Marxist economic analysis of immigration, China, profitability and whether exchange value can be derived from knowledge.
Michael Roberts is an Economist in the City of London and a prolific blogger.
Cross-posted from Michael Roberts’ blog
The 2025 conference of the International Initiative for the Promotion of Political Economy (IIPPE) just took place in Ankara, Turkey. The IIPPE was founded in 2006 with the aim of “developing and promoting political economy in and of itself but also through critical and constructive engagement with mainstream economics, heterodox alternatives, interdisciplinarity, and activism understood broadly as ranging across formulating progressive policy through to support for progressive movement.” The intention of IIPPE “is to develop and promote political economy, especially but not exclusively Marxist political economy.”
I was unable to go to Ankara for the conference, but I did participate in some online sessions organised by the China Working Group of IIPPE and presented in one session. But I was also able to obtain some of the papers presented by the participants in the main conference. So I can give a view on just a few of the papers presented.
The main theme of this year’s conference was Immigration: Crisis of the World Capitalist System, Crisis for the World Capitalist System and the plenary speaker on this was Hannah Cross from the University of Westminster. In 2021, Hannah Cross wrote an important book offering a Marxist perspective on immigration, called Migration Beyond Capitalism.
In her book, Cross argued that global migration was driven by capital’s need for cheap labour. Immigration was encouraged to provide a ‘reserve army of labour’ that would keep wages low and also divide working people. This migration also led to removing a sizeable number of able-bodied workers (often the more highly educated and skilled) from their home countries in the search for work – the so-called ‘brain drain’.
In her book, Cross uses migration-studies research to show that border regimes have very little effect on the overall volume of migration, which is primarily dependent on conditions in migrants’ home countries and labour-market opportunities in the host countries. And there is little to no relationship between the volume of migration to an area and anti-migrant attitudes in that area – rather, what causes anti-migrant attitudes is the intensification of border systems.
With increased global warming, migration will accelerate in the decade ahead. That will increase the contradiction between native-born workers and immigrant workers – so nationalist and racist attitudes are likely to increase. But Cross argues that, just as there is a material basis for the division between workers under capitalism, so must there also be a material basis for unity. It is, again, the capitalist system itself that provides this material basis. Capitalism gives workers common problems to confront and struggles to undertake, with these struggles often resonating across borders. Ending imperialism in the Global South is a precondition of ending borders for immigration in the Global North.
There is a lot more to be said on migration and there were several papers on the theme at IIPPE that I cannot comment on. So I shall move onto China. The China Working Group within IIPPE held a series of workshop presentations before the official conference and also sessions in the conference itself. One of the workshop was on ‘China is not imperialist’. This is a controversial issue among Marxists, many (most?) of whom consider China as both capitalist and imperialist, and that issue was also debated at the China sessions.
I presented paper on whether China was imperialist, based on Lenin’s key categories for imperialism, particularly on how imperialist states moved from direct colonial dominations to economic domination through monopoly companies dominating trade and through the export of capital to exploit the peoples of what we now call the Global South. In my paper, I argued that there are now four ways that capital in the so-called Global North gain transfers of surplus value from the capital and labour of the Global South: first, the transfer of value through international trade (unequal exchange); second, through cross-border flows of profit, interest and dividends; third, through flows and the stock of foreign direct investment; and fourth, through ‘excess yield’ (returns) on net foreign assets. There is no room to spell out all the points here (see the paper).
The major peripheral economies (including China) are transferring billions in value to the imperialist North through these avenues of trade and capital flows, although it is true that China’s phenomenal rise as a manufacturing power has increasingly reduced and even reversed its losses of value on trade with the Global North. But as one study has shown, China’s switch from net loser to net gainer in international trade was almost entirely due to high investment and technological advances ie a rising capital composition. So my conclusion was that China still did not fit the bill as an imperialist economy.
