Tuesday, April 30, 2013

The tragic cost of capitalism

This is the first part of a new series on the influence of capitalism on our daily lives and that of others

The collapse of Rana Plaza, a building in Bangladesh containing five garment-making factories, is only the latest in a long series of such tragedies. This industry, which contributes $20 billion every year to the economy of that country, is notorious for its hazardous workplaces and subsistence-level wages.

Since November, when 122 garment workers died in a fire, there have been 40 other fires in Bangladeshi factories, killing nine more workers, and injuring 400. The number of bodies recovered from this building collapse now stands at 382, with many more seriously injured. Many workers are still unaccounted for.

It is alleged that the first four floors of the building were built without a permit; later four more floors were added and finally, as the last straw, a ninth floor. A lack of proper regulation has led to this and many other tragedies.

The day before the collapse, deep cracks in the concrete outer walls of the building became visible and the police ordered it evacuated. But the factory owners ignored these orders, and forced more than 2,000 people to keep working. Then the building caved in.

There is more than enough blame to go around for these tragedies: the Bangladeshi government; the owners of the buildings, factories, and brands; then there are also the retailers and even consumers, like you and me.

Thus far two owners of the factories, two government engineers, and the building owner, who had been on the run, have been arrested. His wife was arrested first, apparently, to force her husband to turn himself in. People in Bangladesh are now asking for the death penalty for the building owner.

Yet such tragedies are preventable. These tragedies represent part of what I call the tragic cost of capitalism. There are many more costs, as I intend to show in future posts. What is happening in Bangladesh is only the tip of the iceberg, and is not the most egregious example of the damage that capitalism has done.

According to reports, the garment workers are paid as little as $38 a month. Even China cannot compete with such wages, and is shifting work to Bangladesh.

The problem is greed at every level. It illustrates one of the most serious shortcomings of capitalism. This economic system pervades just about aspect of daily life around the globe. It is more than just an economic theory, it determines and shapes much of everyone's life in every country of the world.

Add Bangladesh to the list of countries racing to the bottom

The desire of shoppers to buy affordable clothes has driven retailers further and further afield to find factories to make products at lower and lower prices. Whereas for many years clothes had a "Made in China" label, today "Made in Bangladesh" is increasingly common. China is increasingly losing business to countries that can make goods even cheaper than they can.

In Bangladesh not only are the wages rock bottom, safety standards are ignored, all in the name of greater profits for everyone along the supply chain. Factory owners lease space in substandard buildings so that they can make more money. The owners of the buildings, of course, profit enormously. The owners of the brands outsource their orders to these factories, so that they too can increase their profits. And finally the retailers stock these cheap brands because of consumer demand. The consumers benefit from the low prices.

Greed drives the entire process, from the consumer to the huge multinationals that own the brands and the retailers. The victims are the workers who are desperate for work even at abysmal wages and are willing to endure terrible working conditions in buildings that are firetraps and in danger of imminent collapse.

Cost determines everything. Everyone one wants the lowest price. But the greatest cost, which is ignored by many, is borne by the workers whose lives are threatened and whose families may lose their breadwinners.

Slowly consumers are waking up to this tragic reality. Some are boycotting products manufactured in such factories in Bangladesh, but that does solve the problem, since the workers are the ones who will suffer the most from such a boycott.

A group of Bangladeshi and international unions have recently drawn a nine-page safety proposal that would ditch government inspections. because they can easily be corrupted. Instead, the report has proposed an independent inspectorate to oversee all the 4000 garment factories in Bangladesh. The major retailers, not surprisingly, objected that this proposal would be legally binding and too costly.

Walmart's representative said about this proposal that it was "not financially feasible ... to make such investments." Walmart's only concern seems to be its bottom line: it wants to make money and lots of it.

The problem at its deepest level is money, or better the love of money, as the Bible teaches. The Bible does not condemn wealth as such. Abraham, for example, was a very wealthy man by the standards of his day. Instead, the Bible condemns greed, by which it means people who love money, more than people, in fact, and who will do almost anything for the sake of money.

Greedy people are not hard to find. They are not found only on Wall Street, or in the corner offices of major corporations. They are found on every street, in every city, in every country; in other words, everywhere. Some of us are greedy as well.

Many people shop regularly at Walmart. By doing so, they are complicit in the greed of this company and at the same time display their own greed. They may excuse their shopping there as stewardship, but how many are aware of the enormous cost in term of human misery of the products that Walmart sells?

Walmart is only one example, but it is certainly the most well-known. For many retailers such products are a small part of the merchandise they sell, and they may not even be fully conscious of the conditions in the factories where each of them are made.

Consumer boycotting is not the answer, since poor workers will suffer the most. Yet consumers will need to find ways to put pressure on governments everywhere to better regulate these garment factories. Stricter enforcement of existing regulations is necessary so that the workers in the garment factories can be properly protected. Also they need better wages.

There is a human rights issue here, as well as an ethical one. We cannot eradicate greed, but we can alleviate the situation of those who are suffering the most as a result of the greed of others. There have already been many calls for justice from both inside Bangladesh and outside the country. Riots have occurred daily in Dhaka after the building collapsed and supporters of these workers are springing up everywhere.

