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Late Imperialism
(continued from the last issue)
The new phase of imperialism
that arose at the very end of the
twentieth and the beginning of the
twenty-first century has been
described by Amin and various
authors associated with Monthly
Review as a system of global
monopoly-finance capital or a
capitalism of “generalized mono-
polies.” In this more integrated
imperialist system, five hundred
corporations account for nearly 40
percent of world revenue while
most other firms in the world
economy are entangled in the webs
of these giant firms and exist as
mere subcontractors. Production
and circulation are now organized
in the form of global commodity
chains, serving to highlight the
different roles of center and
periphery within these commodity
chains. This is in line with the global
labor arbitrage, which serves to
promote the intensified exploitation/
expropriation of labor in the global
South, leading to the capture of
much of this extra value by the
North. The heightened imperialist
controls of global finance and
communications are inherent parts
of this process without which the
globalization of production would
not be possible.
The late 1970s and ’80s saw
the growth of neoliberal globali-
zation, which sought with consi-
derable success to subordinate
states, particularly in the global
South, to the rules of a world
market where, by definition, the
financial center rules. Late
imperialism can thus also be seen
as the period in which economic
stagnation, financialization, and the
planetary ecological crisis all
emerged as widening, irreversible
fissures, inseparable from the
system of monopoly-capitalist
accumulation itself and finding its
ideological
justification
in
neoliberalism.
Aug,Sep - 2019
A distinguishing feature of
globalized production and finance
in the current century is the
systematic exploitation of low unit
labor costs in the South, a product
of the fact that wages are kept at
levels far below those of the North
due to: (1) the enormous global
reserve army located primarily in
the South; (2) restrictions on the
movement of labor between
countries, and particularly from
poor to rich countries; and (3) the
force of imperialist pressures past
and present. As economist Tony
Norfield, former executive director
and global head of foreign
exchange strategy in a major
European bank, explained in 2015
in “T-Shirt Economics: Labour in
the Imperialist World Economy,”
everybody knows that workers in
developed capitalist countries are
paid more than those in poorer
countries. However, the divergence
in
average
wages
can
nevertheless be surprising: not just
20 percent or 50 percent, but more
like a factor of 2, 5, 10 or 20
between the richer countries and
the poorer countries. Mainstream
economic theory explains this—and
justifies it—by arguing that workers
in richer countries are more
productive than in poorer ones,
because the former are more
educated and skilled, working with
higher levels of technology. Yet this
explanation does not sit well with
the reality that many manufacturing
employees in poor countries are
employed, directly or indirectly, by
major corporations, and working
with technology that is often
comparable to that in the richer
country.
Production by (or contracted
out by) foreign multinationals in
poor countries relies on the same
or near to the same technology
utilized in the rich economies,
leading to comparable levels of
By john Bellamy Foster
productivity. The result, combined
with extremely low wages, is that unit
labor costs in manufacturing in the
so-called emerging economies of
China, India, Indonesia, and Mexico
in 2014 were only 46, 37, 62, and
43 percent, respectively, of U.S.
levels. This generates vastly
inflated gross profit margins for
multinationals located in the North.
The total production cost (reflected
in the export price) for a T-shirt
produced in 2010 through a
subcontractor in Bangladesh
working for the Swedish firm
Hennes & Mauritz (H&M) was 27
percent of the final sales price in
Europe, with the workers in
Bangladesh receiving a mere
pittance for their labor. One worker
at the factory received •1.36 for a
ten to twelve hour day. The price
markup (or gross profit margin) on
an iPhone assembled in China in
2009 was over 64 percent. The
widening gross profit margins
associated with the global labor
arbitrage have led to a rapid
globalization of production, with the
world share of industrial
employment located in developing
(including emerging) economies
rising from 52 percent in 1980 to
83 percent in 2012.
Today, a large and rapidly
growing portion of production is
outsourced to the periphery in the
form of arms-length contracting or
what is known as the non-equity
modes of production (such as
leasing, licensing, franchising, and
management-service contracts),
constituting a kind of middle
ground between foreign direct
investment by multinationals and
actual trade. In 2010, the non-
equity modes of production
generated over $2 trillion in sales.
Still, not all value-chain
production exploiting low unit labor
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