Modeling How Parasitism Impacts Wages at the Centres of Imperialism

The following essay first appeared on the news blog Anti-Imperialism.com. It explores, using the Marxist theory of the Labour Theory of Value, the relationship between the imperialist exploitation and oppression of colonized workers (who are chiefly concentrated in the so-called “Third World”) and the wages of the working class of the imperialist White nation.

For a similar view that also goes into the relationship between imperialist parasitism and White wages that also examines the role of the exploitation of internally colonized nations (Natives & Africans primarily) be sure to check out the article The White Working Class: Gross Parasitism

To Clarify: As usual posting this article does not imply 100% agreement or endorsement of the line presented.

Days before his first trip to Cuba, Pope Benedict XVI stated that “Marxist ideology [sic] in the way it was originally conceived no longer corresponds to reality.”

Left-leaning commentators concluded with, “says man in giant hat who speaks to invisible cloud people.” It is easy for leftists to poke at the pope’s archaic religious views and supposed authority. Yet the pope’s criticism shouldn’t be dismissed outright, especially because it has some truth to it.

Marxism as it was expressed in the 1800′s doesn’t correspond to material or social conditions today. However, Marxism as methodology necessarily changes its outlook according to changes in material conditions and shifts in class struggle. But this doesn’t entirely cut to the matter either. The pope didn’t need god to tell him what most people realize: that there are significant deficiencies and dogmatisms in mainstream Marxism today and that much of what is called ‘Marxism’ does not fully represent today’s reality. The pope didn’t say anything profound or deep. He was speaking to common perception.

There is one particularly deficient area where most Marxists fail in accounting for modern material conditions. In much of typical Marxism, there is consistent aloofness regarding the significance of the divide between rich over-developed countries and poor maldeveloped countries. 1 Given that the global divide is so basic and long-standing and that many contemporary Marxists continue to overlook the disparity, it is understandable how someone like the pope could call out such ‘Marxism’ for not corresponding to reality.

So the question remains, how can the gap between a handful of wealthy countries and a majority of poor ones be accounted for under a Marxist paradigm? How can Marx’s methodological approach account for the world today?

In some ways, coming to a Marxist understanding on the global gap requires us to toss out much of Marx’s specific conclusions. While some mainstream Marxists resist this, it is necessary if we are to realistically grasp and explain current phenomena.

One of the long-held conclusions in mainstream Marxism is that workers are necessarily exploited under capitalism. This is one of the conclusions which must be reevaluated if Marxism is to come to terms with the world as it actually is today.

The Numbers

The following examples provide an abstract model, based on the labor theory of value, of the mechanism by which value can be transferred between workers themselves. What is shown is how some workers can earn above the value of labor with part of their wages being drawn from the exploitation of others’ labor.

[The following examples refer to the illustration above]

Example 1, Simple Aggregate Model: This is the easiest way to demonstrate this model of aggregated capital accumulation under conditions with steeply tiered global labor markets. For the sake of ease of clarity, fixed capital is ignored in most of these equations. In example one, a capitalist takes $21 to pay for one hour of labor from worker A at $1/hr and one hour of labor from worker B for $20/hr. The end result is a commodity which the capitalist sells for $36 dollars, yielding a profit of $15. In this case, labor in its abstract (or ‘socially necessary’) form creates $18/hr in value [the full value of the commodity ($36), divided by the two hours which produced it], and this represents the value of labor.

In this example, worker B is paid $20 for an hour of labor power: this price of labor power is higher than the value of labor. In this case, for one hour of work worker B is able to purchase 1.11 hours of abstract labor. Consequently, worker A must work 18 hours to purchase the one hour of abstract labor. To clarify further: in this example, $17 in surplus value is exploited from worker A [the abstract value of labor ($18) minus the price of labor power paid as wages ($1)]. Of this $17, $15 is kept by the capitalist and $2 is handed to worker B on top of the full value of labor. Functionally, worker B is an exploiter.

