HOW LOGISTIC REVOLUTION AND PLATFORM CAPITALISM CAN BE RELATED TO SYSTEMIC PROBLEMS

Deadline is approaching?

Wait no more. Let us write you an essay from scratch

Receive Paper In 3 Hours

Charles Darwin discovered that it is natural for species to emanate by conforming to changing occurrences around them. This also applies to the business world. As regular problems increase in the business world, businesses change their patterns, models and methods and develop through the use of technology in limiting these problems, thereby running smooth business operations. Improved system enhances time delivery, security, improves infrastructural framework and meets changing customer needs and requirement. With reference to the two books, “Getting the Goods” by Bonacich and Wilson. Wilson and the book platform capitalism written by Nick Smicek, the paper will examine how different business models have evolved from underlying systematic problems.

Logistics has undergone a metamorphosis because the entire chain of supply has embraced new designs of production, ordering and transportation (Bonacich and Wilson 2008, p.3). Edna Bonacich in her book is apprehensive of the global dimensions of the changing modern production systems and how it impacts on work, in relation to clothing industry (Bonacich and Wilson 2008, p.11). The author explains that “logistics dynamics’ is fundamentally shaping patterns of global distribution and therefore its places “big box” retailers firmly in command. Moreover, fair trade rules, neoliberalism, changing regulations and increased investment in the US has further re-defined the logistics industry (Bonacich and Wilson 2008, p.6). Thus, manufacturers, distributors and their employees face dramatic consequences. Take for instance Walmart. It represents a monopsony because it is a single buyer and not a single seller (Bonacich and Wilson 2008, p.8). Getting the goods expounds on this analysis by doing a first-hand study by basing the research on the Los Angeles’ Long Beach Area, California.

”The Logistic revolution” occupies the first section of the book. Fundamentally, Edna and Wilson elaborates that the increasingly economically and globally integrated supply models chains are governed and controlled by a new pull model of production and distribution. In this case “the point of sale” data capture is done by the retailer and therefore, it dictates how the whole mass-production system works (Bonacich and Wilson 2008, p.12). The retailer’s scale, unit cost, quality, timing and designs result in compressed delivery and strict inventory schedules. As a result, independent business are increasingly forming business prototypes that are closely integrated into these retailer system by employing electronic data interchange. The data interchange occurs between these organizations and other mega retailers, who act as translator for consumer preferences. Shift from in dominance by these mega-retailers has resulted in opening up of financial markets and as a result, big retailers reshape development policies in the international regulations and lending market (Bonacich and Wilson 2008, p.15).

The causes of the logistic evolution include capitalism, which results in the disjuncture between distribution and production (Bonacich and Wilson 2008, p.4). To solve the systemic problem attributed to quantity, quality and perishable loss, a revolution in the realm of distribution and production has invented shorter, more differentiated production lines and strict pressure on labourers. More content scheduling (that is an “as needed’ basis) are crucial features of the new system. These attributes are also accompanied by other auxiliary schemes such as offshoring and subcontracting. Efficient production frameworks involve various sub-contractors around the world, partnering with their parent corporations. These parent organizations look for lower pricing which prompted the rise of world-wide factories/sweatshops in Asia. To synchronise the matrix of manufacture and supply, a revolutionized ‘scientific approach’ and ‘logistics’ was invented with the aim of maximizing and easing flow of goods. More so, the approach invented transport innovations such as containerisation and inter-modal freight movement.

Actual freight movement along the supply chain is extensively explored through the detailed study in the Long Beach Port Area, California. The reason for choosing this area as a case study was because it is the largest US port and it serves as a crucial conduit for entry of Asian, (especially Chinese) manufacture importations. The array of powers revealed the internal complexity of how the system works. Moreover, the approach illustrates the ultimate control by the companies that provide data for importation of such goods. The big-time merchants such as Walmart decide what is imported, by whom and more importantly, they set the prices for such merchandise. Hence, their analysis of the market and the pre-determined demands are then conveyed along the supply chain. This constrains dealers, contractors and more critical effect is on their labour force. Wilson and Bonachic provide an elaborate study of each stage of how the global distribution process has adapted into the changing system.

