What Should Reshape the Globe Trades

the Law of Oppression Proliferating.

( extracted Econoics)









Author: He Yufeng


Adam Smith believed that every animal must rely on efforts by itself to survive, and it need to know how to protect itself, he also believed that only human could exchange something each other. Nevertheless, modern ecologists proved that animals also have abilities to exchange something. In America, where lives a kind of blood sucking bats (vampire bat), they food on sucking other animal’s blood. If a bat has not sucked blood more than 60 hours, it would die. So some mutual mechanism exist in the communities of these blood sucking bats. If a bat sucked a large meal of blood, it would spit out some blood to feeding its hungry mates, despite of they are no relations at all. Nevertheless, ecologists found that there were following strict rules in the game, bats would not feed members who just did free ride but did not reward at all. Obviously, it is a mutual mechanism in nature. the magazine primate, 2005, it had recorded a exchange action in a community of chimpanzees. An other well known exchange action in chimpanzees is that males use foods changing mating opportunities with females. Anthropologists and archaeologists argued that human had begun to exchange something with each other from the Stone Age, and primitives had exchange they stone tools at long-distance. In Lauriston Sharp’s article Steel Axes for Stone–Age Australians, he narrated exchanges in primitive society. When colonists had arrived Australia first time, aborigines called Yir Yoront had been the Stone Age still, they subsisted by hunting, fishing, and gathering. Stone axe was the most important tool in their

community, and it also played important roles in local social relations , it also was highly valued property. Women used it for firewood harvesting, felling of trees and collect wild fruit, men used it for hunting and fishing, some times used it for Split wild honeycomb which was inside tree. Stone axes belonged to men, but men could lend it to women, it was the unique power of men. Yir Yoront lived in a broad alluvial plain near north coast of Australia, but the raw stone which used to make stone axe is more than 400 miles away. If Yir Yoront people wanted to make stone axes by themselves, it was a hard work. Fortunately, they needn’t do it, they could get stone axes by exchanging with other tribes. Spears made from stingray spines were the major export, while stone from tribes to the south for stone axe heads was the major import. The tribes which lived nearby Yir Yoront also did not make stone axes by themselves they just middleman of the trade circulations. However, when Western missionaries brought steel axes to the aborigines in Australia, local societies were greatly impacted by these steel axes. Steel axe performed great advantage than stone axe which aborigine used before, but steel axe were very expansive, Yir Yoront men bothered day after day. If any one who could give a steel axe to Yir Yoront man, the man would rather let his wife to make love to the one. What is the definition of commodity? In Karl Marx’s capital (Das Kapital) he mentioned that: “A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another”. As neo-classic economics definition, commodity is anything which could be exchanged for satisfying human wants. Karl Marx argued that the essential attribute of commodity is labor. However in realities, lot of commodities are not the exchange about labor-productions, for example, a businessman want to bribe a officer for some commercial interest, this exchange at least not concern any labor factors for the officer who involved in. behaviors of exchange are so complicated and diversified. In the Chinese classic ZhuangZi has an allegory about exchanging which showed the huge diversities between exchanges. Once upon time, there were a family living in Song state(a seigneur existed in 11 centuries BC – 286 BC), the family had subsisted their lives for generations by dying and tanning, they made a sort of medicine which preventing crack of skin. A merchant had known that, he bid five hundred golden coins for the formula of preventing crack. Senior of the family gathered all members to discuss that, they argued that: we worked for generations just for several golden coins, now, one could

