September 28, 2004

Seth Stevenson Urges Us to Be Worse Than Debbie--Much Worse Than Debbie

UPDATE: On reflection, I owe Seth Stevenson an apology. He is not a moral imbecile. He is wrestling with the right questions. (Even though, from my perspective, he needs different intellectual tools to get the correct answers). What is below looks, in the cold light of the computer screen, a lot rougher than I intended it too.

I therefore apologize.

But I don't concede the point. I want to preserve it: First Worlders are more complicit in the continuation of Third World poverty when they don't buy products made by Third World labor than when they do. The big problem (which the government of Kerala and the CPI(M) are trying hard to solve) is the thin market/local politics monopsony of Mr. Shady Middleman. Debbie is doing a good thing (although not the best thing) for world development by raising demand for coir in India rather than sourcing her mats from some high-tech materials factory in North Carolina. It is important to think analytically. Et cetera...


Seth Stevenson of Slate urges us to become morally upstanding by undertaking a course of action that would worsen the misery of India's poor. No, seriously, he does. He writes:

Trying Really Hard To Like India. By Seth Stevenson: [T]ake our last night at Marari Beach. We somehow end up drinking in the bar with a thirtysomething American woman—let's call her "Debbie"—who is six stiff drinks ahead of us. Between sips of some tropical concoction, she delivers a slurry monologue explaining that she has come to India on business. Her business: designing doormats. No joke.

One of Kerala's big industries is coir—a textile made from coconut husks. On a bike ride we took around the village (yes, "the world beyond the hotel gates"), we could see into huts that had looms and people weaving coir into simple mats. These mats get trimmed and finished (by some big export factory) to Debbie's design specs. Then they get shipped to North America and end up in some middlebrow home-furnishings catalog where you can buy them for $26.99.

Debbie is drinking heavily because her job here is wicked depressing. She buys in bulk from the big exporter, who pays a shady middleman, who (barely) pays the villagers here. The villagers can make about three mats per week—all of excellent quality—and for this they get paid a few cents per mat. The middleman of course takes all the profit.

Debbie, goodhearted human that she is, is on the verge of drunken tears as she describes all this. She knows the whole thing is grossly unfair. And that she perpetuates it. But if she wants to keep her job with the American firm she works for, and still make deals with Indian exporters, there's not a damn thing she can do about it.

And unless you have carefully avoided buying any products made by Third World labor--and chances are you have not--you're really no better than Debbie.

Suppose that all of us who would otherwise buy coir doormats for $26.99 at Cost Plus World Market read Seth Stevenson's article in Slate, obey his injunction to become 'better than Debbie" by not buying our coir doormats--or "any other products made by Third World labor." What happens then?

Demand for coir doormats drops through the floor. Cost Plus World Market stops selling them. Debbie's company transfers her to another job, managing a maquiladora in El Paso. Mr. Big Exporter goes bankrupt, and has to return to his ancestral village in Oudh. Mr. Shady Middleman loses his job too, and has to become a lower-paid janitor at the Luxury Beach Hotel where Seth Stevenson says. "Ha, ha! Serves them right!" you say. "Disgusting exploiters! They got what's coming to them." And you kick back and feel morally virtuous.

And next year, what do the tourists who leave Big Luxury Hotel and take a ride around Desperately Poor Village see? They look into huts. The huts are empty. The looms stand idle. Nobody is making coir mats anymore--Mr. Shady Middleman is no longer buying.

What are the people who used to sit in their huts and make coir mats doing instead? We don't know. But we do know one thing: Whatever they are doing, they would rather be making coir mats. Those who took up the option of making coir mats did so because it seemed to them to be the best available option. And we--by trying to preserve our moral purity by not becoming polluted by physical contact with the products of Third World labor--have stolen that option from them.

Seth Stevenson thinks that those who do not buy the coir mats are morally superior to Debbie and the rest of us: they are not complicit in the exploitation of Third World labor. But there is another way of looking at it--a way that makes those who do not buy the coir mats (and Seth Stevenson) into moral monsters. Suppose that Seth Stevenson, on his bicycle ride, were to stop by a couple of empty huts, run into them, steel the looms, and then smash their looms to pieces on the beach and dance in front of the resulting bonfire. Then the villagers could no longer make coir mats. They would have to find something else to do--something else that is worse than making mats. Such a theft-and-bonfire would have the same effect on the people of Desperately Poor Village as... as... drying up demand for their products by urging First World consumers to adopt a higher standard of morality and eschew the products of Third World labor, no?

So shouldn't we evaluate Seth Stevenson's plea for us not to buy coir mats as having the same moral value as loom-smashing, since it has the same effect on the people in Desperately Poor Village? By this way of thinking, Seth Stevenson is a thief. No, he is worse than your common-variety thief: a common-thief steals from the rich, while Stevenson steals their livelihood from the poor. Stevenson is a thief who steals the poor's livelihod. No, he is even worse--for he incites others to steal the poor's livelihood as well. And he is even worse than that: a thief--even the master of a gang of thieves--makes use of what he steals, while Stevenson simply destroys the looms (or, rather, urges us to destroy the looms' market value as a capital good.)

There is no reason. He's a thief--no, worse, the organizer of a large gang of thieves--no, worse, the organizer of a large gang of vandals who prey on the world's poor. By my lights, Stevenson is on a moral plane far, far lower than that of Debbie. Debbie may be reborn as a Brahman. But the karmic wages of Stevenson's internet virtual loom-smashing ensure that he will, at best, be reborn as a dung-fly.

