 Hi everyone, welcome. We'll just wait a moment to let everyone into the room before we begin. Okay, hello everyone, welcome. Thank you so much for joining us for this installment of the SOAS Economics webinar series, Intensify Inequalities and the Limitations of Global Capitalism. This series aims to bring together perspectives that extend our understanding of how inequalities take root in our societies and economies and how these relate to the crises of global capitalism. These include contributions on feminist economics, racial inequalities and economic imperialism. The series is organized by the SOAS Economics Department in collaboration with our students in the Open Economics Forum, the SOAS Feminist Economics Network, and the Black Economist Network. Today's topic is the flexible seamstress, global self-suppliers, and the new economic imperialism. Before I introduce our speakers, I'll introduce myself. My name is Alice Malovois. I recently completed my Masters in the SOAS Economics Department where I was an active organiser in the Open Economics Forum. Today I'm so pleased to introduce Dr. Intansawandi and Professor Susan Newman. Thank you both so much for joining us. Intansawandi is assistant professor of sociology at Illinois State University. She holds a PhD in sociology from the University of Oregon. Her areas of specialization include international political economy, global sociology, Marxist theories, imperialism, labour, social stratification and development. Her book Value Chains the New Economic Imperialism, which I personally have been recommending to everyone, examines the exploitation of labour that continues to occur in the global south, particularly under the domination of multinational firms, emanating primarily from the global north, despite the complexities and decentralization that characterize global value chains in today's world economy. Our discussant today is Susan Newman, who is a professor and head of economics at the Open University. She has previously held positions at the University of West of England, the International Institute for Social Studies, Erasmus University of Rossdam and the University of the Waterstrand. Susan completed her PhD at SOAS on future markets and coffee prices. Her research interests include the political economy of industrial development, the relationship between finance and production and the social relations of production and exchange in aggregate commodity chains. Susan is committed to the promotion of political economy, interdisciplinarity and pluralism in economic education. She is a member of reteaching economics, the International Initiative for Promotable Political Economy and responsible global value chains. She currently serves on the editorial board for the review of radical political economics, having won the journal's best paper award in 2010 for her first academic publication on financialization and the changing social relations along coffee commodity chains. So the structure of today, in time we'll speak for about 40 minutes, followed by Susan's discussion, which will take around 15 minutes and then we'll have time at the end for audience questions. So I would really encourage you to put your questions in the chat and I will try to get through as many of them as possible. So without further ado, I'd love to hand over to Intan. Thank you Alice for the wonderful introduction. It's really good to be here. Thank you for inviting me. It's such an honor and let me share my screen here. Okay, so I will talk today, I will talk about my book, Value Chains, the New Economic Imperialism, but I will focus on the case studies, which I'm excited about because usually in previous talks, I focus more on the theoretical part of the book. So hopefully this is useful for people here. Okay, so before we get to the case study, however, I do want to give a brief background about globalization and global commodity chains. So I think it's commonly discussed that globalization is not a new phenomenon and it has accompanied capitalism from the very beginning. We cannot really talk about our current globalization without thinking about the conquest of the Americas, the colonial subjection of Asia and Africa, and all of these phases of globalization have the same goals. Sameer Amin, for example, argue that the goals of globalization at company capitalism are, first of all, it's to control the expansion of markets and also to plunder earth's natural resources and to exploit labor reserves in the periphery. However, we can also agree and scholars have correctly pointed this out that even though globalization can be traced from the beginning of capitalism, but the new wave of globalization that started in the 1970s has distinguishing characteristics. The first one is an increasing trend of foreign direct investments. So starting about 10 years ago, more than 50% of global FDI actually went to developing countries. And even though there has been a decrease in global FDI in general, the inflow to the developing economies remain increasing. And the second trend is also the increase in arms length contracts. And these are subcontracting, you know, sourcing of production without any equity involvement. And arms length contracts also have increased dramatically. Between 2010 and 2014, for example, arms length trading grew at 6.6%, and that's higher than the growth of world economy. And in 2010 alone, it generated about $2 trillion in sales and much of that also in developing economies. And another trend is that the concentration of world's industrial workers in the global south. In 2010, also about more than 440 million industrial workers are located in the global south as compared to about 140 million in the global north. So combined, these trends signify globalized production with increased production in low wage areas in the global south. And the trends are especially noticeable in manufacturing. It also leads to the increase in global supply chains jobs. So by 2012, global supply chains coordinated by multinationals accounted for about 80% of global trade. And you can see that the jobs also increased by more than 150 million between 95 and 2013. And a lot of these workers, again, are located in the global south. If you look at the countries where these global supply chain jobs are concentrated, the top three are China, India, and Indonesia. And you can also see here that they have the largest share of all global supply chain jobs. And the primary export destinations are countries like United States and Japan. So what we see is this is what global commodity chains are. Some people call it global value chains. Some people call it global production networks. I won't get into the explanation of, you know, because these terms differ from one another, but probably it's not too important to highlight that right now. But when they are used interchangeably, it means a vast network of people, tools and activities needed to deliver goods and services to the market. And in addition, each chain consists of various nodes. And each node signifies a specific production process. For example, you know, one node is the acquisition of raw materials. And then another node is a production of semi-finished products. And then there's provisioning of labor, transportation, and so on. So these, a lot of you probably have known this, that these commodity chains are very complex networks. There was an article in foreign policy earlier this year that points out that no CEOs in this world knows their complete chains. Volkswagen, for example, has 5,000 direct suppliers. And each of the supplier has on average 250 tier two suppliers. And then combined, it's about 1.2 million suppliers. And that doesn't include the tier three suppliers. So it can be that complicated. So you can see how the pandemic, COVID-19 pandemic can create big disruptions. It was actually dubbed as the first global supply chain crisis. When COVID, the first outbreak in Wuhan happened, about 51,000 companies in this world has at least one supplier, one tier one supplier in Wuhan. And 5 million companies have at least one tier two