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The Wild West of Free Market Capitalism

Joe Shwingding BN-ZERO 2012/01/21 17:33:20

Imagine a world where sixteen hour days and .70¢ hr is the prevailing wage. Now imagine the company you worked for earned $10B in profit in 2010 and by all accounts will make $30B in profit in 2011. Now finally put yourself in a work setting where the chairman referred to the employees as "animals" and managing them gave him "a headache". The aforementioned chairman also hired a zoo keeper to give a 'peptalk' to his senior managers.

The place I am referring to manufactures many of those high tech gadgets you probably have in your house. Companies like Apple, Sony, Nintendo and HP, among many others are produced by Foxconn.

920,000 jobs

That’s the number of employees Foxconn has as of 2010. You might not have ever heard of Foxconn however We’ll bet you’ve bought some of their stuff before. Yea. In one campus….ONE CAMPUS. Foxconn has 300,000 to 450,000 workers which are employed in Shenzhen China at the Longhua Science & Technology Park, a cramped, walled campus sometimes referred to as “Foxconn City”or “iPod City”. Covering about 1.16 square miles (3 square km).

On the surface it would appear as a college campus with dorms, tennis courts, and swimming pool.
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But look closer at the "dorm rooms" and you will usually find 8 people living in one room.

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.

Look closer still.
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If it looks like a prison you are not too far off. Why the bars? Well Foxconn has a problem with jumpers.
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Lets rewind back to 2010 when it was first making headlines. By spring of 2010 it was being reported that Shenzen had at least 10 successful suicides take place at the Foxconnfactory/city.

This week, international attention has focused on the enormous Foxconn factory in the Chinese city of Shenzhen, where 13 workers have tried to commit suicide in the first five months of this year, with 10 succeeding. Hours after Foxconn's chairman, Terry Gou, took reporters on a tour of the industrial complex Wednesday in an attempt to ease concerns, a 23-year-old man jumped to his death from a dormitory balcony. And on Thursday, a 25-year-old man who had worked at Foxconn for only two months slit his wrists in his dorm room, but survived.

The working conditions are literally out of Upton Sinclairs "The Jungle". Where workers stand for 12 to 16 hours a day. 13 days of work before a day off. Factory gates manned by guards with automatic weapons.
Mike Daisey who does a one man stage show "The Agony and the Ecstasy of Steve Jobs" reports that:

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.

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After 13 attempted deaths, 10 successful in iPod City, and promises to change conditions you might have thought some improvement would have been made since 2010.

By the spring of 2011 at least 14 workers had killed themselves so the Foxconn executives came up with a new idea to change the problems plaguing the factory cities in Chengdu or Shenzen. This new idea ... a no suicide pledge they forced workers to sign.

As far as working conditions the Centre for Research on Multinational Companies and Students & Scholars Against Corporate Misbehaviour (Sacom) found appalling conditions in the factories. They claimed that:

  • Excessive overtime was rife, despite a legal limit of 36 hours a month. One payslip showed a worker did 98 hours of overtime in one month, the Observer reported.
  • During peak periods of demand for the iPad, workers were made to take only one day off in 13.
  • Badly performing workers were humiliated in front of colleagues.
  • Workers are banned from talking and are made to stand up for their 12-hour shifts.

One employee was quoted that "She said they were made to work illegally long hours for a basic daily wage, as little as £5.20, and that workers were housed in dormitories of up to 24 people a room."

In Chengdu, working between 60 and 80 hours overtime a month was normal, with many breaching Apple's own code of conduct with the length of their shifts.
The investigation also found that employees claimed they were still not allowed to speak to each other on the factory floors.

Foxconn Spokesman Louis Woo: 'But we are working to change it.'

Surely after two years and multiple deaths we should be happy to report that conditions haveimproved at Foxconn.

Terry Gou, chairman of Foxconn parent Hon Hai Precision Industry was reportedly entertaining Taipei Zoo director Chin Shih-chien onstage when he asked Chin "how animals should be managed" and instructed Hon Hai executives present to listen carefully to the zookeeper's advice.
"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," Gou said,according to the website run by Taiwan's China Times News Group.

Well they did implement the mandatory "no-suicide" rule since last year. And just to insure that there would be full compliance with this new mandate they have also installed new safety procedures that will ensure compliance. Nets!

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Not to be deterred though the factory workers upped the ante. Just last week around 150 Chinese workers at Foxconn, the world's largest electronics manufacturer, threatened to commit suicide by leaping from their factory roof in protest at their working conditions.

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The situation was resolved with no jumpers this time.

Usually around this time the discussion turns to the bottom line. Even with all the bad publicity Foxconn profits continue to make new highs

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Apple has also not suffered any setbacks.

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How much less money would Apple make if those 400,000+ manufacturing jobs were based in the USA. A billion less? Two? FIVE? So instead of making 14 billion last year they would have only made roughly 10 billion in profit. Or this year Instead of being on pace for 30 billion they would only make 25 billion in profit?? What kind of impact would almost a half a million manufacturing jobs have in the U.S. economy?

