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For the term "foxconn".

On the dangers of believing the worst

Thanks to Dave Hoffman and the Co-op gang for having me back here. I’m planning to blog about global labor issues, starting with some thoughts on the recent news that Nicholas Kristof’s source for some of his anti-trafficking columns – the high-profile Cambodian activist Somaly Mam – “fabricated at least some parts of her own story and the dramatic, heartrending stories of girls she said were sold into sex slavery.”

Now, I can’t deny a bit of shadenfreude here—not because I harbor any malice for Mam or her organization, but rather because of Kristof’s know-nothing column of February insisting that academics should be more engaged in policy debates. The thing is, certain law professors have long argued that criminalization-based global regulatory approaches to sex trafficking can be downright counterproductive, and Mam’s organization seems to have been exemplified some of those trends. In particular, it seems to have thrived by casting trafficking as a wrong perpetrated by particular bad actors rather than a complex social phenomenon rooted in extreme economic and gender inequality. I’m oversimplifying, of course–sex trafficking is obviously a terrible practice, and those who perpetrate it are certainly bad actors. Nevertheless, this approach helped lead, some have argued, to “abusive crackdowns on the people [Mam] claimed to save,” rather than more nuanced efforts to prevent trafficking and assist its victims in the first place. Kristof might have called a law professor before embracing Mam’s work so uncritically.

This affair echoes a broader disturbing trend in public debate around global labor issues, particularly for unskilled production workers and the vast majority of trafficked workers who are in the domestic, agriculture, and garment sectors: namely, many activists’ and consumers’ uncritical belief of terrible stories of labor or other exploitation in the Global South.

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Management Wants Precarity: A California Ideology for Employment Law

LaborShareThe reader of Talent Wants to be Free effectively gets two books for the price of one. As one of the top legal scholars on the intersection of employment and intellectual property law, Prof. Lobel skillfully describes key concepts and disputes in both areas. Lobel has distilled years of rigorous, careful legal analysis into a series of narratives, theories, and key concepts. Lobel brings legal ideas to life, dramatizing the workplace tensions between loyalty and commitment, control and creativity, better than any work I’ve encountered over the past decade. Her enthusiasm for the subject matter animates the work throughout, making the book a joy to read. Most of the other participants in this symposium have already commented on how successful this aspect of the book is, so I won’t belabor their points.

Talent Want to Be Free also functions as a second kind of book: a management guide. The ending of the first chapter sets up this project, proposing to advise corporate leaders on how to “meet the challenge” of keeping the best performers from leaving, and how “to react when, inevitably, some of these most talented people become competitors” (26). This is a work not only destined for law schools, but also for business schools: for captains of industry eager for new strategies to deploy in the great game of luring and keeping “talent.” Reversing Machiavelli’s famous prescription, Lobel advises the Princes of modern business that it is better to be loved than feared. They should celebrate mobile workers, and should not seek to bind their top employees with burdensome noncompete clauses. Drawing on the work of social scientists like AnnaLee Saxenian (68), Lobel argues that an ecology of innovation depends on workers’ ability to freely move to where their talents are best appreciated.

For Lobel, many restrictions on the free flow of human capital are becoming just as much of a threat to economic prosperity as excess copyright, patent, and trademark protection. Both sets of laws waste resources combating the free flow of information. A firm that trains its workers may want to require them to stay for several years, to recoup its investment (28-29). But Lobel exposes the costs of such a strategy: human capital controls “restrict careers and connections that are born between people” (32). They can also hurt the development of a local talent pool that could, in all likelihood, redound to the benefit of the would-be controlling firm. Trapped in their firms by rigid Massachusetts’ custom and law, Route 128’s talent tended to stagnate. California refused to enforce noncompete clauses, encouraging its knowledge workers to find the firms best able to use their skills.

I have little doubt that Lobel’s book will be assigned in B-schools from Stanford to Wharton. She tells a consistently positive, upbeat story about management techniques to fraternize the incompatibles of personal fulfillment, profit maximization, and regional advantage. But for every normative term that animates her analysis (labor mobility, freedom of contract, innovation, creative or constructive destruction) there is a shadow term (precarity, exploitation, disruption, waste) that goes unexplored. I want to surface a few of these terms, and explore the degree to which they limit the scope or force of Lobel’s message. My worry is that managers will be receptive to the book not because they want talent to be free in the sense of “free speech,” but rather, in the sense of “free beer:” interchangeable cog(nitive unit)s desperately pitching themselves on MTurk and TaskRabbit.
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Tax Havens on the Electronic Silk Road

UKTaxHavensElephantInRoomAnupam Chander could not have picked a better topic in modern political economy than the digitization of flows of commerce. The Electronic Silk Road is packed with fascinating narratives about the legal conflicts that digitization generates.

