The New International Division of Labour

Global Transformation and Uneven Development

Guido Starosta, Greig Charnock, Guido Starosta

• Publisher: Palgrave Macmillan
• Year: 2016
• Print ISBN: 9781137538710
• eBook ISBN: 9781137538727
• Topic: Politics & International Relations
• Subtopic: Development Economics
• Index: Politics & International Relations

This book revisits the debate over the new international division of labour (NIDL) that dominated discussions in international political economy and development studies until the early 1990s. It submits that a revised NIDL thesis can shed light on the specificities of capitalist development in various parts of the world today. Taken together, the contributions amount to a novel value-theoretical approach to understanding the NIDL. This rests upon the distinction between the global economic content that determines the constitution and dynamics of the NIDL and the evolving national political forms that mediate its development. More specifically, the authors argue that uneven development is an expression of the underlying essential unity of the production of relative surplus-value on a world scale. They substantiate and illustrate this argument through several international case studies, including Argentina, Brazil, Ecuador, Ireland, South Korea, Spain and Venezuela.

© The Editor(s) (if applicable) and The Author(s) 2016

Greig Charnock and Guido Starosta (eds.)The New International Division of LabourInternational Political Economy Series10.1057/978-1-137-53872-7_1

Begin Abstract

1. Introduction: The New International Division of Labour and the Critique of Political Economy Today

Greig Charnock¹ and Guido Starosta²

(1)

Politics, The University of Manchester, Manchester, UK

(2)

Department of Economics and Administration, National University of Quilmes and National Scientific and Technical Research Council, Buenos Aires, Argentina

End Abstract

Thus, from the bare enumeration of some of the more glaringly obvious features of the present-day world economy, it can be seen that the old or ‘classical’ international division of labour, by which the underdeveloped countries were on the whole incorporated into the capitalist world economy as mere raw materials suppliers, no longer exists. The underdeveloped countries are increasingly chosen as sites for manufacturing industries producing goods that are competitive in the world market.

… This tendency will be designated the ‘new international division of labor’ (to be considered as an on-going, not a completed, process) (Fröbel et al. 1978: 845, 849).

In a recent anthology of his essays on Global Capitalism (2015) Hugo Radice recounts how in the 1960s and early 1970s progressive, broadly Marxist, scholarship fell short of providing a satisfactory means of understanding what was by then a rapidly changing world. The debates back then, he summarises, ‘had little to say directly about the transformations of production and work within firms, or about the political relations between organised economic interests and the state, while international economic relations between states were understood firmly in nineteenth century terms of autonomous and mutually antagonistic powers, great or small’ (Radice 2015: 9). Yet profound and lightning-paced transformations in worldwide production and trade were indeed palpable to any observer back then, and by the mid-1970s Marxist scholars in the UK and beyond were beginning to engage in highly productive—and still influential—debates on the labour process, state theory, and alternative political strategies in the context of deep world recession and heightened social and political tensions across much of the West. Radice recalls, in particular, his participation in a 1974 workshop in Starnberg, Germany, ‘at which Otto Kreye and his colleagues presented the first results of their project on the new international division of labour’. This work, he confirms, was to become ‘very influential for progressive scholarship on global capitalism’ (Radice 2015: 9).

The new international division of labour (NIDL) thesis developed by Folker Fröbel, Jurgen Heinrichs, and Otto Kreye very much stands out as one of the most influential and widely debated contributions at the forefront of discussions on late-industrialisation and global production long into the 1980s and 1990s. Based on their empirical studies in the 1970s, Fröbel, Heinrichs, and Kreye’s work seemed to capture extremely well the transformations in the world market taking place by the beginning of that decade, and very rapidly caught the attention of most analysts of international political economy (IPE) and the changing geographies of global capitalism. Although the argument in their book The New International Division of Labour (published in English in 1980) rested on very distinctive theoretical foundations and arguments, reviewed below, the expression ‘new international division of labour’ was to somehow acquire a life of its own and soon became very much a part of the working vocabulary of most scholars empirically concerned with global processes of industrial restructuring—a kind of conceptual shorthand to encapsulate what were regarded as the main developments in the world economy at that time. The ‘NIDL’ thus became a catchphrase, widely accepted and loosely used (sometimes by default) to describe the novel configuration of the capitalist world market, but without always making a self-conscious effort to acknowledge or flesh out the particular conceptual approach being deployed to explain this empirical phenomenon and its subsequent developments.

