The Economics of Imperialism

Philip Roddis

The most important book I’ve read in years is John Smith’s Imperialism in the Twenty-First Century: Globalization, Super-Exploitation and Capitalism’s Final Crisis.

Here’s an abridged extract from its opening words:

The collapse of Rana Plaza, an eight-story building housing textile factories, a bank and shops in an industrial district north of Dhaka, Bangladesh’s capital, on 24 April 2013, killing 1,133 garment workers and wounding 2,500, was one of the worst workplace disasters in history. This disaster, and workers’ grief, rage, and demands for justice, stirred sympathy and solidarity from working people around the world— and a frantic damage-limitation exercise by the giant corporations that rely on Bangladeshi factories for their products yet deny any responsibility for the atrocious wages, living, and working conditions of those who produce all their stuff.

Adding to the sense of outrage is the fact that, the day before, cracks had opened in the building’s structure. An initial inspection resulted in its evacuation and a recommendation that it remain closed. Next morning a bank and shops on the ground floor obeyed this advice, but thousands of garment workers were ordered back to work on pain of dismissal.

When generators illegally installed on the top floor were started up the building collapsed. Jyrki Raina, general secretary of IndustriALL, an international union federation, called it “mass industrial slaughter.” The screams of thousands trapped and crushed as concrete and machinery cascaded down upon them unleashed a full-spectrum shockwave, amplified by the anguished howl of millions around the world. The calamity made headline news. Consumers of clothes made in Bangladesh’s garment factories were confronted by their connection to the people whose hands made their clothes, by their miserable existence on this earth. Like an x-ray beam, Rana Plaza lit up the global economy, throwing into sharp relief a fundamental fact about global capitalism normally kept out of sight and mind: its good health rests on extreme rates of exploitation of workers in the low-wage countries where production of consumer goods and intermediate inputs has been relocated.

The attention of the world was drawn in particular to Bangladesh’s poverty wages, the lowest of any major exporter in the world and death-trap factories — five months earlier a fire at nearby Tazreen Fashions killed 112 workers, trapped behind barred windows and locked doors while working long into the night; to the violent suppression of union rights and incestuous relations between factory owners, politicians, and police chiefs — no employer in Bangladesh’s garment industry has ever been convicted of an infringement of health and safety laws…

The garment industry is “the quintessential example of a buyer-driven commodity chain … where global buyers determine what is to be produced, where, by whom, and at what price.” Bangladesh’s garment industry distils the export-oriented industrialization strategy pursued by governments across the Global South. Said TUC General Secretary Frances O’Grady of the Rana Plaza disaster, “This proves that, in the global race to the bottom on working conditions, the finishing line is Bangladesh.”

Starvation wages, death-trap factories and fetid slums in Bangladesh typify conditions for hundreds of millions of workers in the Global South, source of surplus value sustaining profits and unsustainable overconsumption in imperialist countries. Bangladesh is also in the front line of another consequence of capitalism’s reckless exploitation of living labor and nature: “climate change”, more accurately described as capitalist destruction of nature. Most of Bangladesh is low-lying. As sea levels rise and monsoons become more energetic, farmland is inundated with salt water, accelerating migration into the cities…

Rana Plaza not only shone a light on the pitiless exploitation of Bangladeshi workers. It lit up the hidden structure of global capitalism, revealing the extent to which the capital-labor relation has become a relation between Northern capital and Southern labor. The garment industry was first to shift production to low-wage countries, yet power and profits remain in the grip of firms in imperialist countries. This reality is different from the fantasies of neoliberalism’s apologists. Few dispute that Primark, M&S, Walmart and other retailers profit by exploiting Bangladeshi garment workers. Why else have they raced to outsource the production of their clothes to the lowest of low-wage countries?

