4. A global calculation of surplus-value extracted from the Third World

"The culture of the advanced countries has been, and still is, the result of their being able to live at the expense of a thousand million oppressed people. It is because the capitalists of these countries obtain a great deal more in this way than they could obtain as profits from plundering the workers in their own countries." V. I. Lenin, "The Second Congress of the Communist International"(183)

If the United $tates receives on the order of $500 billion a year--maybe 50 percent more, maybe 50 percent less--from its superexploitive relationship with the Third World, then we can safely say that the Amerikan oppressor nation contains no proletariat. We have explained this concept in MT#1 and subsequent issues. The profits of the U.$. economy not going to the oppressor nation labor aristocracy would be accounted for strictly by exploitation of oppressed nationalities. With regard to internal oppressed nationalities, we left open a question of their relationship to the global class structure, mainly because of difficulties in calculation. Everyone within imperialist country borders whether nationally oppressed or not, may be exploiter, not exploited if the transfer of surplus-value from the Third World is large enough.

The question arises as to how much profit would imperialist countries have if they had no internal semi-colonies or immigrants. Unfortunately, it is a very difficult question to ask, because the major imperialist countries all have these immigrant workers who do the most difficult work and all the imperialist countries invest in each other heavily. Hence, in some sectors of different imperialist economies we can see how immigrant labor has its effect --cheaper food in the United $tates for instance--but we have no easy way of calculating the impact on the overall profit rate for an imperialist economy, especially after we consider that other imperialists are sharing in the profits. Empirically, the oppressed nationalities internal to Japan number less than 1 percent; in the European Union the legal immigrants number 10 out of 344 million people and as we showed in MT #1, in the United $tates, the oppressed nationalities perform over 20 percent of the labor. Allowing for the number of illegal immigrants, and the growth of legal immigration happening in the United $tates and anticipated in Japan, we might take a round figure of 10 percent as average oppressed nationality share of labor within imperialist country borders.

Those following the logic of MT#1 would next attempt to take this global estimate of the labor performed by internal semi-colonies of imperialism by averaging out Japanese, European Union and U.$. oppressed nationalities and then comparing that with profits and GNP. About half the profits go to the "middle classes" and half to the capitalist class. The estimate that one percent is the capitalist class in the imperialist countries turns out to be fairly general for the imperialist countries.(184) From our perspective, anyone with a sense of perspective knows from reading MT#1 that the possibility of oppressor nation working-class exploitation is non-existent.

One of the better members of the Communist Party USA, Victor Perlo has admitted that parasitism has surged and he has performed some further calculations similar to those we conducted in MT #1. He admits that "less than half of all employees are now providing the revenue not only for all forms of capitalist profit and for taxes paid to governments, but also for the wages and salaries of the majority of employees who are not themselves producing surplus-value."(185) The only problem with that statement is that it does not count international transfers of value to imperialism. If we count productive sector workers abroad supporting unproductive sector workers in the imperialist countries, we get a much better picture.

Later in the book Perlo does try to account for superprofits from abroad. We credit him greatly for coming to an estimate of $150 billion in profits a year from discrimination and $96 billion a year from abroad. This he believes represents only one-third of property income,(186) so he maintains that oppressor nation workers are exploited for the other two-thirds. However, his own work is highly contradictory, and those who read it with proletarian determination will see that it is possible to conclude otherwise.

In agriculture, Perlo shows that in 1986, developing countries received five cents a pound for sugar and seven cents a pound for bananas. Meanwhile, sugar would sell for about 40 cents a pound retail and bananas would sell for 45 cents a pound. If transportation is another five cents a pound then, the value transferred to the imperialist countries' retail sector workers and capitalists is 30 cents a pound for sugar and 33 cents a pound for bananas. Later we shall see that Shaikh and Tonak are good at imagining transfers of value from the U.$. productive sector workers to unproductive sector workers, but not so good at imagining transfers from other countries' productive sector workers to unproductive workers in the imperialist countries. Perlo himself is a precursor of our line of argument when he admits that the Third World ends up paying two hours of its labor for one hour "of equivalent labor"(187) from the imperialist countries. He does not enter calculations similar to his ones on sugar and bananas into the transfers of value to the imperialist countries.

Next we should point out that Perlo himself notes that the capitalist class has 50 percent of the wealth, so the percent of that property income going to them is probably 50 percent just as a first approximation. The rest of the property incomes go to the traditional petty-bourgeoisie and the labor aristocracy. The principle of earning dividends or interest for owning things is a principle of capitalism, but capitalists are not the exclusive beneficiaries of such income under the capitalist system. Perlo did not account for that fact.

If we make the earnest effort of breaking down where the property incomes goes that Perlo does not, those making less than $50,000 a year are 94 percent of the population as individuals; they receive over 80 percent of the income of which about 9 percent is capitalist income from dividends, interest, capital gains etc.( 188) Hence, over 7 percent of the U.$. income goes to the bottom 94 percent in the form of capitalist income. That leaves just under 7 percent to go to the top 6 percent for a total of 14 percent capitalist income in the economy. In other words, half the capitalist income a year goes to the top 6 percent and half to the bottom 94 percent. By Perlo's own view of the class structure as 1 percent capitalist, 9 percent petty-bourgeois and 90 percent workers, that means the capitalists and upper half of the petty-bourgeoisie split the property income with the workers and bottom half of the petty-bourgeoisie. Hence, the capitalist share of the property income is much less than half, because it is sharing its half with the petty-bourgeoisie. To understand exactly how much capitalist income the capitalist class is getting as opposed to the petty-bourgeoisie we break it down further. For the capitalist class defined as the top 1 percent in 1985 to receive no income at all from property or from working, it would have to be deprived of less than $400 billion in income a year. Of that, property income is about $175 billion. (189) If we believe that 30 percent of profits stay with corporations and that they do not go to households, we can scrounge up a few more billion to account for, split again with other classes, but the total could not be more than $235 billion of relevant property income. By Perlo's own calculations, adjusted by the fact he left out that the top one percent does not get all the property income, racism and foreign profits account for more than the property income of the capitalist class. He admits racism and foreign profits account for a third of property income, but he just did not realize that capitalists receive less than a third of property income. This means the capitalist class does not exploit oppressor nation workers, if Perlo sticks to his 1 percent is capitalist class definition and his own calculations of discrimination and profits from abroad.

Updating Perlo's calculations for 1995, we will keep his estimate of $150 billion in discrimination profits, but foreign profits increased to $181.3 billion. (190) Since we have already proved our point, we are going to look at the picture more generally applicable for the OECD.

We are going to drop the GNP-and-oppressed-nationalities approach except as something to keep in mind when we talk about the rate of exploitation of unproductive sector workers later. When our critics calculate the rate of exploitation, we should all know that if it is low from looking at just the workers in isolation of transfers of value from other nations, then the critics risk having their arguments overturned once we consider those flows of value from the oppressed nations.

