The global reserve army of labor and the new imperialism

Monthly Review

Volumn 63, Issue 6, 2011, Pages 1-31

  Foster, John Bellamy ^a   McChesney, Robert W ^b   Jonna, R Jamil ^a  

^a UNIVERSITY OF OREGON   (United States)

^b UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 82055161856     PISSN: 00270520     EISSN: None     Source Type: Journal    
DOI: 10.14452/MR-063-06-2011-10_1     Document Type: Review

References (123)

1. Stephen Herbert Hymer, The Multinational Corporation (Cambridge: Cambridge University Press, 1979), 41, 75, 183.
2. Hymer, The Multinational Corporation, 81, 86, 161, 262-69.
3. Gary Gereffi, The New Offshoring of Jobs and Global Development, ILO Social Policy Lectures, Jamaica, December 2005 (Geneva: International Institute for labour Studies, 2006), http://ilo.org, 1;
4. Peter Dicken, Global Shift (New York: Guilford Press, 1998), 26-28.
5. Thorstein Veblen already understood this in the 1920s. See his Absentee Ownership and Business Enterprise in Recent Times (New York: Augustus M. Kelley, 1964), 287.
6. See Paul M. Sweezy, Four Lectures on Marxism (New York: Monthly Review Press, 1981), 64-65;
7. Michael E. Porter, Competitive Stratejy (New York: The Free Press, 1980), 35-36.
8. Ajit K. Ghose, Nomaan Maji, and Christoph Ernst, The Global Employment Challenge (Geneva: International Labour Organisation, 2008), 9-10.
9. On depeasantization see Farshad Araghi, The Great Global Enclosure of Our Times", in Fred Magdoff, John Bellamy Foster, and Frederick H. Buttel, eds., Hungry for Profit (New York: Monthly Review Press, 2000), 145-60.
10. John Smith, Imperialism and the Globalisation of Production (Ph. D. Thesis, University of Sheffield, July 2010), 224.
11. Stephen Roach, 'How Global Labor Arbitrage Will Shape the World Economy', Global Agenda Magazine, 2004, http://ecocritique.free.fr;
12. John Bellamy Foster, Harry Magdoff, and Robert W. McChesney, "The Stagnation of Employment", Monthly Review, 55, no. 11(April 2004):9-11.
13. See John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna, "The Internationalization of Monopoly Capital", Monthly Review 63, no. 2(June 2011):1-23.
14. Thomas L Friedman, The WorldisFlat (New York: Farrar, Straus, and Giroux, 2005). Friedman wrongly claims that his "flat world hypothesis" was first advanced by Marx. See 234-37.
15. Paul Krugman, Pop Internationalism (Cambridge, Massachusetts: MIT Press, 1996), 66-67.
16. On the absurdity of expecting wage differences between nations simply to reflect productivity trends see Marx, Capital, vol. 1, (London: Penguin, 1976), 705.
17. On fears of an end to global labor arbitrage see "Moving Back to America", The Economist, May 12, 2011, http://economist.com.
18. Karl Marx, Capital, vol. 1, 798. Immediately after the quoted passage Max added the following qualification: "Like all other laws, it is modified in its workings by circumstances, the analysis of which does not concern us here." It should be added that Marx used "absolute" here in the Hegelian sense, i.e., in terms of abstract.
19. Harry Magdoff and Paul M. Sweezy, Stagnation and the Financial Explosion (New York: Monthly Review Press, 1987), 204. By 2010, OECD unemployment had grown by 38 percent, reaching 48.5 million persons. ("Unemployment, Employment, Labour Force and Population of Working Age [15-64]", OECD StatExtracts, (OECD, Geneva, 2011L retrieved September 24, 2011.)
20. The concept of "imperialist rent" is developed by Samir Amin in The Law ol Worldwide Value (New York: Monthly Review Press, 2011) and is discussed further below.
21. See, for example, the discussion in Anthony Giddens, Capitalism and Modern Social Theory (Cambridge: Cambridge University Press, 1971), 55-58. Giddens offers a half-hearted and confused defense of Marx which is full of misconceptions.
22. John Strachey, Contemporary Capitalism, 101; Marx, Capital, vol. 1, 929. Strachey also quotes on the same page the passage from The Communist Manifesto where Marx and Engels write, "The modern labourers...instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth." Karl Marx and Frederick Engels, The Communist Manifesto (New York: Monthly Review Press, 1964), 23. At first sight this seems to support Strache/s point (though taken from an early and non-economic work). However, as Hal Draper points out: This may sound as if the class of proletarians, as such, is inevitably pauperized. This language reflected the socialistic propaganda of the day; later in Capital I (Chap. 25), Marx made clear that the pauper layer is 'the lowest sediment of the relative surplus population. "
