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Davis, California

Friday, April 12, 2024

Column: The real economy

In Margin Call, a film about the 2008 economic meltdown, an investment banker watches as all of the firm’s financial products become worthless. When his boss attempts to console him, noting that he could have been “digging ditches all these years,” the banker responds, “That’s right. And if I had, there’d be some holes in the ground to show for it.”

This is a common refrain in analysis of the financial crisis: Instead of swapping derivatives on Wall Street, we should be building things.

It’s true that Wall Street is a parasite, producing nothing of value while siphoning off money from the rest of us. The vast majority of transactions exchange existing stocks that don’t even provide additional capital to businesses. Wall Street’s real function is not to fund risky new ventures but to concentrate wealth in the hands of the one percent.

However, bourgeois liberals and right-wing populists who long for a return to good, solid, virtuous industrial capital are living in fantasyland.

Let’s take Apple, a company recently praised by President Barack Obama. Unlike collateralized debt instruments, the commodities that Apple makes have a genuine use value for consumers.

Yet these sleek machines conceal the labor required to manufacture them. According to a recent report by The New York Times, Chinese workers are often made to work over 60 hours per week in dangerous conditions to produce iPads in Apple supplier Foxconn’s factories.

Foxconn, driven by Apple’s relentless demand for products on a slimmer profit margin, drives workers to exhaustion while skimping on ventilation and safety equipment. Last May this led to an explosion which killed four and injured 18.

Meanwhile, Apple inspectors seem to pass over their supplier’s abuses. As one Apple executive said: “You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.”

So, while it is true that banks and investors produce nothing of worth, we should also remember that real-world commodities like the latest iPod emerge from the factory stained with blood.

Some might argue that the abuses seen at Foxconn are the result of China’s more authoritarian form of capitalism. Employees are better protected here in the U.S., we’re told.

Of course, no capitalist enterprise would choose to pay an American a living wage when they could just as easily pay someone else a starvation wage.

Indeed, capitalists and their flunkies are overjoyed at the increase in profits made possible by the cheap labor provided by China and the third world. Global capital’s faithful apologist, Thomas Friedman, lavishes praise on one of Apple’s Chinese plants, which woke its workers in the middle of the night for an extra 12-hour shift when an emergency order of iPhone screens came in. “Average is over,” as Friedman puts it.

But even if we somehow repatriated those factories, there’s no reason to believe it would somehow transform them into workers’ utopias.

From the Upper Big Branch Mine disaster to the Triangle Shirtwaist Factory fire, American companies have a long history of preventable deaths. Capitalists will always undermine or ignore safety and labor regulations in their pursuit of ever-expanding profits. It’s just business sense: dangerous, low-paid work is cheaper.

These arguments about a golden era of manufacturing in America represent the latest in an age-old reactionary tradition which blames a single scapegoat for the ills of the entire capitalist system. Automobile tycoon Henry Ford railed against banks, claiming they were an international conspiracy, while police gunned down unemployed protesters in Detroit.

Now, libertarians like Ron Paul attack the bank bailouts but call for a repeal of minimum wage laws and the Occupational Health and Safety Act.

My point is that we shouldn’t ignore the grotesque wealth grabs of the banks. (Even as they help wreck the economy, a Goldman Sachs employee was overheard boasting that “My garbage disposal eats better than 98% of the world.”)  At the same time, we also cannot overlook the exploitation of industrial works.

As long as we remain within capitalism, workers in the real economy will be sacrificed to make more profits.

JORDAN S. CARROLL is a PhD student in English who can be reached at jscarroll@ucdavis.edu.


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