Change In Your Hands - Global Poverty

Corporations do serve people. They are called the stockholders.

Do you want to remove the privitization of our companies? Thats about the only way businesses could really serve "the people"

 

I'd renationalise certain public services, so that they exist not for profit but for service to the people. It'd be fairly counter productive to nationalise all companies though, you'd simply have a state run capitalist structure, much like the one Stalin presided over in Russia, much like China until recently. In an ideal world companies would be run by worker co-operatives, sharing profit for the need of the people. Very hard to implement I'd imagine, but it can be done. Oxfam is opening a chain of fair trade only coffee shops in this country. 50% of the company will be owned by Oxfam, a non-profit organisation, and 50% will be owned by co-operatives of third world coffee growers. Now if only we could do that with Starbucks....

 

Come on EarthWhirler, GUESS!!! Are you telling me you are outraged by Nike exploiting the third world yet you have no idea what their profit margins are? Not even a guess?

Sorry EnonEmouse, I want some guesses before I give away the answer!

The problem with economics is that you can't create prosperity by legislating it, so agreeing that people deserve better really means nothing. Nobody is denying the third world more than a dollar a day.

Nobody is calling it charity. Countries need investment and jobs. Corporations provide investment and jobs. The fact that it is not out of benevolence is irrelevant. Since we have already seen that without these jobs there would be unemployment and starvation, where is the exploitation?

Plenty of nations have risen from poverty to wealth, many despite long histories of colonial exploitation and war. Sitting around blaming the West for third world povery decades after their independence is worse than useless, it is a destructive, defeatist mentality. Stop looking for reasons to complain and make excuses, look at the success stories and learn from them.

Working for wages is not slavery, that's just sloganeering. No nation leaped from poverty to prosperity in a single bound, bypassing all the difficult periods of industrialisation. The fact is that this "dead end" is no different than the phase all successful developing countries went through (Taiwan, Korea, etc.). First they were agricultural, then they did light manufacturing (sweatshops), then they moved up to services and higher value added industries.

We cannot just say "OK everyone gets 5 bucks an hour worldwide" and expect suddenly the billions of third world poor to suddenly make five bucks and hour and be catapulted out of poverty. That's just naive. There is no getting away from the reality of demand and supply. There are lots of reasons why wages are low in third world countries. Economic and political instability, weak legal systems, poor infrastructure, corruption, unskilled labour forces, poor education, higher costs, etc. Low wages are necessary to offset these disadvantages and make in appealing to invest in these countries. Take away those lower wages and you take away the reason to invest, they get nothing. How exactly has that helped?

You may very much like to believe it is that simple, but it isn't. This is the socialist "money is just there, we only need to divide it up properly" mentality. Countries do not get richer by getting other countries poorer. The "beans" are made each year, by each country. You make it sound as if everyone is making an equal number of beans and the rich countries are going in and taking everyone elses beans. This is totally false. Get it? If it were true, why do the poorest countries in the world have the least investment and the least trade with rich western nations? It makes no sense.

This is the lesson learned, at a tragic price, by Zimbabwe, Cambodia, China, Vietnam, and many others. They took all the beans from those who had too many and gave them to the bean poor. Mysteriously, everyone ended up even poorer than before, although "equality" had increased.

 

Of course it's not that simple. This is an example, not a complex model.

No. They get rich by keeping other countries poorer. If you have a country with low wages and low standards of living, then it can be used to provide cheap goods to countries with higher wages and higher standards of living, thus subsidising the lifestyle of the West at the expense of the third world.

Ummmmm.... no. If you encourage repressive regimes, thus artificially deflating the market value of a commodity produced by a country, you are creating a market in which you can secure goods for less than their true worth. This is, in effect, taking the beans.

But it does. Low investment facilitates artificial price suppression. a developed country will not part with its goods for low prices. Trade may be lower over all, but if you break that down to basic commodities, you'll find a very different picture.

