Sunday, February 5, 2012

Why do some GOP party politicians envision a China-like America?

A few weeks ago, Huffington Post published a very interesting article titled "Emerging GOP View: Communist China Is Model for American Capitalism". The article discusses a growing trend amongst US capitalists, especially those who favor the Republican party, to view China as an example that the USA needs to follow. Here are some key quotes from the Huffington Post article:
First came Rep. Mike Coffman who wrote in May that China has "enjoyed sustained economic growth based on the free market principles that we have long abandoned in favor of the redistributionist policies of a welfare state."

Then in November, Michele Bachmann said, essentially, that China is growing like crazy because it lacks America's Great Society programs, which she'd dump.

And now yesterday, according to a tweet by AFP reporter Olivier Knox, Mitt Romney held up China as a place where people are getting rich on free enterprise and capitalism, while, by implication, Americans are watching on the sidelines getting poor
There are many monopolies in China, and a lot of state regulation (especially when it comes to "regulating" the workers rights, so that the capitalists can "freely" make huge profits). So there is not much point in seriously debating whether or not China is based on "free markets".

But still, China IS growing, and it does attract capital investments like no other country. We have discussed of course (in previous posts) how China is also heading for a crisis, as the Chinese workers are 'too poor' to buy all the products they produce, and as the Westerners can't keep buying them anymore (because they are getting poor), Chinese exports will suffer. Or that there are increasing signs of a Chinese property and housing bubble, as the workers can't buy all the houses they have built (because they are too poor). But China will probably get over any crisis in he long run, because it can attract investments (unlike the Western countries, with the exception of Germany).

We even remembered John Stapleton, an English Liberal Party politician who sat in the House of Commons between 1852 and 1874 - here's a famous quote of his: "If China," says Mr. Stapleton, M.P., to his constituents, "should become a great manufacturing country, I do not see how the manufacturing population of Europe could sustain the contest without descending to the level of their competitors." (Times, Sept. 3, 1873, p. 8.).

But hey, who cares if some workers live or die? In fact, from a capitalist's point of view, if when a crisis hits, then it makes a lot of sense to let some workers suffer or even die, as they can easily be replaced (there are billions of them). So, if some of them die, then there is no problem - on the contrary, their deaths would help keep the unemployment rate lower.

"Know your place in the universe" as the saying goes - but what is a workers place in the universe? Here is FOXCONN's CEO on the subject:

CEO OF APPLE PARTNER FOXCONN: 'Managing One Million Animals Gives Me A Headache'
According to WantChinaTimes, Terry Gou, the head of Hon Hai (Foxconn), the largest contract manufacturer in the world, had this to say at a recent meeting with his senior managers:

"Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache," said Hon Hai chairman Terry Gou at a recent year-end party, adding that he wants to learn from Chin Shih-chien, director of Taipei Zoo, regarding how animals should be managed.

As WantChinaTimes put it, Gou "could have chosen his words more carefully." But Gou had indeed invited the zoo director to speak to Hon Hai's top managers in the hope that the zoo-keeper's advice would help them do their jobs better
So, why does China attracts investments? And why does the GOP want to emulate the Chinese model?

It's simple: It's not just the low wages or the long working hours. It's not even the fact that the new generation of Chinese workers is more skilled and educated than the previous ones.

It's also because the workers have no rights, not really. They pretty much do whatever the capitalists order them to do in order to increase productivity and their profits. And if they have the "audacity" to make some demands, then they are fired or the state sends in the police or the army and crack down on protesters. There is no "free speech", and the list goes on and on.

So, the Western capitalists have billions of "man-animals" in China, so they simply have no use for the Western workers, not all of them anyway. And, naturally, they just let them rot, die, while the rest have to accept "austerity measures", that force them to work longer hours for less money. They become "Chinafied" - after all, this is what the GOP members want to do, right? They don't like "the redistributionist policies of a welfare state", because there is no way to compete against China if your workers are living in relatively "humane" conditions", while the Chinese workers are treated like "animals". Capitalism has reached a point where it can only grow in a "China-like business environment" (Germany being the one notable exception).

So, if humanity is to keep forcing the workers to compete against each other, for the sake of a few capitalists, then this is what happens:
If you are a worker, you'll have to accept a very low wage, working long hours, etc., or you'll have to face massive unemployment, as the capitalists can invest their capital in other places (wherever the workers DO accept living in poverty).

YES, there are some notable exceptions to this - for example Germany is doing pretty well, as it produces better quality products to make up for the relatively "high" German wages. But the general trend is clear: China is the new row model for the capitalists, and the workers have an important choice to make - They can either accept living like "animals", or they can overthrow the capitalists, who make us compete against each other, for their benefit and their benefit alone.

Here is what you, as a worker, have to compete against (from the "New York Times"):

This Article Explains Why Apple Makes iPhones In China And Why The US Is Screwed
When one reads about these working conditions — 12-16 hour shifts, pay of ~$1 per hour or less, dormitories with 15 beds in 12x12 rooms — the obvious assumption is that it's all about money:

Greedy manufacturers want to make bigger profits, so they make their products in places with labor practices that would be illegal in America.

And money is certainly part of it.

But an amazing new article by Charles Duhigg and Keith Bradsher of the New York Times reveals that there's a lot more to it than that.

Most of the components of iPhones and iPads — the supply chain — are now manufactured in China, so assembling the phones half-a-world away would create huge logistical challenges. It would also reduce flexibility — the ability to switch easily from one component supplier or manufacturer to another.

