Jul 14, 2012

Hating the Free Trade Player While Loving the Game

When I was participating in Harvard’s Model Congress as a high school freshman, I remember noticing that the American flags which decorated the conference rooms had “Made in China” written on them. While I forget what I wrote in my journal about it, I’m sure it was a suitably poignant meditation on the contradictions inherent in producing things that claim to be symbols of freedom in a place that, itself, is not free. And that’s the perfect place for those kinds of observations to remain – in the journal of a politically precocious 14 year old.

So I was disappointed to hear Rachel Maddow railing against the fact that the uniforms of the US Olympic team were made in China. Joining Maddow were a number of Congresscritters: Harry Reid, Nancy Pelosi, and John Boehner. It is, apparently, horrible, just horrible, that Ralph Lauren would make the clothes for the US Olympic Team where he makes much of the rest of his clothes, in the Perl River Delta of China. But, do they have any problem with the fact that the fashion industry generally produce their goods outside of the US? If not, what’s the big deal? And if so, what are they doing about it?

While as a child I noticed that my He Man toys had the names of places I’d never heard of before, such as Taiwan, stamped on them, I didn’t really know why somewhere half way around the world would be making my stuff. In that particular instance, the answer would include technological developments, such as plastic injection molds, and containerized shipping; Taiwanese ethnic politics; and US cold war political alliances. More recently, the creation of long distance supply chains has been promoted by policies, such as the WTO, which seek to elevate the removal of barriers to trade as a central goal in international relations.

Cheerleaders for globalization, such as Tom Friedman, tend to take it to be a process with only one possible trajectory. This allows them to label protesters at WTO meetings as “Anti-globalization”, which is an odd way to describe an international network of NGOs and activists organizing on a global scale. The question is not, as Friedman would pose it, for or against globalization. The world has always been global. The question is the kind of globe that we work towards creating – one which privileges the ability of corporations to make a profit, one that promotes some vision of social justice, or some other goal?

I’m cynical enough not to be surprised that promoting the ability of Apple, Walmart et al to construct global supply chains, and the ability of financial elites to transfer money frictionlessly across regulatory regimes is the form of globalization that has been ascending for the past several decades. But in constructing our trade policy, politicians make choices and those choices have consequences. The decline in America’s industrial sector and the rise in reliance on imports is hardly a surprising result of NAFTA, GATT, WTO and similar acronyms which privilege the ability of goods to move across national borders. Remember Ross Perot’s “Giant sucking sound?”

Even so eminent a cheerleader for free trade as Paul Krugman points out that the process will have winners and losers within a nation:

After all, economists are familiar with a number of reasons why the gains from free trade may not work out quite as easily as in the simplest Ricardian model. External economies may mean underinvestment in import-competing sectors; imperfect competition may lead to a strategic competition over industry rents; because of distortions in domestic labor markets, imports may reduce wages or cause unemployment; and so on. And even if national income rises as a result of trade, the distribution of income within a country may shift in a way that hurts large groups. In short, there are a number of sophisticated extensions to and qualifications of the model introduced in the first few chapters of the undergraduate textbook (typically covered later in the book — for example, in Chapters 10-12 of Krugman and Obstfeld (1994)).

At the same time that the US state has promoted the integration of the US into global trade networks under the banner of “Globalization”, it has done precious little to provide for the continued employment and wellbeing of those working in industries displaced by globalization. Has there been any broad based effort at retraining workers, making US industry more competitive, or to otherwise compensate for the effects of globalization?

I don’t pretend to know how to advance the US’s industrial sector. When talking to someone working on the issue in a US policy think tank, he pointed out that the problem with developing an industrial policy is the fact that the phrase “industrial policy” is somewhat taboo in policy circles. But looking at Germany, it is possible for a country to be integrated into global trade networks to have a thriving industrial sector, and a strong union movement. So, what is the US state doing to bring us in that direction?

This is similarly true for President Obama’s criticism of Mitt Romney’s profiting from offshoring American workers. Is the President actively working to promote policies which will end such outsourcing? If not, what is his specific problem with Romney’s choices, beyond scoring cheap political points?

Which is just to say, don’t hate the player, hate the game. And if you do hate the game, and find yourself to be the Senate Majority Leader, Speaker of the House or otherwise in a position of power, rather than score cheap political points over something trivial, why not find a solution? And if, like Rachel Maddow, you’ve got a popular news program focused on policy issues, why not, you know, discuss the policies underlying these things?