What would Seth Stevenson do--instead of urging all of us to help him virtually smash the looms of Desperately Poor Village--if he wanted to improve his chances of being reborn as something higher than an insect (a mangy dog, say; or a lesser marmoset)? The odds are low: some people will read his piece, and not buy the coir doormat, and India's exports will drop, and some looms will stand idle, and some people in Desperately Poor Village will lose their livelihood and be forced into some worse situation because of his actions. The karmic burden can only be lightened, not removed.

Here are some possibilities:

  • Praise coir doormats extravagantly, to boost demand in America for them. With higher demand, Mr. Shady Middleman will have to go further, work harder, and pay more. More families will have the option of making a livelihood by weaving coir doormats--and those families that take up that option are pretty likely to be made better off as a result.
  • Agitate for the expiration-on-time of the Multi Fiber Agreement, which restricts textile exports from the Third World to the United States--and so virtually smashes more looms in a minute than Seth Stevenson on his bike could smash in a year.
  • Figure out a way to generate alternatives to Mr. Shady Middleman. If there were two or three such bidding for Debbie's business, each would be a lot less shady--and each would pay the mat-makers more. The fact that Mr. Shady Middleman has his local monopoly is a sign that this is going to be hard. Either Mr. Shady Middleman himself is barely getting by, and nobody else with the organizational skills to successfully do his job wants it; or bad things happen to competitors at the hands either of the local police or the local notables. Kerala is the province of India in which the local government does the best job of protecting the poor against the rich, but it is extremely rare in historical perspective for the government to be anything other than a committee for managing (and advancing) the affairs of the local landlord class and the local bourgeoisie.
  • Take more vacations at Big Luxury Hotel, so that it will have to hire more people from Desperately Poor Village, and so give them even better options.
  • Band together with the other guests at Big Luxury Hotel, collect a pool of $10,000 or so, and give it to a committee of senior women in Desperately Poor Village to lend out in small amounts to those in the village who need capital for projects.
  • Buy the villagers some goats (or whatever other piece of agricultural capital seems useful).
  • Give money to the Kerala Ministry of Education (which is a reasonably clean and uncorrupt institution).
  • Agitate for the United States to increase its foreign aid budget.

There are lots more constructive things that Seth Stevenson could do. But urge his First World readers to join him in boycotting the products of Third World labor, and so virtually smash the looms that are the best current option of the inhabitants of Desperately Poor Village? No. No! No!! No!!!! No!!!!!!!!

Think analytically, people. Think hard about opportunity cost--what people's options are--and how to expand those options, not narrow them. Think not about the first-round effects of actions, but their implications for equilibrium. Only thus do you have a hope of attaining Enlightenment.

Seth Stevenson will never achieve the blessed state of being reborn as a Boddhisatva--or even a Neoliberal Economist--at this rate.

Posted by DeLong at September 28, 2004 04:07 PM | TrackBack
Comments

"Trying Really Hard To Like India. By Seth Stevenson"

What an awful arrogance of Seth Stevenson. I dearly like India without trying at all. Brad's response is brilliantly written and should be wildly convincing to any of us who know or even in sympathy can imagine India.

Posted by: lise at September 28, 2004 04:26 PM

Would Brad have given this same advice for the same reasons to the people who boycotted table grapes at Caesar Chavez' behest in 1965-1970?

Microeconomics often seems to neglect the larger issues of strategy and tactics.

Posted by: Mike Huben at September 28, 2004 04:34 PM

Skimming through that before I leave for a few hours, I'm reminded of Krugman's "In Praise of Cheap Labor." Yes, things do suck, and as others have pointed out, we can do things to fix certain problems. Yet if we abandon this process entirely, the alternative will come about, and that's much, much worse.

Also, Brad, I'm not sure how personal a question this is, but exactly what type of economist do you consider yourself? I've heard you describe yourself as a "liberal economist," which I know, but in academic terms, such as Keynesian or Neo-Keynesian, which is it? (I want to be sure, is all.)

Posted by: Brian at September 28, 2004 04:40 PM

I don't see any strategy. I don't see any tactics. I see a call to achieve moral virtue by avoiding physical pollution via contact with the products of Third World labor.

Posted by: Brad DeLong at September 28, 2004 04:44 PM

The nice thing about this example is that the coir mats cannot be made more cheaply in America, or in China, by a machine. The things that they compete with are either the nice wood things made in the Philipines by hand, or some weird polyester thing made by some massively capitalized entity whose comings and goings are inscrutable to normal humans. It seems highly unlikely that anyone is going to lose a job to the coir mat weavers.

Posted by: masaccio at September 28, 2004 04:48 PM

This isn't a rhetorical question, I'm trying to do the right thing: Say that I want a coir rug, and that I want to support Indian laborors as best I can. Do I buy the rug from, say, Cost Plus, or do I buy it from a "fair trade" place like 10000 Villages? Or is fair trade just BS and amounts to breaking looms, just like not buying from Cost Plus?