In MT#1, we made simplifying assumptions to give readers a quick sense of proportion. Now we break it down further. In the United $tates, the relevant figure of oppressed nationality labor is not 20 percent but much higher, because the oppressed nationalities are disproportionately located in what Marx called the productive sector. Of course it is well-known that illegal immigrants do the hard work in agriculture, but the oppressed nationalities are also highly represented in manufacturing. Thus when it comes to figuring out which workers are producing surplus-value for the capitalists, the oppressed nationalities play a role much higher than 20 percent. The white workers are disproportionately represented in sectors realizing and appropriating surplus-value and we did not account for that in MT#1, just in order to keep it simple and to throw our critics another generous assumption.

We do not have figures on First Nations or Asian-descended peoples, but we have Black and "Hispanic" (Latino) for 1995. Farm operators and managers are over 97 percent white, but farm workers are 40.3 percent Latino and 4.3 percent Black. Of course, we question to what degree official statistics captured undocumented workers. If we count farm operators and managers, then still 22.3 percent of all agriculture is Black and Latino workers, so at least 22.3 percent of surplus-value there is generated by them. In reality, the surplus-value added by oppressed nationalities is probably greater than 50 percent in agriculture, once we consider discriminatory and sub-minimum wage wages.

Employing almost 10 times more people than agriculture is manufacturing, mining, transport and construction. In these productive sector occupations, there were 3, 779,000 Black workers and 3,891,000 Latino workers. Out of 31,592,000 productive sector workers, Blacks were 12 percent and Latinos another 12 percent.(191) Combined with the wild-card of agriculture, 24 percent would be a conservative estimate of Black and Latino labor in the whole U.$. productive sector. If the discrimination rate is such that oppressed nationalities in industry get 85 percent the pay of white workers and if Asian-descended and First Nation workers account for another 2 percent of productive sector employment, then it seems safe to say that over 30 percent of surplus-value that originates within U.S. borders is from internal semi-colonies of U.$. imperialism.

Looking at the same question from the perspective of each nation, over 80 percent of the oppressor nation is in the unproductive sector. The productive sector exceptions amongst whites are well-paid and tend to be white-collar if not outright farm-owners. When this minority of the Euro-Amerikan people looks around, it has relatives and family that are not in the productive sector and who are also well-paid. Any scattered poor whites would have family members who are rich. Meanwhile, at least 42 percent of the Latino workers as of 1995 are in the productive sector.(192) From the point of view of this nation, there is still a battle. There is the whole range of a Latino bourgeoisie, Latino labor aristocracy and Latino workers being exploited and Latino workers being super-exploited. Within this oppressed nationality group, there is a "split in the working class." Blacks are somewhere between whites and Latinos on the continuum and thanks to unemployment the Black nation may too have a "split in the working class" instead of just one parasitic working-class.

The other assumption we made in MT#1 just to show how ridiculous our critics are is that there is no imperialist exploitation. Hence, we used GNP figures as if everything were produced entirely by the workers inside U.S. borders, when in fact it is our task to figure out what portion of that GNP is a result of a transfer of value from the Third World just as agricultural and industrial workers within the imperialist countries transfer value to other sectors of the economy. Even excluding Third World value transfers to imperialism, it was impossible to conclude that oppressor nation workers were exploited, at least in the United $tates. Now we are going to open the question to international transfers of value across borders.

To perform the necessary calculations in reverse, we can monetize the surplus product delivered to the imperialists from the Third World. If we use methods similar to those of Samir Amin, we might conclude the surplus product extracted each year from the Third World amounts to 20 percent of Third World production. As we shall see, if such an estimate is correct, that would mean sweeping implications for the parasitism of the entire class structure of the imperialist countries.

To move away from commodity fetishism, we drag our reader into some exercises on the labor theory of value. Let us start from rough estimates of the Third World labor force in accordance with the labor theory of value. If there are 4 billion Third World people and we assume that 2.5 billion are toilers, then 20 percent of their product is the labor of 500 million people each year.(193) In Marxist language, those 500 million workers produce 500 million worker-years of "surplus-labor" every year. "Surplus-labor" is a term we use interchangeably with "surplus-value" depending on the context. Actually, surplus-labor is only potential surplus-value, because if the capitalists organize production and generate the surplus-labor, but then they do not sell anything, they do not get surplus-value, which is a general term for profits of various kinds. If the capitalists manage to sell all their products, we Marxists say they "realized surplus-value from their surplus-labor."

If 20 percent of Third World toilers are doing surplus-labor being appropriated by the First World, that would mean that approximately for every worker in the imperialist countries there is at least one Third World worker standing next to him or her working for free but invisible. That is how we Marxists think, starting from production, with labor and then working our way over to less important matters such as exchange.

If it is true that the First World appropriates the labor of 500 million toilers a year for nothing, then the entirety of profits in the imperialist countries is due to the Third World and the workers of no oppressor nations or internal semi-colonies are being exploited. We can say that off the top of our heads if we know that those 500 million should be getting half the income of the OECD countries, but they are not, and in fact, wages and salaries of oppressor nation workers are at least triple profits, so even if we took all the profits and gave them to pay the 500 million invisible workers, we would still need more money from somewhere else to pay them equally to the imperialist country workers. That "somewhere else" would have to be the superprofits paid to the oppressor nation workers of imperialism.

The reason profits would not exceed wages and salaries paid out in the imperialist countries would be that the imperialist country labor aristocracy eats into the superprofits generated by the 500 million Third World workers. These bourgeoisified workers receive some fraction greater than 100 percent of their own labor back in the form of pay. On account of these workers and the other bourgeois classes, Third World workers have to do unpaid labor.

The 500 million invisible workers work under military regimes or death-squad governments or in the best of circumstances, they work in newly minted political regimes with good intentions that nonetheless come with a history of low wages. We do not mean that there is a particular set of 500 million workers who work for free. We only mean that 20 percent of the work of 2.5 billion Third World workers and peasants is done for free for the imperialist countries, because they are forced to by military regimes or regimes that compete with military regimes.

Even in those regimes where the rulers do not use military force, the threat of political/military force remains and unless they mobilize their peoples for people's war against imperialism, even the best-intentioned rulers must set up their countries to compete with countries that do keep down wages by using death-squads often furnished with Amerikan weapons and training. "Sony's Kirihara observed: 'We should not think only of Japan but Korea and Taiwan, If we compare Korea with China, nobody can compete. Even Malaysia or Singapore is weaker than China or India because of wages."(194) So if you are a poor country emerging from semi-feudalism and you have many people seeking employment, whether you like it or not, you are competing with countries where they do use repression against union organizers to keep down wages.