supplier in Wuhan. So that's just to show you how complex these networks can be. So the question now is that, well, the production processes are really decentralized. But does this mean that power is also decentralized? A lot of the mainstream works on global commodity chains focus on this decentralized character. And a lot of times they undermine inequality that results from this organization of commodity chains. And another question is in relation to imperialism. So is this world economy imperialistic considering how global commodity chains are structured? Some people argue that imperialism is obsolete. Because what we're seeing now is the shifting hegemonies, especially if you consider emerging economies, especially China. And some on the left even argue that what has been happening is the reversal of the drain of surplus from the global north to the global south. So my study here tries to contribute to this discussion. And the conclusion is that what I found is that world economy is imperialistic. And this is how I came to this conclusion. The first thing. So the first layer of the study is you can say the macro level to examine the macro level of global commodity chains. I created this framework called labor value commodity chains. And it incorporates the measurement of unit labor cost. Because this data combines labor productivity and compensation to assess the price competitiveness of a given set of country. So this measurement is important because it combines labor productivity with wage costs in the manners closely related to Marx's theory of exploitation. So from the data and actually this part of the study, I co-authored with John Bellamy Foster and Jamil Jonah. And this was the result we got. So you can see that there's a big gap of unit labor costs between a group of countries, United States, United Kingdom, Japan, Germany, and the global south countries, including China, India, Indonesia, and Mexico. What does this mean, right? So first of all, the gap in unit labor cost in manufacturing between key core and key periphery free emerging states has been on the order of 40 to 60% during most of the last three decades. And this arises, this gap arises from a system that allows for the relatively free international mobility of capital while tightly restricting the international mobility of labor. So this is global labor arbitrage. And this process holds wages down in the periphery and make possible the enormous siphoning off of economic surplus from the countries in the global south. And when we talk about node, nodes within global commodity chains, now we can see that the node where final assembly happens is usually located in a country that has low unit labor costs. I mean, this suggests that, you know, from the standpoint of profitability for the economies of the global north to maintain substantial parts of their labor value chains in poor and emerging economies. And the result is a much higher rates of exploitation in the global south and also much higher profit margins for multinationals. Hidden in the pricing and international exchange processes of the global capitalist economy is an enormous gross markup on labor costs amounting to higher exploitation in the south. Of course, it can be in the relative sense about average rates of exploitation focusing on increasing productivity or also in absolute sense paying workers less than the reproduction of labor power. So that's the macro level. If you see what happened that multinational companies search for lower unit labor costs in the global south. Now, radical and critical scholars have also talked about this by pointing out by pointing out the nature of global production, which is flexibility. So our flexible production. So scholars like Bennett Harrison, he wrote Lean and Meant talks about flexible production and also German industrial sociologists, they talk about systemic rationalization. They are very similar. And I also combine this literature with the labor process, literature on labor process in monopoly capitalism. A lot of them are Marxist. So what is flexible production? So when we see that the organization of global commodity chains, we see that firms search for greater flexibility through reorganization and technological change in labor management relations and in the firm's relationships with other companies and operating units. So this kind of flexible production, you can say that these are new corporate strategies aimed at establishing production, administration and distribution processes that are more flexible and economical. So we will see these examples in my study, but some of them are built in control mechanisms, delivery on demand system, ranking by suppliers, and so on. So these scholars argue that this is the most important part of their argument is that the decentralization of production processes does not imply the end of unequal economic power among firms, let alone the different classes of workers who are employed in different segments of this network. Flexible production and this kind of rationalization has created hierarchical structures in the production chain consisting of dominant and dependent segments. So that's why combining this literature, I argue that it's important also to examine firms. So we still have to examine firms. It's the meso level to know how exactly these mechanisms realize the production in the production sphere. So my questions are what are the mechanisms that allow core companies to maintain or enhance their oligopolistic position in labor value chains and ensure stably low unit labor cost? Also how do processes that occur in labor value chains affect workers or the direct the direct producers of commodities? When we talk about global production, especially in the global south, so a lot of the discussion that exists, they focus usually on really tragic and extreme events like this one is the factory collapse in Dhaka or you talk about the Foxconn worker suicide. These are very important things that happened and they really are, they highlight how global production processes happened or you can usually see images of sweatshops like this. But what I want to also offer is that it doesn't have to be extreme for exploitation to happen because exploitation is central to how global commodity chains work. So the firms that I studied, I studied two firms in Indonesia. They are suppliers for multinationals and these are not quote unquote sweatshops. These are just regular factories. I don't think they neglected to pay their workers or any of those extreme cases. But the point is that even without these horrible working conditions, exploitation still happens and control mechanisms are still there and these companies are related to plastic. So Jaffa Philham is a plastic company and Star Inc. They made packaging from plastic for products of multinational corporations, a lot of them. So for example, this hand sanitizer, they made, for example, they make something like this, like the packaging of this sanitizer, including the label and so on. So I observe documents and I observe the factories, but the main part of the study is that I interview top executives as key informants. And this is important because to understand the decision making that go within these firms, you have to talk to them. If you want to, if you want to be critical of capital, of course, first of all, you have to understand how capital works, how they think, what their logic is. And I think studying suppliers in the Global South is interesting and important because they manage both relationships. On the one hand, they manage relationships with their multinational clients. And on the other hand, they manage relationships with their workforce. So a lot of times they have to, the exploitation happens in their factories precisely because they have to fulfill the demands given by multinationals. So that's what I mean when we have to examine the hidden abode of production, right? Referring to Marx because Marx says that in capital volume one, that you really have to follow Mr. Moneybags and the workers to the hidden abode of production if you want to