A moment’s thought reveals other beneficiaries: the commercial capitalists who own the buildings leased by these retailers, the myriad companies providing them with advertising, security, and other services; and also governments, which tax their profits and their employees’ wages and collect the VAT on every sale. Yet, according to trade and financial data, not one penny of U.S., European, and Japanese firms’ profits or governments’ tax revenues derive from the sweated labor of the workers who made their goods. The huge markups on production costs instead appear as “value-added” in the UK and other countries where these goods are consumed, with each item of clothing expanding the GDP of the country where it is consumed by far more than that of the country where it is produced. Only an economist could think there is nothing wrong about this!

That first chapter goes on to consider two other products, iPhones and coffee. These too are produced in the global south for consumption in the north. Although very different products, Smith’s teasing out of the socioeconomic relations they embed shows their commonality. All are created under conditions of a super-exploitation which mainstream economics is at pains to conceal or obscure by a ‘value chain’ orthodoxy that would have us believe an iPhone made in China for $80 retails in the west for $800 not through exploitation but because the activities of shipping, advertising and packaging add $720 of value.

Imperialism in the Twenty-First Century is not the easiest of reads, despite Smith’s cogent and frequently witty style. I see three reasons for this. One is that it is empirically dense. While its engagement with a wealth of detail is what makes its so valuable, it demands very close study. This is not a bedtime book.

The second reason is that its theoretical chapters confront, point by point, the arguments of the value-chainers and marginalists* to lance a blister of far-fetched assumption, tautology and what PG Wodehouse would call in-and-out running. All stem from the need to avoid the truth that manufacturing is outsourced southwards to exploit low wages premised on various factors, the most important being high unemployment. In taking on such arguments, Smith plants his political-economy feet squarely on terrain Marx opened up in Capital: a labour theory of value simple in its fundamentals but less so in the detail, particularly for an imperialist world order unknown to Marx and barely dawning in Lenin’s day. These theoretical exchanges, not just with the apologetics of mainstream economists but errant marxists too, again do not make for light reading.

My third reason brings me closest to a criticism of Smith’s stupendous achievement. This book is a conversion from a Ph.D thesis and the fact shows here and there in overly complex and at times suboptimal structure. It would benefit from the kind of revisit an author cannot usefully make until reflective time has passed. Given the author’s knowledge, passion and writing skills, I see a case for a reworked version. One that simplifies: axing – never a pain-free editorial task – some of the more arcane point and counterpoint while retaining the supporting detail that makes it so important and remarkable a work; one that deserves the wider readership such a reworking would attract.

That said, underlying the book is a simple combination of circumstances we needn’t subscribe – as I in fact do – to any theory of value to grasp. When Europe industrialised in the nineteenth century, those displaced from the land were too numerous to be absorbed by manufacturing. This created labour supply-demand ratios very favourable to capital. (Marx and Engels wrote at length on capitalism’s need for a “reserve army of unemployed”.) But while holding down wage levels to boost profits, high levels of unemployment are potentially dangerous. Fortunately for the social order in Europe – less so for the indigenous victims of genocide in the Americas and Antipodes – a ‘new world’ was opening up to beckon industrious souls prepared to uproot and start afresh.
Recent decades have seen southwardly outsourced manufacturing replace, in the interests of arms-length distancing, direct foreign investment in subsidiaries of northern firms. The shift began gradually but accelerated in the nineties and noughties, as did value-chain ascendancy in economic ‘science’. But whether by direct ownership (mirroring the direct rule of colonialism) or outsourcing (under asymetric conditions that mirror the indirect rule of modern imperialism) the results are that two of the three conditions pertaining to nineteenth century Europe also apply in the global south, Asia especially. (For reasons outside my scope here Latin America is slightly – and Africa very – different.)

  • Check: as in Europe, hundreds of millions of Asia’s small farmers and land labourers have been displaced.
  • Check: as in Europe, their numbers are too high to find full employment in the city, a ‘reserve army’ exerting the same downward effect on wages.

