Title: Are Sweatshops
the dream?
Globalization is good
for LDCs
A)
Introduction
According to Allen (1995), Globalization
is a worldwide phenomenon that affects our economic, social as well as our
political lives as there is the intensification of global interconnectedness.
It is a dual process of global convergence and global divergence. Neo-liberal
argument claim that globalization will result in a uniform world and aid in the
development of poorer countries (Potter, 2004). Yet there are views of
anti-globalization asserting that world poverty and inequality have been
rising, not falling (Wade, 2004).
The focus of the essay will be on
Transnational Corporations (TNCs) as they represent the most significant factor
in driving global shifts and changes in how production are organize. In 2000,
“the top 100 TNCs had assets of $2 trillion” (Orock, 2013). TNCs account for
approximately two-thirds of the world exports of goods and services. However,
in the process, there is marginalization. Investments channeled are spatially
uneven with 49 least developed countries (LDCs) receiving only 0.3% of Foreign
Direct Investment (FDI) in 2000 (Potter, 2004). One of the most contentious
aspects of FDI through the dependency theories would be the location of
factories, as the TNCs can easily relocate to exploit low cost without
promoting national development (Kiely, 2008). Sweatshops that are factories
which do not adhere to “safety standards, minimum wage laws and legislated
working conditions, etc” (Chartier, 2008) set up by TNCs are distinct
representations of globalization forces oppressing the poor and harming local
economies (Meredith & Hoppough, 2007).
The issue that revolves around globalization
is often its positive and negative effects on the world. Yet, it is pointless
to argue for a verdict on globalization as effects are differentiated across
the world (Basu, 2006). Similar to Basu, this essay will be from the standpoint
that Globalization is potentially beneficial for all. Firstly, I contend that
globalization is potentially good for LDCs even though they are marginalized in
the recent years by exploring the benefits of globalization with the concept of
place. Next, I will be investigating the
necessities of sweatshops and the positive effects of sweatshops to show that TNCs
can be good for LDCs.
B)
TNCs
are potentially good for LDCs.
Many
governments and world organizations like the World Bank, International Monetary
Fund and World Trade Organization support globalization as they see the role of
globalization in enhancing global development (Potter, 2004). The World Bank
studies claim that more globalized countries had faster economic growth, higher
poverty decline rates and more equality. This assertion is base on countries
like China, South Korea, Hong Kong and Taiwan who benefit significantly by
adopting free trade and plugging themselves into the world economy (Wade,
2004). Yet, globalization could lead to
increase in marginalization and exploitations of LDCs. This is evident as the
Africa is sidelined in the “corporate-led globalization” as amongst the 100
largest TNCs in 2000, none are own by African countries. Also, the total wealth
of top 5 TNCs was more than 46 poorest countries where majority are located in
Africa (Orock, 2013).
A
geographical lens is useful in the analysis of the failure of TNCs to bring
about benefits to LDCs. The “crux of geography is that it deals with the
spatial manifestations of a phenomenon”. The developing world is divided into
the Newly industrialized economies called the Asian tigers as well as the LDCs
whom seem to not benefit from the increasingly connected world economy. The
concern of geography would be the “uniqueness of place” (Yeboah, 2007). One of
the reasons behind the spatial variation of successes would be the unique state
interventions by the Asian Tigers. The success of the Asian Tigers cannot be
wholly attributed to the opening of their economies. In fact, they were able to reap the benefits
of globalization due to protectionist stance in early years, which helped them
grow their domestic businesses before they were exposed to foreign competition.
They only begin to liberalize trade when they economies started to grow (Wade,
2004).
Through
this example of the Asian Tigers, we see the possibilities of globalization having
the potential to do good for LDCs. I agree with Orock (2013)’s opinion that we
should not make judgment of globalization as it “promises nothing to poorer
countries or richer countries unless actors involved conduct themselves in ways
that will deliver on expectations.” This view also coincides with Basu (2006)
and Kiesly (2008) that there is a need for strategies to “convert potential
benefits to actual benefits”. Thus, TNCs
can bring benefits to LDCs even though the benefits are unevenly distributed.
Moving on, it is pertinent to address the
concerns of Sweatshops, a form of FDI channeled into LDCs to exploit lower cost.
They are common features of TNCs in the manufacturing sectors of LDCs and the
core of todays’ dispute on globalization concerning global labor practices.
C)
Sweatshops
as the next best alternative
There is a divided view on the benefits
of sweatshops. On one side of the argument, supporters of sweatshops like Harvard
economist Jeffrey Sachs claimed that “there is too few sweatshops” and Paul
Krugman from MIT claimed that the “overwhelming mainstream view among
economist” is that such employment are beneficial for LDCs (Levinson, 1997). On
the flipside, due to the dangerous conditions and the exploitation of workers
with the denial of human rights in the factories, many have campaigned against
sweatshops. Defenders of sweatshops like Kristof (2009), condemns the banning
of sweatshops, as it destroyed the next best livelihood of the poor people in
LDCs. He argues that even though conditions are bad in sweatshops, people still
hope to have a chance to work in one of those factories, as it is comparatively
better than living off rubbish scavenged from dumps. According to Zwolinski
(2007), the wages paid by sweatshops are higher than wages paid by other local
firms in LDCs. Moreover, sweatshop wages are “three to seven times as high as
the national income in Dominican Republic, Haiti, Honduras, and Nicaragua”. Such evidences suggest that sweatshops might
not be considered as exploitation as it is beneficial for both sweatshop workers
and TNCs as conditions in domestic factories tend to be worse then TNCs
operated ones (Chatier, 2008). Thus, the blame on TNCs for harming workers may
not be justifiable as at least they improving the lives of the workers but just
not to the extend that people expect it should be (Zwolinski, 2009).