offer five hundred for the formula in one day, that is several times than we have gotten before. Finally, they decided to sell it to the merchant. Subsequently, the merchant devoted the formula to the king of Wu (a seigneur existed in 11 centuries BC – 473 BC). At that time, in winters, Wu state was warring against Yue state. By the advance of the formula, soldiers could prevent crack in the float battles, and they won the war. The king of Wu constituted the merchant as a feudal lord of a land. Both the family and merchant had the ability of prevent crack of skin, family just protected their hand, and the merchant could became a lord of a land. ZhuangZi the Free Roam In this allegory, the family got currency in the exchange, corresponded, the merchant got powers of lording a land. In the circulation of exchanges, the power of the patent became the power of lord a land. Back to the Yir Yoront case, the man of Yir Yoront who wanted get a steel axe, was willing to letting his wife making lover with a stranger. The man temporarily alienated his exclusive power of mating with his wife. The exclusive power of mating exchanged the (power of) ownership of commodity in this case. Karl Marx argued that: As values, all commodities are only definite masses of congealed labour-time. This viewpoint had been challenged by many economists. David Ricardo had mentioned that, he could not resolved such difficulty, why wine which had been stored in cellars for couples of years cost equally to 100 pounds oak. Marginalism argued that the value of a commodity is relied on the subjective evaluation of consumers. If a commodity embodying lot of labors not be sold in market, it has not any value. But the marginal utilities for individuals were so different that marginalism value theory lost its basic function of scales. Like I mentioned in chapter 1, human brains do not work centrally, he or she works modularly and parallel. Such architectures of human mind also limit rational of human behaviors. Yir Yoront man exchanged steel axe with the exclusive power of mating with his wife. There are not labour in Yir Yoront side at all. The value of steel axe constituted of the power of mine exploitation, labour, the cost of long distance transportations, tax, and so on, but the cost of Yir Yoront was almost none. And the desire of merchant who wanted to mating with the man’s wife probably was involved by the Yir Yoront man self. What is the essential fact of the commodity exchange? It is power. All exchanges in human societies are Human power in the abstract. In

the steel axe case, the power of making love with Yir Yoront man’s wife is equal to the sum of: the power of mine exploitation, labour, the cost of long distance transportations, tax, and so on. Harlotries exist for long time and all over the world, such unmoral exchanges base on the power of one’s body. To some extent, the harlotry is similar to the behavior of male chimpanzee which induce female by foods, that is nature. In normal circumstance, comparing saleslady who looks mediocre with beautiful model, there are a gap in wage in same time. That is because of beautiful girl is less abundant than saleslady. Less abundant or scarcity is nature of the world, but how to handle it is a sort of power mechanism. It also is one of the most critical facts in nature evolutionary competitions. When robbers hijacked a passerby, they could ask any thing they could find at that time. That is for robbers controlled the most important power for passerby, the power of live, so they can ask any thing. In contemporary societies commodity exchanges are multifarious. In 2007, Guangzhou, china, a special number of License plate of car, had been sold for 747,000 RMB in public sales. That is exchange between the power of money and power of scarcity. Marxian scale of value, labor, do not work for analyzing the history of land leases and exchanges. In history lands always were expensive commodities, but who was the first owner of the lands? It is obvious that the first owner is the conqueror. For lands exchange in ancient time, the essential thing people exchanged is power, most exchange is between political ownership power and money. Power of labor is a sort of power which mean workers had the power to get reward for his work. British philosopher Jeremy Bentham had said that, there had not existed any fortune, until laws came to being. If laws had been abolished, any fortune would not exist. That happened in the beginning of the communist china, PRC. It is usually happened in the alternations of dynasties all over the world. In a country too, where, though the rich or the owners of large capitals enjoy a good deal of security, the poor or the owners of small capitals enjoy scarce any, but are liable, under the pretence of justice, to be pillaged and plundered at any time by the inferior mandarins, the quantity of stock employed in all the different branches of business transacted within it can never be equal to what the nature and extent of that business might admit. In every different branch, the oppression of the poor

