Unravelling the Hidden Underpinnings of Capitalism: revisiting labour regimes and value chains in globalised production

What are the analytical tools with which we can best understand the changing organisation of work in globalised production? This review essay revisits and contextualises critical concepts such as labour regime and value chains as discussed in two recent outstanding publications.

Review Essay

Labour Regimes and Global Production, Edited by Elena Baglioni, Liam Campling, Neil M. Coe, Adrian Smith, Agenda Publishing, 2022

Value Chains: The New Economic Imperialism, By Intan Suwandi, Monthly Review Press, 2019

Among recent publications on global labour studies, two books – Labour Regimes and Global Production (2022) and Value Chains: The New Economic Imperialism (2019) – stand out as significant contributions from multi-disciplinary perspectives: political economy, sociology, international development and human geography. They stimulate current debates and critiques of capitalism by providing a comprehensive conceptual account of labour regimes and global production networks, and relating them to issues of scale, informality, gender, race, social reproduction, ecology and migration.

Most interestingly, the two books reintroduce the key ideas of two prominent Marxist thinkers, Harry Braverman and Michael Burawoy, who in the 1970s engaged in a debate regarding the labour process. While Value Chains: The New Economic Imperialism draws on Braverman’s analysis of the labour process theory (as well as other thinkers such as Harry Magdoff who studied the development of imperialism) in monopoly capitalism, Labour Regimes and Global Production takes Burawoy’s concept of the “factory regime” as its main foundation and approach. Through their works, these two successors of Braverman and Burawoy continue the interesting conversation and contribute to our understanding of the development and critique of capitalism today.

I will refer to the two books in this review as Value Chains and Labour Regimes, respectively. While Value Chains contributes to a detailed theory of the labour process in the context of the global production networks based on empirical findings and its relation to a theory of imperialism, Labour Regimes discusses the notion of labour regimes comprehensively in terms of theoretical developments, methodologies and findings from recent field research. Hence, although they use rather different lenses, the two books complement each other’s viewpoints.


Value Chains – Labour Process and Labour Control


The book Value Chains discusses labour exploitation in the Global South by analysing empirical labour issues in global commodity chains. Global commodity chains or global value chains are a vast and complex network of people, tools and production activities required to create commodities and services and make them available to global markets. This book offers an in-depth empirical analysis of unit labour cost, a measurement that draws closely on Marx’s analysis of exploitation theory, as well as from later thinkers including Samir Amin and Immanuel Wallerstein, who focus on the historical development of capitalism. What is interesting about this book is its solid and clear argument that the multinational corporations are the major culprit behind the labour exploitation in the global production networks, hence the latest form of imperialism.

The book seeks to answer a question, among others: What are the factors that influence the control of the labour process in the current era of monopoly capitalism? According to the author, the dominance and enormous pressure exerted by multinationals on their supplier companies along the global supply chains ultimately has major consequences on the exploitative labour process. Using Braverman’s analysis, Value Chains addresses how labour processes are controlled through labour-employer relations in the context of monopoly capitalism.

Mechanisms of labour control are becoming more complex, which are further complicated by different layers of power relations in each node of value chains. Value Chains explains the control mechanisms of the labour processes as well as the relationship between multinational corporations and their suppliers based on empirical studies in Indonesia. Supplier companies in production countries such as Indonesia are highly dependent on and often pressured by multinational corporations in fulfilling their demands. The book refers to these supplier companies as “seamstresses” – a term used by the Indonesian executives interviewed by the author – who are forced to accept various orders (mostly menial jobs) to survive. Metaphorically, unlike distinguished skilled tailors, seamstresses must accept orders from powerful customers who dictate to them what to do in the process.

The illustration above shows how multinational corporations, mostly from the Global North, accumulate their profit from labour exploitation in the Global South. Multinationals exploit different strategies to operate economically and flexibly, exercising dominant management methods that continue to maintain the dependency of developing countries, and produce a global economic polarisation. The empirical study of Value Chains is a clear example of the latest capitalist mode of production, where the labour process is governed by exploitative capital-labour relations expressed through its organisation of work.

In the era of monopoly capitalism, multinational corporations grew exponentially, both in terms of their global reach and influence, as well as in the way they accumulated profits. East Asia has become a favourite region for multinational corporations. In 2021 the region accounted for 39% of the world’s total gross domestic product (GDP), significantly increased from 28% in 2010 and only 10% in 1980 (see also Chapter 8 of the book Labour Regimes). Value Chains convincingly explains how multinational corporations create exploitative value chains as a new form of imperialism.

