Resolving problems with capitalism

Wednesday, December 14, 2005

The Noble Feat of Nike

Nike. It means victory. It also means a type of expensive gym shoe. In the minds of the anti-globalisation movement, it stands for both at once. Nike stands for the victory of a Western footwear company over the poor and dispossessed. Spongy, smelly, hungered after by kids across the world, Nike is the symbol of the unacceptable triumph of global capital. A Nike is a shoe that simultaneously kicks people out of jobs in the West, and tramples on the poor in the Third World. Sold for 100 times more than the wages of the peons who make them, Nike shoes are hate-objects more potent, in the eyes of the protesters at this week´s G8 riots, than McDonald´s hamburgers. If you want to be trendy these days, you don´t wear Nikes; you boycott them.

So I was interested to hear someone not only praising Nike sweatshops, but also claiming that Nike is an example of a good and responsible business. That someone was the ruling Communist party of Vietnam.

Today Nike has almost four times more workers in Vietnam than in the United States. I travelled to Ho Chi Minh to examine the effects of multinational corporations on poor countries. Nike being the most notorious multinational villain, and Vietnam being a dictatorship with a documented lack of free speech, the operation is supposed to be a classic of conscience-free capitalist oppression.

In truth the work does look tough, and the conditions grim, if we compare Vietnamese factories with what we have back home. But that´s not the comparison these workers make. They compare the work at Nike with the way they lived before, or the way their parents or neighbours still work. And the facts are revealing. The average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise.

Ten years ago, when Nike was established in Vietnam, the workers had to walk to the factories, often for many miles. After three years on Nike wages, they could afford bicycles. Another three years later, they could afford scooters, so they all take the scooters to work (and if you go there, beware; they haven´t really decided on which side of the road to drive). Today, the first workers can afford to buy a car.

But when I talk to a young Vietnamese woman, Tsi-Chi, at the factory, it is not the wages she is most happy about. Sure, she makes five times more than she did, she earns more than her husband, and she can now afford to build an extension to her house. But the most important thing, she says, is that she doesn´t have to work outdoors on a farm any more. For me, a Swede with only three months of summer, this sounds bizarre. Surely working conditions under the blue sky must be superior to those in a sweatshop? But then I am naively Eurocentric. Farming means 10 to 14 hours a day in the burning sun or the intensive rain, in rice fields with water up to your ankles and insects in your face. Even a Swede would prefer working nine to five in a clean, air-conditioned factory.

Furthermore, the Nike job comes with a regular wage, with free or subsidised meals, free medical services and training and education. The most persistent demand Nike hears from the workers is for an expansion of the factories so that their relatives can be offered a job as well.

These facts make Nike sound more like Santa Claus than Scrooge. But corporations such as Nike don´t bring these benefits and wages because they are generous. It is not altruism that is at work here; it is globalisation. With their investments in poor countries, multinationals bring new machinery, better technology, new management skills and production ideas, a larger market and the education of their workers. That is exactly what raises productivity. And if you increase productivity - the amount a worker can produce - you can also increase his wage.

Nike is not the accidental good guy. On average, multinationals in the least developed countries pay twice as much as domestic companies in the same line of business. If you get to work for an American multinational in a low-income country, you get eight times the average income. If this is exploitation, then the problem in our world is that the poor countries aren´t sufficiently exploited.

The effect on local business is profound: ´Before I visit some foreign factory, especially like Nike, we have a question. Why do the foreign factories here work well and produce much more?´ That was what Mr Kiet, the owner of a local shoe factory who visited Nike to learn how he could be just as successful at attracting workers, told me: ´And I recognise that productivity does not only come from machinery but also from satisfaction of the worker. So for the future factory we should concentrate on our working conditions.´

If I was an antiglobalist, I would stop complaining about Nike´s bad wages. If there is a problem, it is that the wages are too high, so that they are almost luring doctors and teachers away from their important jobs.

But - happily - I don´t think even that is a realistic threat. With growing productivity it will also be possible to invest in education and healthcare for Vietnam. Since 1990, when the Vietnamese communists began to liberalise the economy, exports of coffee, rice, clothes and footwear have surged, the economy has doubled, and poverty has been halved. Nike and Coca-Cola triumphed where American bombs failed. They have made Vietnam capitalist.

