TOWARDS GLOBAL FORDISM ? MARX OR ROSTOW ?Al a i n LIPIETZ

( N * 7 0 3 )

N ew L e £ t R e v ie w - n 0 J 32 - W w s-k v h JU L 1 9 8 2 .

A la in L ip ie tz — I

Towards Global Fordism?

Is the ‘ industrialization o f the T h ird W o rld ’ the spectre w hich n o w haunts old Europe? Certainly in the apologctic d iscourse o f governm ents, as w ell as in the obsessional th inking o f trade-union leaders, the resulting 'u n fa ir com p etition ’ is at the root o f the jobs crisis in the old industries. But there is also a quite different point o f v iew . F o r the dynam ic m anagers o f m ultinational or export-oriented corporations, for philanthropic econom ists and vario u s T h ird World leaders, the industrial developm ent o f the periphery brings a m ore equal balance to N o rth -S o u th relations, both offering a w ay out o f the crisis and heralding the end o f unequal developm ent. Beyond such unw arranted outbursts o f praise or indignation, w e m ust adopt a critical approach to the concept o f T hird W orld industrialization th rough a new international d ivision

oflabour. It cannot even be accepted, fo r exam ple, that ‘ the T h ird W o rld ’ o r ‘the periphery’ actually designates a unitary reality. F o r while national per

capita incom e varies from i to 3 in the o e c d ‘centre’ , the corresp on ding spread is 1 to 27 in the rest o f the w orld outside the eastern bloc. M oreo ver, the crisis in

the centre has so dramatically sharpened differences among peripheral countries that it seems questionable to bracket together Kuwait, Mali and Brazil.

Still, in three ‘glorious’ post-war decades, a crucial change was introduced by the system o f capitalist accumulation that various French economists, following Gramsci, have baptized ‘Fordism’. A ‘centre’, displaying a cohesive internal logic at the level o f blocs (North America, the E E C ) if not individual countries, came to stand against a ‘periphery’ which, whatever the internal dynamic o f its component parts, was ever more disconnected from this ‘autocentred’ logic. The onset o f crisis, however, affected the centre much more sharply than the periphery as a whole: whereas the annual growth-rate by volume o f o e c d industrial production fell from 6.4 per cent before 1967 to 4.6 per cent and then to 1.6 per cent between 1973 and 1978, the rate in the ‘developing countries’ rose, without a break in 197}, from 5 per cent to an average o f 7.1 per cent since 1967-1

Can we, then, really speak of a ‘world wide extension o f Fordism’? Is it true that, although the rise o f Fordism in at least some parts o f the Third World stimulated the present capitalist crisis, it is now an element in the solution to that crisis? Which countries would gain, and which would lose, from such a development? In this article, we shall try to answer these questions by building upon the existing analysis o f Fordism.

I— Central Fordism in Crisis

Fordism is intrinsically bound up with the socio-economic formations o f the old industrial heartlands, where the problem was to adjust the long-stabilized relation between capital and wage-labour.2 This should never be forgotten when we speak o f the extension o f Fordism to countries where the problem is the creation or establishment o f the wage-relation.

J. fordism

The concept o f Fordism denotes two relatively distinct, though historically and theoretically interlinked, phenomena. First, it refers to a modi of capital accumulation-, one based upon radical and constant change in the labour process, such that the workers’ ‘know-how’ is incorporated in the form o f machinery. This ‘ system o f intensive accumulation’, combining a rise in apparent labour productivity with an increase in the per capita volume of fixed capital (the ‘ technical composition o f capital’), presupposes that the body movements o f the old craft-worker have been systematized through the methods o f Scientific Work Organization. This

' See G. Lafay, M. Fouquin and L. dc Mautort, ‘ Specialisation et adaptation face a la crisc’, Economit Prospective Internationale No. I, 1980.1 See, for the United States, M. Aglietta, A Theory of Capitalist Regulation, London ( n l b )

1979; for Franco, B. Coriat, l.'A ttlier et ie cbronometre, Paris 1979. J . P. Bcnassy ct ai., ‘ Approche de 1‘ inflation: l’exemple fran$ais\ c e p r e m a p duplicated paper, Paris 1977, and J. £afont, D. Lebrogne and A. Lipietz, ‘Redcploiement industriel et cspace economique: unc etude intersectorielle comparative’ , c e p r e m a p paper, Paris >980; and for Italy, the writings o f the 0ptrauto current.

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‘Taylorist’ stage widens the gap at the heart o f the work collective between conception and performance, technical and unskilled labour. Most characteristically in the case o f metal-processing, however, the new production line does require the presence o f skilled workers— above all, in such key areas o f ‘incorporation’ as the manufacture of equipment goods and machine-tools. Besides, although Fordism and Taylorism appear to reduce ‘know-how’ to norms issued by the Methods Depart­ment to a completely unskilled workforce, they actually require a great deal more than the theoretically necessary, and socially recognized, level o f involvement and skill. In fact, the aim is to systematize the ever-new content o f workers’ skills, and to ensure capitalist control over it by hunting down the ‘ free space’ left in the labour process.

This contradiction between ‘dispossession’ and ‘involvemSst’ is a major source o f the ‘work crisis’ in industrialized countries. I f impels the systematic quest for manpower supplies which, though skilled in reality, have been downgraded through employment in labour-intensive indus­tries: for example, women uprooted from dress-making activity in the West o f France, or the redundant workforce o f declining industries in the North o f France.3 It also lies behind ‘neo-Fordist’ attempts to temper direct control with a little ‘ responsible autonomy’.4 Generally speaking, however, it is still true that Fordism propels industrial skills towards two poles. Thus in French industry in 1975, engineers and technicians accounted for 8 per cent o f the workforce, skilled workers for 36 per cent, and unskilled workers for 3 3 per cent. In the typically Fordist ‘equipment industries’ , the two extremes rose to 13 and 36 percent respectively, while the proportion o f skilled workers fell to 33 per cent.5

Secondly, Fordism refers to the continual adjustment o f mass consumption to the historically unprecedented rise in productivity generated by intensive accumulation. The realization problem, associated with the flooding of commodities onto the market, had caused the great crisis o f the thirties. But after the war, ‘monopolistic’ forms o f wage-regulation linked the nominal wage to both the cost-of-living and productivity, therebv ensuring that final demand would keep pace with supplv. As a result of this ‘normalization’ , the life-style o f wage-earners underwent a dramatic change, and was even integrated into capitalist accumulation itself.

2. The Crisis of Fordism

This system o f intensive accumulation combined with monopolist regulation may go on indefinitely, the rise in mass purchasing-power making it possible to ward off a crisis o f overproduction. However, capital can only remain profitable on two conditions: unless increased productivity in the producer-goods sector offsets the rising technical composition of capital, the proportion o f immobilized assets will become dangerously high; and unless increased productivity in the consumer- goods sector balances the rise in mass purchasing-power, the share of wages in total value-added will climb to the detriment o f profit.

3 See ftatont ct al.4 These phrases are quoted from A. Friedman. Industry and Labour, London 19*“ .5 See £at’ont ei ai.

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These two conditions were broadly fulfilled during the ‘golden years’ o f post-war intensive accumulation. In France, for example, the basic variables (productivity, purchasing-power, per capita fixed capital) all increased threefold in the space o f twenty years. But the general rise in productivity began to slacken at the end o f the sixties, so that Fordism became an ever more ‘costly’ endeavour.6 Government and employers then precipitated the crisis when, on the pretext o f ‘passing on’ the increased oil rent, they set out to halt the rise in mass purchasing-power. To be sure, it has taken the form o f a crisis o f mass underconsumption, particularly apparent, in France, in the motor and construction industries. Unlike the thirties crisis, however, it is essentially due not to the tendency o f supply to exceed popular demand, but to the fact that insufficient surplus-value results from a growing mass o f invested capital. For capital in general (not, o f course, for each individual capitalist), the problem is not so much to find markets as to drive up the rate o f exploitation. And that has been the case since the late sixties.

II— The ‘Outside W orld’ in Post-War Growth

The reduced importance o f the classical ‘question o f markets’ has a number o f consequences for international trade that would be difficult to overestimate. In its early stages, capitalist trade was above all a world phenomenon, its structures floating like icebergs on a sea o f natural economy. The first manufactures had to find customers, and the search was world-wide. Although capitalist development and the breaking-up o f village agriculture allowed a ‘domestic’ capitalist market to be formed in Britain, Manchester had to comb the whole o f Europe, even India, in quest o f a market for its cotton-goods.

At the beginning o f the twentieth century, a number o f debates began to divide the Marxist movement. Some theorists argued that balanced development of production offered capitalism a market o f its own; others, like Rosa Luxemburg, maintained that capitalism was in need o f external outlets. The 19 14-18 war, a struggle to redivide the world, confirmed that Rosa Luxemburg had been right; and the underconsumption crisis of the^thirties once more refuted her opponents’ position. After 1945, however, the spread o f Fordism throughout the imperialist metropolises would completely alter the picture.

