Thursday 25 September 2014

Obama at the UN

Here is an edited transcript of the speech given by Barack Obama, aka POTUS, at the United Nations in New York on 24 September 2014. He is revered throughout the world for his shameless appeal to humanitarian, democratic values, and we were so impressed by the manner in which his speech obscured what was really going on that, at great expense, we have commissioned a translation into plain English:
"Fellow citizens of the world, one that we had previously controlled with little problem, I am greatly concerned that recent events have exposed the shortcomings of our former strategy. I would now ask for your cooperation so that this becomes less embarrassing.
"It is your decision, but you can either join what I will call, after my illustrious predecessor, a 'coalition of the willing' to intervene against ISIL, or I will consider you to be a traitor to the cause. If such a gambit is beyond your abilities, and is only supported by our friends in the Gulf, so be it. But, even so, you will be called upon next year, maybe, to explain what you are doing to help us out. The least you can do is to arrest a couple of jihadi crazies when they come back home and explain to them that their madness has nothing to do with us. Whatever, Guantanamo is full up, so you must sort it out yourselves.
"On another pressing topic, I know for some of you that it will be difficult to accept that president al-Assad is now not such a bad guy. The news media has understood this, but let me explain further in case there is any misunderstanding. We still do not like him all that much, and it pains me deeply to think that we are now bombing the opposition to his regime that only a few weeks ago we were arming and training. But my latest perspective is based upon fundamental principles: facts change, people are gullible and hardly anyone that counts will be bothered by this new position.
"As an example, I have arranged that more extensive discussions will now take place between Iran, with whom we will have no dealings whatever, and our closest ally, the UK. In this respect, I would like to thank Donald Trump for his efforts in securing the continued unity of this sceptred isle. You never know when you need your friends, although, personally, I have not been so confident about the value of the Brits.
"I will not mention, and neither will you, that financial support for ISIL came not only from us, but also from our Gulf allies who are joining this intervention. Let there at least be a consensus on that issue. We can build on this for the good of all. The funding of ISIL must stop, so we ask our friends in the Gulf not to do it any more. Regime change in Syria looked like a good idea at the time. But can we really risk undermining the wider range of imperial borders when this can only start a war over resources and influence - not only between different Middle East groups, Kurds, Sunnis, Shia, etc, but also between the major powers that have run the system in their own interests?
"I am pleased that Russia has been polite enough not to laugh in our faces about the shit we have caused in the Middle East. This is especially polite, because today I will continue to insult them further about Ukraine. I count on your press corps not to mention too often that we provoked the turmoil in that country, with some help from the Europeans who also do not understand politics.
"The assembly before me will support my affirmation of human rights and dignity today. And I ask you not to complicate matters by comparing my support of Israel's slaughter in Gaza with my opposition to the beheading and murder of innocents. The world surely knows that our provision of Israeli missiles and weapons to destroy residential apartments and our support of the Israeli military sniping at civilians in Gaza cannot be compared with Youtube videos of Americans being killed anywhere."

Translation by G Orwell, 25 September 2014

Wednesday 24 September 2014

T-Shirt Economics Update

In June 2011, I published an article on this blog: "What the 'China Price' Really Means". The article discussed international wage differentials, productivity and how low wages in poor countries translated into economic gains for rich countries. Using the data I had found, together with an investigative report from Die Zeit, I made a guess that the unit labour cost of a T-shirt produced in Bangladesh was some 10-15 euro cents (it sold for 4.95 euros in a German shop). That seemed reasonable, but a reader contacted me recently to point out some problems.
If the 10-15 cents labour cost estimate were true, he noted that it contradicted the other data I cited from Die Zeit, namely the 1.36 euro daily wage of one of the machine workers in the Bangladesh factory. Or else it implied that an implausibly large number of workers were employed, perhaps around 200 per machine. So, I examined the issue again, revised my guess and have reached a more damning conclusion about the rate of exploitation of workers in Bangladesh!
The usual caveats with data apply: do the figures really measure what they claim to measure? Furthermore, there are gaps in the data available, and I had to make some estimates. However, the main reason behind the much lower guess I would make now for the unit labour cost of a T-shirt produced in Bangladesh is the rise in productivity. These data come from the Bangladesh Statistics Office, and I had not seen these, and am not sure they were even published, when I wrote my blog article. They show a much larger rise than I had previously allowed for.
Another point is that I had used the results of a study by S C Zohir, published in 2000, that the unit labour cost in 1994 of a 'shirt' in Bangladesh was 11 cents (in US dollars). I did not then take into account that if the labour cost of a (full) shirt was 11 cents, then presumably a T-shirt would cost less. Assume 8 cents for a T-shirt (excluding working on the sleeves, buttons, etc, on a full shirt).
Starting from 8 US cents unit labour cost for a T-shirt in 1994, this can be translated into Bangladeshi currency (the taka) at that point. Then, the number can be inflated by the rise in wages for Bangladeshi cotton workers, but also deflated by the increase in productivity of cotton production workers. I have done this to estimate the unit labour cost in taka for the T-shirt (in 2011). In addition, the depreciation of the taka versus the euro and the dollar since 1994 also needs to be taken into account to work out what the T-shirt costs are for the buyers in rich countries.
The end result is that instead of the unit labour cost for producing a T-shirt being 10-15 euro cents, it is very likely to have been more like 2-3 cents. Even if that estimate were 20-30% too low, it would not really make any appreciable difference, given the minuscule starting point.
Going back to the original article, on the basis of 10-15 euro cents per T-shirt, I estimated that H&M's net profit per T-shirt in 2011 was 4-6 times higher than what was paid to the Bangladeshi producer. My apologies for underestimating the fruits of exploitation: the ratio is closer to 20-30 times higher.
The lesson to draw from this is that the closer you examine the economics of imperialism, the worse it gets!

Tony Norfield, 24 September 2014