Ben Selwyn and Christin Bernhold, Capitalist Value Chains: Labour Exploitation, Nature Destruction, Geopolitics, Oxford University Press, 2025.
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RATING: 85
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The one good thing about global value chain (GVC) analysis, say the authors, is that it recognises that the world economy is global, and so refuses to treat national economies as self-contained units. But that is about it. Otherwise, it has serious shortcomings: it treats individual value chains in isolation from others, lacks a theory of capitalism, and paints a benign picture of value chain-based production as a source of progress and prosperity, ignoring not only the povrty and misery wages it generates but also the unequal global system it produces and the environmental destruction for which it is responsible. Their critical challenge centres on the specifically capitalist character of value chains (hence CVCs), and the effects on labour markets, geopolitics and the environment. ‘CVCs,’ in short, ‘are generating highly exploitative jobs and new forms of poverty, stunting real human development, and destroying the world’s environment’ 5-6); but ‘the GVC mainstream’s theoretical toolbox is not equipped to explain labour exploitation and impoverishment, capital concentration, the destruction of the natural world, and geopolitics’ (9). They aim to do better, and they do, although they miss a trick or two, and fall short in one important respect.
Following a clear and succinct introduction, Chapter 2 outlines the authors’ impeccable ‘class-relational’ theoretical framework in a clear and jargon-free outline of Marx’s capitalist mode of production, and situates CVCs within it: they define CVCs as ‘historically specific sociospatial configurations of capitalist production, based upon and reproduced through international class relations’, and suggest that ‘the underlying class dynamics – the dialectics of exploitation of labour by capital and competition among capitals – tend to be ignored empirically and conceptually within mainstream Global Value Chain (GVC) approaches’ (19). Chapter 3 then offers a fuller critique of the mainstream GVC approach; Chapter 4 (to which Dara Leyden contributes) dissects the World Bank’s pro-CVC 2020 World Development Report, Trading for Development; Chapter 5 reviews the historical role of geopolitics in the making of CVCs, and Chapter 6 connects post-COVID ideas of supply chain resilience to US efforts to contain China. Chapter 7 outlines the notion of ‘immiserating growth’ and applies it to CVCs; Chapter 8 ‘shows how upgrading in CVCs occurs through processes of class differentiation'; Chapter 9 (based again on work by Dara Leyden) argues that any social gains ‘are most likely achieved by workers’ collective actions’; and Chapter 10 outlines the 'environmental toll of capitalist production in general, and CVCs in particular’; Chapter 11 concludes. There is an extensive bibliography with plenty of recent material, and it is easy to see how the text would lend itself to a semester-long teaching programme.
Through the run of chapters devoted to empirical analysis (Five to Ten), the focus is unwaveringly on the capital relation and the antagonistic relationship between capital and labour, as manifested in different ways in the history and operation of value chains. So, the approach to geopolitics’ (Chapter Five) begins with the general proposition that: ‘Capitalist states institutionalize and enforce capital’s ability to extract surplus value from labour’. From there it goes on to the specific manner in which ‘key states – the United States and China – established core technologies and political economic frameworks in which CVCs emerged’ (89). Europe, you may wish to note, gets only a passing mention. Key historical turning points are briskly and effectively reviewed, and the claim that geopolitics have ‘returned’ in the context of the US-China trade and tech war is debunked: ‘geopolitics have always shaped CVCs’ (95). Similarly: ‘Contemporary complaints, principally from Washington, that China is ‘distorting’ markets by state-intervention, represent historically myopic and politically bad-faith misinterpretations of China’s industrial policy - as if vested-interest-policies were not previously, and are not currently, deployed by the US state and its allies’ (101). Notions of resilience, pre- and post-COVID (Chapter Six), similarly hinge on geopolitical goals, and the continued effort to boost the power of lead firms in relation to both supplier firms and workers, while digital technologies are used ‘to enhance capital accumulation (by heightening the rate of exploitation) and capital’s power over labour’ (114). Whether in Mexico’s maquila industry, electronics in China, footwear production in Eastern and Central Europe, or garment production in Cambodia or the UK (case studies, 141-56), the ‘growth regimes that emerge are ‘immiserating’ (Chapter Seven): that is to say, the wages they offer for a normal day are insufficient to cover the social reproduction costs of the individual or family, obliging workers ‘to work health-damaging levels of overtime, multiple jobs, and/or rely on other sources of income’. CVC employment, in short, ‘is predicated upon and reproduces impoverished labour forces’ (134), and generally ‘cannot secure the reproduction of individual CVC workers’ labour power’ (136). The poverty that results is not the consequence of exclusion from global markets, or low productivity, but of ‘adverse incorporation’ (Phillips 2011). The authors attribute it to ‘the exploitative dynamics at the heart of the capital-labour relation’ arising out of ‘capital’s ability and ceaseless quest to extract surplus value from labour’. Immiserating growth, then, is ‘an optimal outcome of CVC development used by capitalist firms to increase the exploitation of workers, and an optimal development strategy from the perspective of many supplier firms and local institutions’ (139). ‘Global wage differentials,’ in summary, in part following Mosley (2008), ‘reflect less in-firm productivity levels than (1) the socially determined costs of wage-labour force reproduction, (2) labour market institutions (that do or do not link wage rates to productivity), and (3) the ability of labouring-class organizations to achieve ‘progressive’ wage settlements’ (141). These core chapters bring out clearly the significance of global value chains as key structuring features of the contemporary capitalist world market, devoted to extracting ever more surplus value from labour.