 

It's a worthless example based on false logic. The wealth of western nations only makes it easier for third world countries to develop. Where else are they going to get investment? Where else can they find markets for their exports? If the wealthy nations disappeared off the face of the earth would developing countries suddenly see an economic boom? That's ridiculous.

Your "cheap goods" theory is a typical one dimensional understanding of economics. We buy goods. End of story. Who is buying our goods? Ever heard of exports? How much can you export to a desperately poor country? Zero.

Look at the countries the United States has had the most influence in: Korea, Japan, Germany. They all went from totalitarianism and extreme poverty or economic ruin to prosperity and freedom under US guidance. These countries are now among the biggest trading partners of the US. Was this an accident?

Why do you think the Eastern European countries joining the EU are getting rich so rapidly? Isn't the EU supposed to conspire to keep them poor?

If we are getting rich by keeping countries poorer, we obviously aren't doing a very good job because third world countries are getting richer. So what's your explanation for that?

Again, this seems like logic invented on the spot. In the early stages of their development, Korea, Singapore, Malaysia, and Indonesia all had repressive regimes which at the same time saw huge advances in national wealth and standards of living. Your theory does not fit reality.

Again, made up economic theory. Do you think Australia sells gold for more than South Africa? Is North Sea oil more expensive than Nigerian oil? Obviously not, commodity prices are global. As I said before, the poorest countries are the ones with no trade and investment.

 

This shows the deeply flawed nature of your thinking. By your definition, no wealthy country could ever have developed in the first instance, because other wealth countries didn't exist as markets for their goods.

Again, you fail to grasp the reality. Of course we sell goods to underdeveloped countries. Arms, luxury goods for the ruling class etc etc.

Well that depends entirely on your definition of influence. You might equally argue that it's had a much greater influence in countries such as Afghanistan.

Woah. Steady on there! It's a bit early for that generalisation, when the Eastern European countries are barely through the door! Of course, you might ask the more productive question of why Europe is already starting to talk about where to draw the line, and when to star excluding further enlargement. The answer being fairly obvious.... wealth is not an unlimited commodity that can be shared with all.

Which countries did you have in mind? And what's your definition of 'richer'?

That depends entirely on how selective you wish to be. Countries such as Brazil export cheap commodities to the West, and yet the majority of their citizens continue to exist in grinding poverty.

Are you just chronically stupid? All theories are 'made up'. They don't spring magically into existence, signed by god and endorsed by the whitehouse! Oh, hang on.... what you mean is that it's a theory with which you do not agree.

 

Whilst many nations may be getting richer, this does not reflect the standard of living amongst the majority of people within those countries. Even in Japan there are people who still live in extreme poverty and work in sweat shops. Even in Northern Ireland there are people living in extreme poverty, but the economy is great. 25% of adults have reading and writing skills no better than the average 12 year old in England, but nobody deems this a poor country. There was a report last week saying that mental health problems in Northern Ireland is costing the economy £3billion a year. So what? What about the human cost of the mental health problems. Poverty is being held in place by low wages and high living costs, and this is supposedly the first world. As for living costs going up as wages go up, this is only because companies seek maximum profits. If profit margins went down then the cost of living would go down.

As for companies serving share holders. What exactly do share holders do? To make a decent profit from shares you have to be pretty rich to begin with. Take the supermarkets in the UK. I work for Sainsbury's at the moment. we have been told that this year we are not getting any Christmas bonus, but we'll still be expected to keep up a higher standard of work in the run up to Christmas. And for who? The shareholders who do fuck all. Then there's Tesco's. Last year they made a profit of £1.6 billion. So I sat and did some sums, based on a thousand stores (from local to mega) employing an average of 4000 man-hours per week on the shop floor. If they raised the wage by £1 per hour it would cost an extra £300 million a year. Which leaves a measly profit of £1.3 billion.

So how much do Nike make, and how much wold it cost them to double the wages that they pay? It would still be less than if they moved to a first world country. The shareholders could still afford their yachts.