know how capital is produced, if you want to know the secret of profit-making. So the first thing I want to explain is why global self-suppliers are really keen on having multinationals as clients, even though multinationals are not always kind or polite. For examples, you know, this is a common thing that multinationals say to their global self-suppliers. This is a quote from my interview. So multinationals representatives sometimes they say, well, can you help us or not? And if you can't fulfill these demands, then we'll go to someone else. And once we've done it, you know, don't you dare beg us for orders. Another time, for example, a multinational client asked them, you want this order? Like, you know, I give you two weeks of completion, can you do that? And they said, we can't. And the representative was furious saying, I gave you the opportunity and you refused. And that's multinational for you, according to my interview. If you take their offer, that's it, you have to serve them till death and sacrifice your other customers. All their demands, we have to meet them. They act as if they are king. Now, the question is that why do they still do this? Even though they actually told me that they prefer local customers, because the profits are bigger when they deal with local customers. But the first, you know, one of the reasons is that multinationals give them large repeat orders. And that's really important for them. It gives them some kind of stability in a sense, even though, you know, it comes with a lot of price. But also something that they mention a lot is that multinationals kind of gave them a brand. So these are their A-list customers. And if they have A-list customers, you know, their business becomes more well known. For example, I mean, in relation to their creditors, you know, their creditors will say to them that, you know, you are different. We cannot compare you with your competitors, because of your personal customers profiles, because you have multinational clients. And if they supply to multinationals, they said, you know, we can take that as brand equity, then we can use it as a referral. We have supplied to customer A. So that's why multinationals are very important for them. So that's the starting point, right, to understand why they have multinational clients. Now, the next thing is that how is the relationship between them? And I found that there's a lot of control given by multinationals to global sales suppliers. You know, some people usually highlight the fact that, well, if you do arms length contracts, if you outsource your production, then, you know, multinationals kind of are, they don't really get involved that much, right, in the production processes, which is true for some aspects of how this global commodity chains works. But what I found is that multinationals actually have a lot of control over their suppliers. And in the end, they also control labor through their suppliers. So first of all, we have control of technological knowledge or knowhow by dominant companies. Technology is controlled, technological knowledge is controlled from the top. And you also have control production processes through specific mechanisms. And most importantly, you have control over the labor process of workers. We'll relate this also to Tayloristic forms of work, including the skilling aspect of Taylorism. And Marx actually, quote unquote, predicted this, right? It's included in capital, volume one in the Penguin edition, that he talks about the real subsumption of labor under capital. It developed in all the forms evolved by relative surplus value, increasing productivity. And when Marx said this, he actually predicted Taylorism. So we can also trace it back to Marx. Okay. So first of all, let's talk about the innovation and technology transfer. So is this really happening, right? Because some literature argue that global commodity chains make it possible for global suppliers to innovate. And then so they benefit from technology transfer. And in this case, the suppliers identify themselves as producers of middle high products. They have a niche market. They are not labor intensive. They claim that they're not labor intensive. They're capital intensive. At first, they talk a lot about, well, we have a lot of technological kind of advancements in this company. We innovate and so on. But after I talk more with them, it became clear that what they meant by innovation is to fulfill customers' needs, the multinationals needs. And a lot of times that's about pressure to cut cost. So these companies have R&D department. But what they do in the R&D department, they mainly cater to research or trials that meet customers' demands to cut cost. For example, making sure that the new specification for certain packaging materials can indeed work without problem. So after I talk more and more with them, it was also clear that there was this idea that there was this fear, you can say, that they think that they're just seamstress. It's their own term. So seamstress in Indonesian is Tukang Jahit. And it denotes a person who accepts various sewing orders, usually menial jobs from customers at their little shop. And they are usually distinguished from like, you know, skilled tailors. So there was this concept. This term was kind of secretively going around within the companies that, you know, they were kind of disappointed that, well, we're actually just a seamstress. We're just fulfilling order. We just, you know, making sure that the multinational requests are done properly. So the way I see it, they say when we deal with multinationals, it feels that we're just a seamstress. And here's another quote about in relation to fulfilling demands in relation to quote unquote innovation. So the multinational customer told us to come and meet them. They say, we want to make this packaging product. Let's say it used to be 12 microns in thickness. This is about plastic. So now they wanted it to be eight microns to cut cost. And then they asked us to share, well, how much you can you save? It was to the point that they called the supplier of that eight microns material to come meet us so that Star Inc could buy from them. If then our factory produces too much waste, they would tell us to come again. They demanded that we fix that problem. So this is an example of how, you know, what innovation really means is just, they were just forcing them to find a way so that, you know, eight microns, you know, the thinner materials works as well as the thicker materials for their packaging. And another form of control is bureaucratic control. And an example of this is open costing requirements. Multinationals require their suppliers to give them a detailed list of costs, usually using the clean business reasons. So they would say, you know, we don't want to corrupt, you know, process. So we have to know all your costs. And they will, they have the ability to compare, they have, they have the information, they have the ability to compare costs among suppliers and question costs that are not deemed low enough. And they can, through this practice, they can also pitch suppliers against each other, right? They can say, look, the Malaysian factory or this Thailand factory can give us a better, a better price. Why can't you give us this price? And this is so extreme that they can, the multinationals can actually determine the profit margins of their suppliers. So their profit margins are actually determined from the beginning. So the multinational will say, you know, you can only have, you know, such and such a percent of profit. And that's it. That's why a lot of times they, they think that, you know, dealing with local customers are better because they can have higher profits. And this is also another important finding is that these global South suppliers have to offer higher flexibility to survive. So this is in relation to flexible production. They have to play that game and they have to play it well. So flexibility and production and delivery surface are needed are needed to win over multinationals and survive competition with other