The following two chapters make useful contributions but in some ways are an awkward fit. In Chapter Eight, Bernhold takes the idea of ‘upgrading’ from the GVC literature and deploys it in relation to changing relations of production and class differentiation in agribusiness in Argentina. However, she focuses, without comment, on a national lead firm, ‘Agro’, and its transformation of national production networks. The soybean industry, with which it is concerned, does of course have significant global and geopolitical characteristics, currently prominent in US-China-Argentina relations (see for example Thomas 2025), but these are not considered here. A trick missed then. In Chapter Nine Leyden notes the manner in which CVC literature on standards and codes of conduct sidelines workers’ agency and class struggle as a means of social upgrading, and references a wide range of excellent sources in doing so, but the weight is too much towards reviewing contending approaches, to the detriment of deeper exploration of empirical evidence that workers’ agency is the primary source of gains for labour, and reflection on variations across different contexts. A useful chapter, but another trick missed: it would have been good to have explored the relationship between forms of labour struggle and their degree of success on the one hand, and predominant patterns of social reproduction on the other. This run of chapters finishes strongly, though. In Chapter Ten, Bernhold as lead author very effectively not only identifies the specific tendencies in global capitalism that bring about environmental destruction, but brings out specific contributing features of CVCs too; and she is particularly acute on the ‘techno-optimism' of the World Bank (220-23).
All in all, then, her account bears out well the claim that ‘mainstream GVC analysis is unable to understand, or is politically oriented towards obscuring, the root causes of systematic capitalist and CVC destruction of the natural world’ (206). But on this and every other topic there is a world of difference between ‘unable to understand’, and ‘politically oriented towards obscuring’, and this takes us back to Chapters Three and Four: the critical reviews of GVC literature in general, and the World Bank’s Trading for Development in particular. On the first, the drift towards pro-capitalist apologetics suggests to me that a better understanding of how to extract more surplus value from labour has gone along with an increasing reluctance to be so impolite as to mention it directly. On the second, more needs to be said.
It is true, of course, that the World Bank aims to promote capitalism on a global scale – after all, it was set up to do just that, and it is no surprise that its ideological stance reflects this consistently. But this does not mean that it does not understand either the driving forces or the inherent contradictions of capitalist development. So, Trading for Development takes a positive view of global value chains. But in presenting it as analytically weak because it is grounded on comparative advantage trade theory, Selwyn, Bernhold and Leyden miss the central theme of every World Development Report from 1978 onwards, this one included: a laser-like focus on the imperative need to extract as much surplus as possible from as many workers around the world as possible, and a concomitant need to manage the inevitable contradictions that ensue as best one can. I suggested a long time ago, on the basis of detailed analysis of the run of reports from 1990 to 2001, that the Bank’s basic goal was the proletarianization of the world’s poor (Cammack 2002), and if anything this orientation has been reinforced since (Cammack 2022). So first, it is risky to look at a single report out of context – the one that preceded Trading for Development, The Changing Nature of Work, for example, argued that if there was a danger that new technology might produce unequal opportunities and divisive outcomes, it was because not all workers were equally available to be exploited productively by capital, and it dwelt at length in chapter after chapter on various means by which their productive induction into wage labour might be brought about. This one complements it. Second, in point of fact the focus of Trading for Development is as much on production as it is on trade; and insofar as it is on trade, it is addressed as a means to global competitiveness and the disciplines it entails. It does not take a narrow or static view of comparative advantage, but a dynamic view focused primarily on a different factor of production - labour - and active state intervention aimed at addressing imperfections in labour markets. In short, it sees global value chains as primary instruments for boosting competitiveness and extracting more surplus value from more workers.
