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Tuesday, October 16, 2012

Fascinating article on the BBC about a modern incidence of corvee labor – Uzbekistan requires its citizens to handpick cotton in the fields for free.
Uzbekistan is one of the world's main producers of cotton and the crop is a mainstay of its economy. The government controls production and enforces Soviet-style quotas to get the harvest off the fields as quickly as possible.

A history of using child and forced labour at harvest time has led to a number of retailers - including H&M, Marks and Spencer and Tesco - to pledge to source their cotton from elsewhere.

In response, earlier this year Uzbekistan's Prime Minister Shavkat Mirziyayev issued a decree banning children from working in the cotton fields. Yet many adults, including teachers, cleaners and office workers, are still forced to return to the land during October and November.

This year, like last year, medical staff have been ordered to join them. There are reports of patients in towns being turned away because their doctor is "in cotton".
Doctors and nurses forced to pick cotton (BBC)

Wikipedia entry on corvee labor is instructive.

I first heard about Uzbekistan’s forcing its citizens to pick cotton because it was used as a prime example of extractive institutions on the Why Nations Fail blog:
Government-imposed prices at which you’re forced to sell; coerced labor; expropriation of assets by the intelligence services and the president’s family. These are just some of the examples of what we call extractive economic institutions — economic institutions designed to extract resources from the population and businesses for the benefit of a narrow elite.

Like almost all nations that are poor, Uzbekistan fails because its people operate under extractive economic institutions, which provide few incentives for investment or technological ingenuity, and force people to engage in activities that they do not wish or are not well-suited to (such as farmers being forced to grow crops that they don’t want and children being forced to pick cotton rather than learn in school).

And the important point is this: these extractive economic institutions are not there by mistake. They have been designed this way for the benefit of the elite. There was no coerced child labor in Uzbekistan when cotton was produced by state-owned firms. This economic institution was introduced when Karimov and his cronies realized that at the prices they were imposing on farmers, cotton production was going to plummet.
Extractive institutions in action: Uzbekistan

This is especially ironic as cotton-picking was a major driver of slavery and indentured servitude in the antebellum United States. The mechanical cotton picker sent millions of former slaves and sharecroppers to northern industrial cities just in time for deindustrialization. Northern cities became ghettos as whites got in their automobiles and decamped to seperatist enclaves in the corn fields surrounding urban areas while America's formerly world-class cities to deteriorated to third-world levels. From these enclaves they could wage a war on the very idea of collective purpose and civil government.

Just as no old and obsolete technology has never truly vanished, it seems like no economic system has ever truly died. It’s almost a guarantee that somewhere on earth today you will be able to find “extinct” economic forms - corvee labor, debt bondage, indentured servitude, chattel slavery, plantations, sharecropping, etc., if you look hard enough. It’s a corrective to assuming that our mutual-obligation system of wage slavery (fixed amount of time per day in exchange for lump sum of currency and subsidized benefits) that we call a “job” is a permanent feature of the human condition.

I and others have noticed a dramatic return to unfree and unpaid labor all around the world as our economic system deteriorates. First there is the vast amount of prison labor used today, including in the United States, the world's jailer. Then there are the “unpaid internships” which keep all but the children of the rich who are subsidized by their families from the most desirable professional jobs. Then there are the “welfare to work” schemes which make the unemployed work essentially for free in lieu of welfare benefits. Then there is the vast amount of overtime “expected” of terrified salaried workers lest they get laid off in the next corporate purge.

Today’s college graduates are often referred to as “indentured servants” because they are forced to fork over large parts of their salaries in wage garnishments to college debt collection agencies in return for the “work chit” of a degree. Tell me materially how this is different from traditional indentured servitude, where people were fined heavily for being transported to America, and then forced to work to pay back their sponsors for free. And of course, the laws protecting debtors have been stripped away, returning to an almost eighteenth-century mode of unforgivable debt and no limits to what can be done to collect it. We’ve even seen the backdoor return of debtor’s prisons. Others have noted the breakdown of what’s commonly referred to as “the rule of law” in financial matters and noted the creation of separate rules and standards of conduct for the rich as opposed to ordinary people. Of course we are all free to "choose" our jobs, just as we are free to be starving and homeless as those jobs disappear.