suppliers. So Star Inc actually had a big competitors called Sun Printing, also a pseudonym, but Sun Printing is a multinational to begin with. And since it's a multinational from one of the countries in the triad, they have stable customers from their own country, and they can afford not to be flexible. You know, they can reject multinational clients and reject their request. They don't have problems with that. So global South suppliers like Star Inc have to, you know, have to be really flexible. They have to sell that flexibility in order to compete with, with other suppliers. So they call themselves strategic supplier, whatever our competitors cannot supply due to unreasonable time constraints, we must be able to take over. So being flexible, this is a part of, of what, what scholars call functional flexibility, right? It's a transfer of responsibility in relation to costs and ways to suppliers. So some examples include delivery on demand. So multinationals will just say, you know, you have to deliver this much at this time. We don't want you to deliver it early, for example. So as a result, global South suppliers have to have more warehouses to, to keep their, their supplies until the time is right to send it to them, to their clients. And then they also have buffer service to offset missed forecasts and meet fluctuating market demands. So even though multinationals have, have forecasts, but they can be missed. And they miss forecasts a lot of times. But the responsibility to offset that forecast, that missed forecast is given to their suppliers. And buffering is a big part of it. All of them talk about this buffering service. So buffering service, we, we can understand this through this quote, actually. So this is a quote from one of the, I think the planning department. Our marketing team always reminds us that we have agreed that we need to buffer up to 20%. But the order for this multinational is humongous. The amount needed to supply to them in a month is almost equivalent to one warehouse. On the one hand, it's a problem to anticipate a 20% increase by storing all of the goods there. But on the other hand, we also must be ready to anticipate a decrease by 20% of what they promise us to take in the following month. So starting, for example, has this policy of, of, you know, being flexible by 20%. If the multinationals say we have to cut our orders by 20%, they have to do it. Or if they, you know, they need a rush order and increase it by 20%, then they have to do that. So considering all of these examples, you can see that systemic rationalization or flexible production pursues contradictory goals. So the first goal is the increase of flexibility in company administration and manufacturing process to fulfill constantly changing market requirements with respect to quality and quantity. But then they also have the goal of achieving a more cost effective production system under conditions of fiercest competition. And this is very contradictory. So on the one hand, you're, you need to be flexible. But on the other hand, you need to be cost effective. But flexibility, you know, results in a lot of waste, waste in labor, waste in products. And they have to stop, of course, if you know how how factory works, like factories like this work, you know, they have to stop the whole production just to, you know, change it for another order that require that that is rush order, right. So it disrupted the whole production. And here's a quote from one of the production manager, our director, he said, Well, we sometimes have to make sacrifices, meaning we allow the waste to be high, because we have to cut the ongoing production of a certain product in order to fit in a different product. And here's another example. If all of a sudden, say because of certain promotional periods that increase market demands, one packaging size is needed more than the others, this customer would suddenly change their plans. This week, I need you to send me the 20 grams one instead of seven grams one. If you're a rigid supplier, you would definitely say no, because it would disrupt the whole production process. They have to reprint stuff, everything most converting companies would refuse to do this because it was create inefficiencies and plenty of waste. But they have to do it in order to fulfill their customer's needs. So those are about control over production processes control over technology, technology. And in the end, of course, the question is who bears the burden of the contradiction and other consequences of these demands? Of course, the question is workers at, you know, direct producers of these commodities. And if you remember, if you recall what I called about the open cost requirements, a lot of these suppliers don't have other options, right? I mean, they have to accept the cost that demanded the cost requirements, the low cost requirements demanded by their multinational clients. So what they can do is, of course, to force their workers to work as productive and as efficient as possible. You know, they don't in other cases, of course, people can decrease the wages, right? But in their case, they didn't decrease wages. And there were increases in minimum wage and they, you know, they accepted that. But as a result, demanded directly by multinationals, they want more productive workforce. And of course, in the end, this is about lowering the unit labor cost, right? So it doesn't matter if wage increase, if productivity increase as well, then labor cost can be can be kept low. So the burden is given to the workers on the shop floor, whose labor remains unskilled and are detached from the decision making process, which is exclusive to the management. And this is done through various means, mostly through the reorganization of work in order to increase productivity, especially to offset the increase in wages and to meet clients' demands. These are some examples. One is bureaucratic control. These are through international certifications, such as ISO, ERSA, SEDEX. This is one of the main mechanisms in sourcing of production, right? Multinationals will just give third party to audit their suppliers. So these suppliers have to have to have to fulfill requirements, you know, and a lot of time this is about safety and so on. But, you know, of course, some of these are good for workers because they have some kind of standards. They have regulations about safety, about overtime, you know, and so on. But when we see behind all of these things, we can ask what is the real reason behind such certifications? When I talk to, you know, directors from Human Resource Department, for example, they don't hide the real reasons. They say, well, yeah, we, you know, we need, you know, safe and healthy work environment so that workers can keep working so that they have good productivity. And actually when I was doing my field work, they were undergoing one of these audits, and they have this big, you know, what do you call it, like big slogan printed in their factories as safe and healthy work is a mandatory conditions for an increase in productivity and efficiency. So that's the real reason. There were several other studies that show similar things, for example, in food industries, right? They, you know, a lot of times the certification only care about the safety of the food production, but not really the well-being of workers. And as Harry Braverman says, the humanization of work is never the goal, right, of this kind of cases because it's based on antagonistic relationship between workers and capital to begin with. And then there's also technical control, machines as a means to control the labor process away from the shop floor. This can be done, for example, through incentive system and key performance index-based evaluations. One interesting example is about this incentive system. When I was doing the interviews, multinationals were really strict at that point about overtime, but limiting overtime. And so, you know, a lot of times global suppliers, also low-wage workers, depend on overtime work to increase their income. And when you limit overtime, I