The Noble Feat of Nike

What really are the pros and cons of globalization? In this article, Johan Norberg, an advocate of globalization, uses the example of Nike in Vietnam to demonstrate the benefits of globalization. According to Norberg, in Vietnam Nike pays its workers three times higher than the minimum wage earned in state-owned enterprises, provides its workers free or subsidized meals, education, and training, as well as medical services. The rise in their living standard has given Nike workers more incentive to invest more in their children's education instead of sending them to work on farms at an early age. Furthermore, he argues, multinational companies such as Nike and Coca-Cola have brought to developing countries "new machinery, better technology, new management skills and production ideas, a larger market and the education of their workers."Even though multinational corporations have made Vietnam more capitalist, says Norberg, the Communist government there is in fact welcoming them. - YaleGlobal

The Noble Feat of Nike

Johan Norberg
Friday, June 13, 2003

Nike. It means victory. It also means a type of expensive gym shoe. In the minds of the anti-globalisation movement, it stands for both at once. Nike stands for the victory of a Western footwear company over the poor and dispossessed. Spongy, smelly, hungered after by kids across the world, Nike is the symbol of the unacceptable triumph of global capital.

A Nike is a shoe that simultaneously kicks people out of jobs in the West, and tramples on the poor in the Third World. Sold for 100 times more than the wages of the peons who make them, Nike shoes are hate-objects more potent, in the eyes of the protesters at this week's G8 riots, than McDonald's hamburgers. If you want to be trendy these days, you don't wear Nikes; you boycott them.

So I was interested to hear someone not only praising Nike sweatshops, but also claiming that Nike is an example of a good and responsible business. That someone was the ruling Communist party of Vietnam.

Today Nike has almost four times more workers in Vietnam than in the United States. I travelled to Ho Chi Minh to examine the effects of multinational corporations on poor countries. Nike being the most notorious multinational villain, and Vietnam being a dictatorship with a documented lack of free speech, the operation is supposed to be a classic of conscience-free capitalist oppression.

In truth the work does look tough, and the conditions grim, if we compare Vietnamese factories with what we have back home. But that's not the comparison these workers make. They compare the work at Nike with the way they lived before, or the way their parents or neighbours still work. And the facts are revealing. The average pay at a Nike factory close to Ho Chi Minh is $54 a month, almost three times the minimum wage for a state-owned enterprise.

Ten years ago, when Nike was established in Vietnam, the workers had to walk to the factories, often for many miles. After three years on Nike wages, they could afford bicycles. Another three years later, they could afford scooters, so they all take the scooters to work (and if you go there, beware; they haven't really decided on which side of the road to drive). Today, the first workers can afford to buy a car.

But when I talk to a young Vietnamese woman, Tsi-Chi, at the factory, it is not the wages she is most happy about. Sure, she makes five times more than she did, she earns more than her husband, and she can now afford to build an extension to her house. But the most important thing, she says, is that she doesn't have to work outdoors on a farm any more. For me, a Swede with only three months of summer, this sounds bizarre. Surely working conditions under the blue sky must be superior to those in a sweatshop? But then I am naively Eurocentric. Farming means 10 to 14 hours a day in the burning sun or the intensive rain, in rice fields with water up to your ankles and insects in your face. Even a Swede would prefer working nine to five in a clean, air-conditioned factory.

Furthermore, the Nike job comes with a regular wage, with free or subsidised meals, free medical services and training and education. The most persistent demand Nike hears from the workers is for an expansion of the factories so that their relatives can be offered a job as well.

These facts make Nike sound more like Santa Claus than Scrooge. But corporations such as Nike don't bring these benefits and wages because they are generous. It is not altruism that is at work here; it is globalisation. With their investments in poor countries, multinationals bring new machinery, better technology, new management skills and production ideas, a larger market and the education of their workers. That is exactly what raises productivity. And if you increase productivity - the amount a worker can produce - you can also increase his wage.

Nike is not the accidental good guy. On average, multinationals in the least developed countries pay twice as much as domestic companies in the same line of business. If you get to work for an American multinational in a low-income country, you get eight times the average income. If this is exploitation, then the problem in our world is that the poor countries aren't sufficiently exploited.

The effect on local business is profound: 'Before I visit some foreign factory, especially like Nike, we have a question. Why do the foreign factories here work well and produce much more?' That was what Mr Kiet, the owner of a local shoe factory who visited Nike to learn how he could be just as successful at attracting workers, told me: 'And I recognise that productivity does not only come from machinery but also from satisfaction of the worker. So for the future factory we should concentrate on our working conditions.'

If I was an antiglobalist, I would stop complaining about Nike's bad wages. If there is a problem, it is that the wages are too high, so that they are almost luring doctors and teachers away from their important jobs.

But - happily - I don't think even that is a realistic threat. With growing productivity it will also be possible to invest in education and healthcare for Vietnam. Since 1990, when the Vietnamese communists began to liberalise the economy, exports of coffee, rice, clothes and footwear have surged, the economy has doubled, and poverty has been halved. Nike and Coca-Cola triumphed where American bombs failed. They have made Vietnam capitalist.

I asked the young Nike worker Tsi-Chi what her hopes were for her son's future. A generation ago, she would have had to put him to work on the farm from an early age. But Tsi-Chi told me she wants to give him a good education, so that he can become a doctor. That's one of the most impressive developments since Vietnam's economy was opened up. In ten years 2.2 million children have gone from child labour to education. It would be extremely interesting to hear an antiglobalist explain to Tsi-Chi why it is important for Westerners to boycott Nike, so that she loses her job, and has to go back into farming, and has to send her son to work.

The European Left used to listen to the Vietnamese communists when they brought only misery and starvation to their population. Shouldn't they listen to the Vietnamese now, when they have found a way to improve people's lives? The party officials have been convinced by Nike that ruthless multinational capitalists are better than the state at providing workers with high wages and a good and healthy workplace. How long will it take for our own anticapitalists to learn that lesson?

Johan Norberg is the author of In Defence of Global Capitalism, and writer and presenter of the documentary Globalisation is Good, to be broadcast by Channel 4 on 28 June.

© 2003 The This article appears in the 7 June 2003 issue of The Spectator.


I teach high school in United States and my student's read your article as part of a Global Studies class. We would like to know where you got your facts . They questioned where you got the data on what "state-owned enterprises". When you say "you talked to a young Vietnamese woman" did you make a personal tour of Nike factories? Mr. Norberg eludes to the factories a
"clean,[and] air-conditioned ", is that from personal observation of every factory or just the ones that the Vietnam government took you to? Do the factories have a workers handbook that outlines all the benefits such as you explained: "regular wages, free or subsidized meals, free medical services and training and education". I applaud my students for wanting to know the truth based on solid data. Thank you for your time Mrs. Deb McLaughlin Belgrade High School Belgrade, Montana