As more value becomes digitally mobile, we may be on the cusp of unprecedented regulatory arbitrage (predicated on dubiously relevant doctrines, free trade commitments, and contracts.) To his great credit, Chander offers a fair assessment of digital commerce, balancing enthusiasm for its inclusive effects with caution about the need to curb the worst abuses of multinational corporations. My question is: will there be funding available to governments who take such a regulatory agenda seriously? For example, if Amazon’s Mechanical Turk decomposes digital labor among workers on different continents, how are we to fund the (sure to be sizeable) regulatory apparatus needed to assure that basic labor, safety, and other legal obligations are honored?

Consider, for instance, the aggressive tax planning of Apple. The company uses transfer pricing and Irish subsidiaries to manipulate its tax obligations. Apple’s IP (ranging from the Apple trademark, to the copyright-protected software, to patents on the phone’s innards, to design patents that give Apple an exclusive right to use the particular “look and feel” of its phones) may, in turn, be “owned” by an Apple subsidiary in, say, Bermuda, or the Cayman Islands. When people try to criticize Apple’s suppliers’ sharp labor practices, their work is often banned from the company’s app store. Apple ensures its own iGovernance mechanisms are unitary, swift in judgment, and a near-absolute authority on many aspects of the smartphone experience of tens of millions of netizens, while taking advantage of weak and fragmented jurisdictions for tax planning purposes.
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LTAAA Symposium: Campaign 2020’s Bots United

A Legal Theory of Autonomous Artificial Agents offers a serious look at several legal controversies set off by the rise of bots. “Autonomy” is one of the key concepts in the work. We would not think of a simple drone programmed to fly in a straight line as an autonomous entity. On the other hand, films like Blade Runner envision humanoid robots that so closely mimic real homo sapiens that it seems churlish or cruel to dismiss their claims for respect and dignity (and perhaps even love). In between these extremes we find already well-implemented, cute automatons. As Sherry Turkle has noted, when confronted by Paro (above right), children “move from inquiries such as “Does it swim?” and “Does it eat?” to “Is it alive?” and “Can it love?””

For today’s post, I want to move to another, perhaps childish, question: can the bot speak? The question will be particularly urgent by 2020, but is relevant even now because corporate and governmental entities want to promote armies of propagandizing bots to disseminate their views and drown out opposing voices. Consider the experiment run by Tim Hwang, of the law firm Robot, Robot, & Hwang, on Twitter, as explained in conversation with Bob Garfield:

GARFIELD: Earlier this year, 500 or so Twitterers received tweets from someone with the handle @JamesMTitus who posed one of several generic questions: How long do you want to live to, for example, or do you have any pets? @JamesMTitus was cheerful and enthusiastic, kind of like those people who comment on the weather and then laugh heartily. Perhaps because of that good nature or perhaps because of his inquiring spirit and interest in others, @JamesMTitus was able to strike up a fair number of continuing conversations. Only thing is, there is no @JamesMTitus. He, or it, is a bot, a software program designed to engage actual humans in social networks.

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“The Workers are Animals. Let’s Replace Them with Robots.”

Among the billionaires at the vanguard of global capital, Terry Gou of Hon Hai (also known as Foxconn) deserves special recognition for his honesty. “Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache,” said the chairman. His company has also begun building “an empire of robots” to replace a whining workforce.

To get a better sense of why the “animals” may be complaining, be sure to listen to Mike Daisey’s extraordinary report on his trip to Shenzhen, home of a massive Foxconn factory. Here’s one excerpt:

N-hexane is an iPhone screen cleaner. It’s great because it evaporates a little bit faster than alcohol does, which means you can run the production line even faster and try to keep up with the quotas. The problem is that n-hexane is a potent neurotoxin, and all these people have been exposed. Their hands shake uncontrollably. Most of them can’t even pick up a glass.

I talk to people whose joints in their hands have disintegrated from working on the line, doing the same motion hundreds and hundreds of thousands of times. It’s like carpal tunnel on a scale we can scarcely imagine. And you need to know that this is eminently avoidable. If these people were rotated monthly on their jobs, this would not happen.