These political/military facts of life will make the labor of 500 million appear in monetary form to the imperialist eye to be the labor of 50 million, if we assume that wages are 10 times as high in the imperialist countries as in the Third World and if we assume the capital used in production also originates in the Third World despite being owned by the First World. If we were to take a weighted average of the Third World--China, India, Bangladesh and Ceylon would drag down the average, because they are the countries where the most workers are and where wages are lowest. The Financial Times in 1994 reported that average manufacturing wages in China per hour were 50 cents, which meant U.$. wages of $16.40 an hour were nearly 33 times higher.(195) Adrian Wood has put together a detailed global estimate for 1985 to which our only objection is that he counted Greece as Third World; although it is such a small portion of the total employment and wages that it will not matter much. Greece averaged $3.45 an hour in compensation, which is on the borderline there between the Third World and the imperialist countries anyway. It turns out if we weight the average the way it should be weighted, so that each worker counts equally in the total of wages, then China and India drag down the average to 48 cents an hour for the whole Third World. A different average gives weight to each country's share in the Third World's exports. Taiwan ($1.38 an hour) and Korea ($1.28 an hour) are much more important in this regard, so the average wage in Third World exports is $1.24 an hour.(196) For this reason, MIM recommends using a multiplier parameter of 10 whenever some production in the Third World comes up in discussion. If they say the product is worth $1 million, then we at MIM think it's likely worth $10 million, with $9 million going to unproductive sector workers and the bourgeoisie of the imperialist countries. We could use a parameter of 33 or 15, but we choose 10 to account for the minority of inputs in Third World exports originating from imperialist countries and the mark-up or transfer of value from Third World workers to the Third World bourgeoisie and the unproductive sector.

Just to break down the case of China further, as of 1992 it exceeds $80 billion a year in merchandise exports, almost all of which go to the imperialist countries. At 2000 hours a year for 50 cents an hour, that is the work of 80 million workers. Fortunately, China's bourgeoisie marks up the price of its merchandise and keeps a large share of value-added for reinvestment. We do not know how much China's state-capitalist class marks up the price from labor costs in the export sector, but the export sector is over one-third of the industrial sector and we do have figures for that. In 1994, the state-capitalist class in China gave workers one-sixth of value-added in manufacturing. That would mean the $80 billion in exports represents the work of over 13 million industrial workers. By now we can say China's exports alone involve more industrial workers than the total of all industrial workers in France, Germany and the "United Kingdom" combined. Given the higher rate of exploitation of Chinese workers, when we look at the economies of the OECD nations, we should attribute more surplus-value and share of the profits to the labor of Chinese workers than all the industrial workers of France, Germany and England combined. Moreover, such calculations tend to show that when we are said and done, industrial workers in the OECD produce surplus-value, but no net surplus-value. Merchandise exports embody a transfer of value of 15 million industrial workers to the rest of the world each year. About half end up in the United $tates and almost all of the rest of the value ends up in the EU and Japan. Yet, this is not the only means of transfer of value out of China to the imperialist countries. We should not forget that a portion of China's domestic production goes to the imperialist countries as repatriated profits and interest payments.

Using slightly older data, in a similar vein of thought, bourgeois economist Adrian Wood calculates that the Third World added 20 million manufacturing workers between 1950 and 1990 just to handle exports to the North.(197) That is two million more industrial workers than the United $tates has. Thus, by his calculation, we Marxists can account for a huge transfer of value to the non-productive sectors of the imperialist countries.

Just to give an example of how transfer of value to the unproductive sector works, the cheapest genuine Swiss army knife sells for $10 at U.$. military surplus stores when they are in stock. If the Swiss made it and shipped it for $8, the transfer of value to the unproductive sector in the United $tates would be $2, the mark-up for the retailer in the United $tates.

Walking about rural New Hampshire in the United $tates is a salespersyn who has switched jobs to sell Chinese merchandise. He has no particular plan of approach and carries his goods for sale in his station-wagon. Approaching random passers-by, he offers not stolen property, but 3 Chinese replica Swiss Army knives for $5. These knives have all the functions that kids and have ever seen on a Swiss Army knife. After success with Swiss Army knives, he offers his customers a $10 deal on roadside emergency kits including a flashing yellow light for the road and a flash-light. This merchant says he has hugely increased his income, and is typical of the unproductive sector's appropriation of surplus-value from China. The salespersyn added no value to the products, but he benefitted from a transfer of value from China.

Some people may wonder, "but what about the OECD exports transferring value to China?" The United $tates runs a deficit with China, which was three-quarters of merchandise imports from China at $33.79 billion in 1995,(198) but if it did export $80 billion in manufactured goods back to China, it would represent the work of 2.4 million manufacturing workers. Once we account for the fact that industrial workers receive around half of value-added in the imperialist countries, we would end up talking about 1.2 million workers, less in the case of the United $tates which has lower wages to value-added ratios and higher retail and white-collar employment.(199) After counting repatriation of profits, interest payments and royalty payments for "intellectual property," we can see that the net transfer of value to the imperialist countries will exceed 15 million Chinese industrial worker-years per year(200)--for free. Unpaid labor is another term for capital. Rather than accumulate the capital equivalent to the industrial work of Germany, France and England done for free, that unpaid labor goes in the form of super-profits into OECD wages. We can prove that by proving that the net capitalist accumulation in a year is less than total surplus-value extracted by discrimination. If we account for net capital accumulation in this way, then transfers from China and other developing countries go straight into the pockets of unproductive and productive sector workers of the imperialist countries. Alternatively we could take a portion of Third World transfers of value and use it to account for capital accumulation, and put the rest as playing its role in First World wages.

One might ask, come to think of it, why do Third World countries trade with the First World when they get such a bad deal? The problem is that the trade is not really trade the way we think of it in the imperialist countries. It is a situation where people work or starve under the rule of death-squads backing up capital. It is not the people making this choice, just a lackey clique running the Third World puppet regime. A proletarian-led government armed with the labor theory of value would never undertake the kind of trade we see today.

Let us return to our elementary labor theory of value thinking. If we are wrong and the figure for annual exploitation only amounts to 10 percent of annual Third World production, then the labor of 250 million will appear in the imperialist countries to be the labor of 25 million people, because it will be measured in monetary terms and not the labor units that went into it. As Arghiri Emmanuel pointed out, it is the phony monetization of the Third World's labor that makes it seem so insignificant to the imperialist country economists who only know how to reason when free trade conditions are assumed. To understand the average value of Third World products transferred to the First World, we recommend using a multiplier parameter of 10. If we do so, suddenly 30 percent of the GNP of the imperialist countries is accounted for by a transfer of value from the neo-colonies and we have an explanation for why there is an unproductive sector generally three times the size of the productive sector in the imperialist countries.

