Assessing a Proposal for Updating the Marxist Theory of Dependency

Dependency Without the Superexploitation of Labor

The initial disagreement stems from the attempt to create a Marxist theory of “dependency without superexploitation” (Katz, 2017: 6)—a theory that does not include the violation of the value of labor power or the payment of wages below that value. ³ Katz’s arguments for this are multiple, among them that Marx “left no doubt as to the labor power’s remuneration’s being in agreement with its value” (2017: 7), and he asks what, if the violation of the value of labor power is the norm, might be the meaning of value theory as a foundational tenet of the capitalist rationale. According to Katz (2017: 8), “violation should be considered mostly an exception. It is not sensible to assume that the theoretical structure of Capital factually operates the other way around.”

First, for his “general analysis of capital”—in other words, in the most abstract terms—Marx really does say, “Our assumption [is] that all commodities, including labour-power, are bought and sold at their full value” (Marx, 1996, Vol. 1: 221). This assumption is key for a rebuttal of the various arguments that land, trade, or industry is the source of wealth in capitalism. Marx has to show that the value in this societal organization comes only from the difference between the value produced by labor power in a single working day and the value of that labor power. In other words, even if capital pays wages equivalent to the value of those goods, surplus value is produced. This is the elementary tenet of exploitation in capitalism and the basis for the class struggle, and it is established in the first chapters of the first volume of Capital. The “assumption” becomes nuanced once Marx’s reflection moves toward more concrete ideas and it becomes clear that the demand for surplus labor that stimulates capital leads to its violation.

In analyzing relative surplus value, he indicates that capital can increase surplus work time by reducing the pay corresponding to the necessary working time, which entails “lowering the wages of the labourer below the value of his labour-power” (Marx, 1996, Vol. 1: 220). He adds, some lines later, “Despite the important part which this method plays in actual practice, we are excluded from considering it in this place by our assumption that all commodities, including labour-power, are bought and sold at their full value” (Marx, 1996, Vol. 1: 221). Regarding the “actual movement of wages,” he says, paying wages below the value of labor power is “very important,” but under the above “assumption” it will not be considered “for the time being.” In short, the whole meaning of the paragraph is that, under more specific conditions, the assumption cannot be sustained. This idea is reiterated later (Marx, 1996, Vol. 1: 421, my emphasis):

In the chapters on the production of surplus-value it was constantly presupposed that wages are at least equal to the value of labour-power. Forcible reduction of wages below this value plays, however, in practice too important a part for us not to pause upon it for a moment. It, in fact, transforms, within certain limits, the labourer’s necessary consumption fund into a fund for the accumulation of capital.

In the context of these formulations, could it be said, following Katz, that Marx is destroying his own “theoretical construction”? Obviously not. Rather, some of his interpreters have failed to understand the initially formulated “assumption” and its limits, simply insisting that these are “Marx’s own words.” What, then, are we to make of the various statements in the same work that call into question the certainties of that assumption? It is not uncommon for Marx to indicate that the payment for labor power below its actual value is among the fundamental mechanisms for counteracting the decline of profit rates. This alleged “exception” is repeated over and over again. In analyzing the limits of the working day, in the words of a worker addressing himself to a capitalist, Marx points out, “By an unlimited extension of the working day, you may in one day use up a quantity of labour-power greater than I can restore in three. What you gain in labour I lose in substance. The use of my labour-power and the spoliation of it are quite different things” (Marx, 1996, Vol.1: 163). Only up “to a certain point, the increased wear and tear of labour-power, inseparable from a lengthened working day, may be compensated by higher wages. But beyond this point the wear and tear increases in geometrical progression, and every condition suitable for the normal reproduction and functioning of labour-power is suppressed” (Marx, 1996, Vol. 1: 371). The same thing happens with the intensification of work.

In short, the assumption pointed out by Marx makes sense when explaining how exploitation is possible in the capitalist mode of production. As indicated, surplus value is generated while still respecting the value of labor power. From here, this main assumption becomes more nuanced as Marx points out that historical capitalism, the one actually unfolding, pursues superexploitation in certain regions via the appropriation of some of the daily value of labor power either directly (through the payment of wages below that value, converting part of the consumption fund to an accumulation fund) or as part of the total value, by extending the working day or work intensity (an appropriation of the life fund and future years of work).