23. Hal Draper, The Adventures of the Communist Manifesto (Berkeley-Center for Socialist History, 1998), 233.
24. Roman Rosdolsky, The Making of Marx's 'Capital' (London: Pluto Press, 1977), 307.
25. Fredric Jameson, Representing Capital (New York: Verso, 2011), 71.
26. Marx, Capital, vol. 1, 799.
27. Marx, Capital, vol. 1, 764, 772, 781-94;
28. Marx and Engels, The Communist Manifesto, 7;
29. Paul M. Sweezy, The Theory of Capitalist Development (New York: Monthly Review Press, 1970), 87-92.
30. Marx, Capital, vol. 1, 792.
31. Karl Marx, "Wage-labour and Capital', in Wage-Labour and Capital/Value, Price and Profit (New York: International Publishers, 1935), 45;
32. Sweezy, The Theory of Capitalist Development, 89.
33. Marx, Capital, vol. 1, 763, 776-81, 929.
34. Marx, Capital, vol. 1, 794-95;
35. David Harvey, A Companion to Marx's Capital (London: Verso, 2010), 278, 318.
36. Marx. Capital, vol. 1, 795-96.
37. Marx, Capital, vol. 1, 590-99, 793-77.
38. Marx, Capital, vol. 1, 797-98.
39. Engels deserves credit for having introduced the reserve army concept into Marxian theory, and makes it clear that what demonstrates the reservearmy or relative surplus-population status of workers is the fact that the economy draws them into employment at business cycle peaks. See Frederick Engels, The Condition of the Working Class in England (Chicago: Academy Chicago Publishers, 1984), 117-22, and
40. Engels on Capital (New York: International Publishers, 1937), 19.
41. Karl Marx, Capital, vol. 3 (London: Penguin, 1981), Capital, vol. 2 (London: Penguin, 1978), 486-87, and Capital, vol. 1, 769-70;
42. Rosa Luxemburg, The Accumulation of Capital-An Anti-Critique, and Nikolai Bukharin, Imperialism and the Accumulation of Capital (New York: Monthly Review Press, 1972), 121.
43. Marx, Capital, vol. 3, 363.
44. Karl Marx and Frederick Engels, Collected Works (New York: International Publishers, 1975), 422.
45. Karl Marx, Theories of Surplus Value, (Moscow: Progress Publishers, 1971), part 3, 105-6;
46. Capital, vol. 3, 344-46;
47. David Ricardo, On the Principles of Political Economy and Taxation (Cambridge: Cambridge University Press, 1951), 135-36;
48. John Stuart Mill, Essap on Some Unsettled Questions in Political Economy (London: Longmans, Green, and Co., 1877), 1-46:
49. Rosdolsky, The Making of Marx's 'Capital', 307-12. A wide-ranging analysis/debate regarding unequal exchange occurred within Marxism in the 1970s.
50. See Arghiri Emmanuel, Unequal Exchange (New York: Monthly Review Press, 172);
51. Samir Amin, Imperialism and Unequal Development (New York: Monthly Review Press, 1977), 181-252. Some Marxist theorists still deny that the rate of surplus value is higher in the periphery than in the center.
52. See Alex Callinicos, Imperialism and Global Political Economy (London: Polity, 2009), 179-81;
53. and Joseph Choonara, Unraveling Capitalism (London: Bookmarks Publications, 2009), 34-35.
54. For a contrary view, see Sweezy, Four Lectures on Marxism, 76-77.
55. Rosa Luxemburg, The Accumulation of Capital (New York: Monthly Review Press, 1951), 361-65.
56. Marx, Capital, vol. 3, 344.
57. The term 'globalization" was first coined in the 1930s. But the first article to use the concept in its modern economic sense, according to the Oxford English Dictionary, was Fouad Ajami, 'Corporate Giants: Some Global Social Costs", International Studies Quarterly 16, no. 4(December 1972):513.
58. Ajami introduced the term in a paragraph in which he was addressing Marxian notions of "concentration and centralization'-and in particular Paul Baran and Paul Sweey's Monopoly Capital (New York: Monthly Review Press, 1966), which had pointed to the multinational corporation as a manifestation of the growth of monopolistic production at the world level. Although critical of Baran and Sweez/s analysis for its Marxian basis, Ajami (a mainstream political scientist now affiliated with the Hoover Institution and the Council on Foreign Relations) nevertheless saw what he called "the domination of multinational giants and the globalization of markets" as emerging out of the same kinds of developments-with respect to the tendency to international oligopolythat Baran and Sweezy had raised. Ironically, Ajami failed to notice that other theorists he drew upon in his article in contradistinction to Baran and Sweezy-Stephen Hymer, Michael Tanzer, Bob Rowthorn, and Herbert Schiller-were also Marxian and radical political economists, and in the case of the first two, authors of articles in Monthly Review.
