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The noble feat of Nike
The Spectator (U.K.) ^ | 06/07/03 | Johan Norberg

Posted on 06/05/2003 2:58:28 PM PDT by Pokey78

Globalisation — otherwise known as ‘ruthless international capitalism’ — is enriching the world’s poor, says Johan Norberg

Nike. It means victory. It also means a type of expensive gym shoe. In the minds of the anti-globalisation movement, it stands for both at once. Nike stands for the victory of a Western footwear company over the poor and dispossessed. Spongy, smelly, hungered after by kids across the world, Nike is the symbol of the unacceptable triumph of global capital.

A Nike is a shoe that simultaneously kicks people out of jobs in the West, and tramples on the poor in the Third World. Sold for 100 times more than the wages of the peons who make them, Nike shoes are hate-objects more potent, in the eyes of the protesters at this week’s G8 riots, than McDonald’s hamburgers. If you want to be trendy these days, you don’t wear Nikes; you boycott them.

So I was interested to hear someone not only praising Nike sweatshops, but also claiming that Nike is an example of a good and responsible business. That someone was the ruling Communist party of Vietnam.

Today Nike has almost four times more workers in Vietnam than in the United States. I travelled to Ho Chi Minh to examine the effects of multinational corporations on poor countries. Nike being the most notorious multinational villain, and Vietnam being a dictatorship with a documented lack of free speech, the operation is supposed to be a classic of conscience-free capitalist oppression.

In truth the work does look tough, and the conditions grim, if we compare Vietnamese factories with what we have back home. But that’s not the comparison these workers make. They compare the work at Nike with the way they lived before, or the way their parents or neighbours still work. And the facts are revealing. The average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise.

Ten years ago, when Nike was established in Vietnam, the workers had to walk to the factories, often for many miles. After three years on Nike wages, they could afford bicycles. Another three years later, they could afford scooters, so they all take the scooters to work (and if you go there, beware; they haven’t really decided on which side of the road to drive). Today, the first workers can afford to buy a car.

But when I talk to a young Vietnamese woman, Tsi-Chi, at the factory, it is not the wages she is most happy about. Sure, she makes five times more than she did, she earns more than her husband, and she can now afford to build an extension to her house. But the most important thing, she says, is that she doesn’t have to work outdoors on a farm any more. For me, a Swede with only three months of summer, this sounds bizarre. Surely working conditions under the blue sky must be superior to those in a sweatshop? But then I am naively Eurocentric. Farming means 10 to 14 hours a day in the burning sun or the intensive rain, in rice fields with water up to your ankles and insects in your face. Even a Swede would prefer working nine to five in a clean, air-conditioned factory.

Furthermore, the Nike job comes with a regular wage, with free or subsidised meals, free medical services and training and education. The most persistent demand Nike hears from the workers is for an expansion of the factories so that their relatives can be offered a job as well.

These facts make Nike sound more like Santa Claus than Scrooge. But corporations such as Nike don’t bring these benefits and wages because they are generous. It is not altruism that is at work here; it is globalisation. With their investments in poor countries, multinationals bring new machinery, better technology, new management skills and production ideas, a larger market and the education of their workers. That is exactly what raises productivity. And if you increase productivity — the amount a worker can produce — you can also increase his wage.

Nike is not the accidental good guy. On average, multinationals in the least developed countries pay twice as much as domestic companies in the same line of business. If you get to work for an American multinational in a low-income country, you get eight times the average income. If this is exploitation, then the problem in our world is that the poor countries aren’t sufficiently exploited.

The effect on local business is profound: ‘Before I visit some foreign factory, especially like Nike, we have a question. Why do the foreign factories here work well and produce much more?’ That was what Mr Kiet, the owner of a local shoe factory who visited Nike to learn how he could be just as successful at attracting workers, told me: ‘And I recognise that productivity does not only come from machinery but also from satisfaction of the worker. So for the future factory we should concentrate on our working conditions.’

If I was an antiglobalist, I would stop complaining about Nike’s bad wages. If there is a problem, it is that the wages are too high, so that they are almost luring doctors and teachers away from their important jobs.

But — happily — I don’t think even that is a realistic threat. With growing productivity it will also be possible to invest in education and healthcare for Vietnam. Since 1990, when the Vietnamese communists began to liberalise the economy, exports of coffee, rice, clothes and footwear have surged, the economy has doubled, and poverty has been halved. Nike and Coca-Cola triumphed where American bombs failed. They have made Vietnam capitalist.

I asked the young Nike worker Tsi-Chi what her hopes were for her son’s future. A generation ago, she would have had to put him to work on the farm from an early age. But Tsi-Chi told me she wants to give him a good education, so that he can become a doctor. That’s one of the most impressive developments since Vietnam’s economy was opened up. In ten years 2.2 million children have gone from child labour to education. It would be extremely interesting to hear an antiglobalist explain to Tsi-Chi why it is important for Westerners to boycott Nike, so that she loses her job, and has to go back into farming, and has to send her son to work.

The European Left used to listen to the Vietnamese communists when they brought only misery and starvation to their population. Shouldn’t they listen to the Vietnamese now, when they have found a way to improve people’s lives? The party officials have been convinced by Nike that ruthless multinational capitalists are better than the state at providing workers with high wages and a good and healthy workplace. How long will it take for our own anticapitalists to learn that lesson?