Example 2, Simple Segment Model: This example demonstrates how the system appears and operates at the single-enterprise level. Specifically, it begins to demonstrate how the surplus value rendered through labor can be distributed to other workers. It also demonstrates how this system can operate from the standpoint of individual capitalists who are only directly employing one or the other worker.

In this example, Capitalist A buys one hour of labor from worker A at a price of $1/hr. Capitalist A then sells the commodity to capitalist B for a price of $1.71. In this segment of the capitalist process, it appears the capitalist drew .71 cents of surplus value and the total value of labor for worker A is $1.71. The commodity which passes through the initial (capitalist/worker A) circuit necessarily passes through a second (capitalist/worker B) circuit. 2 In the second part, worker B is paid by capitalist B $20/hr to further handle (e.g., transport, market, account, repackage, shelve, draw up a receipt for, etc) the commodity, after which it is sold for $36. In this case, the final price of the commodity ($36) includes both the ‘raw material’ provided at a price of $1.71 and $34.29 (which appears to be the value of labor for worker B), and it appears $14.29 is the surplus extracted by capitalist B from worker B. This example illustrates how under conditions of disparity wage strata, rates of segmental exploitation can remain fairly constant throughout. In a manner, this model demonstrates how the global economy works from the perspective of the individual capitalists. This is a narrow view also encapsulated by much of what is currently (erroneously) thought of as Marxist class analysis.

Example 3, Aggregated Segment Model: This model fully demonstrates the links between the first two models, and demonstrates how the surplus derived from the exploitation in one segment can be transferred throughout the entire process via the structuring of prices.

What is missed by Example 2 is the manner in which the disparity in price in labor is more than incidental. Price itself does not necessarily reflect value. Instead price is a mechanism through which value is circulated. This disparity between prices of labor didn’t magically happen. It is historically formed, deeply part of the modern system, and militantly enforced by imperial and neo-colonial regimes. This divide is structurally significant. It effects class alignments and the development of class struggle.

Where example 2 falls short is that is sees the process of capital accumulation as random forms of segment labor, not specific forms of labor abstracted as part of a general aggregated process. It fails to define abstract labor within the context of an interconnected historically-formed global economy. There are not multiple separate economies and societies under which production and accumulation are happening ignorant of each other. In the model, the roles that circuit A and B play represent historically-created relations based on power within a larger system of general capital accumulation. Indeed, capital can move around the world with little restriction whereas borders merely serve to bar Third World workers from the status of the hypothetical worker B.

In example three, worker A is paid $1 to work for an hour for capitalist A. From this labor, $17 is rendered as surplus. Capitalist A, in selling the commodity to capitalist B for $1.71, keeps $.71 of this surplus. Capitalist B pays worker B $20 for an hour of work with the commodity, then sells it on the market for $36. In doing so, part of the surplus drawn from worker A goes towards paying worker B $2 above the value of labor, and the remaining $14.29 of surplus is kept as profit by capitalist B. This is basically how example one was illustrated, only in a manner that is an aggregate of two connected processes.

Example 4, Socialist Revolution: In this example, the capitalists have been done away with and exploitation no longer exists. Worker A and B both work for a hour to produce a commodity with a value of $36. In this case, each worker keeps the full value of labor ($18). Yet curiously, for worker B this amounts to a $2 decrease in pay from the previous examples.

Conclusion

This abstract model is significant for a few particular reasons. First, it shows that in a system of drastically disparate wages, some workers can actually receive wages based on the exploitation of others. This raises an interesting notion. Insofar as the hypothetical worker B actually benefits from the system of accumulation, its class interest is different than that of worker A. The demand of worker A to end the system of exploitation implies a lowering of price of labor power for worker B. The higher wages demanded by worker B would necessarily be drawn from the surplus value created by worker A, even if it appears to come from the pocket of capitalist B.

The reality of global disparities between workers themselves, its significance for class struggle, and the further questions it raises are things Marxism must account for if it is to remain relevant and incisive today. Dogma and “Marxist ideology” explain little about the modern world. However, the methodological approach based on Marx’s own has not ceased to be paramount to understanding and changing the roots of today’s common phenomena.

