Modern Imperialism, Monopoly Finance Capital and Marx’s Law of Value
By Samir Amin
Monthly Review Press, 2018
One of the most obvious and abhorrent features of the global economy is the stark division of the world into a wealthy “North” and a poor “South”. Egyptian-born economist Samir Amin, who passed away in August, often referred to this divide as one of “centre” and “periphery”.
Amin, former director of the Third World Forum in Senegal, was renowned as one of the most significant theorists in the field of global economics, uneven development and imperialism. His work is a major reference point in explaining the origin and nature of the North/South divide.
Modern Imperialism, Monopoly Finance Capital and Marx’s Law of Value was published shortly before his death. It comprises his 2010 work The Law of Value Worldwide and several essays explaining and expanding upon the themes of that work.
It is captures the scope of his thinking, starting from the foundational issue of Marx’s theory of value and linking this through to the development of a divided and financialised global economy.
Widely considered as a foundation of Marx’s economics is the labour theory of value — that is the idea that the value of a commodity depends upon the amount of labour used to produce it. That includes not just the direct labour used, but also the labour used to produce the needed instruments, machinery and raw materials used.
But the value of a commodity does not necessarily equate to its price. Amin lists nine mechanisms that lead to divergences between value and price.
One of those divergences, for example, is ground rent. Marx proposed a theory of rent based on the labour theory of value in Capital, which Amin discusses and develops.
From the perspective of the labour theory of value, unimproved land, having had no labour invested in it, has no value. Yet in most modern capitalist economies, it still commands a price.
In Capital, Marx cites an example involving Thomas Peel, who took with him from England to the Swan River colony in Western Australia £50,000 of means of subsistence and production as well as 300 workers. But on arriving in the colony, “Mr. Peel was left without a servant to make his bed or fetch him water from the river”.
When land is freely available, the usual rules of capitalism cannot be enforced. In such a situation, land has no more a price than air.
It is only when land has been monopolised that a price can be charged. Though land has no value, it is required for production, so landowners who control that monopoly can demand a share of the value produced in spite of not producing any value themselves.
Marx’s labour theory of value has been controversial, especially since the value debate of the 1970s.
Those rejecting Marx’s theory have instead suggested that economics, even Marxist economics, should not be formulated in terms of values. Rather it should stick to analysing everything in terms of prices as is standard practice in most mainstream economics.
Replacing Marx’s value-based models, these critics rely on the models created by economist Pierro Sraffa with simultaneous equations of the prices of commodity inputs and outputs. From these they argue that the idea of value is redundant and/or wrong.
Amin, however, contrasts these models with ones using value-based equations. In particular, he shows how these can be used to create models of successive phases of production in which labour productivity changes.
Bypassing value in favour of prices leaves priced-based models unable to account for changes in labour productivity and efficiency. Using values shows, “that the social system that maximizes the rate of profit (for a given level of wages) does not necessarily maximize the development of the productive forces (the reduction of social labour time)”.
The rejection of values in favour of prices ignores the “distinction between phenomenal appearances and the essential material reality behind them, reduc[ing] scientific analysis to direct empirical observation”.
The difference between value and price assumes great significance in the concept of “imperialist rent”, with which Amin explains the economic gulf existing between the countries of the North and those of the South.
One of the most obvious differences between them is the level of wages.
There are often differences in productivity between the North and South, but this difference alone cannot explain the difference in the level of wages. Even a worker performing the same task with the same productivity in the South will generally only receive a fraction of what an equivalent worker in the North would receive.
The same labour in the South has, in the labour theory of value, the same value as in the North, but it has a radically different price. By availing itself of labour in the South, capital in the North is able to extract the same value but for a much lower price.
Capital can move with relative ease in search of greater profits, but labour is generally fairly immobile. States of the North expend considerable effort in keeping those from poorer, lower-wage countries out. Thus they enforce the wage differential.
The result is super-profits for the North — a transfer of value from South to North.
Because of this, Amin rejects the commonplace rhetoric that envisages poorer countries as existing parallel to wealthier countries but just at a “different stage of growth” on a path to “catch up”.
Rather than existing in parallel, they are part of a world system with a dominant “centre” and an exploited “periphery”. The transfer of value from periphery to centre helps perpetuate the accumulation of wealth and capital in the centre.
In the periphery, the outward transfer of value keeps them unable to accumulate the wealth and capital that would allow them to develop by simply following the same path as the countries of the centre and to catch up.
Amin also examines the way “mining rent” operates within capitalism, and between the states of the centre and periphery. Just like land, minerals are subject to monopolisation save that they are non-renewable. Just like land, this monopolisation allows its owners to charge a levy beyond any contribution of value through the labour involved in actually extracting the minerals.
Through colonialism, imperialist states frequently enjoyed free access to the monopolies of natural resources in the periphery. Even after formal independence, this situation has often continued with only symbolic royalties being paid.
This represents another means by which the centre benefits at the expense of the periphery.
Among other issues Amin discusses is ecology and unsustainable development. As well as the destruction of the planet, Amin critiques ecological theorising that tries to analyse environmental issues with cost benefit analysis, thus shoehorning ecological analysis into calculations of price.