must establish the monopoly of the rich, who, by engrossing the whole trade to themselves, will be able to make very large profits. Twelve per cent accordingly is said to be the common interest of money in China, and the ordinary profits of stock must be sufficient to afford this large interest. 1776, Adam Smith: the Wealth of Nations Adam Smith was right, he evaluated the corrupt society of Qing dynasty (1644-1911). The rich and powerful man had pillaged the poor and small capitals in that time. Unfortunately, today in china, it have been happened still, more unfortunately, it happened in myself. In 2008, I found that state owned Shanghai Media Group, SMG, had broadcasted my documents film the Wars of Qing Dynasty all over the china, but as a result they did pay any for that criminal behaviors. Government, police, and bureaucracies refused to do any thing for that. There are also existing exchanges that state owned TV could broadcast illegal programs without caring about any punishments, as rewards TV will do some propaganda which proved the legalization of the rule of communist party. Of cause, it also happened on Hollywood and HK film producers. Other wards, state run TV stations in china are authorized to pillage film producers all over the world in disguise. Back to the property of commodity, the essential exchange is based on the powers. Now, I could give the conclusion: the commodity essentially is the power which could be exchanged. The exchange of commodity is the exchange of power. The familiar Marxian theory of labor value is the exchange of the same power of labor in fact. If one charge his lens for a second hands video camera to an other, in this exchange they exchanged the commodities’ ownership of each other. If a beekeeper charge a jar of honey for barber to cut his hair, in this case, the beekeeper alienate the ownership of honey, that exchange the server of barber that is a sort of power of labor. If the barber works in the open air, this exchange also could be analyzed by the theory of labor value. But if the barber works indoor, the exchange become complicated immediately. The rent and such like electricity fee and water fee become main costs of the barber. Beekeeper’s ownership of his work + scarcity of honey in local + other cost of tools = barber’s ownership of his work + landlord of barber’s ownership of the land and house + the ownership of power firms + monopoly power of

electricity + other cost of tools This equation shows that exchange is complicated by various forms of powers, but not the power of labor only. Exchange of commodity is often involved by productivity, scarcity, production relation, ethics of distribution, trading circumstance, and so on. The common property of these elements about exchange is that they are power. In a interesting Hollywood movie, The Shawshank Redemption, it has a remarkable story inside the movie. The head of the Shawshank State Prison, he exploited the prisoner’s free labor for his own profit. He undertook building jobs by low cost of labor, that caused lot of building contractor lost their jobs, for keeping their jobs, they had to bribe the head of prison for his retreating in some biddings. Why the free labor in this case harmed the society instead of benefit it? In reality, it is usual that same production with deferent price in the market. In lot of case, the deference of the price not from the deference of power which owned by the workers. For example, assumption that there are two firms A & B, which manufacturing same product, the workers of two firms had same wages of week. Workers in firm A works 10 hours a day, and 6 days a week. Worker of firm B works 8 hours a day, and 5 days a week. Both firm have same productivity. As a result the firm A product’s price should be at least 30% off than firm B, firm B would retreat from the market by the competition. In such case, free market competition eliminated the health, and transformed the competition of managing to the oppression of workers. Such phenomenon should be formed by the oppression of power. I should argue that it is the Law of Oppression Proliferating. It means that in the free trade network, by the exchange of commodity, oppression would proliferate all over the network. And if there are no any political intervention, the oppressive relation of labor should be the main relation of labor. According to this law, in the film of The Shawshank Redemption, the prisoner who worked as free labor made the normal work lost their job or working opportunities. Most of workers can not work at totally free, so the only way building contractor nearby could exist is bribing the head of prison, letting him retreating form the market. But the cost of

bribing finally would shift burden on workers. The most oppressive relation of labor is slavery. Slavery in ancient cultures was known to occur in civilizations as old as Sumer, and it was found in every civilization. Classic economists had an observation, it is that slavery becomes more desirable for land owners when land is abundant but labor is not, so paid workers can demand high wages. If labor is abundant but land is scarce, then it becomes more costly for the land owners to have guards for the slaves than to employ paid workers who can only demand low wages due to the competition. But in the history, abolishing of slavery had not been caused by the economic transformation, in fact, it had been caused by the political movements and wars. One of the most famous war of abolishing slavery is the American civil war (1861-1865). As the traditional historians and economists believed that American south slave agriculture was inefficient and unprofitable compared with the free agriculture in north, and slavery had already been a moribund institution before the Civil War. The profit of slave mainly came form the rearing and trading of slave. However, more and more economic historians proved that it is wrong. In 1974, Robert Fogel and Stanly Engerman had co-written a famous work the Cross Time, in the book, they argued that on purely economic grounds, slavery was not unprofitable or inefficient or a moribund institution. They argued that slavery economy is an efficient and profitable system at that time. By analyzing history evidences, they revealed that slave owners were not becoming pessimistic about the future of their system during the decade that preceded the Civil War. The rise of the secessionist movement coincided with a wave of optimism. In fact, on the eve of the Civil War, slaveholders anticipated an era of unprecedented prosperity. In fact, the South slaver economy was not an irrational system, the price of slave also exposed the profitability of slave. Far from stagnating, the economy of the antebellum South grew quite rapidly. Between 1840 and 1860, per capita income increased more rapidly in the south than in the rest of the nation. (Ironically, such situation is so familiar to china and America today.) By the source of census of the United States from 1790-1860, the slaves population in south increased from 648,640 to 3,951,798 (The figures