***

1That is not to say all Marxists have been silent or ignorant on this contemporary phenomena, but generally, mainstream Marxism has not included a serious evaluation of this phenomena.

2This is just a simple model which uses individual workers to illustrate regionally specific hierarchies in the price of labor power and a single commodity to represent a wide range of economic exchanges. Under actual conditions of global economy and due to the function of prices, this basic principle regarding the the origin and distribution of surplus value applies to all workers even if their labor doesn’t involve commodities exchanged internationally. This is because price, in varying from value, allows for the equalization of the rate of profit.

Source

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Posted on June 7, 2012, in Anti-War & Anti-Imperialism, Imperialism & Colonialism, Revolutionary Theory, White Power. Bookmark the permalink. 3 Comments.

  1. Professor Toad

    I strongly suspect that this is the heart of the disagreement between us, and the main engine behind our differences of view on the Greek situation. I am going to be frank; I mean no offense, and I think you know that I respect you as a comrade, despite that we disagree.

    To begin with, your example is at the level of a thought experiment. Yet, if what you want to do is to convince Marxists to abandon Marxism, you have to expect they will want real world proof that a thing is going on, rather than simply a thought experiment purportedly showing that it COULD take place.

    Further: I have read, of course, many defenses of the theory that first world workers are overpaid, and I have never yet read one that actually showed a full grasp of Marxist economics. Regrettably, your example above is no exception.

    The first problem is that you treat all labor as equally productive or equally valuable. Yet, of course, that simply isn’t the case. The productivity of labor is affected by many things, including the skills of the laborer and the tools, or capital, available to the laborer. Thus, if you work a farm with a wooden hoe, and I work a farm with a tractor, I’m likely to be considerably more productive than you. This is covered at length in the first volume of Capital. If you wish to refute or revise Marxist economics, you must first confront Marxist economics in its entirety.

    On the whole, the United States remains an enormously developed country, provided with roads, railroads, electrical power, and numerous high tech factories. A worker in an auto plant in Detroit operating a line of robots is adding more value to the goods by working the robots than is a worker in China assembling pens by hand or a farmer in Chiapas growing corn without a tractor.

    Of course, you may say that a worker assembling pens by hand is working on the same product as the worker operating the pen manufacturing machine. But that isn’t how things are valued; the fact is that pen parts ready to assemble have a real value which can be calculated, distinct from the pens which have been finally assembled.

    Further, you may say that in any case justice requires a greater redistribution of wealth than that. Yet this has never been the demand of any of the main third world revolutionary movements, which have consistently sought an end to foreign interference and control of their own economy. Beyond that, at most they have sought reparations. An immediate and absolute equalization of income has simply never been an actual demand of third world revolutionaries.

    The second problem is that you ignore the well-known phenomenon of disparity in buying power. Anyone who has traveled to the third world knows that a dollar will buy much more there than it will in the United States. So, while there are huge real wage differences between first world workers and third world workers, they are actually not as high as the nominal wage differences.

  2. To clarify before this discussion goes any farther: this is not my article, it first appeared on the website anti-imperialism.com, so this is not my argument, nor is it my examples. Anti-imperialism.com is a group made up primarily former members of the Revolutionary Anti-Imperialist Movement. That’s why there is a disclaimer at the end of my introduction which states that “As usual posting this article does not imply 100% agreement or endorsement of the line presented.” So you would do best to refrain from discussing this article as if it was mine.

    Articles like this are posted for discussion purposes, not because I share in the particulars of any worldview presented. Because its not my analysis, my line or my article I don’t feel I could defend it properly, nor would it be my job to. I am glad though that it did peak your interest and hopefully someone from anti-imperialism.com will stop by to discuss the article as well.