In a nutshell, the popularised version of the NIDL thesis consisted of the following stylised account of the process of global restructuring. Faced with declining profitability in advanced capitalist countries (mainly due to rising wages), transnational corporations (TNCs) started to relocate labour-intensive manufacturing to the then, so-called, Third World, thus acting as a major factor in the industrial decline that seemed to prevail in the former countries in the late 1970s and early 1980s. ‘Third World’ countries, for their part, provided TNCs with a huge potential reserve of low-paid and disciplined workers. Combined with technological advances in the means of communication and transport, the increasing fragmentation of production processes and the consequent simplification of semi-skilled and unskilled tasks created a tendency for the establishment of export-oriented ‘world market factories’ in the ‘Third World’. Accordingly, the story went on, the classical international division of labour (CIDL)—revolving around the polarisation of the world economy into an industrialised ‘core’ and a dependent ‘periphery’ confined to the role of supplier of raw materials and staple foods—had been superseded by the NIDL, with an industrialised but still dependent Third World, and a ‘First World’ oriented to a service-based economy, which could not absorb the resulting unemployed population.

The NIDL thesis remained highly influential into the 1990s but—if the scant number of studies published in the last decade dealing directly with the NIDL is any indication—the thesis has since become passé. Undoubtedly, this can be explained in part by changing fads and the development of new lines of inquiry and debate among academics. Yet it is also the case that some scholars had started to put forward strong reservations against the NIDL approach by the 1990s—prompted principally by some empirical developments which seemed to contradict the major claims of the NIDL thesis. The ‘impressive’ developmental record of the first generation of Asian Tigers (especially South Korea), in particular, seemed to undermine a theory that put export-oriented industrialisation based on extremely low wages in labour-intensive industries at the heart of its argument. More broadly, as many critics have rightly highlighted, the initial formulations of the NIDL thesis contained untenable sweeping generalisations, which could not account for national differences in the developmental path of many countries. The industrial upgrading of the first generation of Asian Tigers, for example, would eventually include relatively complex, capital-intensive sectors rather than simply unskilled-labour-intensive ones, as the stylised version of the NIDL that became common currency appeared to suggest.

While accepting the veracity of some of the criticisms levelled at the original NIDL thesis and the version of it that became common currency by the 1990s, we believe that it now deserves to be revisited. We propose that a properly reconsidered and revised NIDL thesis can still shed light on the specificities of capitalist development in various parts of the world today, as well as the nature of uneven development across the capitalist world market. Taken together, the contributions to this book represent the basis for such a reconsideration of the NIDL thesis which rests upon the Marxian distinction between the global economic content that determines the constitution and dynamics of the international division of labour, and the evolving national political forms that mediate its development. More specifically, the book argues that national developmental processes across the world have been but an expression of the underlying essential unity of the production of relative surplus-value on a world scale. The fact that the approach taken in this book is rooted in the critique of political economy originally developed by Karl Marx over 150 years ago does not detract from its contemporary significance. Moreover, a revised NIDL thesis as put forward in this volume represents an original contribution to key debates in international and critical political economy, insofar as, firstly, its theoretical foundations lie in research that moves to some extent beyond Marx; and, secondly, it departs in significant ways from not only Fröbel and his colleagues, but also a variety of contemporary approaches that seek to understand the nature of—and the relation between—global transformation and uneven development.