Only on the third condition do we see a difference. Where the dispossessed of nineteenth century Europe looked in despair or hope to America and Canada, Australia and New Zealand, no such opportunities beckon for Asia’s landless and jobless. Ever stricter immigration controls – glaring exceptions to globalisation, and neoliberalism’s version of Apartheid South Africa’s infamous Pass Laws – see to that.

The upshot? Cheap consumables for the north, driving down the value of labour power there in ways we do  require an understanding of the law of value to appreciate, are one consequence; super profits for the various capitals another. Only slightly less obvious is the fact of welfare systems in the north – armaments too – premised on taxes accruing to this ‘global value chain’. As I say in another post, insofar as we access municipal libraries and parks, send our children to state schools and/or rely on tax funded health and social care, we too are beneficiaries of the global exploitation.

That doesn’t make us equal partners though. We may see the only alternative as a ‘levelling down’; impoverishment of the global north to improve conditions in the south. Yes, those of limited understanding, incapable of envisioning any alternative to capitalism, fear or profess to fear precisely that. But as Marx saw, but humanists like J S Mill did not, the chaos and misery of capitalism – chaos and misery we in the north will be less shielded from as capital increases its share of the super-profits vis a vis that of the state – originate not in its relations of wealth distribution but in those of wealth creation. Even at this late hour, with the threats – to peace, natural environment, welfare and social justice – posed by production for profit exacerbated by a crowded planet, a fairer and sustainable world is possible. Just not under capitalism.

All the more reason, then, for a slightly less daunting version of John Smith’s invaluable work.

*I’ll discuss ‘marginalism’, or theory of marginal utility, in a future post. For now it suffices that when economics abandoned the (imperfect) labour theories of value put forward by Adam Smith then David Ricardo – a politically driven abandonment that coincides, in Marx’s scathing view, with its shifting from science and the descriptive to apologetics and the normative – it banished all talk of objectively grounded value with one subjectively determined by the market and therefore indistinguishable from price.


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The Student Economist
The Student Economist
Sep 6, 2017 8:23 PM

An interesting read! If possible, please check our website! If you enjoy a fun & insightful read, click th link below to out latest article #goodreads #economics #students

Aug 18, 2017 10:47 PM

Dear Phillip,
At the time the building in Rana Plaza collapsed, I recall reading on some online websites that it was owned by businessman Sohel Rana who was also prominent in the youth wing of the Bangladesh Awami League, which was then and still is the ruling political party in Bangladesh. The case against Sohel Rana and others is still ongoing and Rana himself remains in jail due to another police case against him.
Unfortunately justice for the Rana Plaza collapse victims will continue to be very slow when individuals or sections withing the dominant Bangladeshi political parties are linked to or are the same people and groups involved in exploiting low wage labour and resisting the enforcement of industrial labour legislation to stop this exploitation.

Aug 18, 2017 1:41 PM

“… When Europe industrialised in the nineteenth century, those displaced from the land were too numerous to be absorbed by manufacturing. This created labour supply-demand ratios very favourable to capital. …”
Never mind Europe- the classic case was England. And here the process described was a little more subtle than that outlined. For example the industrialisation process began in the households of the countryside and became integrated with the agricultural year: spinning and weaving accelerated in the cold months and came to a halt during harvests. Households divided their time between three sets of activity yielding income opportunities. The third- often forgotten-was independent self provision.
Enclosure-the privatisation of land- was the critical thing. It was a complex process, occurring over long periods, and its design was to strip the householders of any vestige of independence, making them utterly dependent on employment and patronage. Included in this process were such details as the banning of gleaning, the game laws and the sequestration of every scrap of fuel and building material as well as every building lot. Yea, even unto the scraps of grass in the road on which the peasant’s cow might feed.
The object was to prevent the labourer from becoming ‘saucy’ or independent. And this is why, from the beginning, every campaign to provide households with plots of land, for self provisioning were resisted. It is not without significance that the heir to Cobbett’s mantle -Jeremy Corbyn- exercises his right to an allotment.
I will add just one thing the basis of much of our ‘modern’ culture lies in the extraordinary intellectual gymnastics performed to mystify the enormous crime of privatising the common means of production, in order to ensure that the poor man
should be naked and vulnerable in the labour market.
Many of these intellectual exercises, such as the ludicrous claim that extensive farming is more productive than horticulture on smallholdings, are part of English orthodoxy. Proudhon was right about property and what British imperialism-guided by the Utilitarian ‘radicals’- did in the ‘settlement’ of Bangla Desh exemplified his peasant wisdom.

