Remember the opening scene to the amazing Nick Cage movie Lord of War?
The one where you follow the life of a bullet from its birth in a factory to its shipment
from the Soviet Union to the jungles of Africa?
When I watched that I was mesmerized.
Almost all of our material goods make a similar journey.
From the extraction of raw materials found in the Earth, to their production in a factory
most likely somewhere in Asia, to the retail store that you or I can head to down the street.
Hello everyone.
Thought Monkey here.
Today we’re going to journey around the world and discover why all of our stuff comes
from places like China.
The last time you looked at your T-shirt tag you probably noticed that it was made in China,
or Bangladesh, or Pakistan, or…wherever - you get the point.
But have you stopped to ask yourself why they never say England, or France, or the U.S.?
Well as most of us probably know already it has to do with cost.
But that’s only part of the story.
Awhile back I read an interesting article on NPR that talked about the journey of a
t-shirt.
In their investigations they found that the cotton for most t-shirts are grown in either
China, India or surprisingly the U.S. in places like Texas.
If the cotton is grown in the U.S. it is then shipped over 7,000 miles to China or India
where the milling process begins which transforms the plant cotton into yarn or sheets.
From there it is shipped another 1,800 miles to Bangladesh where it is sewn into shirts
by workers who are paid $40 a month in super sketchy conditions.
In 2013 for example a factory collapsed and killed 1,100 garment workers.
Most popular clothing companies like Gap, Walmart, Target and well pretty much every
store you can think of rely heavily on suppliers from this region.
When sewn the shirts are shipped another 8,000 miles back to the U.S. where they are delivered
to retailers, folded neatly by workers who are paid whatever the minimum wage in your
city is and sold for $20 bucks a pop.
The estimated miles traveled for any given t-shirt from cotton farm to retail store?
About 16,000 miles.
$20 bucks for an item that has seen more of the world than you or I have?
Not bad.
But why does this happen and how is it a viable economic model?
During the 19th century the process of industrialization began which was basically the time when everyday
household items became easier to make with the use of machines and standardization and
allowed the prices of items to decrease making it more affordable for the public to buy.
Along with this there was a transportation revolution with the invention of the steam
engine making shipping using boats or trains much cheaper.
At the same time Europeans were busy conquering the world which had the sometimes very unwanted
effect of integrating parts of the world with other parts of the world.
But nonetheless it happened and here we are.
Because of this more and more nations began to embrace international trade while at the
same time vigorously competing with each other to gain economic and military dominance over
one another and their colonies.
Eventually this competition grew to a tipping point and WWI happened.
Then WWII happened.
Then the Cold War.
Finally after the Cold War when most major government decided to just chill the f*ck
out, a period of rapid globalization happened.
But it was really after the agreements made by the international community after WWII,
that laid the foundation to the kind of globalization that we know and either love or hate or have
no opinion about today.
Most countries agreed to an international monetary policy which basically has made it
easier for countries to trade with each other by eliminating or reducing taxes.
This led to other economic agreements between the international community and eventually
the World Trade Organization which currently provides a system for countries to make trade
agreements with one another.
There are also other bilateral agreements between countries – for example the U.S.
and South Korea has a Free Trade Agreement which eliminates 95% of taxes or NAFTA between
Canada, Mexico, and the U.S. which probably ruined the lives of millions of poor corn
farmers in Mexico – but that’s a story for another time.
Technology such as planes and sh*t has also helped speed up globalization.
Oh and the standardized shipping container that can be seen on freight ships around the
world was invented in 1956 making it super easy for boats to load and unload stuff.
When the internet came out CEOs could also skype with powerful politicians around the
world and set up agreements on how to best take advantage of their constituents in China
and India and other places that don’t care too much about basic human rights.
So why is this a viable economic model?
Why can’t we just make our khakis in our own developed countries?
The answer is kind of simple.
Obviously other countries pay their workers dog sh*t.
But they also can treat them like dog sh*t.
In one story, a boss at Foxconn – a tech manufacturing company – woke up an 8,000
dorm-residing crew in the middle of the night to start 12-hour shifts in order to pump out
10,000 iPhones in 96 hours.
Basically it’s easy to take advantage of laborers in developing countries whereas in
the U.S. we throw a hissy fit when our boss asks us politely to cover for someone and
has to pay us time and a half to do it.
This economic model has been termed Neo-liberalism which is a fancy word for a system of economics
that chooses profit over people.
In the end harvesting cotton from Texas, shipping it to China, then to Bangladesh and then back
to some mall in Texas is cheaper – due to industrialization, low or no taxes between
countries, and slave – I mean cheap labor.
Thanks for watching.
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