Capitalism: “It might start sucking less”

From The International Herald Tribune:

On the cusp of economic history

Is economic history about to change course? Among the chieftains of politics and industry gathering in Davos for the World Economic Forum on Wednesday, a consensus appears to be building that the capitalist system is in for one of those rare and tempestuous mutations that give rise to a new set of economic policies . . .

“The pendulum between market and state is swinging back,” Pascal Lamy, director general of the World Trade Organization, said by telephone before traveling to Davos. “The year 2008 is a crucial year that could end up setting the tone for some time to come. What we need is an ideological mutation without falling into the trap of protectionism.”

One such mutation in mainstream economic policy took place after the Depression of 1929, which led to a protectionist interlude and then gave rise to Keynesian demand-side policies and eventually the welfare state. Another took place following the oil price shocks in the 1970s, which refocused policy makers’ attention to supply-side measures and strengthened those pushing for privatization and free markets as the best way to stimulate growth.

When students of economics open their history books in 2030, they might read about 2008 as the year when the groundwork was laid for a re-regulation of certain markets, a more redistributive tax system and new forms of international policy coordination, economists say.

I don’t know, isn’t this just more of the classic cycles we’re supposed to expect from capitalism?  But having said that, it would be unfair to claim that nothing has changed and that we’re stuck in a perpetual circle of death and reincarnation.  Perhaps the roller coaster is a more apt metaphor – things go up and down, but they never go backwards.  After all, the environment is in a more precarious position today and the emerging economies of China and India are far stronger than they have been in the recent past.

So, while no one can expect the abolition or even the gradual phasing-out of the capitalist nation-state system, perhaps we will see some encouraging moves towards allowing more people around the world the chance not to get gang-raped out of nowhere by economic policies they never agreed to.  And perhaps some of these people might be more open-minded to an alternative to the current political-economic system?  Hope springs eternal.

By the way, that picture of Davos just makes me even happier that I’m in Costa Rica right now.  Man, it looks cold up there (although it’s snowing so it must be relatively warm, like only -5 Celsius).

Plus ça change, plus c’est la même chose

For history-minded people who are also China watchers, it’s fascinating to see how China’s current drive towards accelerated industrialization resembles the historical trajectory of European industrialization.  There is, of course, the massive pile of Chinese migrant labourer bodies stacking up from various coal mine accidents, sweatshop fires, and worker riots.  All of this recalls “Western” experiences, and if you squint at the headlines in the right way you can even imagine you’re reading a news article from the 19th century.  The wealthier Chinese are even aware of this:

But an odd change has come about in some [Chinese] shoppers’ minds. As members of China’s business and political elite, they have come to believe that the world is a huge jungle of Darwinian competition, where connections and smarts mean everything, and quaint notions of fairness count for little.

I noticed this attitude on my most recent trip to China from the United States, where I moved nine years ago. So I asked a relative who lives rather comfortably to explain. “Is it fair that the household maids make 65 cents an hour while the well-connected real estate developers become millionaires or billionaires in just a few years?” I asked. He was caught off guard. After a few seconds of silence, he settled on an answer he had read in a popular magazine.

“Look at England, look at America,” he said. “The Industrial Revolution was very cruel. When the English capitalists needed land, sheep ate people.” (Chinese history books use the phrase “sheep ate people” to describe what happened in the 19th century, when tenant farmers in Britain were thrown off their land to starve so that sheep could graze and produce wool for new mills.)

“Since England and America went through that pain, shouldn’t we try to avoid the same pain, now that we have history as our guide?” I asked.

“If we want to proceed to a full market economy, some people have to make sacrifices,” my relative said solemnly. “To get to where we want to get, we must go through the ‘sheep eating people’ stage too.”

In other words, while most Chinese have privately dumped the economic prescriptions of Marx, two pillars of the way he saw the world have remained. First is the inexorable procession of history to a goal. The goal used to be the Communist utopia; now the destination is a market economy of material abundance.

Second, just as before, the welfare of some people must be sacrificed so the community can march toward its destiny. Many well-to-do Chinese readily endorse those views, so long as neither they nor their relatives are placed on the altar of history. In the end, Marx is used to justify ignoring the pain of the poor.