If you live in Canada, you will probably be aware by now that many of the workers inside the collapsed building were making clothes for Joe Fresh, a Canadian brand that is owned by Loblaw Companies Ltd. This company sells the clothing at their grocery stores and other retail outlets across the country under many different names -- Loblaws, Real Canadian Superstore, No Frills, Valu-Mart, Independent, and Zehrs Markets.

You can help by signing this petition to tell Joe Fresh and Loblaws that all the factory workers deserve safe workplaces: http://www.publicresponse.ca/blog/lets-tell-joe-fresh-and-loblaws-that-we-demand-better.

Naming and shaming is more effective than a boycott. These companies need to become more responsible for the products they sell, not only by becoming better informed about the working conditions but also by pressuring their suppliers to improve these conditions.

Loblaws has just announced a plan to compensate garment workers' families, as has Primark, a British firm. Both companies are largely owned by the Weston family of Canada. But such compensation does not go far enough; it does not yet address the safety issue.

If you live elsewhere, there are maybe other petitions circulating in your country. All retailers and companies involved in the garment industry should be sent a clear message that such substandard workplaces are not acceptable any longer and that the workers deserve better conditions.

Safe working conditions are an important human rights issue. They are also an ethical issue that no believer of whatever faith must lose sight of. These garment workers are human beings. They are also our neighbors and they deserve our love. The least we can do is promote safer working conditions for them and, while we are at it, help to increase their pitiful wages.


  1. Very well said. Greed is indeed the source of the misery of too many (for the benefit of the few). Greed and Capitalism are inseparable, you cannot fight one without undermining the foundation of the other. What is necessary therefore is a new economic paradigm that promote sustained growth and prosperity, but is not rooted in greed. Luckily, there is such an economic paradigm, its is called the Flow Economy (see here: http://www.geopolitics.us/?p=1645 )

    1. You will not eradicate greed because it is a fundamental part of base human nature, ever since people became 'civilised' ironically and probably before that. Kids want more toys, adults want more money, a better job, a bigger house and so on. We all buy into it, and I hate to say it but Americans, and then Western Europeans one step after them, are the greediest of all; and what does such greed create? A tiny super-wealthy elite owning most of everything, controlling most of ervything and everyone, controlling the media and therefore the debate, controlling politics and the police and armies, and it goes on and on and on. The buck stops with us; I have learnt to be content with what I have, even though being from a poor background I work hard towards kickstarting a writing career. Being content and learning to be grateful is something we all need to learn. No one needs a collection of expensive cars or ten houses or multi-millions, most of the world's population have no choice but to make do on far less, and just get on with it. There is joy beyond wealth and success, beyond the attainment of high social status and money for its own sake. Maybe one day some of these rich people will understand that. But whatever they do, we reasonable people can all learn to be considerate of others and learn to live within our means.

    2. Sure, you cannot eradicate greed, but it does help if the economic system didn't depend on it, let alone promote it. You can have an economic paradigm that does not depend on greed to be sustainable (and still has fantastic growth and prosperity). What you're doing is certainly commendable, but it also "hurts the economy", because the market economy cannot survive without growth in production.

    3. 'Sure, you cannot eradicate greed, but it does help if the economic system didn't depend on it, let alone promote it.' I agree with you 100%, no problem at all. I assume you're in the US; here in Britain if you are unemployed, as I am, you have to be actively seeking work. If not, you can be sanctioned and have your welfare and other benefits cut. The Right-wing government we have in now is attacking the poor and the disabled and cutting their benefits, whilst allowing millionaires and billionaires and businesses and corporations (often US ones) to effortlessly dodge tax. Even though I am unemployed I often donate to charities and give to Big Issue sellers too. I grew up in poverty and see no problem whatsoever in trying to better myself through education and improving my lot economically. It's not having or making money that is a problem, it's what you do with it. If I give now, when I am more affluent I will give a lot more, I will pay my taxes and I will always believe in a decent minimum wage for ordinary people at the lower end of the class/economic chain. My parents did menial low-paid jobs all their lives; why would anyone want to do that if they could better themselves?

      'What you're doing is certainly commendable, but it also "hurts the economy", because the market economy cannot survive without growth in production.' I don't understand what you mean? Can you explain please? Yes, the world is a greedy, selfish, unfair and deeply divided place I agree.

    4. "I don't understand what you mean? Can you explain please?"

      What I meant is that the economy is based on people buying more and more stuff (usually stuff they don't really need). If people stop buying more stuff there would be less employment, less taxes for the government, and less social services.

    5. I see your point, but in some countries some people just can't buy stuff because they literally don't have the money to buy things. And for me, it is always an issue of 'do I really need this or do I want just want it?' My desire to get on isn't just an issue of making money, it is so that I can stand on my own tow feet and be doing something useful at the same time. The solution to the endless quest to get people to buy stuff they don't really want, and of course keep the system going, is to tax the rich more; not a ridiculous rate of tax, just a fair one.