D)
Development
as Freedom:
Sen’s
notion of development as freedom coincides with the benefits of sweatshops.
Fundamentally, his definition of freedom is more than the gross domestic
product of a nation but should be measured by other means like gender
inequality, political freedom, economic opportunities, etc. Also, according the
United Nation Developmental report, the measure of human development is more
than national income instead it should include creating an environment that
people can perform autonomy where “development is about expanding the choices
of people have to lead the lives they value” (Potter, 2004). All these aspects of development mentioned can
be achieved through sweatshops
Zwolinski(2007)
argue that the choice made to work and accept the conditions in a sweatshop is
“morally significant” as it is an “exercise of their autonomy and as an
expression of their preferences”. The availability of sweatshops enable people
to make respectful choices whereby taking up the job enables them to survive,
earn enough to provide education for their children and even escape poverty. Thus
sweatshops provide opportunities for the people in LDCs to have the freedom to
have a choice out of poverty and improve their lives. If such opportunities
were stripped off due to the ban on sweatshops, the next best income could be
returning to dumps or farms where the pay is much lesser. Even though by the
developed countries standards, it is considered immoral for labor exploitation
yet critics fail to consider what alternative opportunities can be created
apart form sweatshop work (Chatier, 2008). Thus, when we look at sweatshops it
is important to not overlook its significance in the lives of the poorest
people
Apart
from gaining economic freedom, gender equality is also achieved through
sweatshops. In Bangladesh, many Muslims believed that single women should not
work which result in the unfreedom of Muslim women. However, TNCs played an
important role in liberalizing women into the workforce where now “95% of the
1.4 million garment sector employees are women” in Bangladesh. TNCs’ influence
on gender equality is also evident in Asia, Latin America and Mexico where
working have shown to help women “gain control over their lives”, and give them
more power in the patriarchal societies (Moran, 2002). Apart from empowering
women, Moran also highlighted the trickle-down effects of the increase in
income onto the women’s family, which improves standard of living. There would
be more disposable income for “ health, nutrition and education” which can help
break the intergenerational poverty cycle. As a result, we should see
sweatshops and TNCs in a new light, even though they may seem exploitative,
various freedoms are achieved through their activities which is good for LDCs.
E)
Temporality
of sweatshops
Interestingly,
Kristof assures that sweatshop work is transitory. He claims that all countries
have to go through “sweatshop phase” during industrial growth (Rothstein,
2005). Many mainstream economists suggest that the dreadful working conditions
around the world is “unavoidable” due to the nature of the global economy (Chatier,
2008). Most importantly, many nations have managed to move up the production
chain to higher profit and higher skilled production hence increasing income of
workers. For example, China was once a sweatshop nation where TNCs have built
thousands of factories (Meredith & Hoppough, 2007) to exploit the comparative
advantages of China since its economic reforms in 1978. The workers in China
were also exploited and receive low wages as evident from the example from
Forbes where one of the interviewee only earned $2/ month while working in a
steel mill. However, as the country continue industrializing and with the
government’s continual efforts to develop the nation, per capita income
increase from a mere $16/ year in 1978 to approximately $2000 recently.
Admittedly, sweatshops are exploitative and immoral, but it is an inevitable
phase for LDCs and there are benefits as mentioned previously. I agree with
Kristof (2009) argument that sweatshops are symptoms of poverty and not the
cause of poverty. With the freedoms that can be achieve, the country will
develop more than just economically but also socially. As the people from LDCs
are empowered and the society progress, there would be stricter regulations and
more emphasis on human rights. Power will then no long be from a top-down
approach where the power is within the state and TNCs. Instead, power would be
diffused where individuals whom have benefitted from their country’s
development will have a voice like the developed nations today.
F)
Conclusion
In
all, I feel that we should consider our positionality when we look at the case
of TNCs and in particularly the issue of sweatshops and reflect critically if
our judgments are justifiable. Using the first world’s perspective to analyze
the effects TNCs and sweatshops can be misleading and blind us from their
benefits. I pointed that the effects of
globalization is differentiated throughout the world and that benefits do exist
I sweatshops. However like Zwolinski (2007), I would like to emphasize that it
does not mean that TNCs as operators of sweatshops are “morally praiseworthy”
but comparatively at least they improving the lives of the workers.
G)
References
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Retrieved from http://www.jstor.org.libproxy1.nus.edu.sg/stable/27673206
