August 2016        

Globalisation: The plunder of the poor

Jimmy Doran

More than a hundred years ago Karl Marx pointed out that “the veiled slavery of wage labourers in Europe needed the unqualified slavery of the New World as its Pedestal.” The discovery of gold and silver in America, the conquest and plunder of India and the colonisation of Africa are inextricably linked to capitalism and imperialism—its highest form. Colonialism was a necessity of capitalism: it designed and created it.
     The treasures captured outside Europe by undisguised looting, enslavement and murder flowed back to the mother countries and were turned into the capital that financed the Industrial Revolution in Europe. These workshops, mines and mills turned out massive additional profits for their owners, who had already plundered the natural resources of the colonies in the global south, on the backs of generations of exploited workers throughout Europe.
     This plunder and desecration of peoples and environments still goes on today. It is much more subtle than the plunder carried out by invading armies, but it also reaps a much higher reward for capital.
     Globalisation is the preferred army of plunder today to satisfy the insatiable appetite for ever more and ever increasing profits.
     To increase profits and overcome the stagnation in capitalism, new markets were needed and cheaper production costs. Globalisation was their answer. It began in the form of foreign direct investment, whereby transnational corporations moved their production facilities to the developing world in the global south to benefit from cheap labour and favourable tax breaks by local governments.
     Eventually, however, this led to bad publicity back home, as the poor working conditions and wages of workers were exposed in the way massive profits were being made on the designer goods being sold in the developed world. Workers in foreign branches of transnationals also started to get organised in trade unions and to fight for better pay and conditions, which led to an increase in production costs and more bad publicity, as the intimidation, blacklisting and, in some cases, the murder of trade union leaders received publicity in the developed world, most notably the Coca-Cola Company in Colombia, Mexico, and El Salvador.
     The corporations did not want their “good name” being linked to such atrocities, as it was not good for business. They changed their policy of direct investment to what is known as “arm’s length” investment, where production is outsourced to local factories under a franchise or contracts.
     This led to a further decrease in costs, as the local capitalists competed ferociously with each other to win contracts through reductions in wages and in safety and environmental considerations.
     In this way the corporations could increase their profit to massive levels, while they could not be linked to the sweatshop conditions suffered by the workers, as they would say they have no control over local employers and the way they treat their workers.
     This is the modern method of achieving the “unqualified slavery” of workers in the global south today, where plunder, pillage and genocide was the way in colonial days. Much larger financial gains are being achieved today through globalisation and arm’s length outsourcing of production in the developing world.
     This transfer of production has the same devastating effects on the local population and environment that colonialism had in the past. From these sweatshops in the global south half a trillion euros is repatriated to the global north every year in profits—that is, €500,000,000,000 in wealth transferred every year from the poorest countries on the planet to the richest, created by the slave wages paid to the local workers.
     To put this transfer of wealth in context, it is the equivalent of 15,000 tonnes of gold being shipped from the colonies every year back to the motherland—that is twice as much gold in one year as was plundered in the entire 350 years since Columbus set sail.
     Neither slavery, genocidal clearances of indigenous people nor the worst excesses of colonialism achieved a wealth transfer of this magnitude from the poorest to the richest countries.
     What military forces failed to achieve in the past couple of centuries, market forces are achieving on a massive scale every year, and with an enormous and devastating cost for humanity.

Home page  >  Socialist Voice  >  August 2016  >  Globalisation: The plunder of the poor
Baile  >  Socialist Voice  >  Lúnasa 2016  >  Globalisation: The plunder of the poor