This is an archive of the former website of the Maoist Internationalist Movement, which was run by the now defunct Maoist Internationalist Party - Amerika. The MIM now consists of many independent cells, many of which have their own indendendent organs both online and off. MIM(Prisons) serves these documents as a service to and reference for the anti-imperialist movement worldwide.
Maoist Internationalist Movement

5. The class structure, labor productivity and the calculation of the profit rate

"We must carry statistics to the people and make them popular so that the working people themselves may gradually learn to understand and see how long and in what way it is necessary to work, how much time and in what way one may rest, so that the comparison of the business results of the various communes may become a matter of general interest and study, and that the most outstanding communes may be rewarded immediately (by reducing the working day, raising remuneration, placing a larger amount of cultural or aesthetic facilities or values at their disposal, etc.)."(242)

Marx based his idea of "v" on a free market for labor-power case. To accurately measure "s," we have to know how much income goes to paying for workers' necessities of life. Thus the question arises, should we use the "s" and "v" referring to just imperialist country workers or should we include the "s" and "v" hired by those same imperialists in other countries.

Even if we try to restrict "s" and "v" to imperialist countries, we have to calculate the living standard of workers based on the food, clothes and minerals they obtain from Third World countries at cheapened rates. Thus "v" can go down in the imperialist countries because of superexploitation of the Third World that makes food, clothing, cars and gas cheaper than it would be otherwise. When the "v" goes down because of this effect, the new "s" should be attributed to the Third World, not the worker who had his means of life cheapened and provided for by Third World workers. That new "s" is not the result of the speed-up of First World workers.

It also follows that "s" can be inflated if we naively accept the GNP of imperialist countries as produced by imperialist country workers and then subtract "v" from the GNP to arrive at "s." Ultimately, because of this problem, MIM no longer refers to a rising inorganic composition of capital restricted to the imperialist countries. If we were ignorant of super-exploitation, we should have predicted the collapse of imperialist capitalism long ago, strictly based on the rising inorganic composition of capital. Instead, we have to follow the transfers of value very carefully. 1) In the productive sector, the first step is to pay oppressed nation workers 10 times less per unit of output. 2) Next is to administratively transfer that value to the imperialist countries through transfer prices, outright smuggling or price-fixing by imperialist-puppet regimes. Once that value arrives in the imperialist countries, then retail margin, insurance, guarding, legal--all the various unproductive sector mark-ups occur to appropriate the value. 3) The final step is that the bourgeois classes and their own purchasing-power reaches such a level that they pull along the productive sector workers of the oppressor nation with them. In a vicious cycle of loss of value to the imperialist countries, (which leads to those imperialist countries being richer and having better markets leading to more exports), imperialist countries are considered the "best market." Value reaches the oppressor nation productive sector workers that way and one other way. By using Third World agricultural, mining and manufactured goods as inputs in industrial production established with their phony transfer, monopsony or government/death-squad-set prices, oppressor nation workers can appear to be the source of value in a product that actually originated in the Third World.

Even when the imperialist invests in the Third World "instead" of in the imperialist countries it is still possible for the imperialist country worker to appear to have increased labor productivity when in fact it was merely an increase in the extensiveness of superexploitation in the Third World. The reason this happens is simple--political realities including borders with military enforcement. If there were a true free market, we would see a flow of capital to the Third World and a corresponding rise in Third World wages. That does not happen so clearly, because the imperialists close their own borders to immigration and thus eliminate a free market in labor-power while they also back any regime of lackeys with military training and weapons so that puppets keep down the wage-rate--often in the name of attracting further investment. As long as puppet regimes like that of Marcos in the Philippines, Park in Korea or Somoza in Nicaragua were and are in place, capital could and does flow to a Third World country with no rise in wages. The "Brazilian miracle" is a perfect case in point where export trade did increase as well as internal luxury consumption, but the income of the bottom three-quarters in Brazil actually fell in that boom. Meanwhile, if the capitalists don't have enough operations in the imperialist countries themselves to create phony jobs, the workers go on pensions or welfare and still live better than superexploited workers of the Third World. In European social-democracy, workers who would be receiving low-wages relative to imperialist standards receive social benefits instead. Since the real game is superexploitation of the Third World, the Amerikan capitalists do not care about that difference and they offer integration with European imperialists. Even without working at all, the imperialist country workers can see their living standard increase, thanks to super-profits.

Hence, political realities prevent the Third World proletariat from getting its due. All it gets is death-squad government. Additionally the imperialist country labor aristocracy gets the false impression that its hard work results in a gradual increase in its living standard, maybe 2 or 3 percent a year.

If we leave aside the issue of whether capital per worker is the same in the imperialist countries and the Third World and whether that capital--unpaid labor--originated in the Third World or the imperialist countries, it is still evident even to bourgeois economists now that the alleged productivity gap is small compared with the wage gap. According to William Greider, Mexican auto workers are 50 percent to 70 percent as efficient as U.$. workers (leaving aside capital per worker). Yet, the wages are not 50 to 70 percent as much. The wages are only 12 percent to 16 percent as much. Thus the Mexican auto workers receive only one quarter or one fifth as much per unit of output, if we leave aside issues such as monetization and capital per worker and just accept the bourgeois economists at face-value.

In Bangladesh, the gap is even larger. Bangladesh workers are better than 50 percent as efficient as U.$. shirt-workers, but they receive 3 percent of the pay. That means U.$. workers get paid 17 times more per unit output in shirts.

Again if we leave aside capital per worker and look at what it takes to produce a ton of steel, the Brazilian worker is 59 percent as efficient as a U.$. worker, but s/he only receives 10 percent of the pay. Thus, U.$. workers get paid 6 times more per unit output in steel.(243)

To reinforce the point we made earlier about commodity fetishism and the problem of monetization, this means that if we had two countries, and one country had Brazilian steel workers that produced 100 tons of steel and the other country had U.$. workers that produced 100 tons of steel, the GNP of the first country would be one-sixth that of the second country even though both countries produced 100 tons of steel. To be precise using Greider's productivity and wage figures, the Brazilian steel-worker country would have a GNP of $742.40 and the U.$. steel-worker country would have a GNP of $4420. (But as international cost-of-living and inflation indices show, this does not result in much lower prices in one country and much higher prices in the other country.) What happens is the rich country buys the 100 tons of steel from the poor country with the help of a lackey regime. The apologists of exploitation known as economists have to write libraries full of material overlooking this elementary fact, but we scientists have no intention of going along with their nonsense. We use a monetization parameter of 10 that assumes that purchases occur as they do in the First World, with multiple buyers, and not with death-squads setting wages. We derive this parameter not from trade figures but from looking at the above figures on comparative wages and productivities.

Next MIM would like to develop at greater length one of the consequences of ignoring the existence of the labor aristocracy in the imperialist countries. Trotsky accused Stalin of overestimating the possibility for stabilization in the imperialist countries as MIM explained in MT10. Later, Stalin accused Bukharin, the German comrades and the U.$. comrades of the same thing. The revisionists see the labor aristocracy thesis as both an "ultraleft" and "right opportunist" thesis. To the extent that the labor aristocracy thesis means that we believe a smaller portion of the population can get the job of revolution done (leaving out the question of outside intervention), the thesis is seen as "ultraleft." On the other hand, to the extent that claims of a broad labor aristocracy mean political stability for imperialism, the thesis is seen as "right opportunist" for underestimating the possibility of crisis.

In actuality, the labor aristocracy thesis forms one dialectical and interconnected whole. In the first place, we at MIM believe that the Third World proletariat is the main force of revolution, even in the case of the United $tates and other imperialist countries. It is not that we see only a small force necessary for revolution, the way some ultraleftists talk.

