The Dark Side of Capitalism

Chinese Factory WorkersInsatiable demand for iPhones has helped Apple achieve first quarter profits of $13B, more than double that for the same period in the previous year. It’s been a bonanza for  Apple shareholders. Not so much for the Chinese workers assembling the iPhones.

In a piece written for the New York Times, Charles Duhigg and David Barboza describe an accident at a factory where employees polished thousands of iPad cases a day. “Two people were killed immediately, and over a dozen others hurt. As the injured were rushed into ambulances, one in particular stood out. His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.”

Chinese employees “work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors.”

Companies like Apple love the flexibility Chinese manufacturing affords them, enabling them to reduce product cycles and change direction quickly — crucially important in the fast-paced world of consumer electronics. But this kind of flexibility comes at a price.

“Apple never cared about anything other than increasing product quality and decreasing production cost, said Li Mingqi, who until April worked in management at Foxconn Technology, one of Apple’s most important manufacturing partners. Mr. Li, who is suing Foxconn over his dismissal, helped manage the Chengdu factory where the explosion occurred.”

The arguments for globalization, more or less, are that  capital respects no barriers, and that these workers — such as their lot is — are still better off than they would otherwise be. We should all realize that globalization is here to stay get used to the new reality.

Here at home in London Ontario, Caterpillar, a global company with almost $60B of annual revenue has “offered” to cut Electro Motive workers wages in half and reduce  benefits and pensions. Caterpillar isn’t citing competition or threatening to move their plant because they don’t have to. They are simply following a business strategy designed to increase profitability and it works. Caterpillar stock rises when they stage a planned lockout.

Under the present tenets of capitalism, no amount is too much, and no violations of human or environmental capital are too egregious. Do corporations have ethical and moral responsibilities? It’s time to have this conversation. Not to do so means you’re tacitly accepting your role in the race to the bottom.


About Wayne Kolenchuk

I was a web developer. Now I'm a web marketer at Clickstream Marketing


  1. The core problem here is not human nature (which causes us to seek the lowest price) but the complete lack of ethical and moral responsibility in corporations. Caterpillar, a 60B company, will save 20M to 30M when the union caves. How much is enough? Under the current tenets of capitalism, there is never enough.

    • I agree that Caterpillar are being morally and ethically irrisponsible, but what really can be done about it? If they are within the law to do this then there is no case other than public shaming. So, all we need is a champion who has some basic knowledge of the workings of the interweb to set up a service where consumers can visit to see which producer behaves in a moral and ethical manner. This would be a bit like Facebook started and Zuckerberg did reasonably well for himself!
      Ontario needs a champion! Ontario needs a new Zuckergerg.

      • What can be done is to raise public conciousness about corporation ethics and morality. When this issue is forced into public conciousness, politicians and corporate leaders will have no choice but to rein in corporate morality. The Occupy movement is the first step in this process

        • Then what is the second step?

          • Second step is self-completing. When conciousness rises to this level, politicians will be forced to take action. We are starting to see this in the USwith Obama's new stand. Yes some of it may be political posturing, but the issue have been raised by a mainstream politician.

  2. 2) With respect to the Caterpillar disaster there appears to be some conflicting information that has come out of London. I read a statement from one of the union organizers who said that "some" jobs are to be reduced by up to 50%. The assumption has been that all jobs are subjected to this brutal cut but these are the non-skilled positions such as cleaners and support staff. The technical and trades people who are making the $34/hr actually are supposedly not affected. So, what is the truth? If the latter is in fact correct then is Caterpillar's position really so bad? If we knew the facts then we can make an informed decision otherwise we're being played for stooges by the CAW.

    • There are 258 workers, including assemblers and machinists facing a potential 50 percent pay cut. Below that are 4 workers classified as cleaners or truck drivers, and they are looking a 54 percent pay cut. Higher up fabrication machinists are facing a 43 to 45 percent pay cut. Quoted from Jan 28 Toronto Star

  3. am not

    continued from last post due to small acceptable coment size:

    So, why can't corporations behave as follows?
    a) Demand that their suppliers treat their workers properly, as defined by our standards not theirs.
    b) Pay the suppliers accordingly and reflect this cost in the price of the product.
    c) Audit the syppliers on a regular basis to ensure adherence.
    d) Have a provision in every contract that unethical behaviour by the supplier will result in termination of the contract.
    The reason these corporations won't do this is because WE will not let them. We'll drive across town to get a TV $20 less but demand ethical behaviour from the supply chain. It is the Western consumer who is the boss over these abused employees and who is actually killing the enslaved workers. Cont.

  4. I know that they are connected but there are actually two different topics here.

    A couple of comments on the information presented:

    1) Whether its Apple or Nike or hundreds of other multinational corporations it is too easy to complain about their unethical behaviour. But complaining is not nearly enough. Sure it makes you feel as if you are protesting by complaining but then many of us rush out to buy the newest gadget or the trendiest shoes. The only options for an effective strategy, if it even can be referred to as effective, is public shaming and/or a product boycott. It is not the Chinese companies that we should be complaining about but their customers who demand the lowest price. Cont.