Marketing

Markets are Progressive and Inclusive: The cost of the Market- the Increase in Urban and International Violence In this essay we will discuss the drawbacks of a self-interest market like capitalism and how, if not controlled, has and will continue to lead to violence on both the local and international level. We will show how self-interest markets are neither always progressive (especially the third world markets) nor inclusive simply because the benefits are not shared by all the stakeholders. This treatise is split into two main parts. The first aims to show, on a local (urban) level, how the markets tend to discriminate against certain people creating classes where one is given more power and control whilst the rest are forced to labour with little or no say in how their use is placed. Using 18-19th century England as an example we see how, without proper governing, the few who acquire the power to control the labour force usually do not act in the interests of the labour and how this alienation inevitably forces the alienated to desperate measures- usually through an uprise against those in power. Furthermore, we will see how governments, though they are expected to, are not always objective and so do not always act in the interests of the majority and powerless population. The second section aims to extend the first onto a global level showing how the richer nations exercise their power to take or maintain control over assets which alienates whole nations. Finally, we will see just how willing they are to engage in violent means to protect such assets. However, it must be highlighted that this treatise is not concerned with conspiracies or the like but rather appeals to the reality of the markets we trade in using concrete evidence to support the views expressed. Both sections are concerned with showing that the nature of human beings is to act, primarily, in their own self interest and how, if given the power to do so and not held accountable, others will suffer. This treatise, however, does not claim that nothing but bad has resulted from man’s pursuit of his own self interests but rather that a lot of bad has happened and will continue if it is not controlled. Therefore, we do not contravene Adam Smith's concept of The Invisible Hand (1690) where he stated that in man’s pursuit of his own self interest, he unknowingly acts in the interests of society [1]. Afterall, has this not created a competitive market where there are a whole variety of products one can choose from much of which is extremely cheap to buy' Products like coffee where international organisations like Starbucks sell a wide range of coffees grown from different parts of the world, some cheaper and some more luxurious, expensive and richer than others. The problem is that the richer nations have benefited at the expense of the less economically developed. For this treatise, the capitalistic market is used seeing as it embodies the self-interest concepts we are concerned with. Capitalism is a socio-economic system based on private property rights, including the private ownership of resources or capital, with economic decisions made largely through the operation of a free market rather than by state control[2]. In the treatise the word violence is used to refer to any act that results in a harm caused to an individual or group of individuals as a result of alienation. Inclusive of our definition is the following lines of Durkheim's (1897) view on anomie: “Anomy, in fact, begets a state of exasperation and irritated weariness which may turn against the person himself or another according to circumstances; in the first case, we have suicide, in the second, homicide.”[3] So, we intent to see how alienation and social deprivation can lead to non-fatal acts against, murder -whether it be directly applied (by killing those who own the means of exploitation or those rebelling) or indirectly (by being the cause of the harms incurred by others) -as well as the self inflicted harm. Private property rights and traditional society John Locke (1690) states that the defining moment when something becomes a person's own property to the exclusion of others to be when a person labours over something common thereby giving them exclusive rights over it: “Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property”[4] He says that the world and all its resources such as the trees, water- but most importantly the land itself where all the animals and fruits are found- have all been given to man in common i.e. everyone has a claim to all of it. However, as soon as a person makes an effort to attain a part of the common resource it automatically becomes his property. To maintain the balance though, he also qualifies this right by saying that the person only has a right to whatever s/he is able to use and benefit from. Anything beyond this that is not used or becomes obsolete before its use is still common and that person does not have a right to it: “He was only to look, that he used them before they spoiled, else he took more than his share, and robbed others.”