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Don't cry over spilt beer - Red Stripe and the cold, hard facts of capitalism
Published: Sunday | October 23, 2011 1 Comment
Trevor Campbell
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Trevor A. Campbell, Contributor
The current obsession in Jamaica with the politics of political succession - with special emphasis on the chronological age of political leaders - is overshadowing a recent event that has much greater significance for how the economic and political struggles between the social classes in Jamaican society will be managed in the coming years.
I am referring to the announcement in the Jamaican press that Red Stripe plans to move production of its beer destined for the US to North America, which will result in the loss of jobs.
Richard Byles, the chairman of Red Stripe, summed up the company's strategic decision with the following words: "It's a tough decision. It does involve jobs ... . Within this economic environment, it is a tough decision. What is clear, continuing on this path [keeping production in Jamaica] is going to end up one place - a company that is weaker overall."
Individuals who are burdened with naïve and misconceived notions regarding the nature of capitalism and capital accumulation would most likely condemn this move by Red Stripe as being unpatriotic, and not in the nation's best interest. Similar charges are often levelled at well-known US corporations that have been shifting a significant segment of their manufacturing activities to various parts of the globe, for quite a number of years, as part of their corporate global strategy. In other words, what Red Stripe is doing is quite consistent with the objective demands that capitalist competition is imposing on corporations in this era of globalised capitalism.
The primary objective of capitalist production
Politicians and their advisers talk - in very generalised and abstract terms - about 'economic growth' and 'sustainable economic development' as if the primary goal of capitalist production is not the accumulation of capital (that is, the continuous expansion of the capitalists' wealth). The managers of capital are compelled to do what they have to do in order to, at the very least, maintain the rate of profit on the investment. Mr Byles appears to be very clear on this and, as long as he continues to deliver on what he was hired to do, he will, more than likely, retain his position.
Politicians, on the other hand, are inclined (irrespective of their age) to tell the voters - the workers - what they think they want to hear, as part of their attempt to remain in or get into office. In other words, the politicians must tell the working class that, if they elect them, they are going to make jobs available.
In order to have a systematic discussion on the above points, it might be useful for us to situate the dialogue within a conceptual framework that includes outlining the fundamental features of the capitalist economy, which will, hopefully, help more people develop a better understanding of why the managers of corporations such as Red Stripe and General Electric are being compelled to do what they are doing, in spite of their personal feelings or the subjective whims of this or that corporate leader.
For instance: President Obama is being heavily criticised for appointing the CEO of General Electric (GE), Jeffrey Immelt, to head up the President's Council on Jobs and Competitiveness. According to Chris Townsend, the political action director of United Electrical, Radio and Machine Workers of America, which represents 3,500 General Electric workers: "They call it the jobs and competitiveness committee, but what they mean by competitiveness is massive concessions being imposed on working people.
General Electric has closed 31 US locations and cut 22,000 jobs in the last four years. It has cut wages of non-union workers and, in the most recent union contract, required employees to pay higher deductibles for health insurance and eradicated pensions for new employees." (Los Angeles Times, October 9; The Wall St Journal, October 10)
Nevertheless, President Obama is keenly aware that he cannot successfully compete in the capitalist electoral arena (the political marketplace) without massive amounts of cash from the coffers of the corporate titans. And, on the other hand, he must tell the working class what he thinks they want to hear - that jobs are forthcoming and that they will be provided with the means to feed their families. Here lies the source of the contradiction that he is clearly struggling to manage!
We can even imagine how Mr Byles (who at one time had some connections to the now-defunct Workers' Party of Jamaica) could very well have had his brief moment of anguish as he made the decision to eliminate the jobs of 70 Jamaica-based workers, in the process of shifting production to the North American mainland.
Corporations are formed and exist to facilitate the accumulation of wealth (capital) for its owners, investors/shareholders. Everything else is subordinate to this primary objective. Corporate managers and their staff are hired to manage the assets of the corporation on behalf of its owners/shareholders. The ultimate criterion for measuring the success or failure of any management team is the amount of return, in the form of profit, that the investors are making on their investment. In other words, quantitative considerations - how to maximise profit - must, of necessity (within the confines of the capitalist mode of production), be accorded the privileged position over all so-called 'qualitative' concerns. If one doesn't understand this basic economic law of capitalist production, it becomes easy to get dragged into useless discussions about 'economic growth without development', etc. This is what occurs among the clueless academics/ideologues at the universities.
Well-managed corporations do not purchase labour power (which is sold by the worker) if that particular labour power is not perceived as increasing the wealth of the corporation. If the workers' past labour (crystallised in the form of a robot) is cheaper and can be used by fewer workers to produce more value for the owners of capital, some of the workers will have to be eliminated. Nothing personal here! This is economic necessity, as defined by the objective needs of capital. Capitalist competition drives this process.
Saving the jobless
Of course, the workers who are laid off/eliminated still have to eat to stay alive. That is something that the politicians will have to worry about. In other words, how do the politicians and the managers of the capitalist state manage this growing mass of individuals who are being rendered economically obsolete by what is now becoming robotised capitalist production? That is one of the major questions of our time!