I did a degree in business studies. We learned about the 'race-to-the-bottom'. This is where countries compete for jobs by undercutting other countries, by taking away workers rights. If VietNam decide to impose a minimum wage, then the multinationals just up and leave and move to Cambodia. They pay low wages because they can.

 

It's pretty frustrating to debate someone who just makes up economic theory to fit their political prejudices.

I never said you can't get rich on your own. I just said it is a lot easier when you have other people to trade with or to invest in your economy, which should have been obvious.

This is one of those laughable statements where cartoon good and evil stereotypes replace real thinking. Developing countries import everything - cars, aircraft, computers, pharmaceuticals, ordinary consumer goods, machinery and industrial goods, commodities, virtually anything. What do you think has happened to the demand for Intel CPU's with the economic boom in India and China? Try to guess.

I'd really like to see you argue that, but I suspect you won't.

It has been over a decade, still waiting? These countries are growing faster than any part of western europe. And again, you are falling for the socialist stereotype that wealth is just sitting there, and it gets shared around, and that for every winner there must be a loser. It is not. Economies create wealth, they don't take wealth. Eastern European nations are not being given wealth from the EU, they are being given the opportunity to generate wealth by trading with less obstructions. Wealth IS an unlimited commodity. This is ignorance of the most fundamental concept of economics.

Richer is rising real GDP, rising per capita income, and rising standards of living. The two biggest countries in the world, India and China, are getting rapidly richer. That's two billion poor people who escaped the global conspiracy.

Either you are going to explain how rich countries like Australia and Canada get a higher price for gold, natural gas, timber, and nickel, etc. than developing countries selling exactly the same thing or you are going to admit that your theory of pushing commodity prices down is made-up bullshit which you cannot prove or explain. So go ahead, give it your best shot. This is your second chance.

It's funny you should mention Brazil. Between 1993 and 2000, infant mortality under free-trading conservative Cardoso fell from 41/1000 live births to 29. Children in school rose from 87% to 97%. After privatising the telephone company, households with phones rose from 20% to 58%. 600,000 landless families were settled. OH THE HORROR OF GLOBALISATION !

Speaking of made up bullshit theories, how about made up bullshit facts? You said the majority of Brazil's citizens live in grinding poverty, yet the actual figure is less than a quarter. So did you just make up that fact or are you going to back it up?

 

Well no, all you have to do is save money for retirement like most people do.

Well except they invested the money that created the company that provided you with a job. Is that your definition of "fuck all"? Do you how much the value of Sainsbury shares have increased over the last 14 years? ZERO.

What if your bank decides not to pay you interest because you did "fuck all"? What if someone buys your house but refuses to pay more for it than you did 5 years ago because you did "fuck all" except live in it?

The yachts they bought with a 14 year return on investment of zero?

I really have to wonder what kind of business studies course teaches you about the race to the bottom. Why are so many countries failing so miserably at racing to the bottom? Why are they climbing to the top instead?

It's simple. Go here. http://www.worldbank.org/data/databytopic/GNIPC.pdf

Are people racing to invest in these "bottom" countries? No. The bottom countries have virtually no investment at all. Nobody is relocating there. What happenend to Taiwan, Korea, Singapore and Hong Kong as they got richer? Did their industries all pick up and leave for Indonesia and China? Actually yes, they did, because they were displaced by higher paying, higher value added, more sophisticated industries. Strange, isn't it?

 

Funny that, I was just thinking the same thing!

I never said you can't get rich on your own. I just said it is a lot easier when you have other people to trade with or to invest in your economy, which should have been obvious.

Of course they do. Nobody claimed they were backwaters that never imported anything. That still doesn't change the underlying fact that the west is more interested in exploiting these countries than in developing their economies. Oh, and when were China and India last referred to as 3rd world economies?

Hey, well that's easy! How about funding the Mujahadeen and using the country as a proxy battleground for opposing the USSR?

