SOCI 116: Society, Culture and Environment Week 4A: Global Capitalism and the Cultural Economy Required reading: Chapter 4 of Cohen & Kennedy Teaching Team: Examiner: Dr. Koji Kobayashi (author of this lecture note) Office: #705 George Forbes Office Phone: 03-423-0490 Email: koji.kobayashi@lincoln.ac.nz Tutor: Seonaid Espiner Email: seonaid.espiner@lincolnuni.ac.nz

SOCI116 PASS Session Times Monday 10am with Karina (at L112) 3:10pm with Karina (at L113) Wednesday 1:10pm with Mac (at L112)

Last time… What are ‘tough’ and ‘soft’ environmentalist approaches? How does Greenpeace promote its messages and achieve its missions? What are legal forms of whaling under the IWC?

This week... Online discussion (4% of your overall grade) You will see the icon “Online discussion 2017” under Week 4 on Learn where you can make a contribution Wednesday 22nd – Thursday 23rd There is NO face-to-face tutorials this week For details, refer to the PDF file, “Online discussion guidelines 2017”, under Week 3 on Learn

Capitalism is responsible for a remarkable inequality in modern society Photo in Public domain Karl Marx

Marx’s critique of capitalism Today, 41% of global wealth are controlled by less than 1% of global population http://www.pewresearch.org/fact-tank/2014/11/08/with-41-of-global-wealth-in-the-hands-of-less-than-1-elites-and-citizens-agree-inequality-is-a-top-priority/ So, what is capitalism? “An economic and political system in which a country’s trade and industry are controlled by private owners for profit” (Oxford Dictionaries (2016) Capitalism. Retrieved on 11 March 2016 from http://www.oxforddictionaries.com/definition/english/capitalism)

Capitalist system (according to Marx) Owners Owned Investments Wage Capitalists (bourgeoisie) shareholders investors property owners Profit Means of production factories land machines materials Labour power Labourers (proletariat) physical ability knowledge creative potential

Exploitation of labour Capitalist system (according to Marx) Profit maximisation Exploitation of labour Owners Owned Investments Wage Capitalists (bourgeoisie) shareholders investors property owners Profit Means of production factories land machines materials Labour power Labourers (proletariat) physical ability knowledge creative potential Ever increasing gap between bourgeoisie and proletariat

Photo in Public domain Karl Marx “By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which [s]he exercises whenever [s]he produces a use-value of any description.” (Marx, 1867. Capital, Volume 1, Chapter 6, p. 88)

“Alienation” Photo in Public domain Karl Marx Realisation of full creative potential? Deskilled and disposable workers? “…under capitalism, workers become estranged or alienated from their skills and their potential, since now they are compelled to work for capitalists to survive and the product of their labour no longer belongs to them” (Cohen & Kennedy, 2013, p. 68) Cohen, R. & Kennedy, P. (2013). Global Sociology, 3rd ed. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan

‘proletarian revolutions’ Alienated workers will unite to create ‘proletarian revolutions’ Photo in Public domain Karl Marx Deskilled and disposable workers? Revolutionaries? Marx thought that proletarian revolutions would eventually lead to the birth of communism where there are no national borders and social class. Although this has not happened, his analysis is still relevant to the understanding of ever dominating global capitalism. Cohen, R. & Kennedy, P. (2013). Global Sociology, 3rd ed. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan

Case of Nike and its shoes Where are most of Nike products produced? And why?

International comparison of labour costs Hourly labour costs in the clothing industries (2008) More than US$30 Switzerland, Belgium, Austria, Japan, France More than US$20 Germany, Australia, Ireland, Italy, Greece Less than US$10 Portugal, Taiwan, South Korea, Uruguay, Poland, Estonia Less than US$5 South Africa, Mexico, Peru, China, Thailand, India, Vietnam Source: Dicken, P. (2011). Global Shift: Mapping the Changing Contours of the World Economy. 6th Edition. Los Angels: Sage Publications.

Nike was one of the first TNCs to take advantage of outsourcing or subcontracting systems on a global scale. Global supply chain Greater flexibility, cost reduction in production and more profit

What is unique about Nike is that it has almost NEVER produced its products ‘in-house’ (or domestically). In the early 1960s, Phil Knight (founder of Nike) went to Japan and proposed to Kihachiro Onitsuka (founder of Asics) that his company would import their shoes into the US. Onitsuka wanted exposure in the US market and agreed with Knight’s proposal. In 1963, Blue Ribbon Sports (=Nike) started its business as a distributor of Onitsuka Tiger (=Asics) shoes in the USA

Shift of Nike Production Sites Mid-1960s to Mid-1970s In Japan

Shift of Nike Production Sites Mid-1970s to Mid-1980s In South Korea & Taiwan

Shift of Nike Production Sites Mid-1980s to Present In China & Southeast Asia

Indeed, Nike was accused of running ‘sweatshops’ in 1990s The constant search for cheaper labour was called the ‘race to the bottom’. However, social activists and media discovered the poor working and living conditions of workers at these factories and provoked a public outcry. “Behind the Swoosh”: http://www.youtube.com/watch?v=M5uYCWVfuPQ Indeed, Nike was accused of running ‘sweatshops’ in 1990s

Nike’s Corporate Social Responsibility In 1998: “The Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse… I truly believe that the American consumer does not want to buy products made in abusive conditions.” Phil Knight (ex-Nike CEO) Source: http://www.nytimes.com/1998/05/13/business/international-business-nike-pledges-to-end-child-labor-and-apply-us-rules-abroad.html

Nike’s Corporate Social Responsibility 1999: Nike helped establish Fair Labor Association. - http://www.fairlabor.org/ 2005: Nike became the first company to disclose a full list of contract factories in the sporting goods industry. - http://about.nike.com/pages/manufacturing 2011: Nike launched the Better World campaign which promotes the use of eco-friendly materials. - http://www.nike.com/us/en_us/c/better-world

Discussion time! Asics has taken a different approach: https://www.youtube.com/watch?v=Dmhaal5eHds Does it matter who makes products? Does it matter who makes profits? What is the ‘fair labour practice’?, and why does it matter? Does it matter how products are made when you buy them? Discuss what you think with your classmates.

Tips for the test/exam Think about how capitalism was analysed by Karl Marx (i.e. what is the dominant logic of capitalism?) Think about why TNCs globalised their production and how they were challenged Think about the ways in which social movement can exert pressure on TNCs to adhere to CSR Feel free to share your thoughts or examples via FB/Learn/email