Superexploitation as Absolute Poverty

For Katz and for his theoretical reference in the field, the Ecuadorian sociologist Agustín Cueva (1994 [1977]: 99, 228), superexploitation is synonymous with absolute poverty. Cueva, Katz (2017: 2) reminds us, noted “the incompatibility of capitalism with the widespread remuneration of labor power below its actual value” and said that “the underremuneration of employees violated the principles of accumulation,” that this entailed “the reproduction of labor power through prices commensurate with the value of that commodity,” and that “the violation of [these] criteria would threaten the very survival of workers,” who if they did not receive “the goods required to survive would suffer a deterioration that would undermine the nurturing human element of the system.”

Confusing superexploitation with absolute poverty, Katz (2018a: 2, my emphasis) says,

The bourgeoisie must compensate the bulk of the proletariat for the value of its labor power, [since] only in this way can the continuity of the system be ensured [given that the] continued underremuneration of employees would prevent its functioning. . . . By postulating the preeminence of wages lower than those required for the reproduction of workers, the old mistakes that emerged in debates regarding absolute pauperization are repeated . . . These controversies showed that a proletariat lacking the necessary goods for subsistence would tend to suffer terminal deterioration.

Elsewhere he adds, “The system . . . does not obstruct the normal reproduction of the operators [because] capitalism is recreated in brutal forms [but] without destroying its main foundation” (Katz, 2017: 2).

In other words, acknowledging superexploitation would mean pointing out that capital physically destroys the working population, and capitalism is unthinkable without workers. As Katz and Cueva see it, superexploitation is absolute impoverishment. However, superexploitation is a violation of the value of labor power, a value also strained by the development of new goods, which emerge as luxury items (e.g., refrigerators, washing machines, televisions, cell phones) and, as productivity increases in the sectors that produce them and their prices decline, become wage goods with their mass consumption.

Thus, the mass of use values (goods and services) involved in the value of labor power in the twenty-first century is greater than the mass of use values that defined the value of labor power in the nineteenth century. If a worker in the twenty-first century cannot access the set of use values (goods and services) that define the value of his labor power, he is being superexploited. This does not mean that he has to consume the same or less than a nineteenth-century or earlier worker. Nor does it mean that workers must die at age 40 or 50, as Katz (2017: 2) argues when he says that the premature depletion of work skills is not consistent with the “increase in the average life span of workers.” The appropriation of future life years and abnormal labor-power sale favoring superexploitation is reflected in the fact that that sale is made under increasingly worsening conditions. Workers who have been superexploited from a young age may at 40 or 50 years be given jobs with lower wages, since they belong to a prematurely depleted workforce, and they may have life spans close to current life expectancy averages but with more ailments resulting from neglect and/or poor nutrition, lack of rest, and insufficient health care. Their life spans, while extended, will be marked by those living conditions. How, then, are we to understand the countless processes that make working and survival conditions so precarious for workers in our times, whether in the sewing workshops of Bangladesh and Honduras or elsewhere in the dependent world (Crossa, 2016; Smith, 2016)?

Superexploitation as Relative Poverty

Superexploitation leads to an increase in relative poverty but under conditions that affect the normal reproduction of the workforce and their consequences for capital reproduction in general, such as its power to increase capital gains or reduce the consumer market generated by wages. Saying that superexploitation is widespread in an economy is not simply a matter of paying little or requiring long hours of work. It has pivotal implications for the reproduction of capital and the ways in which Latin American economies participate in the global system, and therefore it is key to the theory of dependent capitalism.

