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American companies don't go to China SOLELY to screw the working class, no;that's largely incidental Joel Send a noteboard - 25/08/2011 08:03:05 PM
In the generation or so since every US president has maintained Nixons policy of ignoring Chinas human rights abuse so American multinationals could reap huge profits opening plants there and closing them here, Chinas economy has flourished at Americas expense .

No. Early support for the Nixon doctrine had everything to do with offshore balancing as a means of giving us a leg up in the Cold War and very little to do with economics. Deng's goal of making China rich--promulgated in '79, I think--was largely ignored by the West at the time. Investment in the 4 original SEZs came mostly from the Chinese diaspora at first and then the Japanese. We were latecomers, but we made up for it in sheer amounts of money later on.

EDIT: Oops. I just now realized you meant since Tiananmen.

Well, they aren't easily separated; Tiananmen might never have happened without Detente era US support for a Chinese government whose position was far more precarious than Russias (and still is; aggressively converting precious farmland to industrial could make China as dependent on imported food as the Soviets were).
Also, you really need to start filling in and out your argument on this whole corporate obsession of yours. China does a lot to make FDIs attractive to multinational corporations. For example, it grants subsidies, creates favorable regulatory policies, constructs supporting infrastructure, might employ government procurement to provide early markets, offers special tax incentives, and lot of other things I could list. Oh, I should add free land (sometimes) and an undervalued currency (huge, that). American companies aren't going there solely to fuck over the working class, which is how your message comes across. America could, and should!, start playing a slightly different game. Recognizing that Ricardo was wrong in many ways would be a start.

Something else to do is realize that economic decisions that in most countries are made based--like our national security and geopolitical decisions--on careful consideration of the objective national interest are, in Amercia, made largely on the basis of lobbying. I know you've got the latter, and perhaps the former as well, but it doesn't show.

These elements are also inextricably intertwined; part of the outsourcing dynamic is that corporate lobbyists can self servingly cite their clients shift to unregulated Third World production as justification for removing that regulation at home. It's no more respectable or responsible than a pimp arguing his lucrative Thai sex trade demonstrates an economic reason for America to repeal laws against prostitution and pedophilia. It's not that American corporations are INHERENTLY hostile to the working class or clean air and water, any more than pimps are motivated by a desire to sexually exploit women; both are pursuing wealth, to which laws against their preferred means are an unwelcome obstacle. Cheap labor and unregulated production are considered good for business (despite Henry Fords observation that he had to pay his employees enough that they could afford his cars).
There's a lot more to it than just lack of ambition or diligence among natives whose callous and unscrupulous leaders keep them cowed. The strong men hand out plenty of bribes and are rife with corruption, but a lot of that corruption is based on bribes they RECEIVE from multinationals...

Sure, and stability is simply a precondition. Organizational skills, managerial skills, and a social contract of some sort in a capitalist system of some kind are what really count. And a "free market, free trade" system is simply another name for American capitalism, done in a bid to pass it off as objective economic truth.

As to those bribes, did you ever stop to think that plenty of them are demanded by the strongmen?

Sure, it's the price of doing business, as surely as Congressional graft is the price of American de-regulation. The only real difference is the scale and sophistication but, absent bribes, neither Congressmen nor dictators have any incentive to allow corporate exploitation of their fellow citizens, and every incentive in the form of elections for the former and the revolution of the month against the latter NOT to allow it. Thus social contracts are, as noted above, a real obstacle, while organizational and managerial skills can be imported as company executives from home. The real precondition is that individual government officials recognize they personally profit more from allowing corporations a free hand than by interfering with them, whether on the peoples behalf or simply by seizing whatever assets corporations develop in or import to the region. That's where the graft and kleptocracy come into play: Convincing whatever dishonest official a company depends on to look the other way that he shouldn't kill the goose that laid the golden egg.

Multinationals, like all businesses, just want to make money, and aren't inherently hostile to the working class or anyone except competitors; in the largest sense, just the opposite is true, because they don't want to alienate potential customers. The problems lie in that phrase "except competitors" that makes so many relationships with corporations adversarial. Businesses don't simply compete with each other for raw materials, employees, market shares and investors (though they certainly do that, too). Those competitions themselves create additional competitions with suppliers, labor and governments over the very conditions of competition between businesses. In practice, it means that multinational competitors often become unlikely ALLIES in establishing conditions most favorable to all of them. That unfortunately results in multinational competitors joining forces in a larger competition against suppliers, labor, small business, government, and consumer and environmental activists.

