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14th May 2008, 15:14
From: Arghiri Emmanuel, "Unequal Exchange Revisited," IDS Discussion Paper no. 77, 1975 August, pp. 62-67
Excerpt:
3.2. The Impact of Wage Variations
How can workers in underdeveloped countries be affected by
increased wages in developed countries, since all wages are
supposed to be independent variables? And if they are not
affected, how can one say that by obtaining increases in their
money wages, workers in developed countries exploit or share
in the exploitation of workers in underdeveloped countries.
It is clear that money wages in underdeveloped countries - which,
according to the premises of the theory of unequal exchange,
vary independently and extraneously - are not affected by
variations in money wages in developed countries - at any rate
not immediately or directly.
But it seems equally clear that the real incomes of workers in
underdeveloped countries are significantly affected by these
increases, because of the resulting increases in the price of
products imported from developed countries, in so far as these
products are part of their consumption, either directly, in
the form of goods, or indirectly, as the raw materials of other
consumer goods produced locally.
In other words, variations in the money wages of one group
determine variations in the corresponding relative prices, and
it is these variations of money prices that determine in turn
the respective variations in the real wages of the other group.
But if one takes an imported product not directly or indirectly
consumed by workers in the underdeveloped country, can one say
that in this case at least the only losers in that country are
the local capitalists, first, because of the fall in the world
rate of profit and therefore of their own earnings, and secondly,
because of an eventual rise in the price of imported luxury goods?
In the short term, the answer is yes. But in the long term
certainly not. Whatever their opposition to their own capitalists,
it is not at all a matter of indifference to workers in poor
countries that increased wages in foreign countries whittle
away the profits of their own national capitalists, which
constitute in any case a potential subject of bargaining and a
factor influencing their own demands for future wage increases.
However determined these workers may be to expropriate their
own capitalists, they cannot favour an expropriation which would
only benefit the working classes of another country.
The Share of Surplus Value Contained in Certain Wages and
The International Solidarity of Workers
Since exploitation in capitalistic relations consists of an
appropriation of surplus value, a worker cannot benefit from
capitalistic exploitation, even involuntarily and objectively,
unless his wages contain surplus value extorted from other
workers.
So long as this point is not reached, so long as the increases
obtained by workers of industrialised countries only represent
a partial recuperation (however large) of the surplus value
extorted from them by their own employers, there is no share
in exploitation and no antagonism between the working classes
of different nations.
So those who believe in the continuing international solidarity
of the proletariat in the present day world argue as follows:
If for one reason or another American workers are less exploited
than Mexican workers, this is no reason for the latter to try
to diminish American wages, thus achieving equalisation from
below. They should, on the contrary, act hand in hand with
American workers, so that together they may expropriate the
exploiters, recover all the surplus values, however unequal
these may be, and improve their respective conditions, although
one group will probably automatically gain considerably more
improvement than the other.
This argument might be valid if the premises were well founded.
For it is true that in so far as a worker is a donor of surplus
value, however reduced this may be, there is no breach of
solidarity, whatever the rates of pay. But this is not the case.
Today, the vast majority of American workers, and even those
in other large OECD countries, are no longer donors but
receivers of surplus value; and naturally this surplus can only
come from the labour of workers of other nations, even though
it is not directly extorted by those at the end of the line.
This is what upsets the basic pattern of the class struggle on
the international level. It means that even if one were to
expropriate all the capitalists of the planet, the value produced
would not be enough to ensure equalisation from above; and a
fraternal socialistic world would have to expropriate not only
the capitalists but also - partially and to the amount of
foreign surplus value appropriated today - large sections of
the working classes of certain nations. This is enough to make
these sections, who know very well what they are doing, turn
their faces resolutely against any kind of fraternal socialistic
world.
None of this is merely theoretical. No Marxist would deny that
certain wages, far from providing surplus value, contain it.
The question of whether this only happens with the 200,000 dollar
annual salary of an Executive Director at General Motors, or
with a Sub-Director's 100,000 dollar salary, or already with
the wages of a qualified French worker at 4,000 francs a
month, is a mere matter of calculation, not of conceptual
analysis. In the same way, whether the "workers' aristocracy"
as defined by Lenin includes 5% or 10% or 90% of the working
class of this or that nation at this or that moment is not
a question of principle but a matter of history and of general
economic conditions. The calculation can be made as follows
(1969 figures, but the proportions today are about the same
or even more pronounced):
a) Even in the most developed countries, wages could not
be aligned at the highest (American) rate without the
global surplus value of the area as a whole becoming
negative:
In 1969, the total income of wage-earners in the United
States was $566,558 millions
less the wages of the armed forces $ 20,229 millions
Wage income of civilian labour force $546,329 millions
The total number of salaried civilians being 70,274,000 at
the same date, the average annual income per wage-earner
in the United States in 1969 was $7,775.