Selwyn, Bernhold and Leyden do actually quote the sentence that best expresses the core argument of the report, and include the reference to the working paper behind it:
‘For example, the report states that global value chains “have contributed to lower inflation via downward pressures on labour through heightened competition across countries to attract tasks, in particular when low-wage countries are integrated in supply chains” (World Bank 2020, 106; see Andrews et al. 2018)’ (68).
However, they not only present this as an inadvertent admission rather than the basis of World Bank doctrine, but altogether miss its meaning. Andrews, Gal and Witheridge, all employed in the OECD’s Economics Department, were interested in the impact of greater GVC integration on inflation in the (relatively high labour cost) countries importing goods produced in such chains. So, they argued that ‘rising integration in global value chains (GVCs) has placed downward pressure on producer price inflation, by increasing the ability of firms to substitute domestic inputs with cheaper foreign equivalents’, and, crucially, went on: ‘Next we dig deeper into the channels, which suggests that increased GVC participation may have contributed to lower inflation via downward pressures on unit labour costs (through raising productivity and reducing wages) in the importing country, especially when low-wage countries are integrated in supply chains’ (Andrews et al 2018: 6, emphasis mine). And as elaborated later: ‘Stronger integration into GVCs can lead to lower domestic prices via several channels … . It can put downward pressure on wage growth through the use of foreign workers embodied in inputs who thus become more direct competitors to domestic workers. Moreover, a wider pool of foreign suppliers enables domestic firms to access better quality and/or cheaper imported inputs which may further decrease output prices. Stronger GVC integration can also raise productivity, which together with lower wages reduces unit labour costs’ (21).
The moral: the World Bank knows very well what is to be done. And although it may not use the term ‘capital relation’, it knows very well what it is, and which side it is on.
References
Andrews, Dan, Gal, Peter, and Witheridge, William. 2018. ‘A Genie in a Bottle? Globalisation, Competition and Inflation’, Economics Department Working Papers, No. 1462, OECD.
Cammack, Paul. 2002. ‘Attacking the Poor’, New Left Review, 2/13, Jan-Feb, pp. 125-134.
Cammack, Paul. 2022. The Politics of Global Competitiveness, Oxford University Press.
Mosley, Layna, 2008. ‘Workers’ Rights in Open Economies: Global Production and Domestic Institutions in the Developing World’. Comparative Political Studies, 41, 4-5, pp. 674–714. doi: 10.1177/0010414007313119.
Phillips, Nicola, 2011. ‘Informality, Global Production Networks and the Dynamics of “Adverse Incorporation”’. Global Networks, 11, 3, pp. 380–397. doi: 10.1111/j.1471-0374.2011.00331.x.
Thomas, Patrick. 2025. ‘How the Lowly Soybean Got Trapped in the Crossfire of the U.S.-China Trade Wars’, Wall Street Journal, 6 November.
WDR 2020, World Development Report 2020: Trading for Development in the Age of Global Value Chains, World Bank.
Following a clear and succinct introduction, Chapter 2 outlines the authors’ impeccable ‘class-relational’ theoretical framework in a clear and jargon-free outline of Marx’s capitalist mode of production, and situates CVCs within it: they define CVCs as ‘historically specific sociospatial configurations of capitalist production, based upon and reproduced through international class relations’, and suggest that ‘the underlying class dynamics – the dialectics of exploitation of labour by capital and competition among capitals – tend to be ignored empirically and conceptually within mainstream Global Value Chain (GVC) approaches’ (19). Chapter 3 then offers a fuller critique of the mainstream GVC approach; Chapter 4 (to which Dara Leyden contributes) dissects the World Bank’s pro-CVC 2020 World Development Report, Trading for Development; Chapter 5 reviews the historical role of geopolitics in the making of CVCs, and Chapter 6 connects post-COVID ideas of supply chain resilience to US efforts to contain China. Chapter 7 outlines the notion of ‘immiserating growth’ and applies it to CVCs; Chapter 8 ‘shows how upgrading in CVCs occurs through processes of class differentiation'; Chapter 9 (based again on work by Dara Leyden) argues that any social gains ‘are most likely achieved by workers’ collective actions’; and Chapter 10 outlines the 'environmental toll of capitalist production in general, and CVCs in particular’; Chapter 11 concludes. There is an extensive bibliography with plenty of recent material, and it is easy to see how the text would lend itself to a semester-long teaching programme.