China's factories are now far bigger and more nimble than those in the United States. They can hire (and fire) tens of thousands of workers practically overnight. Because so many of the workers live on-site, they can also press them into service at a moment's notice. And they can change production practices and speeds extremely rapidly.
China now has a far bigger supply of appropriately-qualified engineers than the U.S. does — folks with the technical skills necessary to build complex gadgets but not so credentialed that they cost too much.

And, lastly, China's workforce is much hungrier and more frugal than many of their counterparts in the United States.

On this last point, Duhigg and Bradsher tell the story of Eric Saragoza, an engineer who began working in an Apple factory near Sacramento in 1995. The plant made Macs, and for a few years, Saragoza did well, earning $50,000 a year, getting married and having kids, and buying a house with a pool.

Soon, however, Apple started shipping jobs overseas, because the costs of manufacturing in Asia were so much lower. Importantly, these reduced costs weren't just about wages — they were about being closer to the supply chain and the willingness of the workforce to put in over-time.

Saragoza was soon asked to work 12-hour days and come in on Saturdays. But, understandably, he wanted to watch his kids play soccer on the weekends.

Saragoza's salary was too high for him to take an unskilled job. And he didn't have the experience and credentials necessary to move into senior management. In 2002, his job was eliminated. Apple, meanwhile, turned the Elk Grove plant into an AppleCare facility, with call-center employees making $12 an hour.

Recently, desperate for work, Saragoza took a job at an electronics temp firm. Assigned to the AppleCare plant, he was paid $10 an hour to test repaired iPads before they were sent back to customers. That job paid so little (and was presumably so depressing) that the now 48-year-old Saragoza quit and is looking for work again.

Meanwhile, in Shenzhen, a young project manager named Lina Lin coordinates the manufacture of Apple accessories for a company in the Apple ecosystem. She makes a bit less than Saragoza made a decade ago as an Apple engineer. She lives in an 1,100-square foot apartment with her husband, their in-laws, and their son. They save a quarter of their salaries every month.
Your iPhone Was Built, In Part, By 13 Year-Olds Working 16 Hours A Day For 70 Cents An Hour

  • One Foxconn worker Mike Daisey interviewed, outside factory gates manned by guards with guns, was a 13-year old girl. She polished the glass of thousands of new iPhones a day.
  • The 13-year old said Foxconn doesn't really check ages. There are on-site inspections, from time to time, but Foxconn always knows when they're happening. And before the inspectors arrive, Foxconn just replaces the young-looking workers with older ones.
  • In the first two hours outside the factory gates, Daisey meets workers who say they are 14, 13, and 12 years old (along with plenty of older ones). Daisey estimates that about 5% of the workers he talked to were underage.
  • Daisey assumes that Apple, obsessed as it is with details, must know this. Or, if they don't, it's because they don't want to know.
  • Daisey visits other Shenzhen factories, posing as a potential customer. He discovers that most of the factory floors are vast rooms filled with 20,000-30,000 workers apiece. The rooms are quiet: There's no machinery, and there's no talking allowed. When labor costs so little, there's no reason to build anything other than by hand.
  • A Chinese working "hour" is 60 minutes — unlike an American "hour," which generally includes breaks for Facebook, the bathroom, a phone call, and some conversation. The official work day in China is 8 hours long, but the standard shift is 12 hours. Generally, these shifts extend to 14-16 hours, especially when there's a hot new gadget to build. While Daisey is in Shenzhen, a Foxconn worker dies after working a 34-hour shift.
  • Assembly lines can only move as fast as their slowest worker, so all the workers are watched (with cameras). Most people stand.
  • The workers stay in dormitories. In a 12-by-12 cement cube of a room, Daisey counts 15 beds, stacked like drawers up to the ceiling. Normal-sized Americans would not fit in them.
  • Unions are illegal in China. Anyone found trying to unionize is sent to prison.
  • Daisey interviews dozens of (former) workers who are secretly supporting a union. One group talked about using "hexane," an iPhone screen cleaner. Hexane evaporates faster than other screen cleaners, which allows the production line to go faster. Hexane is also a neuro-toxin. The hands of the workers who tell him about it shake uncontrollably.
  • Some workers can no longer work because their hands have been destroyed by doing the same thing hundreds of thousands of times over many years (mega-carpal-tunnel). This could have been avoided if the workers had merely shifted jobs. Once the workers' hands no longer work, obviously, they're canned.
  • One former worker had asked her company to pay her overtime, and when her company refused, she went to the labor board. The labor board put her on a black list that was circulated to every company in the area. The workers on the black list are branded "troublemakers" and companies won't hire them.
  • One man got his hand crushed in a metal press at Foxconn. Foxconn did not give him medical attention. When the man's hand healed, it no longer worked. So they fired him. (Fortunately, the man was able to get a new job, at a wood-working plant. The hours are much better there, he says — only 70 hours a week).
  • The man, by the way, made the metal casings of iPads at Foxconn. Daisey showed him his iPad. The man had never seen one before. He held it and played with it. He said it was "magic."
 Nike factory to pay $1m to Indonesian workers for overtime
Shoe plant workers clocked up nearly 600,000 hours of overtime without pay over two years

A Nike factory has agreed to pay $1m in unpaid overtime to Indonesian workers in a move that could force other suppliers of multinational companies to follow suit.

"This has the potential to send shockwaves through the Indonesian labour movement," he said, adding that the victory had prepared the union to take on the fight for any workers who had been forced to work overtime without pay. "We have only just begun."