Transcript Inequitable Impacts of global Commodity Chains on workers in

From Global Commodity Chains to Global Value Chains how the
concepts evolved from its most direct progenitor, the
“global commodity chains” (GCC) framework as developed by Gary
Gereffi (1994, 1999).
Gereffi’s framework lays out four key structures that shape GCCs
(input-output, geographic, governance, and institutional)
The GCC concept was first developed by Hopkins and Wallerstein
(1977, 1986) who highlighted the power of the state in shaping global
production systems, exercised in large part in the form of tariffs and
local content rules affected at the point where goods crossed borders
(see also Wallerstein in this volume). Gereffi (1994) revived the GCC
concept by refocusing it on the strategies and actions of firms, in part
because of the restricted ability of states to set tariffs and local content
rules in the context of trade liberalization.
1. Global corporatization has integrated children/
youth in the Core and Peripheral countries into a
global commodity chain.
CHILD LABOR/SLAVERY: NIKE, APPLE, GAP, MICROSOFT -- CHINA, INDIA, PAK
http://www.youtube.com/watch?v=57v_v6oSGZI 2010 4min
• Single division of labor: core accumulates
capital as periphery supplies labour
WST & Global Commodity Chain (GCC):
Commodity Chain Research HD
http://www.youtube.com/watch?v=bs65dIcRKXE
Core:
Capital rich
MNCs’ corporate Head Office:
R&D
Product design
Customization
Market distribution
Products
Retail
Ads
GCC
Peripheries:
Labour surplus
Production process:
•
•
Vertically integrated
GCC
Vertically integrated Model: MNCs’ GCC
Foreign subsidiary or Subcontracting local company
Manufacturing factories or Sweatshops
Extract raw materials from resource rich areas
Extract surplus from labour
Household labour of the poor (low/no wage or
slavery): Men, Women, Youth & Children
Hidden Inputs of the Peripheries’ child & women in the global
Commodity Chain
Typical Production Node of a
Capitalist Commodity Chain
Cheap Labor
Working class
child & women subsidize
the Production Process
Capitalist Costs that are
Externalized to
Households
Inequitable Impacts on children & women
Economic Costs to the Periphery
Surplus extraction from
labour: No-wage, Unpaid &
Low-wage subsidize
commodity production
State Subsidies: in providing societal
Infrastructure of maintaining stable
social order
State Subsidies to Capitalist Enterprises
External costs: http://www.youtube.com/watch?v=yC5R9WPId0s (7.39min)
Inequitable Impacts of global Commodity Chains on workers in
Canada (Core): Wilma A. Dunaway,
Wealth & Capital Concentration
Economic Costs
In Commodity Production, lower wages for
the workers
Low Remuneration for Non-Wage Labor
(e.g. household work)
Educational &
cultural costs
Critical individual costs
Conspicuous Consumption
Devaluation of Arts & Humanities
Commodification of Youth, child, women as
Ads, Logo
Health
Civic freedoms
Discrimination: gender & Age
Human rights
Law & Order (prejudice against the poor)
Differences between the Great Depression 1929-33, and the
Great Recession of 2008
GDP Growth: what is recession?
a recession is when economic growth contracts for two quarters
straight
Significant decline in economic activity is spread across the
economy, lasting more than a few months, normally visible in
real GDP, real income, employment, industrial production, and
wholesale-retail sales.
A depression is broadly defined as a drop in 10% of the GDP.
Between 1929 and 1933, the United States’ GDP dropped more
than 30%.
Global Industrial Production
During the Great Depression industrial production had a
massive three-year decline.
Today’s global markets experienced an initial shock, but since
then global trade and global production have continued more
slow than previously but nonetheless remains unabated. …
World industrial production is much more vibrant in today’s
Great Recession than it was during the Great Depression.
Unemployment
The unemployment rate at the height of the Great Depression was
at a staggering 25%.
After 2008 crisis, under recession, unemployment is around
9.80%.
