Can Creative Capitalism Save the World?

August 4th, 2008 | By Kelsey | No Comments »

Bill Gates thinks so.

Gates in the pages of Time magazine:

As I see it, there are two great forces of human nature: self-interest and caring for others. Capitalism harnesses self-interest in a helpful and sustainable way but only on behalf of those who can pay. Government aid and philanthropy channel our caring for those who can’t pay. And the world will make lasting progress on the big inequities that remain — problems like AIDS, poverty and education — only if governments and nonprofits do their part by giving more aid and more effective aid. But the improvements will happen faster and last longer if we can channel market forces, including innovation that’s tailored to the needs of the poorest, to complement what governments and nonprofits do. We need a system that draws in innovators and businesses in a far better way than we do today.

Naturally, if companies are going to get more involved, they need to earn some kind of return. This is the heart of creative capitalism. It’s not just about doing more corporate philanthropy or asking companies to be more virtuous. It’s about giving them a real incentive to apply their expertise in new ways, making it possible to earn a return while serving the people who have been left out.

A great place to turn for discussions about Creative Capitalism is THIS BLOG. The contributors list is basically a who’s who of authorities on economics and globalization. The posts and discussions from the blog are going to be anthologized in a book by Simon and Schuster in the fall of 2008.

In the most recent post Stephen Landsburg criticizes Gates’s example of fair trade as a form of creative capitalism:

Never mind the fact that “fair trade” seems to be a euphemism for the enforcement of monopsony power (enriching some producers by pricing others out of the marketplace); this isn’t the place to get into that debate. But this much is directly to the point: Lots of people feel a moral obligation to help poor people in general. No sane person feels a moral obligation to help poor coffee farmers in particular. So the “creative capitalism” solution serves a non-existent goal—and this was one of the best two examples the authors could come up with! (KT: the other was the (Red) program)

In fact, the whole fair trade thing is an excellent illustration of creative capitalism gone insane. You can pay an inflated price for your coffee and put a farmer out of work, or you can buy ordinary coffee, contribute to CARE, and feed a starving child. Please oh please don’t trick people into thinking the former is a good deed.

The questions at hand:

1. Is it better for a consumer to NOT pay a premium for products produced under ethical conditions and to take the money they saved and donate it to charity?

2. Is it better for a business to maximize their profits by whatever means possible and then use the maximized profits to do good?

My thoughts:

Bill Gates talking about how capitalism can cure inequities is kind of like the United States, which wasn’t hindered by environmental regulations during its own industrial expansion, telling developing nations to stop polluting. Bill gates got where he did with cutthroat capitalism, not creative capitalism and the Unites States got where it did by burning unclean fossil fuels.

Gates is more of an example of earning boatloads of cash via cutthroat capitalism and then taking all of his money and trying to change the world. And few would argue that there are any individual philanthropists doing more than Gates to help the world’s poor at this time.

Companies doing “good” would be great, but I think that’s shooting a bit high. I would settle for companies “doing no harm” – to the environment and its employees. A company that donates money to a good cause, but has its products manufactured by workers treated unfairly – unpaid overtime, working off the clock, underpaid, overworked, abused, etc – or does unnecessary harm to the environment, more than negates whatever good their philanthropy does.

Before a company tries to do right in the world, they should do right in their own house.

That said, I think marketing fair trade products is a perfectly legitimate niche. There are people that want to buy products made ethically, and they should have the option.

I find the debate very interesting, and hope to check out the Creative Capitalism blog regularly. I’ve added it to my Blogroll on the right.

UNITE to NYC garment factory: You underpaid workers about $5 million

July 24th, 2008 | By Kelsey | No Comments »

The garment industry in the U.S. started in the north-east, followed cheaper labor overseas, and eventually, for the most part, jumped our borders. I know that LA is still (in)famous for its garment factories, but I had no idea that the needles were still thumping away in NYC.

These factories haven’t slipped beneath UNITE’s radar. From UNITE’s recent press release:

“This latest investigation shows that horrible sweatshop working conditions are still present in New York City and that the apparel industry is still not taking this issue seriously,” said Bruce Raynor, General President of UNITE HERE, the apparel and textile workers union. “The major apparel brands that were using this factory all have social responsibility systems that have failed to detect this major sweatshop operation.”

The factory that was recently cited, Jin Shun in Long Island City, NY, has operated under a number of different names, and was found to have underpaid more than 100 workers over several years. The Department of Labor stated that the contractor kept false records and coached its workers to lie to inspectors. The investigation also revealed that workers routinely worked twelve-hour days, six to seven days-a-week.

