"Countries have always traded with each other to exploit their natural advantages, and in the past it was goods that could be put in a box and shipped. This meant it was generally low-paid and low-skilled jobs in areas such as manufacturing that were lost offshore. "Not any more." (See here)
A few days ago, a brief TV segment asked passersby their opinion about Apple products being manufactured by Foxconn workers earning less than US$ 2 an hour, under semi-slavery conditions.
Unfortunately, I could not find footage of the segment.
This well-dressed, prosperous looking, young fellow, when asked, replied something to the effect that he found it regrettable, of course, but that's life and the bottom line is that he gets good products at an affordable price.
Let's see if these prices remain affordable much longer after the shit hits the fan, because "it is now architects, accountants, lawyers, web designers, analysts, geologists, engineers and computer programmers - the knowledge workers - whose jobs are at risk".
One of the explanations for income/wealth inequality is technological advancement.
The reasoning that often underlies this explanation goes something like this: newer, more productive technology requires more technically capable operators; more educated individuals in possession of these higher skills, being more productive, command higher incomes than their less technically adept, less educated and less productive counterparts.
Or, as The Wall Street Journal, quoting research by the IMF, put it back in 2008:
" 'The disequalizing impact of financial openness (...) and technological progress appear to be (...)increasing the premium on higher skills, rather than limiting opportunities for economic advancement,' Jaumotte, Lall, and Papageorgiou write.
"The authors say that the best solution to this problem is increased education. 'Broader access to education will allow a greater segment of the population to take advantage of the opportunities from globalization and technological change' they said". (Emphasis added. See here)
Sounds fair, right?
Too bad that the people at Rio Tinto did not read WSJ or chose to ignore the theory of marginal productivity of labour: their Mine of the Future ™ programme introducing 150 driverless robotic trucks to replace their current fleet of conventional trucks aims to replace human drivers, whose only skill is to drive a humongous truck, with highly skilled operators.
However, unlike WSJ's theory suggests, these more highly skilled, educated operators are not supposed to earn higher wages.
From yesterday's 7:30 (from ABC):
"PETER STRACHAN, ANALYST: You aren't using the same sort of people, different skill set, different cost base. You don't have to accommodate them, you don't have to fly them in and out. All those costs come off for the company, and it's a matter of saying, 'Well instead of having someone we have to pay $300,000 a year, say, to be on-site, flying in, flying out, all the extra cost of fly in/fly out, we can get a skilled person for $75,000 or $80,000 a year to do that same job'." (Emphasis added. See here)
So much for the theory, I guess.
Update:
24-02-2012. David Ruccio has a very insightful piece on outcome fairness under capitalism. This is a big topic, with implications for the study of inequality, for instance.
But it also has other implications: capitalism is often justified (or legitimized, to be more precise) with the argument that "you get what you deserve". Your wages are proportional to your productivity: capitalism is supposed to be "meritocratic".
As I've shown above, this is not generally true.
If you are on the receiving end, you are entitled to say this is unfair. However, it is legal and legitimate under capitalism. And no appeal to fairness or justice will ever change this. I've written about this already.
So, if you don't like it, you better do something about it.
Spain is currently being convulsed by large national protests against the labour laws reform the Rajoy Government imposed. (See here)
However, other protests, largely ignored by foreign media, are taking place in Spain at the same time. Here I will focus on one.
Since the Valencian Generalitat approved a decree, last January, cutting down salaries to 55,000 teachers and 140,000 other public servants in Valencia, Alicante and Castellón, peaceful public protests have been taking place in those provinces.
The cuts were made in an attempt to free resources to pay a 62.5 billion euro debt, attributed in a large part to corrupt deals between the centre-right ruling party Partido Popular ("People's" Party) officials, in power in the Generalitat for the last 16 years, and private sector "entrepreneurs" and the until recently apparently clean local financial institution Caja Mediterráneo. (See here, Spanish)
Spanish PM Mariano Rajoy appointed Paula Sánchez de León national government representative before the Generalitat.
And although Sánchez de León has not been personally implicated in the corrupt deals, she was a close collaborator to the former president of the Generalitat, Francisco Camps, who was forced to resign and is on trial under corruption charges. (See here, Spanish)
High school and university students, teachers and public servants have been protesting the measures, demanding Sánchez de León's resignation and those deemed involved in corruption be punished. Until Wednesday 15 of February, the protests had been peaceful.
This is how record numbers of the Spanish National Police officers are treating Spanish kids:
Readers will note no stones are being thrown. No fires. This is what El País had to say:
"The student protest degenerated into an improvised and chaotic Prague Spring. While the youngsters defended in the street their freedom of expression (...) tens of patrols and hundreds of agents dispersed themselves, running after the kids, who -in the fourth day of protest- have not yet broken a glass, a shop front or a street light". (See here. Spanish. My translation)
According El País, Antonio Moreno, head of the National Police in Valencia, is clear he is waging a war against the protesters: "En el anterior conflicto del 15-M también tuvimos que utilizar la fuerza cuando fuimos atacados" (my translation: in the previous conflict, against the 15-M, we also had to use force when attacked). Asked by journalists how many agents were deployed, Moreno refused to answer because he did not intend to "proporcionar esa información al enemigo" (my translation: he did not intend to give the enemy that information).
These statements may appear a ridiculous over-reaction by an armchair general fighting a unilateral war against an unarmed "army" of teenagers, their parents and middle-aged teachers. Arguably, that's a valid interpretation.
I, however, could find another interpretation: "general" Moreno is indeed fighting a war. A class war. He is fighting this "conflict" on behalf of the corrupt, the thieves, charlatans and snake-oil sellers of capitalism, and the "enemy" are those designated to pay for the fuck up Moreno's masters left behind: the Spanish people.
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Carta abierta a la policía española:
Joder, que me dais asco y vergüenza. Sois más despreciables que la Merkel o Sarkosy: sois vosotros quienes traicionan a España, no ellos.
Antes que sea demasiado tarde, decidle "basta" al Gobierno de Rajoy, porque vais por el mismo camino que Grecia.
With the exception of a story at The Sydney Morning Herald Online (published yesterday morning, Thursday 16th), an op-ed by free-lance journalist Graham Readfearn (at The Drum Unleashed), and a piece by Amber Jamieson (at Crikey), both of which appeared yesterday towards the end of the afternoon, apparently no Australian media organization considered newsworthy the alleged leaking of documents from The Heartland Institute and the subsequent statement by the Institute.
In particular, yesterday I could not find any reference to this in the ABC, SBS, the private TV free-to-air channels (Seven, Nine and Ten). And I certainly did not expect to find any reference in the News Ltd press.
This in contrast to The New York Times, The Guardian, BBC, AP, The Washington Post, Forbes, New Scientist, National Geographic, ABC (America), ZDNet, Slate Magazine, Scientific American, The Financial Times, and a host of minor publications in English language, all of which have reported on this subject during the last 24 to 20 hours, as this screen capture of Google News partially shows:
In fact, an hour ago (approximately 11:00 am, Australian time) even The Australian (a branch of News Ltd.) finally reported on this subject.
I am not privy to how news editors work in Australia. Maybe they are too conservative (both in the political sense, or in the sense of considering newsworthy only a set of conventional subjects). Perhaps they are too overwhelmed with really newsworthy items like the investigation by French police of the theft of a diamond-studded dog collar from a grave at the world's oldest pet cemetery (see here).
But I would hate to believe that political considerations stop news from being reported, and that they are only reported after the Australian public has been exposed to foreign news sources.