When governments actually use force to set wage-rates and union organizers are killed for attempting negotiations, the imperialist country economists and labor bureaucrat chauvinists pay no notice. They could in their own language conclude that Third World regimes, bureaucrat capitalists known as compradors or puppets are collecting a "rent" (which is a different idea than paying for an apartment per month) from their monopoly power over the resource of labor-power in their country. The imperialist country capitalists share in this rent with the U.$. puppets, who are after all set up with military aid courtesy of U.$. taxpayers. The economists have a language to deal with all of this, but they don't. Professor Ozay Mehmet in Ottawa, Canada is an exception. He says that in Indonesia for instance, there are "gatekeepers," which MIM calls compradors. The bribes that have to be paid to the "gatekeepers" are about three to eight percent of overhead and is referred to as "corruption" by the academics. The bottom-line of why Indonesia can do this is that the compradors have decided to let their workers starve to death. Since they pay them only 70 percent of the amount of money it takes to buy daily physical requirements of life,(201) the compradors are overseeing super-exploitation. With such a huge super-exploitation, the foreign capitalists and internal capitalists do not mind paying the corruption charges to the gatekeepers, because they are still paying less for labor-power than they would in a merely free-market exploitation situation. The strategy relies on a huge reserve army of unemployed to re-supply the workforce that dies at a premature age. In many countries, that means the workers come from the pre-capitalist sectors. Of course, since 1960 it was necessary to kill a half million communists, East Timor people and others with U.$. weapons and training to achieve the military situation behind super-exploitation in Indonesia--which is again nothing compared with the portion being starved and otherwise put to death prematurely from conditions of poverty.

A similar situation exists everywhere in the Third World. In 1987, Ford fired 3,400 Mexican workers during a strike; even though workers made one-tenth what they do in the United $tates. Ford also cut wages by 45 percent, but to back up Ford the government-run union hired hitmen to shoot workers at the Ford factory.(202) In Colombia, British Petroleum "is accused of collaborating with military death squads in Columbia, but the new Labour government just made the chair of British Petroleum a minister and secured him a lifetime civic honor." (203) There is much more systematic information available in U.$. Congressional records and in the works of Noam Chomsky, who details U.$. military aid to Third World lackeys. Without understanding these basic facts, economists are living in a fantasy-world and hurting real-world people.

Professor Mehmet has shown that it is possible to raise wages in Indonesia and similar countries, perhaps as much as 100 percent without any effect on profit rates if the comprador corruption were eliminated. Later in the section "C 6" we will talk about how thoroughgoing internationalism allows for the potential of eliminating or at least weakening the comprador class. Although not in recent textbooks, in the economics textbook of Paul Samuelson, which openly responds to and rebuts the rebellion of students in the 1960s, students learn that it is possible for unions to raise both wages and employment when there is a situation of monopsony, and of all shocking things in a Euro-centered profession, the book actually mentions "tin mines of Bolivia" as a case where monopsony applies.(204) What this little snippet in a bourgeois economics textbook represents is the slight tension between imperialists and their puppets known as compradors. This textbook case should be generalized to the Third World and we internationalist communists should make use of it.

These days the only academic attention to monopoly of labor-power occurs in the context of First World unions. Robert Z. Lawrence shows that those unions obtain monopoly rents for their workers. He does not consider what would happen if he did the same analysis in the developing countries substituting the word "comprador" for union and a different set of beneficiaries. For the academicians, this is partly just a matter of laziness, partly national chauvinism and partly a matter of finding simple models more beautiful for their own sake. Many of them don't claim to be studying anything of relevance.(205)

The question of surplus-labor is additionally difficult, because it is likely that if there were a free market in labor-power in the Third World, the capitalist system still would not be able to realize surplus-value and hence would not accept the contributions of the 250 or 500 million workers, instead preferring that a large fraction be unemployed for the short-run. In the long-run, however, through the creation of demand as is done by OECD governments, it is possible for capitalism to employ the 250 or 500 million workers and all others as well. Later in our discussion of "Star Trek capitalism" where we also make the bizarre assumption that political consciousness does not stir the exploited, we look at what happens under full employment in capitalism.

The labor theory of value is most enlightening, because it reminds us to make these comparisons. We do not approve of the simplifications for beauty's sake that the bourgeois economists employ in their thinking. They leave out the role of military force and closed borders in their thinking. There is as yet no free-market for labor-power as most economists admit but do not incorporate in their theories.

When the imperialist economists do undertake cross-national analysis, they often focus on labor productivity statistics that start with the assumption of the existing distribution of property.(206) They purport to show that Third World workers have lower productivity by starting with the assumption that the capital imperialist country workers work with is really properly owned by those workers or their capitalists to begin with! In the case of Robert Z. Lawrence of the Brooking Institute, the propaganda goes even a level deeper than that. According to Lawrence, based on an examination of U.$. multinational corporations, in 1989 developed country workers were 2.5 times more productive than developing country workers. He concludes that "the fact that output per worker is not similar worldwide indicates that not all sources of international competitive advantage are readily mobile."(207) (Hint: read this as a typical crypto-racist mention of genetics.) He then proceeds to conclude Third World workers are less productive, without first adjusting for the effect of different amounts of capital per worker! So from Lawrence's own data, there is no way of knowing that those developing country workers are less "productive," because of what should be readily mobile sources of international competitive advantage, namely capital. Beyond that, Lawrence, also did the usual in taking seriously the dollar figures given for developing countries' production per worker, when it is really a matter of monopsony power and unequal exchange. Marx called this commodity fetishism, where sales prices are taken seriously to the extent of having a life of their own in the minds of Lawrence and other economists. They do not stop to consider that maybe wages are held down by military means in some countries. What matters is not product per worker but product unit per dollar of wages given a fixed level of capital per worker. The bourgeois economists are such a contradictory lot that though they all condemn Deng Xiaoping's China as repressive, they don't bother to integrate that observation into their theories. The fact is that even oppressed capitalist countries with no military regime must compete with those that have military regimes, if they have surplus labor-power available for hire.

In response, Lawrence says, "If output per worker is actually the same throughout the world economy, while wages per worker are much lower, profits and rents per worker in the developing world should be enormous; in fact, total national income per worker should be the same in developed and developing countries. But that is not the case."(208) We thank Lawrence for noticing something absolutely important many chauvinist phony Marxists have not noticed, but the reason that national income per worker is not the same is that value is transferred to the First World workers and capitalists by political-military means well described in Noam Chomsky's books on the Third World. Lower income per worker is not caused by lower output per worker. Countries that transfer too much value to imperialism have nothing left to fund their own growth through investment. The chauvinists conclude that Third World workers just aren't very productive, and that U.$. workers are 33 times more productive than Chinese workers. In contrast, we at MIM say there is something going on and Lawrence put his finger on it. There is something huge going on if as he says, "total national income per worker is not the same in developed and developing countries." That wealth is going to unproductive sector workers in the First World and some of it is the hidden wealth of ruling classes. What is called $100 million in goods gets shipped to the First World. Then the First World dedicates a percentage of GNP to guarding those goods against arson/vandalism (because it does not matter in country or class calculations if one capitalist steals the goods from another). Another percentage goes to accounting, advertising and customizing with a little extra labor. Soon the goods are "worth" over $1 billion; even though it would seem that the capitalists added a lot of overhead in security guards, accountants, lawyers and advertising for the products created.