know this sounds ironic, but workers really are upset because they lose that opportunity to gain more income. So when I was doing the field work, their competitor limited overtime just like that. And there was a big strike, massive strike in the factory because of that. And they had to lay off about more than a thousand workers. So Star Inc. at that time was really nervous about this. So they had to come up with something, right? They didn't want what happened to their competitors have happened to them. So they have to limit, they have to do something to offset this new regulation, or not new regulation, the regulation is actually old, but at that time, multinationals were really straight about us, really strict about it. So they came out with this incentive system. They will give incentives to all workers based on production output, variant waste, and returns. And just a little thing about this. This is a really good example of how workers have to juggle production output and waste. So they will get extra money or extra wage if they have good performance. And to do this, for example, they have to make sure their production output is high. And you can do this by setting the machines higher, higher speed, right? So they have to keep up with the machines. But on the other hand, they also have to control the waste. And you can have very minimum waste by setting the machine very low, but then you don't have a lot of production, a lot of productivity that way. So this way, workers have to juggle this to make sure that they have the incentives. So this is an example of how you control the labor process without directly controlling them at the factory floor. This is a control made through decisions by management, right, away from the factory floor. Peter Custer has already talked about this as well, and he calls this internal decentralization. But if all else fails, then you have forms of simple control on factory floor. I mean, not fail, but if it's not enough, then you also have direct control. For example, these executives, they told me that even after being encouraged by the incentive system, there's no guarantee that workers can work well. That's why we need management's presence. Every single deviation needs to be evaluated. If workers want to be paid more, I need to know how high their labor productivity is per hour. It needs to be measured first. And then of course, they say, you know, things like Indonesians can still obey orders if you watch their back. So there's this really assumption about workers not being able to work properly and not having enough intelligence or skills or ability to do work properly. Sorry to interrupt. If you could wrap up in the next few minutes so that we've got time for the discussion and questions. Yeah, sure. This is almost done. So thank you. So this is maybe the last thing I would talk about in relation to control of labor process is that management often says, you know, their work is very simple, you know, and repetitive. But the question is that is it really simple work or something else? But what we see is the skilling, right? Work in factories like this is simple, not merely because it is the nature of the job or the machine, but it is a detachment of the brain, of the hand from the brain. So workers are away from decision making. They're not involved in the decision making. The decision making is made by executives, by management, and workers get to perform this so-called simple work because it's this skilled work. And according to Braverman, this is the pivot point upon which all modern management turns the control over work through the control over the decisions that are made in the course of work. And of course, the threats of unions and management usually try to prevent union organizing through different types of rhetoric. And I can talk about this in the question and answer if you're interested. So the conclusion is that there's unequal relations between dominant and dependent companies. And they have these control mechanisms that I explained. And what we see is actually the externalization of cost. And I think we all know that capital prefers that, right? They want to externalize cost and they transfer responsibilities and the problem of waste, both labor and products to their global south suppliers. So this is my last slide. I probably won't be able to talk a lot about this. But the macro level and the firm level studies kind of show that imperialism is not an obsolete concept. Imperialism or the hierarchical structure of world economy, it's never about expansion into other countries or the exception of tribute when we talk about capitalist imperialism. In the age of multinational corporations and globalized production, the dominated areas are transformed, adapted and manipulated to serve the imperatives of capital accumulation at the center. And at the firm level, production in the global south is transformed, adapted and manipulated down to the smallest detail. They're parachuted often with no real organic relation or logic steaming from the emerging or peripheral economy and are just as easily dismantled and removed. So this created the illusion of development. But with arms length production, what is being produced are mere links in the global chain of value in which particular nodes of production are specified and controlled from abroad. So that's my conclusion. Thank you. Thank you so much for that, intern. It was fascinating. Yes, so next we'll hear from Susan for her discussion. But I'd like to encourage everyone to put out their questions in the chat box that can be expanded on in the Q&A. So over to you, Susan. Thanks very much. Thanks, Alison. Thanks, intern, very much for your presentation. I did very much enjoy the book. I did prepare this my response before I heard your presentation. So some of my queries do go beyond your presentation, but perhaps it gives you more of an opportunity to speak about imperialism because I think that's where parts of my questions go. So just to sort of wind back and have a look at, I wanted to sort of understand your contribution to the global value chain research for broadly defined, you know, this is a body of work that's now emerged from adolescence into maturity. If we date its birth to the 1994 monograph, it's by Gareffby and Kozolowicz, so 26 now. And it's no longer a concept discussed at the margins of scholarship as it had been. And there now exists a very well known mainstream variant imprinted with a neoliberal approach to economic development. There are regular publications or reports from the WTO, the World Bank, and well funded databases that measure their extent. Some of this data you've been able to use in your own analysis as a buy. But it's also a concept that's been instrumentalized in right-wing political rhetoric around de-globalization or renationalization of production. So it's still a massively contentious, not only approach, if not a contentious phenomena. Although we can argue about that too. So there've been some very significant developments in the critical analysis of the phenomenon of global value chains, which is not limited to Marx's approaches, and into you cite quite a bit of this in your book. And I just remember from about a decade or so ago, and I think other colleagues in the audience here will also remember, and I'm sure that you also saw this sort of call to action to Marxist scholars from about a decade ago, that was really trying to respond to the apparent absence of an adequately theorized theory of value in GVC research. So in the work, you know, as as bear, Jennifer Baren 2005 outlined, you know, if GVC research sought to understand the where, how, and why, no sorry, the where, how, and by whom value is created in its attributed long commodity chains, then surely it would require a better theorized conception of the social processes regulating the generalized production and exchange of commodities. And this is the starting point of a lot of work that's been doing that's happening, including your own intern here. And much of the starting point has been on this sort of apparent