59. Richard J. Barnet and Ronald E. Muller, Global Reach (New York: Simon and Schuster, 1974), 213-14, 306.
60. Foster, McChesney, and Jonna, "The Internationalization of Monopoly Capital," 5-9.
61. "Moving Back to America."
62. Dale Wen, China Copes with Globalization (International Forum on Globalization, 2005), http://ifg org;
63. Martin Hart-Landsberg, "The Chinese Reform Experience', The Review of Radical Political Economics 43, no. 1(March 2011):56-76;
64. Minqi Li, "The Rise of the Working Class and the Future of the Chinese Revolution", Monthly Review 63, no. 2(June 2011):40.
65. It should be noted that the term "superexploited' appears to have two closely related, overlapping meanings in Marxist theory: (1) workers who receive less than the historically determined value of labor power, as it is defined here; and (2) workers who are subjected to unequal exchange and overexploited, primarily in the global South. In Amin's framework, however, the two meanings are united This is because the value of labor power is determined globally, while actual wage rates are determined nationally, and are hierarchically ordered due to imperialism. In the global South therefore workers normally receive wages that are less than the value of labor power. This is the basis of imperial rent See Amin, The Law of Value and Historical Materialism, 11, 84.
66. John Smith and Andy Higginbottom have developed a similar approach to superexploitation based on Marx.
67. See John Smith "Imperialism and the Law of Value", Global Discourse, 2, no. 1(2011), http://global-discourse.com.
68. Charles J. Whalen, "Sending Jobs Offshore from the United States", Intervention: A Journal of Economics 2, no. 2(2005):35.
69. Quoted in Smith, The Internationalisation of Globalisation, 94.
70. William Millberg, "Shifting Sources and Uses of Profits", Economy and Society 37, no. 3(August 2008):439;
71. Judith Banister and George Cook, "China's Employment and Compensation Costs in Manufacturing Through 2008", U. S. Bureau of Labor Statistics, Monthly Labor Review (March 2011): 44. It is common for commentators to refer to global supply chains as global value chains, based on the concept of value added.
72. (See, for example, Michael Spence and Sandile Hlatshwayo, The Evolving Structure of the American Economy and the Employment Challenge, Council on Foreign Relations Working Paper, March 2011, http://cfr.org). This leads to the notion that the value added is much higher in high technology production engaged in the North than in the laborintensive production now increasingly located in the South. However, more value-added in this sense simply means higher relative prices and higher income. It does not tell us where the value is produced but simply who gets it (via monopoly power, imperial rent, etc.). We therefore avoid the value chain terminology in this paper, and we refer, when necessary, to "high-valuecapture" rather than "high-value" links in the global supply chain. The "value capture' term and a general critique of value-chain theory are presented in John Smith, Imperialism and the Globalisation of Production, 254-60, and "Imperialism and the law of Value."
73. Yuqing Xing and Neal Detert, How the iPhone Widens the United States Trade Deficit with the People's Republic of China, ADBI Working Paper, Asian Development Bank Institute (December 2010; paper revised May 2011);
74. David Barboza, "After Spate of Suicides, Technology Firm in China Raises Workers' Salaries", New York Times, June 2, 2010, http://nytimes.com;
75. Foster, McChesney, and Jonna, "The Internationalization of Monopoly Capital", 17. It should be noted that the assembly in China of iPhone parts and components that are produced elsewhere (heavily in other East Asian countries) is actually the dominant pattern of East Asian production. According to the Asian Development Bank, China is "the assembly hub for final products in Asian production networks."
76. Asian Development Bank, Asian Development Outlook, 2008 (Manila, Philippines), http://adb org, 22;
77. Martin Hart-Landsberg, "The U. S Economy and China", Monthly Review 61, no. 9(February 2010):18.
78. Banister and Cook, "China's Employment and Compensation", 49.
79. U. S. Bureau of Labor Statistics, "International Comparisons of Hourly Compensation Costs in Manufacturing", Table I, last updated March 8, 2011, http://bls.gov.
