Global Sports Brand and the Exploitation of Workers: A Marxist Theory Perspective - Research Paper Example

Global Sports Brand and the Exploitation of Workers: A Marxist Theory Perspective Advances in digital and communication technologies have made is easier for global sports brands to reach consumers all over the world (Santomier, 2008: 15). At the same time, globalisation has facilitated the expansion of labour outside of the country of origin. For example, Nike, a global sports brand resident in the US produces all of its sport equipment, shoes and apparel in factories in developing countries, primarily in South East Asia (Gratton, Liu, Ramchandani, and Wilson, 2012: 109) Other popular global sports brands such as Adidas and Puma also produce their sport products abroad in developing countries (Gratton, et al., 2012: 109). Beginning in the 1990s, a number of media reports exposed poor working conditions, human rights abuse, low wages and general exploitation of workers in the factories producing global sports brands (Vogel, 2006: 77). A Marxist theorist would likely argue that the exploitation of labour by global sports brands is no more than a reflection of the new capitalist theory where the powerful classes exploit the weaker classes for ‘self-interest’ or more specifically for the maximisation of profits (Bowles and Gintis, 1977: 173). Marxist theory begins with what is referred to as commodities or products with market values (Khalil, 1992: 23). These commodities are representative of the ‘socio-natural properties’ of labour and ‘reflects the social relation of the producers’ and the ‘social relation between objects’ which is a relationship that ‘exists apart from and outside of the producers’ (Khalil, 1992: 23). This translates the commodity into a social symbol of the relationship between men (Khalil, 1992: 23). Indeed branded products are regarded as symbols of self-identity and symbols of social status (Elliot and Wattansuvwan, 1998: 131). Consumers will generally make social associations with brands and are willing to pay high prices in order to own and use the brand (del Rio, Vazauez, and Iglesias, 2001: 401). Sport brands in particular have global reach and as such have reflected the ‘capitalist form of consumption’ (Smart, 2007: 113). In particular, sport has emerged as a global culture to which consumers around the world have formed a connection to and association with. Sport brands have taken advantage of this global commodity and have used celebrities and star athletes to promote their brands. As a result, consumers around the globe are willing to pay premium prices for these brands (Smart, 2007: 114). For example, Nike’s Air Jordan athletic shoes are promoted on the basis of superior technology for durability and are endorsed by and named for Michael Jordan, a global sports icon (Shocker, Srivastava and Ruekert, 1994: 149). Consumers are willing to have paid high prices for the privilege of identifying and associating themselves with this brand and the athletic icon. These consumer trends are consistent with Marist theory of capitalism and in particular the capitalist modes of production. As Khalil (1992: 23) describes the commodity feature of Marxist theory, the commodity within the capitalist mode of production is perceived as a ‘fetish’ and: …is the result of empowering products with the power to regulate productive activity which individuals have surrendered to market forces. The power of commodities presents the world in a “distorted way” determined behind the backs of agents. In other words, the value of the brand is distinct from the value of its production and this is the backs of the agents to which Marist theorists refer. These agents are the agents of production. The agents are the labourers who produce in a capitalist system for a value that is far below the value derived by consumers and the capitalist owners. Ideally, the value of the sports brand would be measured by reference to the cost of production. When one considers the low cost of labour, the product marketed should be sold at a much lower price. Anyone who has shopped for a pair of Nike athletic shoes and compared the price to generic brands would observe that the Nike brand is several times higher than the generic brand. One would therefore expect that the cost of labour and production in general with respect to the generic brand is exponentially lower than the cost of labour and production of the Nike brand. During the 1990s, the retail cost of Nike’s Air Carnivore was US$140 at stores in the US. The cost of labour per pair of Air Carnivore was US$4.40 indicating that Nike made a significant profit from these shoes (Trenberth and Hassan, 2012). The reality is that workers in China and Indonesia were paid US$0.4 per hour in producing Nike’s products (Trenberth and Hassan, 2012). The cost of material was estimated at US$17.70, shipping was estimated at US$1.40 and transportation and storage was estimated to be at US$7.20 (Trenberth and Hassan, 2012). Therefore the actual cost of producing and delivering Nike Air Carnivore was US$38.10. The fact that Nike sold its Air Carnivore for US$140 when the shoes actually cost a mere US$38.10, is demonstrative of consumer exploitation (Trenberth and Hassan, 2012). More troubling however, is the exploitation of workers who received a small fraction for their contribution to the company’s profits. Considering the value created by labourers as reflected in the final asking price for Nike’s Air Carnivores, the exploitation of the labourers is unconscionable. It is this economic exploitation of workers that captures the attention of civil society and the public in general. For example, during the 2012 Olympics in London a charity organization’s War on Want was commenced against Adidas, a sportswear manufacturer for its exploitation of labourers in Cambodia, Bangladesh and Indonesia (Barnard, 2014: Ch. 9). Reportedly, Adidas paid these labourers a mere a mere thirty-four pence per hour which is equivalent to fifty-three cents an hour. The War on Want attached price labels to Adidas goods in stores in London. The price tags read 34p as a means of heightening awareness of the exploitation of workers in terms of underpayment compared to overpricing (Barnard, 2014: Ch. 9). The cases of Nike and Adidas are demonstrative of the Marxist theory of capitalist production in which the value exchange is said to be non-existent (Khalil, 1992: 24). If a value exchange existed, the prices of sporting brands in the global market would be measured in accordance