    However, I do feel the need to point out that my personal political economy and revolutionary outlook share superficial similarities with Marxist, Leninist, Maoist and Maoist-Third Worldist political economies, but it is not one of those. My political economy, especially on the question of imperialist parasitism and the place of the White working class is rooted in African Internationalism – what some people would call Yeshitelaism. I think where you fall down a bit in understanding myself though comrade Toad is that (I believe) you assume I am working within one of these paradigms, or one perhaps related to them. If you want to know more about my views and be able to understand more the differences between my thought and Marxism, Leninism and Maoism that I suggest you checkout works like Overturning the Culture of Violence by Penny Hess, One Africa! One Nation!, the Political Report Report to the 5th Congress of the African People’s Socialist Party, The Road to Socialism is Painted Black and Stolen Black Labor: The Political Economy of Domestic Colonialism by Omali Yeshitela.

  3. Thanks for posting this article for discussion, Enaemaehkiw. Whatever ideological differences may exist between us, they pale in comparison to the need to build unity around a proper understanding of class dynamics (i.e., structure and the potentials for struggle) in contemporary society.

    Professor Toad, though I strongly disagree with much of what you say, I thank you for taking the time to attempt to engage in this piece. Nevertheless, I feel it pertinent to respond to several of the remarks you’ve made.

    “To begin with, your example is at the level of a thought experiment.”

    Yes. Have you ever read Capital? It’s one huge thought experiment: testing out capitalism using it’s own basic rules to show how it was result in mass subjugation and immiseration and how, at the end of the day, all wealth is created through the exploitation of labor. I’m using an established Marxist paradigm of LTV to demonstrate how under a tiered labor market which includes superexploitation (blame Lenin’s translators for that term), one could be both a worker and exploiter.

    “Yet, if what you want to do is to convince Marxists to abandon Marxism, you have to expect they will want real world proof that a thing is going on, rather than simply a thought experiment purportedly showing that it COULD take place.”

    Sure,

    I would start here:

    http://www.marxists.org/archive/lenin/works/1916/imp-hsc/

    and continue here:

    http://llco.org/serve-the-peoples-rough-estimate-of-the-value-of-labor/
    http://llco.org/revisiting-value-and-exploitation/
    http://anti-imperialism.com/2012/05/24/the-white-working-class-gross-parasitism/
    http://www.prisoncensorship.info/archive/etext/mt/imp97/ (Just skip to section C)
    http://monthlyreview.org/2012/02/01/the-global-stagnation-and-china
    http://en.wikipedia.org/wiki/Unequal_exchange

    Beyond that, I really think you are reifying “Marxism” here. I’m telling “Marxists” that they are socially irrelevant in no small part due to the fact that their general consensus on global class structure hasn’t kept pace with reality.

    “I have read, of course, many defenses of the theory that first world workers are overpaid, and I have never yet read one that actually showed a full grasp of Marxist economics. Regrettably, your example above is no exception.”

    I’m not saying that First World workers are “overpaid:” I’m saying they are paid more than the value of labor. Perhaps you have some online index of works you’ve written which have such a so I can attain this “full grasp of Marxist economics” to speak of.

    “The first problem is that you treat all labor as equally productive or equally valuable. Yet, of course, that simply isn’t the case. The productivity of labor is affected by many things, including the skills of the laborer and the tools, or capital, available to the laborer. Thus, if you work a farm with a wooden hoe, and I work a farm with a tractor, I’m likely to be considerably more productive than you. This is covered at length in the first volume of Capital. If you wish to refute or revise Marxist economics, you must first confront Marxist economics in its entirety.”

    I really think this line of thought is quasi-racist Trotskyist* bullshit.

    I should start by admitting that your argument does have a logical consistency drawn from Capital. But in this instance you are guilt of falling back on a dogmatic view of Marxism (i.e., reliant on a literal reading of Capital) which fails to apply any subsequent historical materialist analysis.

    Specifically, this line of reasoning fails to account for how, under capitalism imperialism, different rates of organic compositions of capital are imposed. Under your line of reasoning, and why I call it racist, someone from an oppressed community, who likely only has access to a job with more rudimentary tools, is less exploited than the white guy who has the privilege of working at a job with heavy machinery and more advanced tools. The implication of this line of reasoning becomes especially stark when we consider how it relates to understanding the disparate conditions between, say, people from First Nations communities and and your typical Amerikan; or between continents such as Africa, whose use of lack of “development” is something that has been structurally imposed throughout capitalist history, and the imperialist countries (and its working populations) which have benifited from its dispossession and exploitation.