Certainly it’s a mealy-mouthed excuse for an excuse: It’s okay for Chinese to exploit their fellow human beings because the British did the same 150 years ago.  The British also forced the Chinese to buy British opium at gunpoint and cede Hong Kong in the Opium Wars, so my inner cynic wonders if the Chinese are also planning on doing the same thing to other countries.  Then again, the march of progress means that often the new capitalists are welcomed with open arms.

Of course, this pattern of worker abuse is not just a simple reiteration of Western history being played out by people with darker skin.  For example, no witches were ever burned in England because manufacturing jobs were scarce.  The present isn’t the past and the (cough, ahem) Third World isn’t the farcical Napoleon III to the First World’s l’Empereur, Marx’s witticism notwithstanding.

For one thing, while it may be tempting to think of all of this “stuff” as happening in foreign countries or in the past, the resurgence of Taylorism and “scientific management” (a discredited management philosophy organized around getting the most productivity out of workers and damn their health and comfort), the introduction of flexible labour and contingent work (in rural as well as in urban areas), the migration of capital and jobs, and the shrinking of the working class labour market in the “West” means that things are getting crappier where white people live too.  Some economists are even admitting this, despite the fact that most of them seem to be propagandists of global capitalism.

In fact, the globalist project has been so dismal in its rewards that it’s been traded in for straight-up nationalism in some quarters (e.g., the US, Russia, Pakistan, Japan, and so many other countries).  “Here we go again,” say the historians, though in this sequel the Indians sometimes fight off the cowboys successfully — note, though, that it’s not the absolutely downtrodden countries that are resisting successfully, but the ones that already have some power.  Lest anyone forget, remember also that the elites of those countries are hard at work exploiting their paisanos, so what we’re seeing is more like one group of elites fighting off another group of elites than the underdogs beating the five-time league champion.

All of these thoughts were triggered in me when I read about the recent fashionability of skin tanning among wealthier Chinese (via Boas Blog’s shoutout to Racialicious).  Note that light skin was previously the in-thing to have to signify one’s wealth since it’s a sign that one isn’t a common labourer working outdoors, just like in Britain before the Industrial Revolution and just like it is today in many developing countries (and let’s not forget that skin whitening creams are used by many black people in the US, UK, and the Caribbean, though they’re used for slightly different reasons than mere signifiers of wealth).  With the expansion of the airline industry, the drop in ticket prices thanks to cut-throat competition, and the greater number of vacationing middle class people created by industrialization, tanned skin has become a sign that the possessor has been to an expensive holiday overseas — again, like the way tanned skin became fashionable in Britain as a sign that the person has been to the Mediterranean, most likely during their Grand Tour of Europe, such holidaying becoming only possible by the building of railways to criss-cross the continent.

So there you have it: The more things change, the more they stay the same (barring the odd witch-burning and war on Islam here and there).

O brave new world, a whole new fantastic point of view

I’m still living out of boxes here. It’s charming how the first sight I see upon waking up are bottles of hair gel and vitamin C tablets, plus the dead bugs I haven’t swept up yet. (Update: bugs are gone, vitamin C and hair gel remain ready for use in vitamin and hair-related emergencies).

In case it’s not clear, I’m talking about the new place I moved into. It’s not so bad now that I’ve got an air mattress, I actually had some really good sleep last night. Lots better than when I had to sleep in my office chair because I didn’t have any other furniture (it felt like I was at an airport).

But I didn’t pick the title of this post just because it amuses me to discuss my new place under a title that combines lines from 1984 and the Disney movie Aladdin. I thought I would discuss these two articles: More Koreans Look to Retire in Philippines and Living, Doing Business the Philippine Way

Briefly, the articles talk about (South) Korean emigration to the Philippines. I’ve long been aware that more and more Koreans are moving to the Philippines, but I’ve never known exactly why. Now it’s clear what’s happening: middlingly-wealthy Koreans are retiring and living in the Philippines because they get more value for their retirement fund and pension money.

It’s not just that, though. Those retired Koreans need people that can cater to their needs, which is something that has occurred to a lot of other Koreans. It’s also well-known in migration studies that once a certain group has established itself in a particular country, it becomes easier for other members of that group to migrate to that country, as in the case of children joining their parents or sisters sponsoring their siblings. So you get a secondary wave of Korean migration that comes to the Philippines to make money off their fellow Koreans. I’m willing to bet a lot of these businesses were established in the early days by retirees who were rushing to fill this economic niche.