80. Vikas Bajaj, "Bangladesh, With Low Pay, Moves In on China", New York Times, July 16, 2010, http://nytimes. com.
81. Immelt quoted in Millberg, "Shifting Sources and Uses of Profits", 433.
82. For a powerful theoretical analysis in Marxian terms of global labor arbitrage see Smith, Imperialism and the Globalisation of Production.
83. Jannik Lindbaek, "Emerging Economies: How Long Will the Low-Wage Advantage Last?" October 3, 1997, http://actrav. itcilo.org.
84. W. Arthur Lewis, Selected Economic Writings (New York: New York University Press, 1983), 316-17, 321, 348, 387-90.
85. The Next China", The Economist, July 29, 2010, http://economist.com.
86. Li, The Rise of the Working Class and the Future of the Chinese Revolution", 40-41
87. and The Rise of China and the Demise of the Capitalist World Economy (New York: Monthly Review Press, 2008), 87-92.
88. Yang Yao, "No, the Lewisian Turning Point Has Not Yet Arrived", Economist com, July 16, 2010, http://economist com;
89. Stephen Roach, "Chinese Wage Convergence Has a Long Way To Go", Economistcom, July 18, 2010, http://economistcom.
90. Theo Sparreboom and Michael P. F. de Gier, "Assessing Vulnerable Employment", Employment Sector Working Paper, no. 13 (Geneva. ILO, 2008), 7;
91. James Petras and Henry Veltmeyer, Multinationals on Trial (Burlington, Vermont: Ashgate, 2007), 70;
92. Mike Davis, Planet of Slums (London: Verso, 2006), 178.
93. International Labor Organization, Key Indicators of the Labour Market (Geneva: ILO, 2009), chapter 3-3;
94. Sparreboom and de Gier, "Assessing Vulnerable Employment", 11.
95. Michael Yates, "Work is Hell", May 21, 2009, http://blog. cheapmotelsandahotplate.org.
96. ILO, Key Indicators, chapter 1-C, and chapter 5.
97. Samir Amin, "World Poverty, Pauperization and Capital Accumulation", Monthly Review 55, no. 5(October 2003):1-9 (Pubitemid 37347498)
98. and The Law of Worldwide Value, 14, 89, 134;
99. Prabhat Patnaik, "The Myths of Capitalism", MRzine, July 4, 2011, http://mrzine.monthlyreview.org;
100. United Nations, World Economic and Social Survey (New York: UN, 2004), 3;
101. Yates, "Work is Hell";
102. Davis, Planet of Slums, 179;
103. United Nations Human Settlements Programme, The Challenge of the Slums (London: Earthscan, 2003), 40, 46.
104. Prabhat Patnaik, The Value of Money (New York: Columbia University Press, 2009), 212-15;
105. "A Perspective on the Growth Process in India and China", International Development Economics Associates, The IDEAs as Working Paper Series, Paper no. 05/2009, http://networkideas.org, abstract, 4;
106. Lee Chyen Yee and Clare Jim, "Foxconn to Rely More on Robots; Could Use 1 Million in 3 Years", Reuters, August 1, 2011, http://reuters.com.
107. Prabhat Patnaik, "Notes on Contemporary Imperialism", MRzine, December 20, 2010, http://mrzine. monthlyreview.org;
108. "Capitalism and Imperialism", MRzine, June 19, 2011, http://mrzine.monthlyreview org;
109. 'Labour Market Flexibility', MRzine, May 9, 2011, http://mrzine. monthlyreview.org;
110. and 'Contemporary Imperialism and the World's Labour Reserves", Social Scientist 35, no. 5/6(May-June 2007):13.
111. Prabhat Patnaik, "The Paradox of Capitalism", MRzine, October 22, 2010, http://mrzine.monthlyreview.org.
112. For example, Guy Standing, The Precariat: The New Dangerous Class (New York: Bloomsbury Academic, 2011). On the current role of the reserve army of labor at the center of the capitalist system
113. see Fred Magdoff and Harry Magdoff, "Disposable Workers; Today's Reserve Army of Labor", Monthly Review 55, no. 11(April 2004):18-35. (Pubitemid 38535912)
114. Ghose, et al., The Global Employment Challenge, 45-49.
115. On the interrelation of these two negative elements affecting employment in the advanced capitalist countries see Foster, "The Stagnation of Employment"
116. Baran and Sweezy, Monopoly Capital, 107'-8.
117. Michael Spence, The Next Convergence (New York: Farrar, Straus, and Giroux, 2011), 19-23, 48, 53-54, 85-86, 107.
118. Spence, The Next Convergence, 100-3, 194-98.
119. Samir Amin, Capitalism in the Age of Globalization (New York: Zed, 1977), 4-5.
120. Louis Uchitelle, "Is Manufacturing Falling Off the Radar?" New York Times, September 11, 2011, http://nytimes. com.
121. Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: W W. Norton, 1999), 106-7, 14-48.
122. Samir Amin, "The Democratic Fraud and the Universale Alternative", Monthly Review 63, no. 5(October 2011):44-45
123. The World We Wish to See (New York: Monthly Review Press, 2008).