with the value of production. Since labour costs are decidedly low and the retail price of the goods are demonstratively high, the value exchange is disproportionate and is therefore representative of the exploitation of labourers. As observed, the sporting giants such as Nike and Adidas use workers in developing countries to produce their products. In using workers in developing countries to produce their products, sports brands pay these workers below-value wages. In other words, these workers’ salaries do not reflect the value of their labour which is subsequently reflected in the premium price of the products once they reach the retail outlets. This strategy is referred to as ‘social labour’ or ‘social production’ (Khalil, 1992: 24). Social production or social labour takes on two dimensions according to Marist theory. On the one hand, the product exists and is produced in a market with external conditions. It is these external conditions that dictate the price of labour (Khalil, 1992: 24). The external conditions in developing countries can be referred to as living conditions, wages and general economic conditions. In developing countries the wages are very low compared to the wages in developed countries. Rather than produce in developed countries where sports brands have their headquarters, they deliberately manufacture their goods in developing countries where they are at liberty to pay wages that paid in those markets. This is looked upon as a means of exploitation. Therefore, sports brands look to profit rather than progress in terms of promoting employment and economic growth and development in developing countries. The second dynamic in social labour or social production is ensuring that there is a market demand for these branded products (Khalil, 1992: 24). Sport brands ensure that there is market demand for their branded goods through promotions and endorsements primarily using celebrities and star athletes. Through branding, not only are sport brands able to create a demand for their brands, they are able to increase the demand for their brands. In order to meet those demands, sport brands employ the services of low wage workers in developing countries. In the meantime, sport brands are able to demand a premium price for their products in the retail market globally. This exploitation of workers according to Marxist theory is the capitalist exploitation which is a method by which products become nothing more than ‘social relation between persons which is mediated through things’ (Khalil, 1992: 26). What is exchanged is a free will. The consumer through the encouragement of the profiteering large company exercises his or her free will at the expense of the free will of the worker who surrenders his or her free will for wages (Khalil, 1992: 26). From the perspective of the profiteering company that exploits the labour markets in the developing world, everyone is demanding their actual value (Khalil, 1992: 26). The labourers who are living in less than satisfactory conditions are being paid wages for which they are entitled to. They are not entitled to ask for or receive a higher wages. Similarly, the asking price in the retail market is precisely what the corporate giants are entitled to demand. The price paid by the consumer is also fair because it provides the social value that the consumer craves. Thus, as Khalil (1992: 26) explains, according to Marxist theory, this exploitation of labourers by sporting brands can be viewed as an ‘exploitative exchange’ which ‘masquerades under the shroud of equal exchange’. While this exchange is patently unfair it is representative of the practices and policies of corporate giants globally. The fact that sport brands engage in this practice is especially disappointing since they represent a global culture. Moreover, sports symbolize a global value that transcends cultural differences. Sports should transcend boundaries and should represent universal norms. The exploitation of labourers by sport brands tend to divide nations and are inconsistent with the unity that sports should create. Fairness and equity which is the foundation of competitive sports in a globalized world is lost by sports brands that seek to exploit workers and in many ways the consumers that purchase their goods at premium prices. Fairness can only be accomplished if a fair price is asked and paid for the goods that are produced. Alternatively, fairness can be achieved when workers are paid a fair wage for the value of the goods that they produce. Since neither of these approaches are taken by sport brands, it can be concluded that sport brands exploit workers in a way that is reflected by the assumptions of Marxist theorists. The strength of the Marxist theory of capitalism is that it recognises the manner in which consumers prioritise materialism and the manner in which firms use this knowledge to their economic advantage (Skillman, 1996:1). For example, sport brands know that consumers will pay a premium price for their products and set unjustifiable prices for their brands. Another strength in the Marxist theory of capitalism is its recognition of how multinational corporations exploit workers abroad with the intention of maximising their profits. The weakness in Marxist theory of capitalism however, is that it fails to take account of how the exploitation of labour is the subject of international debate. Contrary to what Marx predicted, the exploitation of labour did not lead to a revolution, but rather to a solution. For example, the International Labour Office is determined to eliminate the exploitation of labourers all over the world (Hopkins, 2004: 1). In doing so, the International Labour Organisation is calling upon companies abroad to implement corporate social responsibility governance frameworks that safeguard against poor working conditions, unfair wages and so on (Hopkins, 2004: v). Marxist theory also did not contemplate that intergovernmental organizations such as the International Labour Organisation together with non-governmental organisations would intervene to heighten consumer awareness of corporate exploitation of workers and thus negatively impact profits. References Barnard, M. (2014). Fashion Theory: An Introduction. Oxon: Routledge. Print. Bowles, S. and Gintis, H. (June 1977). ‘The Marxian theory of value and hetero-geneous labour: A critique and reformulation.’ Cambridge Journal of Economics, Vol. 1(1): 173-192. Print. del Rio, a.B.; Vazquez, R. and Iglesias, V. 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