Sweatshops won’t last forever
The proposed theory falls into two parts: the supply chain and the bargaining power of workers.
One way of thinking about the supply chain is that if capitalism is a framework, then supply chains are the nuts and bolts that hold it together. But it’s also important to note that, just like with capitalism, the supply chain is not static. Supply chain analysis tends to avoid theory in favor of more rigid typologies.
In my book, I identify a universal logic that governs the supply chain, by measuring the degree of monopsony power. Second, I show that the bargaining power of workers in global supply chains is itself reflected in the degree of monopsony power. These logics are based on the forces of competition, in which supply chains everywhere are subject to similar laws of motion, and workers everywhere are driven by a common set of interests and aspirations, albeit with various strategies.
This process follows a logical chain. Liberalization produces high degrees of monopsony power (many suppliers, few buyers), which increases the profits accruing to buyers (since they can exploit the increased competition among many suppliers). The drive to maximize buyers’ profits further intensifies competition among suppliers, causing greater downward pressure on the supply chain. This takes the form of a lower source price offer. In other words, in order to increase their profits, brands like Gap or Nike will require a supplier to produce a shirt or a shoe at a lower price. This reduces the number of suppliers able to compete.
This results in a consolidation on the supplier side, i.e. it increases the value share of the surviving suppliers, which expands their access to finance, facilitates their self-investment and increases the investment in fixed capital. (machines). All of this raises barriers to entry for aspiring capitalists. The disappearance of many small suppliers and the growth of a few large suppliers reduce the degree of monopsony power in the supply chain. This, in turn, increases the profits captured by the large suppliers. And, ultimately, the growth in the bargaining power of suppliers is reflected in the bargaining power of workers.
By identifying these changes in capital and labor, I explore a number of workers’ struggles around the world. As György Lukács wrote in History and class consciousness, a crisis can reveal the contours of capitalism as a system. With this in mind, I analyze labor disruptions and their effects on the composition of labor-intensive global supply chains and the bargaining power of workers. On this basis, I show how international solidarity, illegal strikes, labor disruptions, etc. reflect changes in the balance of power.
My research focuses on the collective actions of workers in a number of countries, mainly in China, India, Honduras and the United States, and secondarily in Vietnam, Cambodia, Bangladesh and Indonesia. By analyzing the more developed sections of the underdeveloped sectors, we can see where capital is going and how it is getting there. And the two questions the supply chain turns on are how capital affects the shop floor and how the shop floor affects capital.
I put forward a theory of the structural bargaining power of workers that focuses on the degree of spatial inflexibility. This term refers to the breadth of geographic possibilities within which production can take place. In other words, it has to do with the constraints on how far global buyers can move production in order to maximize their profits. Thus, a high degree of spatial inflexibility translates into greater structural bargaining power for workers, and a low degree of inflexibility means less structural power for workers.
Within this framework, there are two forms of spatial constraints on capital: regulatory limits and market limits. Regulatory spatial inflexibility is the set of geographic constraints imposed on capital, typically by states. Many of these regulations have been dismantled under neoliberalism, or effectively dismantled through offshoring.
I define Marlet spatial inflexibility, on the other hand, as the set of de facto geographic limitations that are integrated into a given stage of capitalist development. At the start of capitalist development, for example, crude technology, insufficient surpluses and a petty bourgeoisie limited market growth, producing great spatial inflexibility in the market. During advanced capitalism, however, efforts to centralize, redistribute wealth upward, and erect high barriers to entry effectively blocked the relationship between buyers of clothing and a few mega-suppliers.
Put simply, the inability of buyers to cut and go to another factory – which is their power base in the industry – ends up increasing the structural bargaining power of factory owners and workers. This improved working conditions for workers in the more advanced sections (shoes, underwear, denim) in the historically underdeveloped sector most associated with sweatshops.
As for the question regarding the subtitle of the book – first of all, it’s important to note that “sweatshop” is primarily an emotional definition. It evokes a scene of intense work in cramped quarters – of exploited work and passive misery. However, I think it is more fair and useful to describe the sweatshop as a workplace with very little bargaining power from the workers. The changing composition of capitalism described here – coupled with the subjective action of workers to make demands and take action – means that changes are beginning to occur in parts of these sectors.
Whether it is the twilight of the sweatshop era or a new race to the bottom may ultimately depend on the self-organization and demands of those working in the factory. But for now, at least, workers have more and more opportunities to assert their demands to their more value-laden, geographically anchored direct employer.