Through the run of chapters devoted to empirical analysis (Five to Ten), the focus is unwaveringly on the capital relation and the antagonistic relationship between capital and labour, as manifested in different ways in the history and operation of value chains. So, the approach to geopolitics’ (Chapter Five) begins with the general proposition that: ‘Capitalist states institutionalize and enforce capital’s ability to extract surplus value from labour’. From there it goes on to the specific manner in which ‘key states – the United States and China – established core technologies and political economic frameworks in which CVCs emerged’ (89). Europe, you may wish to note, gets only a passing mention. Key historical turning points are briskly and effectively reviewed, and the claim that geopolitics have ‘returned’ in the context of the US-China trade and tech war is debunked: ‘geopolitics have always shaped CVCs’ (95). Similarly: ‘Contemporary complaints, principally from Washington, that China is ‘distorting’ markets by state-intervention, represent historically myopic and politically bad-faith misinterpretations of China’s industrial policy - as if vested-interest-policies were not previously, and are not currently, deployed by the US state and its allies’ (101). Notions of resilience, pre- and post-COVID (Chapter Six), similarly hinge on geopolitical goals, and the continued effort to boost the power of lead firms in relation to both supplier firms and workers, while digital technologies are used ‘to enhance capital accumulation (by heightening the rate of exploitation) and capital’s power over labour’ (114). Whether in Mexico’s maquila industry, electronics in China, footwear production in Eastern and Central Europe, or garment production in Cambodia or the UK (case studies, 141-56), the ‘growth regimes that emerge are ‘immiserating’ (Chapter Seven): that is to say, the wages they offer for a normal day are insufficient to cover the social reproduction costs of the individual or family, obliging workers ‘to work health-damaging levels of overtime, multiple jobs, and/or rely on other sources of income’. CVC employment, in short, ‘is predicated upon and reproduces impoverished labour forces’ (134), and generally ‘cannot secure the reproduction of individual CVC workers’ labour power’ (136). The poverty that results is not the consequence of exclusion from global markets, or low productivity, but of ‘adverse incorporation’ (Phillips 2011). The authors attribute it to ‘the exploitative dynamics at the heart of the capital-labour relation’ arising out of ‘capital’s ability and ceaseless quest to extract surplus value from labour’. Immiserating growth, then, is ‘an optimal outcome of CVC development used by capitalist firms to increase the exploitation of workers, and an optimal development strategy from the perspective of many supplier firms and local institutions’ (139). ‘Global wage differentials,’ in summary, in part following Mosley (2008), ‘reflect less in-firm productivity levels than (1) the socially determined costs of wage-labour force reproduction, (2) labour market institutions (that do or do not link wage rates to productivity), and (3) the ability of labouring-class organizations to achieve ‘progressive’ wage settlements’ (141). These core chapters bring out clearly the significance of global value chains as key structuring features of the contemporary capitalist world market, devoted to extracting ever more surplus value from labour.
The following two chapters make useful contributions but in some ways are an awkward fit. In Chapter Eight, Bernhold takes the idea of ‘upgrading’ from the GVC literature and deploys it in relation to changing relations of production and class differentiation in agribusiness in Argentina. However, she focuses, without comment, on a national lead firm, ‘Agro’, and its transformation of national production networks. The soybean industry, with which it is concerned, does of course have significant global and geopolitical characteristics, currently prominent in US-China-Argentina relations (see for example Thomas 2025), but these are not considered here. A trick missed then. In Chapter Nine Leyden notes the manner in which CVC literature on standards and codes of conduct sidelines workers’ agency and class struggle as a means of social upgrading, and references a wide range of excellent sources in doing so, but the weight is too much towards reviewing contending approaches, to the detriment of deeper exploration of empirical evidence that workers’ agency is the primary source of gains for labour, and reflection on variations across different contexts. A useful chapter, but another trick missed: it would have been good to have explored the relationship between forms of labour struggle and their degree of success on the one hand, and predominant patterns of social reproduction on the other. This run of chapters finishes strongly, though. In Chapter Ten, Bernhold as lead author very effectively not only identifies the specific tendencies in global capitalism that bring about environmental destruction, but brings out specific contributing features of CVCs too; and she is particularly acute on the ‘techno-optimism' of the World Bank (220-23).
All in all, then, her account bears out well the claim that ‘mainstream GVC analysis is unable to understand, or is politically oriented towards obscuring, the root causes of systematic capitalist and CVC destruction of the natural world’ (206). But on this and every other topic there is a world of difference between ‘unable to understand’, and ‘politically oriented towards obscuring’, and this takes us back to Chapters Three and Four: the critical reviews of GVC literature in general, and the World Bank’s Trading for Development in particular. On the first, the drift towards pro-capitalist apologetics suggests to me that a better understanding of how to extract more surplus value from labour has gone along with an increasing reluctance to be so impolite as to mention it directly. On the second, more needs to be said.