Mar 17, 2012

My Email to This American Life About Their Apple Shows.

Hello,

While listening to Mr. Daisy’s story I noticed the inconsistencies that you point out in the retraction. I’ve never seen private security guards with guns in China and even most Chinese police are unarmed; and a Starbucks is an unlikely meeting place for migrant workers.  Two things that you didn’t point out are Mr. Daisy’s assertion that its hard to get business cards made at the last minute in Shenzhen - most copy shops would be able to bang out a rush order pretty quickly - and his description of Shenzhen as looking like “Blade Runner vomited on itself”, its actually a fairly nice town - its much greener than any other Chinese city that I’ve been to, and you can wander 10 minutes from downtown Shenzhen and find yourself in nice wooded areas.  Indeed, what I find so disturbing about Shenzhen is that, for a cesspool of capitalist exploitation, it has some of the loveliest neighborhoods that I’ve come across in China.

I’m curious as to why both of your shows on the subject had an absence of Chinese voices.  The first show had Debby Chan Sze Wang speaking for a few minutes in the podcast version, but for the rest of the shows you relied primarily on Americans to speak for Chinese workers.  I took the point of Mr. Daisy’s show to be the absence of the Chinese people involved in the production of Apple products in our experience of the Apple brand.  Supply chain capitalism relies on the circulation of commodities, and of images about those commodities.  In producing commodities firms such as Apple shop for the least expensive producers possible, which inevitably leads to horrible working conditions as labor is the area where it is easiest to drive prices down.  In producing images about those commodities - branding - firms attempt to create an experience of a product that has nothing to do with the physical conditions in which it was produced - so my Macbook embodies creativity, innovation and passion, not a bunch of 18 year olds from the Chinese countryside working long shifts in unhealthy conditions and not being paid their full wages.  What made Mr. Daisy’s show so jarring is that he breaks down the barrier between those two kinds of circulation, suggesting that rather than experiencing a brand we should experience a connection to the humanity of Apple workers.

But the way that you reported on it reproduces that absence of Chinese voices.  There are, of course, Chinese activists and scholars who have spent a lot more time studying labor in China that Nick Kristof.  Is it really so hard to interview someone like Pun Ngai or Yan Hairong, anthropologists who study labor in China?  And, more importantly, how might Chinese factory workers want to represent themselves to Apple consumers?  How would they explain the choices that they make, and their place in China’s economic and social order?  Are they simply driven from the grimness of the rice paddies to the grimness of Foxconn, or are they actively composing lives for themselves outside of any plot-line that Kristof, or Daisy would impose on them? Isn’t that at least as important as the views of a crusading columnist and a tall telling Apple fanboy?  

I’ve visited factories in Shenzhen, and am aware of the logistical difficulties involved in interviewing migrant workers, and am sure that you have limited resources for your reporting.  But based solely on your shows, that question doesn’t seem to have entered into your consideration.  And from my perspective that is an ethical lapse far more serious than any of Mr. Daisy’s exaggerations.

Feb 1, 2012

Industrial Chemicals Sold as Table Salt

Selling poisonous industrial chemicals as table salt is, apparently, only illegal in China if done in amounts greater than 20 tons.  Which is reassuring.  Fortunately, the fact that everything I eat is potentially poisonous makes loosing weight that much easier.

Feb 1, 2012

Chinese Nationalist Gets Head Stuck in DC Airport Escalator.

No, seriously.  I only know of Sima Nan for his anti-qigong activities (which also involved, bizarrely, him performing qigong healing).  Had no idea he had gone on to denouncing America as a global force for evil, or getting his head stuck in the machinery of everyday life.

Jan 31, 2012

A Battle for the Soul of my iPod

Anthropologists have been interested in stuff since the beginning of the discipline. This interest with things can be seen in Marcel Mauss’ seminal Essay on The Gift, where he examines societies with economies that are based on the giving of gifts. There are three obligations in the giving of a gift – the obligation to give the gift, the obligation to accept it and the obligation to reciprocate. Mauss focuses on the third of these, asking why is it that people, upon receiving a gift, feel the need to reciprocate. What is it in the physical object one gives to another which compels the receiver to return the favor?