In the ‘old’ imperialist division o f labour, the 'outside world’ appeared as a giant thermostat regulating capitalist growth: it provided a market for the finished goods o f capitalist industry, offering, in exchange, raw materials and labour for export. Now, the need to find cheap raw materials and manpower does, o f course, remain today. But the question o f markets was solved on an internal basis through the post-194 5 development o f mass consumption in the metropolises. Whereas exports still accounted for 26 per cent o f goods manufactured in France in 19 13, the corresponding figure for 195 9 was 18 per cent. The fall was even more spectacular in the case o f Japan (from 40 to 2 3 per cent), and truly gigantic in the case o f Britain (from 45 to 19 per cent). It is true o f all industrial

6 Figures for the major industrial countries may be found in A. Lipietz, ‘Derriere la crise, la tendance a la baisse du taux de profit’, c e p r e m a p paper, Paris 1981.

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countries, in fact, that the share o f exports in g n p reached its historical bottom in the mid-sixties.7 At that point, the ‘developing countries' accounted for no more than 7 per cent o f the total world trade in manufactured goods— trade which, as far as they were concerned, mainly referred to net imports. Exports o f manufactured items to the ‘develop­ing countries’ had fallen to 2 per cent o f g d p in the e e c , 0.8 per cent in the United States, and 5.2 per cent in Japan. As for imports, the figures is in all three cases less than 0.2 percent o f g d p . It would appear that capitalism grew out o f imperialism, and not the other way round!

Since 1965, however, the share o f international trade in capitalist production has once again begun to increase. The two basic reasons for this, both corresponding to the latent crisis o f Fordism, are a quest for gains in productivity and a search for cheaper wage-zonesSjfhe first is a genuinely Fordist rescue-operation, involving use o f the system’s own resources. Insofar as rising productivity is for Fordism coupled with the expansion o f markets through mass production and economies o f scale, greater international trade within the centre heightens the interdependence o f developed economies, yielding fresh gains iny productivity. This process, whereby systems o f production tend to ‘overstep’ national boundaries, has led to the formation o f huge blocs (the u s a and Canada, the E E C ) , and even affects an ‘inner periphery’ o f intermediate industria­lized countries in the Mediterranean and Eastern Europe. As we shall see, the same phenomenon has appeared in the American South and the area surrounding Japan. Such internationalization within the centre will produce a very serious situation in which the regulation o f growth is still further weakened. Indeed, as each country strives to boost its competiti­veness at the expense o f domestic purchasing-power, there will be an overall decline in world markets.8

Greater flexibility in the ‘inner periphery’ corresponds to the second objective o f Fordist strategy: namely, discovery o f cheaper wage-zones. O f course, the aim is also to gain a foothold in countries protected bv customs barriers. But in a sense, this merely develops an intrinsically Fordist mechanism, spreading ‘branch circuits’ over a pool o f unevenly skilled and unevenly paid workers.9

From the point o f view o f the labour process, Fordism involves a disjuncture between conception and unskilled execution, although skilled productive operations continue to play a minor role. It is very tempting to relate these three forms to corresponding geographical regions: engineering and conception in region I, skilled production in region II, unskilled assembly in region III. As far as France is concerned, such a regional distribution has indeed occurred. Thus in 1 9 7 5 , skills were so distributed in equipment industries that engineers and tech­nicians constituted the same proportion as unskilled workers in the Paris region (21 per cent), yet made up only 8 per cent o f the workforce (against 46 per cent for unskilled workers) in the M *» tf€ rn m le . The North, the Rhone-Alpes and Alsace were in an intermediate'position.

7 Sec S. Mistral, 'Competitivite et formation de capital en longue periode*. F-conomit ti Stalistiqut No- 57, February 1977.8 For a further discussion o f this point, see fafont ct al. \9 See Lipietz, ‘Dcrricre la crisc. .

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Let us assume that the shift o f unskilled industrial jobs to the cheaper wage-zones o f the Third World, and the retention o f ‘grey-matter’ activity in the developed countries, would allow a massive rise in the rate o f surplus-value. We must now ask ourselves whether this would solve the crisis o f Fordism. One thing is certain: unless there is also a huge expansion of world markets, it would only be a solution for capital, and not for manual workers in the centre faced with a rising tide o f unemployment.

I ll— Third W orld Industrialization

Despite the figures on industrial growth mentioned in the introduction, and despite the fact that industry accounts for a growing proportion o f jobs in the ‘developing countries’ (20-55 per cent in 1978, against 5-15 per cent in i960), two types o f argument have been used to contest the reality o f Third World industrialization.

1. The low level o f investment in the Third World. According to i m f figures, investment abroad (a mere 25 per cent o f it going to ‘developing countries’) is still a negligible quantity when compared with domestic investment in the developed countries. Between 1974 and 1977, it hovered around 0.3 per cent o f g n p for France, 0.5 per cent for West Germany, 0.6 percent for the United States, and 0.3 percent for Japan. In other words, the yearly flow remained steady at about 6,500 million current dollars. At the same time, domestic fixed capital formation fluctuated around 23 per cent in France and West Germany, 14 per cent in the United States, and 30 per cent in Japan. As at the turn o f the century, ‘ the export o f commodities’ would appear much more significant than ‘the export o f capital'.

In reality, these figures are quite misleading. The last ten years have witnessed ‘anew type o f external financing for a new model o f growth’ , 10 or what Christian Palloix calls the rise o f an ‘international credit economy’ . " In this mechanism, ‘developing countries’ buy industrial equipment with international credit that increasingly comes from private sources. Thus in South Korea, direct investment accounted for 82 per cent o f the inward flow o f capital in i960, and loans on the international financial market for the remaining 18 per cent. By 1975, however, the figures were 18 and 82 per cent respectively— a reversal exactly corresponding to France’s ‘contribution’ to Third World industrializa­tion in 1975! It remains to be seen whether this foreign currency flow, which at most allows means of production to be bought from the developed countries, really does involve a process o f industrialization and a new international division o f labour.

z. The low level o f exports to the developed countries. Christian Palloix has argued that the export o f equipment goods to ‘developing countries’ signifies no more than the ‘delivery of commodities’ . They cannot serve as fixed capital, since they do not find ‘socially formed workers’ capable o f

10 Sec C. Ominami, ‘Un nouveau typede financement extericurpour un nouveau modele de croissance: l’exemple du Chi)^', Problemes <T Ameriqtte la tint, Paris 1980.11 C. Palloix, ‘ Les firmes transnationaies d’origine fran^aise implantees dans le Tiers Monde et I’economie de credit intemationale’, 7̂ France et le Tiers Monde, Grenoble 1979.

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operating them. The foreign debts therefore have to be paid with unfinished goods and emigre manpower, so that the ‘old division of labour’ continues to reproduce itself. The fact that manufactures imported from the centre theoretically have the use-value o f means of production does not in any way alter the situation. For in macroeconomic terms they are no different from armaments.12

This is an attractive theory, which contains a good deal o f truth. With reference to Algeria, Linhart has well demonstrated the difficulties in the way o f autonomous development;13 while a c e p h paper o f 1981 uses the term ‘air bubbles’ to refer to the new markets which the Third World producer-goods sector now represents for the developed countries.14 Nevertheless, Palloix’s general argument against the notioivpf a challenge to the division o f labour is profoundly unsatisfactory. He'jfcmarks t h a t

the level o f manufacturing exports from the developed to the developing countries increased 170 per cent between 1963 and 1977, and remains far higher than the level o f imports. But he forgets to add not only th a t

‘developing countries’ quadrupled such exports during these years, b u t

above all that the global figures conceal wide variations. First, w e s h o u ld

mention the emergence o f several ‘newly industrializing countries’ : f o u r

in Asia (South Korea, Taiwan, Hong Kong, Singapore), t w o in L a t in

America (Brazil, Mexico). Their share o f world manufacturing exports grew by zjper cent per annum between 1967 and 1977 (as against 2. 1 per cent per annum for Japan and West Germany, 1.5 per cent for th e e e c ,

and — 2.9-per cent for the United States), and now stands at 4.6 per c e n t o f

the total. Over the same period, the other n o n -o P E C ‘developing countries’ saw their share fall at the rate o f 2.6 per c e n t . I f w e in c lu d e

another ‘ special case’ , namely the OPEC countries, then i t is c l e a r t h a t w e

are witnessing an explosive fragmentation o f the old periphery. In 1977, these ‘newly industrializing countries’ accounted for 1 5 . 5 per c e n t a n d

17.3 per cent o f imports for the United States and Japan respectively, a n d

it would appear that the United States and Japan have already gone a lo n g

way in relocating their productive processes.

As one would expect, the process mainly affected labour-intensive industries run along Taylorist, rather than Fordist, lines, with a very low composition o f capital. The most typical examples are textiles and electronics. Thus between 1968 and 1978, the share o f ‘newly industrializ­ing countries’ in world exports progressed as follows: leather and shoes— from 4 to 16 per cent; ready-made clothes and hosiery— from 20 to 29 per cent; electronic components— from 4 to 22 per cent; clocks and watches— from 2 to 15 per cent; widely consumed electronic goods— from 4 to 13 per cent. Still more significant, however, is the growing strength of countries like South Korea and Brazil in shipbuilding, automobiles, and other industries with a medium composition o f capital. Whereas Brazil turned out one-thousandth o f the world’s motor-cars in 1959, it already produced 2.6 per cent, or 800,0000 units, in 1978. Of these, only 7 per cent more were exported than registered in the country.

