“A merchant has no country.” - Gore Vidal
Over recent years, profits and competition have driven car manufacturing capitalists to abandon Detroit and move to China. Capitalists did not relocate to China primarily to reduce their prices, but rather to increase their profits by reducing their costs. The last 25 years of capitalists moving to China have been years of stunning profits for them.
In Wuhan, the capital of China's Hubei province, the auto factories of Nissan and Honda pay a basic wage of $333 per month. Even lower-tier auto workers in Detroit get $560 per week. No wonder capitalists saw profit gains from moving. But Chinese wages have been rising over recent years because of workers' demands and strikes and because the number of young Chinese workers is shrinking with urbanization and industrialization.
Wages in other Asian locations have not - yet - risen comparably. Average monthly factory wages in Hanoi, Vietnam, are $111; in Phnom Penh, Cambodia, are $82; and in Dhaka, Bangladesh, are $78. Hong-Kong-based bra maker Top Form International closed its Shenzhen, China, factory last year and is expanding production in Phnom Penh. The logic of capitalism has long driven employers to leave the United States, Western Europe and Japan for the lowest-wage countries elsewhere. It now also impels capitalists in China to do likewise. The total gap between manufacturing costs in the United States and China has been reduced by half, and it continues to fall. Wages rising much faster in China than in the United States, plus rising transportation and associated costs, explain this. Cheaper-wage nations are therefore drawing United States, European and Japanese - but now also Chinese - capitalists away from China. Serious difficulties may confront China in the near future. China moved hundreds of millions of people from agriculture to industry, from interior to the coast and from countryside to city during the past 25 years. They developed new needs, desires and expectations. What enabled that was a sustained capitalist growth spurt (with immense costs for other parts of the world). Yet that growth spurt changed its own conditions and thereby undermined its future. When profits drive capitalist enterprises out of China, it will discover the other, uncounted side of "capitalist efficiency." So capitalists leave Detroit for China and then China for Bangladesh. Capitalists' relocation decisions are never about "efficiency."
Capitalism is simply fulfilling its mission - Accumulation. Profit is not used to nourish the things of this Earth but to try and reproduce itself.
Of course, moving from Chicago or Hamburg or Tokyo to Shanghai raised some production costs for capitalists. Products had to be shipped immense distances, loaded and off-loaded, insured and inspected at each point, and so on. Vast energy resources were expended on that transportation. Far less of those resources were needed when production occurred much closer to final consumption. Only because the extra costs of producing in China were less than their gains from paying low Chinese wages did capitalists move there. Nor did laws compel US capitalists to spend any of those extra profits to help US workers, their families or their communities devastated by those capitalists' relocation decisions. Modern capitalism allows capitalists to capture the profit gains of relocation decisions; it does not make them compensate for the losses. There are no capitalists who are concerned with the effect of their actions on their communities or states or nations. By definition, capitalism is about making money, not about benefitting society.
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Over recent years, profits and competition have driven car manufacturing capitalists to abandon Detroit and move to China. Capitalists did not relocate to China primarily to reduce their prices, but rather to increase their profits by reducing their costs. The last 25 years of capitalists moving to China have been years of stunning profits for them.
In Wuhan, the capital of China's Hubei province, the auto factories of Nissan and Honda pay a basic wage of $333 per month. Even lower-tier auto workers in Detroit get $560 per week. No wonder capitalists saw profit gains from moving. But Chinese wages have been rising over recent years because of workers' demands and strikes and because the number of young Chinese workers is shrinking with urbanization and industrialization.
Wages in other Asian locations have not - yet - risen comparably. Average monthly factory wages in Hanoi, Vietnam, are $111; in Phnom Penh, Cambodia, are $82; and in Dhaka, Bangladesh, are $78. Hong-Kong-based bra maker Top Form International closed its Shenzhen, China, factory last year and is expanding production in Phnom Penh. The logic of capitalism has long driven employers to leave the United States, Western Europe and Japan for the lowest-wage countries elsewhere. It now also impels capitalists in China to do likewise. The total gap between manufacturing costs in the United States and China has been reduced by half, and it continues to fall. Wages rising much faster in China than in the United States, plus rising transportation and associated costs, explain this. Cheaper-wage nations are therefore drawing United States, European and Japanese - but now also Chinese - capitalists away from China. Serious difficulties may confront China in the near future. China moved hundreds of millions of people from agriculture to industry, from interior to the coast and from countryside to city during the past 25 years. They developed new needs, desires and expectations. What enabled that was a sustained capitalist growth spurt (with immense costs for other parts of the world). Yet that growth spurt changed its own conditions and thereby undermined its future. When profits drive capitalist enterprises out of China, it will discover the other, uncounted side of "capitalist efficiency." So capitalists leave Detroit for China and then China for Bangladesh. Capitalists' relocation decisions are never about "efficiency."
Capitalism is simply fulfilling its mission - Accumulation. Profit is not used to nourish the things of this Earth but to try and reproduce itself.
Of course, moving from Chicago or Hamburg or Tokyo to Shanghai raised some production costs for capitalists. Products had to be shipped immense distances, loaded and off-loaded, insured and inspected at each point, and so on. Vast energy resources were expended on that transportation. Far less of those resources were needed when production occurred much closer to final consumption. Only because the extra costs of producing in China were less than their gains from paying low Chinese wages did capitalists move there. Nor did laws compel US capitalists to spend any of those extra profits to help US workers, their families or their communities devastated by those capitalists' relocation decisions. Modern capitalism allows capitalists to capture the profit gains of relocation decisions; it does not make them compensate for the losses. There are no capitalists who are concerned with the effect of their actions on their communities or states or nations. By definition, capitalism is about making money, not about benefitting society.
Extracted from here
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