The Role of the State

Case study of Nike and other Companies

-Do Nike and other Companies take advantage of their factory workers to maximize profits?

"Conditions/.../are horrible - forced overtime, 60 to 90 hours a week, 10-to-15 hours shifts, six and seven day workweeks for wages of 15 to 28 cents an hours./.../housed in cramped dorms/.../if they complain they are fired/.../no independent human rights, labour, or religious organizations to turn to". The overwhelming evidence makes it hard to understand multi-national corporations when claiming that they are not taking advantage of their workers. However, when evaluating the facts, a two sided story is revealed. MNCÒ's do benefit of how the market is run in these countries, and why shouldn't they. More importantly however, is that they supply the country with something that in the long run, would have been impossible without the involvement of MNCÒ's like Nike. Inconsequently they help to raise their workers standards of living. Countries like Taiwan, India and China see the investment of MNCÒ's as a way to economical prosperity. The relationship between MNCÒ's and third world countries should not be described in the narrow limits of the words "taking advantage".

Opponents of globalization suggest that "production of goods for world markets at lowest possible cost" is the main example of the "race to the bottom" phenomenon. This phenomenon is a normal effect of the world market when it is open to free and creative trade, without transnational labour principles and regulations. Big corporations will look to place factories and manufacturing plants in countries with far less environmental and labour standards. Every company, operating in the free market with apparent competition makes an effort to maximize their profits. Consequently the developing countries compete for the investment of these companies by lowering labour standards, such as minimum wages and workplace safety requirements. The problem is that cheap labour is the only commodity that developing countries can offer MNCÒ's. By forcing MNCÒ's to pay artificially high wages in those countries, there will be no motivation for a company to endure the costs of shipping, construction, and the risk that comes with installing a new plant or factory overseas, particularly in countries like these. If MNCÒ's do not invest, those third world labourers will again be forced back into the fields, the alleys, the brothels and the black market with conditions, such as income and safe working environments, that are far more worse than the conditions they are facing in today's factories. Only with the prosperity brought by international trade can a country afford to demand better working conditions for its workers. Is it not better to tolerate the discomfort of poor working conditions in the short run, so that these countries can begin to build the economies that will enable them to demand better working conditions in the long run?

Every prosperous country today was at one point in history portrayed with a "developing" status, and once employed working conditions in its economic youth that would today be classified as "sweatshop" working conditions. Multi-national corporations despite all the misery they can provoke, offers an escape from the poverty that is one of the developing world's greatest problem. Over the past 50 years, countries like India resisted foreign investment, while countries like Taiwan and South Korea accepted it, with included poor working conditions. Today, there can be no doubt about which approach worked better. Taiwan and South Korea are