12 Sec C. Palloix, 'Lcs firmes transnational?s..13 R. Linhart, *Le transfert des technologies et scs contradictions'. Rerut fran^aist i f administration publique No. 4, October 1977.** c e p i i , ‘Redeploiements geographiques et rapports dc forces industriels*. Economic Prospective Internationale No. 1, Paris 198).

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These two cases suggest, more clearly than others, that Fordism is spreading not only as a labour process, but also as a mode of consumption. However, while South Korea has all the features o f a ‘base for export production’ , exports rising from 12 per cent o f g n p in 1968 to 36 per cent in 1977, Brazil seems to be undergoing an expansion in its own market proportional to the steady 6-8 per cent growth in output. Even within the newly industrializing countries, therefore, various modes o f accumulation and regulation, no doubt based upon different wage- relations, have to be carefully distinguished.

IV— Different Models of Accumulation

We cannot here examine in detail the different modes o f accumulation present in the ‘Third World’, but nor can we simply ‘ start from the centre’, defining the periphery as a mere function o f it. We must now consider the ‘peripheral’ countries for themselves, as social formations with their own social relations and policies corresponding to their own dominant classes. Only such an investigation, stemming mainly from local researchers and militants, will reveal how each country might be integrated into a ‘world-wide extension o f Fordism’. For present purposes, however, we must confine ourselves to a few typical situations.

In two recent articles,15 Tissier has distinguished three types o f Third World industrial accumulation: a) ‘export promotion’, developing the old specialization in the export o f industrial and agricultural raw materials; b) classical ‘import substitutions’, boosting the local assembly o f consumer goods formerly purchased from the developed countries; and c) ‘export substitution’, 16 involving the production o f manufactured goods for export. Only the last two types are clearly relevant to this article: the conception o f ‘ industrializing industries’ is more a doctrine than a description o f reality.

1. The Failure of Earlier ‘Import Substitution’

Advocated for many years as a development strategy, import substitution w£s practised by various Latin American populist regimes in the 1940s, and taken up by South Korea and Taiwan in the 1950s. By the sixties, however, it no longer seemed capable o f producing results, at least in its pure form. The idea had been to finance the importation o f ‘Fordist’ producer goods out o f the agricultural surplus or the mineral and oil rent. Massive customs barriers, as high as 100 per cent in Latin America, would then nurture a sector producing consumer goods for the narrow middle-class market within the country. Hopefully, this would later make it possible to ‘move up the ladder’ to producer goods. As it turned out, the mode! ran up against three obstacles: a) The terms o f trade between exported raw materials and imported equipment goods shifted against the former. Even today in an oil-exporting country like Venezuela, the stages preceding final assembly involve such a rise in the composition o f capital that the profit-levels o f imported capital sharply decline. Hence, although

15 P. Tissier. ‘ L ’industrialisarion dans huit pays asiatiques depuis la fin de la seconde guerre mondiale’ , and ‘Conditions de travail et zones (ranches d ’exportation dans quelques pays d'Asie’, Critique de f Bconomie Politique No. 14, January 1981.16 The term is borrou-ed from H. Myint.

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there does not appear to be any external constraint, the process o f internal growth very soon runs out o f steam.17 b) Lacking industrial experience and good management, the young working class which operated the imported machinery could not attain the productivity levels o f Fordist theory, c) The narrow internal market, which in the 1920s blocked the first wave o f intensive accumulation in the centre, made it impossible to introduce a genuinely Fordist system.

We may therefore use the term ‘sub-Fordism’ to denote this caricature of Fordist industrialization, which rested on the illusion that technological acquisitions are the only factor in industrial development. Neither in the labour process itself, nor in the structure o f demand, had the social conditions for such a system o f accumulation really been achieved. In every case, this initial experience ended in failure: slow growth, a rising external debt, high rates o f inflation, and so on. Ominami Has described the final crisis in Chile, where a model based on the domestic market collapsed with the fall o f the Popular Unity government in 1973. Four years earlier, the Brazilian military had already put an end to such populist illusions in their own country.18 }

2. Export Substitution: ‘Bloody’ Taylorization

Although things initially remained at the level o f intentions, it soon became apparent that a fraction o f industrial capital in the centre countries was seeking to relocate parts o f Fordist industry in the cheapest available wage-zones. In the course o f the sixties, however, this tendency began to conflict with the ambition o f local dominant classes to base their own development strategy upon this peculiar ‘natural endowment’. The countries in question were not at all o f the same type: some had just interrupted or altered an import-substitution programme (South Korea, Brazil), while others had traditionally played a sub-contracting role (Singapore, Hong Kong). Some would appear, in the statistics-based c e p i i classification, as ‘newly industrializing countries’ , while others like Morocco (where more and more o f the French textile and electronics industry is being relocated) remain merely as ‘developing countries’. Still, a number o f common features have to be noted.

First, it is more a question o f Taylorism than o f Fordism. The ‘ transferred’ jobs are typically fragmented and repetitive, not linked by any automated system o f machinery. The equipment is light and designed for a single operator: for example, sewing machines in the clothing industry, or microscopes and tweezers in electronics. In short, these are labour-intensive industries in the strictest sense o f the term. As Pierre Salama has pointed out,19 even within individual countries the composi­tion of capital widely varies between industries working for the home market and export-industries. In -South Korea, for example, per capita

17 See R. Hausmann and C. Ominami. ‘The realization o f the oil rent: A preliminary study o f the Venezuelan example, 1 9 4 6 - 1 9 7 9 ’ , c e p r e m a p paper n o . 8 1 0 1 , Paris 1 9 8 1 .

18 See C. Ominami, ‘Sous-dcveloppement et regulation cconomique’, c e r e m duplicated paper, Paris 1981.t9 P. Salama, ‘Recherchc d ’une gestion libre de la forcc de travail et divisions I n t e r n a t io n a le s

du travail’. Critique dr f hconomir Politique No. I t, October 1980.

fixed capital is four times lower in export-oriented manufacturing industry as a whole, z j times lower in the electrical and electronics sector, and 192 times lower in textiles and clothing! Unlike ‘import-substitution’, such ‘export-substitution’ costs local capital virtually nothing in terms o f capital goods. The ‘mega-tools’, corresponding to the heaviest parts o f branch-circuits, most often remain in the hands of technicians and production-workers in the centre. But Ivan Illich need not fear: micro -tools may, within certain social relations, be perfect instruments o f alienation and the exploitation of man by man.

It is not ditticult to find the labour suitable for Taylorization. For whatever Palloix may think, the relationship o f the working class to material production does not make it the sole depository o f skills. Since the advent o f patriarchy— the most widely distributed phenomenon in the world— women’s exploited role in household production has prepared them for the twin requirements o f Tayiorist industry: complete acquiescence in the goals o f the labour process, and complete involve­ment in the job. Even the body-movements are very similar in domestic labour and the two key transfer-btanches: textiles and electronic assembly. A Malaysian investment brochure puts the point well: ‘Oriental women are famous throughout the world for their dexterity. With their small hands, they work fast and pay great attention to detail. Who could be better qualified by nature and tradition to raise the efficiency o f an assembly line? (. . .) Wage rates in Malaysia are among the lowest in the region, and women-workers can be employed for about us $1.50 a day.’

The Asian ‘ free zones’ are, indeed, the most typical o f this kind of ‘development’ (if we dare use the word). Women frequently make up 80 pet cent o f the workforce, earning some two dollars a day. They are young women, seeking an escape from poverty or a forced marriage (90 per cent under jo , and 50 per cent under 20 years o f age). For the Gulag Archipelago does not offer them many years o f work: pregnancy leads to dismissal from the company, even expulsion from Singapore in the case o f Malaysian women; and the whole model is based upon extraction ofthe maximum surplus-value in the shortest possible time. Moreover, the reserve-supply o f labour is virtually inexhaustible if one includes the ‘hinterlands’ o f Thailand, the Philippines, Indonesia and, more recently, People’s China.

Secondly, this model characteristically involves ‘bloody’ exploitation— in the sense o f ‘bloody’ used by Marx to describe the legislation that launched primitive accumulation in eighteenth-century Britain. This is not to say, o f course, that a country like South Korea is following the ‘ British model’: the partial transfer o f central production to the periphery is quite different from the formation o f a new centre. In their studies of Asia and Brazil, Salama, Tissier and Mathias20 independently point out that '^Olport-substitution’ always involves centralized measures (a wage- freeze, inflation) to keep workers’ living standards at a very low level, or even, in Brazil and Chile, drastically to reduce them. Jn general, these

20 G. Mathias, ‘Transfert de technique et transfert de theories: du 'dualisme’ du marche du travail aux nouvelles formes de resistance ouvriere en Amerique Latine’ , Critique de f Econo mi t Politiqut No. 14, Janaury 1981.

