Off-shoring, transfer pricing, financialization, and the profitability of U.S. firms

Some time ago, I had a conversation with a colleague about the ways in which the ostensible financialization of large U.S. firms reflected, or was even just an epiphenomena, of the internationalization of production chains. Reading the chapters for Brenner's class today, I was reminded of this, because I think one could make a case that the disagreement between Brenner and, say, Panitch and Gindin comes down to very different views of financialization. Basically, is the outsized share of financial profits in the U.S. economy since the 80s just froth, i.e. paper returns enabled by the expansion of paper purchasing power that by necessity must end in a 1-for-1 deflation sooner or later, or is it an alternative mode of accumulation (albeit no less contradictory than other modes of capitalist accumulation, or if anything more so)? The problem is that as stated, both positions aren't really viable. Brenner's claim, I think, is overly focused on consumer finance, i.e. debt as crutch for consumption, which is certainly important but overlooks the growing importance of financial income for even nonfinancial corporations (or, at most, just assumes that the latter is the flipside of the former, pointing to auto financing and the like). The alternative claim just remains kind of mystical -- "financial profits" do in fact need to come from somewhere, and I've never seen much concrete evidence for Harvey's suggestion that it's "accumulation by dispossession." (Hell, I've never even been quite clear what he means by that.)

If it is the case that much "financialization" is just the accounting manifestation of expansion of overseas subsidiaries and of offshore subcontracting, then it seems to me that an analysis of this could shed a lot of light on this rather state debate. Do Brenner's calculations of the rate of profit properly take into account the total returns U.S. capital earns, taking into account the full production chain? Is U.S. capital in fact earning a healthy global rate of return, or is all of this internationalization of production (and the tax-accounting tricks that accompany it) just a further manifestation of the diminishing-returns scramble to cut costs in the face of over-competition that Brenner diagnosis as the root cause of the crisis that began in the 70s? On the other side, if this is the real source of the profitability of "financial" strategies, is it even valid to call it an "alternative mode of accumulation"?

Counterfactuals about the decline of the U.S. labor movement

Had the "rank and file rebellion" of the late 60s and 70s successfully taken control of a significant number of unions, would the later trajectory of U.S. politics and the labor movement have been different?

At least 4 possibilities, from leadership mattering a lot to not at all:

1. Substantial difference in political balance of 1980s, thus blunting the edge of the capital assault and retrenchment in various ways
2. Neoliberal gains could have been "slowed down," perhaps preserving some greater degree of organizational capacity for labor
3. The institutional weakness of the American labor movement was institutionally "baked in" to the form in which it coalesced by the mid-20th century. In particular, the existence of the South as a non-union region, locked in by Taft-Hartley, fatally weakened the (northern and western) labor movement.
4. The structural conditions of post-crisis world capitalism fundamentally restricted possibilities. Namely, competitive pressures in the context of world industrial over-capacity and the threat of capital mobility sharply limited the leeway for what labor could ever have won.

Some key questions

1. Was there a sufficient recovery of profits and accumulation, by say the late 80s, such that there was some "surplus" labor could have won?
2. If a more tenacious labor movement had raised the cost of the the straightforward labor-squeezing strategy adopted by many U.S. firms, what would have been their response? Would they have invested more in productivity improvements, or would they have just moved south or overseas more quickly?
3. Would the U.S. have needed German-like institutions to achieve a German-like "high road" trajectory of maintaining industrial competitiveness?