Cheapness - Result of Third-world labor or credit mechanisms?

[Questionable]

I've heard the argument made that workers in the third-world benefit from cheap labor in imperialistically-exploited nations making the prices of commodities in the "first-world" cheaper.

However, I've also heard prices are lower in first-world nations because of things like availability of credit, and aren't directly linked to exploitation in the third-world.

So, which side is more factual? Or is the answer a third option that I haven't heard of yet?

[Zealot]

Both are significant factors. On the one hand, capitalists have had to exploit third-world labour to make cheaper goods and stay competitive. On the other, first-world workers have access to easy credit. It has become particularly important for the maintenance of the expected standard of living in the first world, which came under threat especially from the 1970s onwards as wages either stagnated or fell and people scrambled for a way to make up for that fact.

[Questionable]

Both are significant factors. On the one hand, capitalists have had to exploit third-world labour to make cheaper goods and stay competitive.

Does this mean that first-world workers are beneficients and/or complacent in this mechanism?

[ind_com]

Does this mean that first-world workers are beneficients and/or complacent in this mechanism?

They are. Though, now with immigration and outsourcing being the result of such exploitation, along with shrinking benefits, the possibility of revolution has increased in the first world.

Edit: Clarification - beneficiaries, not complacent.

[Zealot]

Complacent? No. It's just an objective fact that capitalists have moved production elsewhere to make cheaper goods and stay competitive and that the first world benefits from this. The fact that this involves a "first world/third world" divide is irrelevant since this is just capitalism doing its thing. Production would have been moved from, for example, Michigan to Ohio if they thought better profits would be found. But that wasn't the case. First-world workers are completely innocent of that since those changes were affected by the capitalist class who done it completely out of their own interests. But I think to a degree that many people do recognise that most of the things they own were made with cheap labour in China or some other place but the way that this impacts consciousness can vary. Some people simply don't know that many products are made with cheap labour under horrendous conditions and conclude that somehow products are faulty because they were "made in China" (i.e., there's something wrong with China, Chinese workers, Chinese products, etc.). Obviously, as Marxists, we recognise that this explanation is absolutely wrong.

I don't think it's outrageous to say that we "benefit" from this arrangement, since clearly we do, but third-worldists leap to the conclusion that this completely blurs class lines and liquidates class struggle in the first world, which is clearly untrue.

[Prof. Oblivion]

Complacent? No. It's just an objective fact that capitalists have moved production elsewhere to make cheaper goods and stay competitive and that the first world benefits from this.

How do you explain US industrial output, which is the largest in the world at $2.05 trillion in 2009, 18% of global output? (http://greyhill.com/blog/2011/10/5/manufacturing-output-by-country.html)

[#FF0000]

How do you explain US industrial output, which is the largest in the world at $2.05 trillion in 2009, 18% of global output? (http://greyhill.com/blog/2011/10/5/manufacturing-output-by-country.html)

I do wanna point out that it's very easy to produce absolutely mind-boggling amounts of shit in relatively small plants with few workers. And that's really where most of the jobs are going, tbh. Not overseas -- they're just disappearing because things are getting more efficient.

As for the OP, I actually don't think third world wages have that much of an affect on prices. In Haiti, for example, I think there was a push to double the wage of workers for one particular industry from 30-something cents to 60-something. Still a pittance, but the point is that looking at the numbers, the raise wouldn't have impacted the bottom line enough to justify raising prices. The problem management had, though, is that the affected the bottom line at all.

[l'Enfermé]

The matter of fact is, "first-world" workers are far more productive than their comrades in the third-world.

[The Jay]

First-world workers are the beneficiaries of the exploitation (both the marxian conception as well as the colloquial) in so far as their money goes farther, but without the freely flowing consumer credit they would not have the dollars to throw around since their wages have not increased in terms of 'real wages' since the 1970s (I am referring to the United States here). Essentially, this will break eventually so the effects of using cheap third world labor will harm the first world worker in the long run. The only ones that will make out are the owners. That is, until a certain event unfurls.

[Prof. Oblivion]

I do wanna point out that it's very easy to produce absolutely mind-boggling amounts of shit in relatively small plants with few workers. And that's really where most of the jobs are going, tbh. Not overseas -- they're just disappearing because things are getting more efficient.

