Capitalism working for Nike?


Reading the Nike case it was really a sort of wake-up call for me.
Just moments before reading the article, I was shopping for new soccer cleats
and was seriously considering making Nike my choice. I never thought that I
would indirectly be supporting hours of substandard labor that were put into
those shoes.

After the initial media crisis where Nike was pressured into
making changes to their policies in Indonesia everyone forgot about the
implementation and following up on whether they actually did what they said
they would. And, as was mentioned in class last week, what about all the other
retail companies that were doing the exact same thing….why didn’t we try and
flush them out and force them to treat the workers in foreign countries with
adequate working conditions and fair compensation.

No too shockingly, there are still Nike factories where workers
have not seen any change. As recent as July this year, the Daily
Mail
reported that workers were still being abused in these factories and
still receiving far less in compensation than Nike promised the workers in
2001; 10 years ago.

We’ve talked about globalization and how it has spread the
practices of capitalism. But, in my opinion, the spread was the catalyst for
international businesses to look for cheaper labor and, most importantly, find
it. With the spread of capitalism came the “openness” for places such
as Indonesia and China to allow these western businesses to invest within their
borders. Does capitalism hurt those in the third world and is there a way to
tweak it to help those in the lower classes?

People will continue to exploit as long as there in an opportunity
to and unless something within the model of capitalism changes those who are
poor in the first world will continue to be poor and those who are poor in their
third world will be in ever more trouble.

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7 Responses to Capitalism working for Nike?

  1. Jordi says:

    So, I am curious that you say “Third World.” I try and walk a fine line between thinking language matters and not being over-bearing about it. In my life, we have gone form third world, to developing countries, to now emerging economies. But these categories are all shifting. What was South Korea in the 1970s and 1980s? Now? There is a huge difference between a Kenya or South Africa compared to Liberia or Mozambique. So, what gives? Do you think third world is an outdated term?

    On the other hand, I’ll never forget the “Indian” (Native American) who told me he could call himself an Indian (was unclear if I could).

    • tesoman says:

      I agree that we are living in a world of change and you can’t necessarily put a label on countries or cultures because they are ever changing and developing. The only reason I use the term “third world” is because it makes me think of where we (as developing countries) have come and where we are going. The reference in which I used the term “third world” was in a question that challenged the validity of this capitalism concept. Just like I reference a whole slew of countries and their economies under the term “third world” so does developed countries force this economic idea that is meant to encompass all economic structures and cultures. Third world is a term that I understand forces me into an identity that I might not have chosen to be in and sometimes I wonder if capitalism is the same way. And a lot of the time there is this idea that if you have a capitalist market you must be democratic and vice versa. I am not saying that I am an advocate for anything unAmerican (God Forbid), but I wonder if this model that has been introduced to most of the world be the reason that so many of these countries are failing?

      You look at socialism in Sweden, a merger between traditional capitalism and communism in China, and a totalitarian government with a mixed economy in Indonesia and these economies are doing much better than anywhere else on the globe. They have found economies (and governments) that work for them and are prospering and I am wondering, a lot like the case of colonialism, whether all counties should be given this chance to figure out what works for them and their cultures? There are a lot of political reasons why this has not happened yet, for example the rich getting richer and poor poorer in many capitalist models, but if by some miracle countries were able to figure out what worked for them and also had a system in place that embraced this change might there be a push to an equilibrium state for most counties. An equilibrium where most countries will be well off and their economies doing well? I’m interested to hear what people have to say because it is an idea I have struggled to even grasp for a while and might not have even adequately explained it.

  2. Jordi says:

    Also, I like how you included the Daily Mail article.

    What do you think of this line:
    “It says the situation is further complicated because the license holders themselves usually farm out the production work to a subcontractor.”

    Will Nike have to have second-order monitoring of subcontractors? Why would all this sub-contracting happen? Is there an economic reason?

    Read more: http://www.dailymail.co.uk/news/article-2014325/Nike-workers-kicked-slapped-verbally-abused-factories-making-Converse-line-Indonesia.html#ixzz1ZGKsFIKt

    • tesoman says:

      This is where it all gets really muddy and complicated. We can talk about Nike’s moral responsibility to make sure that the people who are directly making their products are doing that in a safe and moral way, but how far down the line do they have to go. Read this article. It talks about how “Starbucks Coffee Beans” are made in Ethiopia; picked and prepared by them and sent through a long process to America where they are packaged and branded under Starbucks. I put “Starbucks Coffee Beans” in quotations because they are most prepared by people in Ethiopia who have to walk miles barefoot, spend hours picking the beans and preparing them, and get paid near nothing. Starbucks will claim to be a free trade corporation but how does that match up to the $1.20/pound that the workers get paid when that same pound is sold in stores for $14? $1.20 does not even cover the cost according to the article. How does Starbucks monitor this? They are indirectly promoting unethical practices and brand stealing everyday but the noise is not as loud as it was for Nike. Sub-contracting seems to be such a sure way for business’ to save money and bring in large aggregates that the bad press now and then will not deter them from continuing to exploit. Nike are still in Indonesia and I’m sure with the further investigations they had to do they found some of the abuses the daily mail article talks about but neglected to do anything about it. Labor costs are the cheapest in these countries and the agreements put in place must be so good economically that these companies are willing to turn a blind eye from all this social injustice for huge profit gains.

  3. awhigbee says:

    I agree about globalization being a rung on the ladder to huge profits at the expense of the workers. Globalization both helps and harms these emerging economies which can make it really challenging to decide what business ventures are going to be positive in the emerging countries. Unfortunately there is no way to determine what business is going to actually be helpful to an emerging economy and what business is going to be harmful. However we should expect more of our government to shield and protect these emerging economies from potentially harmful corporations who will not act responsible in another country.

  4. mnickels says:

    I agree in that there is no way to tell if a business venture is going to be positive in emerging countries, but I think companies should take more responsibility in what effect their venture has in the country it is in. If a company is exploiting the people and citizens of another country, no matter if it is emerging or not, they should take the responsibility in making sure they can have a positive effect. If it is not positive, they are the only ones how can change things around from something negative, and we shouldn’t have to rely on our own government to regulate everything companies do in other countries. When a company takes is operations into some other part of the world, we should be able to rely on them to do things well and have a positive effect in that country or region.

    • tesoman says:

      It’s a real catch 22 I think here because like Nike I believe a lot of the major human rights violations happen when there is a middle man between the multinational and the workers/other social factors that are affected. Shell had been in Nigeria for years but there is no indication that the company knew about the actual harm their pipes were doing for the majority of it. Like Jordi mentioned below, when it comes to a middle man who might also be using someone else who is breaking human and environmental ethics…how much can you blame a multinational? Sadly, the governments in a lot of these countries are driven by greed and will sell their people’s well beings to make a quick buck and shamelessly run for office again after successfully putting the blame elsewhere. There was (as there is often in East Africa) a food shortage in Kenya that was claiming hundreds of lives. An article came out noting that the reserve food for these starving people was being held at a port by a minister in the government who wanted to sell it to a multinational buyer with the buyer making a profit off it. The scandal blew up and ended up being true with this minster of parliament throwing people in his office and anyone else he could find under the bus. Elections in Kenya are next year and he is running to be president of the country and the sad thing is…..some of the people who lost loved ones in that drought will vote for him. My point is a lot of the time companies are aloof to these issues until after the fact and are willing to take a good offer when they see it. But how much can we expect them to do when they work with corrupt governments who have no regard for their own people? (Keeping in mind that these multinationals need the business to make a profit and survive)

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