Empirically, the book Value Chains shows the rise in foreign direct investment (FDI) that mostly concentrated in the Global South, and the increasing number of arm’s length contracting. Moreover, industrial labour is increasingly concentrated in developing countries, and the number of global supply chain jobs in those countries has also been rising. The three countries most connected to global supply chains are China, India and Indonesia, whereas they export largely to developed countries including the US and Japan.

Value Chains offers interesting findings from a different perspective rarely found in most field research, which generally focuses on substandard working conditions from a labour viewpoint. In contrast, this book, among other themes, shows unequal power relations among firms from the perspective of local capitalists, who point out the dominance of multinationals in global production networks. In the end, these unequal power relations between firms clearly become a major factor that enhances labour exploitation in the Global South.

The case study of Value Chains was conducted in two supplier companies in Indonesia: the first a plastic manufacturer under the pseudonym Java Film, and the second a printing company producing packages for manufacturers – called Star Inc. When assessing their work relations with multinationals, Star Inc’s executives testified that they never had a choice but to comply with buyers’ demands. Likewise, Java Film’s executives also expressed that multinationals are like a big fish that always eats the small ones.

Value Chains clearly shows that exploitative labour processes are highly influenced by the demands given by these suppliers’ clients: the multinationals that are still mainly headquartered in the Global North. The degree of control held by multinationals remains strong within global commodity chains, despite the claim that power has been decentralised in such “buyer-driven chains” – it is even not uncommon for multinationals to pre-determine these suppliers’ profit margins and directly control other aspects of the production processes.

In a small study of the garment industry in Asia in 2019, I also found that unequal power relations exist even between South Korean brokerage companies operating in Southeast Asia and their buyers, i.e., big brands such as Nike. Due to the brands’ dominant and powerful position, it is common for South Korean businesses to literally kiss brand officials’ hands and deeply bow before them in every meeting and business negotiation.


Labour Regimes – Three Waves of Labour Regimes


The book Labour Regimes offers a slightly different approach. Michael Burawoy’s thinking is foundational to the approach of all the authors of the book. It provides a comprehensive analysis of labour regimes, from Burawoy’s account of the factory regime to its latest theoretical development, whereas global commodity chains and global production networks are one of its more recent analytical elements.

Since the debate between Braverman and Burawoy began in the 1970s,1 theories and analyses of labour regimes have developed from different perspectives. The concept of labour regimes is remarkably important in analysing the organisational structure and dynamics of global systems related to production (of commodity) and reproduction (of labour). Labour Regimes explores the intellectual development of labour regime concepts across various disciplines, being discussed in multi-scalar and various approaches.

Similar to Value Chains, the book also offers new insights into the work conditions of global production chains from Amazon’s warehouses and its logistic chains in the United States, to industrial production networks in the Global South (Bangladesh, China, Indonesia, Cambodia, Vietnam, Honduras), and to the dormitory town of migrant workers in Czechia. The book also explores recent mobilisations of labour regime analysis in connection to methods, theory and research practice on the ground. Its approach is to recentre the analysis of global capitalism on the labour regime as the core of networked, scalar systems of economic integration and production.

As explored more fully in Chapters 1 and 12, labour regime analysis has arguably evolved through three broad waves. The first originated in the study of labour processes in Braverman and Burawoy’s work in the 1970s (see footnote 1). In the following years – especially through The Politics of Production: Factory Regimes under Capitalism and Socialism (1985) – Burawoy emphasised how factory regimes analysis reflect a contestation of the politics of production influenced by conspiracy between the state and capital. In terms of scalar, the factory regime was then analysed as a workplace situation influenced by contextualised national economic and political development.

The second wave of labour regime studies developed through the work of economic geographers in the 1990s, who identified a unique local/regional labour regimes analysis that reflected the conditions and relations between production, consumption and reproduction. In this phase, one of the most important studies was by Andrew Jonas on regional control regimes (his article “Local labour control regimes: Uneven development and the social regulation of production” was published in the journal Regional Studies in 1996). In scalar terms, Jonas’ main contribution was an analysis of the labour regimes that recognise the national labour regimes as internally variegated at the local/regional scale, reflecting not only the sub-national tiers of governance and restructuring but also location-specific intersections of labour supply and demand.

In the third wave, labour regimes analysis broadened its perspective and adapted its concepts to the context and development of the global production network. Although global dynamics were already discussed in Jonas’ formulation and analysis during the second phase in the 1990s, they have become more critical in the decades since then, as global production networks have become widespread. This third wave explicitly recognises that the dynamics that affect labour regimes at the national, local and workplace levels are often also the impact of other spatials and regions.

Thus, the labour regime can be conceptualised as a historically constituted multi-scalar phenomenon that results from the articulation of struggles in local social relations that intersect with the practices of multinational corporations (in the Global Production Network) at the scalarity of the workplace. Here, labour regimes are shaped or created not only through local/national processes, but also by the conditions of intra-firm relations (subcontracting, modular production systems and just-in-time production) where they are closely connected in the Global Production Network.

