Global Political Economy and the Stratification of Labour Under Capitalism

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* Book: Zak Cope, Divided World, Divided Class: Global Political Economy and the Stratification of Labour Under Capitalism.

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"a book on the history of the labour aristocracy and its interrelationship with the rise of social-democracy as the political expression of the imperialist rent required for the maintenance of that class, with all the necessary economic and historical detail"


Interview

Zak Cope:

"Pervasive national, racial and cultural chauvinism in the core capitalist countries is not primarily attributable to 'false class consciousness', ideological indoctrination or ignorance as much left and liberal thinking assumes. Rather, these and related forms of bigotry are concentrated expressions of the major social strata of the core capitalist nations? shared economic interest in the exploitation and repression of dependent nations.

First, the depredations of colonialism and slavery provided not only the historical impetus for the rise of capitalism, and for the birth of the working class as such, but also a crucial source of food, employment opportunities and land for metropolitan labour. Second, the book highlights a historical shift whereby metropolitan labour first depends upon colonial labour for its existence, then, later, increasingly for its sustenance, and finally, now, upon neo-colonial labour for its entire lifestyle. Third, the book shows that the tasks facing workers in the developed countries are not those facing the workers of the underdeveloped countries. That fact may seem obvious, but the book goes further and shows that there is a deeply rooted contradiction between the aims and interests of the respective workforces, as demonstrated by metropolitan labour's active engagement in colonial and neo-colonial politics.

My initial motivations for writing the book were threefold. Firstly, I wanted to examine why workers in the rich countries seemed to have given up on socialism. As Donald Sassoon?s magisterial *One Hundred Years of Socialism* shows, the working class of the imperialist countries has for a century and more struggled to regulate and socialise capitalism, not replace it. If it is true that capitalism is an inherently exploitative and oppressive socioeconomic system how is it that workers in the rich countries have been so content to put up with it? Moreover, how is it that workers in the developed capitalist countries are so far from having, as Marx wrote, 'nothing to lose but their chains'? My second motivation, then, was to counter those ideologies on the left which seek to explain these phenomena (that is, metropolitan working class conservatism and * embourgeoisement*). So, for much of the left, it is its militancy, its productivity or a combination of both, that explains metropolitan labour's relative affluence. Paradoxically, however, the Western left has felt the need to explain working class conservatism by something other than this. Thus it has tried to excuse metropolitan labour's conservative, complacent and fully reactionary politics with reference to its having been brainwashed or divaricated from its revolutionary tasks by all-powerful ideological state apparatuses (attempts to excuse it with reference to job insecurity and ?precarity? notwithstanding). In short, for much of what passes for the left, it is ?false class consciousness? that has led the Western working class to prefer social democracy, social partnership, and blatant national chauvinism (all these predicated on a political alliance with the capitalist class and its representatives) to socialism. Finally, and most fundamentally, the book was motivated by a desire to reinvigorate an internationalist perspective which had been sorely neglected by a Marxism deeply marked by a pernicious Eurocentrism. In that sense, the book was motivated by wholehearted opposition to colonialism and imperialism, which provide the real underpinnings of *embourgeoisement*, reformism, and racism alike.

..the division between the rich and poor countries brought about by colonialism and imperialism is today the most fundamental group relation shaping peoples' worldviews." (http://anti-imperialism.com/2012/09/18/understanding-and-changing-an-interview-with-zak-cope-author-of-divided-world-divided-class/)


Review

Matthijs Krul:

"Cope’s book is a milestone in the current of Marxist political economy known as “Third Worldism”, that is to say, in developing an honest and realistic understanding based in Marxist value theory of what in the wider literature is called the divergence question: the long-standing division of the world between a small number of rich countries where even the working class has incomes in the top 10-20% of the world population, and a much larger number of poor countries lagging tremendously behind in all aspects of development. As is well known, this gap grows larger rather than smaller, and significantly from the Marxist point of view, it has led for the first time in world history to the majority of the world population actually being poor urban workers – in these countries. There is among socialists little disagreement as to the reality and significance of this fact. Nor of the corollary, the enormous significance of finding the right economic theory to explain and understand the mechanics of this divergence. Even the ‘well-meaning’ type of neoclassical economist would readily agree to this. As Robert Lucas once famously noted: Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s? If so, what, exactly? If not, what is it about the’ nature of India’ that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else. (1)