It is true, of course, that the World Bank aims to promote capitalism on a global scale – after all, it was set up to do just that, and it is no surprise that its ideological stance reflects this consistently. But this does not mean that it does not understand either the driving forces or the inherent contradictions of capitalist development. So, Trading for Development takes a positive view of global value chains. But in presenting it as analytically weak because it is grounded on comparative advantage trade theory, Selwyn, Bernhold and Leyden miss the central theme of every World Development Report from 1978 onwards, this one included: a laser-like focus on the imperative need to extract as much surplus as possible from as many workers around the world as possible, and a concomitant need to manage the inevitable contradictions that ensue as best one can. I suggested a long time ago, on the basis of detailed analysis of the run of reports from 1990 to 2001, that the Bank’s basic goal was the proletarianization of the world’s poor (Cammack 2002), and if anything this orientation has been reinforced since (Cammack 2022). So first, it is risky to look at a single report out of context – the one that preceded Trading for Development, The Changing Nature of Work, for example, argued that if there was a danger that new technology might produce unequal opportunities and divisive outcomes, it was because not all workers were equally available to be exploited productively by capital, and it dwelt at length in chapter after chapter on various means by which their productive induction into wage labour might be brought about. This one complements it. Second, in point of fact the focus of Trading for Development is as much on production as it is on trade; and insofar as it is on trade, it is addressed as a means to global competitiveness and the disciplines it entails. It does not take a narrow or static view of comparative advantage, but a dynamic view focused primarily on a different factor of production - labour - and active state intervention aimed at addressing imperfections in labour markets. In short, it sees global value chains as primary instruments for boosting competitiveness and extracting more surplus value from more workers.
Selwyn, Bernhold and Leyden do actually quote the sentence that best expresses the core argument of the report, and include the reference to the working paper behind it:
‘For example, the report states that global value chains “have contributed to lower inflation via downward pressures on labour through heightened competition across countries to attract tasks, in particular when low-wage countries are integrated in supply chains” (World Bank 2020, 106; see Andrews et al. 2018)’ (68).
However, they not only present this as an inadvertent admission rather than the basis of World Bank doctrine, but altogether miss its meaning. Andrews, Gal and Witheridge, all employed in the OECD’s Economics Department, were interested in the impact of greater GVC integration on inflation in the (relatively high labour cost) countries importing goods produced in such chains. So, they argued that ‘rising integration in global value chains (GVCs) has placed downward pressure on producer price inflation, by increasing the ability of firms to substitute domestic inputs with cheaper foreign equivalents’, and, crucially, went on: ‘Next we dig deeper into the channels, which suggests that increased GVC participation may have contributed to lower inflation via downward pressures on unit labour costs (through raising productivity and reducing wages) in the importing country, especially when low-wage countries are integrated in supply chains’ (Andrews et al 2018: 6, emphasis mine). And as elaborated later: ‘Stronger integration into GVCs can lead to lower domestic prices via several channels … . It can put downward pressure on wage growth through the use of foreign workers embodied in inputs who thus become more direct competitors to domestic workers. Moreover, a wider pool of foreign suppliers enables domestic firms to access better quality and/or cheaper imported inputs which may further decrease output prices. Stronger GVC integration can also raise productivity, which together with lower wages reduces unit labour costs’ (21).
The moral: the World Bank knows very well what is to be done. And although it may not use the term ‘capital relation’, it knows very well what it is, and which side it is on.
References
Andrews, Dan, Gal, Peter, and Witheridge, William. 2018. ‘A Genie in a Bottle? Globalisation, Competition and Inflation’, Economics Department Working Papers, No. 1462, OECD.
Cammack, Paul. 2002. ‘Attacking the Poor’, New Left Review, 2/13, Jan-Feb, pp. 125-134.
Cammack, Paul. 2022. The Politics of Global Competitiveness, Oxford University Press.
Mosley, Layna, 2008. ‘Workers’ Rights in Open Economies: Global Production and Domestic Institutions in the Developing World’. Comparative Political Studies, 41, 4-5, pp. 674–714. doi: 10.1177/0010414007313119.
Phillips, Nicola, 2011. ‘Informality, Global Production Networks and the Dynamics of “Adverse Incorporation”’. Global Networks, 11, 3, pp. 380–397. doi: 10.1111/j.1471-0374.2011.00331.x.
Thomas, Patrick. 2025. ‘How the Lowly Soybean Got Trapped in the Crossfire of the U.S.-China Trade Wars’, Wall Street Journal, 6 November.
WDR 2020, World Development Report 2020: Trading for Development in the Age of Global Value Chains, World Bank.