What are the answers to this complicated problem? You have yet another American Co. exploiting a foreign workforce with subhuman conditions and wages. Union organizers are thrown in jail for attempting to change these horrible working conditions. Raising wages is not the "end-all" solution and would create its own set of problems. Are these people better off than working in the rice fields?

Somewhere in the middle lies a solution.

Discuss.

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  • luvguins 2012/06/05 21:40:56
    luvguins
    +1
    Free market capitalism is a joke, and has been. We have corrupt capitalism and trickle down economics that has never worked except to create the greatest disparity in wealth in history, and the GOP wants to continue it. They think Euro austerity with more tax breaks to corporations will reverse the economy when it will only prolong recovery and dip us back into a recession like what is happening in the UK now. The Wall St. banks, and big corporations want more at the expense of the middle class, and are trying to buy the election to continue looting the country. Even David Stockman, Reagan's OMB head, now says that Reaganomics was a Trojan Horse.

    Stockman said, "In1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967 the wealthiest 20% only accounted for 43% of the nation's income. The trend began in 1982. Between 1967 and 1982 middle-income households were gaining a larger share of the economy. What this means is that between 1982 and 2001 the bottom 8...
    Free market capitalism is a joke, and has been. We have corrupt capitalism and trickle down economics that has never worked except to create the greatest disparity in wealth in history, and the GOP wants to continue it. They think Euro austerity with more tax breaks to corporations will reverse the economy when it will only prolong recovery and dip us back into a recession like what is happening in the UK now. The Wall St. banks, and big corporations want more at the expense of the middle class, and are trying to buy the election to continue looting the country. Even David Stockman, Reagan's OMB head, now says that Reaganomics was a Trojan Horse.

    Stockman said, "In1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967 the wealthiest 20% only accounted for 43% of the nation's income. The trend began in 1982. Between 1967 and 1982 middle-income households were gaining a larger share of the economy. What this means is that between 1982 and 2001 the bottom 80% of Americans have lost share in the nation's economy. This was the inevitable result of Reaganomics. It was an intended result. Political control and economic control go hand in hand. If the control of the economy is not in the hands of the majority of Americans then neither is political control."
    (more)
  • ronnie 2012/03/07 21:41:23
    ronnie
    What you just described is Feudalism. If you dont get the conditions you like, wither put pressure on the business, go work somewhere else or start your own business. Its very easy to criticise, but no economic system has genereated as much wealth as capitalism.
  • findthe... ronnie 2012/03/07 22:06:52
    findthelight2000
    +2
    When Capitalism falls into a system of a handful of multi-billionaires, with the rest of society giving up more and more so that those same multi-billionaires can get richer, then you are looking at a system that has failed, and is broken.
  • Joe Shw... findthe... 2012/03/07 22:10:42
    Joe Shwingding BN-ZERO
    +1
    well stated.
  • ronnie findthe... 2012/03/07 22:13:16
    ronnie
    Broken? I believe that you'll find that the average standard of living in the USA right now, that is, in the middle of a crisis, is more than 10 times higher than the average Mao era Chinese and the average Soviet citizen. Its not the rich's fault that the poor are poor. You can actually own property and set up your own business for profit, its simple, a small shop can get you going for a lifetime. There are multi-millionaires and very poor, very true, but in the same way there are extinct animal species and prosperous species, is ot their fault that some species died out? Its nature, total equal distribution of wealth is unnatural, everyone should have what they worked for. There's a film called "pursuit of Happyness", based on a true story that tells you of the virtue of Capitalism. I can assure you soviet russians were dying for capitalism and democracy to arrive.
  • luvguins ronnie 2012/06/05 21:06:48
    luvguins
    +1
    True Capitalism will cease to exist if the GOP ever controls the government. Billionaires will flourish, and the middle class will be reduced to serfs with no mobility allowed. That would be the future with the GOP. They have working on it for 30 years.
  • Joe Shw... ronnie 2012/03/07 22:12:11
    Joe Shwingding BN-ZERO
    +1
    For the few.

    This says it all about what capitalism has turned into. The Reagan gift that keeps on giving.
    income distribution
  • ronnie Joe Shw... 2012/03/07 22:15:31
    ronnie
    Dont try to convince me with some chart, I bet you cant think of a better economic system. Of course theres rich and poor, but is it the fault of the rich that the poor are poor? They worked for their money.
  • Joe Shw... ronnie 2012/03/07 23:12:53
    Joe Shwingding BN-ZERO
    +1
    Is it their fault? A case can be made that yes. Did they work for it? I think that is a very large assumption on your part, with no substantiated facts to back it up.
    Nobody faults them for being well off ... where the line is drawn is when they use their wealth to "pull the ladder up". That is where capitalism stops being a workable model and becomes a cannibalising entity extracting wealth only for the sake of concentrating wealth.
  • ronnie Joe Shw... 2012/03/08 09:32:02
    ronnie
    The standard of living in the USA is not only One of the highest in the world, but it is more than ten times higher than in the USSR and Cuba and Mao's China, THAT is capitalism
  • Joe Shw... ronnie 2012/03/08 16:22:15 (edited)
    Joe Shwingding BN-ZERO
    No, that is being able to print unlimited amounts of money and pay your bills in your own currency.
    USSR, Cuba, China ... really? Got news for you, USSR and China practice capitalism.
    How about we look at other places that supposedly practice capitalism, only this time by wealth disparity.
    income distribution