Aug 18, 2017 1:09 PM

India’s famous human rights activist and author, Arundhati Roy, in her 2014 book, ‘Capitalism: The Ghost Story’, examines the dark side of democracy in contemporary India, and shows how the demands of the globalized western capitalist banking system has subjugated billions of peoples to the highest and most intense form of racism and exploitation. Watch two videos below to understand the evil world of capitalism and the evildoers who benefit from this system.
Capitalism is based on Usury, which is a great sin in Islam. Islam holds the view that economic disorder is not the cause of a nation’s miseries – but the result of nation’s moral degradation. Character building and development of moral health are the only remedies humanity is in need of – Without which social, political, economic or any other reform is just waste of time – as proven by both Capitalist and Communist dogmas. Islam is not against material progress, but it has to be controlled by Islamic morality – otherwise mere material progress will lead to disastrous results, as seen in the western societies.

Aug 19, 2017 11:19 AM
Reply to  rehmat1

“Capitalism is based on Usury, which is a great sin in Islam. Islam holds the view that economic disorder is not the cause of a nation’s miseries – but the result of nation’s moral degradation.”
In Islam a rental is charged for the use of money.
Or a % of the profits and/or turnover is taken
Or on a House purchase No % is charged on the loan [just a rental fee] but a % of the increase in the value of the property used as security, is taken out of the proceeds of the eventual sale.
INMHO Usury is the use of extortionate % charged on loans.
% charged at the RPI or CPI + 1% is not extortionate.
The use of Property Investors to buy up property in the West and just leave them empty [used as a source of money if ever the need arises is extortionate] due to unrest in their country of origin. .
The West may be degenerate and its morals do leave a lot to be desired. But there appears to be lots of people who fight to leave Islamic Utopias, come to the West for better standards of living for themselves and their children. Then promptly push for Islamic values to be imposed on the host country?
If you take the time to read the article it is about exploitation of the ordinary people, by the elites in Bangladesh, [Who are mainly Muslim] on behalf of the elites in the west [who are of many religions or none]
The main problem is man if given the chance as always exploited is fellow man and as done so for many millennia. I do not know the answers, but the first step is to admit there is a problem. To bring religious bigotry into it only muddies the waters and divides the ordinary people.

Aug 18, 2017 12:59 PM

Well done Phillip, another gold (or should I say red?) star.
To impute the question from Ajamu Baraka’s recent post: if we are going to be the gravediggers for the 525-year-old white supremacist Pan-European, colonial/capitalist patriarchy: what are we going to replace it with? From the pro-business liberal-left – acute and total silence… barely a turning thought… not even the formulation of the questioning. We want a more inclusive equitable future society: but what does that even mean? We pay lip service to our commitment to transition to a post-carbon world: with no map, no compass, and no vision to guide us. Yet change is inevitable and morally imperative (as Phillip admirably demonstrates).
We have to move beyond the deconstructive-analytical-critical view of the structural inequality and violence inherent in Capitalism; particularly Neoliberal Capitalism… and move toward the reconstructive: toward the praxis of peace and ecological prosperity. TINA can be the rallying mantra of the new red-green eco-socialist Left. There Is No Alternative to the equality and global emancipation of living sustainably within our shared planetary means. That is if we are to avoid what Engels euphemistically called “the revenge of Nature.”
Instead of courting Big Business and the financial elites to deliver what they have so abjectly failed to deliver thus far – “the rising tide that raises all boats” – the new left paradigm will have to both court (in the Global North imperial heartlands); and serve the people (in both the Global North and South).
It is not enough to bolt-on social chapter concessions to the Business As Usual globally exploitative model. We need a new model: one with universal guiding principles (universal accessibility to life commons; and a pan-global equitable minimum standard of living – achievable safely within planetary boundaries): but with regional application (broadly economic degrowth for the North; and growth for the South). Food sovereignty, energy sovereignty, water sovereignty, are key (the future is glocal!)
If the Left wants to acquire a new and imperative relevance: it must discard the failed pro-business project of trying to marry the immiscible qualities of Capitalism and Socialism; and foster a new ecological-socialist or ‘Organic Marxist’ perspective. Analysis is now redundant: we absolutely know where Capitalism is taking us. TINA: but to design the orderly transition to a post-capitalist, post-carbon future – post-haste. Will the left be able, or even willing, to discard the broken business model that failed both the bulk of humanity and the planet? Or will it take a broad based grassroots socio-cultural movement to demand it? This is the crux of our 21st century dilemma: because change is a’comin – Nature demands it.