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authors underline the state’s role in managing labour-power: a role which involves regulation (social legislation, or rather the lack o f it, the creation o f free zones, etc.); repression (police control or dismantlement o f trade unions, systematic use o f imprisonment and torture on a more or less selective basis); and regimentation (the whole army o f South Korean workers who, under cover o f the Vietnam War, could be directed to large-scale public works).

As the ‘ scissors’ opened between stagnant purchasing-power and a rising apparent productivity of labour, the rate o f surplus-value climbed to a level markedly higher than the equivalent rate in the ‘Fordist’ centre. Moreover, the increased pet capita output was obtained more on a yearly than an hourly basis, through the lengthening of the workiijg day and the production o f absolute surplus-value. In South Korea, l^r example, where 30 per cent o f women workers have a 1 j-hour or even longer day, disablement as a result o f work-accidents has increased by an annual average o f 17 per cent since 1970. This makes it easier to understand why women workers are discarded after the age o f 50. Qnce their eyes and hands no longer correspond to the norm, they fall back into the ‘traditional sector’ rostitution.

Now, although this model o f accumulation is highly profitable, it cannot escape its narrow limitations. In world terms, the existence o f nineteenth- century enclaves within twentieth-century branch segments can only temporarily augment the surplus-value extracted in what are, after all, very minor areas o f world production. To be sure, these enclaves raise profit-levels for foreign capitalist investors, or, much more generally, for the multinational companies which assign a link in their branch circuit to local capitalists. In 1974, according to Salama, Japanese conglomerates already controlled 40 per cent o f South Korea’s and 56 per cent o f Taiwan’s foreign trade. In 1971, 80 per cent o f Brazil’s and 90 per cent o f Mexico’s electronics exports represented ‘captive trade’ between contrac­tors and subcontractors. These gains do not, however, solve any o f the macro-economic problems o f world accumulation, and leave unchanged both the mode o f production and world consumption patterns. For a branch such as textiles, where world demand is only slightly increasing, it is a zero-sum game in which the loser is employment in the centre. In global terms, o f course, the spread o f capitalism to the periphery does serve to extend the world market, and new jobs in the centre’s equipment-goods sector roughly offset the loss o f traditional employ­ment.21 Still, the global balance conceals the sectoral and regional problems caused in the old industrial countries by ‘competition’ among unequally exploited workers. All this explains the protectionist reactions which have sharply reduced textile imports from the ‘developing’ and ‘newly industrializing’ countries.

For their part, the local dominant classes are well aware that they cannot forever remain the wardens o f capitalist prisons. It will not be long before this nineteenth-century model elicits a corresponding response from the working classes. Indeed, since the model rapidly exhausts the available

J l See O ECO , The Impact of Stu-lj Industrializing Countries on Production and Trade in Manufactures, Paris 1979; and^Jafont, et ai.

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labour-supplv and requires ever more immigrant workers, the social question will soon be combined with an urban and a racial question. At first, the subcontractor-states tried to solve the problem through such ‘bloody’ methods as the forced sterilization o f Malaysian women. But now their aim is to raise the technological level o f their exports, increasing domestic wage-rates and sub-contracting labour-intensive contracts to their hinterland. In the more populous countries o f Taiwan and South Korea, where the task is to establish a more cohesive system o f accumulation and ‘hegemony’ (in the Gramscian sense o f the word), the dominant classes must follow Brazil in a new-style ‘ import-substitution’ programme that we shall call ‘peripheral Fordism’.

3. ‘Peripheral Fordism’: Its Nature and Crisis

Whether it was based on an old-style import-substitution drive, or on an export-substitution programme combined with classical export-promo- tion, local capitalism had become a not-insignificant force by the early seventies in a number o f ‘newly industrializing countries’ . The middle classes, immediately below the richest five per cent, have grown considerably in the last 15 years and, together with the local bourgeoisie, account for virtually all the consumption o f consumer durables. This layer, too, has grown rich on surplus-value extracted in the export sector; but whereas, in the preceding model, this surplus-value was garnered by the multinationals, it here serves to fuel a local petty-bourgeois market. This has opened the way for a new twin-pronged programme o f import-substitution. The first prong is an attempt to integrate more advanced technological links in the chain o f the relevant export branch: South Korea, for example, having captured its own market for textile machinery, now actively exports some o f its output. The second prong involves an attempt to assimilate higher stages in the production o f local consumer goods. Thus, although the export o f such goods is continuing and even expanding, the main effort is directed towards ‘processing industries’ for building material (cement), and above all towards links in the motor and home-equipment industries prior to final assembly.

The motor industry perfectly illustrates the combined dynamio o f this new ‘peripheral’ Fordism: namely, import-substitution plus export-sub­stitution. The problem with motor-car assembly in the ‘ region III ’ periphery was, on the one hand, that it required a skilled-labour component as well as some industrial experience on the part o f unskilled male workers, and, on the other hand, that this particular comodity, unlike T-shirts or pocket-calculators, had to find large, nearby markets. The ideal region-III labour force would have been: a) very cheap to reproduce; b) close to major markets; and c) endowed with a skilled component. But in the Fordist system, for which local consumption norms (and hence wages) are yoked to productivity, this would have been to square the circle. There can be no room for regions located in ‘excessively’ dominated economies that lack an adequate local market. Given the high transport charges, and the relatively minor share o f wages in total costs, there can be no question of using Third World labour-reserves merely as a base for re-exporting operations.

22 See P. Salama, 'Recherche d ’une gestion libre . . .’

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With these simple points in mind, we can identify two ‘inferior’ variants o f ‘decentralization’. First, it is possible to replace vehicle exports with ‘completely knocked-down’ sets o f parts that will be assembled in the Third World for the small markets o f local dominant classes. The costs involved in acclimatization, the loss o f economies o f scale, and so forth, make this a rather unsatisfactory alternative. But since importing-coun- tries began to insist on local assembly, there has often been no other available form o f export. Secondly, it is possible to use cheaper wage-zones near a central market as an assembly base for light vehicles that will then be re-exported to the centre. Citroen deux-cbevaux, for example, can be assembled in Galicia and sold on the French market.

In the course o f the 1970s, two ‘conceptual breakthroughs’, once again due to Ford Motor Company, cast the problem in a completely new light. Already, considerable economies o f scale had been achieved through the distribution o f branch output over North-W'est Europe, such that a number o f large units each produced a standardized component for the whole continental market. It was no longer the assembly o f finished vehicles, but the production o f components—-essentially, engines, gear-boxes, axles, etc.— which most clearly typified such industrial relocation. The closeness o f markets, regional costs, economies o f scale and, above all, benefits conceded by the ‘ recipient’ country combined to dictate the choice o f location. As described, o f course, this system remained internal to the industrialized countries. In the sixties and seventies, however, new countries became technically integrated into the world branch circuits o f Fordism, without being able to master its overall dynamic in an autonomous national framework and, in particular, to assimilate its mode o f social regulation. This solved the contradiction to which we referred earlier. Fordism could find here a working class together with certain managerial structures; the standard o f living did not necessitate a high wage-level; and yet, a sizeable middle-class market was already in existence. Most o f these countries had totalitarian regimes: Eastern Europe, Spain towards the end o f Franco’s rule, Brazil, countries in the ‘ inner periphery’ or ‘newly industrializing countries’ from the wider periphery. With an eye to national development, however, these countries usually required a high rate o f ‘ integration’ . In other words, they expected that local manufacturing industry would make the greatest possible contribution to the final product, or even, in extreme cases, that an all-round national industry would be established.

But although, in most o f these countries, the home market was too small for the advantages o f local production to outweigh the loss o f economies o f scale, such ‘ relocation’ was initially the only way in which the motor companies could avoid losing their market. Besides, the export market for fully equipped factories was o f great importance to two allied branches, mechanical engineering and machine-tools, in which the motor companies are often implicated. Once again. Ford made the ‘break­through’ by signing an agreement with Spain that laid the basis for a new conception o f relocation. This involved not merely import-substitution for an inadequate local market, or use o f the country as a base for re-exporting operations, but a combination o f the two. On the one hand, Spain would provide an expanding local market despite the relatively low norms o f working-class consumption; on the other hand, it would accept

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a reduced rate of integration (so that production segments bccame less dispersed) in return for a clear commitment to produce and re-export in massive quantity a certain number o f components. Thus, the 1972 ‘preference agreement’ or ‘Ford law’ lowered the minimum rate of integration from 95 to 66 per cent, while Ford undertook to re-export two-thirds o f output and to increase its sales in Spain by no more than 10 per cent. At the same time, the government accorded major facilities for the importation of machine-tools. When General Motors also set up local factories, Spain became the great ‘ region III ’ o f the European motor industry. In Portugal, Renault negotiated a variant o f the ‘Ford law’, expanding and building four engine and vehicle plants (15,000 new jobs). In effect, the government extended a certain protection to the Renault subsidiary, whose share o f the internal market rose from 12 to 30 or 40 per cent. But three-quarters o f the }00,000 locally produced engines were re-exported to Northern Europe. More generally, it has been estimated that, in ten years’ time, this new relocation strategy will encompass 1 j per cent o f world output. The resulting loss o f jobs in the industrial heartlands will be partially offset by a rise in tertiary, conceptual employment. But if output remains constant, the balance-sheet will be extremely negative.