I agree with this completely, but what that means is that the workers in the first world are exploited just as much, if not moreso, due to this. Cutting wages or increasing productivity both increase the rate of exploitation.

[#FF0000]

I agree with this completely, but what that means is that the workers in the first world are exploited just as much, if not moreso, due to this. Cutting wages or increasing productivity both increase the rate of exploitation.

Ahhhh nah dude I don't think I agree. Increasing productivity doesn't necessarily mean anyone's working harder. It could just mean the tools and equipment for production are more advanced and more efficient. Workers in the third world might be producing less but they're exerting more effort to do so in sweatshop conditions.

[Prof. Oblivion]

Ahhhh nah dude I don't think I agree. Increasing productivity doesn't necessarily mean anyone's working harder. It could just mean the tools and equipment for production are more advanced and more efficient. Workers in the third world might be producing less but they're exerting more effort to do so in sweatshop conditions.

Increasing productivity means that a worker can produce y additional widgets per hour instead of x, meaning that they have increased their productivity per hour without an increase in wages, increasing the rate of exploitation (v/s).

[hetz]

First-world workers are the beneficiaries of the exploitation
How exactly?


Essentially, this will break eventually so the effects of using cheap third world labor will harm the first world worker in the long run.
It's already harming the people who lost their jobs because the companies they once worked for outsourced to China or elsewhere.

[Hit The North]

A pair of Nike trainers made by cheap labour in Pakistan are not cheap in US or European stores.

The third option is that capitalists make huge profits by ratcheting up the rate of exploitation in the third world and selling at inflated prices through branding in the developed world. Whether workers are performing their function as producers or as consumers, they still get screwed.

[Zealot]

How do you explain US industrial output, which is the largest in the world at $2.05 trillion in 2009, 18% of global output? (http://greyhill.com/blog/2011/10/5/manufacturing-output-by-country.html)

Technology. This really should go without saying.

[Zealot]

A pair of Nike trainers made by cheap labour in Pakistan are not cheap in US or European stores.

But are a lot cheaper than if they were to be made with first-world labour. They do use branding to inflate prices and then sometimes they don't. Capitalists have literally specialised in making profit from shit, which is then sold at low prices in places such as Walmart and its various clones around the world.

[Hit The North]

Technology. This really should go without saying.

Let us not be too quick to dispense with the labour power of millions of American proletarians in our analysis. Besides millions of workers in America subsist on minimum wage, having the value of their labour ripped out of them. It's not like America is some workers paradise.


But are a lot cheaper than if they were to be made with first-world labour.

Sure, but the trade off for the cappie is between costs of production and remuneration in the market place.


They do use branding to inflate prices and then sometimes they don't. Capitalists have literally specialised in making profit from shit, which is then sold at low prices in places such as Walmart and its various clones around the world.

Of course. But a brand that sells far below the cost of a rival brand is merely a brand that cannot compete otherwise. It has little to do with the source of the labour.

[Hit The North]

Ahhhh nah dude I don't think I agree. Increasing productivity doesn't necessarily mean anyone's working harder. It could just mean the tools and equipment for production are more advanced and more efficient. Workers in the third world might be producing less but they're exerting more effort to do so in sweatshop conditions.

The rate of exploitation is not measured by the amount of effort exerted in the production process but in the gap between the amount of value being produced by the workforce and the amount of value being compensate for by the capitalist.

[The Garbage Disposal Unit]

I've heard the argument made that workers in the third-world benefit from cheap labor in imperialistically-exploited nations making the prices of commodities in the "first-world" cheaper.

However, I've also heard prices are lower in first-world nations because of things like availability of credit, and aren't directly linked to exploitation in the third-world.

So, which side is more factual? Or is the answer a third option that I haven't heard of yet?

So, the thing is, "things like the availability of credit" are dependent on neo-colonial relationships with the third-world. The relationship isn't incidental - its intrinsic.

While I don't believe that class struggle has been "liquidated" or is impossible in the first world, I think it is necessary to acknowledge the role first-world white workers have played in relationship to colonialism, and the objective benefits they receive in terms of spoils. Not to sound like a broken record, but I highly recommend J. Sakai's "Settlers" for a detailed history and analysis in this regard.