Aug 18, 2017 5:16 PM
Reply to  BigB

You’re too kind BigB. The real star, emphatically red, goes to John Smith. Unforgivably, given we live in the same city, I’ve yet to meet and shake him by the hand – a derelection I must put right, eftsoons and forthwith.

Aug 18, 2017 11:10 AM

While people fail to acknowledge the gradual evolution of the “me” culture, the wealth distribution and wealth creation will be inseparable. The consumers must accept as much responsibility for the poverty others endure, because without their complicit acceptance of the status quo, which is known, but not acknowledged, nothing will change. They can no longer live by the see no evil, hear no evil, speak no evil, head in the sand or looking elsewhere while the problem remains unresolved. Bryan Farrow made the observation by exposing the growing encroachment of subordination by means of poverty on the richer countries as part of the problem. More poverty is being visited on countries whose economies are the highest in the world and also failing due to the ever expanding capitalist and corporate dominance engineered by the wealth creators who ensure the wealth distribution is shared among themselves, only made possible by government connivance or at least abdication of any responsibility in reining their activities in. Many of the world’s largest economies are corrupt and corrupting and are nothing more than enablers for the wealth hording.
It is not enough to want to change what is, more effort is needed to bring the awareness home, because today’s “doing all right Jack, pull the ladder up” will be tomorrow’s victims of the squeeze on the class ladder. As we have seen, the assault on democracy is being waged especially fervently where socialism makes gains and always backed by wealth interests. Marx would be at a loss on how to counter the sheer weight of wealth assailing democracy and the rights of the workers, even though, ideally, this should provide for a concerted fight back or revolution, sadly it creates death provided by those with wealth and power. The power elites fear socialism and will continue to bash it, any revolution will likely end up with a lot of dead heroes, so where do we begin to put things right?
I would be happy for anyone to offer up a solution that doesn’t get even more lives destroyed.

Aug 18, 2017 1:42 PM
Reply to  mohandeer

Susan: we know the Capitalists will fight “red tooth and claw” to maintain their eco-genocidal Ponzi schemes: and history and human nature can’t discount war as their desired economic reset – but change can arise from unforeseen pathways…
Extrapolating from the work of Nafeez Ahmed… most analysis of the transition to a post-carbon economy is based on linear models… what if the rate of change became exponential???
A negative self-reinforcing feedback loop might look like this: due to the current low price of oil; the Big 3 US oil companies have to borrow heavily against future profitability; to maintain the current debt created, they have to cut back on expenditure; one of the few areas to do that is by cutting back on exploration and investment in future extraction (CAPEX); thus cutting back on future profitability… so they have to borrow more to meet current profitability; etc… eventually leading to “stranded assets”…
A positive self-reinforcing feedback loop might look like this: despite the hydrocarbon subsidy, and without an incremental Carbon Tax; continued investment in solar-wind-PV-RE-battery technology drives up efficiency and drives down unit cost; increases large scale implementation; which attracts more investment… which makes RE a viable and cost effective alternative to hydrocarbon infrastructure… which attracts more investment…
The economic drivers to a sustainable post-carbon society are already in motion: Capitalism is funding its own successor! Well sort of: there are still a lot of hard moral choices to be made… but the future is already happening… and it’s self-funding!