I asked the young Nike worker Tsi-Chi what her hopes were for her son´s future. A generation ago, she would have had to put him to work on the farm from an early age. But Tsi-Chi told me she wants to give him a good education, so that he can become a doctor. That´s one of the most impressive developments since Vietnam´s economy was opened up. In ten years 2.2 million children have gone from child labour to education. It would be extremely interesting to hear an antiglobalist explain to Tsi-Chi why it is important for Westerners to boycott Nike, so that she loses her job, and has to go back into farming, and has to send her son to work.

The European Left used to listen to the Vietnamese communists when they brought only misery and starvation to their population. Shouldn´t they listen to the Vietnamese now, when they have found a way to improve people´s lives? The party officials have been convinced by Nike that ruthless multinational capitalists are better than the state at providing workers with high wages and a good and healthy workplace. How long will it take for our own anticapitalists to learn that lesson?

The Spectator, 7 June 2003

Wednesday, December 07, 2005

Recent discussion

Response to Classes in Capitalism?
Dear person who wrote the Classes in Capitalism?, you said that that lots of workers own computers as "proof" that workers own capital (private property). I have several questions for you:
Do any workers own banks?
Do any workers own factories?
Do any workers own transportation systems?
Do any workers own telecommunication systems?
P.S. Many serfs during feudalism owned small plots of land.
Oh and one more thing. This worker who owned stocks. What percentage of the company did he own? And was he a worker or a foreman?
Leon Trotsky 5:58 PM November 17, 2005
--- My answer (btw. my name is Felix. I forgot to mention.): Those who own banks today are not "workers" today. But they might have been before. (I don't know) I am sure that their parents or grandparents have been. This is even more true for factories, transportation systems and telecommunication systems. Besides, many of these are publicly traded and you can buy your part of them if you like. What I wanted to say was that there is no structural barrier, no law that forbids one man to get rich and provides goods to the other, in free capitalism. Warren Buffett started out as a paper boy. Nobody stops you from starting a company. You can make as much money as you wish. What about Google? Microsoft? McDonalds? KFC? What about J.K. Rowling? She was an unemployed ex-teacher when writing Harry Potter and now she is richer than the Queen. And it is only in capitalism where this sort of change is possible within your lifetime. One thing about owning transportation systems: What do you do when you just bought (or inherited from your rich ancestors for the sake of the argument) a railway system and someone (a 'worker' perhaps) starts an airline. Then that 'worker' becomes a 'capitalist' and the 'capitalist' becomes a 'worker' in your arbitrary definition game. The problem is that this just means that some people have more money than others. It doesn't mean that you can define 'classes' of people where people are stuck and can't come out. And there is also no exploitation. You can change jobs, you can start your own company, you can work as a doctor or lawyer or plastic surgeon and live from your own work without a capitalist or a worker. Of course, this is also only possible in capitalism.
The worker I knew was at the lowest point in the food chain of that company. I know it because I worked with him. I don't know the percentage but it was enough to retire. You only need .1% to be a millionaire several times over. That's because Microsoft is a very rich company. Felix.
So Felix, you are trying to argue that capitalism gives equal opportunity? How narrow-sighted you are! Try telling people who live in Compton, Ethiopia, Haiti, all sweatshop workers and all starving people, that capitalism gives equal oppurtunity! The rich have always had more opportunities than the poor, and this isn't helped by inheritance rights. For no reason other than accident of birth, you get a better opportunity than someone else. As anyone foo' knows, you start off with more money (eg given to you by your parents), you get a better opportunity. And sweatshop workers in Haiti CERTAINLY can't "change jobs... start [their] own company... work as a doctor or lawyer [etc]..." Infinity0 16:52, 25 November 2005 (UTC)
Well, actually the people in Ethiopia and Haiti and all the starving people have horrible living conditions precisely because they do NOT live in capitalism. Read Hernando de Soto's brilliant book 'The Mystery of Capital' on that. I really mean that. It's brilliant. It helped me resolve this issue. They don't have enforcable property rights in these countries. And without these there is no usable capital and therefore no capitalism. The problem is not an unequal distribution of the products of capitalism but an unequal distribution of capitalism. If all poor countries on this planet would vanish suddenly, our standard of living in the rich countries would not change dramatically. If one man builds a house it is his. Is it his fault that others don't have one? No it's not. One man being rich doesn't mean that another man has to be poor. Humans survive by production, not by theft. And Capitalism is the only system that acknowledges this fact. If