for 1850 and before are from DeBow, Statistical View of the United States, p. 85. For 1860, Population of the United States in1860. The Eighth Census, Washington, 1864), that is six times of increase. It also proved that the demands of slave had been brisk. Fogel and Engerman report the results of an extensive method to compare the efficiencies of free-labor farms, north and south, with slave-labor plantations in the Old South and the New South. According to their conclusions, Slave-labor farms were 28 percent more productive than southern free-labor farms and 40 percent more productive than northern free-labor farms. The slave-based agriculture of the New South was 29 percent more productive for equal inputs than slave-based agriculture in the Old South. The free-labor farms of the Old South equaled the productivity of the free-labor farms of the North. The slave-based agriculture of the Old South were 19 percent more productive than the free-labor farms of the North and the slave-based agriculture of the New South were 53 percent more productive than northern free-labor agriculture. In a domestic market network, in antebellum South, the efficiency of slaver owned plantation had the absolutely advantage comparing to North free labor plantation. If a firm’s efficiency is 30 percent more than its competitions, most of competitions would be wash out in the market. In domestic agriculture market, same weight farm products also sold with same or similar price, with the 53 percent advantage, South slave owned plantations also pressed north farmers and landlords to an extremely difficulty plight. This situation similar to the story of the movie The Shawshank Redemption. Assuming that North and South planted a same kind of farm product, North farm workers have to decline their salaries to just offer their lives, if slaves worked 7 days a week the farm workers have to follow it, and most of north plantation would be close down. That is why some case showed that south slaves lived better even than north free labor workers. In reality, with the increase of slave population, south slave owned economy impacted north free labor economy greatly, and caused north agriculture progressively difficulty. Therefore, as time went on, at a tuning point of time in North, the voice of abolishing slavery exceeded the moral confines, at that time, abolishment is the combination of moral and interest, so it became necessity. As we know, the American Civil War, beginning in 1861, led to the end of chattel slavery in the United States.

Comparing the slave labor in south and free labor in north, it revealed that the oppression of slaves in the south had transformed to the free laborers in north by the free market network. It is a perfect instance that proved the Law of Oppression Proliferating which I mentioned above. September 17th, 2004, Elche is the capital of Spain's footwear industry and has been hard hit by Chinese competition. Some protesters held banners reading "Chinese out" - others smashed windows. Before that, the protest took a more menacing turn when two Chinese-owned warehouses and a lorry belonging to a Chinese entrepreneur were set on fire. And several had been arrested. Many Spanish manufacturers blame their current crisis on cheap Asian imports. In Elche local shoes industry once had been 600 manufacturers. When Spain had begun to import Chinese footwear in 1998, till 2003, they had imported 61.9 million pairs of shoes for that year. As the Spanish population is 39 million, in average per capita had bought 1.58 pairs of shoe which made in china. In local market Chinese shoes had been sold at the average prices of 5€, and it also profitable, but shoes which in local manufactured cost 8€ in average. In the retail market, shoes which made in Spain cost 3-8 times than shoes which made in china. It is obvious that most of local footwear manufacturers could not compete with Chinese footwear manufacturers. At that time, lots of footwear factories had been closed down, at least 30 percent workers in this business lost their jobs. By the much higher efficient of per capital Chinese footwear industry evicted many Spanish competitors out of the market. From 1998 till 2003, just for five years, Chinese footwear manufacturers had occupied a great share of local footwear market. Facing the extreme upheaval in the footwear market, local footwear manufacturers had been at a loss for any valid replies. In that unfortunate violent incident, Spanish footwear workers had mistaken the critical issues and attacking at a wrong target. That action liked the free-labor to attack sad slavers in the American 140 years ago. In fact, in this case not Chinese footwear workers deprived Spanish footwear workers’ jobs, but the unfair globe trade orders. That also is the results of the Law of Oppression Proliferating. Comparing the oppression which Chinese footwear workers suffered, it is easy to figure out what caused the unemployed in Spanish