negative correlation between income received and the amount of labour time associated with activities and different nodes of the chain. So I'm just going to share my screen because I'll usually find it helpful to have a picture to hang on to when I'm talking. There we go. How do I make this? There we go. So this is a, I really like this very simple diagram and it's from a special issue in the monthly review that intern also contributed to that that juxtaposes the the technicist or small curve of value addition and price of the neoclassical view and a more objective theory of value associated with Marxist theory of value. We see very clearly divergence of the two patterns and we look not along commodity chains and particularly as they map onto geographical space. So I could maybe I should stop showing that. So intern's work is along with the others have taken this critical agenda forward by focusing on the labour process and exploitation along the chains. And I wanted, I thought it's just worth mentioning some of that work here, particularly because there are a few people in the audience who I think have been have done very significant work in this area, including Alessandro Mazzadri, who has used a feminist approach to study the labour process and rates of exploitation in Indian garment industry. John Smith, from whom I think his work influenced very much the labour value commodity chain approach that you've taken. And Ben Selman with his related concept of poverty chains. I think there's a clear kind of set of arguments and debates that are being taken forward and theorised more carefully with careful field work here, which we can include your work now as well. And by employing a labour theory of value, all of you, all these scholars have analysed the labour process mechanisms and modes of exploitation and practices in the expropriation of value from global south to global north. And what you've done, I think, which wasn't in the presentation just now, but is really to extend some of this by putting to work the concept of the value chain in analysis of economic imperialism and contemporary capitalism. And you've done this quite explicitly to link these relationships of exploitation and labour process to wider systemic analyses of capitalist accumulation as it occurs at a world scale, right? So these different dynamics into relations, articulation between its moving parts, capital and labour in this case, based on this analytical device of the labour value chain that you've talked about. And I think in so doing, you make a number of useful critical points and contributions. I'm just going to outline quickly. There are many more, of course, but one is the connection of labour value chains as a form of unequal exchange that's considered one of the main imperious mechanisms that remain in place today. You very carefully debunk the mainstream economic business analysis approach to efficiency and productivity related to industrial organisation. And you reveal very well what's behind these words and practices through this, both through analysis of the business, mainstream business literature, as well as through the concrete practices of firms that you've studied. And you've revealed what's behind these words and that's exploitation. And I think what you've also brought in you that's not usually seen within this global value chain literature is the insights from German industrial sociologists. So I thought that was extremely important. And how the idea of systemic rationalisation can be used to show that good work and bad work are two sides of the same coin, that there is this systematic, systemic relationship between the two. It's not this every levelling up of this utopian, optimistic, pure and sable view of post-warism. So you look at the meso-level processes in relation to the logic of capital accumulation and you explicitly attempt to analyse the articulation between different scales, from a macro chain as a whole to meso chain constituents. And I think this is a really useful articulation. I think that's something that people often don't seek to try and do that. And it's extremely ambitious but also I think really, really important that we keep on probing that and working at that level. So if I can quote you here in your book on page 69, you say, we cannot gain a comprehensive understanding of the development of commodity chains if we fail to see the process of capital accumulation that underlines this phenomenon. And I would agree completely with that statement. And you take another, I think, important approach you've taken. You explain that in your presentation is taking the vantage point of productive capital and perspectives of the south. So how sub-incapitals operate to intermediate the labour process. And I think that's very useful and there are other examples of this also. But I think this is, again, this is a very important way into understanding these dynamics of unequal exchange and what we might understand as economic imperialism. And you also cite in central literature from the global south. I really liked the way you use a metaphor, the drain of surpluses and how you then connect that theoretically further. So in this and lots of ways, this book has made, has a lot to offer on the contemporary dynamics of uneven development. And while I am sympathetic to the concept of imperialism, and I fully, fully agree with your criticism of the imperialism deniers in your book, I'm not fully convinced or perhaps I don't really understand how imperialism here, as you understand it, and connect it, differs from the old imperialism of Baron and Sweezy. So that's something I think I'd really like you to take forward. And one way which this might be elaborated to help me understand, or perhaps this is where your next book will go, is in terms of a more precise specification of the integrated industrial circuit of capital as a whole, and the articulation between its constituent, interdependent parts. In the first instance, you know, between the circuits of money, commodity and productive capital. I'm being very abstract here, so I'll flesh that out with more than half way through. So hopefully we're okay for time. Okay. So I think we've got a lot to learn, and this is a sort of pet project from volume two of capital. I think a lot of value chain analysis is really focused very much on volume one, and on the labor process. And I think that's quite right. I think that's really important. But, you know, if we look at the world around us, and you've documented there the rise of global value chains as a phenomenon, that rise occurred contemporaneously with so-called financialization, and all the work that's being done around the financialization of accumulation, where Marx is again focused now a bit more on volume three. And I think actually we need to bring all this together and look at volume two as, in understanding the articulation of these circuits of capital. So my, I mean, excuse me for bringing my own work, but I just thought it'd be useful for a different vantage point here. So my own work has really tended to approach some similar questions from the vantage point of commodity capital. So whilst you're looking very clearly from the vantage point, a productive capital within industrial circuit capital, I've looked in my work much more from the perspective of commodity capital. So I focus much more on the sphere of circulation rather than the sphere of production, which is I think where most of your analysis is located. So I've therefore studied mechanisms of value capture and the siphoning off of surplus in concrete process of valuation along commodity chains. And this has informed my own tendency to study agro commodities, coffee, cocoa, milk, power, more recently human breast milk, you know, because these, this is how, you know, if you're looking from the perspective of commodity, this is often the clearest, most simple way of understanding these dynamics. But what I think commodity capital helps us do is it acts as a as a bridge between money capital and the analysis of financialization of capital accumulation and