In Chapter 8, the book offers a new approach to the analysis of transnational labour regimes (TLRs) that discusses how multinationals/transnational corporations are increasingly dominant in influencing labour regimes in many Asian countries in the neoliberal era. TLRs in East Asia contribute to uneven regional integration and hamper an upward convergence of labour standards and welfare across the region. With more than 1.8 billion workers, Asia is a continent of labour, where more than 60% of the world’s working population produces surplus value for many transnational corporations.

This analysis of TLRs examines the formation of labour regimes in East Asia, with a case study of the garment industry in Cambodia, which has been the main driver of the country’s economy in the last three decades since its development in 1994. Cambodia is not only dependent on the garment industry because it accounts for one-third of the country’s total GDP, but also because the industry in the country is dominated by more than 700 transnational corporations.

Other empirical studies on the garment industry were conducted in Vietnam, Bangladesh and Honduras (Chapter 11). This chapter shows the relationship between the international dispersion of garment production and labour control regimes, and the relationship between labour control regimes and patterns of labour resistance. The study concludes that where garment production has concentrated in the last decade, has as much to do with labour control regimes as wage policies and other economic factors. There are three main labour control regimes in the global garment industry: state control, market despotism and employer repression. However, these systems of labour control are also conducive to three patterns of labour resistance: wildcat strikes, international accords and cross-border campaigns.

The China and Indonesia case studies (Chapter 12) focus on the garment and footwear industry, examining how labour regimes are shaped by transnational private regulation (TPR) mechanisms, such as codes of conduct initiated by transnational corporations. The chapter explains that the success of TPR mechanisms is inevitably shaped by various and uneven labour regimes that they are deployed within. In China, the “dormitory labour regime” (it is termed “dormitory” since millions of workers live in dormitories and boarding houses provided by the companies) and the related working conditions, tend to be rather pragmatic and superficial of compliance with the TPR requirements.

By contrast, in Indonesia, TPR in a “precarious labour regime” (it is called “precarious” as workers are increasingly insecure and vulnerable despite relatively protective labour regulations) can be used to negotiate for increased minimum wages, freedom of association and to resist workplace flexibility. This was possible because Indonesia has relatively protective regulations, although they are being eroded by the recent enactment of the Omnibus Law on Job Creation.

The garment industry is also the focus of the Bangladesh case study (Chapter 13), where the country’s labour regime is characterised by (1) a strong alliance between employers and the state (as some employers are members of parliament) to control workers and unions; (2) the structural weakness of national trade unions and the lack of workers’ political struggle; and (3) the intervention of international civil society organisations. This chapter focuses on the dynamics of labour governance and labour agency at the national level in Bangladesh, with a labour regime characterised by the relationship between labour, capital, the state and international civil society organisations.

The role of international civil society organisations in the Bangladeshi context is particularly important in the aftermath of the 2013 Rana Plaza tragedy, a nine-story garment factory building collapse that killed more than 1,100 workers. This chapter highlights the importance of the role of international civil society organisations in Bangladesh which embellish further our understanding of the various institutions and actors that make up the labour regime operating within the global production system.

In Chapter 15 on the case study of Amazon workers in the United States, it is explained that the increasing dominance of Amazon as a giant in the global economy driven by the logistics industry is made possible by the wide-ranging and extremely harsh exploitation of racially segregated workers along Amazon’s warehousing chain and logistics operations.


Beyond Production and Factory Gates


In the section on theoretical and methodological developments (Chapters 5-10), Labour Regimes persuasively proposes a new breakthrough in the study of labour regimes. Chapter 5 (“Exploitation and labour regimes: Production, circulation, social reproduction, ecology”), for example, offers an incisive analysis that the study of labour regimes has to go beyond analysis of production, to also include circulation, social reproduction and ecology. They challenge the static and unidimensional understanding of production and labour and situate the analysis of labour exploitation in each sphere of production, circulation, social reproduction and ecology.

While aspects of production and – to some extent – circulation have been part of the analysis of labour regimes since their development in the 1980s, aspects of social reproduction and ecology have generally been overlooked. Indeed, some feminist-Marxist researchers since the 1970s have proposed an analysis of the relationship between production and reproduction, and the value of domestic work in a patriarchal society in analysing the labour regime (such as Silvia Federici who published Wages Against Housework in 1975), but the analysis of such an aspect has not been adequately explored and discussed.

In other words, the analysis of exploitation has been disjoined from workers’ daily lives and from their generational reproduction, both material and cultural. Labour exploitation has also been separated from the ecological relations that make production and reproduction possible. The chapter tries to highlight the aspects of reproduction and nature/ecology that are also central to the analysis of capitalism and exploitation. As a phenomenon, labour regimes also constitute the hidden infrastructure that produces and supplies labour for capital accumulation.