The number of civilian employees in the 22 OECD countries,
i.e. for the whole area less Turkey, was in the same year:
282,000,000
of which
employees 218,900,000
employers and the self-employed, i.e.
what the United Nations statistics
call "independent traders" 63,100,000
Admitting that "independent traders" only have a right to
the same average salary although they have higher average
qualifications (all the liberal professions, lawyers, doctors,
artists, etc., are included in this category), equalising
wage incomes within the developed group of countries would
mean paying 181 million active workers at $7,775, i.e.
$2,192 billion
But the total national income at
factor price in these same
countries was in 1969 only $1,487 billion
There would therefore be a
negative surplus value of $ 705 billion
Equalisation from above is therefore impossible, even inside
the richest countries in the world. (It is clear that this
negative surplus value would have been still higher if we had
not left Turkey out of our calculations. But Turkey is
obviously not a developed country).
b) If we include in this calculation the non-communist
underdeveloped countries, extrapolating certain missing
data, we shall have in the first place to add an additional
1,680 million people to the total population. The average
active population in these countries is 40.8%. Rounding it
off at 40%, we have an additional 672 million men and women
to pay at the American rate of 7,775 dollars, i.e. a wage
bill of 5,224 billion to add to the 2,192 of the developed
countries, i.e. a total of 7,416 billion dollars for the
whole of the non-communist world.
Now, the national income at factor price of the non-communist
underdeveloped countries was 248 billion dollars in 1966.
According to Paul Bairoch's estimates, it increased by
about 5% a year between 1966 and 1968. Leaving a margin and
calculating at the rate of 6% a year to 1969 (at compound
interest), we arrive at the figure of 275 billion dollars
for 1969. Added to the developed countries' 1,487, this
gives us a total income at factor prices for the whole
non-communist world of:
$1,782 billion
As the wage bill at North
American rates would be $7,416 billion
There would be a negative
surplus value of $5,634 billion
i.e. a sum eleven to twelve times higher than the total surplus
value at present produced in all 22 OECD countries and about
ten times higher than that of the whole non-communist world.
The figures are so telling that no statistical error can
have affected the results.
c) At a zero amount of surplus value (that is to say if,
after expropriating the capitalists and other receivers of
surplus value all over the world, one decided to distribute
the whole social product in wages and stop all accumulation
and all technical progress) each active worker of the
non-communist world would receive an average of
1,782 billion = 1,868 dollars per year. In other words,
954 billion
a quarter of the present North American wage, and a good deal
less than the wages of all advanced countries of the western
world, - i.e. roughly equivalent to wages in Greece or Portugal.
And even this result depends on the assumption of simple
reproduction alone.
And in Real Terms....
6% of the world's population already consumes over 40% of
the world's raw materials. Present world production in
physical terms could only feed, clothe, house, etc., about
600 million people on the American level.
Americans consume nearly 700 kilos of steel per head
per year. If the whole world started to consume as much,
all known reserves of iron ore would be completely exhausted
in 40 years, - provided the world's population ceased to
increase, otherwise depletion would come even sooner.
The same equalisation of world consumption from above,
still with a stable population, would exhaust the known
reserves of copper in 8 years, tin in 6 years, etc.
But where the deadlock is total is once again oil.
At the level of North American consumption, the world
needs some 14-15 billion tons a year. But known world
resources only amount to about 80 billion tons, which,
with a stable population and economy, would be enough
for 5 years.
If we add reserves yet to be discovered or those which
might be exploited with new technological inventions, we
could, according to OECD experts, count on twice that
amount, or about 160 billion tons. In other words, and
assuming the same stable situation, there would be enough
to last 11 years. Finally, taking into account the
marine subsoil of the whole planet, we arrive, according
to certain experts, at a total of 320 billion tons, i.e.
22 years' consumption at the American rate.
This document is hosted at the "Maoist Information Website (http://miws.ws/archive/economics/uerexcerpt.html)" and uses statistical data to show that a section of the working class in developed countries must derive at least part of their income from the exploitation of other workers. Are there any flaws in the reasoning behind this conclusion?
Recently a member on this board argued against the theory of the "labour aristocracy" on the grounds that a capitalist would never choose to employ a worker unless it was possible to accumulate surplus value - but the fact that shareholders appoint managers to make decisions on their behalf suggests that this is not a valid argument, because managers are net exploiters, but are employed because they are able to make effective decisions on how a firm should be organized, and so have use value for the shareholders.
If someone is engaged in the sale and distribution of a finished product (for example, someone who works at a cash register) are they capable of producing surplus value? Do they add any value to the product, given that they do not physically change the product in any way?