It should not be thought strange that such various countries as Poland, Spain, Portugal and Brazil are considered in the same analysis. For it is no longer relevant to conceive the Third World as a single bloc opposed to the industrial countries East and West. To a degree, certain ‘newly industrializing’ and eastern-bloc countries, like the less industrialized parts o f Western Europe before them, are trying to hook on to the accumulation schema o f ‘central Fordism’ . But whereas, some four years ago, this drive appeared so successful that Brazil, Iran and Nigeria were already being described as ‘ imperialist relay-countries’, it is now moving into a an extremely dangerous stage. No only do these countries store up all the crisis-factors o f central Fordism; they must also face the additional problems associated with their ‘peripheral’ situation. As in earlier ‘ import-substitution’ programmes, any attempt to climb the Fordist technological ladder involves that very rise in the composition o f capital which is throwing the central system itself into crisis. Nor can the newcomers find any longer an expanding world market to provide the profits on their costly imported investments. After Poland, which has chosen a basically similar model o f accumulation, Brazil is one o f the most heavily indebted countries in the world. In Asia, South Korea’s debt-level is second only to that o f Indonesia.

Furthermore, the multiplicity o f wage-relations, corresponding to the different logics combined in ‘peripheral Fordism’, prevents the stabiliza­tion o f a hcgemonic political and cultural system. In Brazil, for example, wage-earners fall into at least three categories. First, there are the ‘pre-Fordist’ car-workers who, though a long way from the correspond­ing social benefits, already have the collective factory life and the ‘ firmness’ bestowed by the production process which allowed their French and Italian counterparts to grasp such benefits. Indeed, despite the high labour-turnover imposed by the employers, and despite police repression, the trade-union movement is being constructed or recon­structed and already securing relatively high wages for these workers. As

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Singer shows,21 they are thereby gaining access to durable consumer- goods. Secondly, the women-workers suffering ‘bloody Taylorization’ in the electronics and textile industries are hardly any better off than their Asian sisters. Finally, workers in ‘export-oriented’ agriculture, particu­larly the sugar-cane plantations, are close to slavery: adults, and children stunted from undernourishment, usually work for some ten pence a day. These three types o f wage-labour, far from moving down a scale of ‘backwardness’, actually constitute a single whole. The second and third provide finance for the first, and export-agriculture assures an easy life for the middle classes. Thus, the production o f sugar-based carburol as a large-scale alternative to petrol can only be profitable if the old social relations are preserved on the plantations. But this, in turn, presupposes a ‘bloody dictatorship’ , contradictory to the trade-union forms normally compatible with Fordism and the aspirations o f the new myldle classes.

When this contradiction developed in Southern Europe in the 1970s, it resulted in ‘ the crisis o f the dictatorships’ . However, the lifting o f political repression in Spain and Portugal rapidly led to the loss o f an internationally competitive position based upon what were, for capital, highly beneficial relations. Hence the economic crisis which came hard on the heels o f the ‘opening towards democracy’ . Conversely, the Iranian experience demonstrates the price to be paid if such an opening is not made in time. At any event, the economic crisis in Brazil and South Korea, following the localized strikes and uprisings o f 1980, casts doubt on the idea o f a ‘middle way’ for peripheral Fordism.

In 1980, when I was doing research-work on industrial redeployment, a Renault manager cited a list o f countries which, a few years previously, had seemed to combine the preconditions o f ‘peripheral Fordism’ and were therefore ‘ interesting’ to motor-car manufacturers. These countries were: Mexico, Brazil, Spain, Algeria, Nigeria, Turkey, Iran, South Korea, Poland, and some other eastern-bloc countries. I leave the reader to ponder this list. My own conclusion is that if there is a ‘world-wide extension o f Fordism’, then the extension is o f the crisis o f Fordism.

23 See P. Singer, ‘Reproduction de la force de travail et developpement’ . Rtvut Titrs-Mondt No. 65, October --December 1976.

A lain L ip ietz— II

Marx or Rostow?

Reading John Sender’s glowing introduction to Bill Warren’s ‘ Imperial­ism, Pioneer o f Capitalism’, I thought I could recognize several o f the themes broached in my article on ‘Towards Global Fordism?’ . 1 But unfortunately, although Warren’s book has the great merit o f identifying many weighty issues for Marxists in the dominated countries, his conclusions and even his method o f confronting these ‘ facts’ have made my hair stand on end. Yes, there is a lot o f truth in Warren’s book. It is true that we must have done with a certain Romantic critique o f ‘development’ which falls short o f the necessary precision, balance, autonomy, and so on. It is true that, since ‘ the living soul o f Marxism is concrete analysis o f a concrete situation’ (Lenin), the priority task is to study the Third World Countries as they are, before dreaming o f what they should be— although Warren himself scarcely brings this project nearer to completion. It is true that Lenin’s own ‘bestseller’, Imperialism, The Highest Stage o f Capitalism, was already a poor book, containing a quite erroneous analysis o f the tendencies o f imperialism. Indeed, capitalism itself has cheerfully given the lie to Lenin’s thesis, rising from one stage to another until the glorious 1960s— although Warren does not mention the wars and other monstrosities integral to this process. It is true that a moral critique o f imperialism is not necessarily a critique of capitalism, and that anti-imperialism has too long served as a demagogic cover for the development plans o f a modernist local bourgeoisie, whether liberal or statist in orientation— although it would have been nice to see an equally rigorous critique o f the ‘ lackeys’ o f foreign capital. It is right to stress that domestic causes are paramount, that the local elites bear the main responsibility for their country’s plight, and that ‘dependence’ only perpetuates itself on the ground o f an internal situation— although Warren could have mentioned the military interven­tions which, after all, have provided enough o f the headlines over the last thirty-five years. It is true that capitalism and industrialization are rapidly developing in the dominated countries— although not in all o f them, and not in the carefree way suggested by Warren. It is true that the Third World can no longer be grasped as a single, homogeneous entity, susceptible to uniform criticism o f ‘dependent development’ or a fortiori ‘the development o f underdevelopment’.

Yes, in spite o f the ‘oversights’ that might be put down to polemical zeal, Warren’s theses would make an excellent pamphlet. Unfortunately, Imperialism, Pioneer of Capitalism is not a pamphlet but a book based on

' In breaking with traditional theories o f dependency, I am basically indebted to the work o f two Latin American writers, Carlos Ominami and Ricardo Hausmann. See the references attached to my article; and C. Ominami, ‘Aper^u critique des theories du dcveloppement en Amerique Latine’, Rentt Tiers-Monde No. 80, October-December 1979.

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documentary evidence and reasoned argument: it excoriates opposite points o f view, presenting a new approach and claiming to ground it on considerable erudition. In reality, however, it is the Marxist approach in all its purity which he claims to offer us. Since the work threatens to have a major impact, it should be judged according to rigorous theoretical and political criteria. We cannot content ourselves with knowing smiles at a few ‘verbal excesses’ or ‘needless provocations’. Warren’s book should be read word by word, for his arguments will be used word for word.

The Concept of the Third World and Pre-Capitalist Residues

Alas, when we examine his detailed arguments, all the positive features o f his position ‘turn into their opposite’. He may grasp the Third World’s heterogeneity, but he treats the Third World as a ‘corpus’ o f homo­geneous figures. He may recognize its industrial development, but he does not pay the slightest attention to the character o f such industrializa­tion. He may prioritize internal causes, but he quite simply refuses to analyse the' specificity o f the socio-economic structures in question. He may avoid confusion o f anti-imperialism and anti-capitalism, but at the price o f a veritable apology for capitalism. He may do away with normative criticism, but only in order to restore the hold o f the latter-day Moloch and its high-priest Adam Smith: ‘Accumulate, accumulate! That is Moses and all the prophets!’ Warren’s return to ‘original Marxism’ is, in fact, a return to the nineteenth-century Marxism o f Struve and Kautsky, which continued to flourish in the Third International, particularly in Stalin’s writings. For Stalin declared his faith in limitless development of the productive forces, understanding by this a one-way, linear, quantita­tive growth in the mass o f machinery and the flow o f commodities.