[5] It is this natural order that created the traditional society in England (as with the rest of the world) where families owned lands and lived off it for their existence by consuming its vegetation and the livestock that grazed on it, selling the surplus- to which Locke agrees has been put to use though not consumed[5]. The quickest way of acquiring land was to purchase more land -as was possible for the richer families- but for the majority, not so well off common man, their acquiring of land was from either inheriting more land or marrying into a family who also had enough land to share out the food and profits generated. The Feudal System and the making of a social system However, as time progressed, this traditional way of live became unsuitable and insufficient namely due to the burst in the population growth particularly during the early first half of the 19th century[6]. This overpopulation led to the case where the piece of land a typical common family was living off could no longer suffice the needs of all its inhabitants. Accompanied with the heavy taxes ordered by the State for its maintenance and to fund the imperialistic wars it was waging, families were forced to find another way of surviving. For the common, poorer families the only option was to go out and find work to sell their labour thus becoming “…a commodity, like every other article of commerce…”[7]. This alienated the mass of the population from the decision as to what use their labour was put to seeing as they became part of the production process itself of which they had no say in. This created the social structure found in Capitalism where those who have control over the means of production are empowered and become the bourgeoisie (Marx 1828) just as Foster (1974) highlighted “under capitalism this alienation takes place in the process of production”[8]. Furthermore, the population boom meant that the demand for work exceeded the supply thus giving further power to the bourgeoisie owners of production who, if they so desired, could easily fire any employee and replace them with new ones more willing to work. This also meant that the bourgeoisie could continuously lower the wages knowing that the desperate proletarians will always fill the vacancies. It is important to note however, that it was not always the case that the bourgeoisie lowered wages and fired employees simply because they felt like it. Sometimes they did so because of the increase in tax they had to pay to fund the English wars with other nations competing for control over the seas and trade routes forcing them to cut wages even more and make redundant many of its workforce thus fuelling the tension. To further fuel the tension between the classes, it was during this century that the bourgeois discovered that by replacing its workers with machinery it could not only increase output but also dramatically reduce costs too. Feeling used and abused, whilst having the sympathy of some well-educated individuals (e.g. Marx and the petty bourgeoisie threatened by the competition of large sale production), these workers felt forced to rise up and try to create a system that took into consideration their conditions. It was clear that, although they had a certain degree of rights, this system neither cared much for their well-being nor would it do so unless they empowered themselves. The increase and cause of urban violence This uprise was continuously strengthened by their ever-increasing numbers seeing as more people were forced to join the proletarians. The petit-bourgeoisie (lower middle class) who were small tradespeople, shopkeepers, and retired tradesmen were unable to afford and compete with the scale of production of the richer bourgeois and so were thrown out of the competition simply because “their diminutive capital does not suffice for the scale on which Modern Industry is carried on…because their specialised skill is rendered worthless by new methods of production”[9]. Such people, who were more conservative than the other proletarians, in their desperate attempt to save themselves from joining them, joined the cause to demand more rights and power for the other classes. This rebellion, aimed also to eradicate the social structure created by the bourgeoisie control and any attempts to maintain it, led to the increase in urban violence. Scenarios where, as Foster (1974) records in his detailed book entitled ‘Class Struggle and the Industrial Revolution’, resulted in the burning of production plants, demonstrations turning into violent riots, the murders of some bourgeoisie and the brutal acts of the police force against the rioters authorised by the local governments -much of whom were rich enough to own land and means of production. So it has not been the case that those who have power and control over others, whether it is those who own the means of production or even the government itself, that they have always took the initiative of acting in the interests of the common people. After taking a look at the situation of the socially deprived areas of world today, we hardly see any difference even though governments have passed many laws aimed at preventing discrimination of the weaker population. Today we still see multinational companies exploiting their labour force and drive some consumers to desperate means. When not held to account, they make redundant many employees in pursuit of lower costs and ‘greater efficiency’ thus adding to the local unemployment. Such unemployed who then turn to desperate means such as petty crime and even murder for a mere survival and a way to support their families. Furthermore, we find examples of large organisations resorting to unethical means of making their consumers purchase products that result in them becoming dependant upon it. Shiva (2000) highlighted the huge debts incurred by farmers in India after being “lured by seed companies to buy... 