“the race to the bottom”

SOYMB came across this thoughtful article.

Jeffrey Sachs, well-known author of The End of Poverty, once famously stated, “My concern is not that there are too many sweatshops, but that there are too few.” Similarly Paul Krugman has argued that sweatshops “move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better … so the growth of sweatshop employment is tremendous good news for the world’s poor.” In a New York Times magazine article disturbingly titled Two Cheers for Sweatshops, Nicholas Kristof endorsed this logic by explaining them as “a clear sign of the industrial revolution that is beginning to reshape Asia”. He pointed out that “The simplest way to help the poorest Asians would be to buy more from sweatshops, not less.”

These arguments all turn on one simple idea that sweatshops exist because people are willing to take sweatshop jobs at sweatshop wages. People have a choice in where they go to work, the thinking goes, and sweatshops are often the best deal in town — certainly better than no job at all. If sweatshops didn’t exist, then millions of people would be hungry on the streets. But this assumption entirely misses the crucial point about poverty. People only choose sweatshop jobs because they have been made desperate and given no alternatives for livelihood. So it’s not really a “choice” at all. They are forced by circumstance to sell themselves into sub-human conditions. Sociologists refer to this as the “structural violence” of unemployment.

Most of the people in the so-called third world used to be subsistence farmers who were able to support themselves on the yields of their land. That started to change under late-19th-century colonial regimes. In most places in Africa, Asia, and South America, colonisers initially had a very difficult time getting natives to work in their mines, factories, and plantations. To solve this problem, they either forcibly removed farmers from their land or levied onerous taxes in order to coerce them into seeking wage work, all under the guise of the “civilising mission”. This caused hundreds of thousands of people to move to industrial cities where they constituted a reserve army of workers willing to take whatever job they could find. [Marx called this process "primitive accumulation".]

Beginning in the late 1970s, the World Bank, the International Monetary Fund, and later the World Trade Organisation began pushing new forms of market deregulation — known as “structural adjustment programmes” — on third world governments, requiring them to stop subsidising their agricultural sectors and to allow cheap imported grains into their markets. These neoliberal policies crippled small-scale farming to the point of collapse and created a second wave of people forced to migrate to cities to survive. This happened at the same time as two other crucial structural adjustments. First, protective trade tariffs were drastically reduced, allowing Western corporations to move their operations offshore without paying prohibitive import duties. Second, important labour regulations like collective bargaining rights and high minimum wages were curbed or cut. This created an ideal environment for companies like Nike, Walmart, and General Motors to move their production facilities to places where they get away with paying workers many times less than developed economies would ever allow.

Sweatshops may indeed be preferable to poverty. But instead of taking poverty for granted in the first place, we should question the processes that produce it — the policies that make people desperate. Sweatshops are an easy, unthinking solution, and only make sense if we are ready to bend to the dictates of “market efficiency” and accept exploitation as economically rational. What we need is a new economics.

Unfortunately for the author of the article his alternative "new" economics is a more humane capitalism not any real fundamental change. We are living in a world that has the productive potential to turn out enough to adequately feed, clothe, house, educate and care for the health of every single person on the planet, irrespective of where they live. That this isn’t done today is due to the fact that the production and distribution of wealth is organised on the basis of buying and selling, of trade, whether it is "free" or "fair". Proposals about reforming capitalism is simply ignoring the true nature of capitalism. Capitalism is a ruthless social system whose mode of production cries out for a total overhaul, not patching up. The most far-reaching changes to its rules won't alter one iota its inherent contradictions. These reforms may dampen down the worst excesses of the capitalist profit-seeking, but they can never stop exploitation. Forcing one company to stop employing children or to pay a minimum wage or to allow their workers some rights to orgnise doesn’t address the fundamental issue of general social responsibility. The fact is, whatever sop a corporation may deign to give, whatever concessions any number of corporations may yield, globally there are more people without work, without prospect of work, who are homeless, who are destitute – and who will work longer hours for less pay, who have less bargaining power. Imagine how much change could be brought about with the combined effort and energy of all those dedicated people around the world seeking justice and fairness for all through their single issue campaigns; how much stronger and more powerful the whole when all the separate parts work together for the ultimate single issue, socialism.