Posted by: spiritrover at September 28, 2004 04:51 PM

At least Brad acknowledges some role for institutions:
"Either Mr. Shady Middleman himself is barely getting by, and nobody else with the organizational skills to successfully do his job wants it; or bad things happen to competitors at the hands either of the local police or the local notables."
Economists too often abstract the "choice" available to the desperately poor and severely oppressed, without even a sidelong glance at how that "choice" came to be the "best" available.
I would prefer not to be complicit in the political manuvering, which results in a life of virtual slave labor, making coir mats or any other Wal-Mart trinket.
The U.S. is sucking up these goods from India and China and Southeast Asia, usually at prices ridiculously favorable to us -- the huge trade deficit is testimony to the fact that we are not coming close to paying even the low prices asked of us.
The American corporations, who are buying this stuff can be enormously effective in encouraging a fairer and more humane distribution of income, as well as better working conditions, etc.
We should not be boycotting India or Indian goods, but we ought to be willing to put pressure on Wal-Mart or Nike or "Debbie's" mat congolmerate, to represent this country abroad in a humane way.
Our political "choice" is certainly not between buying a $27 mat, and hoping that 3 or 4 cents reaches the maker, to keep her alive to go on making mats in a dirt-floor hut, and not buying a coir mat, and condemning the mat-maker to desperation plus.
We can and ought to require the giant corporations, which buy all of this stuff for us, act in a liberal fashion, with an awareness of how their ways of doing business affect the local society. Let the Wal-Marts of the world demand that the government and oligarchs of Kerala demonstrate a modicum of respect for the common people; they are enjoying the gravy train far more than the coir weavers and they won't let Wal-Mart boycott them, for the sake of extracting a couple more pennies per mat from the desperately poor.

Posted by: Bruce Wilder at September 28, 2004 04:57 PM

This is difficult stuff, and I have a hard time knowing what to think. So in order to sort out my own opinions, let me ask a follow-up question.

In Stephen Frears fine recent film "Dirty Pretty Things" (small spoiler alert if you haven't seen the film) a hotel worker in London removes the organs (as in kidneys, livers, etc) of illegal immigrants in return for forged papers. When challenged, he says is in the business of happiness -- the recipient of the organ is happy, he as the middle man is happy because he gets 10,000 pounds for the organ, and the illegal immigrant is happy because he/she gets papers. There is, he says, no compulsion, so what's the problem?

My question is, does Brad agree that the organ trader is taking advantage of the immigrants?

Posted by: Tom Slee at September 28, 2004 05:01 PM

Dear Brad,

Brilliant.
I do love you madly!

Anne

Posted by: anne at September 28, 2004 05:04 PM

No, there's nothing wrong I can see with buying from a "fair trade" outlet. You can see the difference between the typical US retail cost of a coir mat and the "fair trade" price as the amount you value that "fair trade" feeling. Thus, you're being sold a mat and a good feeling. If you can convince a lot of people that this warm, righteous feeling is worth that premium, then you've made the mats made my fair trade India matweavers worth more than the others. And the matweavers will benefit, supposedly, since how much the matmakers benefit is the bottom-line you're looking at.

The problem with this is that "feel good" value is even more a luxury in most consumers' eyes than is the mat itself. Good luck getting enough people to buy fair trade mats to do much good.

Brad, I think the counter-argument would be that Stevenson and others aren't only looking at first-order effects, they're assuming some vague outcome where the pressure of not buying those mats causes those people to somehow get *better* jobs. They usually don't have any sense what those jobs might be or how to encourage them, they're just certain that they don't want to be a part of perpetuating the problem. And they for the most part dismiss the claim that the wealth that the matmakers are creating by weaving the mats and exporting them are slowly but surely increasing the standard of living for Indians.

I can't imagine being in that woman's position, and to a less degree Stevenson's, without trying somehow to use my influence to see that the matweavers get more of the proceeds. You're most likely right in your reasons above why this would be a difficult and likely unwinnable battle, but it's worth a shot. Certainly in comparison to quitting or encouraging people not to buy the mats.

Posted by: Keith M Ellis at September 28, 2004 05:06 PM

Brad, this is a great f------ post.

I would only add that one other step Seth Stevenson could take would be to radically agitate in the United States for a humane health care system and employment transition system for those whose jobs are outsourced, etc. peacefully to places like India ...

The estimable Debbie ought to do that, too.

...but until that happens, don't expect rational reactions like yours from the population at large.

One other point: until poverty is relieved beyond subsistence wages for weaving mats, I hope the drunken but moral Debbie is not kidnapped and held for ransom to force the corrupt middleman and Western consumers to provide higher wages.

Yet another tedious point: a little story.

As a Peace Corps volunteer in the Philippines (mid-1970s), I had the opportunity to travel to very cool tribal areas in Mindanao, where I came upon a fellow volunteer who had draped himself in the rags of poverty to, it turns out, express his moral superiority to .. what? exactly, I don't know. But he had told Peace Corps he wanted to take only some small percentage of his monthly salary (@$110 per month) so that he could reach a sort of Filipino Boddhisvatahood.

I counseled him to take the full pay and build a water well for "his" tribe (the Tboli, in this case), which might relieve various gastro-intestinal problems in the area, but he thought being Mother Teresa was quite enough.

By the way, I was not the world's gift to Peace Corps myself.

Posted by: John Thullen at September 28, 2004 05:16 PM

Re: "In Stephen Frears fine recent film "Dirty Pretty Things" (small spoiler alert if you haven't seen the film) a hotel worker in London removes the organs (as in kidneys, livers, etc) of illegal immigrants in return for forged papers. When challenged, he says is in the business of happiness -- the recipient of the organ is happy, he as the middle man is happy because he gets 10,000 pounds for the organ, and the illegal immigrant is happy because he/she gets papers. There is, he says, no compulsion, so what's the problem? My question is, does Brad agree that the organ trader is taking advantage of the immigrants?"