At the most general level, containerisation and inter-modalism are considered as the key ingredients to the change from the old and tedious logistic system. Containerisation can be defined as the continuous movement of cargo. On the other hand, inter-modalism is the integrated transportation of Cargo in across seas. These two factors are the major growth drivers across the US West Coast as well as in the international freight movement department. Closer links between transportation framework and vastly expanded airport facilities have allowed door to door cargo delivered which simply enhances operational efficiency. As expansion of World Trade continues, countries such as US have used LA Beach as national gate-way, which handles 40 percent of the US trading activities.

With regard to the PESTEL framework, one factor that the new logistics approach outdoes the previous systems is the lack of regulation in the ports (Bonacich and Wilson 2008, p.14). One absolute change in the system is the shift from offspring of container shipping to other advance means known as open registry countries. Major shipping lines have thrived through the invention of massive vessels which compete against each other for orders from retailer giants. The huge vessels are considered as flags of convenience because they operate within minimal regulations. Lack of regulations substantially lower logistical costs. Deep water areas such as Los Angeles Port serve major world destinations without incurring any charges resulting from the existing regulatory frameworks.

After the 2008-2009 recession period, rail interchange facilities and intermodal rail yards have been constructed in order to enhance inland fast links. Once the imports are dispatched, they are transported by rail or trucks by employing the same intermodal techniques to ensure operational efficiency. For instance, in South California, you will find a series of firms and workforce that act as interlinks between the international dealers and the local retail stores. Moreover, there are standby warehouses that handle freight that have been directly shipped by tractor or goods that may not be ready for delivery. The whole distribution and inventory assemblage process is enhanced by the Japan-invented JIT (Just in Time) method. By use of this method, cross docking services, customization of stock and inventory checking is automated. The massive warehouses are constructed to accommodate several deliveries and in fact, some of them are capable of handling over 70,000 containers on a daily basis.

All the aforementioned change in international systemic approach has however come with significant social consequences (which is one of the factors in the PESTEL framework). The question asked is, so what happens to all the workers in this ‘refined ‘approach? In the final section in Edna Bonacich and Jack B. Wilson’s book, they examine the impacts of “logistic revolution” on the 5 groups of personnel that bring logistics administration to life. These employees are classified under the following categories: port tuckers, seafarers, DC staff, rail workers and Dockers. Walmartization has transformed regional and global economies by influencing the power of big box stores. Consequently, they affect how workers are paid and their working conditions (Appelbaum and Lichtenstein 2006, p.122). Moreover, access to cheap workforce recruited across the global south significantly lower costs (Bonacich and Wilson 2008, p.10). For instance, port workers have been affected by growth of non-union tracking firms due to arrival self-governing owner operations. In the drayage segment, working relations have been hampered by the disintegrated unions and consequent collapse of teamster power. Change is needed to accommodate the challenges of works, combined forces by unions (especially those employed by big retailer and distribution firms) can regain power by applying new policies that enhance cooperation between unions and promote efficient organizing of their common agenda (Dufey, Glenday & Pupo 2011, p.228). As ever, capitalism produces its own opposition to these aforementioned remedies. Other social repercussions include sever congestion, community protests and rise in pollution levels. Therefore, the government should join this game or most citizens will suffer (Bonacich and Wilson 2008, p.18).

Nick Smicek argues that “platform capitalism” is “fundamentally, a post 2008 (financial depression) phenomenon (Smicek 2017, p.85). The author seeks to answer the question” How is the market going to make sense of the rising platform-based businesses that monopolize the economy? Also, what are effects of this business trend? And are there any remedies to contemplate post-capitalist structure? Smicek notes that the contemporary business world is a combination of platforms and big data analytics (Smeicek 2017, p.2). Capitalism requires firms to continually seek new ways for attaining profitability (Smeicek 2017, p.3). Some of these institutions focus on labour while others focus on digital technology. His approach positions major tech companies as economic players in the capitalist process. Platform capitalism makes use of big data in designing of business models that eventually result in monopolisation. Data is synonymous to oil in that it can be extracted, processed and utilized in several ways (Elder-Vass 2016, p.5).