The key is that the expansion of the labor aristocracy is geographically limited in its ability to bring stability to imperialism and furthermore, the more the labor aristocracy expands, the more the imperialists are slitting their own throats. The labor aristocracy as it exists in the imperialist countries produces no net surplus-value, and most of it produces no surplus-value at all.

Hence, a key Leninist proposition is that the expansion of the labor aristocracy must reach a limit set by the surplus-value that can be extracted from genuinely exploited and super-exploited workers in the global productive sector. For example, commercial workers cannot keep expanding their employment forever, because if everyone works in sales, there is no one to produce cheap products enticing to the market. How far along we are in the process of exhausting the possibilities for unproductive sector growth is indicated crudely in one statistic. An expansion of manufacturing employment by 100 results in the creation of 422 other jobs, because those 100 newly hired people spend money and generate products that end up resulting in the hiring of 422 more people. Expanding personal and business services by 100 jobs increases other employment by 147 and 100 new retail jobs only result in 94 more jobs.(244) While predicting that "Hispanic" employment alone would be 10 percent of all employment in the year 2000, the U.S. Government also said that the occupation with the single largest growth in total numbers for all workers would be sales. The prediction was an increase of 4.5 million sales workers in the last 12 years of the century. From MIM's perspective, such is only possible, because the workers outside the United $tates are increasing their contributions of surplus-value into the U.$. capitalist system.

The top occupations in terms of percentage growth are health services with the top four categories, followed by banking and travel agents, followed by three categories of computers and engineering, two categories of government including jailers and one category for receptionists. Of these, only the engineers are likely to be productive sector workers. The rest are personal consumption services, marketing, administration or security.(245)

It turns out that two radical economists—Anwar M. Shaikh and E. Ahment Tonak—now understand a major aspect of the dialectical relationship between stability and crisis. These two economists make no attempt to understand the national question in relation to surplus-value, because like bourgeois economists taken up with commodity fetishism, they believe it is relatively unimportant to the United $tates,(246) but they grasp the difference between productive and unproductive labor. They have shown that the expansion of the proportion of unproductive laborers in the United $tates coincides with a decline in the rate of profit.

Failure to make the distinction between productive and unproductive labor weakens or eliminates Marx's theory of crisis. If all workers are treated as productive sector workers, they all produce surplus-value and the basis for imperialism to continue without crisis is radically expanded.

According to Shaikh and Tonak, there is one exception in which the unproductive sector can produce profits without underlying help of surplus-value from the productive sector. Capitalist merchants who trade with pre-capitalist societies enjoy what they call "profits of alienation." These profits are not connected with the idea of super-profits. These profits occur only because the pre-capitalist society is not part of the same market and mode of production as the capitalist merchant, and hence production in the pre-capitalist society is not governed by the law of value as explained by Marx for capitalism. In such a situation, a trader can barter goods with the pre-capitalist society and return to the capitalist country to sell exotic goods obtained for more money than it cost to buy the goods given to the pre-capitalist society.(247) Of course, such profits of alienation raise the question of how long will such a situation last. Once the other capitalist merchants find out about this pre-capitalist society, they might go to it and offer better terms than the last merchant. It is not hard to imagine a capitalist trade sector developing in a pre-capitalist society when there was none before. That trade sector would be in the set of goods that are produced by the pre-capitalist society that have potential for creating profits of alienation. Such profits should be seen as originating in the surplus-value produced by the export sector of the foreign country. Then the question arises as to whether it is meaningful to speak of pre-capitalist modes of production anymore or whether there is one global capitalist system. From MIM's point of view, while trade may influence a society decisively, as long as there is a landlord or other such pre-capitalist class in power, the mode of production will not become fully capitalist and so we should continue to speak of various modes of production, and not one world system. The export sector may develop from one fitting "profits of alienation" into one governed by the law of value.

Returning to the topic at hand, MIM would say that "profits of alienation" are proof of MIM's position. To whatever extent profits can be attributed to international transfers from Third World countries with semi-feudalism, MIM has proved its point. The Third World is also contributing surplus-value through the more conventional means of capitalist exploitation and super-exploitation, as in China today.

MIM not only distinguishes between productive and unproductive labor, but also it distinguishes between exploited and non-exploited productive sector workers. According to Shaikh and Tonak, we should say that workers that do not produce surplus-value can nonetheless be exploited, and this is something MIM has seen in Marx's writings on occasion; hence we will give Shaikh and Tonak the benefit of the doubt on that question. The exploitation rate in the unproductive sector case is the profits realized divided by the wages paid. The thesis makes sense when one considers that a worker facing the market for labor-power would surrender unpaid labor to the capitalist whether in a productive sector or unproductive sector job, in the classic case of early and middle-stage capitalism. It has been shown that the productive and unproductive sectors influence each other in terms of wages which are highly correlated and close together.(248) When the majority is unproductive sector and there is no pre-capitalist mode of production to offer up a huge reserve army of unemployed and when the borders are closed, however, MIM warns that it is necessary to make an additional calculation in connection to the superprofits that enter wages.

In imperialist countries, production sector workers are beneficiaries of a transfer of value from the oppressed countries and produce no net surplus-value once their wages are considered. For this reason, we recognize the possibility for a case of workers that Shaikh and Tonak speak of, but this case of exploited unproductive labor does not actually occur in the empirical world of the oppressor nations of imperialism. Using the definitions of Shaikh and Tonak, there is no surplus labor in the day of imperialist country workers, who are petty-bourgeoisie receiving the wage-form of pay. Hence, they are not exploited. All of this calculation is only possible by a careful examination of the national question and international flows of surplus-value.

Before we go further into these questions, we would like to point out that the failure to distinguish a labor aristocracy from the proletariat and the productive and unproductive sector workers results in a further disarming against the onslaught of imperialist propaganda. According to the latest bourgeois propaganda, "industrial society is more affluent than an agricultural society, and a knowledge society is the most affluent of all."(249) Since the oppressor nation workers have increasingly left agriculture and industry, it was inevitable that bourgeois propagandists in the oppressor nations would attribute wealth not to parasitism but to being "smarter." Such sugar-coated bullets go over well with the oppressor nation workers who need some way to understand the increasing role of the Third World in manufacturing, which white-collar propagandist Richard Crawford admits is going to be 30 percent of all manufacturing by 2000.(250) We will add that with the Third World doing 30 percent of all manufacturing, much more than 30 percent of all surplus-value will come from the Third World, probably more than 75 percent. In addition to the fact that the rate of exploitation is higher, the sectors of industry that the Third World is dominating are the labor-intensive ones like textiles and apparel.(251)

To back the message of competitiveness materially-speaking, the imperialists conduct cross-country investment. Such investment contributes to the illusion that imperialist country labor productivity is rising, when in fact, the only thing rising is the possibility of sharing more superprofits extracted from the Third World worker in the guise of "productivity gains" of imperialist country workers. The possibility for super-profit sharing increases as the imperialists allot a larger quantity of capital per imperialist labor aristocracy worker. According to Socialist Action in Montreal and other supposed Maoist organizations and most organizations calling themselves "Marxist-Leninist," MIM is wrong. Oppressor nation wages are higher they say, because oppressor nation workers work harder and are better educated.(252) A corollary of this argument is that the Third World is relatively unimportant to the First World, which could do without it.(253) In its most aggressive form, the "post-industrial" or "information age" thesis says that not even low wages can save a country and make it competitive internationally. According to some economists cited by the proponents of the "Information Age" thesis, there is no correlation between low wages and competitiveness anymore, because of the role of the white-collar worker in production.(254) Meanwhile, with MIM's focus of attack on the low wages in the Third World, Socialist Action finds us guilty of an "unequal exchange" argument.

In this, Socialist Action echoes the oppressor nation bourgeoisie on labor productivity. Indeed, this belief is fully congruent with the current mania about the "information society" and "human capital"— how supposedly global competition in high-technology makes industrialism irrelevant and breathes endless, crisis-free life into capitalism. The contrast could not be more clear—those who believe in the relative permanence of capitalism revived by high-technology and those who believe the high-technology white-collar workers are parasites bringing medium-run political stability at the cost of producing no surplus-value and a hastening of profit rate crises.

