Saturday, July 24, 2010

The race to the bottom and the struggle for the top

A reader alerts me to the following article: Factory Defies Sweatshop Label, but Can It Thrive?:
The factory is a high-minded experiment, a response to appeals from myriad university officials and student activists that the garment industry stop using poverty-wage sweatshops. It has 120 employees and is owned by Knights Apparel, a privately held company based in Spartanburg, S.C., that is the leading supplier of college-logo apparel to American universities, according to the Collegiate Licensing Company.

As a communist, I'm not really impressed.

Communism has a moral dimension, but communism is not fundamentally about morality. Egregious and obvious mistreatment of the workers by the capitalists is definitely bad, but communism does not exist primarily to ameliorate or even eliminate these abuses. Even if the worst abuses were to disappear entirely, the case for communism would still exist. (Fewer abuses would make communism a much tougher to sell, but I'd happily make that trade-off; I just don't think it's in the cards.)

The recent financial collapse and world-wide recession that still threatens to fall into outright depression (by capitalist standards) is not the result of individual companies treating their workers poorly, and the misery the present economic circumstances are causing today to tens of millions in the US and billions around the world are not because capitalists have increase the active and intentional mistreatment of their workers.

The fundamental problems with capitalism — the problems that communism purports to address — are its economic limitations and inherent positive-feedback instabilities. These fundamental economic problems cause far more misery, suffering and death than any petty sadism encouraged by the inequalities of the capitalist system.

The argument for communism vs. capitalism is similar in tone to the argument for scientific medicine vs. shamanism or faith healing. In the latter case, it fundamentally doesn't matter that faith healing sometimes works (which it does). It fundamentally doesn't matter even that most faith healers know they're charlatans and frauds and many actually make people worse: we don't want to get rid of the worst of the faith healers, we want to get rid of all of them. With both cases, the point is that we could have immeasurably better lives by making deep changes rather than simply tweaking a system flawed at its roots.

Or, similarly, there were some slave-owners who treated their slaves with a measure of relative dignity and respect, but that didn't excuse slavery as an institution.

So, OK, some guys in the DR are paying $2.83 instead of $0.80 per hour. Yippie. Good for them, and I mean that sincerely. But that's still just a subsistence wage: it's still a wage that still keeps the working class subordinated to the capitalist class. The owners and bankers are still using their privileged access to capital to make a profit and pay themselves enough not just to live, not even just to enjoy luxuries, but to accumulate even more economic power and privilege. They themselves are not paying the additional wages out of their own profit and interest, they are asking us, the working class customers, to pay. (And pay we should, with a good will.)

And how sustainable is it? Remember: social change happens by selection, which is selection against. The only way a setup like this could create lasting social change is if it were to force marginal producers who didn't pay a living wage out of business, and I don't see how they could do that. If anything, it will encourage some competitors to focus even more on price competition, now that their access to the high-end market has been diminished.

There's a big difference between the race to the bottom and the struggle for the top.


  1. Dear Bum,

    I'd have to double check the article but I thought they said the company making the clothes WAS paying for it out of their profit and NOT asking us to pay more than those companies that are not unionized.

    I'll have to go back and check.

    Keep up the good work!

  2. "The question is whether students, alumni and sports fans will be willing to pay $18 for the factory’s T-shirts — the same as premium brands like Nike and Adidas — to sustain the plant and its generous wages."

  3. Dear Bum,

    I checked. The article say, "Mr. Bozich says the factory’s cost will be $4.80 a T-shirt, 80 cents or 20 percent more than if it paid minimum wage. Knights will absorb a lower-than-usual profit margin, he said, without asking retailers to pay more at wholesale.

    “Obviously we’ll have a higher cost,” Mr. Bozich said. “But we’re pricing the product such that we’re not asking the retailer or the consumer to sacrifice in order to support it.”

    Knights plans to sell the T’s for $8 wholesale, with most retailers marking them up to $18."

    Obviously (to me at least), it is the retailers that should absorb the cost as they have a mark-up of over 100%.

    But still, it looks like the clothes will cost the same as the Nike and Adidas so I'd guess the students, etc., will be willing to pay the cost.


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