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Globalization: Why Everything is Made in China in 5 Minutes
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Remember the opening scene to the amazing Nick Cage movie Lord of War? The one where you follow the life of a bullet from its birth in a factory to its shipment from the Soviet Union to the jungles of Africa? When I watched that I was mesmerized. Almost all of our material goods make a similar journey. From the extraction of raw materials found in the Earth, to their production in a factory most likely somewhere in Asia, to the retail store that you or I can head to down the street.
My Mic:
Music:
L'indécis - Day by Day
Script:
The last time you looked at your T-shirt tag you probably noticed that it was made in China, or Bangladesh, or Pakistan, or…wherever - you get the point. But have you stopped to ask yourself why they never say England, or France, or the U.S.? Well as most of us probably know already it has to do with cost. But that’s only part of the story.
Awhile back I read an interesting article on NPR that talked about the journey of a t-shirt. In their investigations they found that the cotton for most t-shirts are grown in either China, India or surprisingly the U.S. in places like Texas. If the cotton is grown in the U.S. it is then shipped over 7,000 miles to China or India where the milling process begins which transforms the plant cotton into yarn or sheets. From there it is shipped another 1,800 miles to Bangladesh where it is sewn into shirts by workers who are paid $40 a month in super sketchy conditions. In 2013 for example a factory collapsed and killed 1,100 garment workers. Most popular clothing companies like Gap, Walmart, Target and well pretty much every store you can think of rely heavily on suppliers from this region. When sewn the shirts are shipped another 8,000 miles back to the U.S. where they are delivered to retailers, folded neatly by workers who are paid whatever the minimum wage in your city is and sold for $20 bucks a pop. The estimated miles traveled for any given t-shirt from cotton farm to retail store? About 16,000 miles. $20 bucks for an item that has seen more of the world than you or I have? Not bad.
But why does this happen and how is it a viable economic model? During the 19th century the process of industrialization began which was basically the time when everyday household items became easier to make with the use of machines and standardization and allowed the prices of items to decrease making it more affordable for the public to buy. Along with this there was a transportation revolution with the invention of the steam engine making shipping using boats or trains much cheaper. At the same time Europeans were busy conquering the world which had the sometimes very unwanted effect of integrating parts of the world with other parts of the world. But nonetheless it happened and here we are. Because of this more and more nations began to embrace international trade while at the same time vigorously competing with each other to gain economic and military dominance over one another and their colonies. Eventually this competition grew to a tipping point and WWI happened. Then WWII happened. Then the Cold War. Finally after the Cold War when most major government decided to just chill the f*ck out, a period of rapid globalization happened. But it was really after the agreements made by the international community after WWII, that laid the foundation to the kind of globalization that we know and either love or hate or have no opinion about today. Most countries agreed to an international monetary policy which basically has made it easier for countries to trade with each other by eliminating or reducing taxes. This led to other economic agreements between the international community and eventually the World Trade Organization which currently provides a system for countries to make trade agreements with one another. There are also other bilateral agreements between countries – for example the U.S. and South Korea has a Free Trade Agreement which eliminates 95% of taxes or NAFTA between Canada, Mexico, and the U.S. which probably ruined the lives of millions of poor corn farmers in Mexico – but that’s a story for another time.
My Mic:
Music:
L'indécis - Day by Day
Script:
The last time you looked at your T-shirt tag you probably noticed that it was made in China, or Bangladesh, or Pakistan, or…wherever - you get the point. But have you stopped to ask yourself why they never say England, or France, or the U.S.? Well as most of us probably know already it has to do with cost. But that’s only part of the story.
Awhile back I read an interesting article on NPR that talked about the journey of a t-shirt. In their investigations they found that the cotton for most t-shirts are grown in either China, India or surprisingly the U.S. in places like Texas. If the cotton is grown in the U.S. it is then shipped over 7,000 miles to China or India where the milling process begins which transforms the plant cotton into yarn or sheets. From there it is shipped another 1,800 miles to Bangladesh where it is sewn into shirts by workers who are paid $40 a month in super sketchy conditions. In 2013 for example a factory collapsed and killed 1,100 garment workers. Most popular clothing companies like Gap, Walmart, Target and well pretty much every store you can think of rely heavily on suppliers from this region. When sewn the shirts are shipped another 8,000 miles back to the U.S. where they are delivered to retailers, folded neatly by workers who are paid whatever the minimum wage in your city is and sold for $20 bucks a pop. The estimated miles traveled for any given t-shirt from cotton farm to retail store? About 16,000 miles. $20 bucks for an item that has seen more of the world than you or I have? Not bad.
But why does this happen and how is it a viable economic model? During the 19th century the process of industrialization began which was basically the time when everyday household items became easier to make with the use of machines and standardization and allowed the prices of items to decrease making it more affordable for the public to buy. Along with this there was a transportation revolution with the invention of the steam engine making shipping using boats or trains much cheaper. At the same time Europeans were busy conquering the world which had the sometimes very unwanted effect of integrating parts of the world with other parts of the world. But nonetheless it happened and here we are. Because of this more and more nations began to embrace international trade while at the same time vigorously competing with each other to gain economic and military dominance over one another and their colonies. Eventually this competition grew to a tipping point and WWI happened. Then WWII happened. Then the Cold War. Finally after the Cold War when most major government decided to just chill the f*ck out, a period of rapid globalization happened. But it was really after the agreements made by the international community after WWII, that laid the foundation to the kind of globalization that we know and either love or hate or have no opinion about today. Most countries agreed to an international monetary policy which basically has made it easier for countries to trade with each other by eliminating or reducing taxes. This led to other economic agreements between the international community and eventually the World Trade Organization which currently provides a system for countries to make trade agreements with one another. There are also other bilateral agreements between countries – for example the U.S. and South Korea has a Free Trade Agreement which eliminates 95% of taxes or NAFTA between Canada, Mexico, and the U.S. which probably ruined the lives of millions of poor corn farmers in Mexico – but that’s a story for another time.
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