Capitalism: save your guilt for church.

Naomi Klein’s ‘No Logo’ gives a chilling account of the reality for factory workers in Cavite. Klein portrays the atrocities of what is in effect slave labour as the product of transnational corporations (TNCs) outsourcing production. TNCs can only lower their production costs with the assistance of national governments that eschew regulatory protections seeking the capital to sustain local growth. However, the motivation for governments to waive regulations that protect workers’ rights is not readily apparent. As noted by Klein wages within the export processing zones (EPZs) are barley enough to cover workers’ food, accommodation and transport, it could hardly sustain real growth. Although highlighting this anomaly Klein neglects to provide any substantive reason for the provision of EPZs by the governments of developing countries. Presumably these governments derive profits from some of the many subcontractors that manage the TNCs production and manufacturing.

I realise there are some concerns regarding the dominant position of TNCs, especially in terms of them ceding power from the nation state. Surely an argument in favour of greater power or even sovereignty for the UN or at least support for the WTO and World Bank to affect policy and positive change as they move away from the false assumptions of the ‘Washington Consensus’. But to suggest that a corporation cannot dictate their business endeavours is ridiculous. The same way a newspaper does not produce the paper they print on because they are in the business of selling ideas. It is their choice to do so. These ‘super brands’ should also be free to choose brand management over manufacturing.

In many ways capitalism upholds and embodies many of the fundamental principles of a liberal society. The freedom to acquire property, ownership of that property and the ability to choose the terms of trade for that property, reflect the principles of individual liberty and freedom of choice (see Nozick's work for a proper discussion). However, without state protections this freedom can lead to terrible abuse. Here’s a clip of Noam Chomsky talking about globalisation. One of the issues of globalisation Chomsky highlights is the spread of free trade, neoclassical liberal economic policy and the ‘Washington Consensus’, all of which are more or less the same theory.



What Chomsky says is that free trade has been improperly applied, that it is not free enough. High tariffs on agricultural imports to developed countries restrict the growth of an export industry that developing countries rely upon. Furthermore, and citing the work of Adam Smith, Chomsky points to the restrictions on the movement of people. Ever increasing immigration controls stymie the ability of people to seek the higher wages in developed countries. So that capital flows into developed countries without any equalisation from the movement of people. I think these issues need to be addressed specifically and not just with broad recriminations and repudiation of the capitalist economic system. “Viva la Reforma!” (not revolucion.)