    Who does the US keep company with when it comes to gross income disparity?
    http://www.huffingtonpost.com...
    Top 5
    5. Israel
    4. USA
    3. Turkey
    2. Mexico
    1. Chile

    As a result of this "unbridled capitalism" we now have the highest rate of people living in poverty since the Commerce Dept. started collecting data in 1959
    poverty rate

    Not everyone is enjoying that "highest standard of living" and its bound to get worse due to falling incomes ... except for where wealth is concentrated.
  • luvguins ronnie 2012/06/05 21:09:36
    luvguins
    +1
    It won't last long with the GOP. There won't be any average consumers to buy anything except the rich.
  • findthelight2000 2012/01/23 02:03:02
    findthelight2000
    +2
    It's such a shame that so many in the US have enslaved themselves to the pro-corporate right-wing propaganda that floods our airwaves. This will be the end result of that continued commitment to right-wing media - slave workhouses in the USA.
  • ronnie findthe... 2012/03/07 21:41:01
    ronnie
    Do you know a better economic system, because it seems to me that all you know how to do is protest, in Capitalism you get compensated for your efforts, not having the government interfere in every aspect of life is not slavery, its a social conquest that people in europe have given up for that bankrupt welfare system.
  • Joe Shw... ronnie 2012/03/07 21:43:29
    Joe Shwingding BN-ZERO
    If that was really what we were practicing. Unfortunately cut throat capitalism is for the unwashed masses.
  • luvguins ronnie 2012/06/05 21:11:07
    luvguins
    +1
    Not when you end up working for Chinese wages. Capitalism here is corrupt. Have you been asleep?
  • Cthulhu 2012/01/21 19:01:04 (edited)
    Cthulhu
    +1
    Long live the corporate shareholder and dividend stream I guess. They outlaw African conflict diamonds, but suicide iPods are OK. In fact one of my co-workers said they did not care as long as it worked well and was cheap.

    A bit of a calloused attitude but I cannot blame him for not wanting to think about a situation that is not under his control.

    Warren Buffett said a few words about the trade deficit on his Berkshire Hathaway website, but it seems to be largely ignored by both political parties.

    http://www.berkshirehathaway....

    * Excellent post Joe Shwingding BN-0 * :-)
  • Cthulhu Cthulhu 2012/01/21 20:14:19 (edited)
    Cthulhu
    If we pursued a balanced trade policy suggested by Warren Buffett, we might find that many of the import / export companies both in China and here are American owned.

    Just a guess though.
  • David Hussey 2012/01/21 18:35:39
    David Hussey
    +2
    People think that slavery was abolished in America... it was just outsourced
  • Odinsown 2012/01/21 18:08:28
    Odinsown
    +2
    That's not free markets
  • David H... Odinsown 2012/01/21 18:36:21
    David Hussey
    +1
    There is no such thing as a free market
  • Odinsown David H... 2012/01/21 22:56:06
    Odinsown
    Not currently, but there should be.
  • David H... Odinsown 2012/01/21 22:59:56
    David Hussey
    I'm not sure about that, but would be willing to experiment and see if a free market would actually self regulate
  • Odinsown David H... 2012/01/22 00:56:44
    Odinsown
    Good on ya, to be honest I think in some places it would, like here in the states, in others people would take advantage.
  • ronnie David H... 2012/03/07 21:51:41
    ronnie
    I know, but generally we tend to call the USA and South Korea free markets to distinguish them from European mixed economies.
  • Joe Shw... Odinsown 2012/01/21 19:13:05
    Joe Shwingding BN-ZERO
    what is it then?
  • Odinsown Joe Shw... 2012/01/21 22:55:36
    Odinsown
    +1
    This is an example of a top down capitalist market, in a free market the employees recognise that they are not capitol, but are vendors in their own right. As an employee you sell your time and services to your client(the employer) in a mutually beneficial exchange.
  • Joe Shw... Odinsown 2012/01/22 01:07:55
    Joe Shwingding BN-ZERO
    +1
    Then my title is incorrect.

    It should be more along the lines of Goliath and Oligarchy of Capitalism.
  • Odinsown Joe Shw... 2012/01/22 03:37:56
    Odinsown
    Fair enough
  • MichaelJ 2012/01/21 17:44:34
    MichaelJ
    +1
    What?????

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