Daily Archives: March 12, 2017

The collapsed remains of the Rana Plaza garment factory in near Dhaka, Bangladesh, June 30, 2013. The police in Bangladesh filed formal murder charges June 1, 2015, against 41 people accused of involvement in the 2013 collapse of a building that housed several clothing factories, leaving more than 1,100 people dead in the worst disaster in garment industry history. (Photo: Khaled Hasan / The New York Times)

What do imperialism and colonialism look like today? John Smith's Imperialism in the Twenty-First Century argues that core capitalist nations are no longer reliant on military force and direct political control of other countries. Instead, they maintain a financial grip on the Southern Hemisphere in particular, exploiting labor in these countries to increase their own profits. Order this book from Truthout by clicking here!

The "have" nations increase profits for their corporations at the expense of grievously underpaid workers in developed nations. The developed nations call this globalization, John Smith argues in his book Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism's Final Crisis. In this interview with Truthout, Smith discusses his contention that globalization is just neocolonialism by another name.

Mark Karlin: Why did you choose to begin your book with the collapse of Rana Plaza in 2013, which killed more than one thousand exploited garment workers in Bangladesh?

John Smith: Three reasons. First, the Rana Plaza disaster -- a heinous crime, not an accident -- aroused the sympathy and solidarity of hundreds of millions of people around the world, and reminded us all of just how intimately connected we are to the women and men who make our T-shirts, trousers and underwear. It epitomized the dangerous, exploitative and oppressive conditions endured by hundreds of millions of workers in low-wage countries whose labor provides firms in imperialist countries with much of their raw materials and intermediate inputs and working people with so many of our consumer goods. I wanted to bring these legions of low-wage workers "into the room" from the very beginning; to confront readers with the fact of our mutual interdependence and also with facts about the great differences in wages, living conditions and life chances that we are aware of but too often choose to ignore.

This brings me to the second reason. Fidel Castro, the greatest revolutionary of our times, explained Cuba's unparalleled international solidarity as repayment of its debt to humanity. We who live in imperialist countries have an enormous debt of solidarity to our sisters and brothers in nations that have been and are being ransacked by our governments and transnational corporations! There can be no talk of socialism or progress of any sort until we acknowledge this debt and begin to repay it! We need to redefine -- or better, rediscover -- the real meaning of socialism: the transitional stage of society between capitalism and communism in which all forms of oppression and discrimination which violate the equality and unity of working people are progressively and consciously overcome. It is indisputable that the greatest violation of this equality and greatest obstacle to our unity arises from the division of the world between a handful of oppressor nations and the rest; working people in imperialist nations must seize political power and wrest control of the means of production in order to heal this mutilating division. This is what informed my decision to begin Imperialism in the Twenty-First Century with the Rana Plaza disaster.

Finally, Rana Plaza and Bangladesh's garment industry is an extremely useful case study which exemplifies features shared with other low-wage manufactures-exporting nations. These include the centrality of ultra-low wages, the predilection of employers for female labor, and the growing preference of firms based in imperialist countries for arm's-length relations with their low-wage suppliers, as opposed to foreign direct investment. Furthermore, analysis of Bangladesh's garment industry poses a series of questions and paradoxes which mainstream economics cannot resolve and which Marxist economists have barely begun to tackle. Chief amongst them is the mainstream doctrine that wages reflect productivity, and that if Bangladeshi wages are so low it means the productivity of its workers are correspondingly low -- but how can this be true when they work so intensely and for such long hours? Another is this: what is the relation between the global shift of production to low-wage countries and the global economic crisis, still in its early stages? This question is absent from mainstream and most Marxist accounts of the crisis, rendering them, in my opinion, completely redundant. The study of the Rana Plaza disaster and of Bangladesh's garment industry therefore generates a list of issues and paradoxes which provide the themes for each subsequent chapter, and so serves to organize the whole of the rest of the book.

John Smith. (Photo: Monthly Review Press)

How has uber-capitalism, asserted globally by developed nations, replaced the need to control colony nations through direct political power?

