Labour and “social upgrading” in China

butollo.inddRegular JCA book reviewer Kosmas Tsokhas has a new review available at the publisher’s website for the journal. He writes about The End of Cheap Labour? Industrial Transformation and “Social Upgrading” in China by Florian Butollo, and published by the  University of Chicago Press.

Tsokhas observes that China’s economic development patern has seen a change Butollo argues has been “based on domestic consumption” and has seen industrial upgrading. Yet, as Butollo explains, this has “not automatically resulted in higher wages, better working conditions and improved income distribution, even though Chinese enterprises have been in a position to suck extra profits from advanced manufacturing as well as from researching, designing and marketing across global supply chains. He does this by thorough case studies of industries on a sectoral and enterprise level in the vast workshop that is the Pearl River Delta…”.

Tsokhas likes the book and its intricate detail about the industries studied. He concludes:

For Butollo, the principal contradiction of Chinese capitalism has been caused by a disproportion between investment in productive capacity and a structural underconsumption. However, it is arguable that the contradiction has arisen from the relations of production as a problem of over-accumulation, rather than a problem of underconsumption due to the limited purchasing power of wage earners needed to realise the total value of products as such. Over-accumulation has resulted from the failure to realise enough surplus value to be distributed between profit for shareholders and profit for capitalisation in upgraded constant capital, because, as has been suggested earlier in this review, existing machinery and equipment has been rendered obsolete or underutilised or depreciated, so that it has to be written down or written off. Thus, the source of the contradiction should be sought in value production and not in market circulation where the inability to realise surplus value takes on the appearance of underconsumption.



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