Back to Production: Labor-Value Commodity Chains and the Imperialist World Economy

Despite the complexities and decentralization that characterize global supply chains in today’s world economy, imperialist relations of exchange continue to prevail, due to the fact that the differences between wages of North and South is greater than the difference of their productivities. This dissertation examines the global exploitation of labor that mostly occurs in the global South, as a form of such imperialist relations, particularly under the domination of multinational firms emanating primarily from the core of the system. I start by laying out the theoretical and empirical groundwork for the labor-value commodity chains framework that puts labor, along with the question of control and class, at the center of its formulation. By incorporating a calculation of cross-national variation in unit labor costs in manufacturing—a measurement that combines labor productivity with wage costs in a manner closely related to Marx’s theory of exploitation—the labor-value chains framework is a means to operationalize exploitation within the framework of the labor theory of value. Findings show that the global organization of labor-value chains is a means to extract surplus value through the exploitation of workers in the global South, where not only are wages low, but productivity is also high. I then show the concrete processes of how global North capital, personified in multinational corporations, captures value from the global South by applying systemic rationalization and flexible systems as mechanisms to exert control over their dependent suppliers in labor-value commodity chains. The burden of such mechanisms is borne by the workers —the direct producers of commodities—employed by these dependent suppliers. Case studies of two Indonesian companies that supply to multinationals are presented to illustrate these phenomena at the point of production. This observation further suggests that labor-value commodity chains are a form of unequal exchange and thus reveal the imperialistic characteristics of the world economy. This dissertation includes both previously published and coauthored materials.10000-01-0