For this reason it is remarkable with how little seriousness and honesty most Marxist economic theorists have been willing to analyze this subject. There is indeed some excellent Marxist literature in development economics, as exemplified by the works of Ben Fine, Patrick Bond, and others. There is also a wider literature more rooted in Marxisant versions of dependency theory, such as Samir Amin and Arghiri Emmanuel. These already go much further in trying to analyze not just the perpetuation of differences in wealth by immediate policies of imperialism and expropriation, but to also understand the historical reproduction of class relations corresponding to the phenomenon of global divergence. For this reason, perhaps, those authors are already somewhat marginal within Marxist economic theory. Generally it has been very acceptable to the various Marxist parties and political currents to expound upon the evils of imperialism and war and the poverty of the Third World, but it has been much less acceptable to try and understand those “mechanics” underlying this divergence, never mind the political conclusions to be drawn from these facts themselves. This threatens the political viewpoint of most intellectual Marxists, rooted in the politics of students and workers in the First World countries; those conclusions may not be compatible with that viewpoint, and it is hard to ignore the feeling that at some level this is sensed by many Marxist economists. Do not explore too far in this direction, they seem to say: for there be dragons.

It is therefore to the immense credit of Zak Cope (this may or may not be pseudonym) that he has done so regardless of the political consequences or palatability of this research for the Marxist mainstream in the West. Indeed, once one starts thinking about the perpetuation of divergence, the ever-declining interest in revolution and support for a meaningful socialism among First World workers, the rise of social-democracy as the ‘consensus’ of the First World even up to the neoliberal era, the logic of settler states and the inherent ‘workers’ chauvinism’ associated with them and the reproduction of similar ideas among the working classes of Old Europe in response to immigration; in short, all the unpleasant realities of Marxism today and one then notices how all these are contrary to the expectations of mainstream Marxist political thinking but entirely compatible with the Third Worldist perspective, one has a very strong case to be explained indeed. Cope does just this with great vigour and relentless scientific seriousness. What J. Sakai had done for American settlerism in Settlers, this Cope does more extensively and more scientifically for the position of the working class of the rich countries as a whole.

Cope’s case runs, briefly summarized, as follows. The imperialism of the Western countries (broadly taken), enabled initially by the plunder and exploitation of the Americas and continued by the increases in wealth, power, and technology enabled by these, have over time created the potential for systematic transfers of surplus value from the ‘imperialized’ ‘periphery’ to the imperialist ‘center’. These transfers then not only allow a great blossoming of labor in the countries of the center that is not immediately productive of capital, because it is compensated for by the external value transfers, but more importantly it permits the ruling classes of the center to buy off the exploited working class of the center with the proceeds of this imperialist rent. This labor aristocracy, so formed, then no longer fulfils the one special role the working class has in Marx and Engels’ theory of historical materialism: namely, to be unable to emancipate itself without overthrowing the conditions it itself reproduces with its labour.

In and of itself, this is not a new observation: it is the classic expression of the theory of the labor aristocracy as found in Engels and Lenin, among others. However, the real crux is that Cope then extends this theory by demonstrating, as only the obscure “H.W. Edwards” had done before him, that the natural ideology of the labor aristocracy is social-democracy, and that social-democracy is the means by which the imperialist rent is shared with a wider and wider section of the working class of the center. This First World generalized labor aristocracy thereby becomes almost entirely non-exploited in net terms, according to Marx’s theory of value, because the value of the surplus value produced by them is (more than) compensated for in the process of distribution through world trade. That is to say, the imperialist and neo-imperialist unequal exchange between the First World – defined by Cope as roughly the OECD and the non-OECD, excl. Eastern Europe – and the Third constitutes such a vast transfer of surplus value in the sphere of distribution that it permits, through social-democracy, an almost total compensation for the domestic exploitation of the First World working class.