One of the typical bourgeois pulp so-called non-fiction books is titled, "In the Era of Human Capital: The Emergency of Talent, Intelligence, and Knowledge as the Worldwide Economic Force and What It Means to Managers and Investors." The capitalist class is busy hiding behind the chauvinism of the oppressor nation petty-bourgeoisie. The capitalist class does not mind to the extent that it considers itself "talented" and "intelligent." The white-collar class has an increasing array of ideological weapons at its disposal in the mass media.

Placing itself right at the center of the forward march of history, the white-collar class or knowledge class has numerous spokespeople, which can be found claiming: "Knowledge is substitutable. It can and does replace land, labor, and capital."(255) In fact, it is difficult to get at or nationalize "human capital," which is supposedly responsible for two-thirds of the inequalities in wages and salaries within the United $tates.(256)

In the first place, we should de-mystify education's economic role in production. Often it is merely a justification for letting some people rule others. In cases where education did result in actual improvement of brain-power needed for production, we can still assess who paid for that education. The more education a person receives, the more production society foregoes while the student is studying. A student may work-study, but then that student is still just working or studying that much less. What it takes to get a college education is a source of capital. A society with no savings of food, clothing and shelter, a society with no surplus, cannot have people go to college. Someone has to shelter, feed and clothe the students. In China, since Liberation, the government has believed it could not afford to take care of more than 1 percent of the people to give them college education. On the other hand, the revisionist regime has proved willing to transfer tens of millions of worker-years of value to the imperialist countries. So it is fitting to ask, when a country is rich enough to send its children to college, where did the capital come from? Why are the oppressor nation people rich enough to be able to do so? Imperialist countries are rich enough to send a large fraction to college, because they have pillaged the Third World and First Nations. The Third World provides the cheap food, raw materials and manufactured goods that allow capital accumulation in the imperialist countries which is then applied to college education. With that college education, some people patent things and come up with "intellectual property," which the Third World has to pay for to use. Unfortunately, sometimes education under capitalism serves no real purpose except to justify white-collar consumption.

In this regard we point to a very interesting analysis by Robert Z. Lawrence. According to Lawrence, the the fall of prices in the goods of industrial sectors coincided with their faster growths of the unproductive portion of the labor force. The official thinking of this particular OECD and Brooking Institute bourgeois propagandist is that this proves that better-educated workers are more productive and efficient thanks to their creative use of technology, which is the all-powerful dynamo in the economy.

Lawrence interprets the fall of prices as proof of competitiveness in this study of U.$. industry between 1960 and 1990.(257) However, looking at the same facts, MIM concluded that prices fell because with a higher portion of unproductive sector workers, there was a fall in the transfer of value to commodities by imperialist country workers and an increase from oppressed nation workers. The critics of MIM would have to side with Lawrence—who holds there is no danger to capitalism. According to the Lawrence-type of view, the imperialist country workers just have to see to it that they obtain college education, as Clinton also says, even if that means obtaining political concessions from the government or ruling class to do so.

Price competition in connection to technology only sustains the life of the capitalist system if it results in the increased production of surplus-labor by the increased hiring of productive sector workers—if not in the United $tates, then in the Third World. Alternatively, if price competition lowers the price of the necessities of life, then wages may decline and surplus-labor may increase. As we have pointed out in section "C 2" above, the evidence is that the imperialist countries are placing no emphasis on smashing pre-capitalist modes of production and drawing more workers into productive labor, but that did not stop the communist-led movements from achieving that effect. The restoration of capitalism in China does mean a huge new source of surplus-value added into the imperialist system. According to Marxism, even if it occurs only after full employment of the whole world,(258) there is a limit to surplus-value extraction under capitalism thanks to intra-capitalist competition and class struggle. For this same reason, the hiring of labor aristocrats cannot go on forever, contrary to the revisionists and imperialists.

Sidebar "Star Trek Capitalism" and taking chances with life

Marx taught us to pay attention to the following ratio: s/(c+v). Here we would like to exaggerate and push the limits of this ratio to understand dynamics of capitalism and the propaganda claims of the "information age." Suppose we accept the capitalists and imperialist-economists in our own movement at face-value. Suppose that technology allows for continuous advance and that capitalists are able to create the equivalent of the "replicators" in Star Trek, in which a person goes to the machine, asks for any food or commodity item and the machine produces it immediately. The only resource necessary is energy which of course involves a little mining, but nothing compared with today. Star Trek is premised on what Marx called "superabundance," and even in Star Trek II with Captain Picard replacing Kirk, we receive monologues on how civilization long ago left behind conflicts over food and property. Indeed, the Ferengi are viewed as a crude species of another era in their pursuit of profit. Nonetheless, imagine that somehow the system of capitalism continued after the invention of replicators and virtually free energy.

In the situation where there is a replicator that creates all food and commodities like guitars that one could ask for, "v" declines to virtually zero. The capitalists and their propagandists would say there is an increase in productivity. With "v" at zero or virtually zero, the capitalists can handle workers' wants at zero cost or wages. There is no higher "productivity" possible. Meanwhile, "s" becomes the entirety of the working day. Whatever the worker produces goes to surplus, surplus-value in the situation of capitalism with Star Trek replicators. The limit on "s" is simply the number of people and the hours in the day. It is important to note, however, that "s" does have an upper limit and can only grow with the growth in the population or the speed at which it works.(259)

Meanwhile, "c" is the problem for the capitalist. "C" is fixed capital and there is no limit to how much it can accumulate within the bounds of this infinite universe. Hence, s/(c + v) tends to approach zero, because s is finite, v is zero and c continues to grow. This indicates a profit rate crisis. The only possible way out is for annual accumulation to be less than or equal to the population growth rate (of laborers). All available evidence for the advanced industrial countries since 1820 shows that the accumulation of fixed nonresidential capital stock or "c" has always progressed at a pace faster than the growth of population. As examples, the per capita growth rate of "c" in France, Germany, Japan, the Netherlands, the United Kingdom and the United $tates was 3.9%, 3.3%, 6.0%, 2.2%, 3.0% and 2.2% respectively.(260) Without considering the possibility of superexploiting workers abroad, Angus Maddison has concluded that the United $tates risks its profit rate by future accumulation. That means capital can only grow 2 or 3 percent a year or less if that is the population growth rate or if there is no population growth,(261) then capitalism faces the worst crisis imaginable for it in a total or full-employment situation: "c" is in effect given away or lost. (In practice, the central banks will use taxpayer money to subsidize private banks before they allow this to occur. In 1949, 1971, 1975, 1976 and 1977(262) in the United $tates and in recent years in Japan, the central banks gave out loans at negative interest rates to get the economy going again. Other radical steps historically have meant war.)

"C" keeps growing: Total stock of Gross Non-Residential Fixed Capital 1990 constant dollars (which means adjusted for inflation), trillions of dollars(263)

YEAR U$A Japan "UK"
1913 1.70 0.06 0.19
1950 3.55 0.28 0.28
1973 7.44 2.09 0.89
1992 13.38 7.30 1.65

As environmentalists, we need to understand Marx's insight here, because what it means is that one way capitalism can restore the profit rate is by destroying individual capitalists' "c," which concretely means driving them out of business and thereby reducing the world stock of "c." This of course is what happens, and no where in the world more clearly than in Japan which has the most advanced technology in many areas of manufacturing. To stay in business some capitalists must cause other capitalists to take a loss. That means those capitalists must suddenly find themselves owning a worthless plant, worthless because there is no way to produce commodities at a competitive price using that plant. From an environmental perspective, this means wasted efforts are intrinsic to capitalism. Industrial plants and other fixed capital will be built with all the environmental costs that entails, and then they will be rendered useless, sometimes the day they are finished being built.

