Abstract
This chapter critically reviews the contemporary global production network (GPN) analyses from the perspective of Marxian political economy. The GPN analyses focus on rents created at various nodes of the production network, and it ignores the fact that returns from interventions at specific stages in the value chain are not independent of the entire process of surplus creation and realization. Rents from innovation depend on the movement of the average capital in the particular industry and the way political economy of institutions allow certain ‘scarcities’ remain protected while others being drawn into the realm of competition. The chapter also argues that the GPN analyses hardly explain the dynamics of inclusion and exclusion of firms within such networks. It is argued that the dynamics is primarily governed by the relative position of individual capital and its technical composition with reference to the capital that assumes average levels of technology in that industry at a particular point of time.
Originally published in Agrarian South: Journal of Political Economy, Vol. 6 No. 1 Copyright 2017 © Centre for Agrarian Research and Education for South (CARES), New Delhi. All rights reserved. Reproduced with the permission of the copyright holders and the publishers, SAGE Publications India Pvt. Ltd, New Delhi.
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Notes
- 1.
Rent as originally defined by Ricardo (1973, p. 33) in the Principles of Political Economy and Taxation (Chapter II: ‘On Rent’) as ‘that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil’. Ricardo indicates that rent does not arise because of differential fertility of land but because of differential access to scarce resources. Later on ecnomic rent is referred to any return that a resource attracts over and above the opportunity cost of the use of that resource.
- 2.
Quasi-rents are special type of economic rents that are temporary in nature and arise where the supply of a resource is fixed over the short term but not for a longer term. Discussed in detail in fourth section.
- 3.
In Capital vol. III part II, Marx discusses the distribution of surplus value between competing industrial capitals as well as between other forms of capital including commercial and financial capital and the landowning class. Marx shows how prices are linked to values and can be higher and lower than values. This transformation of values into prices is actually a process of distribution of surplus value between different capitals.
- 4.
For a detailed discussion, see Sheikh (1982).
- 5.
Profit rates within industry and between industry tend to equalize through competition converging towards a general rate of profit for the whole economy in the longer period. This is some average rate of profit accrued by capital that has mean or average composition at a particular point of time. Rent can exist by keeping resources or ‘scarce’ factors away from competition or by restricting access to such resources to other capitals. In fact, the average rate of profit is computed on that portion of social capital which enters the equalization process.
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The author would like to thank the anonymous referees for their valuable comments and suggestions. The usual disclaimer applies.
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Roy, S. (2021). Rent and Surplus in the Global Production Network: Identifying ‘Value Capture’ from the South. In: Jha, P., Chambati, W., Ossome, L. (eds) Labour Questions in the Global South. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-33-4635-2_5
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