2000-06-01, Chris Bailey
The trend of modern capitalism is towards both globalisation and networking. These features are closely related, but distinctly separate.
Since the late 1970s, an enormous expansion in the export of capital across national boundaries has taken place. Giant transnational corporations have been carrying out a global ‘rationalisation’ of production and distribution, treating nation-states as largely irrelevant. Neo-liberalism has developed as a political movement accelerating this process by deregulating the cross-border flow of capital around the world.
An explosive expansion of computer and telecommunications technology has accompanied these developments. By shrinking distances, this new technology has been a major factor in the globalisation of capitalist production. It has also played an essential role in bringing about the domination of networked forms of organisation. Although networks of various kinds have existed for centuries, modern computer technology has allowed them to take on new features and modes of operation and made them a central aspect of modern capitalism.
The essential nature of a network and the connection with computer communications has been described by Sally Burch, one of the pioneers of social movement networking in Latin America: “Unlike rigid structures, true networks are essentially flexible. They generate multiple channels of communication in which, as in the functioning of the brain, connections are made as needed and then suspended until a new need arises. In this way, information flows through the channel of least resistance, rapidly making its way to the most dynamic points of the network, on any given issue. Physically, this is very similar to the way the Internet works, and that is precisely one of the reasons why it is so appropriate for any initiative based on networking.”
Computer technology has created the conditions for a global communications network that is essential to the operation of capitalism today. But capitalism has also shown that networking need not be simply limited to communication and the flow of information, it has become a feature of the capitalist manufacturing process itself. In Flexible Dimensions of a Permanent Crisis: TNCs, Flexibility, and Workers in Asia, Gerard Greenfield describes how transnational corporations work with a mass of sub-contractors to bring about what is essentially a networked production system. Here he explains how “the logic of TNC subcontracting” works for Nike’s strategy in Asia: “From July last year, PT Indomulti Inti Industry stopped producing Nike shoes because Nike’s price was too low” and “failed to consider the labour costs and other operational costs. Other subcontractors accepted the lower prices demanded by Nike, and cut labour costs to absorb the loss. On the other hand Nike has cut orders to subcontractors like Samyang, a South Korean-owned factory in Vietnam, in response to the gains workers were making in organising and collective bargaining. At the same time, Nike has increased orders to Yue Yuen, a Taiwanese-owned subcontractor, which is increasing the production capacity of its factories in Indonesia and Vietnam. For Nike, Yue Yuen has emerged as a ‘reliable’ subcontractor because it can ensure both lower prices and more effective repression of workers.” Continue reading