Not to belittle a workday of 12-hours or anything, but my dad has been working 12-hours six to seven days a week for about 35 years. Poor fella. Although, I suspect he pays himself a little better than what the workers at the Jin Shun get paid.

The USA is a pucker and China is a hemorrhoid

July 23rd, 2008 | By Kelsey | No Comments »

I had someone email me today asking about where our clothes come from. Here’s the short answer: 97% come from outside of the U.S., mostly from China.

And here’s that answer visually, courtesy of worldmapper:

The map is accompanied with this interesting tid bit:

Of all earnings from international trade, 7% is earned from clothing exports.

Patagonia makes factory list public

July 10th, 2008 | By Kelsey | No Comments »

Way to go Patagonia. If only I could afford more of your products.

An entire class asks: Where are we wearing?

June 21st, 2008 | By Kelsey | No Comments »

A while back a mother contacted me about her son’s class project where each student was supposed to trace an item of clothing all the way back to the field. Her son Caiman chose his shorts, which were made in Jordan.

She wrote about his research on her blog, Pretty Good Day:

We determined a plausible birth story for his shorts, and it wasn’t pretty:

1. Cotton grown in India, likely harvested by child laborers exposed to deadly pesticides

2. Buttons and zippers from factories in China

3. Stitched in a factory in Jordan by guest workers who’d their passports confiscated upon arrival and been cheated out of promised pay, forced to work 15 hours a day and routinely beaten for slowing down

That’s a pretty cool class project. We could use more teachers and moms like Caimans.

Blood, Sweat, and T-shirts

May 6th, 2008 | By Kelsey | 5 Comments »

When I was in Cambodia and China I heard rumblings about a BBC reality show/documentary that followed young Brits as they worked in a sweatshop in India. The first episode of Blood, Sweat, and T-shirts aired last week.

“I don’t understand. Why don’t you just go to night school.”

“There’s like Poo on the floor” in the slums of Mumbai

Cotton: A fashion revelation or “I ain’t carrying that!” or “Do I look like an ork to you!”

For more of Blood, Sweat, and T-shirts GO HERE.

Radiohead “All I need”

May 2nd, 2008 | By Kelsey | 3 Comments »

As part of MTV’s EXIT campaign to end exploitation and trafficking Radiohead has released a powerful new video.

Not that lead singers are any more qualified to talk about human rights and globalization than, say, drummers or butchers, but here’s what Radiohead’s lead singer Thom Yorke has to say on the subjects:

“(It’s) a video of two parallel stories running, one of a little boy in the West and one of a little boy in a sweatshop in the East, and the boy [in the West] ends up buying the shoes from the sweatshop. It’s actually quite powerful. It’s the sort of images I have in my head anyway. Sometimes when you’re walking down High Street and you’re looking at the incredibly cheap [sneakers], you sort of think, ‘Hmmm, well how did they manage to make that so cheaply?’ It sort of reminds me of one of my preoccupations, so I’m touched that the music goes with that. I think it’s great.”

“…if you are in the West, it’s a luxury to be able to talk about the importance of human rights for everybody, but yet in the East, or the poorer countries where slave labor is going on, if you talk to certain companies, it seems that it’s much more important that they’re on some sort of economic ladder, and somehow the rights of the workers are secondary to economic growth. And that I find a very peculiar logic, and I think that’s as much about the power of the companies and the profits they’re making as it is of any moral stance. So it would be useful when the West talks about human rights, they actually consider countries where, for a lot of workers, it’s not really on the agenda yet.”

Here’s the video:

Bangladesh garment workers want wages to rise with soaring costs of food

April 23rd, 2008 | By Kelsey | 1 Comment »

15,000 workers go on strike. When you earn $25/month and rice is 25 cents a pound, something has gotta give.

Sweatshops on NPR

April 11th, 2008 | By Kelsey | No Comments »

This past Christmas Talk of the Nation did a 35-minute spot on sweatshops. I listened to it last night. If you want to know about the “Anti-Sweatshop Bill” in congress and what it has to do with cat and dog fur, you should give it a listen.

What’s really happening in this pic

February 21st, 2008 | By Kelsey | 7 Comments »

I was scrolling through photos the other day, searching out details, and I came across the photo below. It seems like a nice photo of me and some Bangladeshi garment workers, doesn’t it? Well, you don’t know the whole story. I had forgotten all about it. Such memories are repressed.

See that dude to the right of me? I don’t want to go into details, but as this pic was taken, he was trying to molest me. If you look close, you can see my innocence drifting away. Following this photo, he received a quick elbow to the ribs and then he disappeared, back to whatever creepy lair he crawled out of.