Liberal thinkers find it scandalous that workers consume television sets when they should presumably prioritize food or health care either for themselves or for their children. What these thinkers do not understand is that social needs, such as having a television, carry enormous weight precisely because they are social. However, where superexploitation prevails, it is usually achieved by failing to cover basic needs such as health and dental care, adequate nutrition and clothing, and appropriate accommodation, not to mention leisure expenses. If the workplace is abuzz with talk about the latest soccer match or conversations in the grocery store are about the latest soap opera or reality show, subjects will tend to consume a good that allows them to socialize. Simply put, workforce reproduction is not like feeding horses, where everything is solved with a bale of alfalfa. The workforce is made up of humans who have evolved and live well above the Stone Age level, and therefore superexploitation cannot be confused with absolute poverty. Additionally, in a world where women’s work is increasing, the presence of adults at home is limited to a few hours, the inclusion of green areas in new housing complexes or self-built neighborhoods is decreasing, and insecurity is rife, a TV at home (or, now, an iPad) is a necessary tool for raising children and adolescents in increasingly smaller dwellings.

In the light of the above, the simplicity of Katz’s solutions for the problems he attributes to superexploitation is stupefying: first, reject the concept (“dependency is not based on violation but on compliance with the law of value” (Katz: 2017: 8); ⁴ secondly, continue talking about superexploitation but substitute “the idea of payment below the labor power value with low remuneration of that resource” (Katz, 2017: 15). With regard to the updating of dependency theory, he asks, “How could Marini’s intuition be reformulated without the conceptual problems of superexploitation? Is there a statement that makes Cueva’s above-mentioned objections compatible with the characteristics of the workforce in dependent economies?” ⁵ and answers, “The simplest solution is to postulate that, in these regions, what predominates is a low value of labor power” (Katz, 2017: 3). ⁶

This is the territory of the vulgar economy outlined by Marx (1996, Vol. 1: 58 n. 33), who says, “By classical Political Economy, I understand that economy which . . . has investigated the real relations of production in bourgeois society in contradistinction to the vulgar economy, which deals with appearances only”—in other words, the way these processes are presented and, in the case of wages, where some appear high and others low. There is no background to be addressed, as if the immediate reality for Marxism were not a fetishized, opaque entity, “an enchanted, perverted, topsy-turvy world” (Marx, 1996, Vol. 3: 599).

Accounting for the Heterogeneity of the World Economy

Given his proposed “solution,” Katz posits that the world economy can now be organized into three tiers according to the domestic level of development, advanced, intermediate, and delayed, and three categories based on “the place each country occupies in the global stratification,” center, semiperiphery, and periphery (Katz, 2017: 3, my emphasis). “This record of changing and stratified values of labor power (high in the center, low at the periphery, and medium in the semiperiphery) requires the use of classical Marxist concepts estranged from the principle of superexploitation” (Katz, 2017: 4, my emphasis).

Marxism does need to be able to explain the diversity of economies present in the world system, but the solution cannot come from an eclectic and simple solution that merely points to strata within a rationale in which “things” rather than relationships (see Osorio, 2016a: 39–51) predominate. How is talking about advanced economies, delayed economies, and the classical wild card of intermediate economies a contribution to the updating of Marxist dependency theory? How does it differ from the nomenclature employed by international organizations (e.g., developed, emerging, and developing economies)? In this regard, the retrieval of the Economic Commission for Latin America and the Caribbean’s notions of center and periphery seems progressive, with the added Wallersteinian concept of “semiperiphery”—a classical filler for what is neither this nor that or some of this and some of that.

The problem with stratification theories is that they establish an order without addressing the relationships between the groupings they establish—something that a theory of social classes does address (the social fate of some defining the social fate of others and their conditions of existence). ⁷ An explanation of the diversity of economies in the global system should be in terms of the relationships between them and how these relationships generate that diversity. The above-mentioned simple and eclectic solution replaces the notion of superexploitation with low labor power value. It is with such concepts that Katz presumes to be saving “Marx’s theoretical construction” and employing “classic Marxist concepts.”