Uber-capitalism signifies the supremacy of the law of value, which now rules uber alles. In other words, markets -- in particular, capital markets and the capitalists who wield their social power through these markets-- rule the world to a greater extent than ever before. This doesn't mean there's nothing else under the sun -- pre-capitalist communal societies and subsistence economies still survive in parts of Africa, Asia and Latin America, as do the post-capitalist economic relations manifested in the welfare states in imperialist democracies (a major concession won by workers in those countries, financed to a large extent by the proceeds of super-exploitation in low-wage nations), the post-capitalist economic relations in Cuba defended by the revolutionary power of its working people and the remnants of China's socialist revolution which have yet to be reversed by this country's ongoing transition to capitalism. However, as capitalist social relations have extended their grip on the oppressed nations of the global South, and as the transition back to capitalism of the former socialist countries gathers pace, so these remaining redoubts of non-capitalism have shrunk, and today exist in highly antagonistic contradiction to rampant "market forces," a euphemism for capitalist power.

The social power of capital is enforced through the so-called rule of law, which exalts the sanctity of private property and negates the sanctity of human life. Any people that dares to defy laws protecting capitalist property, e.g. by defaulting on debts or by expropriating assets, is subject to the most severe economic penalties, and, if that is not sufficient, is threatened with subversion, terrorism and invasion. The transition from colonialism of yesteryear to the neocolonialism of today is analogous to the transition from slavery to wage-slavery, and merely signifies that capitalism has largely dispensed with archaic, precapitalist forms of domination and exploitation, while taking great care to preserve its monopoly of military force for use in cases of revolutionary challenge to its rule.

What is the "GDP illusion?"

GDP -- gross domestic product -- measures the monetary value of all the goods and services produced for sale within a national economy. It is often criticized for what it excludes -- goods and services that aren't produced for sale, such as those produced by domestic labor and those provided for free by the state; and so-called "externalities," i.e. the social and environmental costs which don't appear in the accounts of private firms, such as pollution, damage to workers health, etc. However, it has never, to the best of my knowledge, been criticized for what it includes. The problem can be illustrated by considering the mark-up on a T-shirt made in Bangladesh and consumed in the US. Leaving aside, for simplicity's sake, the cost of transport and of the raw materials used up in production, up to $19 of the $20 final sale price will appear in the GDP of the US, the country where this commodity is consumed, while the GDP of Bangladesh will be expanded by just $1, made up of the factory-owner's profits, taxes levied by the state, and a few cents paid to the workers who actually made the T-shirt. The $19 mark-up can be broken down into the "value-added" by wholesalers and retailers and by the advertisers, owners of commercial property, etc. who provide services to them. This strongly suggests that much, most or all of the value-added that is captured by US wholesalers and retailers was actually generated in Bangladesh, not in the US.

GDP is simply the aggregate of all of the value-added of all the firms in a national economy. Taxes, and the government services financed by these taxes, are accounted for by assuming that the value of these services is exactly equal to the taxes used to pay for them -- and so GDP can therefore be calculated by summing firms' income before the deduction of taxes.

What is critical, therefore, is the nature of so-called "value-added." For an individual firm, this is obtained by subtracting the cost of inputs from the monetary value of its output. At this point, mainstream economic theory and standard accounting practice makes a crucial and wholly arbitrary assumption: a firm's value-added is identical to the new value created by the production process within that firm and does not include any value generated elsewhere and captured by that firm in circulation, i.e. in markets, where titles to value are circulated but none is generated. This conflation of the value generated in the production of a commodity and the price received for it is the basis of the ruling economic doctrine in all its forms. On the other hand, recognition that the value generated in production and the value captured in the marketplace are two entirely different quantities which bear no necessary relationship to each other is the starting point of Marxist value theory, one implication of which is that activities, such as advertising, security services and banking produce no value whatsoever and are instead overhead costs, forms of social consumption of values generated in productive sectors of the economy -- much of which have been relocated to low-wage countries like Bangladesh.

