BOOK REVIEW/Seth Sandronsky

Contemporary Imperialism

Why are hundreds of millions of people in nonwhite nations mired in dreadful poverty? Blame the world system, details John Smith in Imperialism in the Twenty First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis (Monthly Review Press, 2016).

His thesis flies in the face of the conventional wisdom that modern capitalism is a force for human development. According to Smith, the opposite is the case, as the Global North deindustrializes.

As that process has unfolded since the 1970s, the Global South has industrialized without the broad-based prosperity that characterized the US in the postwar era, Smith writes. The outcome has vital consequences, beginning with the prevalence of the industrial working class living in the Global South.

Meanwhile, for Smith, the role of human labor, following the critique put forth by Karl Marx in Capital Vol. 1, is key to a forensic examination of the commodity, updated for 2016. Thus, he opens with a close look at the social relations of production for three global commodities: the cup of coffee, iPhone and T-shirt.

Smith takes readers well beyond the buying and using of these products, common to many who live in developed nations such as Americans and Europeans. They benefit from the ultra-low wage income that the producers of these popular commodities receive under a system of export-oriented industrialization.

This asymmetric dynamic also reveals a problem: the trouble of establishing and maintaining labor solidarity between the Global North and South poor and working classes. Smith’s book could help to begin solving that problem, in my view.

His focus on social conditions of production of three popular commodities that create vast wealth for corporations in the Global North, while occurring in the Global South, is informed and informing. Workers there are out of sight and mind, except when disasters such as the collapse of a textile factory that killed thousands of apparel workers in Bangladesh grabbed headlines in 2013.

Capitalism, in Marx’s era and ours, renders invisible the labor, e.g., people whose energy mixed with Mother Nature, creates commodities for market exchange. The distance involved compounds the invisibility of the Global South’s working class, earning a scant fraction of the wage-income of workers in rich nations.

Smith’s book shines analytical and theoretical light on the phenomenon of commodity outsourcing, or offshoring. It is a complex process, ideological and material, but entirely understandable for the layperson.

He writes not to speak with other economists but to communicate with ordinary readers. On that note, don’t let Smith’s figures and tables frighten you.

Take your time digesting the numbers from an alphabet soup of conventional groups such as the International Monetary Fund, World Bank and United Nations. To the end of making clear the roots of inequality and poverty in the world system, Smith knocks down mainstream economic theory, e.g., that workers’ income is a result of their productivity, or output.

If this was the actual case, workers’ share of national income would be rising in the Global South. But the opposite prevails there, much more drastically than the same trend of shifting national income to profits away from labor in the Global North.

In brief, corporate shifts in commodity production via means such as foreign direct investment reveal the whys and wherefores of vast wealth extraction flowing from the Global South to the North. Low wages under a system of labor arbitrage, a term for capital investment scouring the planet to extract wealth via worker impoverishment, is central.

Smith sharply critiques economic growth in his chapter “The GDP Illusion.” In it, he reveals the interpretation of GDP data as one that hides wealth creation in the Global South.

He delves into two forms of outsourcing behind labor arbitrage, in-house, and arm’s length. Labor arbitrage dovetails with the process of forcing farmers off their land to create a “reserve army of labor,” e.g., the un- and under-employed, using Marx’s term, who stream into the Global South’s urban areas seeking paid work.

In many ways these related processes are the signature features of our time, outcomes of capital’s response to the economic crisis of stagflation (stagnation and inflation) in the early 1970s. Such crises are results of the system’s contradictions, which in turn pave the path for a future crisis.

Quoting Cuban revolutionary leader Raúl Valdés Vivó, Smith writes in conclusion: “(this) is “un crisis sin salida del capitalismo,” a crisis with no capitalist way out. The only way forward for humanity is to “begin the transition to a communist mode of production. . . . Either the peoples will destroy the imperialist power and establish their own or the end of history. It is not ‘socialism or barbarism,’ as Rosa Luxemburg said in 1918, but socialism or nothing.”

It is a do or die situation, indeed.

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email

From The Progressive Populist, July 1-15, 2016

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