Yes, the organ trader is taking advantage of the immigrants. And I would support the prohibition of trades of organs for cash: if poor immigrants can't sell their organs, then the makers of forged papers are reduced to demanding their (limited) cash, the price of forged papers drops, and immigrants are made better off because they *don't* have the power to sell their kidneys.

But this isn't Seth Stevenson's situation: there's no way in hell that telling First World consumers that if they were moral they would boycott goods made from Third World labor is going to be a good thing for the inhabitants of Desperately Poor Village.

Posted by: Brad DeLong at September 28, 2004 05:23 PM

I usually enjoy Seth S's work in Slate, but somehow the country of my ancestry has intersected with a really bad mood on his part and he's being unreasonable. I hope he gets better.

Posted by: Sumana at September 28, 2004 05:25 PM

The argument is facesious. The reality is that the country where the weavers live owes IMF billions of dollars and US makes sure the local goverment is "neo-liberal" so the weavers will never make anything other than mats - and once the fashion goes away they move into the cities and become prostitutes, criminals and beggars. And of course Brad gets to keep the cheap hand-woven mat with good conscience.

Posted by: a at September 28, 2004 05:28 PM

Just don't buy the mat and send the villagers the 4 cents. Your other ideas are just not going to happen, which makes the choice for buying a single mat simple.

Posted by: Tim H. at September 28, 2004 05:31 PM

Just to sum up the situation, we aren't actually paying for the mat. Our balance of payments deficit amounts to borrowing money from the rich people in India by way of Tbills and from the poor people by way of printing paper currency (which they use as a medium of saving up for their child's college education or penicillin tablets).
Which is why I feel that our inevitable default on the currency is going to ruin more lives and make more enemies than the default on the treasury bills.

Posted by: wkwillis at September 28, 2004 05:59 PM


In recent news Ayn Rand has been confirmed to have possesed proffesor DeLong.

Posted by: Rob Sperry at September 28, 2004 06:01 PM

"Figure out a way to generate alternatives to Mr. Shady Middleman..."

Is what everybody should be looking for.

Seth Stevenson's argument is the leftwing equivalent of rightwingers claiming that welfare is morally repugnant and should be abolished. Satisfying their own conception of morality they condemn millions to penury.

Posted by: Tadhgin at September 28, 2004 06:25 PM

"In recent news Ayn Rand has been confirmed to have possesed proffesor DeLong."

No, I think the good prof. speaks the truth: that boycoting products made by third world labor hurts poor Indians. The only purpose such a boycott serves is making Seth Stevenson feel better than Debbie.

HOWEVER, I would like to know Prof. DeLong's opinion of "fair trade": purchasing products made by third world labor that come with a guarantee of fair treatment of that labor. I can see the down side to it (i.e., the high cost of the products would make them niche markets for do-gooder types who want to feel better than Debbie), but I think that giving companies a profit incentive for good behavior is worthwhile (and it doesn't even involve nasty protectionism).

Posted by: Brad Reed at September 28, 2004 06:27 PM

I am just lost. Economists never seem to consider that the people making the mats, might want to have done something else, but the mighty winds of unchecked capitalism have swept them into the garment district of old New York. Yee Haw! We know it turns out OK, but tit takes a lot of eggs to make that omelet.

The supply of one item in one location has a negative effect by driving mono industries and mono culture as well as enriching a single, middle man. I am just not enamored with an Economists ability to ensure the proper manipulation of market forces to make a planet where every person's talents are exploited, but the workers are not, as well as maintaining a sustainable balance of resources.

Beautiful Horizons has a discussion of the deforestation of Haiti (http://www.beautifulhorizons.net/weblog/2004/09/deforestation_i.html) which proves that the US cannot even properly impact a small neighbor. How are we going to do any better in India?

I have any idea…

Posted by: Greg Hunter at September 28, 2004 06:31 PM

but he thought being Mother Teresa was quite enough.

Not fair! Mother Teresa would have built the well.

This guy was playing MT on his own internal TV.

Posted by: sm at September 28, 2004 06:32 PM

Actually, within "a's" post, there is a good point, but unfortunately it's got cheap shot at Brad all over it, thereby making it useless.

Here's what you do "a": Go buy the time of a prostitute in a poor country. Pay her/him (who am I to presume what "a" stands for) $100 American dollars. Don't have sex with him/her.

Instead, watch as he/her heads back to her village/barrio and gives the $100 to her his/her family to pay the rent, buy some food, and maybe, a loom.

When you get back, buy 62 mats. Sell them to somebody for a higher price. Take the money, send it to the prostitute you didn't have sex with, well, cause posting rules probably forbid me suggesting what you were doing instead.

But, yeah, you pointed out a problem.

I'm picking fights with everyone today, "a" so don't think you're special.

Posted by: John Thullen at September 28, 2004 06:34 PM

Awesome post. I explain this point to my wife again and again. But I'm a libertarian and she's a liberal. Maybe she'll listen to you?

Of course, she doesn't like economists. Especially how the ones at the IMF and World Bank ignore the advice of anthropologists, according to her.

Posted by: fling93 at September 28, 2004 06:36 PM

This stuff makes my headache. You guys sound like Scrooge. Can't they go to the workhouse and make mats! Just think if you would like to make a living doing this. Maybe write to the company and tell them why you are not buying their mats. If enough people do this, conditions will change. The power of the market.

Of course, maybe if more economists made mats,we would be better off.

Posted by: la at September 28, 2004 07:09 PM

As weak as Nike's sweatshop reforms were, without consumer pressure (including, yes, boycotts) would they have made them at all?

