ENTRY
[ESC]DOC TAYROC'S [UNSOLICITED] ECONOMICS HOT THOUGHT
Marx and the Death of the Author XI: Does losing the chains include supply chains?
The 1950s was a period of immense economic, technological, and political optimism. The bloody horrors of the Second World War had subsided, and the only countries experiencing the full paranoia of the Cold War were the United States, United Kingdom, and the Soviet Union, in that order. The rest of the world was rebuilding after the horrors of war or moving towards liberation from former colonial powers. The citizenry of the US, UK, and USSR were also considerably less paranoid. For them, the era was one of newfound economic prospects and/or one of post-war rebuilding. There was also a bevy of new technology, computers had finally become fully electronic, plastic could last forever, cars, planes, and motorbikes were plentiful, cigarettes were healthy, and we could burn fossil fuels to our heart's content without any fear of long-term planetary repercussions. The music was allegedly good as well, and now we had teenagers and teenage culture. It was a very exciting time to be alive, as immortalised in the documentary Grease. Mod culture and poodle skirts abound.
For the UK and US, a combination of war profiteering, colonialism, and Keynesian economic policies meant the 'golden age of capitalism'. Everybody in Britain got a television just to watch the new Queen get crowned! Those feeling left out could also listen to the Archers on the radio. Doctor Who and Star Trek aren't here yet, and non-white people aren't really tolerated. The Irish and Italians are still earning the right to be white, and a non-zero number of British home owners are questioning if they can convert their Blitz-era bomb shelters into nuclear bunkers. But, an age of optimism none the less.
Into this age of optimism comes Trinidadian economist W.A. Lewis, who looks around his fellow British Caribbean Islands, as well as the economic history of their colonial oppressor Britain, and thinks he has a plan for improving the local economies: less farmers, more factories.
I never said it was radical, Russian Tsar Nicholas II's advisors had come up with a similar suggestion several decades earlier, and of course, we know how that ended. To be fair, Lewis was in a different time and place than Nicky 2 and his men, among other reasons no one believed they were divinely appointed to be there, and therefore beyond reproach. The other factor, of course, is Lewis was a proper academic. His economics approach was widely in line with the Keynesian consensus of the time. This meant that government interventionalism was not out of the question, and indeed should even be done in order to push the economy towards 'full employment'. Further, whilst Keynes was not a Marxist by any stretch of the imagination, there was still room for what Walter Rodney would call 'scientific socialism' to be engaged, that is the idea that economies should be measured and studied carefully with centralised planning based on the findings, no defaulting to any invisible hands necessary, especially as they cannot be measured.
There are some issues with this, but for now, let's focus on what Lewis did give us that is useful. Lewis gave us the sectoral model, which we still use, albeit updated to reflect modern economies. Lewis' model only included two sectors, today we use three. Let me explain the three 'modern' sectors:
Agriculture/Primary Sector: This is raw material extraction, and so includes all industries relevant to agriculture, mining, and logging. No refining or processing of any of the materials is done in this sector, excepting what's immediately necessary for transport. The key words for this sector from the capitalist perspective is high labour/low productivity. Raw aluminium is not sell-able to the consumer, no 'value added' (in VAT terms, for my fellow Britons and Europeans)
Manufacturing/Secondary Sector: Here the raw materials are refined and processed into consumer or industrial goods. In Lewis' words, this is 'low labour/high productivity', in modern economics thought this is 'medium labour/medium productivity'. The raw aluminium is turned into aluminium foil. We're right in the middle of the VAT tree now.
Services/Tertiary Sector: Here the consumer goods are delivered to the consumer, often with additional immaterial services wrapped around it. The aluminium foil is wrapped around a toasty and given to the customer. Perhaps as part of a toasty of the month subscription service that routinely delivers high-end toasties to the door of the subscriber. The subscription service maintains a copyright/patent on all toasties delivered and the technology relevant to their delivery. In modern thought this is 'low labour/high productivity', and the high-end of the VAT tree now. If you're in Britain, you're paying extra tax to dine in, that's how high on the VAT spectrum.
Lewis' argument was that, for example, Jamaica's poverty could be attributed to the fact that the majority of the Jamaican economy, by GDP and by employment percentage, was stuck in the agricultural/primary sector. In order to become 'rich like Britain', they needed to do what the British had been doing since the 18th century and move the bulk of the labour force from agriculture to manufacturing. Like I said, this was the 1950s, when the majority of persons employed in Britain were indeed employed in manufacturing.