Length of Average Unemployment
Very much as in the Great Depression, people are
currently experiencing a long duration of
unemployment. By January of 2010, Americans
were waiting an average of 35.2 weeks to find
employment.
Exam Review of Course Kit articles
Foster, J.B. & Magdoff, F (2010), “The Great Financial Crisis—
Three Years On”
Thesis: Capitalist development involves a dual process:
Industrial maturation
Monopolistic accumulation
What is ‘Financialization’: the shift from production to finance
for making profit
Result: Financialization lifts the economic system but the
system becomes fragile and the real economy gets trapped in
stagnation , e.g. capital gains without real production of goods
creates debt.
Causes of Fin. crisis: The secular decline in economic growth
rates and the long-run increase of financial fragility and
instability within the capitalist structure.
Onaran, O (2010). “The Crisis of Capitalism in Europe, West and
East”
1. Capitalism is facing a major realization crisis—an inability to
sell the output produced, i.e., to realize, in the form of profits,
the surplus value extracted from workers’ labor.
2. Recovery efforts have been centered on maintaining growth
and employment through high consumption.
3. To sustain our environment, long-term economic growth must
be zero or low—equal to the growth rate of “environmental
productivity
4. Financial sector profits displaced the profits from actual
production
5. From “retain and reinvest” to “downsize and distribute”
occurred.
6. Unregulated financial markets and the pressure of financial
market investors created a bias in favor of asset purchases as
opposed to asset creation
Wilkinson, J ( 2009). “Globalization of Agribusiness and
Developing World Food Systems”
1. Increasing global concentration of agribusiness
2. Poor countries have been a target of corporate investments from
the outset of the industrial food system
3. Metropolitan (core) corporate capital is still subjugating the
agriculture and domestic food markets of many developing
countries
Wilkinson, J ( 2009). “Globalization of Agribusiness and
Developing World Food Systems” (cont’d)
4. Developing countries importance in the supply of foods in the
“nutritional transition”
(shift to a diet of high animal protein, fresh fruit and
vegetables)
5. Domestic agribusinesses emerge in the LDCs due to Global
Agrifood Economy: large domestic food companies, e.g., in
Brazil, Argentina, Thailand as major suppliers of animal feed
and meat: esp. white meats sector (poultry and pigs) – rise of
large domestic agribusiness firms—Sadia and Perdigão in
Brazil; the Charoen Pokphand Group in Thailand.
Wallerstein, I (2011), “Structural Crisis in the World-System.
Where Do We Go from Here?
Arguments:
1. The cyclical rhythms are sets of systemic fluctuations
(upturns and downturns), in which the system regularly
returns to equilibrium.
2. Structural crisis of the system: Chaos or new equilibrium
stability is sought as the system is unable to continue its
normal, regular, slow upward push.
3. Capital accumulation requires the appropriation of surplus
value through quasi-monopoly of world-economy-wide
production.
4. Like quasi-monopolies of leading industries, quasimonopolies of geopolitical power are self-liquidating. Other
states improve their economic positions, and then their
political and cultural positions and become less willing to
accept the “leadership” of the erstwhile hegemonic power.
Wallerstein, I (2011) cont’d)
Arguments
5. Hegemony has lasted only, on average, twenty-five years. A
hegemonic power achieves a quasi-monopoly of geopolitical
power
6. The hegemonic state imposes its rules, its order, on the system
as a whole.
7. It favours maximal capital accumulation for the enterprises
located within its borders.
8. Achieved three times in the five-hundred-year history of the
modern world-system —
• 17th C the Dutch Republic
• 19th C the United Kingdom
• 20th C the United States
Lea Caragata in “Neoconservative Realities”
1. Changes to labour markets as a result of globalization profoundly gendered and racialized.
2. Marginalization of poor families from the economic
marketplace to render an underclass not seen in the
developed world since the 1930s.