Lawrence like most bourgeois social-scientists has no explanation for why rich countries get richer and poor countries get poorer. He does not care, but we have explained the pattern of facts by a transfer of value from the Third World to the First World. In 1820, the largest gap between any two countries in per capita GNP was over 3:1, but by 1992 it had steadily increased to 72:1. The same is true if we group countries together into regions. The spread between regions increased from less than 3:1 in 1820 to 16:1 in 1992.(209) If we take the top 20 percent of the world's population by income and compare it with the bottom 20 percent of the population by income, we have a ratio of 11.1 in 1960 and 17.1:1 in 1989.(210) Some countries have grown more slowly than others because of slavery, war and transfers of value through more ordinary means that resemble trade.

Adrian Wood, who along with Lawrence are the top Anglo-Saxon bourgeois experts on international trade's impact on workers in the North and the Third World, runs up against an anomaly similar to the one Lawrence does. Wood starts out with the obligatory paeans to chauvinism--putting forward that differences in intelligence are innate.(211) Pandering to the peanut-gallery, Wood introduces a parameter that values all Third World labor hours at one-half the value of First World labor hours. We will call it the chauvinism parameter, but we should recall that in Wood's particular case, he assumes capital intensity to be equal in industries all around the world, so this parameter can also stand in for a difference in capital-labor ratios that Woods left out. In any case, because Third World labor produces so much more output per wage dollar even in Adrian Wood's model with the chauvinism parameter, Wood is forced into an anomaly that Wood and his profession will never successfully face. As the title of his book says, Wood would like to attribute the important facts of life to skill differences between the North and South. Yet, in his own model, he is forced to conclude that "if skill-intensive manufactures were produced in the South, their price would apparently be only about one-half of what it costs to import them from the North. This result is not believable: it suggests that the South could produce both goods more cheaply than the North."(212) Wood says thereafter that the chauvinism parameter was not enough to account for this and that there must be a big difference in productivity created from having so many skilled workers so close together in the imperialist countries.

So Wood wants to talk about skilled workers being clumped together in the First World as an explanation for why goods are not cheaper by half to build in the Third World, even in the most skill-intensive categories of goods. Yet there is no reason, skilled workers in Beijing or Delhi could not be clumped together too. Furthermore, as Wood is no doubt aware, given the unemployment situation in the South and the politics behind protectionism, Wood has hit on a sensitive point. Hence, we will explain it for Wood where Wood was likely to allow various extreme chauvinist assumptions enter the calculations. Setting the chauvinism parameter at .20 instead of .50 would have solved Wood's problem, nicely but of course, there is no data to back such a view, only the emotional thoughts of the oppressor nation labor aristocracy. We say to Wood that he has hit on the truth: both sets of goods can be produced more cheaply in the South. There is huge unemployment for political and historical reasons, namely a lack of political success by theorists upholding the labor theory of value. The ruling class in the South does not believe in nor care about the fact that labor creates all wealth and that the Third World could be wealthy if it stopped transferring value to the North. All the puppet cliques in the South understand is that the imperialists pay good money for an easy job that requires no background in wealth production. The compradors can ape the imperialist lifestyle by arranging production for the market where the "skilled" workers are clumped together, namely the imperialist countries. Yes, that is where demand for products is because of the existing distribution of property and power. It has nothing to do with the vaunted skill of the imperialist country workers and everything to do with their purchasing power achieved by centuries of pillage and plunder of Third World wealth.

To the credit of Adrian Wood, he rejected the idea of capital including infrastructure as making the difference between Third World and First World conditions, but at least he considered it. He admits 40 percent of non-residential capital is infrastructure, and it is thought to be less extensive in the Third World.(213)

Returning to the subject of the capital available per worker in the calculation of labor productivity, we can point to an in-depth study of Mexico. At first glance, labor productivity of multinational corporations in Mexico of 1970 was more than twice as high than the labor productivity in Mexican corporations in the same industries. However, it turns out that capital per employee was also more than twice as high in multinational corporations operating in Mexico than in Mexican companies operating in Mexico. When this is taken into account in one method of calculation that bourgeois economists thought appropriate, the gap in labor productivity almost disappears and in some industries, Mexican companies appear to have higher labor productivity than multinational corporations.

Compared with the United $tates, in 1970, Mexicans working in multinational corporations had 93 percent of the productivity of U.$. workers in industry averaged as a whole. Productivity in Mexican companies was much lower, but as we explained already, that was mostly because of the capital to labor ratio in those companies. The bourgeois authors of the Mexico study believe the multinational corporations do a little better than other companies and bring a "technology spillover." Regardless, viewing the 93 percent figure, the racists and crypto-racists have no leg to stand on for why Mexican wages should be one-tenth U.$. wages.

Between 1970 and 1984, Mexican "labor productivity" caught up further with U.$. "labor productivity," again as measured without an adjustment for the capital per worker. Out of 13 industrial sectors for which there is data, food products stayed the same and chemicals fell further behind the same sectors in the United $tates, but all the other sectors gained ground even further. In rubber and plastics, data shows Mexican workers are 1.85 times more productive than U.$. workers and 1.11 times more productive in lumber and wood. We do not have an average for manufacturing available to compare with the United $tates in 1984.(214) In fact, the most interesting thing about the academic work on the subject is the lack of concern with regard to capital-labor ratios(215) or units of product per dollar in wages in the discussion of so-called labor productivity by bourgeois economists. The next most remarkable thing is that in these cross-national studies of labor productivity of which there are few of profound depth, none are addressing "transfer pricing" or monopsony.

On the one hand it is an error to attribute any reason to reward capital-holders for owning capital. All capital is unpaid labor, and most of the world's unpaid labor comes from the Third World. For this reason, Marxists might be fooled into accepting the bourgeois method of calculating labor productivity, which is dividing output or national income by the number of workers in a particular country. They believe they have deducted the consumption of fixed capital before they calculated labor productivity. But they didn't account for which workers were really the source of that unpaid labor known as capital and which workers were the source of the value expressed in monetary terms in the national income. In reality, income should be divided by the number of workers in the country plus the invisible ones from the Third World working for free discussed earlier.

