THE TWO FACES OF CAPITALISM, ADIDAS, AND RANA PLAZA DISASTER

Donghyun Park

Chapter 15 in Capitalism in the 21st Century:Why Global Capitalism Is Broken and How It Can Be Fixed, 2019, pp 66-69 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The two-sided Janusian face of capitalism can be seen everywhere. Multinational clothing and footwear companies like Gap, H&M, Old Navy, Uniqlo, Zara, Adidas, Nike, and Puma typically outsource their production to developing countries, in search of ample pool of low-wage workers and lax labor standards. From the profit perspective, such outsourcing makes perfect sense since clothing and footwear are labor-intensive. The central importance of labor costs in the industry explains how Bangladesh, one of world’s poorest — ranked 164th out of 189 countries in 2013 — and most densely populated countries, with a population of over 150 million, managed to become one of the world’s biggest apparel exporters, despite having a weak infrastructure and an otherwise embryonic manufacturing sector. In 2012, Bangladesh was home to 5,600 garment factories, and the world’s second largest garment manufacturer, behind only China. Labor costs, and labor costs alone, explain why those factories are based there…

Keywords: Capitalism; Globalization; Inequality; Entrepreneur; Financial Industry; Government; Socialism; Market (search for similar items in EconPapers)
JEL-codes: A1 F00 F6 N2 P16 (search for similar items in EconPapers)
Date: 2019
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