And by weak analogy to coffee (which I don't drink and therefore know relatively little about), fair trade is not much of an additional cost - the Starbucks luxury coffee beans (at cooking.com, anyways) are all within a few dollars of each other, including the fair trade ones. Why would fair trade coir mats rise to an unreasonable level over $27?

Also, I think it's disingenous hyperbole to consider a boycott of unfair trade as equivalent to loom smashing. I'm against sweatshops, but I'm not saying that Nike should shrivel up and die; just that they shouldn't mistreat their workers (including by proxy).

Posted by: ArC at September 28, 2004 07:13 PM

So guys, what is your position on buying rugs from India and Pakistan made by children sold into bondage? They are inexpensive and they are good, kids can tie tighter knots. The kids get a bit a gruel each day, enough to stay alive, and might be allowed occasionally to go outside. Or is there some thing that even rational economists choke on?

According to your own economic criteria, this is a good outcome.

It is fairly amusing to contrast the levels of self delusion about whom is better off when in this argument with the self delusion on the same issue in arguments about Iraq.

Posted by: Eli Rabett at September 28, 2004 07:18 PM

While Seth Steven's logic is wrong, so is Brad DeLong's.

BDL has fallen into one of the the usual traps of people looking at developing countries. What counts isn't whether the mat makers would rather be making mats or not, but whether their activities are only making them better off but making others even worse off. The trap is easy to fall into because the mat makers look like the bottom of the heap; they aren't, they are better integrated into the cash economy than those really at the bottom of the heap. What counts for the really poor is the availability of subsistence. If they can get into mat making fast enough, well and good. If coir doesn't displace subsistence crops, well and good. If coir does displace them, but the really poor and landless get new opportunities, well and good.

But if coir means there is less for the really poor to eat, buying mats is only making the mat makers better off while making the really poor worse off - since they don't get compensated for their lost opportunities. And they often don't show in the statistics too.

There are yet other problems with analysing what does or doesn't help people in those countries, but that's a common trap that BDL fell into just there.

Posted by: P.M.Lawrence at September 28, 2004 07:56 PM

This is too hard on Seth Stevenson. His main concern is the exploitive middle man who takes all the profit, not that the profit is relatively small. It may be economically naive to worry about the latter, but surely not about the former. His last sentence is the only one that might imply advocating a boycott, and even that sentence can be interpreted differently.

And yes, it's hard for a rich Westerner to like being in India. It's one thing to know, in the abstract, that most of the world is poor, and it's something else to travel through endless vistas of dusty, dirty, grinding poverty, infant beggars, garbage pickers, rows of people sleeping in train stations, a perpetual smell of smoke, chaotic traffic, aggressive panhandlers, swarms of mosquitos and flies, hole-in-the-ground toilets. You can even "dearly love" India, and still find it hard to take.

Posted by: Ken C. at September 28, 2004 07:58 PM

P. M. Lawrence, how does weaving the mats affects subsistence farmers? Does the general (relative) prosperity of a mat-making region drive up land prices so that tenant-subsistence farmers can no longer afford their rents or what?

Posted by: Julian Elson at September 28, 2004 08:51 PM

"But if coir means there is less for the really poor to eat, buying mats is only making the mat makers better off while making the really poor worse off - since they don't get compensated for their lost opportunities. And they often don't show in the statistics too."

Is there any evidence that this has actualy taken place for a prolonged period in a developing contry with GNP growth?

If you are at subsistance the only place you can go down is to be dead. Is there evidence of an increase in the death rate for certain segments of the indian population?

Posted by: Rob Sperry at September 28, 2004 08:58 PM

One would normally think that pulling people out of the unskilled labor pool into the mat-making pool would raise the real wage paid to the landless and unskilled truly poor.

Posted by: Brad DeLong at September 28, 2004 09:00 PM

While I don't see the logic of P. M. Lawrence's post, Rob Sperry, there are different degrees of subsistence. You can be a subsistence farmer with chronic-but-not-fatal malnutrition, getting 1,700 calories a day, or you can be a somewhat healthier subsistence farmer, with no money, but who gets 2,400 calories a day.

Posted by: Julian Elson at September 28, 2004 09:03 PM

Brad Delong is no Ayn Rand. Gimme a break.

Besides, I just saw Ayn shopping for cheap mats at Wal Mart with Grover Norquist so that even more Americans could be denied heath insurance. They didn't buy any because they thought maybe the mats were subsidized by government.

That's not Brad's gig.

Eli: my position on buying mats from the kids in forced labor is to buy lots of mats, use the money to buy lots of big-clip weapons at American gun shops, smuggle those guns to the kids so they can kill their fucking exploiters, and then see what happens.

Or, we could do Brad's thing and hope it works, somehow, to prevent even more bloodshed than is imminent.

What's your plan?

Posted by: John Thullen at September 28, 2004 09:07 PM

John,

My plan is

http://www.anti-slaverysociety.addr.com/rugmark.htm

Emotionally I am with you, though, but that makes me a non-economic optimzer.

Posted by: Eli Rabett at September 28, 2004 09:11 PM

Interesting. Now explain, please, why you're in favor of child labor and minimum wage laws in the US. Don't those laws take jobs away from poor people who'd rather be working?

Posted by: jr at September 28, 2004 09:35 PM

Eli:

Good plan. I suspect your plan and Brad's plan together may be effective.

We'll keep my plan on the back burner for now, but within sight, as a non-economic incentive-optimizer plan, for the Ayn Rands and Grover Norquists in our midst.