On the other hand, it is also an error to pretend that the unpaid labor or "dead labor" as we Marxists say has no effect on production. When we seek to compare the labor productivity of living oppressed nation workers with living oppressor nation workers, there is no way out of this question of capital-labor ratios. We doubt the arguments and thin evidence of economists that despite higher profit rates in the Third World, capital flows there to such a degree as to equalize profit rates globally or increase capital intensity to match the higher rates of exploitation. For instance, while four bourgeois economists admit there is not even long-term capital mobility yet and that 72 percent of countries belonging to the IMF have capital controls, they say that after-tax returns converge toward 7.5 percent.(216) We believe that is as yet a futurologist fantasy--an important fantasy, but still a fantasy. Such returns converge within the imperialist world, because of capital mobility there, but profits remain much higher in the Third World. Lenin gave us the explanation for this: we live in an era of "coupon-clippers," or to translate into bourgeois economics language, the imperialists exact a huge "risk premium" for investment(217) in the Third World and would generally much "prefer" bonds over fixed investment in the Third World, all other things being equal. The other reason for the low capital to labor ratios and high profit rates is that there is still a huge reserve army of unemployed in the Third World. Hence, we at MIM are not interested in capital-labor ratios, because capital deserves some mythical return, but because it is a matter of reparations to the Third World which is the source of capital accumulation in the first place.

So with these imperialist country economists, their analysis always boils down to the primordial free market economy at the origin of everything, where the existing distribution of property is freely arrived at and not a matter of dispute. In contrast, we have two lines of attack on this question: 1) Was the capital (unpaid labor) that the higher-productivity workers use directly produced in the Third World or the result of congealed surplus-labor extracted from the Third World? 2) Under communism, the right to distribution according to work is one aspect of bourgeois right that will be eliminated, but before that we will see to the opposite, namely that work is rewarded for what it is worth, and not what some military-bureaucrat says, and not with a skimming off the top to reward people for owning things. The skimming off the top will be for savings and investment under socialism.

The foolishness surrounding labor productivity and any monetized calculations is another reason it is better just to start with the quantity of laborers and the quantity of physical production. For example, multinational corporations take up a huge share of the manufacturing sector in the Third World. The percentage of Third World manufacturing workers working for multinational corporations, "ranges from 10 to 23 percent in Argentina, Bolivia, Brazil, and Colombia to over 50 percent in Singapore and Senegal."(218 ) The total price of Third World manufactured goods exported to the industrial countries in 1986 reached a dramatic high of $269.4 billion.( 219) If the prices of those manufactured goods should have been so much higher, because of artificially depressed Third World wages and the use of locally produced and consumed capital goods in production, say ten times higher, then the price of those manufactured goods would have been 2.694 trillion dollars. Thus, the imperialist countries can make over $2 trillion in superprofits and profits by dealing with the Third World countries' export manufactured goods trade. Then on top of the $2 trillion in super-profits are the normal profits associated with such merchandise in the First World, the profits that allow a margin for retail chains to pay their workers and make a profit. Even in 1986, $269.4 billion in manufactured goods could have explained a lot about the First World economy. However, the phenomenal growth of exports from the Third World did not stop in the 1990s. By 1992, the figure was up to $363.8 billion in exports of manufactured goods to the imperialist countries.(220)

By 1994, the manufactured exports from just the "Four Tigers" exceeded the manufacturing exports of the whole Third World in 1986. Growing as much as 35 percent a year, China's exports reached $119.8 billion in 1994, of which only about $8 billion were raw materials and fuels. Korea exported $95.4 billion; Taiwan exported $106.9 billion and Singapore $93.5 billion. The numbers for China are even bigger, because this particular means of counting does not include exports to Hong Kong re-exported from Hong Kong. The exports of just the Four Tigers to the United $tates were over $123 billion in 1994.(221)

Aside from being out-of-date, the potential for super-profits even in 1986 was higher than mentioned, because we should also not forget that many cross-border transfers of value will not appear in any statistical table, because they are transfers within multinational corporations that are faked. "Transfer pricing" is another fancy phrase for smuggling. In some cases, it probably is outright smuggling to hide the exports from the puppet regimes bribed to look the other way. Even the major imperialist countries are upset with Switzerland, the Cayman Islands, Andorra and Liechtenstein for their willingness to hide wealth to such an extent that the IMF admits its statistics on financial flows have to be inaccurate.

In addition to legitimate smuggling of Third World value into the First World, known as transfer pricing, and illegitimate smuggling through outright bribery, there is also the power-play where a multinational corporation simply threatens to leave unless given appropriate tax breaks that effectively hide production. On occasion, multinational corporations have also been known to escape taxation in two imperialist countries at once, by playing the two countries off against each other, through complex legal entanglements and agreements.(222) What this all means is that a certain pile of goods may be worth $1 trillion, but it may go on the books as $100 billion. Once they arrive at their destination in the imperialist countries, they will sell to consumers for way more than $100 billion, but that gets called profit or salaries for parasites. It gives the parasites the illusion of working for a living and having a real reason to look down on Third World workers who only seem to produce goods worth $100 billion, when the tremendous legal, guarding and sales prowess of the oppressor nation workers sold the same goods for over $1 trillion. To answer Lawrence's question why there is no huge wealth in the Third World, if the multinational corporate capitalists and other capitalists hired enough lawyers, accountants, security guards and sales and bank staff in the Third World, we would suddenly find "total income per worker" the same in the Third World as the First World, but because of the existing distribution of property and power, the Third World people do not have the money to buy their own goods.

By the early 1980s, 20 Third World governments were receiving at least 10 percent of their total tax revenue from export taxes--which are illegal in the United $tates.(223) So we can imagine that in those countries the exporters including multinational corporations would rather bribe a few officials to keep their products off the books than pay taxes. That just means again we underestimate the superexploitation going on by going by published statistics, because as the bourgeoisie always says, whenever there are taxes, there is smuggling. (224) This could be a worst case scenario, because then the multinational corporation could name any price it wanted for the value of its goods it is shipping back to the imperialist country in question. The agricultural, mining and semi-finished goods then go back at low cost and with a little touching up in the imperialist countries, they sell for huge sums.

Grazia Ietto-Gillies explains the administrative motivations of multinational corporations that result in hidden transfers of value across borders. "Differences in corporate taxation between countries will make it profitable to shift recorded profits to the low tax-rate country. Similarly, expected changes in currency values may prompt shifts of funds towards the country where the currency is expected to appreciate. . . . similarly, under-pricing a commodity may lead to payment of a lower ad valorem tariff. Obstacles to the repatriation of profits may be removed by appropriate internal pricing. A company may also have political reasons for wanting to have low declared profits in a particular country; for example, such a strategy might allow the company to avoid pressure for wage increases or pressure for more competition in the market and hence for tighter competition policies."(225) As an example, all of Latin America was scandalized to learn how U.$. copper companies had repatriated profits several times the value of the initial investments in Chile. Likewise, today, China still puts up a pretense of caring about the issue by claiming at least in public that there is a limit to profit repatriation that the government will allow. The natural response in Latin America is to pass laws or apply informal political pressure on a multinational corporation to keep it from repatriating profits to the First World. By the use of transfer pricing, the multinational corporation escapes all such pressures. According to one estimate, by shifting around numbers from country to country, 200 U.S. corporations only pay 51.6 percent the taxes they would usually have to pay.(226)

