Ethical and economic questions for the coming decades?
How to turn a liberal hipster into a capitalist tyrant in one evening
London Theater Review by Paul Mason
The aggregated flowchart reveals that every audience, on every night, veers towards money and away from ethics.
In Zoe Svendsen’s play World Factory at the Young Vic, the audience becomes the cast. Sixteen teams sit around factory desks playing out a carefully constructed game that requires you to run a clothing factory in China. How to deal with a troublemaker? How to dupe the buyers from ethical retail brands? What to do about the ever-present problem of clients that do not pay? Because the choices are binary they are rarely palatable. But what shocked me – and has surprised the theatre – is the capacity of perfectly decent, liberal hipsters on London’s south bank to become ruthless capitalists when seated at the boardroom table.
The classic problem presented by the game is one all managers face: short-term issues, usually involving cashflow, versus the long-term challenge of nurturing your workforce and your client base. Despite the fact that a public-address system was blaring out, in English and Chinese, that “your workforce is your vital asset” our assembled young professionals repeatedly had to be cajoled not to treat them like dirt.
Review by Paul Mason,who is economics editor of Channel 4 News. Follow him
@paulmasonnews Read his blog here. World Factory runs at the Young Vic until 6 June.
http://www.theguardian.com/commentisfree/2015/may/24/turn-a-liberal-hipster-into-global-capitalist-world-factory
Comments
I think what this play goes to show is that even those who claim to support causes like fair pay and better working conditions don't follow through on their beliefs when it comes to "competition". Of course that's not real life, but I wouldn't be surprised to find the same is true in many aspects of real life. Regulation, which certainly has a role in some aspects of business and life, nonetheless gets used too frequently as the mechanism for those who didn't get their way in the court of public opinion/action to bludgeon everyone else into doing what they think is best, and of course to share in the cost.
I don't disagree with you that consumers collectively have power, but individually many don't have much. In fact again the system reinforces the abuse of labor and the environment. Underpaid workers have no choice often but to buy the cheapest goods for themselves. In other words, I don't think everyone buying the cheapest clothes they can find at Walmart necessarily wants to buy the cheapest clothes they can find at Walmart. This is why without adequate regulation such as minimum wages, labor safety and environmental laws there is a vicious cycle that constantly reinforces the worst sort of behavior, among both consumers and producers and few have much freedom in the matter. Only the wealthy and middle class have some say. And from a middle class perspective it makes sense probably to those on a budget to cut corners and accept the fact that maybe some Chinese garment worker will be abused thousands of miles away and a potentially better paid American won't get a job. Without regulation, the system becomes a Darwinian struggle that it doesn't necessarily need to be. This is why even though I try to shop more ethically I don't criticize most people who don't because most people who don't can't afford to shop ethically because they're underpaid to begin with.
That's the best description of capitalism that I've ever seen. And Lewis Braham's description of the basic mechanism is spot on. Unfortunately, I'm unaware of any alternate system that combines the advantages of capitalism with the overall fairness that's desired.
Edited to add: A boy has to have his dreams.
Easier said than done... a hundred years or so of trying haven't changed much. The present system, where regulation is a component of capitalism, would almost have to be reversed, with capitalism becoming a component of regulation. Sorry to say, I don't see that as a viable alternative either.
It's an obscure part of US economic history, but for many years the freight rates that every railroad in the United States charged were dictated by the Interstate Commerce Commission. I know this to be a fact because my father spent his entire working career analyzing freight rates for the Southern Pacific Railroad. Imagine that: every single item that was shipped by rail was described in detail and regulated both according to that description and other factors, such as distance shipped, and the time enroute.
As an historical footnote, one of the reasons that this sort of regulation was initiated was the typically capitalistic efforts of John D. Rockefeller to gain a major advantage for Standard Oil by reaching secret agreements with various railroads to transport his products at a rate which would guarantee a disadvantage for competitors.
An army of freight-rate specialists, like my father, was employed by railroads to insure compliance with these regulations. An opposing army secured employment finding loopholes and devising strategies for the gaming of these regulations. Yet a third army worked for the US government adjudicating these disputes.
This was an example of regulation taken to it's logical extreme. In this period the airlines were also subject to similar regulation regarding fare structures. Who among us would even consider such an approach today?
Man is by nature both devious and quite capable of bending regulation to his own interests. This creates an inherently adversarial relationship between regulation and capitalism. The end result is a proliferation of regulatory mandates, usually constructed piecemeal to deal with some brilliant new strategy of cheating, that gradually acquires such a degree of complexity that after a time no one actually understands all of it. Example: the US tax system. Possibly soon to be followed by the US health system.
Based upon the historical evidence, regulation simply is not an efficient governor of capitalism.
Edit/Add: The above history occurred during a period where the US was not in cutthroat competition with Asia and the EU, and therefore such detailed regulation did not really impact the US economy as related to world-wide competition. LLJB's comments, below, raise the additional very valid question as to how such regulation here in the US would affect the ability of the US economy to compete in today's very different circumstances.