If that's all Jamaica needs to do, and someone not only identified this in the 1950s, but was so acclaimed for it that he won a Nobel prize, then why is Jamaica still poor? Why can't they just build that industrial base that Britain did?
Knock, knock It's Walter Rodney and Cedric Robinson, that's right, the Marxists are here to take the Keynesian to task.
Rodney was a pan-Africanist Marxist scholar from Guyana, also frequently considered part of the British Caribbean, despite being on the South American mainland. Robinson was a Black American and like many Black American radicals identified with the Pan-Africanist movement, which at the time included not only Black Africans, but also the Black diaspora and Arabic Africa. Viewing liberation of all as a victory for mankind and a step towards betterment for us all. Pan-Africanism isn't intrinsically Marxist, although quite a few Marxists are Pan-Africanists and vice versa. It was seen as many as an intrinsically African alternative to the European nation-statism that various nationalists in Africa as well as European/Western powers were racing to impose on Africa. A Pan-Africanist would argue, for example, that Nigeria and Kenya are British inventions, based on lines on a map drawn in London that have no historical bearing on Africa other than the bloody history of British colonialism. But I digress.
Rodney would argue that what Lewis' analysis of Jamaican poverty versus British wealth was how the British had gotten the wealth in the first place. Indeed, British wealth predated the existence of British factories. In a real chicken-and-egg moment, we can argue that British factories couldn't exist without the pre-existence of British capital to finance the development and construction of the factories.
British counties are a famously vexing thing, and exist in several forms and states simultaneously, as if the British government mastered the concept of quantum super-positions around the invention of the Gutenberg press. For today's definition of county boundaries I'm going with the pre-1965 'historical' county borders. Which is apropos for a Yorkshireman who never quite recognised the 'four modern Yorkshires'. This is important today, because the first industrial revolution of the mid 18th century is generally credited to have begun within Lancashire. Of course, as a Yorkshireman, Lancashire is my sworn ancestral enemy. But, credit where credit is due. Rodney argues that the appearance of the first modern factories in Lancashire is no mistake or product of random chance, since Liverpool sits comfortably inside Lancashirean borders. Liverpool frequently worked as Britain's busiest trading port, and was also infamously key to British trade with Africa, up to and including the trans-Atlantic slave trade. Through the trans-Atlantic slave trade, certain Liverpudlian families were able to amass considerable capital through the slave, sugar, and textile trades, which enabled the investment of this capital into the development and expansion of these textile factories, down the river in Lancashire. No cheap and plentiful slave labour, no cheap sugar from Jamaica nor cotton for the textile factories from the American colonies. No cheap sugar and cotton, no factories. No factories, no British primitive accumulation of capital.
Jamaica was poor in Lewis' time because Jamaican poverty was profitable to the British capitalist class. Jamaica is poor today because we never moved it off of the periphery of global trade. In Lewis' time and for centuries prior, British profitability in Jamaica relied on Jamaica being a cheap source of a primary good, in this instance sugar. As such, it was by design that Jamaica was kept stuck in the primary/agricultural sector, not even allowed to refine the sugar, as that would be done in Britain, before the refined sugar was shipped back and sold to Jamaican labourers, for profit to the British owners of the plantations the Jamaicans worked on as well as the British sugar refineries in the British metropole. As British capital matured, over the course of the 20th century, it became less profitable to maintain Britain as a manufacturing power, with cheap labour available in China, and India, which were quickly moved into the secondary sector by global capital. Africa, of course, as well as much of Asia outside of India, Bangladesh, and China were kept firmly in the primary sector. Congo, for example, produces 75 per cent of the world's cobalt, necessary for modern mobile phones. Kenya and Sri Lanka produce the bulk of the tea and coffee we consume. Nigeria remains a reliable source for cheap oil for Shell corporation. After decades of monoculture, Jamaica can no longer produce at previous scale the levels of sugar that had made it so desirable to the British capitalist class historically. As such, even in Rodney's time, it was relegated to what he referred to as the exploitative scourge of the tourist industry.