What countries are you talking about?!? The EU's only just opened the door to Eastern European members.

You keep falling back on India and China, which have long been regarded as sleeping economic giants.

Ahhhh.... let's see. How about this?

You constantly refer to 'made up' facts, and yet pointedly fail to provide any evidence to support your own. A rant is not an argument.

 

Your quotes are a mess, I think you left out a '/' somewhere.

I note you don't even bother to explain how the global commodity conspiracy works seeing as many wealthy countries are commodity producers too, and all countries get the same prices for their commodities. Are you silently abandoning this made up theory? I've asked twice with no response now.

Nobody, including me. But you claimed that they import "arms, luxury goods for the ruling class etc etc." in a cartoonish parody of third world reality. I claimed they import a whole range of goods, and the richer they are the better they will be as export markets. I geuss you can't support the cartoonland version, and are trying to change the topic to whether or not they imported anything.

You don't think a GDP per capital of less than $1,000 makes China a third world county? And what exactly does "sleeping giants" mean? Countries which could have great economies but have been burdened by bad policies? And now that they have opened their economies to trade and investment they are growing rapidly? Maybe you forgot, but you were trying to tell us globalisation is bad and keeps poor countries poor.

You are supposed to be proving how the US had "greater influence" in Afghanistan than in Korea, remember? Want to try again to explain how the US had greater influence in Afghanistan than in Korea, despite the fact that they weren't even in Afghanistan and effectively occupied Korea? I suspect you're going to go real quiet on this one too.

You also failed to back up your made-up fact that "most people in Brazil live in grinding poverty". I provided a link proving you are wrong, you provided a link which says nothing about % of the population below the poverty line. Is that the best you could do? Do you need more time?

And which of my facts are you contesting? Are you saying they are wrong or are you just trying to take up my time?

If you want, read this http://www.nhh.no/geo/114/lula.htm and you'll see the facts, which coincidentally are from IBGE as well.

 

This seems to be a practically random cut and paste job.

None of which has anything to do with commodity prices.

EXACTLY! They need MORE free trade, not less. http://kickaas.typepad.com/. They want globalisation!

They assume no such thing, which is why the Doha round died - developing countries stood up for their rights and refused to sign. And in terms of implementation, in a world without the WTO, developing countries are completely at the mercy of rich country protectionism. The WTO can only protect developing countries.

 

Not at all. I was answering your post while in work, so my time was limited.

The price suppression does not occur at the point of delivery. With the commodities to which you referred, most producers are foreign companies, and the price suppression is in their low operating costs achieved by poor wages and cheap overheads. It's at this level that the exploitation occurs.

But your model only accounts for one side of the equation. If they're richer, then their production costs will be higher, reducing their benefit as cheap suppliers of goods. If my perspective is 'a cartoonish parody', then yours is equally so - it's loaded towards your pro-capitalist bias. You see only those facts which suit your prejudice.

Make your mind up. A moment ago you were trying to tell us that China is a boom economy that is rapidly getting richer. You're not being consistent.

'Sleeping giants' (the term used by the capitalist market analysts of the West - not me) is used to describe the economies of countries that are on the verge of becoming major players in the international markets. It's natural that countries the size of India and China will eventually come to dominate the global economy, so I don't see the logic of the argument that you're trying to make.

I thought I just did? America funds a decade long war, encouraging Afghanistan to descend into anarchy as it battles the occupying forces of the Soviet Union..... or does that not count as influence, because it's not what you perceive as positive?

What's the purpose of your repeated snide comments? Are you hoping that I'm just going to give up on the thread and ignore you if you're behaviour becomes childish enough? To answer your point though, here's some more specific information:

Not quite the capitalist utopia, huh?

 

Not particulary interested in singular profit on one pair of trainers, I think this about covers their profit as a whole:

But seeing as you're so persistant:

If all you see is a company providing jobs without actually researching pay and conditions then you're choosing not to see the exploitation.