When a number of capitalists are more or less in the same boat, they have another means of knocking the "c" out of competitors' hands and driving up the profit rate. They can go to war and destroy the "c" of other countries' capitalists. This will also have the effect of restoring the profit rate.

The other alternative is for capitalists to give away their "c" if that is possible, which in the case of industrial plants, often makes no sense. Of course, when we have reached that stage where capitalists have to give their things away, even they realize that the logic of capitalism has destroyed capitalism itself.

Whether through war or driving people out of business, capitalism will necessarily produce environmental degradation until that day when fixed capital can be produced with no negative environmental consequences, which seems unlikely in the foreseeable future, especially under capitalism. Knowing what pollution is and what causes it requires science, and that is not the same thing as "consumer is King."

It is important to keep in mind the exaggerated case above in looking at s/(c + v), as an example of a full-employment crisis. Should capitalism survive to its very last moment of logically possible life, the whole planet will have full employment, contrary to the usual scenario of crisis. In addition, if the humyn species continues to be befuddled by bourgeois ideology, there will be only one capitalist left who owns all the means of production. At such a time, the system is necessarily state capitalism. We find it unlikely that the population would find it necessary to have a capitalist anymore, once the capitalist class gets whittled down to such a degree. Even in such a situation, the workers may realize they do not need the capitalists anymore, but they might also decide to let some of their lot divide the loot of the one capitalist and start the process of class formation all over again in a war involving the destruction of "c." If enough "c" is destroyed, it will again be possible to start various businesses running a profit. Unfortunately, strictly logically-speaking, this nightmare system of destruction can go on forever, if the proletariat never makes the leap to communist consciousness.

On the other hand, as dialectics would have it, the odds of the species having the time to go on forever in this system that periodically destroys "c" while weapons of mass destruction are conceivable, are not good. If the disharmonies of capitalism permit a one percent chance annually of mass destruction through war or environmental disaster, we can say that the species will be doomed in rather short order. After 50 years of playing one bullet in one hundred chambers Russian Roulette, the probability of survival is only (.99) to the 50th power or .605, a little over 60 percent. There is only a 36.6 percent chance of surviving such Russian Roulette after 100 years. After 200 years, there is only a 13.4 percent chance of surviving 1 bullet out of 100 chambers Russian Roulette. Of course, if the actual probability of total nuclear/environmental disaster in a year is five percent annually, then after 50 years, there is only a 7.7 percent chance of survival. For these reasons, we must be absolutely sure of eliminating the causes of militarism and environmental degradation. We must study these questions with utmost scientific urgency. MIM believes that the most harmonious humyn societies yet seen are those of the "primitive communists" also known as indigenous peoples or First Nations. These societies have in many cases sustained life without war or murder.

If we look at the classes in imperialist society, we see that in everyday life the lumpenproletariat is willing to chance being arrested, usually over petty theft or smoking pot. Yet, even worse is the petty-bourgeoisie and bourgeoisie that will spend a lifetime's savings and spend hours commuting each week to move to the suburbs to decrease the likelihood of crime. One in ten thousand die from street crime each year. Meanwhile, ask the same classes of people to put in an equal effort to building a harmonious society and they reply it is "impossible" or they "don't have time."

In all of the above, we have assumed that with the advent of replicators, all workers somehow stayed in "productive sector" employment. Yet the question arises, why would they be productive sector workers? Why would not everyone become an artist or space explorer or pursue some other dream if the daily needs are taken care of by replicators and virtually free energy? Would there be a class of people with military force able to force people to work under those conditions? If not, we have asked the question of classless society, and we must remember that in classless society, there is also no proletariat. The proletariat will have to dominate until that time, if we are to survive as a species, but when classless society arises, it will be a qualitatively new thing, neither proletarian nor parasitic.

While the imperialists can ratchet up the class struggle with the proletariat, they have no chance of eliminating all the consequences of intra-capitalist competition, even as the finance capitalists have eliminated borders amongst themselves. The ratio of fixed capital to productive sector employment continues to rise. Once all the workers of the Third World are brought on-line, capitalism will have no wriggle room, because "s" and "v" won't be able to increase anymore without speed-up.

In fact, in bourgeois economics, there is a crude measure called the capital to output ratio. The bourgeois measure of "output" counts all kinds of garbage like soldier, private security guard and financial trader services. Nonetheless, even this statistic much revered by bourgeois economists shows that the rise of the fraction of workers in nonproductive employment or white-collar work has coincided with a rise of the capital/output ratio in the imperialist countries. It is about the closest thing to a declining rate of profit that the bourgeois economists will consider systematically.

Although Lawrence is one of those rare bourgeois social scientists who can contribute to scientific discussion, even he tends to assume that capitalists are always right, and at a system-wide level. "The fact that manufacturers are using more skilled labor despite its relatively higher price strongly supports the hypothesis that technological change in manufacturing played a role in the wage change."(264) In contrast, MIM sees the manufacturers as political hostages of their own parasitic system. All the miraculous claims for white-collar employment and capitalism's vitality are belied by the capital-output ratio data of these same bourgeois social scientists.

"Ratio of Gross Nonresidential Fixed Capital Stock to GDP" "(at 1985 U.S. relative prices)"(265)

Country 1950 1973 1989
France 1.64 1.73 2.38
Germany 2.24 2.44 3.01
Japan 1.85 1.82 2.87
Netherlands 2.44 2.36 2.70
United Kingdom 1.06 1.69 2.01
United States 2.26 2.06 2.24

If it were true that technological skills could be the key to the ongoing victory of capitalism, then we should expect to see that as more white-collar workers are hired, the capital/output ratio should decline, because white-collar workers or skilled workers will make better or "smarter" use of capital than the old-fashioned productive sector workers of a previous industrial era. In point of fact, the capital-output ratio in the imperialist countries reveals what MIM has been saying: there is a tremendous growth of parasitic strata accompanied by pressure on the profit rate. The only thing keeping capitalism afloat is the injection of surplus-value into the system, especially from East Asia. At this time, while still less than 5 percent, thanks to improper monetization, the share of the Third World's manufactured goods in First World consumption is rising.(266) The question is how much longer will the capitalist system hang on thanks to the momentum it received from the communist movement's attack on pre-capitalist formations. By renting out Chinese workers to capitalism, Hua Guofeng and Deng Xiaoping may have bought the capitalist system 100 years of breathing room.

The idea that science will save capitalism was already around in the 1960s. Reviewing the data of the first half of the century, Third World economist Samir Amin showed that the capital-output ratio declined in the "United Kingdom" and the United $tates.(267) He attributed the decline to science, and added that by way of contrast "in the underdeveloped countries, where industrial accumulation of the classical type is still going on, the capital-output ratio tends to get heavier, whereas in the advanced countries it is getting lighter."(268) The fact that since that time the trend Amin saw has reversed shows that there is a limit to what the information society can achieve with "human capital."

Once we recall Marx's distinction between productive and unproductive labor, we are forced to make some choices. In the simplest breakdown of the employment of the OECD countries, 25 percent of workers were in agriculture and 36 percent in industry in 1950, but by 1987, 64 percent were in services, with 6 percent in agriculture and 30 percent in industry.(269) In 1994, in the United $tates 34.9 percent of workers in manufacturing were not production workers,(270) which means they were white-collar. Since the same is likely true in the rest of the OECD at least to some degree, the ratio of productive sector workers to unproductive workers is over-stated in the table below.

