1

Reading on “global commodity chains” and sweatshop labor

What happens in global commodity chains? Production of shoes, clothes, toys, consumer electronics

Design Factory investment, ownership, & management Manufacturing (some call “sweatshop labor”) Marketing

Where does each function take place? Core? Semi-periphery? Periphery?

Which functions command the biggest share of the profits?

2

Background to reading on “global commodity chains” and sweatshop labor

Dependency World SystemsCore CorePeriphery Semi-periphery

Periphery

World systems theory There is some potential for countries in the periphery to

develop and move into the “semi-periphery,” although they are unlikely to catch up to core countries.

Global commodity chain studies draw on the insights of dependency/world systems theory

Chinese Development in Comparative Perspective

China was extremely backward in late 19th and early 20th C

Agriculture—failed to keep up with population growth leading to extreme poverty

Little industrial development

China Faced Severe Military Threats

Repeatedly defeat in war Opium Wars 1842, 1860 Sino-Japanese War 1895

Resulted in limits on sovereignty China “carved up like a ripe

melon” treaty ports, foreign

“concessions,” extra-territoriality

Chinese Development in Comparative Perspective

China’s early failed response to the challenge of the WestContrasts w/ Japan

resistance to “Westernization” China: how to adopt Western technology without

Western values? Internal crisis

population pressure 1600s: 125 million; mid-1800s: 400 million

peasant rebellions 1850-1880—est. 100 million deaths

Chinese Development in Comparative Perspective

China begins to catch up Successful

industrialization Military

implications

Origins of the Chinese Communist System

Communist Party of China founded 1921 Fights for power

People’s Republic of China founded 1949

Origins of the Chinese Communist System

Sources of support for Communist revolution in China redistribution of land to

peasants (land reform) appeal to socio-economic interests

resistance to Japanese invasion (1937-45) appeal to nationalism

Origins of the Chinese Communist System

China looks to Soviet Union for model of “catch-up” development Soviet-style planned economy Totalitarian regime under Mao Zedong

Chinese Development in Comparative Perspective

China attempts to adopt Soviet-style planned economyContrasts w/ Soviet Union

Compare starting points of “First Five-Year Plans” Soviet—1927 China—1953

Even more backward (Gerschenkron) China: Lower agricultural output (Soviet 5x higher) China: Lower industrial output (Soviet 4x higher)

Chinese Development in Comparative Perspective Lenin’s innovation

vanguard party leads proletariat in establishing socialism

Mao’s innovations vanguard party leads

peasantry–not proletariat—in establishing socialism

voluntarism (where there’s a will there’s a way)

Contrast orthodox Marxist emphasis on real material conditions

mass mobilization

Chinese Development in Comparative Perspective

Mao tries to compensate for China’s relative

backwardness “Great Leap Forward” 1958-61

Chinese Development in Comparative Perspective

Mao tries to compensate for China’s relative backwardness “Great Proletarian

Cultural Revolution” 1966-76

part struggle over correct model for economic development

part struggle for power w/in CCP (Chinese Communist Party)

14

Impetus for Reform in China Crisis of political legitimacy Communist utopia? or

economic stagnation Per capita household

expenditures Increased only 2.2% 1952-75

1975 per capita consumption Grain, cooking oil, meat

lower than in 1950s

15

Impetus for Reform in China Crisis of political legitimacy Nationalism (wealthy/strong China)?

Demonstration effect/challenge of East Asian “tigers”South Korea, Taiwan, Hong Kong, Singapore

Reform in China and Comparisons with Russia

Communist Party welcomes reformCultural Revolution chaos in China made reform more welcome/more urgent

to Communist Party cadres Contrast: entrenched bureaucracy in Soviet

Union

Reform in China and Comparisons with Russia

China introduces market forces Mao’s death creates political opportunity Communist Party begins economic reform 1978

Under new leader Deng Xiaoping

Reform in China and Comparisons with Russia

Economic China still a largely agricultural economy as of

1978 Huge opportunities for growth through industrialization

Contrast: Soviet Union had already completed transition from agricultural to industrial economy

Reform in China and Comparisons with Russia

Contrast: “Shock therapy” in Russia Gradualism in China

Introduce market forces into agricultural sector first

Reform in China and Comparisons with Russia

Contrast “Shock therapy” in Russia Gradualism in China

Gradual change in smaller industrial sector Froze plan obligations at 1984 levels Introduced prices “on the margin” made reform less painful in China

Reform in China and Comparisons with Russia

Russia—neo-liberal-informed policies destroy state sector China—market-oriented policies link state and market

Fundamental change in strategy From planned to market economy With active but more selective state intervention

Pre-WTO: high tariff barriers, bank loans for state industrytax breaks for exporters, key industries

Developmental Outcomes in China Spectacular economic growth

About 9-10 percent per year since the late 1970s Increasing incomes on average (7-fold increase in 20 years)

1985: $293 2006: $2,025

Improving literacy 1978: 37 % of adults illiterate 2005: <10 %

Improving infant survival 1978: 41 deaths per 1,000 live births 2005: 23

Major drop in absolute poverty Between 1990 and 2004 the number of people living on a dollar per

day fell by 246 million, while total population rose by over 156 million.

Growth has helped to lift several hundred million people out of absolute poverty, with the result that China alone accounted for over 75 percent of poverty reduction in the developing world over the last 20 years.

Social Implications of China’s Economic Reforms Symptoms of a “19th-Century-style” capitalism

Large and growing income inequality 1983: 0.28 (gini coefficient) 2001: 0.447

Environmental degradation China has 20 of the world's 30 most polluted cities, largely due to

high coal use and motorization. Lack of protection for vulnerable social groups

Poor Unemployed Elderly Sick