Cost of production and government regulation both inhibit the profitability all businesses pursue, and thus all businesses, even direct competitors, have a shared interest in reducing them. Large scale unemployment lowers labor costs, restricting raw material producers access to manufacturers (or those manufacturers agreeing among themselves to a fixed price) lowers material costs and eliminating government fines for toxic dumping and/or labor exploitation lowers regulation costs. That doesn't mean multinationals desire large scale unemployment, restricted access for raw material producers or toxic dumping in themselves; they desire increased profits through reduced costs, and each of those things are a means to that end. There IS no moral dimension, and that's precisely the problem.

It's cheaper to dump toxic waste into the nearest body of flowing water than to process it into a non-toxic form and/or safely store it in a contained location. The whole basis of environmental inspections and penalties is to change that paradigm so that the most beneficial and responsible recourse is also the cheapest; multinational attempts to regain their cheaper option are consequently unsurprising. It's cheaper to pay employees the bare minimum necessary to keep them fed, housed and WORKING than to pay them some "minimum" or "living" wage determined by irrelevant factors like a living standard that doesn't make them suicidal, so multinationals naturally prefer the latter business conditions. It's cheaper to sweeten medicines with anti-freeze than with sugar and use lead based rather than non-lead paints on toys, so that's the preferred method, not because poisoning consumers is a desirable end in itself, but because it's cheaper and THAT'S desirable.

I can wish that weren't so, but there's a reason the industrialized West only put an end to it through laws, just as there's a reason why such practices have been reborn as Western multinationals have outsourced production to countries without such laws. As we're so often reminded, the evils of regulation drove our native companies to foreign countries without such pernicious ills, only their removal will bring those countries home. Likewise every attempt to increase labor, environmental or consumer protection is instantly and vehemently opposed by corporate lobbies on the grounds that it will drive those businesses elsewhere. It's basic extortion: Western nations must accept corporate abuse or corporate executives retaliate by taking their business elsewhere (but RESIDE in nations whose laws make existence so intolerable).

The only PUBLIC recourse I see is two-fold:

1) Hold the line on existing regulations, resisting lobbyist attempts to dismantle them and banning the sale of products made in countries without them. I see no reason why American companies should be able to stock American stores with products made by slave labor just because that manufacture occurred in a country where slavery remains legal. In other words, fair trade, not "free" trade, since free trade is an impossibility; either government regulation restricts trade practices, or its absence allows the largest corporations do restrict it.

2) Aggressively incentivize and subsidize responsible corporate behavior through government and consumer behavior. We've seen some of that already with the rise of fair trade as a marketing tool and tradable pollutant credits (in American use since the first President Bush). Ultimately, it's the only thing likely to have much impact, and less likely to meet multinational resistance. They're want profits and clearly don't care how they get there, so if government rewards responsible behavior as richly and consistently as it punishes irresponsible behavior we'll see a lot more of the former, and won't have corporate lobbyists fighting us every step of the way. The main thing to ensure is that financial rewards require real substantial reform rather than merely token nominal achievements (e.g. "minimum 10% post consumer content"=/="recycled").

All of that applies to labor and consumer standards as well as environmental ones, of course. The bottom line is accountability; unfortunately, the very premise of corporations from the birth of the concept was allowing real human beings to evade accountability for their actions through a corporate proxy. It's consequently very difficult to establish that accountability for them centuries later. That's why, as noted in the article I recently posted from Matt Taibbis Rolling Stone blog, when the fraudulent firms involved in the subprime mortgage disaster were forced to pay damages those payments came, not from the executives who perpetrated the fraud, but from the investors defrauded. The problem, as I said to Isaac, is human, not corporate; multinationals are just the most notorious and potent form of it, because if an American PERSON was caught running a sweatshop in California or Cambodia he'd go to jail, but if his CORPORATION is caught doing it he just pays a token fine and makes sure they aren't caught again.
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American companies don't go to China SOLELY to screw the working class, no;that's largely incidental - 25/08/2011 08:03:05 PM 583 Views
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