Oooh, and how about this for good measure?

The fact that you're so in love with Nike makes me wonder if you're actually employed by them; or maybe a shareholder? Despite the fact that I despise the following companies, I thought this made interesting reading:

Seeing as you know so much - how about you provide us with some?

LOL, I definately didn't say that! As you know had you been paying attention to my post, I was talking about being forced to work in poor conditions for a ridiculously low wage, especially in comparison to the high profits that these companies make.

I would suggest that you look at your research before you start dismissing others.

 

I'm sorry StarFly but a lot of general talk about how trade sucks doesn't prove anything about commodity prices. Either you have something on commodity prices, or you don't. And you don't. In fact you are ignoring most of my points, such as the fact that rich countries are both producers and consumers of commodities, and that poor countries would benefit from more free trade.

Maybe you think you respond to any post about trade with the same vague academic paper that says "trade is bad" and think it will win any debate, but it doesn't. I could just as easily link to a vague paper that says trade is good and say "SEE! This PROVES trade is good!"

That's where this gets depressing because that is exactly the point I made in my last post, which are obviously responding to without reading properly. Developing countries need more free trade, not less. http://kickaas.typepad.com/. If you are opposed to rich countries subsidising and protecting agriculture, then support free trade. That's exactly what the developing countries demanded at Doha. If you eliminate the WTO there would be absolutely nothing to stop rich countries from extending this kind of subsidies and protectionism from agriculture to every other industry, and who do you think would win a subsidy war, rich or poor countries?

The fact that free markets are beyond your comprehension is not really something to brag about. Nobody, including me, called it charity. The fact is that the only countries that have got rich in this world did it through capitalism and trade. If you are sickened that people end poverty through corporations, investment, and exports, well, too bad for you.

 

Not particulary interested in singular profit on one pair of trainers, I think this about covers their profit as a whole:
Nike Inc., the world's top maker of athletic shoes, on Thursday reported a 60 percent rise in quarterly profit as it repaired ties with its main U.S. distributor and saw strong gains from overseas.......the company posted a net profit of $200 million.......
===============

Right so its not that you don't know, or can't figure it out, you're just "not interested". That's odd. For all your hostility to Nike profitability, you don't actually know how profitable Nike is, and refuse to even guess, and are not even interested in knowing.

But seeing as you're so persistant:
A British NGO estimates that the labor cost involved in making one pair of Nike shoes is only $3, yet this may sell for $100 in the US

OK, so does that make the other $97 profit? Does Nike have a 97% profit margin? Go on, guess.

I also find it revealing that you despise Nike for its track record in sweatshops, but the companies with better record than Nike - you despise them too! Well that's encouraging.

Do you understand the difference between GDP and GDP growth? China had a disasterous socialist economy of state owned industries, so it was poor (low GDP). They it opened up to trade and investment, and is now becoming rich (rapidly growing GDP).

That isn't a theory at all. "it's natural". Huh? So its natural they have made so little economic progress for so long and then suddenly start growing rapidly? Why? Why will they stop sleeping? You are trying to pretend that countries with 2 billion poor people suddenly experience rapid economic growth, and its not for any particular reason.

It is for a reason. Globalisation. 2 billion people getting wealthy - breaks your heart, doesn't it?

 

Oooh. Are we playing a game? I thought this was a discussion? Speaking of hostility though, you're the one that's wandered into this thread with the bad attitude. What axe do you have to grind, exactly?

If you can manage to stop foaming at the mouth for a minute, would you care to explain your point? China starts to open up to external investment, and GDP rises. So.... ummm.... not sure where this fits into your argument? GDP is not a measure of the general wealth of the population. You did know that, right?

You're right. It's not a theory. It's a fact. The two countries with the largest populations on the planet..... of course they're going to eventually come to dominate the global economy. It's simply a matter of numbers.

Which is vacuous. 'Globalisation' is an easy word to throw around, so would you care to define it a little more?

Starfly.... excellent post!