If the labour aristocracy does exist, how large is it, in which sectors is it most predominant, and how should we interact with workers who comprise this aristocracy?
Excerpt:
3.2. The Impact of Wage Variations
How can workers in underdeveloped countries be affected by
increased wages in developed countries, since all wages are
supposed to be independent variables? And if they are not
affected, how can one say that by obtaining increases in their
money wages, workers in developed countries exploit or share
in the exploitation of workers in underdeveloped countries.
It is clear that money wages in underdeveloped countries - which,
according to the premises of the theory of unequal exchange,
vary independently and extraneously - are not affected by
variations in money wages in developed countries - at any rate
not immediately or directly.
But it seems equally clear that the real incomes of workers in
underdeveloped countries are significantly affected by these
increases, because of the resulting increases in the price of
products imported from developed countries, in so far as these
products are part of their consumption, either directly, in
the form of goods, or indirectly, as the raw materials of other
consumer goods produced locally.
In other words, variations in the money wages of one group
determine variations in the corresponding relative prices, and
it is these variations of money prices that determine in turn
the respective variations in the real wages of the other group.
But if one takes an imported product not directly or indirectly
consumed by workers in the underdeveloped country, can one say
that in this case at least the only losers in that country are
the local capitalists, first, because of the fall in the world
rate of profit and therefore of their own earnings, and secondly,
because of an eventual rise in the price of imported luxury goods?
In the short term, the answer is yes. But in the long term
certainly not. Whatever their opposition to their own capitalists,
it is not at all a matter of indifference to workers in poor
countries that increased wages in foreign countries whittle
away the profits of their own national capitalists, which
constitute in any case a potential subject of bargaining and a
factor influencing their own demands for future wage increases.
However determined these workers may be to expropriate their
own capitalists, they cannot favour an expropriation which would
only benefit the working classes of another country.
The Share of Surplus Value Contained in Certain Wages and
The International Solidarity of Workers
Since exploitation in capitalistic relations consists of an
appropriation of surplus value, a worker cannot benefit from
capitalistic exploitation, even involuntarily and objectively,
unless his wages contain surplus value extorted from other
workers.
So long as this point is not reached, so long as the increases
obtained by workers of industrialised countries only represent
a partial recuperation (however large) of the surplus value
extorted from them by their own employers, there is no share
in exploitation and no antagonism between the working classes
of different nations.
So those who believe in the continuing international solidarity
of the proletariat in the present day world argue as follows:
If for one reason or another American workers are less exploited
than Mexican workers, this is no reason for the latter to try
to diminish American wages, thus achieving equalisation from
below. They should, on the contrary, act hand in hand with
American workers, so that together they may expropriate the
exploiters, recover all the surplus values, however unequal
these may be, and improve their respective conditions, although
one group will probably automatically gain considerably more
improvement than the other.
This argument might be valid if the premises were well founded.
For it is true that in so far as a worker is a donor of surplus
value, however reduced this may be, there is no breach of
solidarity, whatever the rates of pay. But this is not the case.
Today, the vast majority of American workers, and even those
in other large OECD countries, are no longer donors but
receivers of surplus value; and naturally this surplus can only
come from the labour of workers of other nations, even though
it is not directly extorted by those at the end of the line.
This is what upsets the basic pattern of the class struggle on
the international level. It means that even if one were to
expropriate all the capitalists of the planet, the value produced
would not be enough to ensure equalisation from above; and a
fraternal socialistic world would have to expropriate not only
the capitalists but also - partially and to the amount of
foreign surplus value appropriated today - large sections of
the working classes of certain nations. This is enough to make
these sections, who know very well what they are doing, turn
their faces resolutely against any kind of fraternal socialistic
world.
None of this is merely theoretical. No Marxist would deny that
certain wages, far from providing surplus value, contain it.
The question of whether this only happens with the 200,000 dollar
annual salary of an Executive Director at General Motors, or
with a Sub-Director's 100,000 dollar salary, or already with
the wages of a qualified French worker at 4,000 francs a
month, is a mere matter of calculation, not of conceptual
analysis. In the same way, whether the "workers' aristocracy"
as defined by Lenin includes 5% or 10% or 90% of the working
class of this or that nation at this or that moment is not
a question of principle but a matter of history and of general
economic conditions. The calculation can be made as follows
(1969 figures, but the proportions today are about the same
or even more pronounced):
a) Even in the most developed countries, wages could not
be aligned at the highest (American) rate without the
global surplus value of the area as a whole becoming
negative:
In 1969, the total income of wage-earners in the United
States was $566,558 millions
less the wages of the armed forces $ 20,229 millions
Wage income of civilian labour force $546,329 millions
The total number of salaried civilians being 70,274,000 at
the same date, the average annual income per wage-earner
in the United States in 1969 was $7,775.