'white cotton'”[10] -a type of hybrid cotton seeds that the farmers were convinced would make them millionaires. The seeds, which replaced and caused the native seeds to die out, proved very costly as they cannot be saved and so need to be bought every year making the farmers dependant upon the company to supply them with the seeds annually. Furthermore, the seeds were very venerable to pest attacks, which resulted in the $50 million a year spending on pesticide (a 2000% increase) much of which was bought through bank loans. The pesticides have also caused trees to stop bearing fruit, vast lands becoming water logged and wells to dry up. Much of the population either died (and continue to do so) from hunger, thirst or commit suicide to escape from the huge debts they cannot pay back. This exploitation, which is still affecting the lives of the Indian farmers today, goes to show that unless these markets are regulated properly, there will always be some people who are exploited for profit and, depending on the degree of anomie, will result in violence. International violence There are many examples we could use to show how the market creates nations superior to others in their economy and trade making these nations, small in number, powerful enough to control the majority of the world through these means. Nations whose leaders are empowered enough to enforce their way upon others seeking to profit out of it. Those nations who are willing to engage in violence to protect or gain control over foreign assets in order to maintain or increase their countries' competitiveness and economic superiority. Throughout history we can recall examples from the imperialistic eras where nations aimed to control major resources and ports. Examples like the Anglo-Dutch wars between England and the United Provinces to control the colonial possessions of the Portuguese and Spanish Empires; or the continuous invasion of Morocco, which links Africa and Europe, by the Phoenicians, Romans, Visigoths and others after them. Even today we still witness increased tension and wars between whole nations to control economic assets. However, for this section we will just discuss one example: the Gulf War. The reason is simple: it was the results of the Gulf War that, perhaps, had one of the greatest influence in the shaping of today’s world and the results will do for many years to come. Not only is it one of the best examples of how nations fought together to protect common economical interests but also of how economics was used to intimidate one another. Furthermore, the oil industry plays a crucial role in today’s modern society effecting the lives of everyone who uses it, particularly those people and countries who have a high dependence on it and, therefore, we anticipate that it will continue to influence the future actions of both the countries that continue to produce it and those who buy it. After the failure of America in Vietnam, the world-wide resentment to and the Americans’ loss of faith in its own government and its foreign policy as well as the attacks on the US embassy in Lebanon and on the US barracks in the early 1980s, Ronald Regan realised that the administration was in need of “…a set of principles to guide America in the application of military force abroad”[11]. Casper Weinberger, then US secretary of defence, created the famous six-principles of engagement of war which laid down six conditions that must be met before any future military intervention by the US -the first of which is: “1. No involvement in combat unless the vital interests of the US or its allies are at stake” [12] This means that, as of 1984, whatever foreign military force the US applies and has applied abroad the US has done so as it felt that its vital interests were threatened and so acted. Therefore, in the following example, involving the US, we know that of all the reasons their troops are sent abroad amongst it is to protect assets that they saw was vital to America whether politically, economical or both. After the Iraq-Iran war, Iraq incurred a huge $1.4 billion debt that was bringing the economy to a standstill. The following years witnessed growing tensions between Iraq and its neighbour Kuwait, who funded Iraq during the war, after it refused to pardon the debt and countered Iraq’s attempt to increase oil prices amongst other reasons. After realising that Kuwait, with its oil reserves, could solve this problem Iraq invaded Kuwait on August 2nd 1990 under the claim that it had been illegally slant drilling into Iraq’s share of the Rumaila Oil Field and that Kuwait was already a part of Iraq[13] -the first of many examples of how a country acts militarily against another for economic reasons whether to invade or to defend. Saddam Hussain invaded Kuwait in the hope that it could take over the oil fields to solve its debt and reap the rewards from the oil fields. It also meant that Iraq would gain more power and freedom in the Middle East and abroad to do as it pleases and have more control over the other nations (like America) that are either dependent on or effected by the oil industry. If any country angered Saddam, he would have had the ability to freeze trade between them or to increase the oil prices making that country less stable. Bush expressed how threatened and dependent America was on the 'vital economic interests' in Kuwait. Explaining what he meant by this he continued: “Iraq itself controls some 10 percent of the world's proven oil reserves. Iraq plus Kuwait controls twice that. An Iraq permitted to swallow Kuwait would have the economic and military power, as well as the arrogance, to intimidate and coerce its neighbors -- neighbors who control the lion's share of the world's remaining oil reserves. We cannot permit a resource so vital to be dominated by one so ruthless. And we won't.”