But that would require someone to care. That would require someone at Foxconn and the other suppliers to care. That would require someone at Apple and Dell and the other customers to care. Currently no one in the ecosystem cares enough to even enforce that. And so when you start working at 15 or 16, by the time you are 26, 27, your hands are ruined. And when they are truly ruined, once they will not do anything further, you know what we do with a defective part in a machine that makes machine. We throw it away.

When workers are already treated as machines, perhaps their replacement by robots should be a cause for celebration. But the question then becomes: what do the displaced do for a living? Is there an alternative to exploitation?
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Power and Productivity after the Great Recession

The economic news is bleak. Dean Baker warns that we are very close to a second Great Depression. Tim Duy says that the economy is “circling the drain.” Doug Henwood observes that while the US economy used to be a “brutal but dynamic place” for workers, now it’s just brutal. If employment growth continues at May’s pace (a rate typical of post-financial-crash economies), it will take us a decade just to gain back the jobs lost in the Great Recession.

Back in 2008, many weighed the relative likelihood of deflation or hyperinflation. Today’s via media is stagflation. Commodities are becoming dearer, and consumers feel the squeeze, whatever the mathemagicians behind inflation stats say. We have entered a “great stagnation,” and our political leaders are content to utter platitudes about “expansionary austerity” or “innovating our way” to “win the future.” How either strategy will save the 22 to 29% of US jobs that are offshorable remains unclear.

Since nobody likes an unhappy ending, a boomlet of “soft landing” stories has emerged, explaining why (as Tyler Cowen puts it) “we’ll feel better” eventually. I want to take a look at a few of these, discuss why I think they’re implausible, and turn our attention to what the real stakes of the crisis are.
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Lochner in China

In the book Will the Boat Sink the Water? The Life of China’s Peasants, Chen Guidi and Wu Chuntao conclude that “the edifice of China’s industry is built from the flesh and blood of toiling peasants, and urban development was achieved through their pain and sacrifice.” It looks like the wonders of freedom of contract will spare some managers the hassle of dealing with the collateral damage:

In the wake of a huge wave of suicides at Foxconn plants, the company began reforming its practices related to the suicides. Among these changes included installing anti-suicide nets to catch workers who attempted to leap out of company windows. Yet workers are also being forced to sign a non-suicide pact as a condition of employment. As part of the pact, the employees families have to promise “not sue the company, bring excessive demands, take drastic actions that would damage the company’s reputation or cause trouble that would hurt normal operations” in the case of a suicide.

I highly recommend the entire report from Students & Scholars Against Corporate Misbehaviour (SACOM), a Hong Kong-based advocacy and research group that has studied the production process in some detail. Even more mundane aspects of some workers’ lives are hard to explore, given another contract they are free to sign. Some workers “did not dare to tell their basic salary, position, product that they produce, fearing that will constitute a breach of ‘confidential[ity] agreement[s].'” With a bit more vigorous contract enforcement, laissez-faire’s apologists may never have to hear again about squalid dormitories, 100-hour weeks, and shifts of standing for 14 hours in a row. Who knew the market could so efficiently reduce the negative externality of guilt-inducing news?

“India Shining:” 49 Billionaires, 475 Million+ in Poverty

Mary Albino reports on India’s many economic triumphs (often branded as “India Shining”), and its remaining challenges:

The average Indian takes home $1,017 (U.S.) a year. Not much, but that’s nearly double the average five years ago and triple the annual income at independence, in 1947. . . .The poverty rate is down to 42 per cent from 60 per cent in 1981.

[But] [w]ith a population as big as India’s, 42 per cent means there are some 475 million Indians living on less than $1.25 per day. . . . [O]ne of every three people in the world living without basic necessities is an Indian national. The real number is probably even larger. The recently launched Multidimensional Poverty Index (MPI), a more comprehensive measure of deprivation than the current “poverty line” of $1.25 per day, uses 10 markers of well-being, including education, health and standard of living. The MPI, developed by the Poverty & Human Development Initiative at Oxford University, puts the Indian poverty rate at 55 per cent. That’s 645 million people — double the population of the United States and nearly 20 times the population of Canada. By this measure, India’s eight poorest states have more people living in poverty than Africa’s 26 poorest nations.

As trends toward global inequality continue, it’s worth considering the type of social order that arises amidst vast differences in opportunity and access to resources. In part of India, a resource war has developed. Called “India’s Hidden War,” it now only affects an isolated region of the country (Chhattisgarh). But the commodification of force and violence encouraged by extreme disparities may have larger lessons. Discussing the conflict, Jason Miklian and Scott Carney explain:
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