the circuit productive capital, the focus of your work are here. But a focus on commodity capital alone could lead us to a sort of functional understanding of internationalization as this movement of surplus across national borders. And this is sort of some of the limitations of the work by people like Immanuel as theories of an evil, an even exchange. So it's looking, it looks at this as a very sort of functional form rather than providing more distributive, this regional insights that come from a focus on the circuit of productive capital which you've highlighted here and the labor process. And it only becomes apparent that the process of valuation along commodity chains work to force the cheapening and the skinning of labor in the global south in the ways that you've described here if we take an integrated approach of these circuits. But without an analysis of the internationalization of money capital, international value and world prices, we would not wouldn't have any sense of how you know the transfer price for developing differentiation assistance production occurs, right? So this sort of the problem of the law of value at the level of the world economy creates, reproduces these uneven structures of production and such like. And so there you know, only if we look there can we see that there is this chaotic character of the internationalization of capital that's apparent from looking at the money circuit. So I would argue I think that in order for us to fully appreciate the nature of contemporary capitalist accumulation, its contradictions and concrete character of crises and restructuring and the analytical purchase of your theorization of imperialism today, we would need to develop this work for the better conceptualize this articulation between the circuits of capital. And this is where I think capital volume two or the work of Paloalian 70s is particularly useful. I don't want to, I was going to scare you with some graphs of m's and c's and things, but I think I won't do that. But I will just share my screen for the last slide I have here, which is a, so how do I move from, there we go, so ignore that. But I'm just sharing the screen because this is just, this is actually, this slide is actually comes almost from something else I worked on a few years ago and presented on, but I thought it was a really useful way for me to sort of assess inton's contribution in this book and where we might want to take it further. So, just to finish off, Paloal, so, so whilst as I say I'm not denying the existence of imperialism, we do need to specify it more carefully to enhance analytical purchase rather than imperialism being the simple prism through which all international economic relations promised on an equal power and hierarchical structures is viewed, right, so just because hierarchy, hierarchical structures exist does not imply imperialism exists, so we need to, so I'd like a bit more about the relationships there and how we theorize that. And I thought what was really useful from Paloal's work is this distinction from functional and structural analyses, right, so he's looking at the internationalization of a lot of capital, but I think it does provide a very useful framework to assess inton's contribution to a broader agenda to theorize imperialism in contemporary capitalism, so one of the questions I would ask is to what extent does inton's analysis represent a functional analysis of internationalization of capital and here I think we can see many, many examples of that and I think inton's work does move towards a more structural understanding as well, one that allows us to understand, to include essence of the contradictory process of capitalism, of an internationalization, but I think we could do a bit more work into analytically linking both of these and then specifying what then is meant by imperialism, so if I wanted to end that with, if I wanted to sort of rephrase that as a question or two questions, I would probably say my first question is to inton is in what ways does your analysis differ and surpass that of dependency theory and the other question would probably be how would you see the money in commodity circuits of capital figuring in your analysis? I'll stop there. Can you repeat the second one Susan? How would you see the money in commodity circuits of capital figuring in your analysis? How do I stop this? There we go. Thank you Susan. Yeah well I'll pass over to inton to respond to some of your questions. Well first of all thank you so much Susan for the wonderful discussion. I think some of these questions I can answer, some of them I probably cannot answer comprehensively or completely because I think this is where my study can be developed as you said yourself. This is a brief, really a brief book and it needs a lot of, a lot of the parts need to be elaborated in further research. So in terms of, let me say a few things about the imperialism aspect. I think I do borrow from Baran and Suizi and also Harry Mekdav of course in relation to their theory of imperialism. So the theoretical framework is pretty much the same. I use their theory but in my book what is new imperialism is also very related to John Smith's work and the idea that the way global commodity chains is organized through arm's length contracts especially. That makes it you can see how capital is really searching for stably low unit labor cost and this is a form of imperialist relations in terms coming back again to Mekdav that you know capitalist imperialism is about transforming and adapting in this case global south areas to fulfill the needs of the global north through different mechanisms and in terms of production you know the system is designed especially so it can just be dismantled and of course if you if you look back at John Smith's work for example this is also this is about capturing value and you know the way this is organized the the contribution from labor is very low and then in the end it affects in the GDP accounting as well. So this terms of value capture I mean in this process of value capture this is a form of expropriation and also related to related related to UTSA and private petnics work you know imperialism still exists in relation to to colonialism but also through unequal exchange as you said yourself right so unequal exchange this is a form of unequal exchange and I think there is it's it's a I think we can argue that unequal exchange is a form of imperialism I don't I don't see how you know how that is some kind of super theory it is a form of imperialism and it's you know it's not it's not a theory it's not the theory of imperialism but imperialist relations where global north powers can can just go to global south and sometimes with threats a lot of times with threats also through different mechanisms like trade agreements or financial institutions like IMF or World Bank then that's also I think we can say it's a form of imperialist relations so I hope that answers a little bit but the focus is here on on this the search for low unit labor cost and and this is made possible partly from arms length contracts and that's what has been what has been increasing recently even in the mainstream tradition of global commodity chains that because you know traditionally they kind of separate between production driven and buyer driven chains to distinguish you know like labor intensive industries like garment and so on from high tech industries but with this new globalization where arms length contracts are more prominent even that distinction is no longer it's no longer useful right because the organization has become more and more buyer like and I think that that adds to this understanding of global commodity chains as an imperialistic world economy so that's one thing and I think that also it can answer how this approach um differ from dependency theory um I don't see it as as qualitatively different probably but but in this case I also want to highlight the role of global south suppliers in their as an actor right in global commodity chains so I don't see this I don't see this organization as as merely