Years of Poems and Spirits

Question:
1. Would things be different had Nike owned the factories?
— because Nike did not want to deal with Union and other local headache, maybe
2. Is this case about labor practice or corporate citizenship in general? Is there any apply-to-all “code of conduct” for corporations?
— the former easier to answer/judge. The latter much complicated. Racial/religious tolerance: suppose labor practise was not a problem but Nike had factories in Bosnia or Somalia. Freedom of Press/Speech: Yahoo! China case.

Other thoughts:
1. Nike enjoyed incredible growth in the 80s and 90s: 15,000,000% revenue according to the case

2. Phil Knight was ahead of his time: 60s, MBA. A brilliant business genius.

3. Nike epitomize the Globalization process: its poster boy and its piñata.
a. Poster boy: the phenomenal growth; others’ imitation; leader of the fashion and pop culture; seemingly transcendant of both streets (Wall and Main)
b. Pinata: Attacks on Nike were emotional/visceral, not necessarily rational. Attacks were coordinated, focused and lasting. NGOs were less interested in co-opting Nike than ridiculing it.

4. The impact of FDI to local economy and social life:
a. Overall beneficial. Backed up by Tuck study in 1997.
b. Empirical data implied in the case: the dev. path of “Asian Tigers”. Without initial exploitation, Taiwan and Korea may not be able to become who they are now.

5. The role of NGO
a. Passions of Crusaders (Jeff Ballinger living in basement and single-handedly brought the Nike abuse to light)
b. Different agendas within NGOs: Ballinger’s human rights concern, AAFLI/AFL-CIO’s goal.
c. As a result, NGO’s are good at bringing up abuse cases, not always good at constructing solutions. Some are suspected of disruptive tactics and promoting own agenda. e.g. Columbia University professor Jagdish Bhagwati’s general critique of NGO in his article.
d. Anarchical elements in anti-globalization movements: the Seattle protests. Reduced the effectiveness and moral credentials of good NGOs. May also explain why they couldn’t agree on FLA issues.

6. Nike’s Response to the Challenge
a. CEO lack of sensitivity to the issue. As a result, lacks conviction, vision and decisiveness. Unbecoming his role of a leader in globalization
b. Knights’ business model was absolutely cutting edge but view of labor and HR was hopelessly mercantile: I don’t have to know how the profits come, as long as they come.
c. Still lacks of sincerity: pre-notification of an inspection: what the heck was that?!
d. Improved a lot by proactively organizing and coercing smaller players into FLA. Gaining tractions, aiming small: a valid, business-like approach.
e. Damage done to Nike’s image/brand appeal/value: Long term, intangible, no question detrimental. Corporate arrogance, “swooshtika“, expose business to competition and during down turn.
d. Compare what Reebok’s pre-emptive, overwhelming response. Good example to follow.

In the second half of his book, Wallerstein pushed further his concept of World System. In discussing the path of many European countries took that eventually converged into the system, he extended his analysis beyond capital and labor, to include geological, religious and political determinants.

In the case of English ascendancy to the core, Wallerstein eluded to a British sub-system, which consisted of England, Ireland and Wales . The union of the three accelerated the division of labor. For example, by 1614, Ireland was reduced to an economic colony of England, a supplier of wool for an expanding English clothing industry (p228). Similarly, the land enclosure in Wales accelerated. As a result, a greater number of peasants were forced off their land and became available laborers in the cities or mercenaries for the state machine (p250).

In addition, the “capitalization” of England (or the subsystem centered in London) was not an exclusively urban or manufacturing affair. Market-driven agricultural production was the other side of coin. Wallerstein repeatedly drew the distinction between rural labor relations of the earlier Feudalistic continent and that of the 16th century England. Whereas medieval husbandmen slaved for their lords in exchange for protection (p90), English farmers were free laborers and had unprecedented social mobility (p236). When commenting on the definition of “Gentry”, Wallerstein promulgated his interpretation that they were “capitalist landowners” (p240). They were so defined because their economic outlook was aligned to that of the world system: they operated by capital means and produced for the market. In the case of the Polish aristocracy (i.e. land owners) squeezing out local merchants in grain trade (p247, p305), Wallerstein seemed to suggest that, when there was a conflict of their commercial identity with the national one, the loyalty was with the world system. Wallerstein’s narration certainly helped me to overcome a misconception that the capitalism started hand in hand with mechanical industrialization.

Although Wallerstein summarized that “state structures are relatively strong in the core areas and relatively weak in the periphery” (p355), his study of the relationship between the state machine and the configuration of world economy, is at its best in the study of the semi-periphery regions, such as France and Russia. According to Wallerstein, the reign of Ivan the Terrible was a critical period of Russian history. Thanks to Ivan’s “single-minded” drive to secure state authority, Russia was able to join the world system later as a semi-peripheral state, not a peripheral one such as Poland (p315). In France, Wallerstein described the existence of a “centrifugal force” within its border before and during the Wars of Religion. Although such forces eventually succumbed to a determined French state, the very model of “absolute monarchy”, the cost of homogenization was that “France never had the degree of development like England” had (p287).

It is interesting that Wallerstein claimed there was only “one class” at the genesis of modern world system (p356). He asserted that it was the awareness of their common economic orientation that told the nascent bourgeoisies apart from other actors in the society. From his analysis, one might say that a state’s response to the challenges of a new world was often reflected in the complicated relationship between the “traditionalists” (Wallerstein’s way to group together the aristocracy represented by the monarch himself) and the bourgeoisie. There were always enormous tensions between the two as each benefited from very different means of production. On the other hand, there was a symbiotic dependency. The state could provide much needed security, protection (especially trade protection), and production coordination that was desperately needed by the capitalists. The bourgeoisies, in turn, could provide much desired cash to fund the expansion of the state machine. In Russia, for example, the interests of the old and the new were much aligned as the state expanded territories and corralled laborers for capital, as well as tax base, growth. But the tensions were greater in both France and England. The different outcome of the two states, according to Wallerstein, was partly because the French state was able to co-opt the bourgeoisies through both violent and non-violent means. Relative to the French and to its own merchant class, the English Crown was weaker, thus had to accommodate, and later yield, to the demand of the bourgeoisies.

Overall, I can see how Wallerstein’s concept of modern world system threads up the materials in the book. His emphasis on the foundation of such a system: capital expansion and labor division, is well placed. At a personal level, I was never satisfied at various theories explaining the decline of the Spanish empire or the rise of the British. By introducing the two dimensions and their relationship to the modern capitalism, Wallerstein certainly gives me a new perspective to look at history.

Washington Post article: “Little Support for Bush Immigration Plan”

There are H-1B visas for skilled workers. How come there are not visas for unskilled labors? With some kind of public acknowledgement, it will be a lot easier for employers to comply and for law enforcement to check.

Have a feeling that illegal immigration and IP piracy both result from the huge gap between the developed and the underdeveloped countries. According to Wallerstein (I could be wrong), England used to forbid American colonies to have any Mouflon sheep. Someone had to risk his life to smuggle some into the new world. Soon enough, wool joined cotton as the major exports of the colonies back to England.

This is not fair, one may say. But as much as one is entitled to denounce individual act of theft, the definition of theft may be betraying us.