“…it is better to be educated than to be a thief.”

A short story about education.

There was this robbery in Guangzhou , the robber shouted to everyone: “All don’t move, money belongs to the state, life belongs to you”.

Everyone in the bank laid down quietly.

This is called “Mind Changing Concept –> Changing the conventional way of thinking”.

One lady lay on the table provocatively, the robber shouted at her “Please be civilised! This is a robbery and not a rape!”

This is called “Being Professional –> Focus only on what you are trained to do!”

When the robbers got back, the younger robber (MBA trained) told the older robber (who is only primary school educated), “Big bro, let’s count how much we got”, the older robber rebutted and said, “You very stupid, so much money, how to count, tonight TV will tell us how much we robbed from the bank!”

This is called “Experience –> nowadays experience is more important than paper qualifications!”

After the robbers left, the bank manager told the bank supervisor to call the police quickly. The supervisor says “Wait, wait wait, let’s put the 5 million RMB we embezzled into the amount the robbers robbed”.

This is called “Swim with the tide –> converting an unfavorable situation to your advantage!”

The supervisor says “It will be good if there is a robbery every month”.

This is called “Killing Boredom –> Happiness is most important.”

The next day, TV news reported that 100 million RMB was taken from the bank. The robbers counted and counted and counted, but they could only count 20 million RMB. The robbers were very angry and complained “We risked our lives and only took 20 million RMB, the bank manager took 80 million RMB with a snap of his fingers. It looks like it is better to be educated than to be a thief!”

This is called “Knowledge is worth as much as gold !”

The bank manager was smiling and happy because his loss in the CINOPEC shares are now covered by this robbery.

This is called “Seizing the opportunity –> daring to take risks!”

Foxconn & the Organic Composition of Capital

Originally From: http://economicsofimperialism.blogspot.ca/2011/08/foxconn-organic-composition-of-capital.html

“Foxconn, the world’s largest contract electronics manufacturer by revenue, plans to increase the use of robots in its factories 100-fold to 1m within three years, according to Terry Gou, chairman and chief executive.” (Financial Times, 1 August 2011)

Taiwanese company Foxconn has already made an appearance on this blog. Last time it was to give an example of how the exploitation of Chinese workers helps boost the profits of foreign companies.[1] Here it is to illustrate what Marx called the rising ‘organic composition’ of capital.

Marx’s theory of value analyses the form that social labour takes when workers have to sell their labour-power to capitalists,[2], the owners of the means of production. The sole motive for capitalist production is profit, and this is derived from workers receiving less value for hiring out their labour than they add to the value of the product when working. Competition forces capitalists to raise productivity in order to cut costs. But raising productivity means more things are made per worker in a given time, so this will increase the mass of means of production (raw materials, machinery, etc) compared to the number of workers employed and the labour they perform. Alongside this rise in what Marx called the ‘technical composition’ of capital, the value of the means of production will also tend to increase relative to the amount of the wage bill. The concept of the rising ‘organic composition’ of capital is used to refer to the process of capital accumulation where both the technical and the value compositions rise together.[3]

This combined ‘organic’ concept of the composition of capital is critical for understanding what happens to capitalist profitability. While the number of hours of surplus-labour determines the amount of the profit, the rate of profit is measured by this amount divided by the value of the total capital invested. Take the example of a typical worker. There is a limit to the amount of surplus-labour that can be performed which is set by the total working day. Yet there is no definite limit to the mass of raw materials and machinery that he or she can work with. So, over time, there is a tendency for the rate of profit to fall per worker, and in general across the capitalist economy. This is because the mass of profit will tend not to rise as much as the value of the capital invested in means of production. As the rate of profit falls, the system becomes more prone to crises. Marx’s theory shows how capitalism places limits on increasing productivity and is a barrier to social progress.[4]

Of course, there are many factors that affect how this trend works out in reality. It can be misleading to focus on particular examples, but Foxconn’s investment plans clearly show this dynamic at work. This company runs huge factories employing a total of a million workers in China alone. If its decisions are exceptional, it is only in their magnitude. The Financial Times report cited above gives the following details:[5]

Foxconn currently uses just 10,000 robots, below the normal level expected. The number of robots will increase to 300,000 next year and to 1 million in three years. This is a response both to the need to increase productivity and to the higher wages that Foxconn is forced to pay due to labour shortages, adverse publicity from the suicides of workers at its plants, etc.

