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Capital Mobility and Corporate Whitewashing

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This is an interesting piece about apparel corporations looking to get out of Bangladesh because of the bad publicity the building collapse has given the companies. They want to move to Cambodia, Vietnam, and the new frontier of Indonesia. What’s telling about it is that the corporations have zero interest in actually improving conditions for Bangladeshis. For all the talk (including by liberals) about how we need to keep outsourcing the jobs to countries with dangerous working conditions because the companies are providing them work, there is no commitment at all to keeping those people employed. While it might be a good thing that companies want to avoid multi-story factories with the potential to kill over 1100 workers like in Bangladesh, rather than work with Bangladesh to improve conditions or take some responsibility, instead they just want to bail on the country entirely because it might make them look bad to western customers.

Under normal circumstances, 2 workers dying in a Cambodian roof collapse wouldn’t make the news at all, which makes accidents in single-story buildings acceptable to corporations. Right now, if the linked article is accurate, there are some positive things in Indonesia, with contractors having to offer health insurance to attract scarce workers, but I am skeptical of the long-term continuance of such practices if Indonesia becomes a fully mobilized apparel economy with the plethora of workers that has allowed for low wages in other nations.

This issue also gets at the comments in the Cambodia workplace death thread, which were not unusual in their ultimate acquiescence in a spatially mobile capitalism. The only way capital has ever granted safer working conditions is to damage the bottom line. Workers’ compensation laws in the United States happened after workers began winning lawsuits for damages, forcing companies to create a rational system of low compensation to avoid expensive payouts. Corporations stopped dumping chemicals when OSHA and EPA created civil and criminal penalties for violators, minimal as they may have been. Capital mobility across the globe is not “natural.” Rather it is a process encouraged by the governments of the corporations’ home nations. Capital moved to pay lower wages, to reinstitute unsafe workplaces, to dump poisons into rivers and air, all of which increased profits. It is true that calling for international standards where workers around the world could sue corporations in the country of corporate origin for unsafe conditions and environmental degradation would lessen capital mobility, but I hardly see this as a bad thing.

We might ask, “What about the Bangladeshi worker!” if we lessened the incentives for race to the bottom capital mobility, but a) as the flight from Bangladesh shows, capital doesn’t care about that worker anyway, b) a job is a job no matter where it is–there is a great need for work in the United States, Cambodia, Bangladesh, wherever, c) we could create a system with some differentiation in conditions but that still protected basic worker safety and stopped grotesque pollution, both of which are very inexpensive to implement, and d) companies are more than welcome to stay in Bangladesh or Honduras or Vietnam and commit to long-term investments there that will help bring workers out of poverty. We rightfully say that these nations have laws on the books but because of corruption or indifference or violence they aren’t enforced. Allowing foreign workers access to international courts is one way to help solve these problems. The idea that enforcing safety in Cambodia is “impossible” is no different than saying that enforcing safety in Gilded Age American factories was impossible. It’s a process and there are issues of corruption, but of course it is possible, especially if the corporations in charge of the whole process want it enforced. If you want to see conditions in these factories improve fast, a couple of successful lawsuits against Gap or Asics is a pretty likely way to make that happen.

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