This whole situation is only possible because of globalization, which I take here to mean “the intensification of global interconnectedness . . . [combined with] the the speeding up of economic and social processes” (Rosaldo & Inda 2002:2-6). This intensification has happened due to several factors. First is the development of new technologies that make it easier to transfer money overseas as well as communicate with distant relatives and friends. However, just as important, if not more so, is the development of new regulations and the signing of new agreements between governments which make the bureaucratic processes involved in international money transfer and immigration easier. After all, to take one example, the technologies involved in jet travel haven’t really changed that much in the last few decades, but the deregulation of the airline industry and the resulting competition between the different carriers have driven ticket prices down.

Because international migration is much easier to achieve, South Koreans have been engaged in what Anna Tsing refers to as a “scale-making project” (Tsing 2002:473). Retiring to the Philippines may have been inconceivable to previous generations of Koreans, but it’s increasingly possible to imagine such a thing today. The sense of scale for South Koreans has been expanded. While the distance between South Korea and the Philippines seemed vast in former times, today the Philippines doesn’t really seem too far to Koreans. This is thanks to the larger scale-making project behind globalization (“It’s one world,” “We’re all connected,” etc.) which is presenting the world as being more interconnected. This is also thanks to the smaller scale-making project in South Korea which is trying to construct the Philippines and Southeast Asia in general as part of the natural sphere of South Korean migration. These scale-making projects are training South Koreans to think of the Philippines as a natural destination for business and retirement.

However, as David Harvey points out, the compression of time and space in globalization is not a neutral process, but has moral implications: a revolution “in temporal and spatial relations often entails . . . not only the destruction of ways of life and social practices built around preceding time-space systems, but the ‘creative destruction’ of a wide range of physical assets embedded in the landscape” (Harvey 1996:241). In theory, capitalism is not a zero-sum game, but in practice, for someone to win at the game of capitalism, someone else has to lose. This is especially true in an age of global capitalism, where companies go all over the world looking for places where they can make the most money while spending the least.

What are the moral implications of intensified global interconnectedness? Consider who it is that participates in international migration. Relatively wealthy people are not the only ones that migrate internationally, there are also millions of the relatively poor who migrate under dangerous conditions to work at dangerous, exploitative, and underpaid jobs. Consider also that making it easier for corporations to move money around means that it’s also easier for corporations to shop around internationally. Don’t like the fact that your workers in Virginia are entitled to bathroom breaks and a living wage? Sell your assets and set up shop in Shenzhen where such things are entirely optional.

Beyond that, also consider who it is that is able to migrate: relatively wealthy South Koreans. Why is it that citizens of South Korea are able to retire overseas, while citizens of the Philippines generally aren’t? The answer is contingent on the different histories of the two countries. The Philippines was a colony of the United States, and after independence the country was still controlled by neocolonial practices that meant the Philippines was still dependent on its “former” colonial master. However, South Korea was vitally important to the United States in its Cold War against the Soviet Union as a bulwark against communist North Korea. It would not have been wise for the US to have South Korea end up like the Philippines, since it would not be able to put up much of a resistance against the North. Therefore, no neocolonial and neoimperial policies were enacted against South Korea and plenty of aid in building infrastructure and such was offered by the US. Simply put, then, it served American interests to have a weak Philippines dependent on the US while at the same time having a strong South Korea to defend against the North. Which brings us to today, where — economically speaking — we have a mini-US in South Korea acting towards the Philippines like the US acts towards Mexico: like a personal playground for its citizens.

And on that note, Happy Labour Day and enjoy the long weekend to those of you that have it.

References:

Inda, Jonathan Xavier; and Renato Rosaldo. 2002. “Introduction: A World in Motion”. In Jonathan Xavier Inda and Renato Rosaldo (eds.), The Anthropology of Globalization: A Reader. Malden, MA: Blackwell Publishing Ltd. Pp. 1-34.

Harvey, David. 1996. Justice, Nature, and the Geography of Difference. Cambridge, MA: Blackwell Publishers Ltd.

Tsing, Anna. 2002. “Conclusion: The Global Situation”. In Jonathan Xavier Inda and Renato Rosaldo (eds.), The Anthropology of Globalization: A Reader. Malden, MA: Blackwell Publishing Ltd. Pp. 453-485.