Aug 19, 2017 1:18 PM
Reply to  BigB

Thanks for the response.
I have my concerns on the alternative energy schemes (specifically the use of children in Cobalt mining) and although I am pro environmental alternate strategies, their is a mountain of resistance to climb emanating from the deniers camp(there is a lot of oil money to fund many deniers sites and MSM).
The fight to the bottom will continue as wealth creation envelops the AE schemes, so finding a responsible way forward is always going to be a battle, usually fought by those who have no voice. As an island nation surrounded by water, Britain should be using more tidal energy, but now we are leaving the union, the only subsidies or investment forthcoming will be from the foreign, privately owned Big 6 energy companies who supply us. Such investment is known, usually as a back up plan or a second avenue of wealth creation, but it does not guarantee that such investment will create wealth on an exponential scale. I too, like what Nafeez writes, but linear models are often constrictive and political engineering is so fluid that it still leaves us with the problem of implementation.
I’m very hopeful that the Silk Road(OBOR)will be allowed to succeed – the US will resist of course, it spells doom for their debt fueled economy and much hinges on Duterte & Maduro surviving current US attempts to destroy their countries, then there’s Erdogan, who blows with the wind, as does Qatar and we cannot dismiss Perfidious Albion’s contribution to the US interests. When the US economy finally tanks, the rest of the world better have all it’s ducks in a row, because the US will flail out wildly rather than suffer the humiliation, even to the point of using it’s nuclear arsenal to ensure nobody else survives their downfall. It’s worth remembering that the US owes far more to it’s creditors than it can recoup from it’s debtors. So the pace of the positive self-reinforcing/self funding feedback loop needs to pick up the pace – a lot!
I hope Nafeez is thinking on multi planes of divergence and convergence, because everything hangs on the new alliances being forged with US “enemies”(anybody getting their foot in the door before it).

Aug 20, 2017 9:58 AM
Reply to  mohandeer

Re: cobalt – hell yeah, the global supply and value chains need to be radicalised and made ethical, for sure. In the Congo – 5.4 million dead; 10s of 1,000s of child slaves; environmental degradation and pollution – so we can have cheap i-Phones? And yet, Apple still drill down on price??? Energy source is only one part of the equation… that’s exactly what I mean by making the hard ethical choices. Paying the full ecological and humanitarian value for commodities is one way to equalise the North-South global disparity in the value of human life… those children are ‘hidden’ externalities to the current system… their lives are mere disposable means.
“When men talk of the future, the Gods laugh”. Chinese proverb.
As popularised by Naomi Klein, capitalism utilises its inherent crises as ‘shock therapy’ – to morph into ever more extreme versions of itself. I would like to think – post the great financial crash (GFC) – that game is up? Capitalism died in ’08-’09. It is being kept alive in a permanent vegetative state of debt called “secular stagnation”… but for how long? Absent a crash, the unanswerable question is: how long will the people put up with pandemic austerity before demanding change??? I don’t think Capitalism even has the pretence of the answers anymore, they know only how to enrich the few. The rest (the bulk of humanity – including the child slaves in the Congo – and the biosphere) never counted. Thanks to the likes of Ms Klein, and the decentralisation of information flows (via the internet): that is becoming ever more apparent. The system is ripe for a phase-change (for the worse?): or a paradigm shift (for the better?) I’d be lying (and so would anyone else) if they claimed to know which it would be. Let’s hope for the better…
There is a common denominator – the Great Leveller and determiner – that has so far been left out of the equation (much to our great cost) – the biosphere. This, I feel, will be the decider. Not even the ‘Carbon Aristocracy’ or the ‘Gods of Money’ hold sway over Nature (though they will continue to try to ‘buy’ and ‘control’ it). The ‘Capitalocene’ has caused, what Marx called, a “metabolic rift” in Nature. It’s not just my flight of fancy, but the Great Deceleration is already happening (though not necessarily for positive reasons – accumulated debt, low commodity prices {particularly for oil}, increasing inefficiency, decreasing EROEI…). It’s not Governments or the financial Elites that will determine the need for change; but the environment that will demand and necessitate it. The (eco-genocidal) global economy as we know it – apart from being a causal accelerant – is incompatible with the solution. We have to at least admit that we have arrived at the nexus of possibility for a positive life-affirming global change: even if we can’t determine what path it might take??? It is my hope and belief that the course of change can be swayed toward the positive by the conscious environmental awareness of the (ecological) proletariat… that’s you and me…
Maybe I should shut up now, for I fear the Gods may be laughing…

