The Dirty Little Secret of Globalization

On the campaign trail Hillary Clinton tries to distance herself from the North American Free Trade Agreement (NAFTA) worked out by her husband’s administration more than a decade ago. But you can’t put the toothpaste back in the tube, and the Sierra Club’s executive director, Carl Pope, sums up where globalization has brought us.

When corporate America tied its future to globalism, it made a deal with the devil. The record profits reaped by outsourcing U.S. manufacturing abroad came at a high price: the risk to the good names of the country’s biggest companies.

“Globalism has turned brand-name manufacturing into a fraud. Many knockoff handbags and other luxury goods are made in the same factories as the real thing. We’re not paying for quality goods anymore — we’re paying for high-priced marketing and design combined with low-wage, exploited workers.”

…In today’s globalized economy, top companies have lost control of the quality of the goods that display their logos. They are powerless to prevent a recurrence of the toxic-toy tragedy–and they are terrified that their brands could be dragged through the mud when the next epidemic of dangerous products strikes.

…The problem is a business model in which companies outsource manufacturing under short-term, low-cost contracts to the firm that will follow their design standards most cheaply. All that is really Fisher-Price about Dora the Explorer is the design–the product itself is made in a factory over which the company has almost no control. It doesn’t manage the working conditions, environmental standards, or safety practices. As a result, it no longer controls the product itself.

…Fisher-Price didn’t want lead used in its products. But it did want to drive the best bargain it could with toy manufacturers in China and to be able to shift to new suppliers if it found a lower price. Faced with this pressure and already located in the cheapest labor market in the world, subcontracting manufacturers realized the only way to cut costs was to cut corners, and lead is a cost-effective corner to cut.

The joke is on the companies who exploit cheap foreign labor. It’s also on those of us who are willing to shell out big bucks for new items with the right labels.

So brands no longer mean what they used to: Globalism has turned brand-name manufacturing into a fraud. Many of the knockoff handbags and other luxury goods you can buy on the street in Shanghai–or even New York City–are actually made in the same factories as the real thing. We’re not really paying for quality goods anymore–we’re paying for high-priced marketing and design combined with low-wage, exploited workers producing inferior products using shoddy safety and environmental standards.

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