[14] So here we see how valuable the oil is to a country like America particularly since, as stated later on in the speech, America was “...more dependant on foreign oil than ever before”. This is not surprising as America accounted for 2,685 million barrels of oil imports in 1990 alone making them extremely sensitive to any tension in the Middle East[15]. “Higher oil prices slow our growth”, he mentions, highlighting how the increase in Oil prices “...must- it will- be reduced”. Furthermore, under the Carter Doctrine extended by President Ronald Regan, the USA obliged itself to defend Kuwait, and in particular Saudi Arabia, for ‘economic stability’. All these facts show how a rich and powerful nation like America, as well as all the other countries affected, is so willing to enter into war if their economic prosperity is at risk. However, not only were the two nations (Iraq and America) willing to engage in military means to achieve their objectives but others, through the United Nations, used economic means to stop Iraq. The UN imposed mandatory economic sanctions on Iraq and the United States Navy prevented Iraq from exporting the oil and from trading with other nations. This meant that the Iraqis were cut off from food, beverages, materials, spices and all other trade crippling the economic prosperity of many particularly the families of those working in the trading industry. So, not only do we see how nations are willing to engage in violent means -whether partly or fully- over economic assets but we also see how the more powerful nations are able use economic means to intimidate and force others to obey. Conclusion Through the examples used in both segments of this treatise we discover that although markets may be progressive technologically, it cannot be said that markets are progressive socially as there are still vast areas of the world where the workers are not being treated equal by large multinational companies- some of which are government owned or backed. We see that in order for a few people to benefit from economies of scale and gain a better quality of life there must be some people whose expense it is achieved at. We cannot continue benefiting from a variety of good quality but yet cheap products if those companies responsible for manufacturing and/or selling the products experience higher costs. Equally, the richer nations cannot continue experiencing economic prosperity and dominate the markets if their vital economic interests are either at risk from being taken over by another or if the competition of foreign markets slow their economy down. Therefore, although it may be argued that markets like capitalism are progressive, this progression is certainly not inclusive of all as only a few stakeholders benefit at the expense of others whether it be socially, economically or politically. Notes [1] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations taken from: http://www.marxists.org [2] Definition taken from http://www.wiktionary.org [3] Emile Durkheim, Suicide: A study in sociology, New York 1966, page 357 [4] John Locke, Second treatise of civil government (1690)- chp 5: of property sec 5 [5] John Locke, Second treatise of civil government (1690)- chp 5: of property sec 46 [6] John Foster, Class Struggle and the industrial Revolution page18 [7] Karl Marx, Manifesto of the Communist Party, chapter 1: Bourgeois and Proletarians [8] John Foster, Class Struggle and the industrial Revolution page 4 [9] Karl Marx, Manifesto of the Communist Party, chapter 1: Bourgeois and Proletarians [10] Vandana Shiva on BBC Reith Lectures on http://www.news.bbc.co.uk [11] This can be found in President Ronald Regan’s auto biography which has been quoted in: Gilbert Achcar’s ‘The Clash of Barbarisms’ p17-18 [12] Casper Weinberger’s speech ‘The Uses of Military Power’ to the US Congress at the National Press Club, Washington DC, on the 28th November1984. [13] Taken from: http://en.wikipedia.org/wiki/Invasion_of_kuwait [14] George H. W. Bush speech to the join session of congress on 11 September 1990 taken from http://www.cyran.com, 41 days after Saddam Hussain invaded Kuwait. [15] Figures for oil imports taken from: http://www.tonto.eia.doe.gov/ftproot/features/art0012.pdf Bibliography Smith, Adam; An Inquiry into the Nature and Causes of the Wealth of Nations http://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book04/ch02.htm Foster, John; Class Struggle and the Industrial Revolution. Reprinted in 1979 by Billing & Sons limited Shiva, Vandana; ‘Poverty and globalisation’, BBC Reith Lectures (2000) http://www.news.bbc.co.uk/hi/english/static/events/reith_2000/lecture5.stm Marx, Karl; Manifesto of the Communist Party (1848). http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm Locke, John; Second treatise of civil government (1690) http://www.constitution.org/jl/2ndtr05.htm Achcar, Gilbert; The Clash of Barbarisms: the Making of a New World Disorder, Paradigm Publishers 2006 Durkheim, Emile; Suicide: A study in sociology, New York 1966. http://www.wikipedia.org http://www.wiktionary.org http://www.cyran.com Bush, George H. W.; Speech to the Joint Session of Congress, 11th September 1990 Weinberger, Casper; ‘The Uses of Military Power’, 28th November 1984. Harper, Robert. G.; Energy Information Administration/Petroleum Supply Monthly, December 2000, http://www.tonto.eia.doe.gov/ftproot/features/art0012.pdf