THE NOBLE FEAT OF NIKE
Globalisation — otherwise known as ‘ruthless international capitalism’
— is enriching the world’s poor, says Johan Norberg

By Johan Norberg

Nike. It means victory. It also means a type of expensive gym shoe. In
the minds of the anti-globalisation movement, it stands for both at
once. Nike stands for the victory of a Western footwear company over the
poor and dispossessed. Spongy, smelly, hungered after by kids across the
world, Nike is the symbol of the unacceptable triumph of global
capital.

A Nike is a shoe that simultaneously kicks people out of jobs in the
West, and tramples on the poor in the Third World. Sold for 100 times
more than the wages of the peons who make them, Nike shoes are
hate-objects more potent, in the eyes of the protesters at this week’s G8 riots,
than McDonald’s hamburgers. If you want to be trendy these days, you
don’t wear Nikes; you boycott them.

So I was interested to hear someone not only praising Nike sweatshops,
but also claiming that Nike is an example of a good and responsible
business. That someone was the ruling Communist party of Vietnam.

Today Nike has almost four times more workers in Vietnam than in the
United States. I travelled to Ho Chi Minh to examine the effects of
multinational corporations on poor countries. Nike being the most notorious
multinational villain, and Vietnam being a dictatorship with a
documented lack of free speech, the operation is supposed to be a classic of
conscience-free capitalist oppression.

In truth the work does look tough, and the conditions grim, if we
compare Vietnamese factories with what we have back home. But that’s not the
comparison these workers make. They compare the work at Nike with the
way they lived before, or the way their parents or neighbours still
work. And the facts are revealing. The average pay at a Nike factory close
to Ho Chi Minh is $54 a month, almost three times the minimum wage for
a state-owned enterprise.

Ten years ago, when Nike was established in Vietnam, the workers had to
walk to the factories, often for many miles. After three years on Nike
wages, they could afford bicycles. Another three years later, they
could afford scooters, so they all take the scooters to work (and if you go
there, beware; they haven’t really decided on which side of the road to
drive). Today, the first workers can afford to buy a car.

But when I talk to a young Vietnamese woman, Tsi-Chi, at the factory,
it is not the wages she is most happy about. Sure, she makes five times
more than she did, she earns more than her husband, and she can now
afford to build an extension to her house. But the most important thing,
she says, is that she doesn’t have to work outdoors on a farm any more.
For me, a Swede with only three months of summer, this sounds bizarre.
Surely working conditions under the blue sky must be superior to those
in a sweatshop? But then I am naively Eurocentric. Farming means 10 to
14 hours a day in the burning sun or the intensive rain, in rice fields
with water up to your ankles and insects in your face. Even a Swede
would prefer working nine to five in a clean, air-conditioned factory.

Furthermore, the Nike job comes with a regular wage, with free or
subsidised meals, free medical services and training and education. The most
persistent demand Nike hears from the workers is for an expansion of
the factories so that their relatives can be offered a job as well.

These facts make Nike sound more like Santa Claus than Scrooge. But
corporations such as Nike don’t bring these benefits and wages because
they are generous. It is not altruism that is at work here; it is
globalisation. With their investments in poor countries, multinationals bring
new machinery, better technology, new management skills and production
ideas, a larger market and the education of their workers. That is
exactly what raises productivity. And if you increase productivity — the
amount a worker can produce — you can also increase his wage.

Nike is not the accidental good guy. On average, multinationals in the
least developed countries pay twice as much as domestic companies in
the same line of business. If you get to work for an American
multinational in a low-income country, you get eight times the average income. If
this is exploitation, then the problem in our world is that the poor
countries aren’t sufficiently exploited.

The effect on local business is profound: ‘Before I visit some foreign
factory, especially like Nike, we have a question. Why do the foreign
factories here work well and produce much more?’ That was what Mr Kiet,
the owner of a local shoe factory who visited Nike to learn how he
could be just as successful at attracting workers, told me: ‘And I
recognise that productivity does not only come from machinery but also from
satisfaction of the worker. So for the future factory we should
concentrate on our working conditions.’

If I was an antiglobalist, I would stop complaining about Nike’s bad
wages. If there is a problem, it is that the wages are too high, so that
they are almost luring doctors and teachers away from their important
jobs.

But — happily — I don’t think even that is a realistic threat. With
growing productivity it will also be possible to invest in education and
healthcare for Vietnam. Since 1990, when the Vietnamese communists began
to liberalise the economy, exports of coffee, rice, clothes and
footwear have surged, the economy has doubled, and poverty has been halved.
Nike and Coca-Cola triumphed where American bombs failed. They have made
Vietnam capitalist.

I asked the young Nike worker Tsi-Chi what her hopes were for her son’s
future. A generation ago, she would have had to put him to work on the
farm from an early age. But Tsi-Chi told me she wants to give him a
good education, so that he can become a doctor. That’s one of the most
impressive developments since Vietnam’s economy was opened up. In ten
years 2.2 million children have gone from child labour to education. It
would be extremely interesting to hear an antiglobalist explain to Tsi-Chi
why it is important for Westerners to boycott Nike, so that she loses
her job, and has to go back into farming, and has to send her son to
work.

The European Left used to listen to the Vietnamese communists when they
brought only misery and starvation to their population. Shouldn’t they
listen to the Vietnamese now, when they have found a way to improve
people’s lives? The party officials have been convinced by Nike that
ruthless multinational capitalists are better than the state at providing
workers with high wages and a good and healthy workplace. How long will
it take for our own anticapitalists to learn that lesson?

Johan Norberg is the author of In Defence of Global Capitalism, and
writer and presenter of the documentary Globalisation is Good, to be
broadcast by Channel 4 on 28 June.

(c)2001 The Spectator.co.uk