From the Critique of Political Economy to a New New International Division of Labour Thesis

The book draws its inspiration from innovative theoretical scholarship that has emerged under the auspices of the Centre for Research as Practical Criticism (CICP), based in Buenos Aires, Argentina, and especially the work of the independent scholar Juan Iñigo Carrera. This work, which is only just recently beginning to appear in Anglophone literature—in part, because it has been developed outside of formal academic structures and networks¹—represents a thorough re-examination of Marx’s critique of political economy and its dialectical-methodical foundations. While drawing upon Marx’s fundamental insight into the determination of capital as the immediate subject of the organisation of the process of social life, it also moves some way beyond it so as to cast fresh light on global transformation and uneven development in recent decades, as well as to offer ground-breaking research on the emancipatory subjectivity of the working class (a theme we do not broach directly in this book but see, for example, Starosta 2016). The following section outlines the basic contours of the approach pioneered by Iñigo Carrera.

Capital, the System of Machinery and the International Fragmentation of the Productive Subjectivity of the Global Working Class

As Starosta explains in Chap. 4, one of the most potent scientific discoveries of Marx’s critique of political economy was that capital is neither simply a thing (for example, the instruments of production), nor a productive unit or legal entity (such as a firm), nor a social grouping sharing common characteristics and interests (for instance, business or the bourgeoisie). In its general determination as self-valorising value, capital is actually a materialised social relation between commodity owners differentiated into social classes, which, in its fully developed form as the total social capital, becomes inverted into the (alienated) subject of the unity of the process of social reproduction and its expansion (Marx 1976: 763). Thus, capital is essentially the movement of the self-expansion of the objectified general social relation between private and independent human beings which, in its own process, produces and reproduces the latter as members of antagonistic social classes (Marx 1976: 723–4; Marx 1992: 185). All moments of the human life-process thus become inverted into material bearers of the life-cycle of capital, or they become forms assumed by the flow of value in its circulatory process. Subsumed under the capital-form, the alienated content of social life becomes the production of surplus-value or the formally boundless quantitative progression of the general reified form of social mediation (Marx 1976: 251–7).

Although this content governs the movement of capital as a whole or as an alienated collective power, the total (global) social capital is nonetheless the product of the private and independent form taken by social labour. The general unity of the movement of the total social capital cannot be established immediately. It is thereby indirectly established through the exchange of commodities resulting from the apparently autonomous actions of individual capitals in competition with each other, as each of them pursues the maximisation of its profitability through the expanded reproduction of their formally independent cycles of valorisation. In their simplest form, those cycles can be represented through the well-known general formula of capital:

	LP
M − C		…..P………C − M + ΔM
	MP

Where M = money capital, C = commodity capital, P = productive capital, LP = labour power, MP = means of production. More specifically, the concrete form in which individual capitals assert their class unity as ‘aliquot parts’ of the total social capital is the process of formation of the general rate of profit (Marx 1981: 298–300, 312). This is the inner or essential determination of the general social relation between capitalist firms (or individual capitals).

The territorial or spatial dimension of the accumulation process—and the changing forms of the worldwide division of labour—therefore cannot be seen as being determined by the conscious locational ‘strategies’ of TNCs faced with given qualitative national and regional differences, in turn seen as established by allegedly autonomous state policies. Instead, it needs to be grasped as an expression of the underlying formal and material unity of the essentially global contradictory dynamics of the accumulation of the total social capital through the production of relative surplus-value, which are economically mediated by relations of competition among individual capitals like TNCs (again, as opposed to determined), on the one hand, and politically mediated by the policies of the nation state on the other. These contradictory and crisis-ridden dynamics, which, in their most developed form as large-scale industry, fundamentally entail the permanent revolution in the modes of exertion of the labour power of individual workers and of their articulation as a directly collective productive body or organism (Marx 1976: 617), lie at the heart of the changing historical forms of the international division of labour.

The production of relative surplus-value in the form of large-scale industry entails four divergent tendencies in the development of the productive attributes o...

Table of contents

• Cover
• Frontmatter
• 1. Introduction: The New International Division of Labour and the Critique of Political Economy Today
• 1. Capital and the International Division of Labour
• 2. Country Case Studies
• 3. Sectoral Case Studies
• Backmatter