Such a religion, however, stands in no need o f Marx. It has other high-priests in such traditional bourgeois growth-theorists as Walt Rostow,2 and all the modern apostles o f ‘industrialization’ and ‘supply- side’ policies. I f it now finds succour among Marxists seeking to revive the most questionable o f the Old Man’s ideas— for example, his trust in the Promethean virtues o f capitalist technical progress— this says a great deal about the ideological defeat suffered by anti-capitalist forces in the seventies.1 We shall return to this point below, but let us first examine some key areas o f Warren’s argument. To what does he refer when he seeks to prove ‘the illusion o f underdevelopment’? What does he have to say about it? What criteria does he use? Well, he refers to the ‘non-existence’ o f underdevelopment, to the hollowness o f the concept of neo-colonialism. Building around us his first redoubtable paradox, Warren has the facts and figures to demonstrate that the dominated countries are not so underdeveloped after all. Unfortunately, he has to base himself upon a sample o f countries, if only to prove that the sample growth-rates are not at all out o f the ordinary. However, his very choice of countries shows that Warren implicitly recognizes what he seeks to disprove: namely, the existence o f problem-countries, prudently termed

2 Walt R o sto w , Tht Stages o f Eionomic Growth, Cam bridge 1980.3 Arghiri Emmanuel has gone over ro a position fairly similar to that o f Bill W arren. Sec Trchnologie appropriit an technology sous-devtloppee, Paris 1981.

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'the Third World’ , which do not, o f course, include the Eastern bloc, Japan, Australia, New Zealand, and so on.

In fact, Warren does not even define the object o f his analysis— a fine method for a Marxist theoretician! For if we leave aside self-proclamation by a particular country, we are offered no criteria with which to delimit this ‘Third W orld’. Should a common colonial history perhaps be the defining feature? But then we could count on the fingers o f one hand the non-West-European countries that have never borne any kind o f colonial yoke: Japan, Thailand, Afghanistan, and which others? Curiously, Warren seems to overlook that every country in the Americas is the product o f colonization. Perhaps the missing criterion lies in the specificity o f internal socio-economic structures— the true root o f ‘underdevelopment’ in most Marxist thinking. Even Lenin saw this as the basis o f a ‘democratic and anti-imperialist’ stage o f the revolution, at least in those countries where, for reasons bound up with colonization, there had been no capitalist agrarian reform. It is, indeed, hard to grasp the different fates o f two ex-colonies such as Argentina and Australia without taking into account the history o f their agrarian structures.4 Warren, however, objects to this approach in the name o f a supposedly Marxist dogma that pre-capitalist forms are bound to dissolve. Any analysis which refers to the survival or consolidation o f particular semi-feudal or latifundist forms o f production is swept aside without any concrete investigation. We are a long way from Lenin’s patient study o f the development o f capitalism in Russia. What would be the point? After all, capitalism inevitably dissolves everything other than itself!

Now, all Marxist historical analysis proves exactly the opposite. After Spanish colonization o f Central and South America, every serviceable Maya, Aztec or Inca structure was consolidated and mobilized for the extraction o f minerals,5 while slavery was ‘ reinvented’ for the purposes o f colonial agriculture. In the seventeenth century in Eastern Europe, the capitalism o f Amsterdam and then London imposed the ‘second serfdom’ ,6 whose final, more or less debased forms were only abolished in 1918 (after the fall o f the Turkish, Austro-Hungarian and Russian empires), or even in 1945 by the ‘people’s democracies’ . In France, itself, the history o f agriculture refutes Kautsky’s thesis: for petty commodity production, much more profitable than capitalist farming for the agro-food companies, is still the basic fotm o f the exploitation o f peasant labour.7

The Social Relations of Third World Industrialization

Given that Warren sees a case for the ‘ importation’ o f capitalist relations (‘Imperialism, Pioneer o f Capitalism’), it might appear that external structural dependence is the defining characteristic o f his object o f study.

4 O f course, it is possible to embrace ‘psychologist’ explanations a la Weber, counterposing the Protestant capitalist ethic to the Catholic ethic. See F. Braudel, Civilisation matcritlli: Bcstiomu tt Capitalism', Paris 1980, and A. G . Frank, Accumulation primitivi, ijo a -i/o o , which have both correctly demolished such absurd positions.5 See Frank, op. cit.6 See Braudel, op. cit.7 See A. Lipietz, l u Capital tt son Espace, Paris 1977.

Strangely, however, he invokes the two reasons why this is not so: the minor, and declining, importance o f direct foreign investment; and the modification o f the productive structure away from primary towards manufacturing activity. These are certainly crushing arguments against the ‘old theory’ o f dependence which, in the 1960s, beguiled our own childhood as anti-imperiaiist militants, as well as feeding the dreams o f the national bourgeoisies. Although it is easy in 1980 to ‘demolish’ the conceptions o f yesteryear, the task does have to be fulfilled. Still, there should have been a concrete analysis o f precisely what has replaced such dependence. It is strictly impossible to understand contemporary imperialism if no attention is paid to the two essential changes which took place in the seventies: namely, the turn to an ‘international credit economy’, and ‘export substitution’ .8 True, Anaconda and United Fruit were big bad wolves, simpler to identify, although people in Chile and the Dominican Republic can remember that they were not paper tigers. Nowadays, there are other ‘outside controls’ weighing on the Third World and siphoning off the value added by its workers: they are called the Euromarket, the i m f , sub-contracting, engineering royalties, techno­logical dependence. They do not, I admit, so readily spark off popular mobilizations. But that is one more reason why Marxists should analyse and denounce such mechanisms.

It is not enough to hail the lightning industrialization o f certain Third World countries, long ago diagnosed in Rostow’s theory o f ‘ take-ofT. It is necessary to define the socio-economic relations expressed in this process— something I have myself attempted at a still very superficial level. Only in this way can we grasp, behind the flat, uniform language o f statistics, what used to differentiate, and what now differentiates, the centre from the periphery: not only the United States from Uganda, but also, rather more subtly, Australia from Argentina. Here the key factor is the type of relations which arise between social classes in the establish­ment o f a system o f accumulation. In the centre, a basic cohesion developed between the different sections o f production, between the reproduction o f labour-power and the realization o f surplus-value, culminating in the ‘ virtuous circle’ o f post-war intensive and auto­centred accumulation. In the periphery, attempts were made, with a greater or lesser degree o f success, to mimic this ‘virtuous circle’ and to hook on to centre-based accumulation by taking advantage of its requirements and its crises. In the profoundly changed domestic conditions o f today, such an attempt leads to a fragmentation o f the ‘periphery’ and the appearance o f ‘New Industrial Countries’ . Bill Warren is happy to accept their provisional technological dependence, seeing it as merely a growth o f interdependence. What a strange ‘ interdependence’ o f subcontractor upon contractor, performer upon decision-maker, manual upon intellectual, debtor upon creditor! Technology is not a primary product growing on the trees o f Northern forests. It is the materialization of relations of production whose mode o f establishment and reproduction varies according to the social formation that adopts them, or has them imposed.

We can see why Marx hitnself made the huge mistake o f believing that the

* See mv article on Fordism, above.

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railway would revolutionize Indian society. A century later, o f course, the caste system is still in place, and India is not even classed as a New Industrial Country. But at least Marx offered the tools which allow us to account for his error o f prognosis.9 Warren has only retained the prophecy, ignoring both the reality and the tools. Thus he prolemicizes against Samir Amin and various Latin American Marxists who at least have the merit o f knowing the facts and manipulating the tools; but he does not even make any reference to the fundamental concepts o f Marxism: the relations o f production, surplus-value, accumulation, reproduction, realization, and so forth.10 The result is a complete incapacity to analyse ‘ facts’ empirically, apprehended through the quite peculiar and highly distorting lens o f statistics. In the light o f certain statistics, it might be said o f these dominated countries— which Warren is quite able to denote, even if he refuses to define them as such— that thev ‘profit’ from imperialism. But let us look at things more closely.

Economic Statistics and Social Truth

First, we should mention in passing a few incredibly naive (or disingenuous) arguments. In chapter six, it is stated that colonization drove back hunger and led to progress in health care. Obviously, Warren has never heard o f the near-genocide o f the Amerindian peoples, now being consummated in Amazonia, or o f the outbreak and causes o f the 1973—76 Sahel famine.1 1 He credits capitalism with medical advances,12 but does not debit it with the massively unequal level o f provision. In the Brazilian Nordeste one out o f every two children dies in the first year o f life, while in the Third World as a whole some 50 million children die every year. But, after all, the population is growing all the time!

We should also mention the short-sighted character o f the book’s predictions (chapter 7, section 4). Since Bill Warren died in Janauary 1978, his most recent figures dating from 1975, it would be too easy to blame him for the fact that he did not foresee the huge level or Third

9 In a paper written in 1972, my friend H. Rouilleault and myself used the passage from Marx on the colonization o f India as an example o f erroneous prophecy. (See ‘Sur les pratiques et les concepts prospectifs du matcrialismc historique', duplicated paper, Paris University I.) Contrasting it with Marx’s far-sighted predictions on assembly-line labour, we attributed his error to an unwarranted projection o f an abstract tendency o f capitalism to the cmcntt reality o f colonized India which overdetcrmines it. In this w ork, wc based ourselves on the Marxist theories o f imperialism. But curiously, Warren is content to counterpose Marx to these later Marxists, without mentioning that the facts o f the last century (quite a long time even for a 'historical tendency’) have refuted Marx's position.10 Notwithstanding a certain Northern or Euro centric sclfcomplacency, Warren is actually a whole war behind the discussion among Latin American Marxists. See, for instance, the debate on Brazil which opposed R. M. Marini to F. M. Cardoso and J . Serra in the pages o f Rtvitttt Mexicana dt SocioUgia (special issue), 1978.11 See Comite Information Sahel, j2« se nourrit dt la famine tn Afriqut? Paris 1975.12 There is, o f course, a link between the two, and the rather belated discov:rics o f Pasteur and Fleming are, in a sense, the by-product o f bourgeois rationalism and the industrialist perspective. However, there is nothing automatic about this link. Although mercantile and manufacturing capitalism were much more developed in fourteenth- or fifteenth-century Europe than they are in Uganda today, they could not prevent the plague from wiping out two-thirds o f the population. Conversely, China’s health policy during the Cultural Revolution was much mote effective than those o f dominated capitalist countries at an equivalent level o f ’quantitative development’.