This is something a lot of modern Marxists, yours truly included, study in depth, and what we talk about when we talk about global supply chains. This is why you'll often hear modern leftists say there is no ethical consumption under capitalism, even if you buy something 'locally made' or sourced, it likely contains components that come from other exploitative part of the supply chain. Of course, a lot of this is further complicated by attempts to hide the exploitation behind a certain amount of 'charity washing' with provably meaningless labels like 'fair trade' and 'B corp status' which sure do look pretty on a box, but ultimately mean nothing. Although, I think that statement is less controversial now, thanks to the fact that 'colonial violence' always comes home, and that includes exploitative informalised employment models originated in 'periphery' countries in Africa and Asia making their return to the metropole.
Once a year every year, with my development studies students I run them through the thought exercise of building a computer, starting in the cobalt mines of Congo, progressing through the various refineries and assembly plants across Asia, through the 'design' and patent holders in the West, South Korea, and Japan, before ending in the shiny Apple store or Curry's. Of course, once at the Apple store or Curry's, the pressure to upsell a cloud service or two comes into play as well. At every step of the way, it is important to acknowledge who owns the means of production. The African mines are largely owned or operated by a handful of British and American corporations, the refineries also owned by a small handful of corporations, usually the same ones that own the mines. The refineries are never in the same countries as the mines, as that would increase the local expertise, and so increase the value of local labour, undermining any cost-cutting done. The refined goods are sent to factories, which are largely based in China, as global capitalism (including China's state capitalism) have deemed China to, at least for the time being, to be the 'world's factory'. Recently, this has begun to change. Most of China's factories are owned by corporations that, for a variety of tax, governance, shipping, etc purposes are actually headquartered in Taiwan. Yes, even the infamous Foxconn is based in Taipei.
But, finally as Schwartz pointed out in his 2016 paper, the thing really killing the computer's capacity to help anyone develop economically any more, or any room for proper innovation in computing (and why computer companies have to try so very hard to sell non-innovations or scams like AI these days) is completely destroyed by how very monopolised computer companies have become, up to and including the patents. Even alleged competitors have to use each other's parts, and thusly find it most beneficial to engage in cartelism instead competition. On the surface, Apple and Samsung appear to be competitors, even using the courts of multiple countries in costly legal battles to legislate each other out of existence instead of innovating. Inwardly, the iPhone uses a Samsung display. You may try to boycott Amazon, but in truth roughly a third of the internet lives on AWS servers, and so regardless of what you may try to do, you lack the capacity to functionally boycott Amazon (or Microsoft, in a similar position) because frankly, between their patent monopolies and our government's over reliance on their infrastructure, they no longer have to worry about the 'free market', they have become rent-seeking rather than profit seeking.
More importantly for today, as Rodney and more have pointed out, it is these supply chains that maintain colonial status quo and prevent economic development in much of the so-called global south. When looking at IT supply chains alone, we see that the only economies fully capable of extracting profit from these chains are the US, UK, Japan, Taiwan, and South Korea. Even within those economies, the full economic benefit of this extraction is increasingly small, as the small group of employers within the IT landscape continue to eliminate additional potential competition, consolidate around themselves, and eliminate 'redundant' positions in the name of profit maximisation. The most public example of this at present is Microsoft's recent destruction of an entire corner of the vast gaming industry, which despite persistent growth and profitability still, somehow, hasn't produced enough, since Microsoft, like most capitalist firms, is convinced of the notion of 'infinite growth', despite a measurably finite planet.
As long as Microsoft, for example, is convinced that Africa is best for resource extraction because that is what Africa has 'always done', then the majority of African economies will be kept artificially in the primary sector. As long as we push, through the World Bank, IMF, and other such development funds, for Africa to do 'free trade' and to respect the patent and copyright regimes of the West, then it will never be able to develop indigenous industry. Case and point, when Ghana was forced to open Free Trade, Volkswagen flooded Ghana with cheap cars, destroying the Ghanaian car industry. A similar fate came for the once mighty Brazilian car industry, in both places leaving the local economies worse off, and any profitability of local increased consumption of the cars in the hands of foreign capital. This pushed Ghana back into its 'comparative advantage' role of agriculture.
This is why it is so vital, now more than ever, to break up the monopolies held by an increasingly small number of corporations, not only are they preventing the economic development of the majority of the world's inhabitants, they're actively undoing the progress we did manage to make in the last century. The progress that many of them fought against in the first place. Or to borrow again from Rodney, this is why we can't have bourgeois capitalism existing alongside socialism, the capitalists will always take everything they can from the socialists, claim it was theirs all along, and then destroy it for a profit, it's a story we've seen over and over again.
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