FRFI 154 / April / May 2000

Multinational corporations dominate every aspect of our lives. They are the driving force of globalisation, masters of the economies of imperialist powers, super-exploiters of the underdeveloped nations, the furnishers of lifestyles and increasingly the determinants of art and culture the world over. They are among the most powerful political forces of our time. How has this happened and how is it being combated? DAVID YAFFE discusses a new and inspiring book No Logo by Naomi Klein.1 Its central and simple message is that as more people discover the secrets behind the brand names of multinational corporations, their outrage will fuel the next big political movement.

The book's conclusion is based on a detailed examination of the largely underground movement of information, ideas, planning and protest across many countries and several generations of activists: a movement that was dramatically highlighted on 18 June 1999, at the time of the G-8 summit in Cologne, Germany, by simultaneous protest and action in some seventy cities worldwide, in what was called a 'global carnival against capital'. A coalition of groups, including Reclaim the Streets and People's Global Action, held protests and street parties around the world in financial districts, outside stock exchanges, banks, supermarkets and multinational headquarters. They displayed, says Naomi Klein, 'all of the movement's promise and creativity – and showed more forcefully than ever before just how much anticorporate rage is brewing' (p444). The book was written before the battles on the streets of Seattle during the World Trade Organisation summit in November/December 1999.2

How multinationals came to dominate our lives - A branded world

Naomi Klein argues that the astronomical growth of the wealth and cultural influence of multinational companies over the last 15 years can be traced back to an idea developed by management theorists in the mid-1980s: 'successful corporations must primarily produce brands, as opposed to products' (p3). Their real work, it was said, lay in marketing and not manufacturing things. Corporations had to concentrate their resources on building up their brand through sponsorships, advertising, packaging, innovation and expansion. They should buy products and brand them and spend on synergies – buying up distribution and retail networks – to get their brands to as wide a market as possible. The brand image is primary, the product secondary. Manufacture should be farmed out of the home country to contractors and subcontractors who will have the problem of fulfilling orders on time and within budget, ideally in underdeveloped countries where labour is cheap, unions and labour laws are non-existent and long tax holidays are available. Many companies now bypass production completely. Phil Knight, Chief Executive Officer (CEO) of Nike sums up their topsy-turvy rationale: 'There is no value in making things any more. The value is added by careful research, by innovation and marketing' (p197). Competition, therefore, comes down to a fierce battle between brands not products.

Advertising, says Naomi Klein, changes its function in this branded world. Instead of delivering 'product news bulletins' it has to build 'an image around a particular brand name version of the product' (p6). As a consequence, advertising expenditure has risen dramatically. US spending in 1998 at $196.5bn was nearly four times that of 1979. Global spending reached $435bn in 1996, up sevenfold since 1950, growing a third faster than the world economy. If all forms of marketing are included, the figure for global spending approaches a staggering $1 trillion.3 Little wonder that brands are expensive. Philip Morris paid $12.6bn for the multinational Kraft in 1988, six times its paper value because of its brand name (p7).

Marketing, advertising, and buying up brands, however, produce no value – a point Phil Knight cannot grasp and No Logo fails to make. They are paid for out of the super-exploitation of the factory workers who actually produce the products. That is why companies can no longer accept a traditional mark-up of 100% between the cost of factory production and the retail price but have been scouring the world for factories where costs are so low that the mark-up is closer to 400% or greater, with the wages of the factory workers, the real producers of the wealth, constituting an ever-shrinking slice of corporate budgets. Branding, as Naomi Klein correctly states, is indeed hogging all the 'value added' (p197) together with, we should add, the obscene salaries of the corporate executives and the spiralling costs of their marketing personnel. 