[Hit The North]

So, the thing is, "things like the availability of credit" are dependent on neo-colonial relationships with the third-world. The relationship isn't incidental - its intrinsic.


You will have to show this dependency empirically before you can mount a convincing argument about a necessary relationship. Is it not a fact that most "easy credit" is taken up by workers who are already in employment? It seems to me that proponents of this argument want to argue that first world workers benefit from higher wages because of the super-profits extracted from the third world and are then able to buy cheap goods but need access to credit in order to buy these goods, presumably because their inflated wages do not satisfy their consumption needs.

[TheOther]

Hi, this is just my 2 cents, and personal opinion on the differences of the political tastes of people of rich countries compared with the people of poorer countries. And I think that the people of rich countries are more leftists, than the people of the poorer countries. The richer people are, the less conformists and less able they are to adapt to economic crisis. While the societies of poor countries can find ways to live real happy even without electricity. And I think that's why socialism will be overthrown first in rich countries, and then spread to small poorer countries. According to a marxist professor, the Latin America social-democrat populist bolivarian revolutions are anomalies, and not workers-revolution in the pure socialism from below marxism sense.



I've heard the argument made that workers in the third-world benefit from cheap labor in imperialistically-exploited nations making the prices of commodities in the "first-world" cheaper.

However, I've also heard prices are lower in first-world nations because of things like availability of credit, and aren't directly linked to exploitation in the third-world.

So, which side is more factual? Or is the answer a third option that I haven't heard of yet?

[PC LOAD LETTER]

I do wanna point out that it's very easy to produce absolutely mind-boggling amounts of shit in relatively small plants with few workers. And that's really where most of the jobs are going, tbh. Not overseas -- they're just disappearing because things are getting more efficient.

As for the OP, I actually don't think third world wages have that much of an affect on prices. In Haiti, for example, I think there was a push to double the wage of workers for one particular industry from 30-something cents to 60-something. Still a pittance, but the point is that looking at the numbers, the raise wouldn't have impacted the bottom line enough to justify raising prices. The problem management had, though, is that the affected the bottom line at all.
Emphasis mine - take a look at the show "How It's Made" on the Science Channel. It usually runs in blocks at night during the week, sometimes during the day. It really shows just how automated much of the American manufacturing sector is. I was watching it last night and thought, "I wonder what Marx would think if he saw how much shit is just built by robots with little human interaction now." The episode I was watching was sockets for socket wrenches, and the only humans involved moved pieces between two stations while robots carved, pressed, cut, shaped, and chrome plated the sockets, and then humans inspected the finished product for obvious defects.

[Hiero]

How do you explain US industrial output, which is the largest in the world at $2.05 trillion in 2009, 18% of global output? (http://greyhill.com/blog/2011/10/5/manufacturing-output-by-country.html)

From that chart, China should have overtaken the US in industrial output. Which is what the introduction predicted. The US industrial output has also slowed "The U.S. share of global manufacturing stands at 18%, down from 29% in 1970."

Manfucturing is slowing in the US and in the West overall it has had dramatic changes, which has shift the working class landscape. For instance in Australia manfucturing of steel has declined and car manfuturing is subsidised by governments. However manfucturing in mining may still have a viable future in Australia as long as the mining boom continues. Some workers, partically non-white workers (you can look at the changing nature of inner city ethnic conclaves for instance in the US; Bourgois, Selling Crack in El Barrio) were devastated by 'de-industrialisation' and workers in the car manfucturing industry in the US are facing a similar fate, elsewhere like Australia, capitalist adapted and are using skilled workers to tap into the mining boom.

Manfucturing has adapted to many objective factors, mineral booms, wages increases, living standard increases, meaning a company can't afford to invest in say a Nike shoe making factory in Sydney (unless it uses unregisted migrant labour), but maybe company can can afford to invest in production of machinary that will be used in the mines.

These changes mean you can't just look at "manfacturing" as a whole, but break it down and place it into global and local economies.