Aug 18, 2017 10:12 AM

Reblogged this on Worldtruth.

Dead World Walking
Dead World Walking
Aug 18, 2017 9:38 AM

One must ask oneself ‘Why do ordinary people take the path of exploitation, whether it be other human beings or animals (for food and animal products) ?’
The only possible answer is that they have lost touch with Life, the ‘Spirit’ or God.
Religion has been an abysmal failure, so we need to look elsewhere.
Love is in there.

Aug 18, 2017 8:27 AM

And besides the super exploitation of the global South “US Power Elite Declared Bio War on the Southern Hemisphere, East Asia and all Non-Western Countries in September 2000”: https://wipokuli.wordpress.com/2016/03/13/us-power-elite-declared-war-on-the-southern-hemisphere-east-asia-and-all-non-western-countries-in-september-2000/

Aug 18, 2017 8:23 AM

Good article.
To my thinking what Marx saw was the concentration of wealth (accumulation) in the hands of fewer and fewer people which ironically eventually negates the technological advances (fruits of labour) that should be enjoyed by everyone. This ever increasing extraction of productive capacity and it’s concentration leads inevitably to a crisis in capitalism and then revolution. It is at this point of crisis where change happens. Who owns the means of production is central to Marx’s ideas on this question. And what happens at this point of crisis is central to the possibility of fundamental change.
How this might pan out appears complicated in the increasingly diverse world of modern global economics, but in reality is still the same as he outlined. The exploitation and the profit element of accumulation moved from from rich countries to poor ones. However what replaced workforce bondage in rich economies has increasingly been transformed to debt bondage. With the same principle of profit extraction driving down wages and living conditions here also.
The problem is the illusion that capitalism holds central to its existence, that anyone can become rich and wealthy. Anyone does not equate to everyone and this is the main contradiction. So the promise is that individuals will be rewarded for their labour. Within the Christian work ethic this was in heaven. Clearly this was a lie but today it has been largely replaced by other distractions of eventual reward.
If we are to come out of this current crisis of capitalism without annihilation is difficult to foresee. But if we do it will need a different way of thinking about why we do things. The individualistic model of achievement would need to be replaced by a communal model. Competition by cooperation.

Bryan Farrow
Bryan Farrow
Aug 18, 2017 7:49 AM

I must say that the combination of capitalism and neo conservatism has just about been perfect.
For the 1%.
What with, (the fallacy of), trickle-down economics and the privatization of most essential services like health, education, water and energy etc, housing as an investment rather than a place to live, governments in the pockets of corporations, unsustainable debt levels, plus, in real terms, wages decline, most ordinary people can only afford to buy the cheap crap from 3rd world countries.

Aug 18, 2017 9:30 PM
Reply to  Bryan Farrow

Indeed, isn’t it such a ‘beautiful’ irony that the exploited of the north, are complicit in inadvertently exploiting the even-greater-exploited of the south.