Cope goes into considerable historical and economic detail to support this position. Almost always such a suggestion is immediately dismissed by doctrinaire mainstream Marxists as being impossible, or done away with by a kneejerk reference to the idea that the most productive laborers must be the most exploited. But not only does the theory of labor aristocracy have a considerable Marxist pedigree, as mentioned above, but it is vital to note that Marx himself emphasized that ‘world trade’ itself functions as an exogenous factor of distribution in the model of capitalist exploitation presented in Capital. Already early on, Marx criticizes the inability of Proudhon to take the global division of labor, as produced by world trade, into account, much like many Marxists today: Mr Proudhon is so far from the truth that he neglects to do what even profane economists do. In discussing the division of labour, he feels no need to refer to the world market. Well! Must not the division of labour in the fourteenth and fifteenth centuries, when there were as yet no colonies, when America was still non-existent for Europe, and when Eastern Asia existed only through the mediation of Constantinople, have been utterly different from the division of labour in the seventeenth century, when colonies were already developed? And that is not all. Is the whole internal organisation of nations, are their international relations, anything but the expression of a given division of labour? And must they not change as the division of labour changes?

(2) In Capital, too, the modification in the domain of distribution (affecting market prices) is recognized, for example by the classic case of differences in productivity: But the law of value in its international application is yet more modified by the fact that on the world-market the more productive national labour reckons also as the more intense, so long as the more productive nation is not compelled by competition to lower the selling price of its commodities to the level of their value. (3)

Cope describes at length the formation of various labor aristocracies of settler kind, such as those of the American migrants in the United States (over and against the ‘racially inferior’ populations), of the English settlers in Ireland, and so forth. He describes how communism is subverted among these workers into a chauvinistic form, seeking the benefits of the capitalist system but shared with and among the labor aristocracy itself, not globally or with the lower ranks of the segmented labor market, and how social-democracy is the natural expression of this phenomenon, and fascism the crisis expression of it. (Which, incidentally, ought to do away with the Trotskyist canard about the supposedly evident ridiculousness of the theory of ‘social fascism’ proposed against social-democracy by the Comintern; in fact, this is precisely what social-democracy often is, seen from this global vantage point.) But, even all this accepted, Marx proposes above the usual mainstream Marxist explanation, that is, that differences in productivity and intensity of labour account for the very systematic and extremely widely shared wage differentials between the First World working class and the Third World working class. Merely pointing at imperialism and the remarkable ‘coincidence’ of this differential with the main imperialist countries or their primary trading partners is not enough, nor is historically describing the First World workers’ systematic rejection of revolutionary possibilities in favor of social-democracy, from which they benefit but nobody else. One must demonstrate the economic basis in unequal exchange and in direct exploitation of the Third World of this wage differential.

Cope then comes to the major economic contribution of his book, which is to do just that. Using the widely available statistics on working hours, male workers’ wages in OECD and non-OECD countries, the estimates of value transfer through undervaluation of Third World currencies compiled by Gernot Köhler, the estimates of value-added in production between the First World and the Third, and so forth, Cope makes a clear and convincing case suggesting strongly, although with some room for error, that it is not at all possible to account for the differentiation by productivity differentials only, and in fact that the overwhelming majority of the wage differential is composed of vast transfers of value from the developing countries to the developed ones, distributed there to the Western working class. The means of such transfer are unequal exchange in commodity trade (i.e. deteriorating terms of trade), unequal exchange in currency exchange rates, the substantial and systematic trade deficits of the First World (especially the US), FDI profit repatriation, and so forth.

The author has undertaken extensive statistical analysis of publicly available data from the ILO, World Bank, UN, OECD etc., and therefore cannot be accused of coming up with mere speculative estimates or handwaving it away, as is usually done by mainstream Marxists on this issue. Some may object that one cannot simply measure prices of production adjusted in the market and then conclude value transfers from these, but this misses the point: it is precisely the case that bourgeois measurements such as GDP, total factor productivity and so forth are merely based on existing prices, and therefore do not – as is the point of Marxist value theory – explain the causes and social origins of particular prices prevailing rather than others. Measures such as volume of trade within the First World versus between the First and the Third (the latter being much smaller at present prices) will not do as a common counterargument – they constitute a petitio principii, because it is precisely the low prices and low ‘value’ of the Third World production relative to the First World production that is reflected in such statistics, and that needs explaining in the first place.