[Workers-Control-Over-Prod]

How do you explain US industrial output, which is the largest in the world at $2.05 trillion in 2009, 18% of global output? (http://greyhill.com/blog/2011/10/5/manufacturing-output-by-country.html)

The US has, if i remember correctly, slightly below 30% of its labor force working in industry in 2006. The thing is, US enterprises of high constant-Capital intensive sectors saw unprecedented collapse of investment in 2008-2009, hence most of the jobs lost in teh US were manufacturing jobs. I don't doubt that many were replaced by robotics.

Certainly, the US industry still produces, but whenever the next crisis is (banks have not been regulated since 2008, austerity looks on the schedule in the US as Obama has said in interviews etc.) that will see US industry fall. It will be the beginning of a bad decline of Capitalist production.

http://www.revleft.com/vb/attachment.php?attachmentid=8745&d=1337913928

Harvard Prediction for global Industry. Predicted beginning of decline 2013.

http://www.revleft.com/vb/attachment.php?attachmentid=8836&d=1344491774

[hetz]

Holy shit. Why is there such a horrible decline in everything after circa 2015?

[#FF0000]

Industrial output per capita is gonna go back to pre-1950's level? what?

[Let's Get Free]

I would say the savings that the capitalists reap from cheap labor in the developing nations are not passed on in lower prices for consumers in the rich nations. Corporations don't outsource to poor countries so the consumers in rich nations can save money. They outsource in order to increase their margin of profit. For example, shoes made by Indonesian children working 12 hour days for 13 cents an hour, cost less than $3 to make, but still sell for $100 or more in the U.S.

[ind_com]

The matter of fact is, "first-world" workers are far more productive than their comrades in the third-world.

Then a capitalist or manager is also far more productive than a worker.

[#FF0000]

Then a capitalist or manager is also far more productive than a worker.

Capitalists or managers don't produce though -- they just own the things that do part of the work.

[ind_com]

Capitalists or managers don't produce though -- they just own the things that do part of the work.

I was just making a statement as reactionary as claiming that first world workers are more productive than third world workers.

[#FF0000]

I was just making a statement as reactionary as claiming that first world workers are more productive than third world workers.

Oh right.

Yeah. I mean, it's correct, though -- but only because of the tools, if anything.

[ind_com]

Oh right.

Yeah. I mean, it's correct, though -- but only because of the tools, if anything.

Or due to the parameters for measuring productivity being set by the capitalist system itself. Still it excludes call-center workers etc.

[Workers-Control-Over-Prod]

Industrial output per capita is gonna go back to pre-1950's level? what?

No, it will go back to nothingness if we let it. If there is no World Revolution within the next twenty years, and no Socialist revolutions in the west in the next ten years, then Humanity is fucked. We need to now create a mass movement for Socialism.

[Workers-Control-Over-Prod]

Holy shit. Why is there such a horrible decline in everything after circa 2015?

Because once the reproduction of material goods stops, life stops.

[hetz]

Because once the reproduction of material goods stops, life stops. But why does the reproduction stop?

[Workers-Control-Over-Prod]

But why does the reproduction stop?

Because investment into the production sector is increasingly unprofitable for Capital as workers are replaced by machines.

Here the 'Rate of Profit' (http://www.revleft.com/vb/rate-profiti-t175367/index.html?t=175367) and the overall tendency for it to fall (http://www.revleft.com/vb/falling-rate-profiti-t175368/index.html?t=175368).

[Workers-Control-Over-Prod]

Holy shit. Why is there such a horrible decline in everything after circa 2015?

In 2009 investments in the US production sector fell faster than wages, demand. This was unprecedented; normally economies are dragged down by a collapse in demand, but 2009 saw profitability for the first time be the bigger factor of collapse. A large "liquidity" program (throwing hundreds of billions at failing banks) was needed to get banks to lend a little to the real economy. Interest Rates are at historical lows, the corporate welfare system is stronger than ever, but yet banks are still not lending to stimulate economic growth. On the contrary, the bankers have been taking the cheap loans and used it to speculate on the real economy, eating up the surplus and risking mass defaults in 'bubbles'.

Shortly put, this crisis is one of unprecedented low profitability. The production sector in the advanced capitalist countries is stagnating and the next collapse will see capitalist production begin to diminish.