    I find the way you characterize my attempt to bring Marxism out of the 19th century and into the 21st to be tragic and indicative of the pathetic sate of the FW left. If anything, I’m trying to make Marxism relevant again.

    “On the whole, the United States remains an enormously developed country, provided with roads, railroads, electrical power, and numerous high tech factories. A worker in an auto plant in Detroit operating a line of robots is adding more value to the goods by working the robots than is a worker in China assembling pens by hand or a farmer in Chiapas growing corn without a tractor.”

    Again, this judgment doesn’t do much to a) explain how these different levels of “development” have occurred in the first place or been so persistent, nor b) explain the relations between production that occurs in either location.

    A better way to understand different levels of productive is temporally. Because such levels of “productivity” are not natural, it seems best to ask how changing levels of productive affect rates of exploitation over time, not over distance and space (which is largely irrelevant to monopoly capital today). Regardless of the organic composition of capital in the moment, one hour of work is paid in relation to, typically below but sometimes above, a globally construed abstract value of labor.

    “Of course, you may say that a worker assembling pens by hand is working on the same product as the worker operating the pen manufacturing machine. But that isn’t how things are valued; the fact is that pen parts ready to assemble have a real value which can be calculated, distinct from the pens which have been finally assembled.”

    Sure. Reread my essay, because this is all explained in model 2 and 3. It may appear that the pen parts have real value, but this is not the case until they are further consumed by the process of production. And in this case, the final value of the pens can’t be realized until they are sold to a distributor, etc. They point being, while it is fine to note how economic relations operation within different sections of the economy or processes of production, we must also note how they are part of a unified whole and do not occur in isolation of a larger system. What good is a bunch of pen parts at the end of the day, afterall?

    “Further, you may say that in any case justice requires a greater redistribution of wealth than that. Yet this has never been the demand of any of the main third world revolutionary movements, which have consistently sought an end to foreign interference and control of their own economy. Beyond that, at most they have sought reparations. An immediate and absolute equalization of income has simply never been an actual demand of third world revolutionaries.”

    What is reparations and taking control over their own economy (and getting it out of the hands of imperialism) except for a form of redistribution of wealth? You should re-read my article and argue against things I’ve said, not positions you’ve made up. At no point have I said that justice requires and absolute direct redistribution of wealth or an “immediate and absolute equalization of wealth.”

    “The second problem is that you ignore the well-known phenomenon of disparity in buying power. Anyone who has traveled to the third world knows that a dollar will buy much more there than it will in the United States. So, while there are huge real wage differences between first world workers and third world workers, they are actually not as high as the nominal wage differences.”

    What’s your point, besides providing more evidence to show that First World workers are paid above the value of labor? Costs of living and purchasing power vary depending on what side of town you are on as well. Certainly, not “anyone” traveling in the Third World gets to experience such a privilege of having the purchasing power of their money multiply. “Cost of Living” is determined by what a group can afford to pay. For example, if rents are too high for a group living there to afford, the rents will either have to be lowered to account for this or members of another group which can afford the rent will have to move in. Otherwise, the landlord isn’t going to get what they expect (i.e., people paying their rent in full).

    What you are implying is this: just because two people make wages which a nominal difference of 10x, the real difference may be 5x times. Firstly, I would like to see more than on-the-fly anecdotal evidence for this. Secondly, I don’t think it matters that much. Thirdly, studies that branch out from simple labor resources and include ecological resources seem to indicate that FWers, including workers, consume a gravely disparate share. Fifthly (as a explained in the previous paragraph), insofar as FW workers are “overpaid” (your words), they also “overpay.”

    Again, though you are wrong in just about everything you said, thanks for taking the time to engage in this piece.

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