you earn money, it is rightfully yours. You have earned it. You have worked for it. Therefore it is yours. It doesn't belong to some king or count, it doesn't belong to your country or your fellow man, not even a single part of it. It is yours completely. That's the only thing that is ensured in capitalism. If you work you get to keep the money you earn. Yes, it is true that if you own a company or stocks, it is possible to make money by employing other people to do most of the work. But you still need to have the money, and where did that come from if not from working and saving? And then, still, you can lose your money. Take Enron for example. And the only way to really make more money with the money you already have is to spend it on the tools of other people. Nothing else is owning a company. You own the tools and have the responsibility. Then you hire people to do the work. That, too, is work. But it is also done for you if you just buy stocks. But these CEO are fucking expensive. Yet, they are hired. You can't just hire people in America for a cent an hour. Why? Nobody would do it. Because there is competition between employers for the best work force. Why let someone work for your competition when he can work for you? A CEO is an employee, not an employer. Why doesn't he earn minimum wage, then? Because this is a key position and the competition among companies for the best people is fierce.
Before the advent of capitalism, we in the west were as poor as today's third world countries. At the beginning, children had to work under horrible conditions just to make ends meet for their families. Today, the average 'poor american' owns a TV while people in Africa still suffer hunger. Yes, this is horrible. I can only agree. But the solution is not to steal the TV, but to allow Africa to earn its food. All the wealth we have on earth has to be created and we'd see a real boost in the world economy if todays totalitarian regimes would vanish and be replaced by a country where the basic human right to your own life would be appreciated. Yes, it is right that you have more opportunities if you are rich. And if you are born as Paris Hilton, you have made it without breaking a sweat. But to deny people the right to become and be rich doesn't help anyone. Why can't a parent give all he has to his children? It's rightfully his. He can do with it as he pleases. The fact that there is someone out there who had less luck than you did doesn't give him the right to your money. What do you do with lottery winners, then? That you get rich merely by luck is just as rare as winning the lottery. Wealth, before it can be inherited (or unevenly distributed to the lottery winner), has to be earned. Therefore one man's wealth is not another man's misery.
What system do Brazil, China, Haiti and Ethopia use then? Brazil is certainly capitalist, yet has incredibly horrific ghettos. And what about the US? You seem to ignore the reality. There are many shitholes in the US too. People who are born in those areas do NOT have equal opportunity as everyone else.
If you earn money, it is rightfully yours. You have earned it. You have worked for it. Therefore it is yours. - no shit sherlock? But what about the bastard rich companies who pay sweatshop workers 37c a day for hard work? The workers have to put up with much worse crap than a CEO, and yet the CEO gets more. The whole point is that capitalism does NOT give you what is rightfully yours. When you work for a company you help it make profit. How much is that profit? Variable. But the company only gives you a fixed wage. It may be raised, but only at the whim of the boss, who wants to maximise his profits. In effect, the company steals from you. You do not own (a justified part of) the company, and the end-result of your work becomes the COMPANY's property, who then use it to obtain more profit. That profit is rightfully yours, because you worked for it. However, the company takes it. So you DO NOT get what is rightfully yours.
At the beginning [before capitalism]], children had to work under horrible conditions just to make ends meet for their families. - It saddens me to see that you believe this bullshit. In the 1800s, children worked. In reality, Europe in the 1800s was more capitalist than today. Workers rights', like the minimum wage, and the 8-hour day were won by trade unions and left-wing activists, not capitalists. Before capitalism, there was no child labour, or much much less. It is only democracy which has kept capitalism in check.
Why can't a parent give all he has to his children? It's rightfully his. - why is it "rightfully" the child's? It isn't, the parent is giving it to them only because of accident of birth. That is UNequal opportunity. Wealth, before it can be inherited, has to be earned. - who does the earning? CERTAINLY not the inheritor.
Okay, let's do this more slowly. In the 1800s there was less wealth available. People just didn't have much in general. The pie to be divided was much smaller. Yes, there were some who had more than others. Even way more than others. Same as today. Same as always. But unequal distribution of wealth doesn't exist because of unequal distribution of rights. That's my point. A class structure would mean that some people have more rights than others, by corruption or before capitalism also by birth and by law. And this is the case in the poor countries you have mentioned, which is why they are not capitalist countries. Capitalism means equality in rights. And that's what they don't have. The reason you can't start a company in these countries when you are poor is because it takes 10 years of buerocracy(no kidding, de Soto tested this) and about five times the average yearly income just to legally open a little street store in Haiti. Same with the other countries.