In concurrence with Bonacich and Wilson, capitalism has uniquely increased productivity levels. Instead of focusing on political and social factors, the author emphasized on power as a motivator for productivity (Elder-Vass 2016, p.71). Economies have a higher growth capacity because the rule of thumb applied is: the greedier, the more efficient it is (Smeicek 2017, p.30). The argument by (Smeicek 2017, p.6) is that decline in manufacturing profitability has turned capitalism to use data as a way to maintain economic growth in the production sector. Like the East Asian 1998 crisis, the 2008 recession was caused by rapid interest rate reductions and use of ultra-easy monetary policies (Smeicek 2017, p.23). In the US, high levels of debt saw central banks drop its interest in a massive rate, and by 2016, major Central banks had lowered their rates 637 times. Investment in computers and other peripheral items was at 50.1 billion in 1990 and by 2000, it had significantly increased to 412.8 billion (Smicek 2017, p.2). All the above statistics shows how capitalism has been used to transform digital technology.

Post-2008 economy has been characterised by emerging technologies due to deeper capitalist tendencies. Being the most dynamic sector in the modern economy, it guides economic growth and its increasingly pervasive infrastructure has revolutionized the modern market. Due to its dynamic nature, the digital economy has become a hegemonic model. Therefore, these corporations are increasingly becoming disruptive and workers are required to become more flexible (Smeicek 2017, p.5). The imperative consequence of the capitalism schematic model is that it requires constant technological change due to generalized market dependence (Smeicek 2017, p.11). In order to cut costs and reduce turnover, capitalism has been embraced.

However, capitalism has its negative consequences on the workers. Problems encountered include stagnant wages, decline in productivity by employees and inequality. With regard to the workforce, digital companies such as Google have 4 times as less workforce as manufacturing corporations. Tech companies are notoriously small. For instance, Google has 60,000 direct employees while Facebook has only 12,000 workers. In contrast, companies such as AT & T and GM have 564,000 and 605,000 workers respectively (Smicek 2017, p.4). The American Marshall plan was founded by these companies and the aim was to expand export markets due to rising investment levels. Unfortunately, technologies have enabled the hiring of cheaper workers in order to replace skills (Smicek 2017, p.13).

The system has led to more contingent working relations, racialized labour forces and lowered labour standards. The standards are further impacted by the weakening of unions that cater for the rights of these workers. Coupled by unfavourable political legislation, it can be clearly concluded that the revolution’s deregulation approach has resulted in mistreatment of workers (Bonacich and Wilson 2008, p.16).

Conclusion

Bonacich and Wilson views the logistic revolution as a two-side process. Despite the humongous dynamism and change that it has brought in production, logistics and supply chain, there are vulnerabilities that can be addressed to enhance strategic power of containerisation and transportation (Bonacich and Wilson 2008, p.244). This can be done by improving the conditions of warehousing workers whose responsibility is to perform important circulatory functions. The whole system would collapse if these labour forces decided to boycott work. The use of inventory systems such as JIT provide greater commonality between employees absorbed by mega-firms. Therefore, labourers can exert pressure on such firms. Simirlaly Smicek provides a broadened historical perspective of capitalism and he recommends the use of digital technology to remove systemic bureaucracies and increase production.

References

Appelbaum, R. and N. Lichtenstein, ‘A New World of Retail Supremacy: Supply Chains and Workers’ Chains in the Age of Wal-Mart’, in International Labor and Working-Class History, No. 70, Fall (2006): 106–125.

Bonacich, E. and Wilson J.B.(2008). Getting the goods: ports, labor, and the logistics revolution.

Dufey, A., Glenday, D., & Pupo, N. (2011). The shifting landscape of work. Toronto, Nelson Education.

Elder-Vass, D. (2016). Profit and Gift in the Digital Economy. Cambridge University Press.

Kuecker, G. Review of “Getting the Goods by Edna Bonacich and Jake Wilson. World Systems Research.

Smicek, N. (2017). Platform capitalism.

This sample could have been used by your fellow student... Get your own unique essay on any topic and submit it by the deadline.

Let a professional writer get your back and save some time!

Hire Writer

Find Out the Cost of Your Paper

Get Price
Hi!

Can’t find the essay you need? Our professional writers are ready to complete a unique paper for you. Just fill in the form and submit your order.

Proceed to the form No, thank you
Can’t find the essay you need?