The number of civilian employees in the 22 OECD countries,
i.e. for the whole area less Turkey, was in the same year:
282,000,000
of which
employees 218,900,000
employers and the self-employed, i.e.
what the United Nations statistics
call "independent traders" 63,100,000
Admitting that "independent traders" only have a right to
the same average salary although they have higher average
qualifications (all the liberal professions, lawyers, doctors,
artists, etc., are included in this category), equalising
wage incomes within the developed group of countries would
mean paying 181 million active workers at $7,775, i.e.
$2,192 billion
But the total national income at
factor price in these same
countries was in 1969 only $1,487 billion
There would therefore be a
negative surplus value of $ 705 billion
Equalisation from above is therefore impossible, even inside
the richest countries in the world. (It is clear that this
negative surplus value would have been still higher if we had
not left Turkey out of our calculations. But Turkey is
obviously not a developed country).
b) If we include in this calculation the non-communist
underdeveloped countries, extrapolating certain missing
data, we shall have in the first place to add an additional
1,680 million people to the total population. The average
active population in these countries is 40.8%. Rounding it
off at 40%, we have an additional 672 million men and women
to pay at the American rate of 7,775 dollars, i.e. a wage
bill of 5,224 billion to add to the 2,192 of the developed
countries, i.e. a total of 7,416 billion dollars for the
whole of the non-communist world.
Now, the national income at factor price of the non-communist
underdeveloped countries was 248 billion dollars in 1966.
According to Paul Bairoch's estimates, it increased by
about 5% a year between 1966 and 1968. Leaving a margin and
calculating at the rate of 6% a year to 1969 (at compound
interest), we arrive at the figure of 275 billion dollars
for 1969. Added to the developed countries' 1,487, this
gives us a total income at factor prices for the whole
non-communist world of:
$1,782 billion
As the wage bill at North
American rates would be $7,416 billion
There would be a negative
surplus value of $5,634 billion
i.e. a sum eleven to twelve times higher than the total surplus
value at present produced in all 22 OECD countries and about
ten times higher than that of the whole non-communist world.
The figures are so telling that no statistical error can
have affected the results.
c) At a zero amount of surplus value (that is to say if,
after expropriating the capitalists and other receivers of
surplus value all over the world, one decided to distribute
the whole social product in wages and stop all accumulation
and all technical progress) each active worker of the
non-communist world would receive an average of
1,782 billion = 1,868 dollars per year. In other words,
954 billion
a quarter of the present North American wage, and a good deal
less than the wages of all advanced countries of the western
world, - i.e. roughly equivalent to wages in Greece or Portugal.
And even this result depends on the assumption of simple
reproduction alone.
And in Real Terms....
6% of the world's population already consumes over 40% of
the world's raw materials. Present world production in
physical terms could only feed, clothe, house, etc., about
600 million people on the American level.
Americans consume nearly 700 kilos of steel per head
per year. If the whole world started to consume as much,
all known reserves of iron ore would be completely exhausted
in 40 years, - provided the world's population ceased to
increase, otherwise depletion would come even sooner.
The same equalisation of world consumption from above,
still with a stable population, would exhaust the known
reserves of copper in 8 years, tin in 6 years, etc.
But where the deadlock is total is once again oil.
At the level of North American consumption, the world
needs some 14-15 billion tons a year. But known world
resources only amount to about 80 billion tons, which,
with a stable population and economy, would be enough
for 5 years.
If we add reserves yet to be discovered or those which
might be exploited with new technological inventions, we
could, according to OECD experts, count on twice that
amount, or about 160 billion tons. In other words, and
assuming the same stable situation, there would be enough
to last 11 years. Finally, taking into account the
marine subsoil of the whole planet, we arrive, according
to certain experts, at a total of 320 billion tons, i.e.
22 years' consumption at the American rate.
This document is hosted at the "Maoist Information Website (http://miws.ws/archive/economics/uerexcerpt.html)" and uses statistical data to show that a section of the working class in developed countries must derive at least part of their income from the exploitation of other workers. Are there any flaws in the reasoning behind this conclusion?
Recently a member on this board argued against the theory of the "labour aristocracy" on the grounds that a capitalist would never choose to employ a worker unless it was possible to accumulate surplus value - but the fact that shareholders appoint managers to make decisions on their behalf suggests that this is not a valid argument, because managers are net exploiters, but are employed because they are able to make effective decisions on how a firm should be organized, and so have use value for the shareholders.
If someone is engaged in the sale and distribution of a finished product (for example, someone who works at a cash register) are they capable of producing surplus value? Do they add any value to the product, given that they do not physically change the product in any way?
If the labour aristocracy does exist, how large is it, in which sectors is it most predominant, and how should we interact with workers who comprise this aristocracy?