In the same session, Mick Dunford, Visiting Professor, Institute of Geographical Sciences and Natural Resources Research (IGSNRR), Chinese Academy of Sciences, argued that those who claim China is imperialist forget the historical development of China as one of the most exploited and abused nations in the history of imperialist and colonial domination. imperialism was a system where capital went beyond its own boundaries, not just economically but also politically and militarily, with the aim of domination of the periphery. By that definition, China could not be an imperialist state.
In another session, Esther Majerowicz from Brazil seemed to argue to the contrary, appearing to argue that China was a capitalist economy that had developed an imperialist-style extraction of profits and resources from the Global South and indeed it had become a major imperialist rival to US global hegemony. Her arguments were based on her book, jointly edited with Edemilson Parana, called China in Contemporary Capitalism (2024).
Whatever side you take on this, there were several other papers that outlined the huge progress that China has made in development not just of industry, but also increasingly in hi-tech sectors, mostly vividly observed in the production of electric vehicles and solar equipment, which China is exporting in massive amounts to the rest of the world.
Again, in this post I cannot fully cover the many papers on China and the character of its development and progress, so I’ll move on to some interesting presentations on Marxist economics. Oleg Komolov from Plekhanov Russian University of Economics, presented a paper on Unequal Exchange and the place of Russia in Global Economy. I don’ t have this presentation, but an earlier paper by Komolov showed that the Russian economy in the 2010s had a permanent net capital outflow through private and public channels. This led to a depreciation of the ruble. That boosted energy and resources exports but inhibited the wider growth of the Russian economy. So Russia remained part of the periphery in global capitalism. In my view, the Russia-Ukraine conflict sustains that model, but with capital controls blocking outflows.
There was an interesting session on Marx’s law of profitability. Ekin Değirmenci presented an analysis of the Marx’s law as applied to Turkish manufacturing from 1988 to 2020. He found that the rate of profit in Turkish manufacturing rose from the late 1980s to 1998 but declined thereafter. To me, that fitted in with the trend in all the major economies – a rise through the 1980s to the late 1990s and then a decline through to the end of 2010s. And following Marx, Değirmenci found that the downward force on profitability was a rising organic composition of capital (capital intensity) with the main counteracting factor being a rising rate of surplus value (labour exploitation).
Turkey manufacturing: profit rate: weak rising trend overall, but declining post-1998
Luis Arboledas-Lérida presented an excellent critique of the widespread view among Marxist economists that knowledge has no value in exchange as a commodity, so that value gained by the owners of knowledge commodities is not appropriated from the labour of their workers, but only through ‘monopoly rents’. Lerida argues that this theory of ‘knowledge rents’ endorses a totally unrealistic conception of knowledge; it deploys the economic category of ‘rent’ in a manner utterly unrelated to the Marxian framework and Marx’s analysis of ground-rent, despite claims to the contrary; and is actually based on mainstream neoclassical theory. The critique of the theory of monopoly rents has been taken up before by AK Norris and Tavo Espinosa. And Arboledas’s paper reiterated his critique made at the HM 2024 conference.
There was also an interesting session of papers on money hoarding, world money and cryptocurrencies. Unfortunately, I do not have the papers for these. And there was a plenary session led by Galip Yalman from the Middle East Technical University, Ankara on ‘Central Banks as Hegemonic Apparatuses’. The role of central banks is a hot topic among the mainstream at the moment, given the ongoing attempt of Donald Trump to take control of the US Federal Reserve and end its supposed independence.
In my view, central banks were never neutral bodies designed to provide expert advice and decisions on controlling interest rate, money supply and affecting the wider economy. Central banks were created as ‘lenders of last resort’ to ensure that the banking sector did not implode and would continue to ‘lubricate’ the capitalist economy. In the post-1945 period, they morphed into agencies for ‘managing the economy’ (with little success); and the neoliberal period saw a drive to establish their ‘independence’ from any leftist governments in the interests of finance capital.
As usual, IIPPE had many papers and sessions that I could not include in this short post. But have a look at the IIPPE programme, and perhaps you can follow up on the authors of papers that interest you.
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