The screams of thousands trapped and crushed as concrete and machinery cascaded down upon them unleashed a full-spectrum shockwave, amplified by the anguished howl of millions around the world. The calamity made instant headline news. Consumers of clothes made in Bangladesh’s garment factories were confronted by their palpable connection to the people whose hands made their clothes, and about their miserable existence on this earth. Like an intense x-ray beam, the shock-wave from Rana Plaza lit up the internal structure of the global economy, throwing into sharp relief a fundamental fact about global capitalism that is normally kept out of sight and mind: its good health rests on extreme rates of exploitation of workers in the low-wage countries where production of consumer goods and intermediate inputs has been relocated. The attention of the world was drawn in particular to Bangladesh’s poverty wages—the lowest factory wages of any major exporter in the world, even after a 77 percent pay increase in November 2013; to its death-trap factories—just five months earlier a fire at nearby Tazreen Fashions killed 112 workers, who were trapped behind barred windows and locked doors while working long into the night; to the violent suppression of union rights—union activists are routinely blacklisted, beaten up, and subject to arbitrary arrest; and to the incestuous relations between factory owners, politicians, and police chiefs in Bangladesh—no employer in Bangladesh’s garment industry has ever been convicted of an infringement of health and safety laws.³ What makes all of it particularly relevant to this study is that the garment industry is “the quintessential example of a buyer-driven commodity chain … [where] global buyers determine what is to be produced, where, by whom, and at what price.”⁴ As such, Bangladesh’s garment industry distils the export-oriented industrialization strategy pursued by capitalist governments across the Global South. As British Trades Union Congress General Secretary Frances O’Grady said in response to the Ran Plaza disaster, “This appalling loss of life proves that, in the global race to the bottom on working conditions, the finishing line is Bangladesh.”⁵

The starvation wages, death-trap factories, and fetid slums in Bangladesh are representative of the conditions endured by hundreds of millions of working people throughout the Global South, the source of surplus value sustaining profits and feeding unsustainable overconsumption in imperialist countries. The people of Bangladesh are also in the front line of another calamitous consequence of capitalism’s reckless exploitation of living labor and nature: “climate change,” more accurately described as the capitalist destruction of nature. Most of Bangladesh is low-lying, and as sea levels rise and monsoons become more energetic, farmland is being increasingly inundated with salt water, accelerating migration into the cities. As a result Bangladesh’s capital city, Dhaka, whose population has doubled in the last twenty years and is already one of the largest and most densely populated cities in the world, is growing by more than 600,000 people each year.⁶ Over-extraction of fresh water is depleting Dhaka’s aquifers and, worse still, exposing them to contamination with seawater. To cap it all, Dhaka sits atop an active earthquake zone. Seismologists warn that a Richter 7.5 earthquake would reduce Dhaka to rubble and 80,000 buildings could go the same way as Rana Plaza. The predicted scale of destruction is that high because, surrounded by marshland, much of Dhaka’s chaotic, unplanned expansion has been vertical rather than horizontal, typically with the same standard of construction that was exhibited at Rana Plaza.⁷ None of these negative consequences of capitalist development figure in calculations of Bangladesh’s GDP, yet they are real, and are borne by its workers and farmers and by its natural environment. They pay the price, but who profits? How much do the proceeds of their exploitation fuel capitalist development in Bangladesh, and how much of it feeds capitalist accumulation in imperialist countries?

Many commentators have drawn an analogy between the Tazreen and Rana Plaza disasters and notorious disasters in the United States and Europe more than a century ago, arguing that by catalyzing concerted action to tackle underlying causes these recent tragedies could force Bangladesh’s garment factory bosses to finally clean up their act. Thus Amy Kazmin, writing in the Financial Times, argued:

There is no doubt that the Rana Plaza disaster will spur the struggle to unionize Bangladesh’s garment industry. But the FT journalist forgets two things. The response of garment employers to the rise of the ILGWU was to move production to non-union states in the U.S. South, and, eventually, out of the United States altogether, to countries like Bangladesh. Today, just 2 percent of the clothing worn in the United States is actually made there. Peter Custers points out the other weakness in the naïve liberal view expressed by Amy Kazmin:

The collapse of Rana Plaza not only shone a light on the pitiless and extreme exploitation of Bangladeshi workers. It also lit up the hidden structure of the global capitalist economy, revealing the extent to which the capital-labor relation has become a relation between Northern capital and Southern labor. The garment industry was the first industrial sector to shift production to low-wage countries, yet power and profits remain firmly in the grip of firms in imperialist countries. This reality is very different from the fantasies projected by neoliberalism’s apologists. Few informed observers would dispute that Primark (JCPenney in the United States), Walmart, M&S, and other major UK and U.S. retailers profit from the exploitation of Bangladeshi garment workers. Why else have they raced to outsource the production of their clothes to the lowest of low-wage countries? A moment’s thought reveals other beneficiaries: the commercial capitalists who own the buildings leased by these retailers, the myriad companies providing them with advertising, security, and other services; and also governments, which tax their profits and their employees’ wages and collect the VAT on every sale. Yet, according to trade and financial data, not one penny of U.S., European, and Japanese firms’ profits or governments’ tax revenues derive from the sweated labor of the workers who made their goods. The huge markups on production costs instead appear as “value-added” in the UK and other countries where these goods are consumed, with the perverse result that each item of clothing expands the GDP of the country where it is consumed by far more than that of the country where it is produced.¹⁰ Only an economist could think there is nothing wrong about this!