The trend to parasitic occupations in imperialism continues up to present: Employment by sector in 1980 and 1993(271)

Agriculture Industry Services
Country 1980 '93 1980 '93 1980 '93
U$A 4% 3% 29% 23% 67% 74%
Australia 6% 5% 29% 22% 65% 72%
Canada 5% 4% 27% 21% 67% 75%
France 9% 5% 35% 27% 56% 68%
Germany 5% 3% 43% 36% 52% 61%
Italy 14% 8% 38% 33% 48% 59%
Japan 10% 6% 35% 34% 55% 60%
Netherlands 5% 4% 30% 24% 65% 72%
Sweden 6% 4% 32% 25% 63% 72%
United Kingdom 3% 2% 36% 26% 61% 72%
*1980 figures for Germany are only for West Germany.

Somehow we must explain the radical growth of unproductive labor sectors in the oppressor nations so that they are now about 75 percent of the workers and more than 80 percent of the oppressor nation workers, while the combined agriculture and industry employment in Asia remains at 75 percent. One answer is that a new form of the transfer of value occurred through manufactured exports from the South to the North. 70 percent of the growth in the 1960 to 1990 exports of the Third World occurred in the 1980s.(272) Another answer is Lawrence's argument above which we have rebutted by the statistics concerning the capital/output ratio. Lawrence's argument like that of the bourgeoisie generally is to toss Marx's theory of surplus-value, because the whole idea is wrong as well as the purported relationship between the productive and unproductive sectors. If we reject Lawrence's argument and we reject MIM's thesis (and Lenin's) that the surplus-value mainly comes from the Third World and it has grown over time, then we must put forward that the manufacturing sector in the advanced industrial countries is exploited to such a degree as to make possible the employment of a larger and larger unproductive sector. It is to this argument over the comparison of the rates of exploitation in the Third World and First World and the two sectors within the First World that we now must turn.

The MIM headlock on its chauvinist critics

MIM's whole analysis can be questioned at several points, but if we seriously entertain our critics' arguments, we find that they are contradictory and impossible. MIM holds two related theses, 1) a tremendous transfer of surplus-value from the Third World 2) no net surplus-value from the productive sector of the advanced industrial countries.

There are only two possible answers our critics can give: 1) Drop Marx's theory of surplus-value, with the attendant consequences of dropping Marx's theory of crisis and join up with the likes of Lawrence. 2) The surplus-value comes from the productive sector in the United $tates, Japan, England etc., but we have to make some adjustments in our argument.

If our critics drop Marxism, we are pleased and have no more to say beyond what we have said to the open bourgeois critics in this essay. They can go back and refute the capital-output ratio statistics. If our critics argue as Paul Cockshott does that productive sector workers in the advanced industrial countries produce surplus-value sufficient to support the more numerous unproductive workers and bourgeoisie, our answer is more complicated.

If our critics reject our arguments measuring the huge transfer of surplus-value from the Third World, they are left with a question: How did the unproductive sector of the advanced industrial countries grow to 75 percent of all employees? The bottom line is that if we assume as Shaikh and Tonak do that unproductive and productive sector workers have the same rate of exploitation and use the same capital per worker, then it is not possible for the unproductive sector to be larger than the productive sector. The profits generated by the unproductive sector have to come from surplus-value in the productive sector. That means the productive sector must generate surplus-value for profits in its own sector and whatever surplus-value is left-over can be pursued by workers in the unproductive sector. Thus, the unproductive sector has to be smaller than the productive sector. However, let us drop this particular theoretical argument and see where the facts lead us anyway.

To support the contention that productive sector workers are creating the surplus-value for the unproductive sectors, which also receive wages and income equal to or higher than that of the productive sector workers, we must presume a rate of exploitation (s/v) large enough to support that. We must recall at the turn of the century this was not a difficult problem, because in the imperialist countries, the majority of people were farmers, manufacturing sector or other productive sector workers. With the almost complete elimination of the farming sector and some shrinkage in the proportion (not absolute size) of the population in industry, this question arises--where does the surplus-value come from for this vastly expanded unproductive sector? Numerous authors argue that the rate of surplus-value extraction or rate of exploitation (s/v) of productive sector workers in the United $tates has gone up and up, now to exceed 2 or even 3 in Perlo's argument.(273)

Below would be some typical statistics used by those who believe the productive sector is increasingly exploited within imperialist countries. The same story could be told in all the imperialist countries. However, one reason output seems to rise could be that more value is being transferred through the use of inputs from the Third World and just not realized until after the value-added stage in the imperialist countries, because of phony pricing of the inputs.

How miraculous are the productive sector workers? Value-added in U.$. manufacturing(274)

Year Per production worker hour Per dollar of workers' wages
1972 $13.26 $3.34
1982 $35.06 $4.02
1992 $60.56 $5.07
1994 $65.14 $5.25

We find it humorous that in the camp denying a decisive international transfer of value to imperialism, there are those fulminating against Bowles, Gordon and Weisskopf for talking about a labor productivity slow-down and wage squeeze on profits. The social-democrats are simply counting the unproductive sector workers as regular working-class, so if we do that, it is impossible to deny a slow-down in labor productivity. In contrast, Perlo, Shaikh and Tonak use the productive versus unproductive distinction to make a fairly meaningless criticism, unless their intention is to advocate that the capitalists hire more productive sector workers to reduce the profit crisis and wage squeeze! Though our methods are closer to those of Perlo,(275) Shaikh and Tonak, it is a matter of what questions are to be asked and answered. Those who always speak of the unity of the working class including all the supposedly exploited unproductive sector workers have no right to criticize Weisskopf, who went the furthest in saying workers squeezed the capitalists too hard. He is only speaking of the working-class as a whole! Poulantzas tried to tell all these folks that unproductive sector workers were a new kind of petty-bourgeoisie, but they consciously rejected that argument, so they are stuck arguing there is one united working-class, so how Perlo, Shaikh and Tonak can be criticizing Bowles, Gordon and Weisskopf is beyond us. We at MIM believe the workers they treat equally with productive sector workers are obvious parasites. Furthermore, we believe the productive sector workers are net parasites too, but those who do not make this distinction cannot criticize Weisskopf, who is merely the most extreme of the bunch holding the one-working-class view.

We will point to two more difficulties for the view heroizing First World productive sector workers. 1) If the rate of exploitation is 2.5 in the imperialist countries, it might be 25 in the Third World. Since the critics we are dealing with in this particular case deny the value is transferred to the imperialist countries, we have to find signs of this wealth in the Third World. This leaves us with the problem of explaining where all the wealth from all this exploitation is as Lawrence already pointed out above. The capitalist class of the Third World would have to dwarf the capitalist class of the imperialist countries. We have to explain both the surplus-value coming from imperialist country and Third World workers and that surplus-value has to be monumental if imperialist country workers are really exploited. 2) Even excluding the Third World completely as the chauvinist critics of MIM are apt to do, the critics are in another bind. If the rate of exploitation is 2.5, then the workers in the unproductive sector are assisting the capitalists in realizing profits 2.5 times their salaries. Where the hell are all these profits? Where is the data showing profits 2.5 times compensation of oppressor nation unproductive sector employees?

At this point, we apologize to our readers for following through a calculation flawed from its inception but parallel to something like what our critics think. In essence, we can logically explain how the productive workers produce the commodities for a population three times its size, but we cannot explain how that is possible at the same time that unproductive sector workers generate profits 2.5 times their compensation. Thus we must drop the assumption that the rate of exploitation is the same in the two sectors. Since the wages and necessary means of subsistence have been shown to be about the same in the two sectors under imperialism, for this to be a consistent argument, we must assume that capital per worker in the unproductive sector is less. In this way, the exploitation rate can be lower in the unproductive sector and the capitalists in that sector can still make the same rate of profit as the capitalists in the productive sector.