Behind the facade – super-exploitation

A great part of production for most multinational corporations is outsourced to contractors in Export Processing Zones (EPZs) in Asia and South America. There are around 1,000 EPZs in the world employing some 27m workers. The largest zone economy is China with some 18m people working in 124 EPZs. Naomi Klein visited some of these zones and vividly describes the barbaric conditions imposed on the workers, most of them young women. Cavite Export Processing Zone, the largest of the 52 EPZs in the Philippines, is typical. She calls it a 'branding broom closet'. It employs around 50,000 workers. It is a 682 acre walled-in industrial area containing 207 factories that produce only for the export market. Inside the gates workers assemble finished products for Nike running shoes, Gap pyjamas, IBM computer screens and Old Navy jeans. The factories are anonymous windowless workshops crammed next to each other only feet apart. You need to get inside the 'unbranded' workshops to know what is being assembled, often different branded goods side by side, and to see the 'lines of young women hunched in silence over clamouring machines'. The workday is long often 12 hours or more, the management military style, the supervisors often abusive, the wages are below subsistence and the low-skill work is tedious (p202ff). 

And temporary jobs

At the same time that multinational corporations are outsourcing production to underdeveloped countries, they are also reorganising their operations and cutting down their costs in their major markets in the imperialist countries. To do this they employ a fluid reserve of part-timers, temps and freelancers or even contract out the work to job agencies to keep their overheads down and respond to the upturns and downturns of the market. Wal-Mart, Starbucks, McDonalds, KMart and the Gap to name a few have been lowering workplace standards in the service sector to fuel their marketing budgets and expansion. Starbucks is typical. It has a software programme to ensure staff are employed only at the times needed, causing havoc with employees' lives. Wal-Mart has a similar policy. Barely any of the part-time staff earn a living wage. This, then, is the brutal reality behind the 'cool' facade of the multinational brands. 

Neo-liberalism opened the way

It is one thing to create brands but quite another for multinational companies to infiltrate them into every aspect of our lives, furnishing lifestyles, and becoming determinants of our art and culture. No Logo4 What began as sponsorship, a replacement of public funding, soon turned into a highly effective marketing tool (p34). points to the political and economic decisions which shaped this process. It would not have been possible without neo-liberalism, the deregulation and privatisation policies of nearly three decades, during which corporate and other taxes were dramatically lowered and the public sector was starved of adequate funding. As government spending fell, universities, schools, museums, broadcasting media and other public services became ripe for partnerships with private corporations. The ideological assault on the public sector – the presumption of its inescapable, bureaucratic inefficiency and wastefulness – that heralded the collapse of Keynesianism from the mid-1970s onwards accelerated this process.

No Logo is full of examples of multinational corporations marketing their brands through their infiltration of previously non-commercialised public space. Corporate access to education facing chronic underfunding was made easy through the equation with modern technology. Free computers are supplied to schools in partnership with local businesses. Inadequately funded music and sports facilities and student cafeterias allow fast-food chains such as Pizza Hut and McDonalds, drink multinationals such as Coca-Cola and Pepsi and sports gear companies such as Nike to fill the gap. TV companies are allowed to promote their own compulsory current affairs programmes, inclusive of adverts, to young children in exchange for use of their audiovisual equipment.

Corporations often make secret deals with universities preventing them 'disparaging' their brand. At Kent State University where Coca-Cola have exclusive vending rights, a Free Nigeria Movement speaker was denied funding by the student council because negative comments about Coca-Cola's business in Nigeria would be made. Corporate research partnerships at North American universities are used for everything from designing new Nike skates, developing more efficient oil extraction techniques for Shell, assessing the Asian market's stability for Disney and measuring the relative merits of brand compared to generic drugs. Publication of information or research critical of the corporate sponsor is often blocked or delayed to avoid losing sponsorship money (pp98-101). For example, at the University of California, Boots commissioned research hoping to show its high priced thyroid drug was more effective than a cheaper generic competitor. The results showed this was not the case. Boots successfully halted the publication of the research with the backing of the University. The results were finally published two years later after the matter was exposed in The Wall Street Journal (p99). Similar developments are taking place all over the world. 