you know like a narrow kind of sense of of the north versus the south but but global south suppliers here are also responsible and in controlling the labor process especially so they are you know they are this this major component in making sure that exploitation happens and that's something that that I think needs to be studied more in the literature you know it's not like we we we kind of glorify global south suppliers right I mean they are they are pretty much pressured by multinationals and and so on but again they are also an actor and who is making sure that exploitation can actually happen at the production point I don't know if that answers the question but because theoretically I don't I don't think that you know it's it's necessary for me to to separate my approach from from dependency theory and in terms of money and commodity chains oh sorry money and commodity circuits actually I just had a conversation with a colleague a few weeks ago about volume two of capital and how how it can be incorporated in my work and I think that's that's really that's correct right I mean I don't I didn't do that and I should have done that but this is something that that needs to be done separately in the in the in a bigger in a bigger project as well fantastic I hope that answered some of your questions Susan and before we knew I just wanted to quickly ask a question of my own if that's all right because I was interested to pick up on what you said about the sort of take it or leave it relationship between these multinational corporations and suppliers and sort of contextualize that within the COVID-19 crisis and whether you think that the current crisis and the drop in demand sort of globally how that sort of transmitted to suppliers mainly in the global south and whether you think that that relationship sort of the unequal power in that relationship has almost intensified because I was interested you also mentioned unions and I've seen quite a few examples from the garment industry of in the context of COVID-19 unless orders there's been many examples of union busting with obvious implications for the workers in that sector so do you have any reflections on that so just to clarify so you're talking about the the current supply chain crisis and how that's gonna how's that's gonna change the current system you think yeah so that obviously there was already a very uneven power structure within these global commodities chains whether that's gonna the power is even more skewed towards the buyers and the corporations in this in this context yeah so that's actually something that that I'm currently trying to examine so it's still in the very initial stage of the work so I I'll be hesitant to actually you know claiming that I can predict what's gonna happen but we can I think we can we can assume that capital will continue to to look for low unit labor costs but the thing is with this global supply chain disruptions there's a lot of a lot of panicking right I mean because they learned that actually they have learned before from Fukushima and all of that but and now with the pandemic the scale is really big so they know that it's not a good idea to to depend on only certain countries in this case especially China so but what what has been happening I think from what I followed is that different global south countries now are looking at this as an opportunity and and they you know a lot of a lot of countries like India for example already already issued a lot of incentives millions of millions of intensives for corporations to invest in the country right because they want to I mean the goal is to be able to replace China probably and a lot of investments have been flowing to countries like this because of the US China you know trade war Vietnam has been like a lot of multinationals have been going to Vietnam and so on and then you know countries like Malaysia promote their their infrastructure for their semiconductor industries in the hope to to to to promote themselves so investments can can move to these countries but the the question is of course well can we change the structure that easily especially if we if we think about the infrastructure in general right a lot of the countries don't have the infrastructure needed to become huge suppliers like this so we don't know to what extent the change can happen but changes have been happening in terms of you know governments desperate trying to to again promote their countries and Indonesia for example the unit labor cost has been a little higher right compared to China and India and I think they're pretty desperate to attract capital and they just for example issued a new law that that that will be devastating for for labor and the environment precisely to attract investments so you can see that these things have been going on so if if say for example they are ready then there there's really nothing I would say there's nothing incredibly new that will happen because then there you know it's just a changing places and and capital is still going to be able to to search for low unit labor cost. So we've had a few questions we're really running out of time I'm sorry everybody but um what I would be really interested to ask because it's sort of looking forward um Benjamin Selwyn asked do you have any thoughts about how GBCs can be democratized and bought under control of workers. By the way I didn't know that Ben is here hi Ben it's so good to have you and you know in my book I also use Ben's work and you know his work has been very important to me as well. So he asked whether global value chains can be democratized and brought more under the control of workers. You know I think with Ben himself has been uh has been writing about workers movements in a lot of countries right including factory occupations say like in Argentina. I think that that is probably you know a starting point but when we talk about the global commodity chains themselves I mean that's something that that that we need to to think more about especially you know with scholars who have been doing work in terms of logistic labor right and and the strategies that workers have been doing to to control these logistics or as a means to to to put forward their demands I mean that's of course they are important and they can they can be um they can be a starting point like I said um but also of course we have to think about well how real I mean how can we get global commodity chains um under more under the control of workers um beyond you know the fact that these struggles are happening and you know factories can be occupied logistic workers can organize but as long as you know technological control that's one thing as long as multinationals still um still control technological knowledge then of course it's hard for us to for us for workers to control GVCs um you know forms of descaling has to has to be has to be challenged significantly um so yeah you know um that's tough question um but I think that's the two things that that that matter the most the the control of technology and you know because control production processes then if workers can already um occupy factories that's that's one one way to alleviate it but control of technology is a big thing thank you so much um unfortunately it's almost half past five already um I'm sorry we haven't had time to get to all of the questions um but it's been super fascinating thank you so much intern and thank you Susan both of you for your insights uh before we leave I'll just quickly let everyone know about the next webinar in the series which will be on the 16th of December uh 5 p.m the topic is territories that won't be left behind well-being and planning in new tray columbia uh webinar and launch of the documentary film uh on alternative approaches to development originating from local contexts in the columbia specific um sounds fascinating um thank you so much everyone for attending uh hopefully you'll all be here the next one so take care thank you so much thank you it's been so lovely to chat to you yes i'm here i thank you Susan thanks for having me thank you Susan