Empire or Bricolage?

Our economy works by investing more money in the areas of highest growth, meaning the areas of economic development that have the highest returns on investments, make the most profit.
This means that the creation of high levels of profit will always be rewarded with increased investment.
The main way our economy generates profit, i.e. surplus revenue over costs, is by undervaluing labor and calling the savings profit.
We don't call it this, in fact it doesn't make sense in normal economics to even think in this way. Labor has the value at the pay people are willing to take for it.
This is the problem with economics. It blinds itself to the obviously political processes that create artificially low values for labor, values that are used to create large surpluses.
For example, the industrial revolution began through hooking unemployed workers desperate for a living to factory work in England. They took wages that were not high for their time or region, in fact they accepted relatively low pay and relatively wretched working conditions.
Now, why might a man do such a thing? The actual answer, known to any student of English history, is that a combination of political factors forced farmers from land, and the same farmers who became and whose children became underpaid workers in the new industrial mills. The main political interventions were the seizure of church lands in England and the eviction of peasants tied to those lands; the privatization of Scottish farmland that had historically been held by an entire family clan, and was only made possible through undemocratic changes in property ownership; and the seizure of common lands held for centuries by villages, shared by all members of village both as supplements for each and a safety net for the poorest among them.
These political interventions created the English worker, who was willing to work well below prevailing wage rates because he had no choice. Indeed, he was willing to work even in a factory, a singularly unnatural creation at the time, likened by many to organs of hell.

Skip ahead a bit to the current world economy. Pick up a business magazine, any business magazine. What are American businessmen talking about these days, what are they so enthusiastic about? Investment in Chinese manufacturing.
There is much talk of our transition to a service economy, but the truth of the matter is, we have simply expanded the bounds of our economy to include regions with artificially low wages. What do I mean by artificially low? Chinese wages are as low as they are because of political intervention by a totalitarian state. Sweatshop workers are created by the seizure of rural lands by local party officials, or as hidden people without legal status because of the Chinese restriction on child-birth, or through the vast network of Chinese prison factories. These are simply the worst cases- Chinese labor law is incredibly arbitrary (as one might expect in a totalitarian state) and workers aren't actually allowed much of the time to exercise simple rights of labor. For instance, walking off a job, or leaving a job if they aren't paid. Or seeking legal remuneration for failure to pay promised wages.
Even in the less morally questionable aspects, cheap Chinese labor is brought as rural workers who come to cities, work for far lower wages than city dwellers would take (or could survive on), and then go home to villages.

This is the basic pattern of capitalism as we live it, forgetting the rhetoric and pedantry that is promoted by rightwing and leftwing ideologues. Pockets of labor are undervalued through political interventions, even beyond the point of basic reproduction relative to local cost of living. The most profitable industries are those dependent upon this dynamic, those who can best exploit a broken pool of labor and extract the largest surpluses (i.e., pay the least for the most work).

The historic left busies itself with the reduction of inequality, meaning bringing these pockets of undervalued labor into an rough equality regarding labor markets, which tends to come with some level of political equality. Remember, since this mechanism begins with political assault, the undervalued labor pool generally has far more nebulous political rights than regular "citizens" (for example, see immigrants and pre-Civil Rights black workers in the US, and the restrictions and abuse of rural Chinese versus urban in the current era).

However, investment merely moves to find another pool of undervalued labor, and the cycle repeats itself. There is no conscious controller here to be addressed with demands of equality- the most egregious short-term profits can always be made by exploiting a brutalized labor force, wherever it happens to be. Are they immigrants beaten by police agents in Michigan? Are they black workers in pre-Civil Rights Carolinas? Are they uprooted peasants living under a central American dictatorship? Are they Chinese workers without political representation of any real sort, forced off land and forbidden even food rations or the right to officially rent a room in a city? It doesn't matter when and where. This method will always succeed in the short term.

It fails in the long term through political agitation on the part of undervalued laborers, as they develop the means to demand higher wages or better treatment, and in the process reduce profits of the industry employing them.

And so then the gaze of investment begins to move elsewhere, as profits reduce and hence investment capital begins to diminish.

Now of course we must remember that the same pool of labor that has worked to enhance its position can easily fall back into devaluation, and this is precisely what is happening in America today. Workers accept longer hours for less pay, and less control over their economic well-being.

So this mechanism doesn't actually elevate living standards on the whole in the long-run, though it does transform them, shift their mode of expression, and create dynamics of tremendous inequality. The living standards of most people in China have fallen tremendously in recent years, even as the cost of buying amorphous widgets has reduced for Americans shopping in big-box retailers. This isn't a net increase- it's a shift, one population enslaved for the benefit of another.

This is the economic logic of Empire, and it is this logic that governs our world.

However, we have of course had progress, based not on simple exploitation but rather on technical diversification of labor and tools. The two are not the same thing, though they might appear so on a balance sheet. This is the hope for humanity, for civilization, it always has been and always will be.

The question, then, the world-historic question, is this:

Is there an economic mechanism that generates innovation distinct from the economic mechanism tied to simple exploitation and extraction of surpluses from undervalued labor as profit? Is there another way to build an economy? What does it look like?

The answer is yes I think, but it appears very different from what we have come to accept as reasonable. If we became a society of innovators, of broadly educated tinkerers, what would our society turn into?

I will offer notes towards answering this question in the course of this writing.