When there is a large unproductive sector, we can drop the assumption that Shaikh and Tonak make that the rate of exploitation is the same in both the productive and unproductive sectors.(276) But how much flexibility does this buy us? After all the market for labor-power allows for an unproductive sector worker one day to be a productive sector worker another day. For this reason, there has always been a high correlation of the incomes of unproductive and productive sector workers. For the relaxation of this assumption to really buy us anything, we have to presume a permanent difference in the intensity of capital utilization in the productive and unproductive sectors. If workers in the two sectors both use the same quantity of capital on average, the rate of exploitation has to be the same in the two sectors or one set of capitalists would be enjoying a higher profit rate than the other. For unproductive sector workers to be exploited at a much lower rate than productive sector workers, they must use much less capital per worker or profit rates would be unequal.

According to radical economist Daniel Fusfeld and others like him, the service sector is not conducive to capital-intensive investment. Large capital investments will not bring about great leaps in labor productivity. The growth of productivity in the good-producing sector has made it possible for three-quarters to be employed in services while still having goods enough for all. According to Fusfeld, the percentage of goods in total sales in the United $tates has not changed while the percentage of services employment exceeded 75 percent.(277) 55.3 percent of sales were in goods in 1985 compared with 44.7 percent in services.(278)

Share of goods production in Gross Domestic Product in 1980 unless otherwise indicated

Denmark 1977 37%
Sweden 41%
Canada 42%
Netherlands 1978 43%
United Kingdom 44%
United States 1979 46%
Belgium 48%
Australia 50%
Austria 50%
Greece 50%
Spain 1978 50%
Japan 54%
Italy 55%
West Germany 56%

In 1995, if we include building structures with goods, then goods were still 46 percent of the gross domestic product in the United $tates.(280) Somehow service employment is increasing while the overall economy remains anchored in goods sales. This idea is compatible with either a larger transfer of value from the Third World or an increase in exploitation of productive sector workers in the United $tates. Fusfeld's observation points to different capital intensities in the productive and unproductive sectors.

One observer has suggested that white-collar workers use one-tenth as much capital per worker as factory workers do. The trend may be toward more investment in office-workers; although, it is a contradictory trend as the price of computers continues to go down. Between 1970 and 1985, the share of business investment that went to computers went from two percent to 19 percent.(281) This would tend to say that the 10 to 1 ratio if it is true, will not be true much longer. The reason is that computers in the 1980s would attract investment, especially as they increased in their efficiency. Perhaps, for this reason, the average incremental capital-output ratio improved in Japan and the United $tates between the years 1970-1981 compared with 1978 to 1987.(282) The incremental capital-output ratio shows how much output a new investment generates per dollar. Later we will point to evidence that it is not computers causing this incremental capital-output ratio.

We believe we should attach more weight to the combined data of the U.S. Government and Angus Maddison which implies a different story of capital at each worker's disposal. 1992 figures show $1.12 trillion in assets for use by 18.2 million manufacturing workers. That comes to $66,600 in assets per employee, of which over 79 percent is machinery.(283) However, if this is true, and the figures from Angus Maddison are also true, in 1992, that still leaves us with $3.83 trillion in machinery(284) to spread out over the other 100 million workers, roughly $38,000 in machinery per worker compared with $48,000 per worker in manufacturing. However, in manufacturing, the capitalist also has to arrange for another $86,300 per worker in materials to use for inputs in production. How long capitalists get stuck hanging onto the inputs of production before they are sold in the form of products is a difficult question, but there is no way to justify seeing a capital intensity more than 4 times higher in industry compared with the rest of the economy. In fact, once we have accounted for non-residential structures that capitalists have to invest in, that ratio could be back to 1:1 and then we would be back to Shaikh and Tonak's thesis that the rate of exploitation has to be the same in the productive and unproductive sectors.

The reason that the unproductive sector workers may actually use more capital per worker than productive sector workers is strictly that their buildings cost more. Lawyers, retail, health services, banks--all these have to work in buildings more impressive than factories. If we think of the nicest downtown buildings, they are not usually factories.

The figures we used above to rebut the idea that skills, information or white-collar work would save capitalism showed that the United $tates was the only imperialist to stay even in the capital-output ratio, while the other imperialists saw an increasing capital-output ratio which suggests an ever lower profit rate on an ever larger mass of capital. It turns out robots, computers and other automation does not save any imperialist country. A breakdown of fixed capital investment for machinery and equipment as opposed to other fixed capital investments such as buildings, shows that in every imperialist country for which there is data, the capital-output ratio even for machinery and equipment increases over time, even more rapidly than other forms of investment.

Ratio of machinery and equipment to Gross Domestic Product(285)

Country 1950 1973 1992    
U$A .64 .65 .86    
France .21 .50 .74    
Germany .39 .62 .70
Netherlands .27 .61 .78  
"UK" .31 .52 .65    
Japan .74 .58 1.07  

Thus the above figures completely rule out the possibility that computers, robots and other machines are saving the day for productivity. The United $tates saw its capital-output since 1950 remain flat, only because for some reason the building of non-residential structures is still more profitable than it was in 1950. The same is true in the Netherlands, but not the other imperialist countries. However, the latest figures for 1992 show that even that advantage is drying up. The trend in non-residential structures since 1973 is an increase in the capital-output ratio for every imperialist country.(286)

If we have to think of a reason why investing in building non-residential structures is profitable or used to be more profitable and investing in machines is not profitable, then we can think of how it pays to build nicer retail stores. If there is untapped surplus-value to realize, then building more impressive shop windows may do the trick. If goods sell for more, because Third World workers are transferring more value to the First World and because more commercial workers are realizing a higher percentage of surplus-value in brand new malls, then that would explain the pattern of capital-output ratios since the 1950s in the Netherlands and the United $tates.

Very much doubting the office work revolution, MIT Business School Dean Lester C. Thurow, points out that from 1977 to 1982, banking productivity fell 2 percent a year. That was considered indicative at the time, because banks were increasing use of computers and automatic teller machines. Meanwhile, employment in accounting also went up 41 percent between 1977 and 1984. Overall, he believed the unproductive sector was dragging down the whole economy. "Between 1977 and 1982 real output rose 8 percent, yet at the same time clerical employment rose 15 percent and total white-collar employment 18 percent. In contrast blue-collar employment fell 2 percent. The net result was a sharp decline in white-collar productivity that completely offset substantial gains in blue-collar productivity."(287) The trend continued at least to the end of the 1980s where our data ends with the period 1980 to 1990: "Blue-collar productivity rose 28 percent, while white collar productivity was falling 3 percent."(288) This is what we Marxists would expect when the job of realizing surplus-value has reached its outer limits and there are no further international injections of surplus-value to be had. It's also exactly opposite of the post-industrial hoopla and the "whatever consumers want" cant of neo-classical economists. Fortunately for imperialism, Chinese manufacturing came on strong in the 1980s to transfer huge quantities of value to the imperialist countries in order to make those white-collar workers appear "productive" again.

When we consider the global picture, the capital per worker picture gets cloudier. As MIM has suggested, it is necessary to take this into account when measuring Third World worker productivity. "'Assets per employee in the parent manufacturing operations of U.S. multinationals were about 20 percent higher than in affiliate operations in developed countries and almost 200 percent higher than in affiliate operations in the developing countries. Similarly compensation per employee in parent operations was about 17 percent higher than in affiliate operations in developed countries and about 360 percent higher than in the developing countries.'"(289) Yet if capital intensity is lighter in the Third World and if unlike Shaikh and Tonak, we believe that First World manufacturing is more white-collar, then we are seeing a case where blue-collar work has lighter capital intensity than white-collar work.