And when you can't do that, you have no choice but get a job somewhere. But it gets even worse. Because these people have no legal title to their property, they can't use it as a collateral for credit. Besides, in unstable countries where property rights are hardly enforced and corruption rules, no outside investor is likely to invest.
This naturally (well, rather unnaturally) leads to a lack of entrepreneurs and therefore to a better position for the companies already in existence. Yes, this is exploitation. I can only agree. But the solution is not to end capitalism, but to start it. That's not capitalism. If the rich have more *rights* than the poor, that's the beginning of injustice. The rich can use their money to expand their power because they can buy their way through law. That's what's wrong and here, I think, we are on the same side. But my argument here is that this is not capitalism. Capitalism doesn't mean that there are companies where some people work and others profit. You have the same in every socialist country. It means that everybody has the legal right to his property and then can start his own company to make those at the top right now live in fear. Saunders (the KFC guy) started out with a small retirement check and an chicken recipe. He was lucky that he lived in America, because had he lived in Haiti, he would have worked his ass off in a government-protected factory for 37 cents. That's the difference between capitalism and a class system.
About equal opportunity. There is none. Never was. Even if you redistribute all the money in the world evenly among people, about five years later, you'll find the same distribution. With other people at the top maybe, but still it is unequal. Why? Because people are different. They are not equal. Some work more. Some have better ideas. Some prefer enjoying their lives. Some are workaholics. Some lust for money. Others don't.
You will never be able to make all people the same. Simply because this is not a good thing. All you need is a good idea, the persistence to realize it and the right to do it. That's all. The money you have is a minor factor.
Next time, please spread out your paragraphs (press ENTER twice). I need to put you straight. Equal rights is not caused by capitalism. Capitalism is an economic system. Democracy (equal rights) is a political system. The two don't even complement each other - in fact, the owners of the big companies would like nothing more than for you to be forced to buy their shit.
So what if people had "less wealth" in the 1800s (whatever that means)? What relevance does that have to any of the points I made? Also, when did ownership of property come into this?? If you are trying to argue against communism, then Karl Marx said nothing about personal (non-capitalist) property. To quote the Communist Manifesto, "Hard-won, self-acquired property! ... There is no need to abolish that: the development of industry has to a great extent already destroyed it..." Abolishing property means abolishing capitalist property, ie. the means of production, which is used to exploit workers. For a more detailed definition and explanation of the differences, see Property is theft! (not by Marx, but by Proudhon. But nevertheless, I did not mention anything about abolishing property, you pulled that one out of thin air.
About your so-called "government protected" factories in Haiti. Who do you think pays the government to "protect" the factories? The OWNERS of those factories, ie the big companies.
Who said anything about making people the same? People are always going to be unequal but capitalism is taking the piss. The richest person owns about 1 trillion times more than the poorest person in the world. You are the one who has been going on and on about how "capitalism gives you what you deserve." Well, does ANYBODY deserve 1 trillion times more than another person??
It looks like your spewing the usual flawed, anti-communist arguments. Why? I'm not even a communist, and have not even made any communist points! Please actually read what I write in detail, without making assumptions. You haven't shown any sign that you've actually read my points about exploitation or inheritance. What do you think? Are they right, or not? Infinity0 12:17, 3 December 2005 (UTC)
Ok. Let's start with inheritance. Yes, if you inherit something, then you haven't earned the money. Someone else has. And he, who owns the money, decides to give it to you. He could also decide to give it to charity or someone else, but he didn't. What's the problem here? It's not your money they distribute, it's theirs. They can do with it as they please.
Just out of curiosity, what should they do?
Alright, now exploitation. I already agreed with you that the rich government protected company owners exploit the workers of Haiti. What else do you want to hear? But they can only exploit them because these people are not given basic rights. If they were, there would be no exploitation.
