to vimothy - have you never heard of sub-contracting?
Of course, outsourcing being one of the key flatteners (to use Friedman's lingo) of the global economy. All I was saying (once again) is that the issue of pay in foreign owned firms is separate to the issue of pay in export-led local industries. It
is separate.
You should expect a foreign owned firm to pay more than a local one, for reasons already mentioned. The internal-market cost of labour, however, is it's "opportunity cost", i.e. the money that an un-skilled worker could make in a non-exporting sector (most probably agriculture). Thus the wages paid by local firms in these exporting sectors are decided by the internal conditions of the particular country from which they have arisen.
all this about the wages being paid in bangladesh clothing factories are derisory and you're saying that the "foreign" companies pay better than "local" companies - well its a well known fact (or at least was - been a few years since i read it) that mnc's subcontract manufacturing of such clothing items to "local" companies. They give them a quota of items that they want made - then they say we're going to pay x amount (which often enough doesnt leave much profit should the "local" company pay a decent wage). then there's a scrap amongst the "local" companies for who gets the contract - and when whoever gets the contract gets it - they try their hardest to maximise profits for themselves (the owners of these local companies) whilst still fulfilling the quota's to spec (under threat of the contract going to someone else unless they deliver) - this is how exploitation generally occurs in the textile industry.
Ok, I will address the issue of outsourcing and its potential benefits and downsides from the perspective of developing world workers in a moment. First I would like to know,
1. Does what you describe actually happen as you describe it, i.e. does H&M simply say "we want
x amount of t-shirts, for the lowest possible price", and then leave it up to the factories to simply bid each other down? I'm not saying that it doesn't happen, or that it's either good or bad, just that I'd like to know more about the specific example you're using. For another e.g., does wage relate negatively to productivity, meaning do firms up their productivity (and so profits) merely by underpaying workers? (Marx suggested something similar, LTV fans will note).
2. More generally, in aggregate, are exports lowering the price of labour in exporting countries in the developing world (because if what you and IdleRich suggest is true, this is what should be happening)?
Two levels of greed - those of the mnc's not wanting to pay much for the batch of goods because they want to make a decent cut on it, and then the local subcontractor with his staff working 20 hours a day for 10p or so, so that he can pocket a fat wad of cash (despicable).
Yawn - it's all about greed, isn't it? Even those workers who come from the country to the costal industrial centres are there because they want to make more money than they have already, because they want to be more affluent. And if the owner makes a profit, so what - as long as it stays in the country and he ploughs it back into his business (increasing productivity, offering more jobs), then that country will benefit.
the thing is that when theres an outcry - as there invariably is, the mnc's can just go "oh we didnt know that subcontractor was also subhuman - we're going to stop using them etc... and just wash their hands of the affair - although this claim to ignorance simply doesnt wash in today's media savvy world.
Yes, that's fucking brilliant -
stop buying exports from poor countries.
all the above is currently being played out with british farmers by supermarkets. Ask any farmer (milk especially) whether the price of their product (farm gate prices) is going up? obviously not. and what about the price in the supermarket - it hasnt gone down as fast as the farm gate prices have, why? because the supermarkets want to squeeze as much profit out of the farmer and consumer as possible whilst still looking as though they are making massive price reductions.
Why should the price of milk be going up anyway? Shouldn't it naturally go down over time?
but who suffers, not just the farmers - but the whole of britain since we lose our farming industry slowly slowly bit by bit - to get outsourced in africa or wherever. (all this takes time btw)
Don't make me laugh. The subsidised farming industry, as well as being an astonishing example of bare-faced hypocrisy ("socialism for the rich, capitalism for the poor"), is also directly responsible for the impoverishment of millions of developing world agricultural workers who could make the same product more efficiently for less money. You "save" the British farming industry (such as it is), yes, but you remove the easiest route out of poverty for the developing world. There's a reason that people describe manufacturing as the "new agriculture".
vimothy, you may then say, well - all the people involved in the farming industry or whatever will have to adapt to survive - and britain will abandon manufacturing (or at least farming - save speciality crops etc...) ok, fine, but then who looks after the countryside, what happens to villages supported by farmers and farmers families who have moved to the city, the bus routes that supply them, post office closures etc.. etc...
theres something disconcerting about the ruthless progress at which we seem to be heading.
Ruthless! But we are talking about a fairer system where poor people are able to produce their goods and sell them at competitive prices in our developed markets. Don't you think that this is a good thing?
for instance what about dutch tulips grown in kenyan villages where they dont have any water because they use it all on the flowers - which are then flown to holland, to be flown around the world? great eh, but there comes a limit.
What, why aren't all the villagers dead? The limit comment is lost on me, BTW.
i think that this mentality of ruthless expansion and production veiled by the arguments "oh its the only system that'll sustain this number or people on the planet", its the only thing that works - is destructive to our planet and not at all sustainable
A global division of labour where each makes the products of his or her comparative advantage and sells them to one another at profit is hardly a ruthless vision, although I do expect to see massive (probably disconcerting for many) growth in the coming years. I think that the real point is not whether the mentality that agrees with this is ruthless, but is it right, plausible, probable, etc.
as for capitalism not being an ideology - i believe it to be so - even if it is known as liberal democracy, free market, free trade or whatever, it influences political decisions on a global scale, and peoples choices in day to day situations
Capitalism is a machine. Liberalism is an ideology. That's how is see it, anyway. I think.
