Imperialism in the Twenty-First Century. John Smith

TNCs provide job opportunities to eager workers at higher rates of pay than alternative jobs and therefore cannot be said to be exploiting anyone: “If the wages received are actually higher than those available in alternative jobs, even if low according to the critics … surely it seems odd to say that the multinationals are exploiting the workers they are hiring!”⁴⁵ Such charges seem absurd to him because, whatever the level of wages that prevail within a country, if they are market-determined then that is what these workers are worth, and TNCs paying slightly more cannot be accused of exploitation. Whether or not these wages meet the worker’s minimum biological needs, and how hard or long s/he has to work to earn that wage, is irrelevant. Moreover, “By adding to the demand for labor in the host countries, multinationals are also overwhelmingly likely to improve wages all round, thus improving the incomes of workers in these countries.”⁴⁶ Yet, as we shall explore in chapters 4 and 5, nowhere, not even in China, have jobs generated by export-oriented industrialization kept pace with the growth of the labor force, greatly limiting these alleged beneficial effects.

      In a similarly cavalier manner, Bhagwati dismisses charges that there is any problem with hazardous working conditions and violations of labor law in poor countries—or, if there is, none that multinational companies should take responsibility for:

      It is highly unlikely that multinational firms would violate domestic regulatory laws, which generally are not particularly demanding. Since the laws are often not burdensome in poor countries, it is hard to find evidence that violations are taking place in an egregious, even substantial fashion…. Sweatshops are typically small-scale workshops, not multinationals. If the subcontractors who supply parts to the multinationals, for example, are tiny enterprises, it is possible that they, like local entrepreneurs, violate legislation from time to time. But since the problem lies with the lack of effective enforcement in the host country, do we hold multinationals accountable for anything that they buy from these countries, even if it is not produced directly by the multinationals?⁴⁷

      The reality Bhagwati so blithely dismisses is succinctly summarized by UNCTAD:

      Buyer-driven GVCs [Global Value Chains] are typically focused on reduced sourcing costs, and … this means significant downward pressure on labor costs and environmental management costs. Some suppliers are achieving reduced labor costs through violations of national and international labor standards and human rights laws. Practices such as forced labor, child labor, failure to pay minimum wage and illegal overtime work are typical challenges in a number of industries. In addition to downward pressure on wages, the drive for reduced costs often results in significant occupational safety and health violations…. Downward pricing pressure has created economic incentives for violating environmental regulations and industry best practices, leading to the increased release of disease-causing pollutants and climate change–related emissions. Cutting costs by engaging in negative social and environmental practices is a particularly acute trend in developing countries.⁴⁸

      Bhagwati even uses a feminist argument to defend his beloved multinational corporations, and was one of the few to spring to the industries’ defense after the Rana Plaza disaster. Casting around for evidence of the “liberating effect [on] young girls in Bangladesh” of employment in garment factories, he quotes a study on girls’ adolescence in developing countries:

      Unmarried girls employed in these garment factories may endure onerous working conditions, but they also experience pride in their earnings, maintain a higher standard of dress than their unemployed counterparts and, most significantly, develop an identity apart from being a child or wife…. Legitimate income-generating work could transform the nature of girls’ adolescent experience. It could provide them with a degree of autonomy, self-respect, and freedom from traditional gender work.⁴⁹

      This is, to say the least, shallow and one-sided. It casually dismisses the conclusions of decades of feminist-inspired research into “the ways in which apparently modern factory organization drew on, and indeed actively promoted, cultural norms of femininity which helped to legitimate employers’ ‘super-exploitation’ of their predominantly female workforce.”⁵⁰ It forgets that TNCs and their suppliers hire “young unmarried girls” in order to profit from their oppression, not to liberate them from it; and it follows from Bhagwati’s own theories of self-interested, profit-maximizing behavior that employers and politicians, who in Bangladesh are often the same people, have every interest in maintaining the double oppression of women—from which they benefit directly, through even lower wages, and indirectly, by entrenching gender divisions among workers. To this end they counter the potentially liberating effect of female factory employment by using every weapon at hand to perpetuate female submissiveness—including endemic violence, humiliation, and sexual abuse of women workers by male overseers, non-enforcement of laws on maternity leave and childcare, and the use of definitions of “skill” to downgrade women’s labor.⁵¹ This is not to mention the broader ideological offensive, in which promotion of obscurantist religious ideology, which in Bangladesh takes the form of Islamic fundamentalism, is aimed at preventing women workers from seeing themselves, and from being seen by others, as workers rather than housewives, as full and equal members of society rather than as possessions and appendages of present or future husbands.

      The enormous influx of women into factory labor, even in countries like Bangladesh where they have traditionally been confined within the home, will be analyzed in more detail in a later chapter; so too the relation between capitalist exploitation of waged labor and women’s oppression and their performance of unpaid domestic labor.

      THE APPLE IPHONE AND RELATED PRODUCTS are prototypical global commodities, the result of the choreography of an immense diversity of concrete labors of workers in five continents. Contained within each hand-held device are the social relations of contemporary global capitalism.

      Research on the Apple iPod published in 2007 by Greg Linden, Jason Dedrick, and Kenneth Kraemer is particularly valuable because it does something not attempted in the more recent studies cited here. These researchers attempt to quantify the living labor directly involved in the design, production, transportation, and sale of this Apple product, and also report the vastly different wages received by these diverse groups of workers.⁵²

      In 2006, the 30GB Apple iPod retailed at $299, while the total cost of production, performed entirely overseas, was $144.40, giving a gross profit margin of 52 percent. What Linden et al. call gross profits, the other $154.60, is divided among Apple, its retailers and distributors, and—through taxes on sales, profits, and wages—the U.S. government. All of this, 52 percent of the final sale price, is counted as value-added generated within the United States and contributes toward U.S. GDP. Linden et al. found that “the iPod and its components accounted for about 41,000 jobs worldwide in 2006, of which about 27,000 were outside the U.S. and 14,000 in the U.S. The offshore jobs are mostly in low-wage manufacturing, while the jobs in the U.S. are more evenly divided between high-wage engineers and managers and lower-wage retail and non-professional workers.”⁵³

      Just thirty of the 13,920 U.S. workers were production workers (receiving, on average, $47,640 per year), 7,789 were “retail and other non-professional” workers (average wages, $25,580 per year), and 6,101 were “professional” workers, that is, managers and engineers involved in research and development. The latter category captured more than two-thirds of the total U.S. wage bill, receiving, on average, $85,000 per annum. Meanwhile, 12,250 Chinese production workers received $1,540 per annum, or $30 per week—just 6 percent of the average wages of U.S. workers in retail, 3.2 percent of the wages of U.S. production workers, and 1.8 percent of the salaries of U.S. professional workers.⁵⁴ The number of workers employed in iPod-related activities was similar in the United States and China, yet the total U.S. wage bill was $719m and the total Chinese wage bill was $19m.

      A study published by the Asian Development Bank (ADB) in 2010 reported on the first version of Apple’s next big product, revealing an even more spectacular markup: “iPhones were introduced to the U.S. market in 2007 to large fanfare, selling an estimated 3 million units in the U.S. in 2007, 5.3 million in 2008, and 11.3 million in 2009.” The total manufacturing