Wages for the poorest paid (migrant) workers rose by 30-40 per cent last year and are expected to increase by another 20-30 per cent annually until at least 2013 (though this would still leave wages at barely a quarter of those in the US). This is in addition to an expansion of the workforce by several hundred thousand.

No further details were given in the FT report, but it can be estimated that while the company’s wage bill could rise by a factor of 3 in the next few years (higher wages and more workers), the number of robots will increase by a factor of 100. Other elements of the means of production may not increase by anything like as much as the extra cost of the robots, but the total investment in means of production could easily rise by a factor of 10. That would definitely increase the ‘organic composition’ of capital.

The impact of the investment on Foxconn’s profitability remains to be seen. Companies that innovate usually gain a competitive advantage that can boost profits for a while, until others do likewise. But Foxconn is subordinate to the demands of powerful companies like Apple, Dell, SonyEricsson, Nokia and others, so this is less guaranteed. Foxconn actually reported a loss of $220m in 2010, after only a small profit in 2009. This may be creative accounting as much as reality, since Taiwan’s Foxconn International Holdings is incorporated in the Cayman Islands!

Foxconn appears to be shifting away from brutal worker exploitation, based on long hours, terrible conditions and minimal pay, to a strategy that depends more on boosting productivity with further huge capital investments. Details are difficult to get, but one report indicated a $2bn investment in a new factory in China, which gives an idea of the scale of Foxconn’s operations.[6] The end result is a rising organic composition of capital.

Tony Norfield, 2 August 2011

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[1] See ‘What the “China price” Really Means’, 4 June 2011.
[2] The theory of value is a theory of the social organisation of labour under capitalism, extending to an analysis of the forms and dynamic of the system, including the theory of crisis.
[3] Marx introduces this concept in Chapter 25, ‘The general law of capitalist accumulation’, of Volume 1 of Capital. In Volume 3 he develops the analysis to explain the trend in the rate of profit and crisis.
[4] It is important to recognise that the limit to increasing productivity here is a capitalist-determined limit that comes from declining profitability. This is not a limit that comes from technological barriers on how far productivity might be raised.
[5] The bullet points are my interpolations from the article, based on other reports. The link to the FT article is: http://www.ft.com/cms/s/2/e5d9866e-bc25-11e0-80e0-00144feabdc0.html#ixzz1TnCPPKlc
[6] Bloomberg News, ‘Foxconn to Invest $2 Billion in New China Plant, Xinhua Reports’, 22 October 2010.

Matt On China, Is Bad On China

In my travels through the internet I’ve come across a lot written on China. This is a prime example of it; it’s from a blog called Matt On China[1]:

“I’d like to pause for a moment to reflect on these two criticisms: indebted to banks; and dependent on migrant workers without equal rights. Sound familiar? If you live in the United States then it should, because essentially you live in a giant Nanjie, but without the benefits. It’s interesting that such parallels can be drawn between a traditional communist village in central China and the world’s foremost capitalist nation. In this respect, Nanjie tells us less about different political systems and economic models, and more about human nature. It seems that no matter the circumstances or conditions, the incompetence of humans will bring about the same results: corruption; inequality; and exploitation.”

This paragraph is a complete mess.

I was able to find an actual source for the claim of being greatly in debt.[2] Perhaps it would have collapsed under the weight of this “massive debt” by now? Notice how the 2011 and 2012 articles shows it’s still using a commune like system. I going to go ahead and take this claim of a supposed “massive debt” as baseless. In actuality “it’s true Nanjie has a 1.7-billion-yuan debt, but it’s also true it has assets of 900 million yuan. So it is “nowhere near” bankruptcy.”

This is all from 2008, so by the fact that it is still here and operating, then they must be doing something right and surviving.

Even if this debt existed, it is completely illogical to think human nature had anything to do with it. Exactly how does human nature correspond to being “indebted to banks”? If a business owner is going about his producing when a global recession hits, he is unable to make profits and begin to go into debt in order to try and keeping going and survive the recession. Exactly how is the businessman responsible for going into debt? The circumstances were caused by market forces well beyond his ability to control, or even maybe even be able to see coming?

