The Transnational Capital Auction EVIL CORP One of the more difficult aspects to understand in this research project is the effect of corporations on the global economy. That might, in

The Transnational Capital Auction EVIL
CORP One of the more difficult aspects to understand in this research project is the effect of corporations on the global economy. That might, in fact, be one of the most important factors to consider in research, but it’s one of the factors that is the least visible. So, let’s try this simulation exercise–“The Transnational Capital Auction”–to see what the effects of globalization might be on a developing country and its workers. You are the leader of a poor country.  Each of your countries was either colonized by European countries or dominated by them economically & militarily.  You need to attract foreign investment (capital) from transnational corporations for many different reasons.  Of course, not all of your people are poor.  Many, including a number of are quite wealthy.  But your wealth depends largely on making deals with corporations that come back to your country.  You get various kickbacks, bribes, jobs for members of your families, etc.  Some of this is legal, some not.  But in order to stay in power, you also need to provide jobs for your people, & the owners of capital companies like Nike, Disney, Coca-Cola, Levi Strauss, etc. are the ones who provide thousands of jobs in their factories.  The more jobs you can bring into your country, the more legitimacy you have in the eyes of your people. your government collects taxes from these companies, which keep your government working, & also you pay back your loans to the International Monetary Fund (IMF) & other foreign-owned banks.  The bottom line is this: You badly need these companies to invest capital in your country. You must compete with other poor countries that also need capital.  Corporations are not stupid, & so they let you know that if you want their investment, you must compete with other countries by: Basically, companies hold an auction for their investments.  The countries that offer the companies the most “freedom” are the ones who get the investment. Each country team’s goal is to “win” by attracting capital.  The team that bids the 3 highest number of “Friendly-to-capital” credits in a round is awarded 100 game points; the team with the 2 highest number of Capital credits is awarded 50 game points; & the team with the 3 highest Capital credits is awarded 25 game points.  The other teams get no points for the round.  The auction is “silent” – which means you don’t know until the end of each round who has bid what. Again, Capital will go where the people are “friendliest” to it.  However, the “friendlier” you are to Capital, the angrier it may make your own people.  For example, Capital wants workers to work for very little & not to worry about environmental laws.  But that could start demonstrations or even rebellions, which would not be good for Capital or for you as leaders of your country.  That’s why the team bidding the highest number of Capital credits does not get the highest number of game points. I’ll be Big Capital. In fact, I’ll be The Big Evil Corporation. So I have some business that could really stimulate your country’s economy and create jobs, but being Big Evil Corporation personified, I want the cheapest, youngest workers and the least amount of rules about unions, workers, or polluting the environment. Because that’s the kind of pig I am. You get to be the corrupt leader of a developing country. Lucky you. Be careful not to anger your people to the point that they riot.  So, make me an offer. Lots of other countries also want my business, so this is a competitive auction. 1. Decide what country you will represent. It can be a real country or a fake one. 2. Read the charts below where points are listed and decide where to compromise, if anywhere; 3. Post what your country is offering The Big Evil Corporation in each of the bulleted areas below. 4. Do it again. And again, if enough people are participating. I’ll calculate points (or you can) after each round of bidding. There is a graded questionnaire on the next screen and participation is worth points here. “Friendly-to-Capital” credits $5.00………….. zero credits           $2.50………….. 46 credits          $0.55… ….76 credits $4.75…………..10 credits                $2.25………….. 49 credits          $0.45…….79 credits $4.50…………..15 credits                 $2.00………….. 52 credits         $0.35…….82 credits $4.25…………..20 credits                 $1.75………….. 55 credits         $0.30…….85 credits $4.00…………..25 credits                 $1.50……………58 credits.        $0.25…….88 credits $3.75…………..30 credits                $1.25……………61 credits           $0.20…….91 credits $3.50…………..33 credits                $1.00……………64 credits           $0.15…….94 credits $3.25…………..37 credits                $0.85…………….67 credits           $0.10…….97 credits $3.00…………. 39 credits                $0.75…………….70 credits            $0.05…….100 credits $2.75…………..43 credits                $0.65…………….73 credits Child labor below 16 is illegal / enforced ……….. 0 credits Child labor below 16 is illegal/ weakly enforced…15 credits Child labor below 16 is illegal / not enforced…….30 credits Child labor below 14 is illegal / enforced…………50 credits Child labor below 14 is illegal/ weakly enforced…70 credits Child labor below 14 is illegal/ not enforced……..85 credits No Child labor laws…………………………………100 credits Unions fully legal / allowed to organize…………………………….0 credits Unions fully legal / some restrictions on right to strike…………..15 credits Only government approved unions legal/ some restrictions……..30 credits Only government organized unions allowed………………………45 credits Unions banned / no right to strike…………………………………..60 credits Unions banned/no right to strike/ military stationed in factories…85 credits Suspected Union organizers jailed/military used against strikes..100 credits 75% ……..0 credits                35%…………40 credits 70%……….5 credits                30%…………50 credits 65%………10 credits                25%…………60 credits 60%………15 credits                20%………..70 credits 55%……..20 credits                15%………..75 credits 50%……..25 credits                10%………..80 credits 45%……..30 credits                5%………….90 credits 40%……..35 credits                No taxes….100 credits Strict environmental laws / enforced………………… 0 credits Strict environmental laws / weakly enforced………..15 credits Strict environmental laws / not often enforced………30 credits Some environmental laws / enforced……………….50 credits Some environmental laws / weakly enforced……..70 credits Some environmental laws / not often enforced……85 credits Almost no environmental laws……………………..100 credits PART 2 OF ASSIGNMENT. www .
OTHER
ORG
US
CORPORATE
WORKERS
CHINESE
AMERICA
WORKERS
ATTIAN
WORKERS
W
A
A RACE
TO THE
BOTTOM?
YES, THE
HUMAN “Globalization has depressed the wage growth of low-wage workers [in the U.S.]. It’s been a reason for the increasing wage gap between high-wage & low-wage workers.” Laura Tyson, former Chairperson, U.S. Council of Economic Advisers Part 1 is the section under the Evil corp image. The second part is the one under corporate America image. s. Part 1 is to answer the first 4 questions and part 2 to answer the follow-up questions based on the idea obtained from part 1

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