It is tragic to note how little attention to these facts has been paid by most Marxist thinkers of the past decades, despite their enormous political and economic consequences. Perhaps this is because it is not very convenient to the outlook and strategy of many Marxist political organizations to acknowledge that the Western working class currently is not revolutionary, and in fact cannot be revolutionary without majorly violating the expectations of Marx and Engels’ theory of historical materialism. This would perhaps explain the systematic failure of many Marxist parties to analyze why they do not and cannot become ‘mass parties’ in the West, and why the ‘mass parties’ that did exist in the West did not make revolution at any point. (Although in being more serious about supporting the so-called ‘really existing socialisms’ elsewhere in the world, the Moscow line parties and ‘Eurocommunists’ were arguably still more useful than the current leading groups.) However, after the publication of this book the ball is in the court of the mainstream in Marxist political economy to do something with this, at the least to analyze it statistically, come up with new theories and new scientific research in this direction, and to not flinch from the conclusions these may offer. Socialism must be scientific or it is nothing, and there can be no partiality towards preconceived notions in science.

All this being said, I have some minor quibbles with the book, which should not detract from the great appreciation I have for its urgency and importance. At times, I fear – like many Third Worldist Marxists – Cope bends the stick somewhat too far. While he appears not to be wholly consistent in this, he suggests at some points in the historical section of the narrative that the labour aristocracy would have been relatively significant on the world stage for Britain and similar countries as early as the 18th century, due to the benefits of imperialism. This seems to me unlikely for two reasons: firstly, because social-democracy is the vehicle for the actual mechanics of ‘dividing the spoils’, and no such system was to be found anywhere but in the racial economy of settler states (including plantation Ireland). Secondly, because we know from refined economic history writing of the last two to three decades that the true ‘modern’ divergence between Europe and the rest of the world begins roughly between 1750-1830, depending on estimates, and reaches its complete form only with the conquest of India and its use as a cudgel to beat China with.

It seems therefore for a process of generalized labor aristocratization, so to speak, to occur, one would have to estimate this no earlier than the late 19th century – after the Berlin Congress, the complete colonization of the world by Europe, and the rise of social-democracy. It is important here for Cope and sympathizers not to bend the stick too far: imperialism as such is as old as the age of the first empires in Mesopotamia, and the mere fact of its presence even on a large scale does not thereby create the divergence nor generate a labor aristocracy. Ancient Rome had a labor aristocracy paid out of imperialist rent, among the plebeians of the capital city, but even this class was not numerous or politically significant enough to systematically alter the class relations underpinning ancient society, and it faded into nothingness.

It is also important to distinguish the particular political economy of settler societies from the larger set of labor aristocratic countries, and to sharpen these distinctions analytically. Cope does not fully do so. It is also for this reason that I disagree somewhat with his reading of Nazi Germany as a form of labor aristocratic imperialism. While Cope mentions the work of Adam Tooze in his footnotes, he does not seem to understand the significance of his work as counteracting Götz Aly’s claims of widespread German benefits from the very start of the Nazi empire. Of course, in Nazi Germany the programme of rearmament and re-industrialization virtually eliminated unemployment and inflation, and this made the fascist rule possible for most of the 1930s. But its basis, as described by Tooze as well as Sohn-Rethel, was not in a labor aristocracy, but in the expansionist sectors of industry, in the Junker class, and in the small and medium farmers, all classes greatly disadvantaged by the relative underdevelopment of Germany among the greater powers. A relative underdevelopment is not a basis for a classic story of labor aristocracy, but the contrary." (http://mccaine.org/2013/01/03/book-review-zak-cope-divided-world-divided-class-global-political-economy-and-the-stratification-of-labour-under-capitalism/)