Global Capitalism Will Never Lift Workers Out of Poverty
Apologists for capitalist globalization claim that global value chains spread prosperity around the world. In reality, they allow firms like Apple to maximize labor exploitation while keeping workers chained to poverty.
Workers assemble electronic components at the Taiwanese technology giant Foxconn’s factory in Shenzhen, China. (AFP / AFP via Getty Images)
Global value chains (GVCs) “boost incomes, create better jobs and reduce poverty,” according to the World Bank. Since the collapse of the Eastern Bloc in 1991 and the reintegration of China into the global economy, world trade has become increasingly organized through GVCs. For example, the components and inputs for Apple’s iPhone, an icon of contemporary capitalist globalization, are made by millions of workers in over fifty countries.
Transnational corporations (TNCs) — labeled “lead firms” in the academic literature — established GVCs as part of their competitive strategies, outsourcing existing work or starting up new activities in countries where labor costs were cheap. State managers across the Global South increasingly gave up on establishing integrated domestic industries and sought instead to enter GVCs as component suppliers. Today, over four hundred fifty million workers are employed in GVC industries.
Many prominent figures suggest that these systems of production and distribution represent radically new development opportunities. As the former secretary general of the Organisation for Economic Co-operation and Development (OECD), Ángel Gurría, claimed:
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