Unequal Exchange and Superexploitation

Along with replacing superexploitation with the idea of low labor power value, Katz’s (2017: 10) updated dependency theory involves “prioritizing international transfers of capital gains in the explanation of dependency.” Relying on Enrique Dussel (1988: 321), he assumes that unequal exchange rather than, as Marini (1972: 101) pointed out, superexploitation is the foundation of dependency. For a certain sector of Latin American Marxists it seems that merely pointing to unequal exchange or, for Katz, value transfers solves the problem of having to explain dependency or “delay.” However, the problem arises when production costs or market prices in branches and sectors of the central economies are established that are above their value, because of their higher organic composition, to the detriment of branches and sectors of the dependent economies, with their lower organic composition, producing prices below their value, which leads to the central economies’ appropriating the value generated in the dependent ones. This is one of the forms known as unequal exchange.

Unequal exchange and value transfers are symptoms of larger processes. If dependency is caused by unequal exchange and this is not a temporary process but a sustained one, the problem becomes accounting for the way that, despite value loss, capital is reproduced in regions and economies consolidated as dependent. Explaining how capital accumulation and reproduction are possible requires explaining why these economies have privileged the production of certain use values in their incorporation into the world market and why they have often remained in very undiversified and mono-export modes of production that do not stimulate the generation and expansion of the capital goods sector in all its dimensions or the wage and consumer goods sectors or the integration between them that produces self-centered capitalism. On the contrary, they turn toward extraverted capitalisms (Amin, 2011) with export as their fundamental formula, which hardly stimulates production.

How has the breakdown of the capital cycle (a central production that takes place in foreign markets) and the distancing of production from the domestic wage market (given that cutting-edge branches and sectors favor domestic and foreign luxury consumer markets) encouraged superexploitation as fundamental for sustaining international competition and capital accumulation along with losses in unequal exchange. It is with this rationale that the thesis of capitalist reproduction is based on the appropriation of part of the producers’ consumption and life fund so as to supply an accumulation fund not only for the capitals operating locally (alongside foreign capital) but also for global accumulation. This is mediated and favored by unequal exchange and other forms of value transfer.

Does it make any political sense or theoretical profit to highlight unequal exchange as the foundation of dependency if that proposition wholly fails to explain why it operates, what nurtures it, how it is sustained over time, and how capital accumulation and reproduction can be maintained in spite of it? Without answers to these questions, which are not even considered, the discussion is pointless.

In order for unequal exchange to take place in international trade, the production of goods exported by the region since the nineteenth century has to have been characterized by technical backwardness and the superexploitation of labor expressed as unequal exchange or value transfers. There is no historical precedent, only a logical precedent, here. ⁸ It can therefore be argued that while “the superexploitation of labor is stoked by unequal exchange . . . it is derived not from it but from the profit fever that creates the world market” (Marini, 1972: 63; my emphasis) under conditions of dependency. The novelty lies in the fact that, in the international division of labor based on these conditions, unequal exchange and superexploitation do not operate as transitional, occasional processes but are reproduced over time and encourage development in some economies and regions and underdevelopment and dependency in others.

Without unequal exchange, there is no dependency; without superexploitation, there is no dependent capitalism; without the reproduction of dependent capitalism, there is no reproduction of unequal exchange. Thus we have a circle in which causes become consequences and these, in turn, become causes. The two processes feed on and drive each other. ⁹ The reproduction of capital in dependent capitalism is based on superexploitation. A capitalism of this nature cannot compete in world markets without allowing for unequal exchange, and such transfers fuel low productivity, weak or absent diversification of production, a subordinate place in the international division of labor, and production geared toward foreign markets, regularly violating the value of labor power and deploying a kind of capitalism that develops underdevelopment.

Dependent Capitalism and the Current State of the Revolution

Under these conditions, the gap in the world market between the two forms of capitalism can only widen as the contradictions in all capitalism, exacerbated in cases of dependent capitalism, increase within each. Here it is important to address why the major attempts to end capitalism have taken place in these economies rather than in developed ones (see the first chapters of Osorio, 2009; 2017). It is in dependent capitalist areas that the weak links of the imperialist chain of world dominance are apparent. The revolutions in Russia, China, Cuba, and Vietnam attest to this, as do the continued crises of dominance in Latin America of the twenty-first century. It is there that exploitation that takes over workers’ consumption and life funds generates rupture. It is also there that the contradictions of the global system are concentrated through the appropriation of the value of these economies in favor of developed ones so as to slow the tendency toward crisis due to the decline of the profit rate. It is there that the presence of subsovereign (see Osorio, 2004) states under the leadership of local capitals but associated with and subordinated to imperial capitals has fostered a tendency for purely democratic struggles for better living conditions to quickly turn into anticapitalist struggles and these into anti-imperialist struggles. These are new reasons to question Katz’s suggestion that we forget about superexploitation and unequal exchange.

