Global news and analysis

In this issue, worker suicide in China, wildcat strikes in Vietnam, the new new poor, the old anti-capitalism, vampire squids, the finance lobby, why Greece matters, and a world of artificial scarcity.

NEWS

London’s Lobbyists Prepare to Return Fire [Carsten Volkery and Michael Kröger]

Hedge fund regulations, a tax on financial markets, a ban on naked short selling. The EU’s bid to rein in the speculators has the financial industry up in arms. Lobbyists are already preparing to systematically attack the new proposals. [READ THE REST]

First Mecca metro trains arrive in Saudi Arabia

[On the Chinese/Middle Eastern connection]  THE first trains for a high-density metro line in the holy city of Mecca have been shipped to the Saudi port of Jeddah by manufacturer CNR Changchun, China. The first two 12-car trains were delivered just 12 months after the contract was awarded by the Saudi Ministry of Municipal and Rural Affairs. The remaining 15 trains will be delivered by November. [READ THE REST]

1000 workers strike in Hanoi garment sweatshop

About 1,000 workers at a Hong Kong-owned garment factory in Hanoi were in the third day of a wildcat strike over the company’s failure to comply with a new labour law, an official said Thursday.Workers at the Macallan Garment Co said the firm refused to raise salaries to the minimum wage of 1.34 million dong (72 dollars) per month as required by law since May 1 for businesses in Hanoi and Ho Chi Minh City. [READ THE REST]

Workers at the Foxconn factory in Shenzhen, ChinaAnother worker suicide at Foxconn, Shenzenn

A spate of suicides by employees of an electronics giant in China has fuelled concern about the pressures of factory life and the emotional vulnerability of young employees.

Taiwanese-owned Foxconn last week saw the seventh such death this year, despite hiring Buddhist monks and 100 personal counsellors in an attempt to stem the problem. The company is one of the world’s largest contract electronics manufacturers and is thought to supply Apple, Dell and Hewlett-Packard among others. [READ THE REST]

ANALYSIS

The new “new poor” [Suren]

Stenciled graphic art on a wall  in downtown BostonEconomists call it, “structural unemployment,” when job losses are caused by the mismatch between the skills of unemployed workers and those demanded by employers. In a series on the “New Poor,” the New York Times reported on Tuesday about the likelihood that many of the jobs lost in this recession are simply not coming back. The Times points to formerly middle-class workers who honed their clerical and administrative skills only to find these made increasingly obsolete by technological changes and outsourcing. The stories told make a powerful case for government intervention and retraining particularly when there is a need for whole new green industries.

On social justice grounds, though, the Times provides poignant accounts of a worker whose life speaks to our political dilemmas. The story of middle-aged Cynthia Norton is an epic of life failed by our frayed social safety net. [READ THE REST]

Artificial Scarcity in a World of Overproduction: An Escape that Isn’t [Sander]

Whether today’s global overcapacity is seen as cause or effect of the economic crisis, one thing is certain: it isn’t easy to make a profit in a world awash with overproduction. Capitalism is born in conditions of scarcity and is unable to function outside of them. So it seems logical that the crisis creates a tendency to restore these conditions artificially. But how does this affect the chances of the global economy to find a way out of its present predicament? [READ THE REST]

COMMENT

Why Greece matters [Sean Collins]

The economic turmoil in southern Europe shows that, far from going away, the global financial crisis has entered a dangerous new phase. [READ THE REST]

The trouble with “anti-capitalism” [Sean Collins]

The recent crisis has shown that there are no automatic responses to economic downturns. Recessions are not necessarily radicalising, nor do they always create a desire for progress. How we experience a crisis – how we seek to explain it and attempt to address it – is mediated by our understanding of society’s potential. And indeed, it is the prevailing political and social views in the years leading up to 2008 that have influenced how the recession has been interpreted and re-presented back to us.

The most predominant explanations of the economic crisis have to do with individual greed, irresponsible borrowing, excessive consumption and financiers’ reckless speculation.

Time and again, bankers and their bonuses are presented as proof of greed run amok and as the cause of the crisis. Denunciation of big bonuses is meant to denote a profound understanding of what went wrong. In last week’s televised leaders’ debate in Britain there were plenty of references to Sir Fred Goodwin and other bankers. On the other side of the Atlantic, Naomi Klein says that the banks’ culture is ‘an orgy of greed’. There is a strong moralistic streak running through the discussion of greedy bankers, which is reinforced by a condemnation of the apparently decadent practices among them – spending on booze, nights out with lapdancers, and so on. [READ THE REST]

On vampires: bad anti-capitalism

The financial crisis, as many people have noted, has been a hospitable time for populist critics of finance capitalism. (As one capitalist blogger puts it, “with the Economist hosting forums for money manager Jeremy Grantham to denounce the financial industry as a “blood-sucker,” with New York Times columnist Maureen Dowd calling Goldman Sachs “blood-sucking,” with the Huffington Post and the New York Times running articles denouncing the financial industry as “parasitic,” with the Atlantic running a piece by Michael Kinsley pondering a much-discussed article comparing Goldman Sachs to a vampire squid”.)

The partial and one-sided critique of finance capital makes sense in a time when financial instruments have brought poverty and misery to many, but it is an inadequate response. [READ THE REST]

OLD NEWS

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One Comment to “Global news and analysis”

  1. THE EVOLUTION OF CAPITALISM

    Capitalism was founded upon basic principles: production, supply and demand, and capital accumulation. It is a social theory whereby prices are determined by profit and loss, as well as market interest and fluctuations.

    Although I understand the need for a free market enterprise, such a theory should not imply that we are willing to disregard our environment, or sacrifice the needs and comforts of our humanity in an attempt to realize higher profits (a.k.a., BP, Lehman Brothers, Goldman Sachs, etc).

    Capitalism may be wonderful, but like anything else, it is still a flawed system. It’s a work in progress. It needs to be tweaked here and there in order to perfect its balance and to soothe the inordinate swings that occur day-to-day in our financial markets. If left unchecked, however, such a system will prove to be our economic downfall.

    How so?

    Well, for one thing, there is only so much profit a business can make from a product before it is left to cut costs in both quality and workmanship. In order to continually sustain a profit, businesses have to create those same products with lower quality ingredients and cheaper labor: which means that they must pull up stakes and move to other countries like China, Taiwan, or Mexico in order to survive. What does this eventually mean for people like you and me? It means that the very financial theory that promoted our country to super power status has turned on us. It means that the American workforce is now expected to work harder, longer, cheaper, and faster if we are to compete with the global economy now breathing down our necks.

    Where do we go from here?

    George Orwell had it right, to some extent, when he wrote his book1984. Many years from now, money will become worthless and the global populace will be employed and subject to hundreds (if not thousands) of individualized corporations that managed to survive attrition through merger aquisitions. It will be a feudalistic society: every corporation out for blood and vying for global dominance and absolute power. Our children and grandchildren will be there too: housed, clothed and fed by these various corporate entities; all the while being sent out on occasion, like brainless automatons, to errands of war, in an effort to absorb the weakest corporations into the fold. After all the dust settles, and everything is said and done, the remaining corporations will finally merge into a one-world government.

    Science fiction, you say?

    (…I’m left wondering.)

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