I just finished reading "No Logo" by Naomi Klein, which is a book about the globalization of corporate marketing. The book was published in 2000 and parts of it hold up very well while other parts do not hold up so well. 

The first two parts of the book hold up the best, and they are about how corporations have ceased to make any actual products and instead focus on their brand, which is to say that they spend most of their efforts on trying to create a brand identity through advertising and marketing. An example of this is Nike, which in the 1970's made a decision to not focus on shoes, but instead focus on being about "transcendance through sports." Nike today is a huge company which sells sneakers for hundreds of dollars that cost pennies to make in third-world sweatshops, and has such a well-known brand that I didn't even think twice when reading about people tattooing the Nike swoosh on themselves. Nike was one of the first companies to realize that what people think about your brand is more important than your actual products, and that realization turned Nike into a global behemoth.

After Nike's success with this model, other companies followed suit, and led to the creation of the "consumer-based economy" we have today, which basically means that companies don't really do much of value - they instead spend ridiculous amounts of money trying to create demand for their products with marketing. Look at pretty much any expensive designer clothing - do people buy it because they think it's better quality, or do they buy it because they like what they think the brand represents? If people think something is better they will pay more for it, regardless of the actual quality or any other actual physical attributes. Take a pair of jeans from Walmart - people are going to think they are cheap and low quality, when in reality you can take the exact same jeans made in the exact same sweatshop and put a Calvin Klein label on them and people will pay a lot more for them and say they are stylish and high quality.

Here's another example - Tylenol versus generic acetominophen. The brand-name Tylenol is more expensive, because it is more expensive people assume the quality is better. In reality a chemical is a chemical, there is no difference between one acetominophen molecule and another acetominophen molecule - when you pay more for Tylenol you are essentially just paying to watch advertisements on TV - because that is the only difference between brand-name and generic. Of course the corporations have invested billions of dollars to convince you that the logo on the bottle is worth the extra money, and most people are never going to question something which has been drilled into their head repeatedly over their entire lives through advertising.

Before reading this book, I never really got the arguments against globalization. My thought was always that globalization makes cheaper goods available, and if I have the extra money and want to support local businesses I have the option to do that. This book explains how corporations made insane amounts of money by having their goods produced by overseas contractors in third-world sweatshops for pennies, and then selling those goods in first-world countries for insane profit margins, and that the only real value add of the corporation is the marketing they do. There was a popular book a while back called the "Four Hour Work-Week" the thesis of which was basically applying the corporate globalization model on a personal level - you hire people in China or India or another place where people will work for pennies, and have them do your work for you. So you spend a few hours a week overseeing them, and charge first-world rates for the work you have done for third-world rates. 

Globalization is a very complex topic with a lot of angles and nuances, and I'm not totally sure that it is totally a bad thing, but it is clear to me that it has contributed greatly to the income inequality which is growing steadily in the US, and it is clear to me that corporate greed is out of control. Whether there is a solution I don't know. Capitalism is based two concepts - that money is the most important thing there is, and that if everyone is greedy and makes rational decisions based solely on their self-interest everything should work out in the end. If the entire world economy is based on these ideas how can you expect corporations to act any other way than the way they do? After WWII corporations tended to be a bit more socially responsible and care for things like their employees more than their bottom line, but companies that sacrifice profits by the greater good will lag behind those that don't care about anything other than their profits.

The second half of the book talks about a lot of anti-corporate movements, most of which don't exist anymore, so doesn't hold up as well as the first half. In the afterword Ms. Klein talks about how 9/11 killed the anti-globalization movements by scaring people into giving up their civil rights and by fostering an atmosphere where being anti-corporate was portrayed as being anti-American. People were encouraged to go out and buy as much as possible to keep the economy going and told that not doing so was unpatriotic. We did see some vestiges of the anti-corporate movements in the Occupy Wall Street protests a few years ago, and we saw some more in Bernie Sander's recent presidential campaign. But with the upcoming President Trump saying he basically wants to give corporations free reign and no taxes, who knows what will happen over the next four years.

There is a bit of an unintentional poignancy to this book in it's descriptions of the early days of the Internet. Back when the book was written the Internet was revolutionizing communication by allowing people to share and find information and to communicate with other people, bypassing the coporate controlled mainstream media. This was before online advertising really took off, when websites existed to share information rather than to attract as many eyeballs as possible to see as many ads as possible. Once people started to be able to make serious money by showing advertisements on web sites, the Internet radically changed as people started launching websites with the goal of getting as many visitors as possible, and the profit motive corrupted what had promised to be a revolutionary concept. In the book, Ms. Klein talks about how corporations coopt anti-corporate sentiment to try to find new ways to sell themselves, and this is basically what happened to the internet when it turned from a giant public library into a giant version of Times Square.

In summary, "No Logo" is a very interesting book which really clarified for me the problems with free trade and globalization in the hands of people of corporations who only care about making money at everyone else's expense. It also explains why advertising is such a huge industry and why it is now more important than the making actual products or things that have value or uses. Global advertising spend is projected to be about $543 billion for 2016, which is significantly higher than the GNP of Switzerland, where I live. As a comparison, the UN estimates that global hunger could be eliminated for a mere $30 billion a year, and global poverty could be eliminated for about $175 billion a year. But what's more important, people starving to death or convincing people that they need to pay hundreds of dollars for products that cost pennies to make? Think about that next time you see a commercial on TV for, well, anything.

Labels: books, politics, economics
No comments