Posted by: John Thullen at September 28, 2004 09:36 PM

It is so rare, but no less delightful, to see a free trader on the Left nowadays. The retreat of the orthodox left, from the reformist Democratic wing out to the extreme fringes, to a kind of Bolshevik Smoot-Hawley-ism is an authentic intellectual betrayal of all the ideals of the progressive movement, and it is heartening to see you exposing and combatting this intellectual fraud.

Posted by: David Ross at September 28, 2004 10:00 PM

Jr: Reason and Evidence.

What do you propose is the mechanism whereby child labor laws "take away jobs"? Whether its a child or an adult working, a job is still a job. Child labor laws restrict the pool of workers, but do not "take away jobs".

Minimum wages: where is your evidence that an higher minimum wages "take away jobs". In real terms, the minimum wage has been in steady decline over the last 20 years, with precious little evidence of any positive impact on job creation. In fact, job creation was strong during the 1990's when the nominal minimum wage was boosted.

Posted by: Paul G. Brown at September 28, 2004 10:05 PM

I'm from India and dearly love it. The state of Kerala is one of the better performing Indian states as per the UN Human Development Index. It is also one of the heavily unionised states in the country. Literacy rate is well in excess of 90%, but paradoxically unemployment is also very high.

Even though poverty is endemic in India, from my own experience I can attest that it's not that prevalent in Kerala. Many unemployed people just leave the state or find jobs in Saudi Arabia and other gulf countries. The unions in Kerala are quite strident and are in often cited as one of the reasons that investment in the state is lagging the other southern Indian states. The main reason that I harp on the union factor is to say that exploitation is hard(harder?) in Kerala than in other states.

During one of my trips back to India, i did stop at a coir making 'facility' in Kerala. This facility was on the banks of the backwaters and supported a few families. The families were living in decent houses and the living conditions were not bad. Keep in mind, I'm talking in terms of third world living conditions. Without the income from the coir weaving the men-folk would have had to migrate to the cities, or to other states or even to the gulf. And in most cases the families would be splintered and that would have ots own attendant problems.

The next time I see a coir mat in Pier 1 or wherever I'm buying it.

Oh and don't even think about sending any money to the Kerala Education Ministry (or for that matter any ministry in India). It would go straight to some corrupt bureaucrat's or politician's pockets

Posted by: Karthik R at September 28, 2004 10:29 PM

Regarding possibility #2 (Agitate for the expiration-on-time of the Multi Fiber Agreement): won't this allow the giant low-wage countries (China and India) to drive the slightly better off producers like Mexico and the Central American countries out of business? Some market controls, while always causing a mixture of results, seem on balance necessary to protect the "little guys".

Posted by: TomK at September 28, 2004 10:58 PM

Regarding possibility #2 (Agitate for the expiration-on-time of the Multi Fiber Agreement): won't this allow the giant low-wage countries (China and India) to drive the slightly better off producers like Mexico and the Central American countries out of business? Some market controls, while always causing a mixture of results, seem on balance necessary to protect the "little guys".

Posted by: TomK at September 28, 2004 11:00 PM

Regarding possibility #2 (Agitate for the expiration-on-time of the Multi Fiber Agreement): won't this allow the giant low-wage countries (China and India) to drive the slightly better off producers like Mexico and the Central American countries out of business? Some market controls, while always causing a mixture of results, seem on balance necessary to protect the "little guys".

Posted by: TomK at September 28, 2004 11:01 PM

Regarding possibility #2 (Agitate for the expiration-on-time of the Multi Fiber Agreement): won't this allow the giant low-wage countries (China and India) to drive the slightly better off producers like Mexico and the Central American countries out of business? Some market controls, while always causing a mixture of results, seems on balance necessary to protect the "little guys".

Posted by: TomK at September 28, 2004 11:03 PM

Regarding possibility #2 (Agitate for the expiration-on-time of the Multi Fiber Agreement): won't this allow the giant low-wage countries (China and India) to drive the slightly better off producers like Mexico and the Central American countries out of business? Some market controls, while always causing a mixture of results, seems on balance necessary to protect the "little guys".

Posted by: TomK at September 28, 2004 11:05 PM

Resorting to ad hominems, my spouse and I travel to the Far East every now and then. An example, without specifically naming the country, actually, island:

Riding in a rented car over the mountains, I asked our young male driver what he would like to do with his life. Remember, this is a kid who speaks the native dialect, the official state language, plus fluent street English, German, and a passable Japanese, shaming me to a blush.

He said without blinking he wanted to own his own driving business. Being a business person, I asked him flat out how he hoped to own his own car. Oh no, he explained, not a car right away, a motor bike.

OK, I asked, how much would you have to pay for a motorbike? Well, he thought for a moment, 5,000,000 ringets or bahts or rupiahs, I forget what their currency is. In other words, the same price we would pay for a new Japanese motorbike, except plus an additional 25% duty fee.

Where are you going to get 5,000,000 Rb's, I puzzled, thinking, this kid will make maybe 5,000 Rb's for our trip, and pay most of that to the man who loaned him the car, and the rest for gasoline, leaving him just enough for a few skewers of chicken intestines, some cold rice and a narrow bottle of island fizzy-pop.

Oh, he explained, I don't have to pay the whole amount, just 50% upfront in cash that I will borrow from my family back in the village, and then a 100% balloon payment in a year from now, when I will own my motorbike.

Do the math.

