Over the past half century, these global oligopolies have been offshoring whole sectors of production from the rich/high-wage to the poor/low-wage countries, transforming global labor conditions in their search for global low-cost position, and in a divide and rule approach to world labor. Leading U.S. multinationals, such as General Electric, Exxon, Chevron, Ford, General Motors, Proctor and Gamble, IBM, Hewlett Packard, United Technologies, Johnson and Johnson, Alcoa, Kraft, and Coca Cola now employ more workers abroad than they do in the United States—even without considering the vast number of workers they employ through subcontractors. Some major corporations, such as Nike and Reebok, rely on third world subcontractors for 100 percent of their production workforce—with domestic employees confined simply to managerial, product development, marketing, and distribution activities. The result has been the proletarianization, often under precarious conditions, of much of the population of the underdeveloped countries, working in massive export zones under conditions dictated by foreign multinationals.
Two realities dominate labor at the world level today. One is global labor arbitrage or the system of imperial rent. The other is the existence of a massive global reserve army, which makes this world system of extreme exploitation possible. “Labour arbitrage” is defined quite simply by The Economist as “taking advantage of lower wages abroad, especially in poor countries.” It is thus an unequal exchange process in which one country, as Marx said, is able to “cheat” another due to the much higher exploitation of labor in the poorer country. A study of production in China’s industrialized Pearl River Delta region (encompassing Guangzhou, Shenzhen, and Hong Kong) found in 2005 that some workers were compelled to work up to sixteen hours continuously, and that corporal punishment was routinely employed as a means of worker discipline. Some 200 million Chinese are said to work in hazardous conditions, claiming over a 100,000 lives a year.
”—The Global Reserve Army of Labor and the New Imperialism
“I believe that one day hydrogen and oxygen, which together form water, will be used either alone or together as an inexhaustible source of heat and light.”—From “The Mysterious Island” by Jules Verne, 1874