3. Massive labour force changes
4. Current neoconservative economic and social context
5. Women are also more likely than men to hold multiple jobs –
a consequence of part-time work. Women accounted for
about 70 percent of all multiple job holders
Quintero-Ramirez, “The North American Free Trade Agreement and
Women”
Thesis:
The effects of NAFTA on women workers in Canada and Mexico :
1. Mexican maquiladoras - the gap between the economic
importance of maquiladoras in Mexican manufacturing and labour
conditions of the workers, especially women.
2. Global capital’s mobility that has led to de-industrialization in
developed countries and a precarious industrialization, with lower
labour standards, in developing countries.
3. Aggressive government economic policies have inserted Mexico
into the international economic order. The most prominent among
such policies is the support for export industries, e.g.,
maquiladoras, where workers’ wages are controlled.
Ronald L Mize (2008), “Interrogating Race, Class, Gender And
Capitalism Along The U.S.-Mexico Border: Neoliberal Nativism
And Maquila Modes Of Production.” Thesis:
1. Neoliberal nativism defines state-society relations under late
capitalism and neoliberal development projects .
2. The processes of disposable Mexican bodies are subjected to
border militarization, border crossings and citizenship,
maquiladora production, and the non-actualized transformative
potential of cross-border labor coalitions. These processes
define the terrain as gendered, raced, and classed.
Ronald L Mize (2008), “Interrogating Race, Class, Gender And
Capitalism Along The U.S.-Mexico Border: Neoliberal Nativism
And Maquila Modes Of Production.” Thesis: (cont’d)
3. The neoliberal nativism in the Mexican political economy
racialises the border relations – the less developed and more
developed articulations of production on the border sharpens the
inequalities of race, class and gender.
4. In the post-NAFTA era, the border region is being reshaped by
female labour in the circuit of commodities through Mexican
assembly and distribution in the US.
Pantaleo, K (2010). “Gendered Violence: An Analysis of the
Maquiladora Murders.”
Thesis:
1. 1.Three different groups, the news media, human rights
organizations, and academic researchers differ in their social
construction of the murders. Did the narratives suggest
NAFTA, globalization and Maquiladoras, as major factors in the
construction of the maquiladora murders as a social problem?
2. In both the human rights and the newspaper narratives, the most
common cause was indicated as corruption of the criminal
justice system. The academic journals claimed NAFTA as a
cause in all but one narrative.
3. Gender issues are intertwined with the trade agreement that has
aided in the disruption of the social fabric of Mexican society.
UNICEF Report Card 10: Measuring Child Poverty
CANADIAN COMPANION (excerpts)
• The Children Left Behind : measures the gap
between the average child (what a country may
consider 'normal') and the child near the bottom.
• It examines how far children are falling behind in
three dimensions of their lives:
1. material well-being,
2. educational achievement
3. physical health
• These differences in a country’s performance both
within and between countries can be measured
and compared.
http://www.unicef.ca/en/create-content/press-release/rich-countries-includingcanada-letting-poorest-children-fall-behind-sa
Child benefits in Canada’s 2012 budget: $13.2 billion (low)
Elderly benefits: $40.4 billion (higher)
Index of intergenerational justice: Canada ranks below
the OECD average (Indicators in the index of
intergenerational justice : level of national debt, child
and pension policies, and investment in research)
Government action is the key to reduce child poverty:
• Canada must use two measures of child poverty –
relative income poverty measure, and Child
Deprivation Index –to guide policy & action to
reduce child poverty
• Poverty rate in Canada is almost halved while the
rate in USA remains almost unchanged
• Canada spends about 1.25 percent of GDP on
family benefits and tax breaks.
Canada:
• Relative child poverty: 13.3 %
(represents an income threshold below which a family will likely devote a larger
share of its income on the necessities of food shelter and clothing than the average
family)
• Child poverty rate is 25.1% before taxes and
transfers
• After taxes and transfers, child poverty in
Canada is cut by about half, to 13.3 %
• Poverty gap i.e., the depth of child poverty: 23rd
among the 35 industrialized countries
Labour Force Profile Of Youth
2003
1994-2004: a higher proportion of young people
aged 15 to 24 have been participating in the labour
force
working or looking for work: 68% in 2004,
compared to 64% in 1994
More Young men than women in the labour force
in 2004.