The short version of Mauss’ answer was that the exchanges of objects in a gift based economy wasn’t based on the objects at all, but on the individual relationships who’s creation and maintenance those objects facilitated. Thus, the objects became imbued with the essence of those relationships, serving as a marker for them and compelling the maintenance of the relationship with a return gift. The object itself comes to have a soul, giving the gift entails placing part of your self into that object, and receiving it means accepting responsibility for that part of the giver.

We live in very different societies than the one that Mauss described, but a lot of his description of gift giving applies to behavior we’re fairly familiar with.  This goes from buying someone a drink and being annoyed if they dont reciprocate, to a wedding ring - an object whose giving creates the relationship it symbolizes.

What does this have to do with iPhones and the recent todo about Foxconn?

Look at how the repression of the Chinese state is discussed in this apologetic for Foxconn’s workplace standards by Tom Kraitz on Paidcontent.org:

U.S. tech companies have a very complicated relationship with China. It’s the world’s largest potential consumer electronics market and is home to the world’s best tech manufacturing companies, but it is run by a government that encourages censorship, tolerates working conditions that other countries made illegal many years ago, and favors domestic companies to an unnerving degree.

Kraitz concludes the post, “How much change Apple can really bring to an irreplaceable partner born of a country without enough respect for the basic human rights of its people?”

Who is it that doesn’t respect human rights in all of this? The Chinese state certainly doesn’t, and cracks down on independent unions, persecutes workers who complain about working conditions, etc. But that’s not a bug, that’s a feature. Its not something that Foxconn has to endure in order to do business in China, its something that allows them to conduct business in the manner that they do. As far as I know, nobody is alleging that the Chinese state is stepping in and forcing Foxconn to use forced uncompensated overtime. Rather, the Chinese state’s repressive policies allow them to profit from mistreating their workers.

And what about Apple’s respect for human rights? Do they pay someone to mistreat workers, or do they buy a product from someone who happens to mistreat workers? Do the social relationships across which an iPhone is made attach to the object so that all whose hands it passes through receive part of the souls of the workers who produced it? Or is it severed once they pass through customs and make their way abroad. (If this is the case, Chinese consumers are protected, because Apple products are exported from China before being reimported for sale – for some ridiculous reason that nobody’s been able to explain to me).

And how about me as a consumer? I’m typing this on a Macbook, and I’ve got an iPod in my pocket. What’s my relationship to the Foxconn factory floor?

Robert Foster describes the two meanings of value that drive modern supply chain capitalism. There is the economic value that is created, which is gained from sourcing products the the cheapest possible production point. This is, inevitably, achieved by finding places with very bad labor conditions. The second meaning of value are the cultural values that are grafted on to commodities to differentiate them from competitors, so that we choose between Motorola and iPhone based on their differing meanings. Brand value.

This system is created so that instead of identifying with the circulation of goods from production to use, we identify with the circulation of images within advertising, stores, the media and other sources. As one marketing website describes:

Apple has a branding strategy that focuses on the emotions. The Apple brand personality is about lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and aspirations; and power-to-the-people through technology. The Apple brand personality is also about simplicity and the removal of complexity from people’s lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers.

We have a relationship with the idea of Apple, rather than with a hunk of metal and plastic in our pockets. That isn’t to say that functionality isn’t part of that relationship - user interface, design and function are an inherent part of the Apple experience that we participate in when we take our Macbook out and start banging away. This is the soul of the commodity object which we’re supposed to be entering into a relationship with, not those of the workers on Foxconn’s floors.

Successful brand management depends on keeping these two kinds of circulations, of physical objects in a China based supply chain, and of images about those objects, as separate as possible. This is especially true in a premium brand like Apple, where the contrast between the factory in which they are made, and slick aesthetics of the stores in which they are bought is so jarring. And that’s what is disturbs people when these two conflicting souls mingle, as they read about Foxconn factories on the screen of their MacBook.

Jan 30, 2012

When Does Economics Become Ideology?

There has been a lot of discussion online and elsewhere about the conditions under which Apple products are produced in the wake of the New York Times articles about the Foxconn’s factories. I find it an interesting moment to look at the ways in which the poltiics and economics of supply chain capitalism is are discussed. One thing that strikes me is how economic theories and concepts are deployed in rationalizing poor working conditions.  

