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Naomi Klein’s No Logo states that corporations have been championing globalization using the reasons that globalization allows U. S. consumers to benefit from cheaper products produced abroad, while developing nations benefit from the economic growth stimulated by foreign investments. The generally accepted belief is that governmental policies should be established in favor of the corporations to facilitate the trickling down of corporate profits to the end consumers and workers abroad. Klein, however, contends that globalization rarely benefit the workers in the developing countries.
Corporations seek out countries with cheap labor forces to lower their production costs. Consequently, they will engage in practices, such as banning labor unions and selecting a passive labor force, which frequently consists of young women, to ensure their policies on low wages are met with little or no resistance. Ultimately, in order to attract investments of multinational corporations, governments in third world nations must compete against each other to exploit their own labor force to supply the cheapest products.
Furthermore, instead of sharing the profits with the workers, corporations spend most of the money saved from the labors on advertising and celebrity spokespeople. There is no unanimous voice on the subject of globalization from the business community. It is undeniable that unjust labor practices do exist abroad. One notable anti-globalization proponent is economist E. F. Schumacher, who spoke vehemently against the nascent practice of globalization and belief in mass production in his book Small is Beautiful in 1973.
Schumacher claims that mass production through specialization of labor actually do more harm to the poverty-stricken countries. He argues that the specialization of labor was developed to benefit nations with small populations, whose growth was restricted by the shortage of labor, and is therefore incompatible with developing countries that generally have large populations. Specialization of labor in nations with large populations serve only to enslave the majority of the populus to the monotonous production of goods that is devoid of any spiritual purposes and restricts the workers’ creative potentials.
Furthermore, Schumacher also argues that the goal of the government and community is to ensure that every person within the community has the means to lead a meaningful existence. Globalization, on the other hand, fails to benefit communities. Many developing nations that host multinational corporations have a large percentage of the population with little or no means of survival. Therefore, the best option for these nations is to keep production to the local level and attain self-reliance on a small scale.
Although this method of production will not be as efficient and will restrict the locals’ ability to consume foreign goods and investment, it will successfully provide basic sustenance to the people. Proponents of globalization argue that globalization is the best option for workers in developing nations. Living standards and wages are generally quite low in these nations. When multinational corporations enter, they provide more jobs that generally pay more than local companies.
Furthermore, many argue that through the process of self-selection, those who choose to work for multinational corporations did so believing it was in their best interest. Since no one is forced to work for multinational corporations, no one is exploited. I had an opportunity to speak with Dinesh D’Souza, who is a well-known writer and proponent for globalization and capitalism, in 2007. D’Souza notes that out of all the competing economic systems in the past, capitalism proved to be the most profitable, and since capitalism’s triumph over socialism in the 20th century, no viable competitor has emerged.
Capitalism has been tried and proven to be the most efficient system of economics. Nevertheless, since its conception, capitalism has been under on-going attack, even from its founder Adam Smith, who defends capitalism but still thinks of the capitalists as greedy and selfish. Therefore, it is clear that the criticisms against capitalism target not its economic viability but its moral merits. On the subject that globalization has caused the gap between the richer and the poor to widen, Mr. D’Souza believes that the gap in living standards between the rich and poor has been reduced significantly.
In fact, both the rich and the poor are getting richer, only that the rich are amassing wealth at a greater pace than the poor. The reduction of the gap in the standard of living between the rich and the poor can be attributed to capitalism and technological advance. Efforts in the past to solve poverty in other countries through foreign either foreign aid or loans have failed because they were short-term fixes. Capitalism, on the other hand, proved to be the most effective system to cure poverty in the world.
Instead of simply giving money to impoverished nations, capitalism created jobs and incentives for the poor to exchange their labor in the market for better wages, goods and services. The impact of globalization on the workers of the developing nations has been very positive. In fact, these workers welcome foreign investment. The only people complaining are the Americans at home. After graduating from a liberal university, I chose to teach abroad in a third world nation, believing it was the best way I could contribute to humanity.
A year later, after witnessing the positive impacts foreign investments made in that town, I returned as a believer in capitalism and enrolled myself in business school. Knowing that many of my students bear the burden of supporting their families, who were mostly impoverished farmers, I could not tell them to work for $4 a day for local businesses instead of pursuing higher paying jobs at the American or British companies. Wages in developing nations are indeed lower than in the industrialized nations. Nevertheless, they are frequently higher than what the locals could offer.
Workers are not trapped by fear to work for these companies. Instead, they are motivated by the prospects of better financial rewards. Despite Klein’s claim that governments in third world nations are exploiting their own labor force to appease foreign investors, the presence of multinational corporations actually serves to curb corruption to a certain level. Multinational corporations are answerable to their home constituencies and held accountable for their practices abroad. Therefore, they are more wary of engaging in corrupt business practices with the government than the local businesses.
Furthermore, local governments that are eager to attract foreign investments must reassure the firms that the local infrastructures are conducive to business development and thus giving the multinational corporations more leverage in leading change in a positive direction. Foreign firms also have an incentive to improve the environment in which they operate since an unhealthy social environment is not beneficial to any business. Finally, multinational corporations are under more scrutiny in the local environment than other businesses.
Practices that may be perceived as unjust or unethical quickly evoke nationalist outcries from the locals. In fact, foreign businesses have to go the extra mile to win the trust of the locals in order to be embraced into the community. Frequently, they engage in charity organizations to encourage awareness of their companies. No Logo intends to attack globalization by claiming that it damages locals in third world nations and yet it fails to take into context the preexisting social conditions in these nations.
In doing so, Klein inevitably detracts credibility from her claims. Unfortunately, social responsibility cannot be imposed onto others. However, capitalism is a great system in which the behaviors of the players are influenced and balanced by the market. The teacher in me believes that education is the way to ultimately alter the beliefs and practices of future generations to create societies that are free of corruptions and injustice. Nevertheless, I shall choose capitalism as the most expedient and effective way to bring about change in society now.