If a business takes out a loan to begin production and does not sell its product making a profit, then therefore it went into debt because of human nature. By this idiotic logic, anyone who isn’t in debt therefore isn’t human.

What he’s saying is absolute nonsense. What does human nature have to do with debt? Debt is a recent historical development that originated with commodity societies, which are recent modes of production. Rights are also a recent development. Migrant workers exist because there are several nation states. Guess what? These are also modern developments. Nanjie and the United States are both economic organizations that operate under the same logic of the market. Moreover, you only have 2 common points between the US and Nanjie, while I could find dozens points of divergence, so this is a false affinity.

* * *
[1] Matt On China, The Last Maoist Village in China http://mattonchina.com/2012/07/04/the-last-maoist-village-in-china/

[2] China Daily, The village and the controversy http://www.chinadaily.com.cn/30years/2008-11/18/content_7215934.htm

Norman Bethune A Hero, Conservatives Not

The Conservative Party are such terribly petty human beings sometimes. This time its over a monument to Norman Bethune, a Canadian doctor who exemplified self-sacrifice. He exemplified the spirit of doing what is right and helping people at risk to himself. He eventually died because of what he gave to the world in order to help the most disadvantaged and ravaged people. All this, even if you don’t take into account all the inventions he came up with that have saved literally millions of lives. He was the one who invented the mobile blood clinic, and surgery supplies during the Spanish Civil War that was the basis for the development of Mobile Army Surgical Hospital.

Bethune gave free medical care to residents of Montreal during the economic depression when no one could afford it. He was an early supporter of socialized medicine and formed the Montreal Group for the Security of People’s Health. With this alone it is no wonder the Conservative party doesn’t want a statue of him, or why that worthless wretch MP Rob Anders is slandering him. They would rather use money to go ahead and kill more in Afghanistan. Adequately showing what they really think about helping people. They would rather order killings from behind a an oak desk like cowards than than allow the PUBLIC’S money to be used for health care and education, the foundations of dignified human life.

This is how the Chinese remember Bethune in their textbooks:

” Comrade Bethune’s spirit, his utter devotion to others without any thought of self, was shown in his great sense of responsibility in his work and his great warm-heartedness towards all comrades and the people … We must all learn the spirit of absolute selflessness from him. With this spirit everyone can be very useful to the people. A man’s ability may be great or small, but if he has this spirit, he is already noble-minded and pure, a man of moral integrity and above vulgar interests, a man who is of value to the people (In Memory of Bethune, Mao 1939, pp. 337–338) “

What we get is the petty low life’s of the Conservative Party unwilling to recognize the sacrifice of a great man who gave everything he had to help the poor. All for the purpose of sticking their tongs out and saying “nah nah we don’t like those evil commies.”

CBC Article: http://www.cbc.ca/news/politics/story/2012/07/14/politics-tory-mp-anders-on-bethune-memorial-funding.html

China McDonald’s Accused of Expired Food

In the Chinese capital city of Beijing, a local McDonald’s is accused of selling food beyond its expiration date. China Central Television is reporting that a French retailer Carrefour is also selling expired food as well. The report claims that expired chicken products were served to customers. Also claimed was that chicken wings must be served 30 minutes after they have been cooked and that they were served 90 minutes after, 3 times longer than what company’s rules permit.

If that is not bad enough, the Chinese state television had also discovered employees at the Carrefour restaurant in the city of Zhengzhou altered the expiration dates by changing the time placed on food packages so that they may be used later than is recommended as safe.

CCTV reporters interviewed a spokesmen for the restaurant who apologized for the incident.

“McDonald’s China attaches great importance to this. We will immediately investigate this isolated incident, resolutely deal with it earnestly and take concrete actions to apologize to consumers.”