Co-opting style, creating lifestyles

'Cool' is a major selling factor and multinationals hire 'cool hunters' to search out the styles and attitudes finding favour in the perennial teenage markets, utilising peer pressure as a powerful marketing force. No Logo shows how multinationals feed off the alienation at the heart of US race relations: 'selling white youth on their fetishisation of black style, and black youth on their fetishisation of white wealth' (p76). Nike borrows style from black urban youth – its marketers and designers send their prototypes to inner city neighbourhoods to check out the reaction and to create a buzz. They have a word for the practice 'bro-ing' from 'hey, bro, check out the shoes'. Tommy Hilfiger also harnessed 'ghetto cool' in mass marketing the leisure-style clothes associated with skiing, golfing and boating, which poor and working class kids wore to acquire status on the inner city streets. Rap artists were supplied with free clothes to launch the styles.

Nothing is sacrosanct. The book is full of examples of how revolution and revolutionaries, the labour movement, anti-racism and feminism, alternative music and even anti-corporate campaigns can be co-opted to become 'cool' selling features of a multinational brand. 

Fighting back

In May 1993 the Kader toy factory in Bangkok, Thailand burned to the ground killing 188 workers and injuring 469 more. The Kader women had been sewing toys for Toys 'R' Us. Yet few, says Naomi Klein, were prepared to make the connection between the burnt-out building and the brand name toys filling North American and European homes. It took two more years before those connections began to be made by both the public and the media. 'They're getting our jobs' gave way to 'Our corporations are stealing their lives' (p334). Today corporations face thousands of technically-competent, 'investigative activists' who are as globally connected as the corporations they track.

Nevertheless, argues Naomi Klein, opposition to the invasive advertising, the infiltration of public space and the monopolistic business practices of the multinational corporations behind the brands would have amounted to little more than run-of-the-mill cynicism had not these companies begun to close down factories and slash full-time jobs at home. She compares this to the last successful attack on advertising at the time of economic deprivation during the Great Depression in the 1930s. As with the attack on the brands today the adverts were attacked not for their faulty imagery as such but as the most public face of a deeply faulty economic system (p304). And she believes that it will be from the ranks of the millions of temporary workers, with few ties and little loyalty to the corporate system, that the true breeding ground of the anti-corporate backlash will most likely be found (p269). These are important points which demand further discussion and development as the new political movement starts to be formed.

The last sections of the book discuss the creativity and tactics behind the many different campaigns against multinational companies and their brands from culture jamming – distorting and disfiguring the adverts – through anti-sweatshop campaigns, the McLibel trial, Reclaim the Streets to the 'global carnival against capital'. Important points are drawn from the experience and will be of enormous value to activists involved in new campaigns.

Driving the new movement is disillusionment with the political process. Election of liberal or social democratic movements far from reversing neo-liberal trends over the last decade have found them catering 'even more directly to the whims of global corporations'. Similarly, attempts to regulate multinational corporations through the UN and other trade regulatory bodies have been blocked at every turn (p341).

Over a five-year period, reports Klein, the three-person New York office of the National Labour Committee, using Greenpeace-style media tactics, did more to highlight the plight of sweatshop workers by exposing the brutal reality behind some of the most famous logos than the international trade union movement achieved in a century. Its points were simple and crushing and were designed for impact. Typical are the examples relating to the production of Nike running shoes in China and Disney pyjamas in Haiti. All the workers at the Nike Yue Yen factory in China would have to work nineteen years to earn what Nike spends on advertising in one year. Disney CEO Michael Eisner earns $9,783 an hour, a Haitian worker earns 27 cents an hour. The plush living conditions of the dogs on the set of 101 Dalmatians – 'doggie condos' fitted with soft beds and heat lamps, cared for by on-call vets and served beef and chicken – should be compared with living conditions of Haitian workers – the malaria- and dysentery-infected hovels, where they sleep on cots, and are rarely able to buy meat or go to the doctor. The slogans are backed by highly creative rallies and imaginative actions (pp350-352).

