Everyone remembers the 1,133 deaths from the 2013 Rana Plaza collapse. But who knows about Bangladeshi workers who earn just one euro cent for every 18 T-shirts they make, and take home €1.36 after a ten or 12 hour day?
Ultimate villains of this “super-exploitation” are corporate buyers from the Global North and race-to-the-bottom capitalist market competition.
Labour leaders’ “reflex has been to act in partnership with imperialist governments and international brands”. For example, US tariffs on sweatshop imports were re-imposed after pressure from union officials who claimed to be concerned about the plight of the Bangladeshi workers.
John Smith uses such atrocities to expose the ways that conventional statistics understate the value of outsourced commodities created in the Global South.
Apple subcontracts all the manufacture of its iPhones to Chinese companies, whereas its accounts show most of their value deriving from its small US workforce. This masks how indispensable Southern labour has become to the global economy, not only by outsourcing but also by reverse flow of labour to the North.
Smith uses abundant empirical material alongside Marxist economic philosophy. Hence the underlying driver of the present crisis is correctly identified as long-term global decline in real rates of profit in non-financial sectors.
Of the factors that delayed the onset of crisis for 25 years, Smith gives great prominence to labour outsourcing. Others, such as working class defeats, legal restrictions on trade unions, the rise of shadow banking and debt, are downplayed.
His subtitle, Capitalism’s Final Crisis, is more than bravado. “Super-exploitation” is defined as wages that are below the socially necessary labour value. Hence chronic low demand in China and elsewhere and near flatlining in the global economy.
GDP per capita in the US is 16 times that of Bangladesh. But Smith argues that real productivity in outsourced industries of the Global South is relatively high. So it is low wages and transfer prices, not low productivity, that exaggerate the gap between North and South.
Smith meticulously demolishes this GDP Illusion: “Despite its claim to be a measure of product, GDP measures the results of transactions in the marketplace. Yet, nothing is produced in marketplaces, the world of exchange of money and titles of ownership. Production takes place elsewhere — behind high walls, on private property, in production processes.” GDP has become “a veil concealing not just the extent but the very existence of North-South exploitation”.
Recent changes to GDP include the addition of, for example, expenditure on research and development, which adds between 1 percent and 4 percent to imperialist GDPs. Likewise for security, administration and advertising in the rich countries, which Smith regards as forms of “social consumption”.
This readable book makes a good claim on the time of busy revolutionary socialists. Acceptable political asides occur, until: “imperialists’ reluctance to reverse the expensive concessions helped convert the workers of the Global North into passive bystanders, or even accomplices, to their subjugation of the rest of the world.”
Passive bystanders: yes. Accomplices: certainly not. While deservedly winning the first Baran & Sweezy Memorial Award, a fuller political critique will be necessary should it attract widespread attention on the left.