Is the kid better off standing in the taxi line soothing 'welcome, you like ride, welcome, you like ride, welcome, you like ride' over and over to the hordes of Western tourists, knowing that at most he can feed his family for a day, and on a good day put a few dollars away towards a many-thousand dollar motorbike, where he'll only have one passenger, and so no way to ever buy a car?

Do the math.

We created this tourist and sweat shop system. America did. We spread slavery across the globe, just like the English and the Dutch before us.
Now that evil empire is ours. We can justify continuing and expanding and crushing ever more heavily (since our global slaves suffer the same increases in food, gas and living costs we do) this network in the name of Free Trade and Free Travel and its Free Debauchery and Sex Trade, dislocating people from their villages, and so into an anonymous and neverending spiral of slavery, decripitude and finally starvation...

Or?

The white man's Pottery Barn conundrum.

You broke it. You own it.

Let's continue the analysis:

Reaching our destination, we passed a group of women villagers along the beach roadside with a huge mound of mackerel in a woven basket. As the kid of many languages carried our bags into the home-stay hotel, I asked him about the women.

Oh, he replied, those are fishermen's wives. The men rise before dawn and sail their narrow canoes out into the deep waters of the straits, fishing as a flotilla with hook and line for the mackerel tuna. Then, having no refrigeration, they pile the fish on the mats you saw, where a middleman will come by soon and pay them a few Rb's for it. What else can they do?

You mean, I asked, the fisherfolk sell their entire catch to a hotel middleman for a few Rb's? What do they eat themselves?

Rice, he replied with a shrug. And insects.

Are these native fishermen better off selling their entire livelihood and food source to the tourist hotels for just enough Rb's to buy used fabric to repair their sails, with a little left over for a few hooks and skeins of monofilament line? Until the day their canoe capsizes and they drown? Is that the way slavery system works?

I guess it's not altogether different from US.
We get our meager paycheck, and half goes to the various levels of government, a quarter goes to the landlord, an eighth goes to ExxonMobil, a sixteenth goes to the credit card company, and a thirty-second goes for a double whopper at B-K.

Whoopie!

Posted by: Tante Aime at September 28, 2004 11:08 PM

Brad, I agree with Mike Huben, above--your argument is more essentially with Cesar Chavez, then with Stevenson. To say that Stevenson is advocating being "morally superior", by implying a boycott, isn't really being fair to him, unless you are also prepared to say that Cesar Chavez advocated the same thing. A boycott says to the one taking all the profit, "yes we want your product but not at such a price". Is it really all that easy for the Shady Middleman to get out of the mat-making business considering what he's invested in it? You act as if the Shady Middleman is always unwilling to budge. But if the Shady Middleman were to realize that everywhere he turns to exploit impoverished people he would face a boycott or unfavorable public opinion generated by the boycott, then it seems reasonable that he would be forced to give workers a more just share of the profits. Also, a boycott was never meant to be used alone--hence Mike's talk of strategy, which you quite correctly conceded you didn't see.

You decry Seth for advocating a boycott, but what if was done in conjunction with a strike? Would it be as immoral as you depict it then? If you are so inclined to believe that the Shady Middleman can so easily get out of the mat-making business when facing a boycott, why couldn't he just as easily get out when facing a strike? If boycotts are immoral because employers can simply pack up shop and leave, are not strikes open to the same charge?

Seth's mistake here is assuming that the mat-workers would want a boycott of mats to improve their wages--boycotts always need to have the support of the workers involved. However, you make a mistake by automatically assuming they wouldn't. Have you talked with them?

When. next March, you and your students get a day off in recognition of the union organizer whose name is so associated with the word "boycott" that you can hardly mention one with the other, will you tell your students Cesar Chavez's continued boycott of grapes only hurt workers? How many farm-workers themselves believe that?

Posted by: Carl at September 28, 2004 11:09 PM

Posted by Brad DeLong: One would normally think that pulling people out of the unskilled labor pool into the mat-making pool would raise the real wage paid to the landless and unskilled truly poor.

This is a false choice. Industrialization makes countries richer. Being the world purveyor of cheap products of manual labor keeps them poor. Japan, South Korea, Taiwan and now China all understand it - how come you don't?

Posted by: a at September 28, 2004 11:13 PM

That second paragraph from "a" seems almost like a joke.

Posted by: Keith M Ellis at September 28, 2004 11:29 PM

Professor DeLong, you are completely correct, but be careful, that kind of talk could get you run out town in a place like Berkeley. However when China (or anyone else) exploits prison labor we should boycott those products. I fear that dictatorships will keep people in prison as a source of revenue. In this case a boycott might help them get released. Of course we need to know which products are made with prison labor. So perhaps we should simply boycott all products from dictatorships. And yes that includes Saudi Arabia.

Posted by: A. Zarkov at September 28, 2004 11:39 PM

Say, BTW, since I've never bought a coir mat - not as a boycott (until now, I guess), I just haven't felt the desire - have I been complicit in this metaphorical loom-smashing as well?

Posted by: ArC at September 29, 2004 12:01 AM

The bigger question is how a society can develop a middle class with economic opportunity. It will not happen unless the government of poor countries make education and social mobility foundations of their policies. The fact remains that the poor for eternal generations will remain poor as long as they have no protection and live under local oligarchical monopoly. And so will their children unless there is a change in the social system that deprives the poor of education, skills, and access to real markets.

