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TRANSNATIONAL CAPITAL AUCTION: A GAME OF SURVIVAL
One of the more difficult asp
TRANSNATIONAL CAPITAL AUCTION: A GAME OF SURVIVAL
One of the more difficult aspects to understand in this research project is about 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.
Let’s play a game…..
YOUR ROLE:
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 you, 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. And, your government collects taxes from these companies, which help keep your government working, & also help 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.
But here’s the problem: 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:
Keeping workers’ wages low
Having few laws to regulate conditions of work (overtime, breaks, health & safety conditions, age of workers), or not enforcing the laws that are on the books
Having weak environmental laws
Making sure that workers can’t organize unions; having low taxes on corporate profits, etc.
Basically, companies hold an auction for their investments. The countries who offer the companies the most “freedom” are the ones who get the investment.
THE GAME:
The goal of the game is to win the game by ending up with the most game points after 3 auction rounds. We’ll try for three rounds. Let’s see how it goes.
Each country team’s goal is to “win” by attracting capital. The team that bids the 3rd highest number of “Friendly-to-capital” credits in a round is awarded 100 game points; the team with the 2ndhighest number of Capital credits is awarded 50 game points; & the team with the 3rd 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.
What to do / how to play:
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.
Minimum wage credits
Child labor credits
Worker organizing credits
Taxation rate credits
Environmental laws credits
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.
TRANSNATIONAL CAPITAL AUCTION CREDIT SHEET
MINIMUM WAGE/HR.
“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
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
WORKER ORGANIZING
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
TAXATION RATE ON CORPORATE PROFITS
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
ENVIRONMENTAL LAWS
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
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