Outsourcing has just one meaning but is interpreted in a thousand ways. For managers of multinationals it is an opportunity to make billions; for the functionaries of developing nations it is an opportunity to pocket bundles of cash; and for Asian workers it means starvation wages. In actual fact, its true meaning is perfectly harmless: namely, to streamline the production system by passing the production phases which will not be carried out in the company to third parties. Outsourcing is basically the lubricant for globalization.
To better understand the problem, we need to journey back in time to a few years ago, helped by Naomi Klein’s account in her book No Logo (Picador, USA, 2001). It’s April 2 1993, and the director of Philip Morris tells Wall Street that his company has decided to lower the price of Marlboro cigarettes by 20%. Heavens above! It’s a mad rush as all the dealers scramble back to their terminals – immediate sales of share parcels of the most prestigious brands. Needless to say, a real financial disaster took place on that day. Why did this news overturn the world’s economy? “The reason was that if a prestigious brand like Marlboro, whose image had been carefully studied and circulated with a promotional budget of over a billion dollars, was desperate enough to compete with unknown companies, the whole concept of branding had clearly lost its value” writes Naomi Klein, agreeing with the comments of the most respected economists.
We learn that it was actually a healthy cold shower for the multinationals, for whom a new era of astronomical success now began. The main perpetrator of this relaunch has a name: Phil Knight, managing director of Nike. His revolution began with the cry “Brands, not products!”. It is easy to make a shoe or a pair of jeans, no specialized technology or personnel are required, so the key now is: abandon American plants and make large-scale recourse to the famous outsourcing. Furthermore it only costs 5 dollars to make a shoe in the Third World, while in large western stores they are sold for 120 dollars. The money saved is used for expensive, ingenious publicity campaigns. So the whole production system is transferred to contractors in Vietnam, South Korea, Indonesia, the Philippines and China.
In No Logo, journalist Naomi Klein describes her trip to Cavite (a bonded area in the Philippines), which is similar to one of the Circles of Dante’s Hell for the workers, but a funfair for the multinationals. Illness, exhausting work hours (minimum 13 consecutive hours), wages barely above the subsistence level, no checks, no unions, sexual harassment. According to the International Labor Organization, at least 850 bonded areas exist worldwide, but the real figure is probably nearer 1000, in over 70 nations and using about 27 million workers. They are like states-within-states: the rules of the outside world are not applied inside their boundaries and contractors do not pay taxes for several years.
But No Logo also introduces a number of activists who are fighting brand society: saboteurs of advertising boards, demonstrators who challenged Shell on the Niger river delta, the hackers who declared war on multinationals’ computer systems which violate human rights. And Naomi Klein reveals names and surnames, with no fear of libel action: Nike, Reebok, Adidas, Wal-Mart, Philip Morris, Calvin Klein, Shell, General Electrics, Disney, McDonald’s, General Electrics, Gap, Ralph Lauren. No mystery, no holding back. She lines up all her enemies and nails them with precise accusations. They are not normal companies, they do not produce goods or provide services. They do not work to make our lives more comfortable and pleasant. They have cast off the role of simple industries to assume the far more demanding one of rulers and organizers of our lives. And in this they have succeeded through advertising, using poor kids from American ghettos as a life model for young well-to-do white kids, using the media-created air of mysticism surrounding sports champions like Michael Jordan and Schumacher.
Thanks to the questions it raises, and also perhaps due to its size, No Logo has been called the “Seattle People’s Bible”. It is a useful read, also in order to understand the extent to which the times have changed. In fact, this movement has on several occasions been compared to that of 1968. In those days youngsters were reading One-Dimensional Man by Marcuse; today they read Klein or Bové, journalists and people of action, not philosophers. Much more practice and less theory. You are what you wear.
Giancarlo Gariglio, a journalist, is a member of the Sloweb editorial staff