Johan Norberg is the author of In Defence of Global Capitalism, and writer and presenter of the documentary Globalisation is Good, to be broadcast by Channel 4 on 28 June.

TOPICS: Business/Economy; Culture/Society; Editorial; Foreign Affairs; News/Current Events

1 posted on 06/05/2003 2:58:29 PM PDT by Pokey78
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To: Pokey78
Bump. Great article.
2 posted on 06/05/2003 3:03:57 PM PDT by Richard Kimball
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To: Pokey78
In truth the work does look tough, and the conditions grim, if we compare Vietnamese factories with what we have back home. But that’s not the comparison these workers make

That's the message! American workers are too damn SOFT! We should be HAPPY to work 14 hrs 6 days a week for peanuts!

Ohh wait... who'll buy those $120 tennies?

3 posted on 06/05/2003 3:13:45 PM PDT by StatesEnemy
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To: Pokey78
The point of free trade, allows NIke to use cheaper labor, thus allowing Nike to lower its prices below the rest of its competition.

Everyone!!!!! benefits by Nike's low low labor costs. Even the Americans who were put out of work by vietnamese, are still now able to purchase Nike gym shoes very very cheaply because Nike has lowered its production costs so much.

4 posted on 06/05/2003 3:16:01 PM PDT by waterstraat
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To: waterstraat
Take your theory and extrapolate to the end game...
5 posted on 06/05/2003 3:21:50 PM PDT by StatesEnemy
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To: Pokey78
Nike and Coca-Cola triumphed where American bombs failed. They have made Vietnam capitalist.

It was a MacDonalds in Moscow that did the old Soviet Union in.

6 posted on 06/05/2003 3:23:03 PM PDT by KDD
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To: StatesEnemy
Hear hear, and look at the Entertainment and Sports industries in this country. Tom Cruise gets $20 million a picture and the theatre is left so little profit that they have to charge $3.50 for a small popcorn and a surcharge of $00.90 to use my debit card.

The Real Show is Economic (and sadly global)

David Bowie is a corporaion.

7 posted on 06/05/2003 3:31:41 PM PDT by Helms (Jacque Chirac: He's Got No Mojo, Only Hojo)
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To: StatesEnemy
Ah, so the answer is to have the Vietnamese lose their jobs, go back to the farms, and bring those jobs back to the US, right?

Not only is it a stupid idea, but most of the world has been global in its economic orientation for centuries, not just since WW II.

Americans would only hurt themselves by making it mandatory for all manufacturing jobs to stay in the US, just as it would hurt Germans or French or whoever to do the same.

Oh also one other thing: If a company isn't the property of the State, why is it your business what they do with their capital, jobs, factories, etc. Sounds like fascism is what you propose, an "alliance" between government and business, but govts got the guns and the jails.
8 posted on 06/05/2003 3:32:17 PM PDT by Skywalk
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To: Helms

Tom Cruise could get 50,000 and that would have nothing to do with the theater's profit. Jeez, that's been that way for ages because of the cost of film and the grip distribution companies have on their product.

You may not have noticed that theaters have always had higher prices than the outside world. It's called being a captive audience(I choose not to buy their stuff.)

With the advent of digital film, it is possible that some of the costs will go down and that distribution companies will not have the same ability to dictate prices. This would enable the theater to not charge so much.

Also, the theaters would be wise to lower their prices because they'd probably get far more buyers per day than they currently do.
9 posted on 06/05/2003 3:34:41 PM PDT by Skywalk
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To: Pokey78
10 posted on 06/05/2003 3:37:58 PM PDT by Fiddlstix (
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To: Skywalk
Americans would only hurt themselves by making it mandatory for all manufacturing jobs to stay in the US.

You got that right, if you look at these kinds of low skill manufacturing industries that are still in the US you will find most of the employees are illegal aliens anyway.

I would rather they left.

11 posted on 06/05/2003 4:17:38 PM PDT by usurper
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To: Pokey78
Nike. Invented here by U of O track coach Bill Bowerman. Made the soles in a waffle iron - really. Sold them out of the trunk of his car.

Today, seriously overrated shoes. They used to be fairly inexpensive as a regional product, but they quickly went international and started producing in various third world facilities. They never did hold up well for me. In their early years I was a 200 lb. plus kid and was pretty tough on a pair of shoes. At my more reasonable middle age weight, regular shoes hold up better, but still not the Nikes. Due to an old injury that caused nerve damage in one ankle and foot, I wear only high tops for the support and try to get something thin and lightweight to alleviate a constant burning sensation. The old Reebok Ex-o-fits were perfect, but they have been unavailable, at least around here, for several years (anybody know where to get anything like them?).

But Nike founder Phil Knight is a major donor to U of O projects, both sports and academics. His contributions to date are in the hundreds of millions. I suppose it's fair - the university is responsible for his success. But if you ask me, Phil Knight could stand to spend 20 bucks or so on a decent haircut, and he also needs to learn how to make a decent pair of shoes.

Dave in Eugene
12 posted on 06/05/2003 9:45:34 PM PDT by Clinging Bitterly (Tagline error. Press ALT-F4 to continue.)
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To: Pokey78
Shouldn't that read:

The Noble Feet of Nike

13 posted on 06/05/2003 9:48:29 PM PDT by Doctor Stochastic (Vegetabilisch = chaotisch is der Charakter der Modernen. - Friedrich Schlegel)
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