I was about to make this very point. GDP growth for a few countries does not equate with a reduction in poverty overall. In fact, I find your obsession with GDP as a measure of wealth to be somewhat alarming. To use your model, if a company came into a foreign country, enslaved its population and forced them to work for free, fed them the basics that they needed to survive and nothing more..... the actual wealth of the country would have increased, because GDP measures production output!

 

Isn't it funny that you despise Nike and consider it too profitable yet you don't consider it an appropriate part of the discussion to ask just what kind of profit margins Nike is earning. Why don't you quit beating around the bush and admit that you haven't got a clue what Nike's profit margin is (despite the fact that this information is publicly available and easily obtained) and you don't really care.

Funny, just a few posts ago you asked me what getting richer meant, I explained, and then I listed a number of ways in which Brazil was getting better off which did not involve GDP. Your attacks are now becoming repetitive circular arguments and petty. If you want to deny that rising GDP is bringing rising living standards to China, go ahead, otherwise at least keep track of your own failed arguments.

So you can't figure out how rising investment by foreign corporations which results rapid economic growth is relevant to a debate on globalisation? DUH.

This is laughable. It's just a fact? Why will they eventually dominate the economy? Why is it a matter of numbers? It is only inevitable if their economies grow faster than the US, Japan, Europe, etc. No matter how much bigger China and India are by population, unless their GDP growth is faster that US GDP growth, they will never dominate the global economy.

So what are you saying? Chinese and Indian GDP growth will exceed US GDP growth for decades, yet this somehow will not prevent these countries from staying poor? How exactly does this work? These countries have been poor for decades, because of the global system of oppressing poor countries, yet suddenly for no particular reason that is going to change and they will rapidly develop?

Don't you find it strange that there is a TWO BILLION PERSON exception to the global anti-poor country conspiracy?

 

I appreciate that you're so full of your own self-importance that it might be difficult for you to take a step back from spouting insults for the length of time that it takes to write a post, but how about you give it a try? You keep falling back on GDP as a crucial indicator of economic prosperity, and then just whine when I point out that this is hardly a valid indicator of wealth. Make your mind up. Either GDP is important and central to your argument, or it isn't. Try and keep up.

So becuase you can't counter the argument, you fall back on childish outbursts? We're all very impressed over here.

What's laughable is how you can't see the inevitability of a country of 1.2 billion people coming to dominate the global economy.

Huh? Did I say I expect China and India to stay poor?

I don't recall predicting rapid economic growth for India or any kind of economic miracle. That's your agenda, not mine.

However, India is on track to become the world's third largest economoy.... not because of sudden growth from globalisation, but because of the sheer size of its population. But a quarter of its population still live below the poverty line, and the per capita income is still extremely low. As far as I'm aware, market analysts are considerably less bullish with their predictions that you are. But I'm sure you know best, eh?

Don't you find it strange that this economic miracle of yours still leaves a country with 25% of its people living in poverty?

 

GDP is a crucial indicator of economic prosperity, but the point is that you haven't proposed anything else. You point is only to obfuscate. I have tried GDP and I have tried indicators like infant mortality. When I say infant mortality you go silent, when I say GDP you complain. This is typical is the anti-globalisation movement, the point is to be anti, not to stand for anything in particular.

So China and India aren't going to stay poor, and they will somehow dominate the world economy. But without experiencing rapid economic growth. This is the appeal of anti-globalisation economics - up means down, the sky's not blue, and if you don't understand its laughable.

Here's a little experiment for you. China has a GDP of $100 bn. The US has a GDP of $1,000 bn. They both grow at 5% per year. When will China become bigger than the US?

Measured against what? You could have just as easily gone to Korea in 1960 and complained that growth isn't fast enough and poverty hadn't been eliminated. But Korea was on track, and it was going to get there, about as fast as any nation in history has ever managed. Snapping your fingers and saying "i want utopia and i want it NOW" does not make you an expert on development.