Post
by Hermit » Fri Jun 11, 2021 7:05 am
While working conditions at Foxconn factories have not changed a great deal since Apple held a "critical meeting" with Foxconn's top executives in March 2012, Apple bashing is a distraction from the claim Forty Two made in creating this thread, that capitalism is the best solution to poverty. Before I return to it, let me make a comment about Foxconn and another about Apple.
Foxconn is not the only original device manufacturer, although by far the biggest, and Apple is not its only customer, although likely by far the biggest. Further, the Foxconn factories manufacturing Apple products are no better or worse than any other large-scale factories in China, Taiwan or anywhere else in Asia. Working in those factories is arguably better than making a living in a village. The millions of people who flock to them for work attest to that.
For several decades Apple has designed products that have been superior in function, ease of use, manufacturing quality and lower lifetime cost. If you are in any doubt about that, check out IBM. Starting in 2015, the company has switched its computer systems from what used to be "IBM compatible" units to Mac OS. It saves up to $535 per Mac per four years in support costs and claims that its operators are more productive and happier in their work. Apple can charge a premium for two reasons: 1) Its designs are proprietary to the point of constituting a monopoly. 2) Customers are happy to pay for them, regardless of the size of the profit margin Apple manages to cream off. It's just not an issue.
Having (hopefully) dealt with that distraction, I'll return to whether capitalism is the best solution to poverty. Well, command driven economies were manifestly not all that good in terms of consumerism and everyday comfort (although they did well with social services, particularly health and education sectors, and there was no unemployment problem). I'm thinking of conditions behind the iron curtain, where people queued up at supermarkets with mostly empty shelves because they heard rumours that a delivery of bacon is on the way, or where they had to wait for years before they got delivery of their Trabants, which were so scarce that they always sold for more second hand than they cost to buy brand new despite their extremely spartan design and shoddy manufacture. You want a what? A car radio? What's that?. A heater? Don't be ridiculous. A fuel gauge? LOL.) Historically, command economies have never been able to cope with meeting material demands.
So, my reply is yes, capitalism is the best solution to poverty, but not just any form of capitalism. Here my answer is yes and no. It just depends on which flavour of capitalism we're looking at. The Friedmanite, laissez faire flavour so enthusiastically advocated by Forty Two is good for the owners of the means of production. Not so much for the workers. True, the profit motive is a powerful incentive to produce stuff people want, and competition is a powerful incentive to make products superior in quality and price than those of rival owners of factories, but in laissez faire capitalism workers and owners of the means of production are not on an equal footing in the bargaining stakes, except in those rare times when the economy is booming. When it is not, wages and working conditions will always be cut. Because all owners do that, there simply is nowhere else for the workers to go.
This is why I am in favour of a mixed economy - capitalism with comprehensive regulations aimed at protecting the welfare of the workers. It functions well enough, particularly in the Nordic countries. The owners of the means of production continue to turn a profit, competition is preserved and their economies grow, yet the workers' wages and conditions are satisfactory. This state of affairs is almost entirely absent in the USA and disappearing fast in the UK.
Looking at the future, there is one or another big problem on the way. Either 1) Our comfort comes at the cost of Asian workers. This will not always be the case. Eventually labour will organise with the creation of unions that are not government controlled. This is where the price of our mobile phones, computers, washing machines, cars and whatnots will become rather expensive, possibly to the point of becoming luxury items affordable to a decreasing number of people. We'll have to kiss our cushy existence goodbye. Or worse 2) That is unless production methods keep improving to the extent that more units of consumer goods can be produced at less cost. This has of course been happening since Henry Ford introduced conveyor belts in his factories, but the process of automation will need to accelerate, which in turn will cause massive unemployment. The market that is supposed to buy the products - people who earn money - will keep shrinking, perhaps near to the point of disappearance. Capitalism bites its bum. Terminally.
I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops. - Stephen J. Gould
