FREQUENTLY ASKED QUESTIONS ABOUT GLOBALIZATION
AND ALTERNATIVES

Also known as export subsidies, this is when governments pay exporters so that they can sell for lower than local producers.

For example, the the US broke its promise made during Uruguay Round agriculture talks including promises to reduce handouts to US farmers, making it harder for third-world peasants (whose subsidies had been killed by the IMF) to compete with them. The USA often does not practise what it preaches.

Antitrust laws began in America with the Sherman Antitrust Act of 1890. The idea is to keep competition alive by preventing mega-corporations from merging into USSR-style monopolies.

Despite neo talk of competition, transnational mergers and acquisitions have been rising at an annual rate of about 42% for the past 20 years, and the pace is rising. There were $2.3 trillion worth of transnational mergers and acquisitions in 1999.

For just one example, supposed competitors BP and Amoco, merged, with 10,000 layoffs.

All of this is regulated by a few hundred officials in Washington, D.C., and Brussels. They work closely with the merging corporations and their lawyers, many of whom used to be regulators themselves.

The largest mergers are officially "notified." Of these, about 10% get reviewed, and perhaps 1% are challenged.

How mergers make a difference - gas prices

Since the announcement or enactment of the four largest domestic oil mergers in 1999 and 2000, after-tax profits for the top five companies have risen 146%, from $16 billion in 1999 to nearly $40 billion in 2000.

In the oil industry 5 corporations -- Exxon-Mobil, Chevron-Texaco, BP Amoco-Arco, Phillips-Tosco and Marathon -- control nearly half of the domestic reffining and more than three-fifths of the domestic retail market.

Despite Bush blaming "Arabs" for prices the big 5 produce more oil than Saudi Arabia, Kuwait, and Yemen combined. Despite blaming enviromentalists, in the first three months of 2001, (Two and a half of Bush) profits for the five largest oil companies operating in the U.S. rose nearly 40% over the same period last year. Awfully nice enviromentalists who help their foes profit.

Gas prices only fell when a defection caused Democrats to control the US Senate, meaning they could investigate oil prices.

(http://www.citizen.org/cmep/restructuring/report53001.pdf)

Neos argue that while absolute povery - having to food or shelter - is harmful, reletive poverty - being poor compared to everyone else - means nothing.

In 1996, Harvard and Berkeley published separate studies on income inequality in all 50 states. (3) According to

Bruce Kennedy, the lead researcher of the Harvard study: "The size of the gap between the wealthy and less well-off, as distinct from the absolute standard of living enjoyed by the poor, appears to be related to mortality." Both studies found that states with higher income inequality suffered from:

Higher rates of homicide, violent crime, and incarceration.
Higher costs per person for police protection.
Higher rates of unemployment.
More high-school dropouts.
Less state funds spent per person on education.
Fewer books per person in the schools.
Poorer educational performance, including worse reading skills, worse math skills.
Higher infant mortality rates.
Higher heart disease.
Higher cancer rates.
A greater proportion of babies born with low birth weight.
Higher costs per-person for medical care.

Both studies found that each state's average income did not affect the mortality rate.

(Quoted in Robert Pear, "Researchers Link Income Inequality to Higher Mortality Rates," New York Times, Friday, April 19, 1996.) Now consider that global inequality from in 1995 was 82 times worse than 1960.

(Human Development Report 1998, United Nations Development Programme)

While rich nations had sweatshops during their development, there is such a thing as learning from your mistakes. Rich nations also had slaves, civil wars, and genocide - is Hitler "part of development"?

In 1997, the UN conference on Trade and Development reported that unskilled (ie sweatshop) wages in poor nations that had "liberalized" had fallen by up to 30%. The only "progress" is towards more poverty.

Also, this claim forgets that there STILL ARE sweatshops in rich nations: The US Department of Labor estimates that more than half of sewing shops in the US break minimum wage and overtime laws, while other surveys estimate that 75% break health and safety laws.

But surely sweatshops are better than what the poor had before?

This is an update of the "Slavery is okay because things are even worse in Africa" argument, and carries the assumption that people in the third world have spent the last thousand years sitting living in cardboard boxes and waiting for Nike factories to arrive. Of course, they had their own nations and economies - until Western colonialists turned those nations into western-owned areas that existed only to export to the rich nations...Coincidentally, the exact same policy as the neos.

Sweatshop workers often "choose" to work in sweatshops because they are trapped. For example, at the Magatex Factory in Port-O-Prince, Haiti, workers are paid $2.15 a day to make Disney clothes. Their average expenses are $6.12, leaving them trapped to pay off debts.

Sweatshops are all the customers fault!

Since 1995, 3 separate research organizations have found that the average customer would pay up to 28% more for a an item if they could be sure it was not made in a sweatshop.

Because wages are so low, they have no real effect on prices. If any corporation wanted to lower prices, running a few less commercials or paying its executives a tiny bit less less would cut more costs than moving to sweatshops.

But corporations have no idea what factories their products come from, so how can they be held responsiable?

Says an editorial on JustStyle, a resource site for the textile industry "The complexity of most retail supply chains makes it very difficult for companies to realistically monitor their apparel production against abusive or illegal labour conditions." The editorial then passes the buck even further, attacking the free market itself: "Market demands force many to chase the lowest prices farther and farther afield"

Actually, the garment and textile industries admit they know where their products come from, and it is in fact a "necessity". A quick search for "supply chain" shows that corporations are investing money in new technology for the sole purpose of knowing where all of their products are coming from.

One example: "integrated logistics providing management across the entire logistics channel can offer a competitive edge. This fact is increasingly being realised by multinational companies"

And another: "More and more multinational retailers and manufacturers now require pan-regional and increasingly, global, supply chain management." They could easily use this management to stop exploitation, but do not.