world economy since the Second World War and especially since 1980 brings together both of these trends, the dispossession of small farmers and other small producers on the one hand and the substitution of wage labor by machinery on the other. TNCs  [transnational corporations] and domestic capitalists not only exploit low-wage labor, they can can do so with advanced production processes that absorb far less living labor than those available to nineteenth-century European capitalists.

TWR: Really. Good.  Really good.  And we're right back in the grips of uneven and combined development, because capitalism still cannot "resolve" the "land question," cannot capitalize agriculture sufficiently without threatening the very existence of private property, of the means of production as private property.

Smith:  The Feminization of Labor, and the Proletarianizaton of Women

TWR:  Really. Good.  Really Good.  "The face of globalization is the face of the exploited young woman worker."-- participant (female) interrupting Fidel Castro, from the floor, during the first meeting on Globalization and Problems of Development, Havana, Cuba 1999 (if memory serves me).

Smith:  "Global Wage Trends in the Neoliberal Era": Thus the share of national income received by the bottom 90 percent of wage-earners (84 percent of the United States economically active population) earned 42 percent of the total payroll in 1980 and just 28 percent in 2011.  Thus the share of national income received by the bottom 90 percent of US employees has declined....by a staggering 33 percent.

According to the ILO's World of Work Report 2011, since the early 1990s the "share of domestic income that goes to labor...declined in nearly three-quarters of the 69 countries with available information,"  This decline is generally more pronounced in emerging and developing countries than in advanced ones.

TWR:  Really.  Agree.  Completely.  So much for the benefit to the workers in the advanced countries.  So much for the bounty that capitalism bestows upon developing countries.

Smith: Reducing the wage bill, not through investment in labor-savings technology or through wage cuts of domestically employed workers but through outsourcing to low wage countries, has dramatically risen in importance....What is especially ironic is that instead of being a means to raise the productivity of labor, new technology is being use to lower its cost through outsourcing; and instead of replacing labor through the introduction of more advanced machinery, capitalists are using new technology to replace labor with cheaper labor..........

TWR:  Really?  Guess we should forget about the earlier stuff about the share of labor declining.  There has been considerable investment in labor-saving technology in the advanced countries.  And considerable declines in industrial employment, remember Mr. Smith?  You pointed that out.  I would point out that in the US employment in the steel industry has declined some 90 percent in 45 years, and the time required to produce a ton of steel has declined 80 percent.  Or... I might point out that the fleet of container ships has grown fifteen fold since 1980, and 75 percent of that fleet is owned by...brokers based in Hamburg, Germany.  Or that, while employment has dropped in the US rail industry, loaded ton-miles per crew hour have increased, crew sizes have declined, train lengths and weights have grown dramatically since 1980, and the capital values invested in locomotives, signal systems, communication networks, track has increased.    There is nothing ironic about this.  These contradictory element are the whole of capital.  This is precisely how capital navigates between the rock and the hard place of increased extractions of surplus value and declining rates of profitability.

Smith:  Marxists argue that this ideal state is itself absurd, pointing to the third and most fallacious assumption upon which modern trade theory and indeed the entire edifice of bourgeois economy theory is based--the conflation of value and price.... 

TWR: Not really.  Marx produces the immanent critique to capitalism; a critique based on the internal make-up, requirements, assertions of the system itself.  Marx accepts the relationship,and even, the identity of price and value in his critique.  The failure of capitalism is not that price and value do not coincide.  Indeed, Marx points out how any coincidence is just that, a coincidence, and is irrelevant to self-generation of the obstacles that capital only overcomes by expanding reproduction of these conflicts.  The critique is of value, not of the non-correspondence between price and value.

Smith:  The wage (or nominal wage) is the monetary expression of the value of labor-power; the real wage is the wage expressed in terms of purchasing power, by the size of the basket of consumption goods for which it can be exchange.  

TWR: Really.  So I would expect at this point Mr. Smith would investigate the real wage in Bangladesh, in Germany, in the US, in China so that we can see exactly what constitutes "super exploitation," both in quality and quantity.  No such luck.  Not happening.  Instead we get critiques of David Harvey, Ernest Mandel; praise for the Monthly Review crew (and I thought the very rejection of value was a core principle of the Monopoly thumpers) and discussion of unequal exchange, dependency theories, "Euro-marxists," and... Marini.

Smith:  For Marx, the transition from the predominance of absolute surplus-value to relative surplus-value was necessitated.....by the finite maximum length of the working day and the minimum level of consumption required for the reproduction of the labor-power...Marini argued that another factor played a crucial role in this transition: the importation of cheap foodstuffs, and other consumer goods from colonies, neo-colonies, especially from Latin America.
TWR:  Really.  Very important to integrate the development of capitalism in the North, with developments in the South.  We should all read Marini.

Really?  The "transition" to relative surplus value, the "real domination" of capital begins in the 19th century, is well underway by the middle of that century, and tears across developed and developing capitalisms in the last-third of the 19th century, the period of the "long deflation."  Looking at global wheat supplies and production in the last-third, we find the US increasing its production 1867-1898 fourfold,  accounting for 26 percent of global supplies in 1867 and  36 percent of world supplies by 1898.  Russia accounts for 23 percent of supplies at both the beginning and end of the period.  Western Europe's share declines from 37 to 25 percent.  So at the beginning at end of the period, while supplies increase approximately 240%, the US, Russia, and Western Europe continue account for 84 percent.  We should all read Marini.  Carefully.

The end.  Really?  Really.

September 6, 2016

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