This, then, is what I call the GDP illusion, whereby the value generated by low-wage labor in poor countries appears to be generated domestically in rich countries. In this way, the parasitic and exploitative relationship between imperialist countries and low-wage countries is veiled by supposedly objective raw economic data, considered as such even by many Marxist and other radical critics of the system who should know better.

How do you define "global labor arbitrage"?

This term was popularized in the early 2000s by Stephen Roach, a senior economist at Morgan Stanley, who described global labor arbitrage as the replacement of "high-wage workers here with like-quality, low-wage workers abroad," adding that "extract[ing] product from relatively low-wage workers in the developing world has become an increasingly urgent survival tactic for companies in the developed economies." Yet this only offers a superficial description of the phenomenon, while the mainstream theory that Roach subscribes to does not adequately explain it. Before I give my definition of global labor arbitrage, I should first explain its meaning in terms of the mainstream economic theory. Simply, it means moving production to where labor costs are lowest. "Labor costs" doesn't just refer to wages -- from the capitalist's point of view, what matters as well as the cost of labor (i.e., the wage) is the monetary value of the goods or services produced by this labor -- in other words, unit labor cost, defined as the cost of the labor required to produce an extra unit of output. According to mainstream theory, efficient, unimpeded markets equate workers' wages with their "marginal product," i.e. their contribution to total output, and from this two important consequences flow. First, workers are not exploited -- they receive in wages no more and no less than they contribute. Second, free markets equalize unit labor costs between industries and countries -- if wages are higher for some workers, it means they are more productive.

So, if, in the real world, (unit) labor costs are actually lower in some countries than in others, it means that workers in those countries receive wages which are lower than their marginal product -- in other words, even according to mainstream economic theory, they are being exploited. And, secondly, it means that the functioning of the labor market is impeded by extra-economic factors that depress wages, namely restrictions on the free movement of labor across borders. In mainstream economic theory, "arbitrage" means profiting from market imperfections that result in the same commodity fetching a different price in one place than in another. No other market suffers from imperfections on anything like the same scale as those encountered by the sellers of living labor, creating enormous opportunities for corporations to profit at their expense.

While none of this can be disputed by mainstream economists, the norm is to obfuscate these issues for what might be called public relations reasons, and it is to his credit that Stephen Roach spoke so plainly. But the mainstream explanation is inadequate, for several reasons. First, workers don't just replace their wages; their unpaid labor is the source of all of the capitalists' profits, and also pays for economic activities that do not add to social wealth, such as advertising, security, finance, etc. In other words, the exploitation of living labor is fundamental to capitalism and does not depend on market imperfections. Second, suppression of the free movement of labor cannot be regarded as an incidental, exogenous factor; instead, we need a concept that recognizes this to be an intrinsic part of contemporary global capitalism. And the same goes for the compulsion mentioned by Stephen Roach that has obliged capitalists in imperialist countries, on pain of extinction, to shift production to low-wage countries.

My definition of so-called global labor arbitrage is, therefore, that the division of the world between a handful of oppressor nations and a great number of oppressed nations, "the essence of imperialism," as Lenin said, is now an intrinsic property of the capital/labor relation and is manifested in the racially- and nationally-stratified global workforce; and that the super-exploitation this makes possible is a central factor countering the tendency of the rate of profit to fall, postponing the eruption of systemic crisis until the first decade of the 21st century.

What is the relationship between imperialism as currently practiced and mass migration?

Decolonization has emancipated the national bourgeoisies of the oppressed nations, giving them a place for their snouts in the trough, but the working peoples of the oppressed nations, whose hard-fought struggles achieved decolonization, still await their day of liberation. The division of the world between a handful of oppressor nations and a great majority of oppressed nations is today manifested in the racial and national hierarchy that constitutes the global working class; maintaining these divisions plays an absolutely central political as well as economic role in capitalism's continued survival. Violent suppression of free movement of labor across national borders, especially those between imperialist and low-wage nations, is a key factor producing and perpetuating wide international wage differentials; these in turn propel both the migration of production processes to low-wage countries and the migration of low-wage workers to imperialist countries, which are therefore two sides of the same coin.