I brought up the capitalist/communist-issue because as far as I see it, capitalism means just that: Granting everyone basic rights to property and freedom and leaving these people alone, then. Our current system, then, is not capitalism as I see it, but socialism to a great extent, where it is possible to make money by force legally. Like agriculture subsidies for example. Europe pays enough for this to pay a flight around the world for every single cow in Europe. All this with stolen money. This is clearly wrong. But calling this capitalism means attacking the wrong side.
I think we just have different definitions of capitalism. Please name yours. Maybe we can get rid of some of the confusion that way.
It's not your money they distribute, it's theirs. They can do with it as they please. - so, it's not equal opportunity, because equal opportunity means equal starting points. People who die should have their extra assets donated to the public.
But they can only exploit them because these people are not given basic rights. If they were, there would be no exploitation. - what do you think trade-unions and left-wing activists are trying to do? Get worker rights. The eight hour day was won by left-wingers, not right-wingers. If it was up the the owners of the companies, they'd pay their workers the minimum possible. And the big companies can buy power (ie buy the workers' rights away), because they have so much money.
Our current system, then, is not capitalism as I see it, but socialism to a great extent, where it is possible to make money by force legally. - that's not socialism OR communism. Where do you get these twisted definitions from? Please understand that communism is not about taking away your personal property. And if you meant "well it can happen in socialism", it happens in capitalism too, and even more heavily, because a few people have much more money than the rest (ie. large wealth gap). Also, that wasn't what I meant by exploitation. Capitalist exploitation is intrinsic to the employment of wage labour; if you want me to explain I'll do so, but Marx pretty much covers it all. Infinity0 ( talk contribs ) 23:08, 4 December 2005 (UTC)
Again. If you are not allowed to decide what should happen to your belongings after you're dead, what exactly should be done with it? Explain this further. You said that extra assets should be distributed among the public. What are extra assets and who decides this. You? And who is the public? Are families to move out of their houses to move to an appartment? Who gets the cars? What about the playstation? How much wealth do you allow people to have? And why?
Yes, there is no equality of opportunity. I already said that three times. There is equality of rights. There's a difference.
You can't force companies into higher production. It doesn't work. If you had sent today's politicians to the beginning of the 1900's, do you really think they would have been able to raise the general standard of living? With what? Redistribution never creates additional wealth. They could have stolen some money from the rich and given it to some poor people, yes. But they would never have been able to raise the general standard of living. It was low back then. That's not capitalism's fault.
I think here we have opposing views. You think that forcing companies to share is the way to go. I don't. That's because you believe it is exploitation and I don't, I suppose.
I read parts of Das Kapital, but I think that the theory of exploitation in capitalism is false. So, yes, please explain this to me again. Thanks.
As to the rich buying extra rights, yes, that one is wrong. (Something else I already said three times.) It is corruption and it is a crime. You see this as the definition of capitalism, I suppose: The rich do whatever the fuck they want. You never stated it explicitly, so I just have to assume. But that is not the definition any liberal thinker has clung to. And it is not my definition. Corruption is a crime because it is against the principles of capitalism. It's not part of it.
On the socialism/capitalism-thing: We live in a mixed economy today. One part is capitalism, the other is socialism. We have some of both. That's what a mixed economy means.
If the means of production are not privately owned, who owns them? Now don't say the public. Who is the public? Who decides what should be produced? Who maintains the means of production. What happens when something that is produced is not wanted anymore? Who would fire the workers, then? I really don't know how an economy is supposed to work without privately owned companies. Please explain this to me.
When you die, all your property which is not in use or needed by anyone else is given up for public use. Simple as that.
There is nothing in capitalism which says everyone has equal rights. Equal rights is not intrisic to capitalism. Example: slave trade, apartheid, etc, etc.
No, I never said forcing companies/people to share is the way to go. Stop inventing crap.
Worker exploitation in one paragraph, here it goes: A company owner pays a worker a fixed wage for a commodity/service which increases a company's profit (otherwise they wouldn't employ them). The end-product of the worker's labour is taken from him and becomes the company's property, not the worker's, the company then uses it to obtain more profit, which is rightfully the worker's as he has done all the work towards creating that commodity/service. In short, this exploitation arises from the fact that the worker does not own the means of production, and anything he produces is taken away from him (albeit in exchange for a fixed, arbitrary wage). Infinity0 talk 18:02, 6 December 2005 (UTC)