Likewise, when wages go up we're less competitive with other parts of the world and a manufacturing business has more incentive to move manufacturing elsewhere. New businesses certainly have a bigger and easier incentive to create fewer jobs at home if the wage difference is bigger.
Maybe environmental regulations and labor safety are a different story in some cases, but no matter what we have to compete with the rest of the world and we'll lose at least at the margin to the extent that we regulate beyond others, unless of course we have other benefits big enough to offset the costs. Luckily, in many cases we do. But the more we regulate and as long as the consumer isn't willing to pay for/demand responsible and ethical behavior, capital will find its way to the best return it can find.
I'm no expert so these comments are just what I know from my experiences, but look at what the Chinese do. Historically they've forced western companies that wanted access to the Chinese market and cheap Chinese labor to have a local partner. What happens when they have a local partner? Knowledge transfers. I have no idea whether there's a minimum wage in China but they've used these regulations to invest in education and not at the bottom of the social ladder. This is education at the top. They could do that because they have something that capital wants, a huge population and cheap labor. Its a lot different form of regulation than raising the minimum wage and it has created a lot of jobs, even if many of them are lower paying. Like I said I'm no expert about all the various ways the Chinese regulate and most likely I'd find any number that disturbed me, but at first glance it seems like the Chinese are well on their way to doing what the U.S. did to the rest of the world 100 years ago.
If you think about it this makes sense in commoditized industries like food and clothing as companies can't really afford to pass on the increased labor costs to consumers so easily if there is real competition in those industries. Instead they have to eat those costs, which hurts their bottom line in the short term but should help it in the long if consumers can better afford their products. As for losing jobs to other countries where labor is cheaper, again it is an interesting question as to whether we couldn't see some improvement for labor worldwide if regulators at the biggest most powerful nation on earth, which consumes far more than any other nation, said to countries like China we are going to impose tariffs on your goods until you start treating your workers and the environment better, then reinvested the tariff money in the U.S. in educating its workforce to produce higher end goods than China produces. Why should the U.S. even try to compete with slave-like labor? And why should we expect our own workforce to be treated like the virtual slaves in other countries in order to compete? It comes down to a decision--either we protect our people or we don't. And that decision is better coming from the top down from regulators than the bottom up. Because if it comes from the bottom up, you have revolution--and that never seems to end well for anyone.
A great theory, but enforcement (ie: regulation) would require a central Federal authority to have the power to either outright ban or severely tax imports from such places. These places would then naturally retaliate, blocking export of almost anything from the US.
To keep track of which items would be subject to such regulation, we'll need a federal army armed with billions of dollars worth of the very best computing power. Except that that won't be available...
-because imports of computer equipment from those countries to the US will fall to nothing.
-because I have yet to read of any governmental enterprise, with the sole exception of the NSA, to successfully purchase and implement a system of that magnitude.
-because no one is going to vote for, authorize, or pay for such a regulatory empire.
-because each and every attempt to use such power would be challenged via the legal system, reducing the entire process to an exercise in total futility.
-because world trade would be so severely impacted that the US would exist in virtual economic and political isolation.
Politics and government is the art of the possible, not a theoretical wishlist of optimal circumstances.
Regards,
Ted
MFO contributors of every possible political persuasion seem to agree that there's a major problem with Capitalism as evidenced by the problems with Wall Street and the large banking mafia. That certainly doesn't make the MFO folks Communists, either.
Nothing is helped by reducing complex problems to a simplistic slogan.
Regards-
OJ
Ted
Adam Smith Said this.
At the turn of the 19th century, Adam Smith's arguments were invoked by Samuel Whitbread in favor of a minimum wage and by William Pitt against it. "There is something of Smith," Ms. Rothschild wryly observed, "on both sides of the parliamentary debate."
economistsview.typepad.com/economistsview/2006/09/the_many_faces_.html
If the founding father of capitalist ideology can support the concept of a minimum wage, it's hard to argue it's a Communist idea.
Nah, all you gotta do is say it! Who needs logic or facts? If Fox News, Huffpo and MSNBC don't need them, why impose a higher burden of standard on Ted?
Media has largely been focused on being divisive and playing to the left vs right (and vice versa) and their audiences eat it up like cake.
it suits uspossible.Take poor Londoners and offer them a choice - Lower priced product manufactured in China or a higher priced one manufactured in France. All other variable equal.
I have to take Ted's side on that one. Sounds pretty capitalistic to me.
The New Deal went into effect in 1933 and all of its changes were completed by 1938. During that period GDP growth went from -12% in 1932 prior to the New Deal's passage to double digit GDP growth in some years and upwards GDP every year but 1938 after conservatives insisted that spending be curbed and the budget be balanced. Also if FDR was a "communist," it sure would be strange as he was born into one of the wealthiest families in America and instituting Communism would've destroyed his family.