All around the world we are regressing. Welcome to capitalist “progress.” Uzbekistan is the future.

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( 3 comments — Leave a comment )
Oct. 17th, 2012 12:30 am (UTC)
Thanks for sharing
Oct. 17th, 2012 01:39 am (UTC)
Nice one.

I agree that the situation with (most) college graduates is very similar to indentured servitude. The difference, though, would be that college graduates have a great deal of choice over what kind of work they do and for whom they work in contrast to indentured servants. I was going to say that they might also have an opportunity to save some money, but I'm not sure how true that is anymore.
Oct. 17th, 2012 12:40 pm (UTC)
Like almost all nations that are poor, Uzbekistan fails because its people operate under extractive economic institutions, which provide few incentives for investment or technological ingenuity, and force people to engage in activities that they do not wish or are not well-suited to (such as farmers being forced to grow crops that they don’t want and children being forced to pick cotton rather than learn in school).

This is more or less the British plan for the post-recession economy - only in a first-world country. Not quite as primitive obviously, but yes, they want the poor stacking shelves in supermarkets in return for welfare payments (which will be replaced by food stamps as soon as they get rid of those pesky Truck Acts). They want everyone else mortgaged to the hilt and stuck in dead end, shitty jobs. The minimum wage is increasingly seen by our elites not as a floor, but a ceiling - check this story out to see their thinking on this:


"A businessman I know told me: "I would much rather get a school leaver at 16. Get them to do an apprenticeship for two or three years. At 19 they will have the skills necessary to be able to enter the workforce on the national minimum wage. Someone who does a one year course after 18 won’t be ready," he said.

We also have a swingeing rate of VAT to contend with - which ensures that nobody except multinationals and the rich can afford to be in the retail business, as well as tax avoidance scams that mean said multinationals routinely pay less than 5% corporation tax (Starbucks has paid no tax since 2009).

Despite the many economic alternatives, it seems the whole system is doomed to wobble on like this for years unless a political alternative is developed. Above all this has to be practical - no hippy Occutards or starry-eyed utopians need apply.

To fix the economy, we have to fix politics. It's gonna get tough, and if we don't do it, all kinds of monsters are going to well up and fill the hole.
( 3 comments — Leave a comment )


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For one, GDP is often revised several quarters - even years - later, as more complete information becomes available that changes the components of the earlier, initial GDP estimates in what can be very substantial ways.

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Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure?

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In the 2007-2009 recession, the central indicators–real GDP and real GDI–gave mixed signals about the peak date and a clear signal about the trough date. The peak date at the end of 2007 coincided with the peak in employment. We designated June 2009 as the trough, six months before the trough in employment, which is consistent with earlier trough dates in the NBER business-cycle chronology. In the 2001 recession, we found a clear signal in employment and a mixed one in the various measures of output. Consequently, we picked the peak month based on the clear signal in employment, as well as our consideration of output and other measures. In that cycle, as well, the dating of the trough relied primarily on output measures.

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  Gross National Happiness (GNH) is an indicator developed in Bhutan in the Himalayas, based on the concept elaborated in 1972 by the then King Jigme Singye Wangchuck. Since then, the kingdom of Bhutan, with the support of UNDP (UN Development Program), began to put this concept into practice, and has attracted the attention of the rest of the world with its new formula to measure the progress of a community or nation.

GNH is based on the premise that the calculation of "wealth" should consider other aspects besides economic development: the preservation of the environment and the quality of life of the people. The goal of a society should be the integration of material development with psychological, cultural, and spiritual aspects - all in harmony with the Earth.

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