Devaluation of the Theory of Dependent Capitalism

A significant number of the discrepancies I have highlighted also relate to the status of Marxist dependency theory and dependent capitalism. Katz (2018b) says that Cueva rejected the existence of laws typical of “dependent” capitalism and Marini and Dos Santos argued otherwise—that Marini (1973: 99) even argued that “the fundamental task of Marxist dependency theory is to determine the specific legality by which the dependent economy is governed.” Katz (2017: 3) agrees with “reformulations” that consider Marxist dependency theory a “paradigm or research program,” but, inasmuch as he is also in broad “agreement with flexible criteria,” he likewise approves of those who see it as a “perspective,” “focus,” “point of view,” and even “intuition.” What these terms denote is that it is enough to understand transfers of value to have an answer regarding “dependency” since—fundamentally following Cueva (1994 [1977]: 78)—for Katz there is no such thing as “dependent capitalism” and if there were it would not present specific laws or sui generis processes. In this he follows Cardoso (1972) and later Cueva: their proposal aims to speak of dependency without a theory of dependent capitalism.

In the 1960s, many writers professed attachment to a somewhat confusing “dependency theory.” Cardoso himself was a renowned dependentista (see Cardoso and Faletto, 1969). Things began to change after Marini’s presentation ¹⁰ and the publication of the first sample (1972) of what would become Dialéctica de la dependencia (1973). From there, dependency theory began to take on a radical theoretical and political cast for some progressives and the Marxist left wing. ¹¹ Many subsequent accounts of dependency theory include those of Cardoso, Sunkel, and Marini, for example, without establishing differences among them. Therefore, talking about Marxist dependency theory is no minor matter, as we must establish the necessary historical distinctions that have produced it (Osorio, 1984).

That said, I believe that Katz’s approach is classifiable as one of a number of “dependency theories” rather than as Marxist dependency theory, for which Marini’s above-mentioned book was a watershed. It is therefore no coincidence that Katz’s criticisms, like those of Cardoso (1972) and Cueva (1994 [1977]), focus on superexploitation, one of the central categories in Marini’s proposal, and ignore dependent capitalism. For these writers superexploitation, the breakdown of the capital cycle, the “development of underdevelopment,” surplus value, the presence of subsovereign states, and the predominance of foreign-focused reproduction patterns are not elements that account for a particular form of capitalism, dependent capitalism (Osorio, 2016b). Finally, as Cueva pointed out, the concepts and categories present in Capital are enough to explain backwardness, underdevelopment, and dependency.

Dependent Capitalism: Another form of Capitalism

Marx’s Capital seeks to explain “capital in general” in the most abstract terms, and therefore his work plan envisaged the realization of six books—“1. On Capital. 2. Landed Property. 3. Wage Labour. 4. State. 5. International Trade. 6. World Market” (Marx and Engels, 1858)—to address various aspects of capitalism in its historical and global deployment. Therefore the capitalist world system should not be conceived merely as the space in which capitalist economies operate with various levels of scientific and technological development, various organic capital compositions, and different levels of productivity. This global system is fundamentally a distinct unit in which at least two forms of capitalism—the developed and the dependent—operate in an integrated and articulated manner in terms of the rationale of capital and the pursuit of appropriation and profit. They do so, however, in different ways according to a division of forms of capital reproduction that enables some economies to develop while others are driven to underdevelopment.