This can be seen in the invocation of Krugman by Tim Worstall in this Forbes Posting:The Apple Boycott: People Are Spouting Nonsense about Chinese Manufacturing

Paul Krugman has been pulled in to rationalize low wages. A long quote gives the differences between the naïve expectations of a non-economist, with the way an economist understands wage levels. A non-economist expects wages to be based on the productivity of a specific factory, enterprise or industry, but economists understand that wages are based on the overall productivity of the economy as a whole. Wages are based on the national labor market, and not the comparable wages paid to workers at comparative levels of productivity at comparative industries/enterprises in other labor markets.

I’m sure that’s an accurate description of how economists model labor markets – Krugman got a Nobel prize for his work on trade economics, so I’ll assume he represents the mainstream economics model of how labor markets work in countries at different levels of development. But notice how Krugman’s economics explanation is being used here. There’s a subtle shift between analytical and normative. Krugman’s “This is how wages ARE calculated” then shifts to Worstall’s “This is how wages SHOULD BE calculated”.

I quote at such length because it is an extremely important point. Wages paid to manufacturing workers in China are not determined by the productivity of those specific workers. They are not determined by US wages, by the profits that Apple makes nor even by the good intentions of the creative types that purchase Apple products. They are determined by the wages paid by other jobs in China and that is itself determined by the average level of productivity across the Chinese economy.

Which is, of course, entirely besides the point. It is pretty widely understood that China has lower wages than America, and that’s why American firms source production there. The description of WHY wages are lower is then used as an argument that Apple CANT pay higher wages. But can’t they? Is there anything in economic theory preventing Apple from deliberately raising the wages of workers on their production line. If there is, there is nothing in the Krugman quote to suggest as much (Krugman writes that if factories raised wages than companies looking for low wages would go elsewhere, which is doubtlessly true, but doesn’t address why Apple can’t raise the wages its willing to pay its workers.).

And that’s how The Market becomes a force that takes the politics out of social interactions. When used in this register, economics is used to take our attention away from the fact that individuals are making choices about how they treat their workers, about factory conditions, wage levels, etc.. These decisions are then displaced onto impersonal economic trends and forces, that the individuals involved are then imagined to be beholden to, thus absolving them for any responsibility for those decisions.

People who are upset about working conditions in Foxconn factories aren’t disputing economic models of how wages are being calculated. They’re suggesting that economic calculation shouldn’t be the sole means by which we interact with factory workers, that there should be some idea of human dignity that mandates a better work environment and higher wages. When economic models are used as a response to these calls for the human dignity of workers, they cease to be analytical tools, and start to become rationalizations for the dehumanization of workers. To say that isn’t to take away from the analytical use of economics, but to question its political uses in a world where the proclamations of economists like Krugman hold great political weight.

Jul 8, 2011

Reason Why I Love the China Daily #235

An announcement that 31 brands of water have been recalled for bacterial contamination without a corresponding list of those 31 brands.  It just underscores the extent to which eating anything in China is a game of Russian Roulette.  People take for granted that any number of things might be tainted, chemically infused, poisonous or even explosive.  Some folks will share their hints of how to choose what to consumer - never trust fruit, I’ve been advised, that’s conspicuously large, brightly and/or evenly colored and out of season.  I was at a banquette where people were raving about how brilliantly red the watermelon was, and I discretely threw my piece under the table.  It was only the week before that a batch of hormonally enhanced watermelons had spontaneously combusted in a market.

Jun 28, 2011

Stigma and the Market

When I was living in New York City there was an announced illegal immigrant strike, which never came to fruition. And it was a good thing, too, because if it wasn’t for illegal labor NYC would starve to death. Every part of the food chain, from people picking crops in the fields, to warehouse workers, stock boys at the local bodega and kitchen staff at restaurants are undocumented migrants. How is it that something that is formally illegal is so central to the United States economy?

Undocumented migrants are allowed to exist in a liminal area somewhat allowed, but not legal– as the Chinese say of the police, opening one eye, while closing the other – to create a structurally exploitable workforce. They’re people who can work long hours doing difficult labor which exposes them to hazardous pesticides for little money, because that’s the only niche open to them. Race and nationality are used to create a social class.

