The Inequality Gap Story: The Sweatshop Workers, The Mayor, and the Banker

Film Review on Economic Globalization of John Pilger’s “The New Rulers of the World”

Aaron Laylo

Prelude to the Review: The Gap Story

Somewhere down this road, you will find a large and populous town which was once a rich trading port but has now become like one of the relatively less prosperous towns in the region, dominated by the ruler of the big city. After the terrible battle that devastated the region a few years back, the town now lies in stagnant condition. Its mayor had a compromise with the ruler of the big city: welcoming the bankers and the rich city merchants (virtually manipulated by the ruler) in order to revitalize the looming market and provide jobs for the town’s poor denizens through the establishment of sweatshops. According to an inquirer from the big city, the bankers and the merchants have only worsened the situation in the big town, and have actually held back the big town from rising above the quagmire of poverty. On the other hand, the wealth of the merchants has increased to greater heights. Looking at the big picture, one may observe the widening inequality gap in the region: the rich merchants become richer and the poor town folks become poorer.

How true is this in the real setting? 

The Documentary Film

The story above reflects the plot of the subject documentary of this review. The New Rulers of the World is a 2001-2002 documentary film produced, written and presented by John Pilger, an Australian journalist. He explains the impact and serious problems brought by new globalization, particularly the economic dimension of the phenomenon, taking Indonesia as the subject of his study, a country that the World Bank described as a ‘model pupil’ until its ‘globalized’ economy collapsed in 1998. The so-called economic debacle of Indonesia, as implied in Pilger’s inquiry, may be due to the unjust manipulation of the Indonesian economy by influential international financial organizations like World Bank and International Monetary Fund, and the exploitation of Western multinational companies. It is supposed that the collapse was partly due to economic globalization dominated by the West.

Important Points for Analysis

Important points for scrutiny and critical analysis include these queries – who are the real beneficiaries of the globalized economy? Who really rules the world now? Is it governments or a handful of huge companies? Also interesting to ponder on are stunning realities like: the Ford Motor Company alone is bigger than the economy of South Africa and enormously rich men, like Bill Gates, have a wealth greater than all of AfricaGiven these questions and realities, an analyst may weave his questions into one encompassing hypothesis: Economic globalization have caused the widening wealth gap between the rich and the poor in countries the world over, which then further highlights the substantial difference between the powerful dominant and influential actors (primarily states, and MNCs, even individuals) juxtaposed with the relatively weaker players in the international economy (from puppet governments whose economies are blatantly controlled by foreign banks and governments to the smallest of the factory workers residing in poverty-stricken communities).

For this review, I compartmentalized my critical analytical points into three parts to decipher the characters in the story that I wrote above: The Sweatshop Workers, the Mayor, and the Banker/Merchants. But prior to the analysis by segments, I shall first give a brief overview of economic globalization. The first segment, The Workers, will explore on the conditions of the factory workers toiling in giant multinational companies that operate in Indonesia. These workers resemble the millions of factory workers and blue collar workers recruited for labor-intensive employments in developing countries yet paid cheaply. The second segment, The Mayor (signifying the state government), shall examine the role of the government to its people: either supporting by protecting the rights of its citizen-workers or tolerating the rampant exploitation of its manpower at an unreasonable cost. Have these governments become instruments of labor progress and development or otherwise? And the third portion of the review will inquire into the alleged manipulation and exploitation of international financial institutions and multinational companies as represented by the Banker and Merchants from the city (highly-industrialized nation-states). Into these segments, I shall weave both John Pilger’s investigative assessment of economic globalization and my own critical assumptions and reactions regarding the so-called widening inequality gap. Towards the end of the review is my conclusion.

Important Points for Analysis

Important points for scrutiny and critical analysis include these queries – who are the real beneficiaries of the globalized economy? Who really rules the world now? Is it governments or a handful of huge companies? Also interesting to ponder on are stunning realities like: the Ford Motor Company alone is bigger than the economy of South Africa and enormously rich men, like Bill Gates, have a wealth greater than all of Africa.  Given these questions and realities, an analyst may weave his questions into one encompassing hypothesis: Economic globalization have caused the widening wealth gap between the rich and the poor in countries the world over, which then further highlights the substantial difference between the powerful dominant and influential actors (primarily states, and MNCs, even individuals) juxtaposed with the relatively weaker players in the international economy (from puppet governments whose economies are blatantly controlled by foreign banks and governments to the smallest of the factory workers residing in poverty-stricken communities).

