Capitalism, class, and value chain development

Abstract

Much of today’s Global Value Chain (GVC) research sidelines issues of exploitation and instead focuses on upgrading—through capital-led innovation—as a development strategy. This is often accompanied by the assumption that upgrading translates into more and better jobs. This paper, in contrast, argues that GVCs are based upon and reproduced through internationally constituted class relations of capital accumulation. These relations are key determinants of development within GVCs.

Marx argued that ‘in all forms of society there is one specific kind of production which predominates over the rest, whose relations thus assign rank and influence to the others. It is a general illumination which bathes all the other colours and modifies their particularity. It is a particular ether which determines the specific gravity of every being which has materialized within it.” (Marx 2005, 106)

In this vein, we propose that a rigorous conception of class relations is necessary to comprehend who produces and who appropriates profits in GVCs, why competitive exploitation propels firms to adopt technological innovations (upgrading), why capital concentration (monopolisation and the predominance of lead firms) is so characteristic of value chain capitalism, and why and how workers in many GVC sectors experience super-exploitation, often along lines of gendered and racialized ideologies and practices that are reshaped under capitalism. That capital exploits labour is a constant under capitalism—the way and intensity in which exploitation occurs and is justified are historically and geographically specific and depends on class struggles.

It is an ideological common-sense to associate the term ‘class struggle’, pejoratively, with workers’ attempts to ameliorate their conditions. The reverse—struggles from above by capital to reproduce and heighten its exploitation of labour—is the more common reality. Class struggle from above takes various forms—including (a) attempts to segment workforces in order to suppress probabilities if class struggle from below, and (b) the deployment and propagation of markers of social difference to gain access to free and cheap labour.

On this basis, the present paper employs empirical examples to show how

(1)Upgrading (from above) occurs not merely through innovation, but by shaping the social relations of production. We call this ‘upgrading in and through class differentiation,’ and show, how it can potentially worsen the conditions for struggles from below.

(2)What the GVC mainstream calls the social upgrading approach is meaningful only when recognizing workers’ collective power—in its various forms and settings—in a context of class struggle (from below). Here, it is important neither to ignore how capital’s power resides beyond the individual employer, e.g. through labour regimes, nor to negate the political economic importance of identifying the diverse power resources at labour’s potential disposition.