The corporations will only finance those politicians who they perceive to be creating or maintaining the type of social and political environment that is conducive to the specific needs of their respective corporations and industries. As was said earlier, they are not interested in 'economic growth', per se; what they are concerned about is how to maximise the profit on the investment, which translates into the further accumulation of capital for their respective shareholders.
In early June, the then minister of industry, investment and commerce, Karl Samuda, sounded very optimistic regarding Red Stripe's long-term commitment to the manufacturing process in Jamaica. During a tour of Red Stripe's factory, he remarked: "It is very encouraging to see that Red Stripe seems to place importance on its workers through continuous training and the arming of the workforce with appropriate technology to increase productivity." The now former minister of industry then goes on to talk about his expectations for the manufacturing sector, as a whole:
"I want to see that this sector is prepared to continue to invest and that we can look forward to increased exports, because without manufacturing for export, we can't earn the foreign exchange to be able one day, with open arms, love and appreciation, say goodbye to the IMF."
Technological modernisation
What Samuda, his colleagues and their advisers seem oblivious to (or would rather not contend with) is the fact that competitive corporations - battling to survive in this era of globalised capitalist production - are not in the business of trying to meet some vaguely defined, so-called national economic objectives, whether called "sustainable economic development through the use of appropriate technology" or any other sexy-sounding set of platitudes.
The technologies that are deployed in all aspects of the production and distribution processes are designed to decrease the time in which the commodities are produced and delivered to the market. This also requires that the managers find ways of reducing the cost of all forms of energy, including human energy. If a robot can perform the various activities more efficiently and more cheaply than the human being, the human being will be replaced. (See 'Who needs humans?', Newsweek, July 18, and 'Cheap Robots vs Cheap Labor', New York Times, August 14)
The organisational structure that is now considered by several of the leading corporate strategists to be the most appropriate form for the worldwide accumulation of capital is called the globally integrated enterprise (GIE). (For a clear exposition on the nature of the GIE, see Samuel J. Palmisaro's (CEO of IBM) 'Leadership, Trust and the Globally Integrated Enterprise')
In this regard, let us not forget that Red Stripe is now part of a larger family with a global reach: Diageo Plc. The point being made here is that no manufacturing entity (or manufacturer) can survive in Jamaica (or for that matter, anywhere else) unless it is an integral part of a global supply chain, within a globally integrated enterprise.
In my next piece, I will address the challenges that confront the political managers of the nation states, particularly areas such as the Caribbean, as they try to cope with the contradictions emanating from the process of globalised capitalist accumulation.
Trevor A Campbell is a political economist. Email feedback to columns@gleanerjm.com and tcampbell@eee.org.
I am referring to the announcement in the Jamaican press that Red Stripe plans to move production of its beer destined for the US to North America, which will result in the loss of jobs.
Richard Byles, the chairman of Red Stripe, summed up the company's strategic decision with the following words: "It's a tough decision. It does involve jobs ... . Within this economic environment, it is a tough decision. What is clear, continuing on this path [keeping production in Jamaica] is going to end up one place - a company that is weaker overall."
Individuals who are burdened with naïve and misconceived notions regarding the nature of capitalism and capital accumulation would most likely condemn this move by Red Stripe as being unpatriotic, and not in the nation's best interest. Similar charges are often levelled at well-known US corporations that have been shifting a significant segment of their manufacturing activities to various parts of the globe, for quite a number of years, as part of their corporate global strategy. In other words, what Red Stripe is doing is quite consistent with the objective demands that capitalist competition is imposing on corporations in this era of globalised capitalism.
The primary objective of capitalist production
Politicians and their advisers talk - in very generalised and abstract terms - about 'economic growth' and 'sustainable economic development' as if the primary goal of capitalist production is not the accumulation of capital (that is, the continuous expansion of the capitalists' wealth). The managers of capital are compelled to do what they have to do in order to, at the very least, maintain the rate of profit on the investment. Mr Byles appears to be very clear on this and, as long as he continues to deliver on what he was hired to do, he will, more than likely, retain his position.
Politicians, on the other hand, are inclined (irrespective of their age) to tell the voters - the workers - what they think they want to hear, as part of their attempt to remain in or get into office. In other words, the politicians must tell the working class that, if they elect them, they are going to make jobs available.
In order to have a systematic discussion on the above points, it might be useful for us to situate the dialogue within a conceptual framework that includes outlining the fundamental features of the capitalist economy, which will, hopefully, help more people develop a better understanding of why the managers of corporations such as Red Stripe and General Electric are being compelled to do what they are doing, in spite of their personal feelings or the subjective whims of this or that corporate leader.
For instance: President Obama is being heavily criticised for appointing the CEO of General Electric (GE), Jeffrey Immelt, to head up the President's Council on Jobs and Competitiveness. According to Chris Townsend, the political action director of United Electrical, Radio and Machine Workers of America, which represents 3,500 General Electric workers: "They call it the jobs and competitiveness committee, but what they mean by competitiveness is massive concessions being imposed on working people.
