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Pro-Logo: Can Global Brands Become a Force for Good?

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At the close of the 20th century, claims that Nike used child labor to produce clothing and sporting-equipment, or that Coca-Cola bottlers were implicated in the deaths of labor union leaders in Colombia raised doubts about the practices of multinationals operating in the developing world. The crises coincided with large-scale, violent protests at international gatherings, including the World Trade Organization meeting in Seattle, the G8 summit in Genoa, and IMF and World Bank meetings in Prague. Together, they gave birth to the anti-globalization and anti-corporate movement, which would come to epitomize the disenfranchised of 'Generation Why.'

The zeitgeist of the era was eloquently captured by Naomi Klein's totemic work, No Logo. Klein charged international companies, especially those enjoying high brand recognition, with exploitation, environmental pillage, human rights abuses, kowtowing to repressive regimes, disowning their domestic workforces, wage deflation and much more besides. Her arguments helped shape the political consciousness of those who felt economically and emotionally excluded from globalization. Unfortunately, they were both dangerously misguided and wrong.

A decade on concerns about the sustainability of the planet, labor standards, and the hollowing out of the industrialized countries' middle class jobs remain. In the wake of the global financial crisis, they have been exacerbated by a relative shift in economic power to the global South. The apparent incapacity of industrialized governments to alter the course of their domestic economic fortunes has provided fresh oxygen for the anti-corporate movement. Yet progressives should be mindful not to adopt neo-mercantilist policies, or an anti-corporate stance. Our goal should be to simultaneously redefine what is good for business, and to work in partnership with the private sector to achieve mutually desirable goals.

Globalization is a complex and at times contradictory phenomenon. While it has led to a hollowing out of many traditional middle class jobs in the old industrialized world, it has simultaneously lifted millions of people out of poverty. The global mean GDP per capita continues to rise, despite exponential increases in the number of people inhabiting the planet. And while multinational companies do relocate operations, this often guarantees -- albeit not always -- the retention of a proportion of jobs at home that might otherwise have been lost altogether. The challenge today for the developed world is to create new jobs, not protect old ones. And, while more could be done at the international level to develop and enforce international labor and environmental norms, and thus set a more level playing field, this requires empowering rather than undermining multilateral institutions such as the WTO.

Beyond this, however, there is a more fundamental problem for progressives with the anti-corporate mindset. What the anti-corporates fail to recognize is the positive transformational potential of global brands. Global brands are the only ones who have will ever have any incentive to improve environmental sustainability and labor practices, precisely because they are the only ones who will be held to account for their actions. The role for progressives is to set an environment in which the private sector can help deliver good jobs -- at home and abroad -- jobs that comply with the acceptable social norms of a growing consumer base. In an era of subcontracting, outsourcing, and increased competition, CEOs are well aware that brand reputation is one of the few capital assets a corporation possesses. If better working conditions, sustainable production, or ethical supply chains are ways in which a brand can enhance its reputation, appeal and value, then doing good globally can be good for business.

Distinguishing between good and bad capitalism, or what Ed Miliband refers to as predatory or producer capitalism, might be a hard concept for progressives to grasp. Despite this, the distinction is a useful heuristic tool. It helps us think about what type of capitalism we want, and how we can achieve it. The difficulty for many traditionalists comes once we answer those questions. In the future, I suspect that progressives will need to forge a coalition with the private sector, social entrepreneurs, consumer activist groups and corporate leaders to achieve the change we want. Such a movement may seem a less heroic or romantic fight than tearing down multinational corporations, resisting globalization or fighting global institutions. The problem for 'Generation Why' is that this approach is much more likely to work.