In reality the rate of exploitation in the unproductive sector has to be much closer to zero than 1 or the critics would have impossibly large profits to account for. John Gurley has correctly estimated that the total surplus-value in any year is about 20 percent of production in the United $tates, largely by excluding most of the transfers of surplus-value to unproductive sector employee compensation. What it shows is the impossibility of conceiving of profits as twice or three times unproductive sector employee compensation, because unproductive sector workers are getting 75 percent of the compensation. In fact, the inverse is closer to the truth. Unproductive sector compensation is several times realized profits. The (s/v) (realized profits/unproductive sector compensation) of the unproductive sector is the Achilles Heal of the argument of our critics. (290)

Gurley's figure still is too high for the purpose we need which is to see what part is received by the capitalists. Nonetheless, Gurley's figure implies an average rate of exploitation (not an average rate of surplus-value) of 0.25. Yet, the closer the average rate of exploitation gets to zero, the lighter the capital intensity must be in this scenario, if we assume as our critics do that there is no transfer of value from the Third World. The more transfer of value from the Third World occurs, the more we can explain higher capital intensities in the unproductive sector.

On the other hand, the closer we see the rate of exploitation approach zero in the unproductive sector, the closer we get to taking up MIM's line at least for the unproductive sector workers. The critics also open themselves to the attack that even a relatively small transfer of value from the Third World would tip the balance and result in negative exploitation rates for unproductive sector workers. Hence, once the critics realize that profits are not a multiple of compensation, but in fact compensation is a multiple of profits, they will be forced into taking a position much friendlier to MIM's line, something akin to Cockshott's line.

Those who continue to believe that the total transfer of value from the Third World is minor and who continue to use statistics based on the workers of each country's producing all the surplus-value with no international value transfers have one more anomaly to explain away. Shaikh and Tonak were so good as to admit that using methods very similar to their own, one of the better Japanese economists had calculated that the U.$.-occupied Korean rate of exploitation was about half the rate of exploitation in the United $tates in 1970-2 and lower than the exploitation in Japan.(291) This was contrary to Lenin's view that exploitation was 2 or 3 times higher outside the imperialist countries and contradicts the simple facts examined at the point-of-production. In fact, they have things exactly upside-down. These economists have ultimately succumbed to commodity-fetishism, by underestimating the surplus-value generated by the Korean workers by accepting literally transfer prices and administratively set prices undertaken by a U.$. puppet regime complete with a currency fixed to the dollar as true indicators of ultimate value and by not counting the share of surplus-value and purchasing power in the First World accounted for by a transfer of value to the First World.

Those who do not take up MIM's method have a sad fate ahead of them. They must explain why in all Third World countries the production per wage dollar is higher but the rate of exploitation is lower than in the imperialist countries. How did MIM's critics get so far away from the facts about the point-of-production? We will give them a hint: their numbers reflect what is happening AFTER a massive transfer of value out of the Third World. That's why it seems like there is so much surplus in the United $tates relative to Korea in their statistics. That surplus was not produced by U.$. workers, but it looks that way if you do not count the international transfers of value.

Now suppose our critics surrender and say, OK, there is a huge transfer of surplus-value from the Third World requiring the methods of calculation MIM has proposed, because we agree that the Third World bourgeoisie does not dwarf the imperialist country bourgeoisie. The next line of attack of our critics is to argue that surplus-value is not creating a massive oppressor nation petty-bourgeoisie, because the surplus-value is going to the capitalist class.

As MIM said in MT#1and MT#10 the capitalist class can be estimated at one percent of the population in the imperialist countries. So the job for our critics becomes proving that this one percent has absorbed the surplus-value of both the Third World and the productive sectors of the advanced industrial countries without giving that surplus-value over to its allies in the petty-bourgeoisie including the labor aristocracy—advertisers, military weapons producers, insurance salespeople, lawyers and the like. Our critics except for Cockshott need to show that the surplus-value goes to the capitalists and stays with them. Cockshott takes a different tack and admits it ends up in hands other than the capitalists', so we have a huge unproductive sector that serves as the bedrock of political stabilization.

To show that the surplus-value mostly goes to the capitalists and stays with them it becomes necessary to come up with accumulation statistics. In the next section of this essay, we prove that the capitalists are wealthy, but they are not wealthy enough to account for the surplus-value and more importantly, their wealth does not grow fast enough to account for the transfer of surplus-value we would be talking about to support our critics' contentions.

The Achilles Heal of the MIM critics

Here we produce two last tables. The first is a trade table that is easy to understand.

1994 imports from the Third World by OECD countries in billions of dollars(292)
Country S. America China (incl Hong Kong) U.$.-puppet Korea Taiwan Singapore Third World Total
U.$.A. 93.7 57.2 20.6 27.9 17.5 229.0
Israel 0.2 0.4 0.3 0.3 0.2 ?>1.4
Japan 7.7 30.0 13.4 10.8 6.5 142.0
Belgium-Luxembourg 2.3 1.7 0.3 0.4 0.4 14.6
Denmark 0.5 0.8 0.4 0.2 0.3 ?>2.2
France 4.5 4.0 1.2 1.8 1.7 41.7
Germany 7.8 12.3 4.4 4.4 3.9 67.1
Italy 4.1 3.3 0.8 0.9 0.6 36.1
Netherlands 4.7 4.0 0.8 1.4 1.6 24.6
"United Kingdom" 4.7 7.4 1.8 2.4 2.8 37.6
Norway 0.6 0.6 0.2 0.2 0.2 ?>1.8
Sweden 0.8 1.4 0.4 0.6 0.2 6.2
Switzerland 0.8 1.2 0.2 0.4 0.5 5.8
New Zealand 0.1 0.5 0.2 0.3 0.3 ?>1.4
Australia 0.5 3.6 1.2 1.8 2.1 13.4

We recommend to our readers that a rough idea of transfer of value to each country achieved by higher exploitation rates in the Third World would occur by multiplying the last column by 10. We will come back to the table above later.

Honing in on the dominant-nation capitalist-class and dominant-nation workers: quick and dirty with all workers treated as productive sector
Country Surplus-v. (% of GDP) Foreign profits Foreigners % of workforce Minorities % Internal oppressed total % of s-v Capitalist share of s-v % Net from dominant- nation workers
U.$.A., 1993 998.0 (13.8%) 135.4 9.3 30 30 30 -$135.4 billion
Japan, 1993 78.1 (16.8%) 16.9 0.9 3 5 22 -3.6 trillion Y
Germany, 1993 633.5 (22.1%) 117.5 8.9 5 22 -9.8 billion m.
England, 1993 132.0 (21.0%) 64.6 3.3 5.5 8 22 -46.1 billion pds
France, 1993 772.9 (10.9%) 374.3 6.2 8 30 -204.3 billion fr.
Italy, 1993 290.1 (18.6%) 40.7 NA(2) 3 22 +14.4 trillion lira
Canada, 1993 130.0 (18.4%) 6.1 18.5 1.5 10 27 +16 billion dol.
Sweden, 1993 224.7 (15.6%) 60.1 5.5 7 22 -26.4 Billion kr.
Australia, 1992 53.2 (13.2%) 3.0 24.8 5 10? 30 +7.6 Bill. Doll.
New Zealand, 1990 12.8 (17.5%) 0.4 NA 12 15? 30 +1.9 Billion NZ$
Netherlands, 1992 141.7 (24.7%) 52.2 3.9 4 6 22 -37.9 Billion Guilders
Switzerland, 1993 65.1 (19.0%) 27.9 20.1 ? 50+ 30 -35.3 Billion fr.
Belgium 2652.0 (36.4%) 1,565.7 7.4 0 30 -770.1 Billion fr.
Luxembourg, 1991 31.1 (11.7%) 131.9 net 33.3 0 30 -122.6 Billion fr.
Denmark, 1993 66.3 (7.6%) 150.4 2.5 3 22 -137.8 million kr.
Finland 31.6? (6.6%) 13.1 3? 22 + OECD exploited
Israel, 1993 38.2 (19.5%) 2.9 17 20? 30 +0.9 Billion sh

In the table above, we humor our social-democratic critics by not raising Marx's theory of productive versus unproductive workers; thus we throw away his theory of crisis. However, it still largely turns out that imperialist country working-classes are not exploited. The reality is so strong, we do not have to be very precise and it will still shine through.