Which makes what’s been happening in Georgia so interesting. When the state passed legislation cracking down harshly undocumented labor, migrants left the state. This left a shortage of 11,000 workers, and the threat of millions of dollars of food rotting in the fields.

What does this tell us about the labor market? In a state with an unemployment rate approaching 10% it should not, presumably, be difficult to find people to work the fields. If workers don’t want to do it for the wages offered, one would expect the invisible hand of the market to step in and raise wages to a level where people would be willing to sell their labor. This might, of course, raise the price of produce to the point where it isn’t competitive with other states where undocumented labor is (unofficially) allowed, or other countries. But in a free market economy, that would, of course, be allowed.

That doesn’t seem to have happened. And, as this article suggests, farmers have moved on to another stigmatized population – ex-felons – who are structurally discriminated against in employment and are thus easy to exploit. Even then, the prospect of crops rotting in the field looms in the near future – unless the state does something to intervene.

And this perfectly illustrates the social embeddedness of markets – the intersection of race, social stigma, labor and the state that is necessary for getting produce at a price lower than “pure economic” phenomena of supply and demand meeting at an equilibrium could.

Jun 21, 2011

Learning Has its Uses

After last night’s kung fu class I went to my usual hole in the wall restaurant around the corner from the school for dinner. 9 times out of 10 there’s a group of loud drunk people dwelling over the end of a long dinner – which is to say that its a normal neighborhood restaurant in Beijing. Loud drunken dinner conversation is something that, once you’re in Beijing for over a week, fades into the general background din of the city, with the second hand smoke, smog and car horns. I’ve gotten to the point where I find it quite relaxing, and use recordings of people drunkenly shouting for the waitress to bring them more beer when I have trouble sleeping - the same way some people use recordings of waterfalls and crashing waves.

This night, rather than a group of loud drunken men, there was a group of loud drunken women. Really drunk - two of them had already passed out on the table, and the others were sloppily chomping on post-meal cucumbers while finishing their beers. The general consensus at the table was that I was handsome. Apparently. And that one of them should talk to me. (I say that not to stroke my ego, but to illustrate just how drunk they were – after a couple of hours of flailing around in the 90 degree heat, I was a disheveled sweaty mess.)

I stared at my book, trying to ignore their conversation about me, and hoping that nobody too each other up on the dares to go over and strike up a conversation. But, alas, one of them finally did.

“What’s that, an iPad?”

“No, its an ebook”

“What are you reading?”

“US Congressional reports about US China trade policy. Its actually really interesting, lots of economists disagreeing about the long term effects of US China trade on America’s economic growth…”

I’m pretty sure that my attempt to explain Ricardo to her was pretty horrible – considering that my economics is even worse than my Mandarin – but it got the job done. She excused herself, walked back to her friends and said, “He speaks really good Chinese, but I didn’t understand a word he said.”

Jun 20, 2011

And so it begins - the next round of virulent anti-China campaign ads of the season. I’m impressed that this one manages to combine Orientalist stereotypes of sneaky Chinese with suggestions that Obama is anti-American.  I’m just waiting for the John Huntsman as Manchurian Candidate ads start coming out.

(Via TPM)

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About
I am a grad student in Anthropology at UC Santa Cruz, currently doing research into marketing, branding and economic development in China. I’ve lived in China on and off (more off than on) since 1997. Before focusing on Capitalism at UCSC, I got a MA in Anthropology at Hunter College, where I researched the creation of the “Traditional Chinese Martial Arts” in Beijing and Shanghai in the early 20th Century, and in Late 20th Century New York City. I am currently a visiting scholar at the Chinese Academy of Social Sciences.

This blog is primarily to collect my thoughts about issues surrounding Capitalism, Economic Development and Contemporary China. I’m sure I’ll go off on tangents related to kung fu, philosophy, politics and all manner of things along the way. Bare with me.

Its called In Beijing for a couple of reasons. As an anthropologist going through grad school I had the idea that all speaking comes from a specific position, geographically, socially and culturally, drilled into my head enough that I can’t call my blog something grandiose like “Understanding the Rising Dragon”. I have only one piece of the puzzle, and that’s all I can share with you - one that I hope is valuable, but which is limited to where I'm standing and the questions that I'm asking. And that’s how my calligrapher friends sign their calligraphy… with their name, the year, and “In Beijing”. Subscribe via RSS.