How is gender discrimination built into the capitalist workforce?

Capitalists utilize all forms of division and disunity amongst working people in order to reap super-profits from doubly-oppressed layers and to bear down on the wages of all workers. Since hunger for cheap labor is the main force driving the global shift of production, it's no surprise this is manifested in a preference for the cheapest labor in those countries, namely that of women (and children); and as Bangladesh illustrates, this is no less true of countries where patriarchal culture has hitherto excluded women from life and labor outside the home. Conferring the status of wageworkers and breadwinners on young women and concentrating them in large numbers in factories tends to transform their social status and self-image, never more so than when fighting street battles with baton-wielding cops and company goons. To temper the subversive consequences of their greed, capitalist politicians crank up promotion of obscurantist, patriarchal ideologies, aimed at impeding the growth of militant class consciousness among these doubly-oppressed layers of the working class, performing a similar function to the promotion of sexiest celebrity culture and the cosmetics and fashion industries in other parts of the world.

More generally, the wealth gap between men and women is much greater than the income gap, reflecting the cumulative results of centuries and millennia of patriarchal class society. Patriarchy, like imperialism, predated capitalism and was a condition for its rise. Frederick Engels explained, in Origin of the Family, Private Property and the State, that women's oppression originated in the transition from primitive communism to class society, when a layer of the male population used their superior physical strength and aggression to seize possession of the social surplus and live at the expense of the rest of society. To pass accumulated wealth down the male line, they seized control of women's fertility, resulting in what Engels called the "world-historic downfall of the female sex." This implies that social revolution, opening the door to the abolition of class division, is a prerequisite for uprooting women's oppression, which can only be accomplished by building a society that places human beings and children at its center, in place of profit and private wealth accumulation.

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Globalization Is Just a Contemporary Word for Financial Colonialism - Truth-Out

Nicoleta Bolos and her baby daughter in Ragusa province. Photograph: Francesca Commissari for the Observer

Every night for almost three years, Nicoleta Bolos lay awake at night on a dirty mattress in an outhouse in Sicilys Ragusa province, waiting for the sound of footsteps outside the door. As the hours passed, she braced herself for the door to creak open, for the metallic clunk of a gun being placed on the table by her head and the weight of her employer thudding down on the dirty grey mattress beside her.

The only thing that she feared more than the sound of the farmers step outside her door was the threat of losing her job. So she endured night after night of rape and beatings while her husband drank himself into a stupor outside.

The first time, it was my husband who said I had to do this. That the owner of the greenhouse where we had been given work wanted to sleep with me and if we refused he wouldnt pay us and would send us off his land, she says.

I thought he was crazy, but when I refused, he beat me. He said I had to do everything our boss told us to do it was the only way we could keep our work. When my employer came, he threatened me with a gun. He told me that if I moved he would blow my head off. When he finished he just walked away.

The next morning Bolos was back at work, crouching beside her husband in a sweltering greenhouse, tending and harvesting the produce that has helped make Italy the biggest grower and exporter of fruit and vegetables in Europe. The province of Ragusa is the third-largest producer of vegetables in Europe.

During her time on the farm, Bolos says, workers were given scarcely habitable accommodation, fed cat food for their evening meal and were refused medical treatment. At night, Bolos and the other female Romanian workers became entertainment for the farmer and his friends, repeatedly raped and abused over many years.

When I came here I thought I was coming to a hard but decent job in another European country, but we ended up as slaves, she says.

Hidden among fields of flapping white plastic tents across Ragusa province, 5,000 Romanian women like Bolos are working as seasonal agricultural workers. Their treatment is a growing human rights scandal, being perpetrated with almost complete impunity.

An Italian migrant rights organisation, the Proxyma Association, estimates that more than half of all Romanian women working in the greenhouses are forced into sexual relations with their employers. Almost all of them work in conditions of forced labour and severe exploitation.

Police say they believe that up to 7,500 women, the majority of whom are Romanian, are living in slavery on farms across the region. Guido Volpe, a commander in the carabinieri military police in Sicily, told the Observer that Ragusa was the centre of exploitation on the island.