In the past McDonald’s has been frequently criticized for the way they do business. Accusations of errors in food preparation is nothing new to the food giant. This is one more example of the changes that has been brought to China as a result of capitalist economic reforms. These incidents are inevitable as a system based on profit drives towards cutting costs and increasing that profit at any consequence.

http://presstv.com/detail/232139.html

China & Russia Veto Action on Syria

The latest UN Security Council draft resolution for action against Syria has been vetoed by both Russia and China. The move was predicted by pretty much everyone involved. Both China and Russia made statements expressing their concerns over the draft, saying that it did not adequately reflect the situation on the ground. They both felt that what was contained in the resolution would negatively affect the situation and was likely to make matters worse through intervention. Russia and China were the only voting members to oppose the draft. And as permanent members of the UNSC, they had the option to use veto power to block the draft’s passage.

“China actively participated in the draft version of the UN resolution. But unfortunately the proposing nation, despite major disputes among various countries, forced a vote… Such practices do not help maintain the unity and authority of the UN Security Council, nor do they help to properly solve the issues. On the issue of Syria, China is not sheltering anyone, nor do we intentionally oppose anyone. We uphold justice and take a responsible attitude. Our goal is to make sure that Syrians are spared from violent conflict and war, not to complicate the issue.”

– Chinese Foreign Ministry spokesman Liu Weimin

“The Russian delegation was forced to vote against this draft resolution. We seriously regret this outcome of our joint work.”

– Russian UN Ambassador Vitaly Churkin

Both Beijing and Moscow felt that the wording of the draft was too vague and that it left an opening for military intervention which they feel would lead to more deaths than benefits. They also said that the draft favoured the side of the opposition forces over that of the Syrian government, that it was not their “place” to take sides in an internal conflict. Both China and Russia have maintained that this incident in Syria is an internal matter that needs to be solved by those in the country.

The United States did not react well to the pair of vetos. American Ambassador Susan Rice told the Security Council after the vote that she was “disgusted” with Russia and China in their decision not to go along wit the draft proposal. She warned that if action was not taken soon there would be more blood spilled in Syria. Russia responded with Vitaly Churkin saying that it was unfortunate that some colleagues have bizarre interpretations of their intent.

If history is any indication then I feel Syria should be left alone to deal with its own situation by itself. The so-called humanitarian interventions by NATO forces in the past have almost always lead to more bloodshed that it was claimed they were trying to stop. Libya is a good indication of that.

Christian Scott Bale Defends Nanjing Massacre Film

City of Life and Death is the name of a movie by Chinese director Lu Chuan which depicts the story of the Japanese massacre of the city of Nanjing. 70 years ago as Japanese Imperial troops occupied China, they massacred tens of thousands of men, women and children. The film depicts the reality of what happened to Nanjing under Japanese occupation, it shows scenes of rape, murder and cruelty. In an interview with the BBC, the director said he had wanted to make a movie that represented the truth of what went on in Nanjing. Lu Chuan said that it was his goal to show people why the Chinese sill have a tremendous amount of animosity towards the Japanese. This also comes at a time when the relations between the two countries is not very good.

During the film they show “both sides of the story”. In it is the tale of a Japanese soldier who eventually commits suicide. He said he also wants other Chinese to see that the Japanese are not monsters, but that they are people just like them. The film has generated a lot of angry denunciations from people in China. Many in China see this as an insult to those who died, attempting to drum up sympathy for the perpetrators. The subject of the Nanjing massacre is still a touchy subject. Especially in Nanjing itself.

Angry denunciations have come out about the film in the West too. Many on the right wing are claiming its “communist propaganda”. A hollow claim coming from people who think the fictional work “Red Dawn” is academy award winning material. It is a true story of a crime against humanity that was committed by the Japanese Empire.

The problems did not stop there. While the film was being made, there were reports of altercations between Japanese and Chinese actors. There are also a report of a fight between actors. During a scene in which Japanese soldiers were dancing to the beat of a drum, which had drummers brought in from Japan, got angry from noise around him and hit a Chinese actor.

As angry sentiment around the film began to rise, Christian Bale who stars in the movie publicly defend his role in it. He said that the movie was far more a movie about human beings and the nature of human beings’ responses to crisis”. He said it was a historical piece, and anyone describing it as propaganda was not looking at it closely enough.

According to the director, and many of his compatriots, the Japanese have not yet properly apologized for their wartime aggression – including the Rape of Nanjing.