Labor Value and Exploitation in the Global Economy

Abstract

This paper discusses labour value and the rate of exploitation in the global economy using international input-output tables. Labour value is defined as the multiplication of the labour coefficient and Leontief inverse. Exploitation means that the amount of labour embodied in the received wage commodity is less than the amount of the labour actually sold. Therefore, the Fundamental Marxian Theorem, which states that the conditions for the existence of profit and those for the existence of exploitation are the same, should be modified to stipulate that the existence of profit requires exploitation in at least one country. In other words, exploitation may not exist in some countries (nonexploitation). In the context of international input-output tables, we introduce the concept of global labour value, which is the vector of embodied labour in various countries. In the empirical study using an international input-output table, we find that (1) there are non-exploitation cases in several countries. (2) During the time period 1995-2009, the rate of exploitation increased in Asian countries, namely China, Japan, Korea and Taiwan, whereas the advanced countries other than Asia faced a decreased rate of exploitation.

Verification of technical change and cost and productivity criteria: An empirical study using the World Input–Output Database

“…The WIOD covers 43 countries. The approach to measuring labor values is to calculate them based on the studies of Okishio (1959), Wolff (1979), Yamada (1991), Okishio and Nakatani (1993), Nakajima and Izumi (1995), and Hagiwara (2017)—the details of which are presented in Appendix .…”

“…The labor value model used here is inspired by the work of Okishio (1959), Wolff (1979), Yamada (1991), Okishio and Nakatani (1993), Nakajima andIzumi (1995), andHagiwara (2017). We can measure labor value in terms of monetary units of 1 million dollars.…”

“…However, many differences exist between nominal wage rates in each country. Furthermore, Hagiwara (2017) used the World Input–Output Database (WIOD) to measure the levels of 40 countries' nominal wages from 1995 to 2009, finding that nominal wages in developed countries are approximately 16 times higher than those of developing countries (Hagiwara, 2017, pp. 14–15).…”

Investigating the Asymmetric Core/Periphery Structure of International Labor Time Flows

“…The total labor time embodied in final products Y ., j is LcX ., j = Lc(I -A) -1 Y ., j (a scalar). The term to the left of Y ., j is Lc(I -A) -1 = (Lc 1 , Lc 2 , …, Lc g ) (I -A) -1 (a 1×GN vector), which gives the labor time embodied in the $1 product of each sector in each country (Hagiwara 2017). By twisting the labor time input coefficient vector, we can calculate how many labor hours each country exports to country j.…”

“…I do not deal with the issue of complex labor and simple labor in this paper because there is no good justification for the claim that one labor hour in a country equals multiple labor hours in another country(Hagiwara 2017). Moreover, even if one labor hour in a core country does equal multiple labor hours in a semiperipheral or peripheral country in terms of "effectiveness," one labor hour in different countries should be treated as equal in the network of international labor time flows for the purpose of demarcating core, semiperiphery, and periphery.4 An emphasis on the international labor time flows does not preclude the study of international trade.…”