In 2004, 58% of young people were employed. The
rate was the same for men and women
39% of full-time and 72% of part-time students aged
15 to 24 were employed
The unemployment rate for young adults aged 20 to
24: 58%
It was higher than the rate for adults aged 25 to 44
Despite being more highly educated than ever before
in Canadian history
Little gender gap in youth employment: 2004
Employed:
72% of young adult men
70% of women
Rate of part-time work among youth increased
steadily since 1976 :
30% have part-time jobs 2004
a result of the economic recession in the 1990s
primarily due to increased post-secondary
enrollment
Teens have different employment experiences,
depending on where they live. In 2004:
Alberta: the highest teen employment rate
Newfoundland: the lowest
Economic Security
Of Canadian Families: 2006
(excerpts)
Economic security:
an assured standard of living
provides families with the resources necessary to
participate in their community’s activities with
dignity
• economically
• politically
• socially
• culturally
.
During the decade (1993-2003):
gap grew between families with the highest incomes
and those with the lowest incomes
Pre‐tax income of:
The wealthiest 10% of families with children rose by
35%
The poorest 10% of families average annual income
rose only by 7%.
Precarious forms of employment are rising:
Temporary work, part‐time, contract, and seasonal
jobs.
2003: these non‐standard forms of employment make
up 37% of all jobs, compared to 25% in the mid‐1970s.
In 2003
18% of Canadian children under age 18 were poor
(1,207,000 children)
Across Canada, child poverty rates ranged from:
PEI: 11.3%
BC 23.9%
Would be much worse without government transfers.
Child poverty rate would have been 27%
(transfers allowed 628,000 children escape poverty )
1. Female lone‐parent families have the highest poverty rates.
Children in lone‐parent families : 4ó times that of children in
two‐parent families.
2. 2003: Almost one‐third of poor children had at least one family
member who worked full‐time for the entire year.
3. Aboriginal youth aged 15 to 24 had a poverty rate of 37% in
2001, compared to 19% among non‐Aboriginal youth.
4. 2001: 42% of immigrant children under age 15 were poor
compared to 17% of Canadian‐born children.
5. 1996-2001: For children with activity limitations, the poverty
rate dropped by 23%, and among Aboriginal children, by 21%.
Abboushi, S (2010). “A trade dispute between the USA and
Canada.”
• Since 1981, conflict over softwood lumber exports to the US
•In 1983, the DOC found that Canada’s stumpage system was a
“reasonable method of establishing stumpage prices” which does
not vary widely from US prices.
•In 1986, the US lumber producers petitioned for (counterveiling
duty) CVDs on Canadian softwood lumber. The DOC lumped all
forest product industries such as wood products, pulp, and paper
industries as one “vertically integrated” industry, even though
Canadian lumber producers were not involved in paper-derivative
industries.
• Since 1986, Canada voluntarily imposed 15 percent export duties
on Canadian softwood
Abboushi, S (2010). “A trade dispute between the USA and Canada.”
US lumber producers argue:
1. stumpage fee is non-market based, decided by provincial
governments, and is below market prices.
2. Even a small per unit cost differential advantage enjoyed
by Canadian producers results in substantial cost advantage over
US producers. Timberland in the USA, is auctioned in a marketbased system of bidding. In Canada, such auctioning is limited.
3. Canada does not allow non-Canadian companies to acquire
Canadian logs harvested in Canadian public timberlands and,
consequently, does not allow non-Canadian companies to export
Canadian logs.
Stumpage is the fee paid to the government for the harvesting of provincially owned
timber. The price is on a cubic metre basis.
Abboushi, S (2010). “A trade dispute between the USA and
Canada.”