 

For this review, I compartmentalized my critical analytical points into three parts to decipher the characters in the story that I wrote above: The Sweatshop Workers, the Mayor, and the Banker/Merchants. But prior to the analysis by segments, I shall first give a brief overview of economic globalization. The first segment, The Workers, will explore on the conditions of the factory workers toiling in giant multinational companies that operate in Indonesia. These workers resemble the millions of factory workers and blue collar workers recruited for labor-intensive employments in developing countries yet paid cheaply. The second segment, The Mayor (signifying the state government), shall examine the role of the government to its people: either supporting by protecting the rights of its citizen-workers or tolerating the rampant exploitation of its manpower at an unreasonable cost. Have these governments become instruments of labor progress and development or otherwise? And the third portion of the review will inquire into the alleged manipulation and exploitation of international financial institutions and multinational companies as represented by the Banker and Merchants from the city (highly-industrialized nation-states). Into these segments, I shall weave both John Pilger’s investigative assessment of economic globalization and my own critical assumptions and reactions regarding the so-called widening inequality gap. Towards the end of the review is my conclusion.

Economic Globalization

Perhaps, if one would return to the beginnings of globalization, he would be able to discover that the primary aspect that has brought forth globalization was economic in logic and in nature. It is supposed that it was because of the vast trade in the fifteenth and sixteenth centuries that opened the doors of nations for more interaction and barter exchange. It is assumed that nations have since then begun to shrink into a small global village connected by economic and trade interests, and therefore use this medium of transaction to exchange ideas, technological advances, and even culture. Through the years, economic globalization have somehow transformed the medieval towns into booming cities, vast plains into commercial towns and communities, and therefore changed the economic conditions of the population. Some scholars give credit to globalization for the economic development of formerly poor countries, and lifted the people from the quagmire that has trapped them for decades. They strongly believe that it was because of economic globalization that people from different parts of the globe now enjoy varieties, assortments and a relatively broader array of products and commodities transported from virtually anywhere across the globe.

But on the other side of the fence, we find scholars (labeled as anti-globalization activists) who refuse to accept the notion that economic globalization has actually improved the economic conditions of people especially those in less developed countries. For them, economic globalization has actually worsened the economic conditions of a larger populace in these poor countries; and worse, it has widened the gap between the rich and the poor within these countries, as well as between the industrialized and less-developed states. This therefore also brings changes in global politics.

But is economic globalization to blame in this widening inequality among people and states? What does this say about economic globalization? Is it a boon to penetrate into the vast arena of world trade or better build higher barriers to protect national trade against the rapid and raging waves of global trade.

The Workers of the Sweatshop

“Looking at the big picture, one may observe the widening inequality gap in the region: the rich merchants become richer and the poor town folks become poorer.”

It is a sad reality that in most countries, the poor remains trapped in the mire of dearth. Most of these less-skilled are employed in the so-called sweatshops (term that is used to refer to factories whose physical setting and environment is not suitable and conducive to the workers’ health and physical conditions). According to the documentary, “workers are paid on average the equivalent of 72 pence a day, about a dollar. According to the Indonesian government that’s just over half the living wage.” Such condition is not only experienced by sweatshop workers in Indonesia but also by thousands and thousands of factory workers who receive minimum pay way below the average income in developed countries. It is already clear that workers in industrialized countries are also subject to some harsh rules and policies of big companies. But workers in less developed countries experience harsher conditions and perhaps depression due to the nature of their work. Hence, although both workers are employed in the same brand of company, it is assumed that workers in many sweatshop countries receive less and work more. How could one have a decent living with such paltry income and use that amount to sustain his basic needs everyday?

As shown and implied in the film, the gap between the poor and the rich has become wider. The wealthy are becoming richer while the poor are getting poorer. This contrast was blatantly shown in the film. While the rich leisure themselves in buying top brands in high streets and shopping malls, workers return to their poverty-stricken communities and labor camps 5 miles away. .“This is the human price paid for our fashionable designer jeans.” Their dormitories are made from breeze blocks and packing cases – when it rains they flood; whereas on the other side of the city, the well-off celebrate extravagant weddings. Such conditions exemplify great contrast between the poorest and the richest.

The Mayor

“After the terrible battle that devastated the region a few years back, the town now lies in stagnant condition. Its mayor had a compromise with the ruler of the big city: welcoming the bankers and the rich city merchants (virtually manipulated by the ruler) in order to revitalize the looming market and provide jobs for the town’s poor denizens through the establishment of sweatshops.”

After the War, many former colonies remained tied to their former colonial masters. If not tied to a former colonial master, it would have been other “imperial” powers – ones that are obviously financially powerful, politically manipulative, and economically self-sufficient. This was also the case of Indonesia in the decades after the war when it was backed by major industrial countries such as the United States and Britain and by other western leaders and brought to power Gen. Suharto. A few years since then, Indonesia’s economy was redesigned after that of America to fit and provide for the interests of the west. And in such, the West was given access to vast mineral wealth, markets, and cheap labor. This is what Nixon called “the greatest prize in Asia.” Such setting or case in Indonesia (neocolonialism) which is more economic in nature is no different from other former colonies of European or American imperial powers. Albeit the era and trend of colonialism had ended in most countries, these former colonial powers have retained their influence and manipulative capability to dictate or control the institutions they themselves have established (World Bank, International Monetary Fund).