These women are working as slaves in the fields and we know they are blackmailed to have sex with the owners of the farms or greenhouses because of their psychological subjugation, he says. It is not easy to investigate or stop this from happening, as the women are mostly too afraid to speak out.

Many of the Romanian women leave children and dependent families at home and feel forced into making the desperate choices that have carved deep lines of grief into Boloss face.

Where I come from in Romanian Moldavia, nobody has a job, says Bolos, as she nurses her five-month-old daughter in a dark warehouse that is now her home on another farm in Ragusa province. The average salary there is 200 a month. Here you can make much more, even if you need to suffer.

The Observer spoke to 10 Romanian women working on farms in Ragusa. All detailed routine sexual assault and exploitation, including working 12-hour days in extreme heat with no water, non-payment of wages and being forced to live in degrading and unsanitary conditions in isolated outbuildings. Their working days often include physical violence, being threatened with weapons and being blackmailed with threats to their children and family.

Professor Alessandra Sciurba from the University of Palermo co-wrote a report in 2015 that documented the abuse that Romanian women in Sicily were facing. She says conditions are worse now.

The women are telling us they need to migrate to try to ensure their children are not living in complete poverty in Romania, but that they themselves are being forced to endure terrible conditions and abuse as a result, she says. There is no other work, the women told us, so in order to provice for their families they felt they had to accept this deal. It is a conscious choice they are having to make. What we witnessed is nothing less than forced labour and trafficking as defined by the United Nations International Labour Organisation.

Prosecutor Valentina Botti is pursuing multiple charges of sexual assault and labour exploitation against farmers. She says that the abuse of Romanian women is a huge phenomenon.

Kidnapping, sexual assault and keeping people in slavery are three major crimes we have detailed in our investigations to date, she says.

We are talking about potentially thousands of Romanian women as victims of serious abuse. Very few women are coming forward with their stories. Most accept the abuse as the personal sacrifice they must make if they want to keep their jobs. The implication of losing work for many of them is devastating.

Eliza, a 45-year-old Romanian women, told the Observer that she felt she had no choice when her new employer pulled her into a shed on her first day at work.

I tried to run away but he told me clearly that if I did not do this I would have to leave, she says. It had been months that I had been out of work. I realised that if I wanted to stay in Italy I had to accept this.

The huge rise in the number of Romanian women seeking abortions in Sicily is also alarming medical professionals and human rights groups. According to Proxyma, while Romanian women make up only 4% of the female population of Ragusa province, they account for 20% of registered abortions.

The numbers of abortions among Romanian women is very alarming, says Ausilia Cosentini, coordinator of the Fari project, which provides assistance for Romanian women at a clinic. She says that many of the women coming to seek abortions were accompanied by their employers or other Italian men. While you clearly cant conclude that all these pregnancies are the result of sexual violence or fear of losing their work, the high number of abortions in relation to the few thousand Romanian women in the province has to be taken very seriously.

Working conditions are in some cases highly dangerous. One young Romanian woman told us that she became sick when she was forced to handle and work with agricultural chemicals without protective clothing. I had to handle foods covered in pesticides and it made me really sick. I was coughing and I couldnt breathe, she says.

I was pregnant and I started to feel sick and then I gave birth to my baby when I was only five months pregnant. The doctors said she was premature because of the work and that she is probably going to have brain damage because of the chemicals.

Those who did report their abuse to the authorities said they then often found themselves unable to find work elsewhere.

I worked with my husband in the greenhouses and the owner wanted to sleep with me, says Gloria, 48. I refused and he fired me. I reported him to the police but since then I cant find a job. The other farm owners know I went to the police and they dont want me to work for them.

Eventually, Nicoleta Boloss nightly ordeals proved too much. She fled the farm and her husband but was left without work and unable to send money home to her two young children in Romania. By the time her friends had raised enough money for her bus ticket home, she had lost legal custody of both children. They are now living with her ex-husbands uncle and she has not been allowed any contact since. Yet despite the abuse, she returned to work in Ragusa, taking the 50-hour bus journey from Botosani, in Romania, back to Sicily and the greenhouses.