All data and experience, except for economic data, point to a significant contribution to the profits of Primark, Walmart, and other Western firms by the workers who work long, hard, and for low wages to produce their commodities. Yet trade, GDP, and financial flow data show no trace of any such contribution; instead, the bulk of the value realized in the sale of these commodities and all of the profits reaped by the retail giants appear to originate in the country where they are consumed. Exploring and resolving this conundrum is a central task of this book. Our first step is to examine the social, economic, and political relations between workers and employers that are woven into the fabric of each article of apparel produced in low-wage countries like Bangladesh and sold in shopping malls across the imperialist world, where more than 80 percent of garments made in Bangladesh are sold. This will then be augmented by a forensic examination of two other representative “global commodities”: the Apple iPhone and the cup of coffee.

The central point Norfield is making cannot be emphasized enough, because so many liberals and socialists in imperialist countries try very hard to put it out of their minds. H&M makes handsome profits, to be sure, but these are dwarfed by the state’s take, once taxes on wages and profits of H&M and suppliers of services to it are added to its VAT receipts. In 2013, the tariffs charged by the U.S. government on its apparel imports from Bangladesh alone exceeded the total wages received by the workers who made these goods. The state uses this money, as we know, to finance foreign wars, health care, and Social Security, and even returns a few pennies to the poor countries in the form of “foreign aid.” As Tony Norfield argues, low wages in Bangladesh help explain “why the richer countries can have lots of shop assistants, delivery drivers, managers and administrators, accountants, advertising executives, a wide range of welfare payments and much else besides.”¹² His blunt conclusion: “Wage rates in Bangladesh are particularly low, but even the multiples of these seen in other poor countries point to the same conclusion: oppression of workers in the poorer countries is a direct economic benefit for the mass of people in the richer countries.”

In Norfield’s account the Bangladeshi factory makes 125,000 shirts per day, of which half are sold to H&M, the rest to other Western retailers. A worker at the factory earns €1.36 per day, for 10–12 hours, producing 250 T-shirts per hour, or 18 T-shirts for each euro cent paid in wages. Her factory is one of 5,000 garment factories in Bangladesh employing 4 million people, 85 percent of whom are women. According to the ILO, the average wage of female “machine operators and assemblers” is 73 percent of their male counterparts.¹³ Despite the massive influx of women into garment factories, female participation in the labor force in Bangladesh as a whole remains one of the lowest in the world. In 2010, 33.9 percent of working-age women were employed, compared with 79.2 per cent of working-age men.

As noted above, factory wages in Bangladesh are the lowest in the world. An investigation by a UK parliamentary committee into conditions in Bangladesh’s garment industry following the Rana Plaza disaster reported that “Bangladesh’s comparative advantage, its sole asset value, is cheap labor and its correspondingly low unit costs.”¹⁴ An in-depth report by leading U.S.-based management consultancy McKinsey & Co. into the growth of Bangladeshi apparel exports included an extensive survey of the outsourcing behavior of U.S. retailers, reporting that Bangladesh “competitive price level is clearly the prime advantage—all CPOs [chief purchasing officers] participating in the study named price attractiveness as the first and foremost reason for purchasing in Bangladesh.”¹⁵ The price that CPOs find so attractive, of course, is the price of labor-power, but McKinsey & Co., not wishing to offend the sensibilities of their big-business clients, make no mention of low wages anywhere in their study. For months following the Rana Plaza disaster, Bangladesh’s Ready-made Garments (RMG) industry was hit by waves of strikes and demonstrations centering on the demand for wage increases (or payment of wages due), the right to form unions, and the enforcement of widely ignored health and safety legislation. The Bangladeshi government, many of whose top officials are factory owners, responded in the same way to previous upsurges in 2006, 2010, and 2012—with violent repression, using the regular police, the ansars (village-based militias), and the “antiterrorist” Rapid Action Battalion—in addition to the Industrial Police, formed in the midst of the 2010 strike wave, whose sole task is to police garment districts and repress workers’ protests. Its 2,900 officers contrast with the grand total of 51 inspectors who, at the time of the Rana Plaza disaster, were charged with enforcing health and safety, minimum age and minimum wage laws in all of Bangladesh’s 200,000 workshops and factories, including 5,000 in the garment sector.¹⁶

Nevertheless, ...