John Smith, Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis (New York: Monthly Review Press, 2016)
In 2002 Anne Daly produced a documentary called Race to the Bottom, provoked by a fire that killed fifty-two workers in a garment factory in Bangladesh. John Smith’s book begins with the Rana Plaza disaster in 2013, when another garment factory collapsed and 1,131 workers died. Clearly, the race to the bottom continues.
The conditions derive from the cut-throat competition between suppliers in Bangladesh and other oppressed countries that is mandated by the transnational corporations in the imperialist countries. The more monopolised the garment industry in the North, the more intense the competition between countries, between businesses and between workers in the global South. Most of the profits accrue to the North. According to an example given in this book, only €0.95 of the price of a H&M tee-shirt sold in Germany for €4.95 stays in Bangladesh.
Along with other examples of intensified exploitation, smartphone manufacture, and coffee-growing, John Smith connects the outsourcing of production to the lowest-wage economies with the nature of capitalism today.
The twenty-first century dawned with capitalism—according to most observers in the media—swinging along nicely. The taoiseach of the time, Brian Cowan, cheerfully exclaimed that the era of booms and slumps was over. Only Marxists predicted a crash. (They would say that, wouldn’t they?)
When the crash came, the economists and the politicians were taken by surprise. They are still thrashing about looking for an explanation, blaming each other, blaming deregulation, blaming rogue bankers, always addressing the superficialities, afraid to look into the abyss: the crisis of capitalism.
Among the Marxists, Monthly Review Press not only saw the crash coming but described many of its features in advance. It has maintained a spirit of inquiry into the workings of contemporary capitalism, so it is appropriate that it is the publisher of John Smith’s book. This book is strictly about economics, not so much the political and military means of maintaining imperialist hegemony—that would be another book.
The crash of 2007 was not a surprise; the only surprise is that it was delayed so long, which Smith endeavours to explain.
One of the responses to the stagnation crisis of the 1970s was the drive to cut costs by moving production to countries with cheaper labour. This was closely associated with increasing financialisation, which the author insists is not a separate phenomenon. Both were facilitated by the advances in information technology. What began as an economic solution has become a pathology. After thirty years, it was fundamental to the new crisis.
The outsourcing of production, ever seeking cheaper labour power, accelerated up to the crash of 2007: for example, Levi-Strauss, which in the 1960s operated sixty-three factories in the United States, closed its last factory there in 2004. The process was pushed also by the emergence of such retail giants as Walmart, Tesco, and Carrefour—commercial interests coming to dominate manufacturers and growers, at home and abroad. The pressure on suppliers inevitably leads to further pressure on wages.
According to mainstream economics, the “developing countries” should be catching up with the developed. There is no sign of this happening, however (apart from a few special cases), for a number of reasons.
The process is controlled by the transnational corporations, whether through direct investment or subcontracting. While there is free movement of capital, there is no free movement of labour. The reserve army of the unemployed and precariously employed is so large, and continues to be reinforced by the displacement of peasants from the land.
Development is largely limited to the particular activities required by powerful corporations and by commercial and financial interests. It is unusual for a product to be manufactured entirely in one country. For example, transnational companies and their subcontractors operating in China typically assemble articles for export from parts made elsewhere. This keeps control in the hands of the corporation.
The direct rule of the colonial powers has been more or less successfully replaced by neo-colonialism. Imperialist hegemony is enforced by economic means, in alliance with the local ruling class—not that force, or the threat of force, has been abandoned. Levelling up is just not happening.
Meanwhile the wages and conditions of workers in the imperialist countries continue to deteriorate, with jobs in production only partly replaced by service employment. They are facing austerity policies imposed by governments and employers. These have so far met with only sporadic resistance, but this may be changing.
John Smith argues at some length that Marx’s theory of surplus value needs to be interpreted in the global context of contemporary imperialism. As he sums up his argument, “global labour arbitrage—super-exploitation—that is forcing down the value of labour power, is now the increasingly predominant form of the capital-labour relationship.” This he sees as “a defining feature of the neoliberal era,” along with the financialisation with which it is closely associated. He makes the point that financial assets are largely derived from the surplus value extracted from super-exploited workers in low-wage countries.
Behind the financial crisis of 2007 lay a crisis of production, that is, of capitalism itself, of imperialism. After nine years, no solution has been found. The policy of North American and European governments has been to protect business, keeping share prices up by “quantitative easing” and imposing austerity on working people. They have certainly succeeded in making the rich richer, but the underlying crisis remains, and is spreading to the oppressed countries, which depend on exporting to what is now a stagnant market.
The return to Keynesian strategies and re-regulation advocated by the left is hardly more promising; nor is the “non-interference” proposed by some on the right. The author argues that there is no capitalist solution to the crisis. There has been, he maintains, an enormous growth in the working class, the industrial working class in particular, which includes women and men, all races and all religions, “more closely resembling the face of humanity than ever before”—a powerful force.
Either humanity will destroy capitalism, or capitalism will destroy humanity. We are back to Marx: “Workers of all countries, unite!”—never more difficult, never more urgent, never more necessary.