Posted: 07 October 2012 at 10:39pm | IP Logged
Many countries, particularly in the Global South, never developed industrial capacity to produce goods for themsleves. In the mercantilist era, Europe funded its industrial revolution and developed cutting edge technology (especially from profits made from free labour/slavery or wealth from the colonies), Europe's colonies (most countries in the Global South) were forced to produce raw materials or certain non-subsistance goods for export. They were then also forced to import all these finished/processed goods that were more expensive. The rationale used was that everyone should produce what they were "good" at. But this obviously led to massive underdevelopment or unequal development, which became the basis of global power. Funny thing with global power is that it operates not just through militaries, but also through ideas. All these economic policies were pushed onto formerly colonized countries that ended up worsening the problem.
At one point, countries such as India tried to follow something called Import Substitution Industrialization (ISI) where they wanted to try and produce refined/finished products for themselves instead of importing them. But this didn't work very well, because there was a need for huge capital costs (and the revenue was just not there), and many of these countries simply didn't have the infrastructure to "catch up." At one point, there was a turn again towards importing goods and exporting what you can produce the cheapest.
Yet another turn took place when nation-states became basically weak and ineffective at controlling the global economic elite (the new corporations, multinationals, etc.) who threatened to pick up and leave to wherever they got the cheapest labour costs, and the least regulations, such as environmental, etc. You also had some like Margaret Thatcher and Ronald Reagan who kind of helped define these right-wing roles for the state - the state's main job became to protect finance capital, to keep the inflation rate low, etc. rather than coming up with long-term economic sustainability, etc. That's when the free trade agreements and all those things happened, to basically accomodate these big companies. India, for example, used to have before the 90s, a fairly "closed" economy where national industries were supported. But once foreign companies entered the market (such as Coke, for example) they effectively shut down those national companies because they simply couldn't keep up.
So long story short, the reason why products are made in all these places is because it costs the company barely anything, and these countries won't enforce any labour laws because they don't want to lose the investment. Some of them (China, America, etc.) are also countries in which organized Labour/trade unions are really weak and ineffective.
National industries in underdeveloped countries never had a chance, so many of them went kaput. And we are a in a difficult situation now globally, because these big companies can threaten to "pull out," as it were, if they are forced to be accountable. We are in a totally unsustainable situation and unless there's a revolution of some kind, we can expect nothing but a downward spiral.