What then is the role of the Head of State or the Head of Government to ensure that the welfare of its citizens are taken into consideration when implementing economic or trade policies accorded by these international financial institutions? What does “The Mayor” represent – is he the puppet leader who’s always dictated by the ruler of the city/ merchants/ bankers? Or is he one who can argue against any provisions in the policies and transactions that may be disadvantageous to the general public and the domestic economy? The role of the mayor (Head of State/ Head of Government) therefore is very vital in any transaction with outsiders or visitors who wish to do business with the town (the country).

The Banker/ Merchants

“According to an inquirer… the bankers and the merchants have only worsened the situation in the big town, and have actually held back the big town from rising above the quagmire of poverty.”

In the documentary, Pilger cited that “the World Bank and the IMF were set up near the end of World War II to rebuild the economies of Europe, later they began offering loans to poor countries but only if they privatised their economies and allowed western corporations free access to their raw materials and markets…” As stated, the initial logic for putting up institutions such as the WB and IMF was primarily for development and rehabilitation. As time went by, these organizations began to offer loans conditionally, and as clearly cited in the statement, this may only be provided if these countries abide by the rules and conditions and policies of the Bank and the monetary institution. It is important to note that these institutions follow the free trade economic principle which was weaved by western liberal capitalists. If less developed countries wish to have access to world trade, they have to get into the pack and follow the same set of rules and policies, regardless if these particular rules really complement and serve the interests of the people.

It is assumed that in recent decades, these international financial institutions have continually attracted less developed countries to get into the “elite club of traders” in order to have access to world trade, and to borrow loans for domestic development primarily infrastructure and health. But when these countries have given themselves to the magnet of these institutions, would they still be able to handle the pressure associated with being part of the club such as abiding by the rules, opening up markets, breaking trade barriers and in a way, debunk protectionism and totally embrace the rules of the game.

Were the merchants and bankers really sincere in uplifting the denizens of the town from the miry situation in their town? Or are they only doing these to gain profit at the expense of the workers? What’s their real intention for the town –improvement or dependence?

Analysis

Since the WTO meeting in Seattle in the 1990s (which was highly controversial because of the massive protests of anti-globalization activists), the agenda of the organization has been to end extreme poverty and improve the conditions of the people especially in developing countries. The protests have therefore become influential in changing the agenda in international political economy. Their advocacy has since then been noticed and placed to the fore of the international arena.

In the documentary, Pilger seems to explain that economic globalization, through the manipulation of the west and its financial institutions, has only worsened and made heavier the burden of poor people in developing countries. I do not adhere to this. Based on data, following the end of WWII, countries who chose free trade had seen rapid growth compared to countries who chose protectionist policies. Protectionism is not disadvantageous especially when it aims to protect the flourishing domestic industries. But this should come with reformist policies of the government to sustain its economy. I believe that private companies are not the sole responsible actors that design the rules of the game. In fact, it should be the governments that have to do their jobs effectively in setting up the rules, right and reasonable rules, so that MNCs may also play a vital role in solving domestic problems especially those that concern with trade and worker rights. These companies may be more inclined to profit. Of course, what company does not want to gain profit? But anti-globalization activists also have to remember that these companies have become helpful in providing jobs to the unemployed, a task that governments should have been able to provide as part of its role in ensuring and upholding the welfare of its people. Important to note also is the actuality that these MNCs have the technology, research units, and other resources that can improve the level of productivity of the workers.

Reform is where anti-globalization should focus on. Economic globalization, in itself is not bad. In fact, it can be instrumental in addressing the perennial economic conditions of the poor. It is not the mere solution or answer to the problem of poverty. But again, it may be instrumental. What we need, and I adhere to Jeffrey Sach on this, is an Enlightened Globalization – this should be the goal of economic reformists –  zooming in on corporate responsibility, emphasize reformist economic policies, and always integrate in every policy the value of social equity.

To conclude, what the mayor did in the Inequality Gap Story about the town was valid because it was for the good of the people living in a poor town. But he also has to ensure that the merchants and the bankers will also respect the rights of the workers in their established shops. Sweatshops should therefore be transformed into factories where productive workers receive training, maximize their capabilities, enhance skills, and take home enough compensation. The merchants and bankers may be helpful to improve the conditions of the people, working hand in hand with a responsible and selfless government. If generosity and sincere assistance overpowers greed, the workers can find the good side of globalization.

(For complete copy, please email the author at aglaylo07@yahoo.com)

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