billion people have no access to clean water, three billion no access to sanitation and two billion no access to electricity. In the wake of the Asian tsunami disaster an unparalleled level of donations raised hundreds of millions of dollars from ordinary people. At the same time numerous warnings were sounded that this charitable effort should not divert aid from Africa, and other impoverished regions Many people must have wondered whether, if such giving were sustained, something fundamental could be done to end world poverty. The answer, says PHIL HEARSE, is 'no
WORLD POVERTY exists
because of the fundamental
structures of economic, social
and economic power. Huge
donations to the less economically developed countries
eventually hit the barriers of
exploitation, corruption and
debt.
Already people are asking
what will happen to the
money donated after the
tsunami - whether it will end up in the pockets of local rich
elites, or eventually help to service the poor countries' aeDI to governments and banks in the rich countries.
Creating a world without poverty WICHES radically changing what is produced, who produces it, where it is produced and who consumes it. That is absolutely impossible with massive political change on a world scale. The Global Sweatshop In his famous 1901 book The Ragged Trousered Philanthropists, Robert Tressell's Marxist house painter entertains his fellow workers with the Great Money Trick. Using bits of bread, knives and forks and a few pennies, he shows how the capitalists end up with all the bread, all the money and all the knives and forks. Today's great money trick is the exploitation of worldwide sweatshop labour by global corporations and finance capital. Here's how it works.
Someone buys an expensive pair of trainers in their local shopping centre from a chain store for £100. £17.50 goes in tax to the government, but they pass on f8 of that in debt repayment to big banks in Britain or abroad.
The worker who made the
shoes in Indonesia gets 50p (a
generous estimate). The shop
bought the shoes for £60, thus
making a gross profit after tax
of £22.50p.
Of that sum, £12 goes to the insurance company that owns the shopping centre as payment for the huge rent and service charges. The shop assistant got 50p (again a generous estimate). Up to this point the total profit for the shop is £10 and payment to finance capital is £20.
Of the f60 that the shoe company got from the retail chain, 50p went to the Indonesian worker, transport cost £7, and £3 went on facand industries. tory and advertising charges. Total profit for the multinational sportswear company is therefore is a staggering £39.50p.
Look at it another way, out of the whole deal the multinational sportswear company and finance capitalists between them got £59.50p, the retail chain got f10 and the two workers involved got £1 between them (although it's possible that this picture could be modified by the transport workers getting a few pence more).
This modern great money trick is the Global Cheap Labour Economy. There is cheap labour at both ends of the chain, but if the shop assistant is exploited, it is easy to see that the Indonesian factory WOrKeI1S superexploited, and is usually much poorer and has much worse living conditions than her shop assistant sister in the West.
The global cheap labour economy has a dramatic effect on what is produced, because it's easy to see that high profit rates are especially concentrated in luxury and high value production including tourism aimed at the rich countries, whereas profit levels in subsistence goods for the poor countries yield much lower rates.
Pro-capitalist ideologues claim that we get "cheap' goods because of low wages in the third world. Former independent peasant farmers are
forced to become
itinerant seasonal agricultural labourers,
or alternatively gravitate to the slums
in the third world
mega-cities, like Karachi, Mexico City
and Jakarta. Children of Nike workers eke out an existence in Indonesia
Not true. Workers in the poor countries could be paid much higher wages without raising prices of imported manufactures in the West by a single penny - provided the extortion-racket money paid to finance capital and the monopoly super-profits were eliminated. The Supermarketor even thousands of times
what was paid for wages at
either end of the chain.
Another variant is where
the goods are produced by
small independent farmers,
who sell their goods to local
merchants, who in turn sell
them to supermarkets or food
manufacturers. In this more
complex system the profit has
to be shared between merchant, retailer and often a
food manufacturing company.
But the vast operations of agribusiness are putting independent peasant farmers out of business throughout the third world and buying up their land.
A classic case is the destruction of the peasant-collective system in Mexico, and the subsequent dominance of US agribusiness. Former independent peasant farmers are forced to become itinerant seasonal agricultural labourers, or alternatively gravitate to the slums in the third world mega-cities, like Karachi, Mexico City and Jakarta. The Global Slum Thirty years ago it was a commonplace that the majority of the world's population were peasants living in the countryside. Now the number of urban dwellers is greater than the peasantry, but some 60 per cent of these city dwellers live in the giant urban slums, the