workers. As we know, Chinese footwear workers have to be working at least 10 hours a day and 6 days a week, they usually have not any insurances and welfares, they could be fired at any time without any compensations. Even more they worked in the poisonous and fatal environments without any protections, footwear workers are being exposed to high levels of benzene, toluene, and other toxic solvents contained in the adhesives used in the shoe-making process. Their fates filled with blood ad tears. They have not the right to organize their own union. Despite there are little improvement in some globe footwear firms, such like Nike, Adidas, Puma, but most of footwear laborers are working at sad situation. In fact, modern legal definitions of freedom of association, the right to collective bargaining and the right to strike do not appear in Spanish legislation until the Constitution of 1978. Recent years, employment in Spain is highly regulated, with the main purpose to protect an employee's rights. The regulations are complex: jobs are grouped into categories, and each category has a different set of regulations. It’s important both as an employer or employee to be aware of the different types of work contracts, holiday entitlement and social security requirements when considering the options of working in Spain. When china and Spain have begun to trade each other freely, the Low of Oppression Proliferating has worked at same time. Spanish footwear workers lost their job, it also a king of oppression. China became a “workshop of the world”, it has not any accident, because china had the one of the lowest labor protection environment in the world and greatest labor supply in the world. If Chinese footwear workers could have the same right which Spanish footwear workers own, shoes which made in china would be more cost, therefore, the impact of the Chinese shoes would be much more mild, and the taxes of importing could control it. The World Trade Organization, WTO, it play the most important role in the present world. But in the organization’s treaties have not contained any important protector labor rules in its framework agreements up to present. Once time in November 1999, Seattle, U.S. President Clinton and others developed countries chiefs suggested that the WTO include core labor rights and sanctions and so forth if these were violated. many developing countries (such like china)saw this as a protectionism vehicles and that it would be too costly for the poorer nations to be able to afford such dramatic changes given the poverty and dependency they are in. at same time, labor right is also an issue of human

right, labor right include the right to collective bargaining and the right to strike, this related to domestic polities closely, especially those rights have been deemed to challenge the power of governments in some totalitarian regimes. More powerful opponents are the capital forces in developed countries, they also describe labor rights treaties as a protectionism vehicles. Moreover, precisely because third world workers are terribly exploited, their employers will pass on much of the cost of improvements in labor standards achieved through international trade treaties to their employees in the form of lower wages. Robin Hahnel After 1999 Seattle ministerial meeting, subsequent G. W. Bush administration had not insisted to adding labor rights demands in WTO treaties. Some NGOs have played more and more important role in the labor right protections. SAI, Social Accountability International, is an international non-profit human rights organization dedicated to the ethical treatment of workers around the world. SAI’s social standard, called SA8000, functions as a highly effective and expedient system for delivering improved social performance to businesses and their supply chain facilities. It is pity that labor right standard could not became a part of world trade treaties. SA8000 standard adopted by some companies, but because of it had not supported by governments, its effects have been limited seriously. SA8000 could not instead the constitution of labor right which will be legislated by United Nations. It is one of the most important missions for the world trade order and for the every laborer all around the world. I would like to forecast that the Labor right constitution of United Nation will reshape the world trade order far-reaching. In a free trade network, people want to avoid their power (right) being oppressed and exploited, they must concern every trade partners in the network. As I mentioned above, exchange of commodity is the exchange of power, so other’s power are highly related to everyone in the network. Inequality of power inevitably cause Inequality of commodity exchange. Others like monopolization and protectionism are also a king of inequality.

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