Findings of the article:
1. Canada’s public ownership of timberland is not a trade issue.
2. Canada’s Constitution assigns exclusive authority to
provincial governments over natural resources like
timberland.
3. Stumpage fee is not lower than the “market price”
Gandasegui, M.A (2006). Latin America and Imperialism
in the 21st Century, Critical Sociology, 32 (1):45-66
(excerpts)
Imperialism is the struggle between capitalist nationstates for rule over the expanding capitalist world system.
Free Trade Area of the Americas (FTAA) and
Bilateral/Sub-Regional Free Trade Agreements
1964–1989: The period of U.S. military aggression that
accompanied the populist development model in Latin
America had shifted to trade and economic agreements
Neolib policy in LAm – total market utopia or authoritarian
utopia: the economic realm and invades the remaining
spheres of public, private and everyday life.
Polanyi refers to this the market society, a construct that
signifies that the operation of society should become an
appendix of the market.
Instead of the economy being framed in social relations,
social relations are framed in the economic system (Polanyi
1997).
• The United States has closed in on more than
twenty different countries in order to formally
initiate bilateral free trade treaties.
• Discontent and global protests against US drive
to expand free trade agreements
The bilateral or sub-regional free trade agreements are
simply an attempt to accelerate the pace of hemispheric
consolidation.
The United States has been very explicit in this respect
and its strategy has been termed “competitive
liberalization.”
This consists of approaching and pressuring weaker or
submissive countries to sign on with them so that as the
process advances, those countries that continue
displaying some interest in maintaining a measure of
sovereignty must eventually cede on account of the threat
of economic isolation.
Europe and the US are keeping their subsidies – goes
beyond FT includes investments, intellectual property
rights, govt. purchases, services, competition policies
and other crucial domestic econ policies
Privileges profits over human rights and
ecological sustainability
US wants to have advantages over 4 areas:
• Government contracts
• Pharmaceutical markets
• Agricultural markets
• Intellectual property (GRAIN 2004).
Wise, Carol (2009),” The North American Free Trade
Agreement.”
Arguments:
1. 99 per cent of all tariffs on those goods and services covered
by NAFTA have basically been eliminated
2. NAFTA’s key innovations were the protection of IPRs, the
liberalisation of investment and trade in services, and the
creation of mechanisms to resolve investment disputes
based on binding international arbitration
3. Along with the side agreements on labour standards and
environmental protection, NAFTA promoted the free flow
of goods, investment and services within the North
American bloc over a 15-year timeline
Wise, Carol (2009),” The North American Free Trade Agreement.”
4. NAFTA still fell short of its mandate to liberalize all trade
between the three partners
5. Persistence of administered protection in the setting
percentages for local content under NAFTA’s rules of origin in
autos, high-tech products and textiles and apparel.
6. Little progress has been made toward the elimination of
antidumping policies and countervailing duties.
Wise, T.A. (2011). “Mexico: the cost of U.S. dumping.”
Thesis:
1. Result of U.S. dumping on Mexico after NAFTA:
2. Mexican farmers lost more than S1 billion per year (19972005)
3. Half the losses suffered by the country's embattled corn
farmers.
4. Use of subsidies, U.S. government's preferred means of
supporting agriculture
5. Deregulation of U.S. agriculture -larger surpluses of corn and
other commodities
6. NAFTA opened the floodgates to unrestricted dumping into
Mexico.
7. Dumping margin was high
8. Until 2008. Mexican govt could have counteracted against
dumping.
York, et al (2009),“ A tale of contrasting trends ….”
Arguments:
1. What is Jevons's paradox?
• declining ratio of EF to economic activity & lower
costs per unit of production
• Increasing efficiency of coal use in production &
coal consumption
2. Far from contributing to resource conservation,
improvements in efficiency may actually expand
resource consumption
3. Nature’s capital and services are being threatened by
global endless consumption.
4. Economic efficiency makes ecological concerns a cost
or a negative externality that can be ignored