Given the maturity of the capitalist world system and the division of forms of capitalism and the relationships that constitute them, the theoretically viable transition from a developed economy to underdeveloped status and the transition from a dependent economy to a developed one can only happen as the result of an exceptional situation ¹² in which the logic of accumulation operates not in accordance with its own dynamics or by simple self-regulatory market action but in terms of a direction that defines a plan capable of disciplining all social classes, particularly dominant ones, and at the very least neutralizing the forces of imperialism. Very few economies have moved from backwardness to development in the past century of capitalism. None is Latin American. The large number of underdeveloped and dependent economies fuels the hypothesis that a mature capitalist world system is not a space that offers many possibilities for development. Development and underdevelopment not only emerge simultaneously but are interwoven. They result from the deployment, expansion, and maturation of the capitalist global system and the relations that constitute it. Only in this field of close and concentrated relationships between different economies can development and underdevelopment (or developed capitalism and dependent capitalism) be explained. ¹³

The Split Between forms of Capitalism

There is no line of continuity between dependent capitalism and developed capitalism in the sense that, by a simple accumulation of different conditions or processes, a dependent and underdeveloped economy will achieve development. This highlights, from another perspective, the relevance of the concept of dependent capitalism as another form of capitalism. If development and dependent capitalism mature simultaneously, they will tend to reproduce dependency and development while operating normally, given the relationship that they establish and sustain with their respective dynamics of reproduction. For dependent ones, what will be nurtured is “the development of underdevelopment” as posited by André Gunder Frank. Under these conditions, the transition from dependent and underdeveloped status to developed capitalism necessarily implies a split in several dimensions: with the spontaneous trends of accumulation or the self-regulatory capacity of the market, with the ruling classes of the dependent world and their commitment to break away from historically dominant plans and projects, and with imperialist capital.

The bourgeoisie in Latin American dependent capitalism has revealed countless times when it lacks the historical will to break with local superexploitation and achieve a reentry into the world market under conditions other than underdevelopment and dependency. It operates under subordinate conditions and is subject to the prevailing international divisions of labor but can nevertheless achieve great gains despite unequal exchange and other value transfers. This enables the establishment of powerful capital not only on a regional level but globally. Its accumulation and reproduction processes nevertheless do not generate development for local economies. Only an exceptional situation, one that goes against accumulation flow and market trends, can reverse the tendencies that reproduce dependency. In any case, the development achieved will result in the deepening or extension of underdevelopment and dependency in some other corner of the planet, since these processes never emerge separately.

Conclusions

It is difficult to maintain that the cluster of proposals and reformulations issued for an updating of the Marxist theory of dependency emerge from this theoretical proposal. Speaking about centers, semiperipheries, and peripheries does not make Wallerstein a Marxist dependency theoretician or even a Marxist one any more than it does Prebisch or, in general, the whole school of Economic Commission for Latin America and the Caribbean structuralism. And the fact that Cardoso wrote about dependency does not make him a proponent of the Marxist theory of dependency.

Given the things that Katz believes should be eliminated or reformulated in the Marxist theory of dependency, we are faced with a new concept of underdevelopment and dependency that, for the reasons outlined above, cannot move toward a weave of concepts and categories that explains not only the notion of dependency but, particularly, what characterizes dependent capitalism. Dependency without a theory of dependent capitalism has no answers to what dependency is and how it is reproduced. A theory of dependent capitalism without dependency does not enable us to understand the global processes that favor value appropriations from one to another economy or those that strengthen certain capitals and states while allowing for the subordination of others. Only from the relationships prevailing in the global system is it possible to differentiate the economies that belong to it. Without highlighting relations, we can come up with categorizations but remain unaware of the consequences of these relations for each other. Knowing them would put us in a better position to reflect on the processes that would make it possible under exceptional circumstances for economies to achieve developed forms.

The relevance of Marxist dependency theory is evident. Its limited dissemination and withdrawal from curricula are due not to the presence of new theories and concepts that are better but to political factors linked to the capitalist offensive since the beginning of the twenty-first century. A theory holding that developmental achievements adversely affect development in other regions and economies is not acceptable to international imperialist bourgeoisies, and the bourgeois and dominant sectors of the dependent world are not interested in being shown responsible for the development of underdevelopment.

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