World debt in 1981, the stifling o f the Brazilian ‘miracle’ in 1980, and so on. Still, the Marxist dialectic ought to have inspired him with a certain sense o f caution. Most dangerous for scientific and ideological debate, however, is Warren’s acritica! manner o f apprehending ‘the facts’, and the criteria he uses to evaluate them. Amassing statistics on the g n p , trade patterns, income distribution and other aspects o f Third World countries as a whole, he argues in chapter eight (‘The Illusion o f Underdevelop­ment: Facts o f Post-War Progress’) that neither a cross-section nor a longitudinal series displays the traditional ‘profile’ o f ‘underdevelop­ment’ .

First, we should note that this method lumps together countries openly fighting the ugly sores o f underdevelopment and those which bear its full brunt, ‘New Industrial Countries’ and ‘Less Developed Countries’ ( l d c s ) , o p e c member-states and countries with no raw materials. I f everything is jumbled in this way, it is not surprising that the laws o f statistics will yield a rather monotone picture. Warren does ask us to appreciate the heterogeneity o f the Third World, yet he takes no heed o f it whatsoever. Indeed, he disowns any inclination to separate off the o p e c

countries, since ‘it amounts to claiming that the l d c s are all doing badly except for those that are doing well’ . Surely, however, we must not only take into account that the dominated countries are not uniformly ‘successful’ , but also examine, for example, how and in what respect the oil-revenue earners are still dominated countries.13

Now, it is an excellent thing that Marxists should confront the statistics, and most o f the writers I quote in my article are virtuosi in this regard. In the words o f Bachelard, however, we must ‘understand in order to calculate, not calculate in order to understand’. I f we take the example o f ‘per capita g n p ’ , Warren is filled with wonder that this indicator is now growing more rapidly in the dominated countries than it was a century ago in the industrial countries. In reality, this ratio is based upon complex and debatable procedures o f aggregation and evaluation— procedures which Warren does not even dream o f questioning. It measures, in current local value or ‘ international value’ , the changing relationship between the gross market product and the total population. Thus in Marxist terms, its evolution expresses at least three different trends:

1. The change in the ratio o f ‘market (or capitalist) economy to natural economy’ . I f colonization breaks up the communal relations o f an African village, so that its inhabitants are reduced to begging in shanty towns or, in a few cases, to wage-labour, then per capita g n p will sharply rise even if production techniques remain unchanged. In this case, the introduction o f wage-labour is clearly the principal factor behind the rising ratio.

2. The change in the relationship between ‘net product’ and ‘amortization

“ Throughout history, the colonized or dominated countries have experienced similar 'booms' (coffee, sugar, diamonds, and so on, in the case o f Brazil) without being turned into developed countries. On the Venezuelan oil boom, see R. Hausmann and C. Ominami, ‘The realization o f the oil rent: a preliminary study o f the Venezuelan example, 1946-1979’ , c e p r e m a p paper no. 8101. Paris 1981.

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o f fixed capital’ . I f peasants or craftsmen who used to work by hand or with rudimentary tools are made to work on costly yet poorly utilized machinery, then per capita g n p will again rise even if labour productivity remains the same. ‘Mechanization’ o f the Third World, requiring the purchase o f equipment goods whose volume rises more than propor­tionately to g n p , is clearly the second cause o f the rising ratio.

3. The increase in labour productivity (i.e., a fall in the labour-value o f use-values), if g n p is calculated in terms o f volume. This is the only trend which would really justify talk o f the ‘progressive’ character o f the two preceding phenomena. However, numerous field studies suggest that Fordism in the dominated countries does not lead to anything like the gains in hourly labour productivity achieved in the dominating countries.

A similar critique could be made o f all the other statistical indicators used by Warren. But let us rather examine the criteria with which he evaluates his ‘ facts’. (The sense o f ‘criterion’ is given, for example, by my recognition that a rise in hourly labour productivity would be a good thing.) Now, I must say that Warren’s ‘criterion’ leaves me flabbergasted: ‘Is the situation better or worse (in terms o f per capita g n p ) than it would have been in the absence o f colonization or any other outside interven­tion?’ For how can Warren possibly imagine, not to say calculate, what the present standard o f living would be in the Aztec or Inca empire, Ghana or Benin i f colonization had not destroyed them in past centuries, and i f they had developed only through internal class struggles? After all, the Muslim empire had a comfortable lead in culture and economy at the end o f the Middle Ages; and, conversely, nothing suggested in 1850, on the eve o f the Meiji Restoration, that the Japanese feudal system was about to launch into a Prussian-style ‘ revolution from above’. 15

One foot in the past and another in the present— such comparative science-fiction is, o f course, highly questionable from a scientific point o f view .16 But Warren’s approach is also o f extreme political gravity: not only does it resemble the traditional ethnocentrist argument and, above all, the social-chauvinist position o f the European Social-Democratic and Communist parties on national liberation struggles (e.g., the post-1946 line o f the p f c on the Algerian revolution); it is also strikingly similar to capital’s apologetic response when faced with a critique o f wage-labour

14 In my view, this is the main problem affecting the trade balance o f dominated countries. There has been so much discussion on the ‘worsening o f the terms o f trade* that Niep was able to tabulate the conflicting conclusions o f more than eighty writers! (See T. H. Niep, 'Trends in the terms o f trade o f ldcs ’, working paper no. 8106, Lave] University, Quebec.) The real problem involves not so much relative prices as volume-efTccts.13 Samir Amin at least suggests some reasons why ‘decentralized tributary modes o f production* turned towards capitalism in a more spontaneously way than the centralized tributary empires. See S. Amin, L e devtleppement inegal, Paris 1973.16 When he plunges into these retrospective ventures, Warren has recourse to some rather odd testimony. Thus he quotes a settler who explains with some satisfaction that a Ghanaian village family earned enough in 1946 to buy ‘all the food it needed’. A Romanian peasant, he suggests by way o f contrast, lived in near-prehistoric conditions at the beginning of the twentieth century, and was still much worse off in 1946. (Warren, p i j j .) One would, o f course, have preferred a mote impartial account o f Ghana in 1946 and in its prc-colonial empire. But one can only note the worsening o f the Ghanaian peasant’ s lot in relation both to 1946 and to the present situation o f the Romanian peasant.

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(‘ it’s always better to have a wage than to be unemployed’). Evidently, a Renault worker in 1981 has a higher standard o f living than a peasant at the dawn o f the Industrial Revolution. But is that a reason not to fight against capitalist exploitation? The worker does, o f course, receive a wage, but that is no reason to surrender the surplus-value to capital. Thus, beneath all Warren’s talk o f ‘ reciprocal advantage’ and the ‘ interdependence’ o f dominators and dominated within imperialist relations, one finds not only the classical pro-imperialist discourse, but also mutatis mutandis the pro-capitalist discourse in its entirety.

Warren’s Acceptance of Capitalist Exploitation

Let us now look more closely at ‘ the drain o f surplus’, without arguing over Warren’s awkward specifications that betray his inability to distinguish between the primary and the secondary phenomenon.17 The main point is that Warren admits the legitimacy o f a ‘drain o f surplus’ (relative or absolute, it hardly matters): ‘But since investment is generally value-creating . . ., it does not follow that an excess o f repatriated profits over the original investment necessarily represents an absolute drain: the value-added will have also increased wages, salaries, and government revenues— a net gain compared to the situation if there had been no foreign investment.’ 18 There is no mistake: that really is the argument o f a man who, in the name o f the original Marx, seeks to condemn most o f Marxism since Lenin! In point o f fact, even though Marx had not discovered surplus-value in 1844, he would already have dismissed such an argument, typical o f the most vulgar apologetics. For, contrary to the ‘ factor-remuneration’ theory, in which profit accrues to capital and wages to labour, it is not ‘investment’ but the exploitation o f labour that actually creates value.19 However ‘fair’, the wage always involves exploitation (at a rate o f more than 100 per cent in Warren’s example!). Whether the outlay o f variable capital is o f national or external origin, there is no change in the capitalist relationship. But this is not at all the case with regard to international or inter-regional relations: if the surplus-value extracted in a particular country is systematically exported to a ‘centre’, then the rate o f accumulation will be lower than in the centre; the ‘development’ o f capital will be retarded (that is, fewer jobs will be created than in the case o f national capital investment); and the ‘virtuous circle’ o f intensive accumulation, with its positive effects even for the exploited classes, will be unable to establish itself.