    6. Taxing the rich a bit more may work temporarily, but it wouldn't solve the problems inherent in capitalism (which are evident in this article) - the greed, exploitation, nihilism, and so on.

    7. You make a good point, but to me as a Christian, human greed and the results of that greed such as ruthless exploitation, a lack of care for other people's welfare and cutting corners to make more and more profit are just symptomatic of people without morals and those who have basically abandoned God, or abandoned what they know in their hearts is right, to be rich at any cost. How do we stop greedy people being greedy? Often the very same people are those at the top of society in some way; oil sheiks, royalty, big business people, land owners, powerful politicians and their ilk; do you think any of these are going to seriously vote in higher taxes for themselves or curtail their selfishness and greed? it would be like a turkey voting for Christmas!!! I believe what you say is essentially right, but those at the top won't listen full stop. If any of them had a conscience things would change albeit slowly; but they don't and it won't. So, what's the answer my friend?

    8. "So, what's the answer my friend?"

      Well, I do believe that - while capitalism concentrates power and money in fewer and fewer hands at the top - technology can make society freer, more democratic, and less hierarchical. We see it with youtube, facebook, blogs (like this one), smartphones and so on. Almost everyone in the world today has a cellphone, and smartphones are just around the corner. So more and more people do have a voice, and more and more people can see the injustice and the exploitation. Of course, that is not enough if there is no better alternative out there at the moment. Because for me, just like certain forms of government (authoritarian regimes for example) are structured in such a way that there is more corruption, censorship and so on in society, the same is true for the economic system. If the government is better (more just, more democratic, more free and equitable, less bureaucratic) there can be a better and ("morally") healthier civil society, and more honest individuals in that society. So I believe the same is true for the economic structure.

      At the same time, I do believe there is a much better economic paradigm out there (see here: http://www.geopolitics.us/?p=1645 ), but it's not something that is workable in the near future (maybe 50-80 years from now). Any other alternative to the free market at the moment is either unsustainable or inefficient and bureaucratic. So I guess we can hope for a better future...

    9. '...technology can make society freer, more democratic, and less hierarchical.' It certainly can do, and of course when we Brits see that America isn't just a land of happy shiny wealthy people where everyone has a 5-bedroomed house, a 4-wheel drive and a prosperous career, nor we Brits all live in quaint villages or stately homes; we see that reality as usual is more complex and that many of us live hard lives. Yes, communication like the 'Net is good for understanding the world better, but the wealthy and the elites also use these things to control the debate too.

      'If the government is better (more just, more democratic, more free and equitable, less bureaucratic) there can be a better and ("morally") healthier civil society, and more honest individuals in that society.' But governments are really about keeping the rich in wealth, and though I pray for a more democratic government in England, all I see is that the Right-wing government (the Conservatives) are not that different from the so-called alternative Left-of centre (the Labour Party). They are similar but the Labour party are just a little less extreme. And in the end, societies and governments are made up of individuals, and they are all different. The buck stops with us. I may not change society by not being rapacious or not being greedy and so on, but when others feel and act the same, we make up a better society. There will always be greedy people, kings, sheiks, business people, upper class, politicians, whatever you want to call them or whatever they are, but we don't have to emulate them.

      'So I guess we can hope for a better future...' I believe that God can make you and me happier in the here and now, not just in the future. Thanks for the intelligent and thoughtful dialogue. By the way, I clicked on that link and nothing came up?

  2. I appreciate all these comments. I would like to reiterate that all of us can be greedy at times. We cannot legislate greed away, but we can try to curtail it. We need to start with ourselves. We need to get away from the Enlightenment idea of "progress" which is expressed in the economic concept of "growth," and instead promote the idea of stewardship, of taking care of creation and using only what we need (usifruct). As a Christian, I believe that God made everything, thus he owns it, not we. This, in a nut shell, is the way to go to find a solution. We must begin by trying to live that way ourselves, regardless of what others do.

    1. 'I would like to reiterate that all of us can be greedy at times.' Isn't that the truth? No we cannot legislate greed away because it is a fundamental part of base human nature sadly, but whichever way you look at it that's the reality. It isn't necessarily political differences or religious differences or any other human differences in the world that are the problem, it is greed; and greed is found at all levels of society and in every sphere of human activity and human society.

      'As a Christian, I believe that God made everything, thus he owns it, not we.'
      Me too. If only if some Christians also believed and understood that as well. Some of the big denominations around the world in Europe and America especially seem to be far more about wealth and worldly power and controlling people and resources than they ever really do about having a personal relationship with Jesus. I wonder why.

      'We must begin by trying to live that way ourselves, regardless of what others do.' Whatever other people do or don't do, God wants Christians to take regard of Him, and the buck always stops with us. We all need to live within our means and stop worrying about what we haven't got and first of all be grateful for the blessings we already have. Then for the first time we might see that there are others around the world, and even in our own streets and neighbourhoods, that are far worse off than we are.

  3. 'Yes, the Earth is the Lord's and everything in it', and 'I have learned to be content with little and much.' If these words are proving true in our lives, then we are on the right track.