The first number in the quickie guide to oppressor nation working-class non-exploitation is the number estimated to be capitalist-style income from consumed dividends, interest and increase in equity through re-investment of profits.(293) At the end of the table in the second-to-last column is the percentage of capitalist-style income and increased equity actually going to the capitalist class of the oppressor nation with the rest going to other non-capitalist households.(294)

We deduct the surplus-value of "minorities" and foreigners(295) in each imperialist country, and a conservative estimate of their combined responsibility for surplus-value is in the third-to-last column labeled "internal," but we make two offsetting errors. We do not count other OECD nationals as "foreigners," so we do not deduct as much surplus-value as we could by just adding foreigners to oppressed nationals considered citizens. On the other hand, we deduct all foreign profits. Such profits from property abroad(296) are not the same thing as the profits the multinational corporations make through importing the Third World's goods. We also do not count compensation of employees abroad as profit to be remitted home.

The last column shows the amount of surplus-value attributed to the oppressor nation working-class. If the number is negative, it means that the capitalist-class was not getting anything from the oppressor nation workers, but the petty-bourgeoisie or workers were getting some super-profits from foreign operations and oppression of internal oppressed nations. Based on this method, Finland would be a good case of a country that seems to be exploited by the non-Finland OECD bourgeoisie. 5 percent of Finland's GDP goes to net property income outside Finland and internal oppressed nationalities appear to be responsible for less than 5 percent of the surplus-value. Like Sweden, the government in Finland gets more property income than households do. Although taxes and services diminish the surplus-value to be had, we can speak of a Finnish working class that is slightly exploited by the above model counting all workers as productive sector.(297) An even worse case of Finlandism is New Zealand, turning over 1 in 12 units of its GDP to foreigners as property income and getting almost nothing back. There are similar stories for Australia and Canada. On the other hand, Luxembourg is so parasitic that its property income from abroad is four times its GDP. Net international property income (counting outflows) of Luxembourg is still half of GDP. That is to say nothing of the internal labor of immigrants; hence, we will drop Luxembourg as a case, because it is obviously one oppressor-nation petty-bourgeoisie allied to globalized monopoly capital. In a very small imperialist country, it may be wise to forget nationality issues completely and see the country as a speck of global capital. In the larger countries we test for antagonism between the oppressor-nation capitalist-class and its oppressor-nation working-class.

Now we turn to arguments concerning the differential rate of exploitation and transfers between productive labor sectors and unproductive labor sectors. We follow up the last table for a few of the main countries.

How much super-profit enters non-capitalist, dominant-nation incomes?
Country Unproductive to productive sector transfer from Third World & internal oppressed, extension of Shaikh & Tonak Adjusted subtotal (% of unproductive sector compensation) Unequal exchange, differential exploitation, parameter=8 Total superprofits (% of unproductive sector compensation)
U.$.A. $932 billion (40% of s-v) $767 billion (25.6%) 1994 $1832 billion $2.6 trillion (86.6%) 1994
Japan 37.7 trillion yen (10% of 377 tr. Y) 37.4 trillion yen (19%) 1993 $1136 billion $1.45 trillion (95%)
Germany 225 billion marks (10% of 2.25 tr. marks) 202 billion marks (18%) 1993 $537 billion $0.65 trillion (95%)
France 0.9 trillion fr. (14% of 6.4 trillion fr.) 1.14 trillion fr. (42%) $334 billion $0.55 trillion (107%)
"United Kingdom" 75 billion pounds (15% of 500 billion pounds) 110.6 billion pds. (41%) $301 billion $0.47 trillion (116%)
Italy 0.165 trillion lira (11% of 1.5 trillion lira) 0.142 trillion lira (~12% counting unincorporated enterprises as unprod. workers) $289 billion $0.4 trillion (~44%)
Netherlands 114 billion gldrs. (22% of 520 billion guilders) $135 billion gldrs. (60%) $197 billion $0.27 trillion (80% of GDP)
Australia 52.3 billion dollars (19% of 275 billion dollars) 39.3 billion dollars (26%) $107 billion $0.14 trillion (45% of 1992 GDP)
Sweden 163 billion kr. (13% of 1.25 trillion kr.) 174 billion kr. (27%) $50 billion $0.08 trillion (72%)
Switzerland 148.4(53% of 280 billion Swiss fr.) 157 billion fr. (98%) $46 billion $0.16 trillion (65% of GDP)

In the above table the first column redefines surplus-value to be all but roughly 25% of employee compensation, which is an estimate of how much goes to the productive sector workers. Everything else is unproductive sector surplus-value. The exception in the first column is the United $tates, for which we have just used the numbers in Shaikh and Tonak's book. In parentheses below the first figure is the combined percentage of goods that internal oppressed nations and external Third World countries manufacture in the productive sector next to the figure for the total surplus-value. The surplus-value numbers are all rough estimates from looking at household income in 1993. With the exception for the calculation attached to the United $tates, the percentage attributed to the productive sector in the Third World is a percentage of gross manufacturing output in 1994, and not just the much smaller value-added figure.

The second column makes some adjustments by making sure enough surplus-value has been taken out to ensure that the dominant-nation bourgeoisie has been taken care of for its estimated share of property income. The second column also makes the adjustment for foreign profits. Below it in parentheses is the adjusted subtotal of surplus-value that can be thought of as going to unproductive worker wages, and not the capitalist-class. That number is expressed as a percentage of unproductive worker wages.

The third column of the above table is not the parameter 10 that we have discussed in the essay above, but it is 8 instead, because we were afraid that the Shaikh and Tonak extension and the foreign profits would each be contributing some double-counting of surplus-value. For instance our extension of Shaikh and Tonak for Third World imports accounts for $233 in surplus-value in the United $tates, which is about the size of the Third World imports. On that account we bring the parameter at the end down to 9. To make sure we haven't double-counted through foreign profits or other means, we take the parameter down to 8. Hence, we multiply Third World trade by 8 to come up with one last estimate of superprofits. Of course, the parameter being set to 8 has a counterfactual nature to it, because we do not know would happen to imperialism if it suddenly started valuing Third World labor the same way it values First World labor.

Finally, the last column is a grand total with a calculation for what percentage of unproductive sector compensation is accounted for by superprofits, after we make deductions for the oppressor-nation capitalist-class to receive its share of profits and superprofits just from the Third World and internal semi-colonies. The grand total is several times higher than the capitalist-class could be imagined to consume by any accounting, which is why we have gone on to examine how much of the unproductive sectors' existence is owed to the Third World. There is also no reason the number cannot exceed 100 percent of unproductive sector income. It only should not exceed the total income of the imaginary society generated for itself and other societies and there should be some left over to account for the surplus-value created by the productive sector of the oppressor-nation working class, which is not to say that the oppressor-nation productive sector working-class produces any net surplus-value. If the percentage of the last column is 100 percent, then the productive sector workers of the dominant-nation are certainly not transferring any surplus-value to either the capitalist-class or the unproductive sector. In reality, the unproductive sector would not receive 100 percent of its surplus-value from the Third World while the productive sector receives 0 percent, because the distribution of surplus-value between the sectors is regulated by the rate of profit having to be similar. Thus, the capitalists have to put down some "v" in the unproductive sector and we cannot count all "v" as contributed by the Third World for the purposes of understanding the exploitation or non-exploitation of the productive sector workers of the dominant-nation. Regardless, we have shown that there is no way to conceive of the dominant-nation capitalist-class as extracting surplus-value from the dominant-nation working-class. A close examination of column two's subtotal shows that we do not have to assume a different rate of exploitation of Third World workers or account for death-squads, monopsony, government price-setting or transfer prices: it is already obvious by the subtotal in column two that the dominant-nation capitalist-class is taken care of several times over by Third World and internal immigrant/oppressed nationality labor.

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