This week Apple launched its new iPhone in twenty additional countries, only a week after it was released in the initial nine. Just like its predecessors iPhone five generated lengthy queues and overnight vigils of those eager to be the first to hold the shiny new gadget. New Zealanders, (mostly the younger ones, so ‘yours truly’ was not there), were right on trend waiting hours for it.
Reportedly more than five million iPhones were sold during its launch weekend, and it is set to become available in hundred countries by the end of this year. According to Apple, the new iOS6 operating system has been downloaded for more than hundred million devices. This is certainly impressive and no doubt drives Apple’s profits into stratosphere, even if apology was required for problems with maps, yet to be resolved.
Watching interviews with those overly excited young people on TV, it became obvious that most, if not all, are fully aware that their newly acquired phone is neither necessity, nor it will significantly improve their lives. They readily admitted to have purchased it because it is new and shiny and will add more coolness to their already cool images. To various degrees majority also accepts they simply succumb to the charms and lures of sophisticated marketing from Apple, just like to many other such marketing lures from various multinational corporations (MNCs).
Life in our time could be hardly imagined without likes of Apple, Nike, Coca-Cola, Adidas, McDonald, Shell, BGP Billiton, Fonterra, and many others. All of them operate across the globe and shape our lives not only by products they offer, but even more so through their impact on economic, political and social environment resulting from the sheer magnitude of their operation and enormous wealth they generate. In 2008, UNCTAD ‘counted’ 79,000 MNCs operating globally, with 790,000 subsidiaries and estimated sales of 31 trillion, representing over 20% increase since 2006. The number of their employees was estimated at some 82 million, while the activities of hundred largest MNCs continue to expand in all industries.
Contrary to the popular believe MNCs are not a new phenomenon. The early origins of the business formations we now call MNCs, can be traced back to the beginning of 17 century and East India Companies. The structures we today recognize as modern MNCs date from the late 19 century when companies started to invest across the borders, (the actual term ‘Multinational Corporation’ first appeared in 1960s).
While there is a growing body of literature available; academic and popular, on all aspects of good and/or evil generated or at least in some way affected by MNCs, what is common and defines all MNCs is their global operation. Whether their ownership is private, state or mixed, all MNCs originate in one country and are linked across the globe in such way that one or more are able to exercise significant influence over the activities of others, and share knowledge and resources with others. In other words any company that owns, either in whole or in part, controls and manages, to some degree, income generating assets in more than one country is recognized as MNC.
There are those who argue for and those who argue against MNCs. The former point out long and growing list of horrific human rights abuses and elusive accountability of MNCs thanks to, amongst other factors, their operations across borders and thus jurisdictions, while the later stresses that foreign investment injected into developing countries by MNCs generates jobs, incomes and thus lifts millions out of poverty.
While it would take far more space than any blog post allows to even scratch the surface of this issue with any level of credibility, it suffices to say that those opposite views are basically cantered around two schools of thought;
First argues that human rights violations are necessary by-products of economic development and that victims of those violations will still gain more from the benefits they will enjoy from the economic advancements,
Second argues that tremendous profits MNCs make are based on advantages they take from the developing countries weak or non-existent regulatory systems and corrupt government, causing ‘race to the bottom’ where governments compete with each other in order to attract foreign direct investment. Countless examples of child labourers, low wages, long hours of work, unsafe working conditions, etc. are presented. And while infringements on environment, rights to privacy, consumer rights to health and information, certainly occur in developed countries too, the situation is by far worse in developing countries where most MNCs are more powerful, economically and de facto politically, than a state in which they operate.
There is of course the third, less prominent and less heard group arguing that economic power and social influence MNCs have must be coupled with the similar level of obligation and responsibilities’ to country(s) of origin, country(s) of operation and international community. To this end number of voluntary or semi-voluntary mechanisms has been devised and implemented with various degrees of success. A lot can be said (and much has been written already) about the sheer irony of MNCs remarkable achievement in convincing the international community (including UN Human Rights Council) that they are by nature more law-abiding than states and individuals and therefore improvement of their conduct can be achieved through mechanisms that are entirely voluntary!
Thanks to the ascent of information age, international community in developed countries can no longer evoke ignorance. Just like those young people waiting for their new iPhone, we all know, or ought to know, that our electronic gadgets are manufactured in developing countries where unfair and degrading labour practices are common.
Foxconn Technology, company that manufactures Apple goods in China and has manufactured the latest iPhone, has reportedly recruited students forced by their teachers to work on their production lines in order to make deadlines for the phone’s release despite the worker shortages. While Foxconn acknowledged that some of their vocational ‘interns’ are required to work on assembly lines but can leave at any time, student reported that they do not want to work on assembly lines and are forced by their teachers who told them they will not graduate if they do not work. Some of Chinese papers reported that number of schools have been closed to enable students to work in Foxconn plants.
This is not the first time Foxconn has been under the spotlight for their poor labour practices and working conditions inside factories that make phones, tablets, and other electronic devices for Apple and some other manufacturers of electronic goods such as Dell. Some previous reports revealed excessive amounts of overtime, crowded working conditions, under-age workers, dangerous disposal of hazardous waste, and industrial accidents that have killed four people and injured hundreds of workers.
In the same time it has been reported that Apple has earned over $400,000 in profit per employee last year.
It would be far too simplistic and somewhat naïve to plead for developed countries consumers’ restrain in purchasing either Apple’s or any other product made by multination’s on production lines in developing countries. Because, as those consumers, we have been brain-washed and conditions to purchase and to consume almost since cradle by forces far more powerful and sophisticated than our weak human will and conscience.
There is nevertheless something we can at least try to recognize. To recognize that every time we purchase/consume any of those items, we help re-enforce the global balance of power a little bit more.
The balance of power that keeps ‘us’ and ‘our world’ far removed from ‘them’ and ‘their world.’
Those working more than sixty hours per week and sleeping in factory dormitories between the shifts, cannot relate to such efforts as, for instance, the Occupy movement. While ‘we’ on the other hand do not share any, or only very few of ‘their’ problems.
In keeping ‘them’ struggling to work for basic living, and ‘us’ sedated by ever new and shinier ‘toys’ we both remain on the opposite sides from each other and thus neither side can generate sufficient power and momentum to change anything.
And so the ‘show’ goes on … for now.