General Electric has closed 31 US locations and cut 22,000 jobs in the last four years. It has cut wages of non-union workers and, in the most recent union contract, required employees to pay higher deductibles for health insurance and eradicated pensions for new employees." (Los Angeles Times, October 9; The Wall St Journal, October 10)
Nevertheless, President Obama is keenly aware that he cannot successfully compete in the capitalist electoral arena (the political marketplace) without massive amounts of cash from the coffers of the corporate titans. And, on the other hand, he must tell the working class what he thinks they want to hear - that jobs are forthcoming and that they will be provided with the means to feed their families. Here lies the source of the contradiction that he is clearly struggling to manage!
We can even imagine how Mr Byles (who at one time had some connections to the now-defunct Workers' Party of Jamaica) could very well have had his brief moment of anguish as he made the decision to eliminate the jobs of 70 Jamaica-based workers, in the process of shifting production to the North American mainland.
Corporations are formed and exist to facilitate the accumulation of wealth (capital) for its owners, investors/shareholders. Everything else is subordinate to this primary objective. Corporate managers and their staff are hired to manage the assets of the corporation on behalf of its owners/shareholders. The ultimate criterion for measuring the success or failure of any management team is the amount of return, in the form of profit, that the investors are making on their investment. In other words, quantitative considerations - how to maximise profit - must, of necessity (within the confines of the capitalist mode of production), be accorded the privileged position over all so-called 'qualitative' concerns. If one doesn't understand this basic economic law of capitalist production, it becomes easy to get dragged into useless discussions about 'economic growth without development', etc. This is what occurs among the clueless academics/ideologues at the universities.
Well-managed corporations do not purchase labour power (which is sold by the worker) if that particular labour power is not perceived as increasing the wealth of the corporation. If the workers' past labour (crystallised in the form of a robot) is cheaper and can be used by fewer workers to produce more value for the owners of capital, some of the workers will have to be eliminated. Nothing personal here! This is economic necessity, as defined by the objective needs of capital. Capitalist competition drives this process.
Saving the jobless
Of course, the workers who are laid off/eliminated still have to eat to stay alive. That is something that the politicians will have to worry about. In other words, how do the politicians and the managers of the capitalist state manage this growing mass of individuals who are being rendered economically obsolete by what is now becoming robotised capitalist production? That is one of the major questions of our time!
The corporations will only finance those politicians who they perceive to be creating or maintaining the type of social and political environment that is conducive to the specific needs of their respective corporations and industries. As was said earlier, they are not interested in 'economic growth', per se; what they are concerned about is how to maximise the profit on the investment, which translates into the further accumulation of capital for their respective shareholders.
In early June, the then minister of industry, investment and commerce, Karl Samuda, sounded very optimistic regarding Red Stripe's long-term commitment to the manufacturing process in Jamaica. During a tour of Red Stripe's factory, he remarked: "It is very encouraging to see that Red Stripe seems to place importance on its workers through continuous training and the arming of the workforce with appropriate technology to increase productivity." The now former minister of industry then goes on to talk about his expectations for the manufacturing sector, as a whole:
"I want to see that this sector is prepared to continue to invest and that we can look forward to increased exports, because without manufacturing for export, we can't earn the foreign exchange to be able one day, with open arms, love and appreciation, say goodbye to the IMF."
Technological modernisation
What Samuda, his colleagues and their advisers seem oblivious to (or would rather not contend with) is the fact that competitive corporations - battling to survive in this era of globalised capitalist production - are not in the business of trying to meet some vaguely defined, so-called national economic objectives, whether called "sustainable economic development through the use of appropriate technology" or any other sexy-sounding set of platitudes.
The technologies that are deployed in all aspects of the production and distribution processes are designed to decrease the time in which the commodities are produced and delivered to the market. This also requires that the managers find ways of reducing the cost of all forms of energy, including human energy. If a robot can perform the various activities more efficiently and more cheaply than the human being, the human being will be replaced. (See 'Who needs humans?', Newsweek, July 18, and 'Cheap Robots vs Cheap Labor', New York Times, August 14)
The organisational structure that is now considered by several of the leading corporate strategists to be the most appropriate form for the worldwide accumulation of capital is called the globally integrated enterprise (GIE). (For a clear exposition on the nature of the GIE, see Samuel J. Palmisaro's (CEO of IBM) 'Leadership, Trust and the Globally Integrated Enterprise')
In this regard, let us not forget that Red Stripe is now part of a larger family with a global reach: Diageo Plc. The point being made here is that no manufacturing entity (or manufacturer) can survive in Jamaica (or for that matter, anywhere else) unless it is an integral part of a global supply chain, within a globally integrated enterprise.
In my next piece, I will address the challenges that confront the political managers of the nation states, particularly areas such as the Caribbean, as they try to cope with the contradictions emanating from the process of globalised capitalist accumulation.
Trevor A Campbell is a political economist. Email feedback to columns@gleanerjm.com and tcampbell@eee.org.