The authors recommend that the immediate strategic move is to recognise and respond to the multiple forms of exploitation, and for the working class to reclaim its role as a key analytical and political subject in the formation of the labour regime. As the authors of this chapter elaborate, the working class is now diverse, and it is increasingly challenging for them to significantly contest capital accumulation.

In his latest work Symbolic Violence: Conversations with Bourdieu (2019), Burawoy, who explores Pierre Bourdieu’s thinking, suggests that the misrecognition of exploitation experiences by workers themselves is a form of symbolic violence for capital accumulation. This condition therefore requires the labour movement to play a central role in resisting all forms of symbolic violence. This central role is not because workers are an “exclusive group”, but because they are the most important factor for the reasons why capital accumulation occurs. Labour is not a sectoral issue or part of the social issues related to the movement of capital, but it is everything about the raison d’etat of capital.2

A breakthrough in the study of these two books can be one of the tools to uncover the complexity of exploitation under the contemporary capitalist system, and reveal its hidden underpinnings.

An earlier version of this review article was published in Jurnal Prisma, Vol 41, No 2, 2022 (in Indonesian). We are republishing this edited version with permission.

  1. In the 1970s, in Labour and Monopoly Capital: The Degradation of Work in the Twentieth Century (1974), Harry Braverman offered a labour process theory as a new Marxian method of inquiry to analyse the historical dynamics of factory restructuring. Braverman attempted to explain the definitive link between the Taylorist approach (which applied scientific management methods of the firm to increase productivity by controlling labour in the workplace) and the trajectory of industrial capitalism and corporate domination. In his book, Braverman points out a historical trend of monopoly capitalism towards the deskilling of labour (what Braverman calls the destruction of craftsmanship) as a means of capital’s control over labour. The automation of work means that workers no longer develop their professional skills, have less control over their working lives, and ultimately become more alienated. Braverman’s analysis highlights the specific ways in which control over labour was orchestrated in the workplace in the era of monopoly capital, to exploit workers for the accumulation of capital. In his work, Braverman also explains the development of monopoly capitalist society and its relationship to the changing structure of work and class in the 20th century. In response to the labour process theory, Michael Burawoy in Manufacturing Consent: Changes in the Labor Process under Monopoly Capitalism (1979) and The Politics of Production: Factory Regimes under Capitalism and Socialism (1985) proposed another unit of analysis and the need for a broader treatment of the “politics of production” that he argues has to go beyond factory gates. Burawoy’s notion of the factory regime seeks to bridge the analysis of (the political effects of) the “labour process” and what he calls the “political apparatuses of production”, particularly the form and orientation of the state and the patterns of labour regulation it creates. The analysis of the factory regime, therefore, is also one of intersections with the political aspects associated with the labour process, namely the negotiation and mutual influence between workers and employers at the workplaces – as well as the role of the state’s broader “political apparatuses” in regulating and intervening in the labour market. Burawoy also describes the factory regime as one that is shaped by four intersecting dynamics: labour processes, conditions of market competition, labour reproduction and state intervention. By analysing these four dynamics, Burawoy distinguishes three types of factory regimes: (1) despotic regimes where there is little or no state protection for workers other than compensation provided by employers; (2) hegemonic regimes where the welfare state provides assistance in the realm of social reproduction, and where workers also benefit from strong trade unions; and (3) regimes of hegemonic despotism, which is the initial contour of what we now know as the era of neoliberal globalisation, where workers become subordinate to the interests of increasingly expansive capital accumulation. Previously, Burawoy also described the early types of factory regimes: company-state regimes, where workers depend entirely on employers for their social reproduction, and regimes of bureaucratic despotism prevalent in socialist countries. By analysing these types of factory regimes, Burawoy wants to point out two important dimensions in the political dynamics of production: the role of employers (who organise the relations of production in the workplace) and the intervention of the state that structures the system and regulation of work. In short, the factory regime is also shaped by the conspiracy of capital and the state, and how the working class responds to it.
  2. Chang, Dae-Oup and Shepherd, Ed, eds. (2005) Asian Transnational Corporation Outlook 2004: Asian TNCs, Workers and the Movement of Capital. Hong Kong: Asia Monitor Resource Centre (Asian TNC monitoring network book series)

Fahmi Panimbang is a labour researcher based in Indonesia. Among his latest publications is “Solidarity across boundaries: a new practice of collectivity among workers in the app-based transport sector in Indonesia” in a newly published edited volume, "Labour Conflicts in the Global South", edited by Andreas Bieler and Jörg Nowak (Routledge, 2022).