Under the best of conditions of monopsony, which is monopoly power in buying as opposed to monopoly power in production, the purchase of Third World labor-power through the intermediaries of Third World puppets or comprador capitalists, who are often on the payrolls of the CIA or the multinational corporation in question, we would question how much value is lost by the Third World proletariat. When we stop to realize that a growing share of foreign trade by imperialists occurs through transfer pricing within one multinational corporation sending goods from a subsidiary to an imperialist country,(227) we should toss bourgeois economic theory completely and pay closer attention to politics. While the bourgeois propagandists used to attack socialism for administrative pricing, today the greatest practice of administrative pricing and planning of production occurs within multinational corporations. One estimate puts 50 percent of U.$. imports and 40 percent of exports as transfers within companies.(228)

While MIM believes the transfer of value from the Third World is in the trillions of dollars each year, it would only take an explanation of $70 billion to wipe out the profits of the top fifty industrial companies of the world, which combined had $2.1 trillion in sales in 1990 and were equivalent to 39 percent of the U.$. GNP (Gross National Product) in 1989.(229) Knock off a mere $70 billion in profits a year for a few years and global capitalism gets thrown into a loop and maybe collapses if the collapse of the 50 companies has a domino effect on the rest of capitalism, especially through its banks. Starting from the Marxist side of the analysis, we have our difficulties also. We can toss aside commodity fetishism and pay attention to the number of workers as is part of our tradition of political economy. Still, we must translate how the labor of hundreds of millions will work its way into the imperialist country economies in order to understand the class structures of those countries. When we achieve state power we can set about improving statistical measurements of all sort and set up institutes for the study of the question, but for now we have to use very imperfect information. The difficulties of the capitalist-class in selling its products become our difficulties of analysis when we attempt to find out to what degree the capitalists succeed in realizing surplus-value as profit. Shaikh and Tonak calculate that the U.$. imperialists only realize 60 percent of the profit possible from surplus-value appropriated.(230) The imperialist country economists are not even interested in any of these questions, which is apparent above all because their analysis assumes the non-existence of classes. Hence, it is a big mistake for Marxists to swallow uncritically bourgeois statistics on labor productivity and international economics to conclude anything about class structure. The bourgeois economists and statisticians never intended their data to be used for that purpose. It is imperative that we make a Marxist synthesis for our own use. One source of data that we have accessible is the profits that multinational corporations report they repatriated from developing countries. This data tends to be available even if badly faked, because of the need to report income for taxes and stockholders. Repatriated profits from the fixed investments in the Third World are no small matter: "The official figures for the export of profits reveal a wide 'scatter' of the underdeveloped countries from this standpoint: exported profits represent from 2 to 25 percent of the gross domestic product, and from 8 to 70 percent of exports."(231) As an example, Samir Amin details the economy of Africa: "For nine countries of West Africa, during the ten years 1960-1970, the outflow of profits (92 billion CFA francs, or 10 percent of the gross domestic product) was greater than the inflow of private capital together with public aid."(232) The impact of profits from abroad more than doubled between 1950 and 1962 in the United $tates. By 1964, the Third World accounted for 64 percent of profits coming from abroad in the United $tates. "It may be estimated that the revenue which private capital derived from Third World countries came to some 14 percent of the profits made by United States companies (excluding finance companies) after taxes. Harry Magdoff explains that the data available to him tend to undervalue profits derived from abroad."(233)

Since the bourgeois economists and government agencies do not hand over ready-made statistics on the rate of exploitation or the total surplus-value potentially extracted at the point-of-production in the Third World, we must make use of other approaches to approximate an answer to the calculation of the total surplus-value and its impact on the class structure of imperialist countries. Unfortunately, the imperialist country phony Marxists would attack MIM for calculating the unrealized surplus-value embodied in the manufacturing goods trade. They would say we were wrong to focus on trade as the source of surplus-value instead of the mode of production. However, we are not saying that trade is the source of surplus-value and profits. No, we are saying it originates with death-squad governments' intervention in the work process that creates super-profits, where there should be negotiations between labor spokespeople and multiple buyers. The reason we have to talk about trade statistics at all is that the bourgeoisie keeps statistics on that and not on surplus-value at the point-of-production. We talk about trade to measure surplus-value, not to point to its source. We should all know its source just from looking at the comparative wages statistics in manufacturing that show among other things that Chinese workers make 50 cents an hour.

Samir Amin has already forcefully rebutted the chauvinist nonsense surrounding "unequal exchange." "All those who, rejecting unequal exchange, rush to raise the cheap argument that this is a matter of circulation, not production, either are not acquainted with the thesis in question (the root of the matter lies in the different conditions under which labor is exploited), or prefer to evade the thorny question of imperialist exploitation."(234)

Back in 1966, Samir Amin was already pointing to the Third World's losing 3 percent of its product to the First World, just in connection to the measurements he made in unequal exchange and leaving out other possible areas of transfer of surplus-value to the First World, such as repatriation of profits.

"Altogether, then, if exports from the periphery amount to about $35 billion, their value, if the rewards of labor were equivalent to what they are at the center, with the same productivity, would be about $57 billion. The hidden transfers of value from the periphery to the center, due to the mechanism of unequal exchange, are of the order of $22 billion, that is to say, twice the amount of the 'aid' and the private capital that the periphery receives. . . .

"The imports that the advanced countries of the West receive from the Third World represent, it is true, only 2 or 3 percent of their gross internal product. . . But these exports from the underdeveloped countries represent 20 percent of their product, which was about $150 billion. The hidden transfer of value due to unequal exchange is thus of the order of 15 percent of this product, which is far from being negligible in relative terms, and is alone sufficient to account for the blocking of the growth of the periphery, and the increasing gap between it and the center. . . . It comes to about 1.5 percent of the center's product. But this transfer is especially important for the giant firms that are its direct beneficiaries."(235)

In 1994, the imports from the Third World into the European Union were 29.7 percent of all imports and about 3 percent of the European Union's economy.(236) Using the proper monetization multiplier parameter of 10, we would attribute 30 percent of the European Union's economy to imports from the Third World, and we would have enough surplus-value accounted for to explain the huge growth of the unproductive sectors. The increased importance of Third World manufacturing also explains the timing of that growth of the unproductive sectors.

A new means of superexploitation: Third World explosion of manufacturing Composition of merchandise exports of Third World to industrialized countries(237)

Year	Primary and processed primary	Fuel	Manufactured
1955	74.4%	20.4%	5.0%
1970	51.0%	33.1%	15.6%
1980	17.7%	66.4%	15.2%
1989	20.5%	24.8%	53.3%

To look at the same imports from the Third World another way, we can use a different parameter in line with the accounting approach of Shaikh and Tonak. While Third World exports to the First World are around 3 percent of GNP, they are a much higher portion of manufactured goods. In 1990, in the United $tates the ratio of imports from developing countries to value-added in industry within the United $tates was 11.2%. The figure is slightly higher for European imperialism and slightly lower for Japan.(238) In the European Union, according to Lawrence, Third World imports were 5.2 percent of the manufactured goods sold in the unproductive sector in 1992; even though, 40 or 50 percent of those goods were priced by transfer pricing and all the goods were produced by labor under highly coerced conditions.

