When French economist Thomas Piketty declared the 21st century a new “gilded age” in his seminal work, Capital in the Twenty-First Century, he was acutely aware of the impact that mass wealth accumulation had on human rights and equality across the globe. While proponents of capitalism have long argued that, in its purest form, capitalism can bring about healthy competition, egalitarianism, and accessibility, the late-stage capitalism that, at present, dominates the global system, has instead become a means of exploitation for those at the bottom. In light of the ongoing pandemic and climate crisis, which have only further exposed the ills of capitalism and widened the disparities between the so-called “haves and have nots,” the entire system is due for serious re-evaluation.
CAPITALIST STRUCTURE
While capitalism comes in many forms, the central tenets that underpin capitalist systems are common amongst almost all market economies. The structure of capitalist economies is dependent upon the following: maximisation of profit, the existence of private property, free and accessible markets, market mechanisms that self-correct, and the free exchange of labour and services vis-à-vis the division of labour. Additionally, behavioral economists have emphasised the role of intangible elements like “self-interest,” which drive the market forward and push individuals toward innovation and competition. In today’s economy, this “self-interest” is realised in the spirit of entrepreneurship that supposedly bolsters the free exchange of goods and services. However, what the pandemic and current global system have revealed is something far more sinister. Without due and enforceable regulation, the most obvious of the aforementioned tenets, maximisation of profit has become a means of exploitation and exists to the detriment of human rights across the world and has forced the question: can human rights and capitalism coexist?
PROFIT PRINCIPLES
Perhaps the most central idea that upholds capitalist economies is the maximisation of profit. Human rights have taken a back seat as companies and individuals seek to maximise their financial gain and fulfill their corporate mandate to maximise shareholder profit. In a globalised economy, the maximisation of profit has been linked to a “race to the bottom,” wherein companies seek the cheapest labour possible and export primary production to countries typically located in the Global South where a lack of enforced regulation on industry and labour leads to serious abuses. This phenomenon produces the images we see today of overcrowded, unventilated garment factories and unsafe mining conditions across Southeast Asia, Africa, and Latin America. In this system, abuses are not only tolerated but profitable.
But, who profits? Certainly not workers. According to the latest report by the International Labour Organization, millions of workers around the world reside in countries where no minimum wage exists and where labour standards are either dismal or effectively nonexistent.
DECISION TIME FOR COMPANIES ON CHINESE COTTON
An example of the race to the bottom phenomenon can be found in the Xinjiang province of China. 20% of the world’s cotton is produced in this province, and workers are forced into slave labour-like conditions and often are given little to no pay. As a 2020 report by Newlines Institute on the cotton industry in China concluded, there is strong evidence “that the production of the majority of Xinjiang’s cotton involves a coercive, state-run program targeting ethnic minority groups”. Given the global consumption and distribution of Chinese cotton, the implications of this report could be wide reaching.
In order to maximise shareholder profit and keep costs low, clothing brands have long ignored accusations of child and forced labour violations in the cotton industry in China. Only in recent months have companies like H&M, Nike, and Zara denounced the use of forced labour after pressure from labour rights organisations on social media. As Sophie Richardson of Human Rights Watch noted on this issue, “[t]his is a litmus test of companies’ upholding their human rights commitments”. The US, European Union, United Kingdom, and Canada also recently announced sanctions against China in an effort to pressure the government to reconsider human rights policy and the treatment of Uyghur Muslims in Northwest China. This level of mounting political and economic pressure could force companies to choose between the ethical and the economic on not only this issue but many others.
HOPE FOR THE FUTURE
While the profit motive should not be a factor in determining the treatment of individuals, the current system seems to necessitate financial impact to facilitate reform. With increased awareness and transparency in supply chains and sourcing, consumers can make more informed decisions about where their products come from, how they are produced, and the possible implications of their purchases on someone living half a world away. All consumption in a capitalist system implies a choice and a preference. If consumers can signal to corporations that they will not lend their financial support to products made by those without livable wages or free and fair working conditions, companies will be forced to adapt in the name of profit.
Of course, the solution is two-fold. Corporations are responding to their environment and to the way the system has been designed to work, and government regulation and a common policy on an international scale will be needed to address the nexus between human rights abuses and capitalism. Fortunately, if money talks, then boycotts, and public pressure from NGOs, consumers, and international labour organisations can be an effective tool in shaping a more ethical corporate sourcing policy for all companies and in lessening the negative impact capitalist structures have on human rights around the globe.
Alexandra Smith is a recent graduate of Loyola University Maryland where she studied Political Science and Philosophy. Alexandra is an incoming Master's student at the Katholieke Universiteit Leuven in Belgium where she will focus on European Union governance and foreign policy. Her research and academic interests include international relations, game theory, genocide studies, and continental philosophy.