Opportunities for casual farm work in Ragusa are abundant. In recent years, Italian exports of fresh fruit and vegetables have grown and are now worth some 366m a year. Much of this produce is grown in the 5,000 farms across Ragusa province.

Italian agriculture has for many years been heavily reliant on migrant labour. One farming group, Coldiretti, estimates that about 120,000 migrants are working in the sector in southern Italy.

After years of damaging allegations of exploitation and a resulting clampdown by the Italian government, Sicilian farmers who once filled their greenhouses with undocumented migrants and refugees arriving by boat have turned to migrant workers from within the EU.

The number of Romanian women travelling to work in Sicily has increased hugely over the past decade. According to official figures, only 36 Romanian women were working in Ragusa province in 2006, rising to more than 5,000 this year. Romanians overtook Tunisians this year as the largest group working in Ragusas fields.

Greenhouse owners are now afraid of being prosecuted for facilitating illegal migration by hiring undocumented migrants, says Giuseppe Scifo, a union leader for CGIL, Italys largest union. So the new targets for exploitation are EU citizens, who are willing to accept low wages because of the desperate situation in their home countries.

Gianfranco Cunsolo, president of Coldiretti in Ragusa, says he has no choice but to pay low wages.

The exploitation of workers in Ragusa is also the consequence of EU policies, he says. I dont want to justify the actions of farmers and greenhouse owners who pay low wages to migrant workers, but these people often dont feel they have any alternative if they are to compete with other European markets.

When it comes to sexual abuse of women workers, there is obviously no excuse for that. The people doing this need to be arrested and jailed. Women are welcome to work here in Ragusa and must be treated equally. We completely condemn this.

Under Italian law, farm owners must provide seasonal workers with official contracts and a daily wage of 56 for an eight-hour day. Yet Romanian women arriving in Sicily often find a more brutal reality.

Romanian women are paid three times less than the wage required by law, and most of them dont have legal contracts, says Scifo. Many of the women interviewed by the Observer say they are rarely paid more than 20 a day.

Yet there is little political or economic incentive for the authorities to take action and end the abuse. Although the police say they have dozens of open cases and ongoing prosecutions, only one farmer has so far been charged and convicted of abusing Romanian women.

The problem is the farmers are not rich men, says Scifo. If the owners paid their workers legal wages, they would lose too much money and the entire agricultural economy of the province would implode. This is why the authorities look the other way and why it is so hard to get anyone to take action to stop this.

Attempts to raise the issue in the Italian parliament have floundered. In 2015, MP Marisa Nicchi launched a parliamentary inquiry into slavery among Romanian workers in Ragusa and asked the prime minister to launch an investigation.

Two years on and the Italian government has yet to take any action, she says from her parliamentary office in Rome. But we will not give up. These crimes must stop.

In Ragusa, local politicians say that they are trying to provide services to Romanian workers facing abuse. Giovanni Moscato, who last June became mayor of Vittoria, a town in the west of Ragusa province, said the exploitation was persisting because too many economic interests were being served at present, but that the city was opening a hostel to shelter Romanian women fleeing violent employers.

Since returning to Italy, Nicoleta Bolos has met a Romanian man and had two other children. She reported her previous employer to the police, and the man was charged with labour exploitation but his case has yet to come to trial.

Now, she says, she is sick of the abuse. She has decided to go public with her story in an attempt to get justice for herself and other Romanian women caught in a web of exploitation and impunity. Holding her baby and sitting on a cracked plastic chair, she gestures at their home. The walls are wet with damp and there is no heating or running water.

Look at how we live. But this is our life here. I am not going to lose my children again. They are the reason that I have lived through this, why Ive become a slave, she says. It was for them that I had to let that man into my bed every night. Now I want people to know that this is happening and that it must stop.

Some names have been changed to protect identities

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Raped, beaten, exploited: the 21st-century slavery propping up Sicilian farming - The Guardian