It follows that there is as much, if not more, reason to fight against external capital than against capital tout court. Yet this is precisely the

17 ‘For such a drain o f surplus to retard economic development, it must be an abalttte drain.’ Talk o f ’ retarded’ development evokes a secondary drain in which development takes place at a rate higher than before but still lover than in the dominant countries. Thus may be explained by an ‘unequal transaction’ , such that positive accumulation occurs on both sides, but more slowly on the dominated side. (Warren, p. (41.),s Warren, p. 142.19 Capitalists will reply that if they had not advanced constant and variable capital the wage-labourer would have been unable to work. In reality, however, it is not they who ‘give work’ to the wage-labourer, but the worker who 'gives’ surplus-value to the capitalists, thereby reproducing his or her condition as a proletarian divorced from the means o f production and compelled to sell labour-power in order to live.

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conclusion that Warren’s theory seeks to capsize. He may have seemed to be telling us: Don’t fight imperialism because it introduces foreign exploitation, just fight it as exploitation. As we have just seen, however, Warren precisely finds capitalist exploitation to be legitimate. In essence, he is saying: Don’t fight imperialism, since it helps to spread capitalism, and capitalism itself is all right, ‘ functional’ , ‘appropriate to economic growth’. Such is the thesis, worn thin by so many writers from Adam Smith to Walt Rostow yet still hegemonic today,20 which Warren’s final chapter trumpets forth in every key. So much the better if inequality is on the rise: it will promote ‘the necessary diversification o f skills and occupations’; it will kindle ‘energies previously dormant’ ; and it will mobilize ‘ scarce or underutilized entrepreneurial talents’ .21 This side o f things is ‘likely to be most severe in the earliest stages’, but eventually, with the generalization o f the modern sector, the gates will open on the post-industrial paradise promised by Colin Clark and Walt Rostow. So much the better i f the teeming humanity o f the shanty-towns has to survive through the informal economy: this permits very cheap production o f basic consumer goods, and is therefore entirely functional to the development o f the modern sector— which leads us (see above) to paradise. Indeed, should not the activity o f prostitutes ‘be regarded as socially beneficial in cities with large male immigrant populations’?22 Can such a deplorable observation be redeemed by any intended irony?

At this point, Warren’s supporters will break into a smile, remarking that these poor anti-imperialist (and probably Latin) romantics do not have much o f a sense o f humour. We shall return in a moment to the question o f moral indignation. Still at the level o f the economy, however, Warren’s argument is quite clear: every apparent deformity in the underdeveloped countries is not a sjncbronic counterpart o f imperialist-capitalist develop­ment, but merely the delayed or temporally displaced realization o f primitive capitalist accumulation in these countries. The »»//?rdeveloped countries are simply ‘behind’, and external domination does no more than speed up their advance. This is the basic liberal position which, long ago theorized by Rostow et al., is now hegemonic in the press, the universities and various international bodies. It underpins the argument that, in spite o f everything, deformities, inequalities and social marginalization are ‘ functional’ .

Marxism and the Damned of the Earth

The battle around the couplet, ‘ integration/disintegration (or marginali­zation)’, is itself highly revealing, and prostitution really is an excellent example. ‘ In fact,’ Warren argues, ‘so-called marginalization is a way o f referring to the anarchic, chaotic, unplanned, sometimes brutal, but nevertheless vigorous fashion in which urbanization expands the market, stimulates commercialization o f the whole o f society (especially the agricultural sector), and thereby increases the division o f labour and thus

20 Verso Editions present Warren’s book as 'original and iconoclastic*. Maybe it is iconoclastic for the small circles o f the western New Left, but it conforms perfectly to what is said and written in most o f the press and the academic world.21 Warren, p. 208.22 Ibid, p. 216.

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the integration o f society, as Adam Smith noted long ago.’ 23 Warren here seems, like Smith, Marx and Lenin, to place himself on the ground o f the conditions for primitive accumulation: dissolution o f the natural economy, development o f a mercantile and manufacturing capitalism, and so on. In reality, however, one need only turn to the extreme case of Saigon’s ‘brothel economy’ , living entirely upon the redistribution o f dollars o f external origin, in order to understand that the ‘dissolution of particular natural ties’ in no way entails the reconstruction o f a higher-level social, economic and cultural cohesion. Such dissolution was, to be sure, the historical condition for the ‘Fordist’ logic that gave rise to the social-democratic welfare-state in the o e c d countries. But the way in which it now develops on the periphery o f world production and redistribution circuits endows it with precisely that significance which distinguishes a centre from a periphery.

When Warren notes that the informal sector provides ‘a wide variety o f essential goods and services . . . at relatively low cost’,24 this means that the awesome superexploitation o f women— the exploited class o f the informal economy— allows the production o f labour-power at a cost incomparably lower than that o f its reproduction within the ‘virtuous circle’ o f intensive accumulation. Such labour-power, reproduced almost entirely outside capitalism, will nevertheless find work in some export- farm or in the ‘delocalized’ premises o f a Fordist branch circuit. Thus ‘ integration’ (understood as ‘ functionality’ to imperialist-capitalist super­exploitation) really does exist together with ‘marginalization’ (under­stood as a loss o f that ‘autocentred’ character o f socio-economic reproduction which is, in a sense, common to the village economy and the central system o f intensive accumulation). Even in Rostow’s and Warren’s terms, therefore, the deformed growth o f capitalist market relations in the dominated countries does not necessarily point to a rosy future. But even if it did? As the dominated peoples or nations and the exploited classes await this radiant future, what right or norm could prohibit their rebellion. Yet the political conclusion o f Rostow’s books, as o f Warren’s book, is that ‘populist’ attempts to resist imperialism and wrong development are ‘inappropriate, unjust, undemocratic’, an obsta­cle to the capitalist mission o f developing the productive forces. For Warren, it would be ‘ moralism’ to condemn this mode o f growth by referring to the injustice and misery that it brings in its wake. True scientists (like Warren) have only one aim in mind: growth o f the productive forces, ‘ the unification o f humanity’! From these lofty heights, how petty seems the revolt o f peasants, workers and women (women in the home, factory-workers, prostitutes)! How surprising that such a clear-headed thinker as Marx should have wasted his time in organizing the world workers’ movement, and in supporting the Irish national liberation movement even against the British labour organizations.

Warren may justly lay claim, however, to that aspect o f M arx’s work which involved fascinated contemplation o f the historical march of capitalism ‘though blood and dirt’. Above all, he may lay claim to the worst facet o f later Marxism: namely, the mechanistic, economist,

23 Ibid. p. 22j.24 ibid, p. 2 t 6.

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productivist and, at bottom, cynical Marxism o f the Second Interna­tional. Lenin would make a political bte.iV. from such Marxism, but it then moved to new heights in Stalin’s and Deng Xiaoping’s ‘primitive socialist accumulation’ . In this optic, ‘development o f the productive forces’ gauges the advance o f History’s tank while flesh-and-blood generations are just fossil-fuel to be sacrificed to the God o f Progress in the name o f a heavenly future that will conclude our valfey o f tears.25 Through such Marxism, the workers’ movement simply internalizes the positivist myths o f the nineteenth-century Euro-centric bourgeoisie.26 All practical revolutionaries have had to break with it: from Lenin through Gramsci (who extolled ‘the revolution against Capital’) to Mao Tse-tung. Conversely, this ‘left’ variant o f productivist mythology has been used to justify all the capitulations o f social-democracy, and all the abominations o f Stalinism.

It is to this that people refer when they talk o f ‘the crisis o f Marxism’ . A growing number o f workers both East and West, as well as the new feminist, ecological and other social movements, feel so disgusted with it that they are turning away from any reference to Marxism. In many Third World countries— Iran or Egypt, for instance— the identification o f such Marxism with the bourgeois project o f limitless industrialization has turned the revolutionary masses and intellectuals away from ‘ secular’ ideologies and Marxism, shifting their revolt into the ambit o f reaction­ary clerical ideologies. In this sense, Warren’s book is a slap in the face for the mt^avifint-—the outcasts o f capitalist ‘progress’— and the best present which ‘Western Marxism’ has made o f late to the Muslim Brotherhood.

25 In chapter two, Warren inflicts upon us a veritable catechism that owes more to Auguste Comte than to Karl Marx. At the end o f the last century Labriola was, despite his doubts, still clinging to this catechism, but then the grim course o f the twentieth century provided the final refutation.26 Warren openly recognizes this kin-relationship (p. 1 37): ‘ I f we say, with Emerson, that “ imperialism scattered the revolutionary seeds o f Western civilization in haphazard fashion over the surface o f the globe and started them ton the first flowers o f their growth,” then as Marxists, products o f that civilization who aspire to carry it to new heights, we must accept the view that the epochal imperialist sweep was indeed a titanic step towards human unity (on the basis o f the greatest cultural and material achievements so far attained by humanity).'