These sorts of figures help us to separate an unequal exchange argument from an argument about the transfer of value from the productive sector to the unproductive sector. Such a transfer of surplus-value is completely distinct logically-speaking from repatriation of profits and discrimination profits. If Third World goods are 10 percent of the goods sold in the imperialist countries, then 10 percent of the surplus-value realized in the unproductive sector should be attributed to a transfer of value from the Third World productive sector to the First World unproductive sector. If we go by goods prices, we will have a number starting at 5 percent and growing each year. If we start as a ratio to value-added like Lawrence, we will start at 10 percent and increase each year after 1990 as Third World manufactured exports expand.(239)

If we assume that those 10 percent of goods were produced under conditions of the same rate of exploitation as goods in the First World (including the same ratio of wages to value-added), then we can see how much value was transferred to the unproductive sector and capitalists by Third World manufactured goods. This method presumes nothing like an "unequal exchange" argument and simply treats Third World manufactured goods the same way Shaikh and Tonak treat First World manufactured goods--as if the Third World manufactured goods really trade on a free market with no transfer pricing, monopsony, state intervention or corruption conditions. Shaikh and Tonak argue that value transferred to unproductive sector workers can be viewed as a "trading margin" and similar insurance, legal etc. margins added in after production of goods. The final purchase price of a good reflects all the activities of the unproductive sector added in as cost. By this measure, the U.$. surplus-value accounted for by the Third World manufactured goods treated as if they were on a free market is over $233 billion in 1989.(240) Such a sum added to surplus-value accounted for from the internal nation productive sector workers ($699 billion) easily accounts for the net capital formation in a year and the entire consumption of the top 1 percent that most refer to as the capitalist class.

That leaves a tiny portion of white workers who may be "exploited" by other workers with their surplus-value transferred to other white workers. The meaning of such an argument if it were made would be that it is a mistake to talk about one working-class in the imperialist countries and instead we should talk about a tiny exploited class and a majority oppressor nation petty-bourgeoisie and the transfers of value from the Third World. MIM considers that a friendly position. Alternatively we could stay within a one-working-class view and simply hold that its average exploitation rate is negative, which is MIM's preferred solution. In the first case of a small exploited oppressor nation working-class, the problem becomes that the larger majority petty-bourgeoisie enjoys essentially the same living standard and social conditions, so it will be very difficult for it to exist as a distinct class, not just because of its small relative size.

The reason the above argument is difficult for dogmatists to swallow is that they never conceived that surplus-value ever went to anyone but capitalists. The problem is that even in Marx's day, he believed that the unproductive sector appropriated surplus-value for itself, and not just capitalists, and that sector has grown tremendously in the imperialist countries in particular where it is not only large but rich. Appropriating surplus-value is the quintessence of the capitalist-class, but it is not empirically true that it appropriates all of it, so we have to revise our image of the class structure.

As a whole class and on average, just using this very conservative calculation, there is no net surplus-value extraction of the oppressor nation working-class by the oppressor nation capitalist-class. Of course, a corrected calculation would show that the Third World goods are marked up much more in the retail sectors than the other goods, because they start from lower relative prices, because the labor is exploited at a rate several times (maybe infinitely if the reader agrees with MIM that the oppressor nation worker exploitation rate is 0 or negative) higher than the First World labor. We will have to return to that point again later, because of the results that Shaikh and Tonak achieve without accounting for international transfers of value.

We can even go a step further in defending some naive proponents of "unequal exchange," who refer to the terms of trade.(241) According to some, the argument about the "terms of trade" in which 100 tons of Third World goods exchange for fewer and fewer dollars or fewer First World goods each year is an especially bourgeois argument, representing the interests of the oppressed nations' bourgeoisie. Yet, even in a terms of trade argument, it is a question of measurement and not qualitative description of the underlying social relationships. When the terms of trade decline, it could be due to an increase in the rate of exploitation in the Third World or it could be a redivision of monopsony advantages between the comprador capitalist of the Third World and the imperialists of the First World. As an example, the restoration of capitalism in China weakened the prospects of the comprador bourgeoisie of all Third World countries to extract rents from their monopoly of administration of the labor-power resources in their countries. So while the political administration of the monopoly of labor-power within each Third World country may stay the same, the share of the rents going to compradors can decline with an increase in the share going to imperialist capital. That same restoration of capitalism in China strengthened the prospects of the imperialists to threaten their partners globally with relocation to China. Despite this underlying class structure explanation and the possibility of terms of trade shifting because relative rates of exploitation shifted and despite the fact that even Perlo mentions this method of exploitation, we will not use it in any of our calculations, again as a generous concession to our chauvinist critics.

Subsequent to the time the author of the Marxist version of "unequal exchange" wrote, the transfer of value started to occur not just through exotic agricultural goods and raw materials but through a vastly expanded set of manufactured exports from Korea, China, Taiwan and other places with exploited workers. The expansion of the transfer of value to the First World has made it possible for the creation of huge parasitic sectors of employment in those advanced industrial countries. In the next section we shall examine this issue more closely, once again to prove the impossibility of the views of our various critics.

From this discussion we expect our reader to draw out some questions for further study. 1) What is the wage differential between oppressor nation workers and oppressed nation work and what causes that differential? How much of the differential is politics, military oppression and plundered resources and how much comes from oppressed nation workers being lazier like the bourgeois economists and pseudo-Marxists opposed to MIM say? 2)How many industrial and market-sector agricultural workers in the Third World are there and how much are they losing to imperialist superexploitation? 3) How is it possible for capitalists to hire so many imperialist country workers to be in banking, retail and government sectors and still show a profit? The clinching question for the class structure will be given what one knows about how much surplus-labor is extracted from the Third World, how is it possible for profits to be the size they are relative to salaries and wages of oppressor nation workers, unless those oppressor nation workers are absorbing a part of that surplus-labor in their salaries? We hope to have put some flesh on these questions for our readers, but it is more important to remember the questions than the numbers, because if one keeps the questions clear in one's mind, it is always possible to look up the numbers later.

We shall see at the end of this essay that as in the United $tates a majority of European imperialist country workers can be dismissed as the source of surplus-value just from an elementary occupational and labor force statistics breakdown. Then the question arises, does the surplus-value arise from the small and highly paid industrial, transport, mining and agricultural sectors of the oppressor nations or is it not completely explained by the extraction of surplus-value from the Third World and perhaps discrimination against internal semi-colony workers?

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