The international campaign against Nike really began to get to the Nike corporation when the black youth of the inner-cities got involved. Nike's branding power is thoroughly intertwined with black celebrities such as Michael Jordan, Spike Lee, Tiger Woods and Bo Jackson. To get the youth involved the connection had to be made between Nike's overseas operations and conditions at home. That connection was waiting to be made. The very youth who have been manipulated to give the Nike swoosh its cutting edge were the very people most hurt by the company's outrageous prices and the non-existent manufacturing jobs. A social worker sick of seeing kids wearing trainers they couldn't afford and which their family couldn't afford told them how Nike shoes were made.

Workers in Indonesia are paid $2 a day, and it costs Nike $5 to make the shoes they bought for $100 and $180. Nike didn't make any shoes in the US, which is part of the reason their parents had a tough time finding work. The kids were especially angry at being taken for a ride and their campaign against Nike led to them dumping hundreds of their old Nike shoes at Nike town in their area. This was filmed and broadcast. One of the young activists, a 13-year-old boy from the Bronx, spoke into a TV camera: 'Nike, we made you. We can break you.' Nike had been forced to send its chief of public relations to listen to their demands: for a living wage for overseas workers with independent monitoring, for cheaper trainers, and for re-investment in the inner cities in the US. The dumping of the shoes was designed to force some action on those demands.

No Logo does point out the limitations of the anti-brand, anti-sweatshop campaigns and the dangers, all too evident, of the campaigns becoming glorified ethical shopping guides. Codes of conduct which the workers have no hand in drafting will have limited effectiveness. They can be taken on by multinational corporations, not to significantly change anything but 'to muzzle the offshore watchdog groups'. Human rights are far from being protected by this process but are selectively respected when in the spotlight. Multinational corporations can and do simply up their operations and go elsewhere where costs are lower and they are less likely to be troubled. To be only able to take up workers' collective rights and struggles in the context of what people consume is a serious problem (p428).

The linking up of the activists in the anti-sweatshop movement with the workers in the factories and workshops in Export Processing Zones did give workers and their organisations more impetus to organise against their brutal conditions. And that is the only sure way forward as Nidas Barcenas, an organiser at the Workers' Assistance Centre at Cavite, told Naomi Klein: 'The more significant way to solve these problems lies with the workers themselves inside the factory' (p440).

No Logo can point to some recent important advances as rivalries between the social/political and ecological movements are overcome in the unified battle to attack the corporate enemy. So the United Food and Commercial Worker's Union which began a campaign against Wal-Mart because of low wages and union-busting tactics now collects and distributes information on Wal-Mart stores being built on sacred Native American burial grounds. The McLibel Two took up the struggle of McDonald's workers for a living wage and decent conditions. Reclaim the Streets supported the Liverpool dockers. The connections are gradually being made.

Naomi Klein's conclusion is a challenging one 'Political solutions – accountable to people and enforceable by their elected representatives – deserve another shot before we throw in the towel and settle for corporate codes, independent monitors and privatisation of our collective rights as citizens'. Her book does not expand on such questions. Neither does she offer a theoretical framework to examine the likely developments within a crisis-ridden global capitalist system which will accelerate the process. In one sense the questions she raises inescapably lead to an issue that has been off the mainstream agenda since the collapse of the Soviet Union – of an alternative to the capitalist system and the fight for a real socialist society. In the meantime perhaps we should be grateful that such a substantial and inspiring book has been written about a new and alternative political movement.
 

1. Flamingo 2000 pp490 £14.99. All page numbers in the text refer to this book.
2. For an analysis and eyewitness report see Fight Racism! Fight Imperialism! (FRFI) 153 February/March 2000.
3. Figures on global advertising spending from the United Nations Human Development Report 1997 p63.
4. For a discussion of this development see David Yaffe 'The politics and economics of globalisation' in FRFI 137 June/July 1997.