“The Jungle” by Upton Sinclair is a story that reveals the power of big business in late 19th century America. The managers and owners of these conglomerates, who were known as “Robber Barons” were ruthless. They had total dominion over all aspects of trade; manufacturing, loading, storing, transporting and delivery were all part and parcel of their profit. This automatically gave them a great deal of authority over the lives of their workers, most of whom were on very low wages, which ensured that the real profits of the business went into the pockets of those at the top. In other words, these “Barons” robbed the poor. However, their behavior was tolerated because the American people believed in the principle of free trade and did not want to see any government regulations being enforced on businesses.
In this day and age it seems that such practices are no longer acceptable. Strict laws have been introduced by most western countries in order to prevent the market place from returning to the jungle that Sinclair wrote about in his book. Fair play is of the utmost importance and hence no large corporation can gain total control in the market. These laws have been designed as a safeguard to prevent unfair business practices such as, price fixing. Secret transactions have also been eradicated and businesses must now be open and accountable.
The question is have these regulations eliminated unfair control in the market? The answer is categorically, no! The cause of the failure is equally simple; the laws are not enforced across the board in an egalitarian fashion. Favoritism is clearly evident when certain groups receive exemptions. Consequently, those groups that have political influence, like the agricultural sector, get special treatment. The agricultural sector consists of a diverse group; large multinational food producers, land-owners, farmer’s unions, to mention just a few, all of whom combine their resources to prevent the growth of any! competi tion on either the home or the overseas front. Government aid ensures that even if they indulge in financially inefficient methods and grow crops that are ill-suited to the marketplace or the climate, in order to protect their investment the government will be forced to join them and persuade the public that this is really what they want.
Sugar illustrates the above made claims. The most cost-efficient way to produce sugar is from cane, which grows in tropical countries. Sugar that is derived from beets, which is a cold climate vegetable, is far less cost-effective. This being said, developed countries with cold climates not only continue to support the uneconomical home market but they also put high import taxes on imported cane sugar. This irrational response is due to the power of the agricultural sector that are determined to ensure their sugar will be bought. There is no incentive for farmers to change to a crop that is more suitable to the climatic conditions of the country as long as they receive government support. This unfair trading system impacts both the local consumers and many developing countries which as a result of these tariffs cannot afford to export their produce. And so the rich get richer and the poor stay poor.
Another area where the trading practices are unfair is the fashion industry. This hugely profitable sector has government support that ensures that certain countries will be given an advantage. Certain countries in this instance happen to be first world countries. While the fair trade laws that have been set up to control the internal market do not necessarily apply to trade agreements with foreign powers, the clear discrimination against the developing world, which also provides the consumer with cheaper goods, is disturbing. How can it be justified to charge 20% import tax on every clothing item that comes from Bangladesh, 19% on those from India and 1% or even zero on those coming from developed countries such as France or England.
But according t! o many o f the leaders of the corporate world these measures of heavy taxes are needed. They maintain that there is no way they can compete with the products coming out of the third world. Their expenditure to produce the same product is so much higher that they have to be given some sort of advantage. And as long as these arguments appear to make sense, then governments will continue to protect local industry and penalize those whom they believe have an unfair advantage. But the third world countries have no advantages. The cycle of poverty that these countries are embroiled in will never end unless their industry is developed. And the pity is the conglomerates do not see any of this as an opportunity. Or if they do they see it, as Nike did, it is an opportunity to exploit cheap workers. How different it could be if the “Robber Barons” sent even one aspect of their business, such as assembly, to the third world, and set up the sort of system they employ in the first world. Everyone would benefit: the consumer, the developing country and even the corporations.
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