What exactly do you mean by not needed? Who says what is needed and what isn't? What about the family's house? Who decides if the family needs that house?
Capitalism has one single basic premise: Equal rights for everyone. Everything else is not capitalism. There may be companies and workers, but that's not capitalism. Period.
You said that companies have no right to their profits. This implies that they have to give away their money, right? If you don't say what you mean, I have to make assumptions.
My problems with exploitation theory in one paragraph: The company owners own the tools for production. They cost money. They then have these tools used by their workers. These tools are the reason for the high production of the worker, sometimes boosting it up to a hundredfold. How else can one pay higher wages for less work? The worker's labor is not the only source of the value creation. Without the tools, no work could be done effectively. The notion that those with money just make more money is also false. Most of the time, the company owner doesn't even have the money himself but has to borrow it to then pay it back with interest. And in most of the cases, they can't do this in the first year already and end up bankrupt (98% of the cases, to be exact) and the money borrowed is lost. The funny thing is that a big chunk of that money landed in the worker's pockets who then go to work for another employer. In one sentence: If I buy tools (and providing everything for a good job (engineering, etc.) cost about 100.000$ each currently), and then pay all income to the workers, why in the world should I do that in the first place? Then, you can only make money with other people's labor if that labor is geared to a useful purpose, that is: the creation of a value someone is willing to pay more money for than you paid for tools and labor for production (and marketing, legal issues, etc.). This doesn't have to be the case. Actually, most products fail in the market place (again it's over 90%). Getting a good company started is a great achievement.
Something else: What is the alternative you offer to capitalism and how does it differ from socialism?
Who says what is needed and what isn't? - If it's in constant use or not.
Capitalism has one single basic premise: Equal rights for everyone. - OH RLY? I think somebody has their definitions very very mixed up. What the hell do you think CAPITAL is??? And if capitalism is "equal rights", then what is DEMOCRACY? Everything else is not capitalism. - OK, so you're saying free market, private MOP, is not capitalism? BTW, if nobody has private property (communism), that's still equal rights. Capisce?
This implies that they have to give away their money, right? - Yup, for justice, the company should give the profits to its workers instead of its investors. The solution is basically to make it so that companies do have a right to their profits. And the easiest way to do that is for workers to own the company.
These tools are the reason for the high production of the worker - And how did you get the tools? Who built the tools in the first place? Why should you retain the profit from the tools even though somebody else uses them? The worker still produces things without the tools (although less), but tools by themselves can't produce jack. The worker uses the tools to boost his productivity, so he should get a proportion of the profits, but instead capitalists give him a fixed-wage - ie. stealing his profit.
Alternative to capitalism: read below sections on "company ownership" and "LTOV", which is about 5000 words I guess. Have fun! :) Infinity0 talk 21:21, 6 December 2005 (UTC) 13:03, 7 December 2005 (UTC) Sigh! The term equal rights consists of two parts. One is equal, the other is rights. In communism you don't have property rights, that's what rights means here. Equal refers to the rights, the property rights that is. Everyone has the same rights to his property. That doesn't mean that everyone should have equal property nor does it mean that if nobody has rights, that this is a good thing because a lack of rights is equally distributed.
Oh, and here's a link to a page about the principles of liberal thought:
Try it!
Now who's mistaken about the intellectual premises of capitalism? If all you know is Marx, you have no idea. Actually it's worse: You have a wrong idea. I hope this helped.
If I own a 24 million dollar house and my familiy uses it and I die, may they keep it? Please, finally define your terms.
The other workers were paid for the tools. The tools weren't stolen. They were bought. That's the part of the capital owner in the production process. Buying the tools. With his money or money he borrowed. The only reason for a wage increase is increased use of capital. You can only work a given amount of time every year. The productivity of that time is given by the tools you use. Any increase in productivity is due to capital increase or by implementing an idea that allows you to create more with the same capital. This, by the way, is the job of the capitalist. The workers already worked to their maximum in 1900 didn't they? They even worked harder and longer. How can people today work less and still not die of starvation? By increased use of capital and brain power.
This seems to take longer than I thought. I think I'll get an account.