The sweatshops and slavery in the USA ended from political action imposed on rapacious capitalists--rarely because buyers boycotted anything. A consumer's field of impact is limited--but a government of citizens can regulate and establish the market rules--in this case it seems like there is a local monopoly that is probably maintained through criminality or social inertia. Who can break that up? Either the government or the companies doing the buying--consumers are only indirect participants in the process. The sad fact though is that neither the government nor, generally, the companies will address the issue unless serious pressure is applied. It has always been so. It will always be so. This is where the value of an informed public, boycotts and "fair trade" policy matters. Without them, the woman will likely be selling her mats for 2 cents each eventually .

Lastly, the values of a culture matter--intolerance of corruption, a moral belief in human rights, and meaningful compliance with law by a large majority. All of these are rare in a developing country. Yet there is no chance of anything except a de facto lawless oligarchy reigning without these.


Posted by: Tim B. at September 29, 2004 01:07 AM

The bigger question is how a society can develop a middle class with economic opportunity. It will not happen unless the government of poor countries make education and social mobility foundations of their policies. The fact remains that the poor for eternal generations will remain poor as long as they have no protection and live under local oligarchical monopoly. And so will their children unless there is a change in the social system that deprives the poor of education, skills, and access to real markets.

The sweatshops and slavery in the USA ended from political action imposed on rapacious capitalists--rarely because buyers boycotted anything. A consumer's field of impact is limited--but a government of citizens can regulate and establish the market rules--in this case it seems like there is a local monopoly that is probably maintained through criminality or social inertia. Who can break that up? Either the government or the companies doing the buying--consumers are only indirect participants in the process. The sad fact though is that neither the government nor, generally, the companies will address the issue unless serious pressure is applied. It has always been so. It will always be so. This is where the value of an informed public, boycotts and "fair trade" policy matters. Without them, the woman will likely be selling her mats for 2 cents each eventually .

Lastly, the values of a culture matter--intolerance of corruption, a moral belief in human rights, and meaningful compliance with law by a large majority. All of these are rare in a developing country. Yet there is no chance of anything except a de facto lawless oligarchy reigning without these.


Posted by: Tim B. at September 29, 2004 01:09 AM

Um, Brad, Stevenson doesn't actually advocate a boycott. What he actually writes is "I've resolved to send a check to some worthy Indian charity when I get home." Perhaps a donation to a fair trade group would be appropriate?

Posted by: Randolph Fritz at September 29, 2004 01:16 AM

And, a little more research quickly reveals that coir is in fact one of the subject of fair trade advocacy.

Would it really be so hard to make all trade fair trade?

Posted by: Randolph Fritz at September 29, 2004 01:22 AM

Why is no one mentioning South Africa? BDL's argument--that boycotts hurt most those who are most oppressed--was a major propaganda theme of American supporters of the apartheid government. Would BDL have a different opinion of Stevenson's proposed boycott of coir mats if it were sufficiently organized to have a real effect on the politics, as well as the economy, of Kerala? Or does BDL believe that the attempts to boycott South African products were irrelevant to the ending of apartheid?

Posted by: B. Hunnicutt at September 29, 2004 01:40 AM

Sorry, I'm too busy to post a full reply to people's queries about my last post here. I should be able to do more in about 24 hours.

Meanwhile, here are some hints. Nearly all my points in reply show up at least implicitly in other people's replies - including BDL's about how organ selling really is exploitative after all. Another source to look at is Nassau Senior's insights into what "wages" really are. Another is the lack of proper market mechanisms in developing countries, including how externalities are rife (India is suffering from them over well pumping right now, according to a recent New Scientist). Finally, look at the material on India I put on my publications page, http://member.netlink.com.au/~peterl/publicns.html - some of it overlaps this present discussion.

But there is a lot more to be said, which I may yet have the opportunity to tell.

Posted by: P.M.Lawrence at September 29, 2004 01:56 AM

The problem with poverty in the developing world was correctly analyzed by Henry George.

The problem with Seth Stevenson's analysis is that it's essentially Marxist in nature---capitalists exploiting workers, rather than (the correct) landowners exploiting non-landowners.

The problem with modern economists' analysis is that modern economics has chosen to bury George's critique.

Posted by: liberal at September 29, 2004 03:12 AM

This is too awesome. Thank you for putting this so well. It will help me next time I'm looking to defend global trade from well-intentioned do-gooders.

Posted by: cw at September 29, 2004 03:34 AM

The boycott of South Africa to end apartheid was wished for by those who were fiercely discriminated against. This was truly a moral effort that helped end apartheid and free millions who had aspired for freedom for generations. Nelson Mandela was our moral guide, and a wonderful guide to freeing South Africans.

Posted by: anne at September 29, 2004 04:08 AM

Brad, you're right that you don't see any strategy or tactics.

But you didn't say whether your argument would have been the same for Caesar Chavez. Or South Africa. Or many of the other boycott examples people have raised.

Posted by: Mike Huben at September 29, 2004 04:37 AM

Again, the question is whether a boycott is in the interests of a struggling people. Nelson Mandela and Caesar Chavez wished a boycott, for there was no chance of helping black South Africans or western farm workers unless there was a boycott. To boycott to end apartheid is in no way comparable to discriminating against goods made by contemporary Indian workers who have gained hopeful employment.

Posted by: anne at September 29, 2004 05:43 AM

Workers who strike for better treatment, may choose to harm themselves by the very strike in hope of better treatment in future even if for workers who are to come after them. Many South African blacks did not live to know the end of apartheid, nonetheless they gave themselves for others in working to an end.

Posted by: anne at September 29, 2004 05:57 AM

Why are we even discussing this as an economic theory?

First of all, coir is a biodegradable product - one of the sturdiest natural, waterproof, wear-proof
products. If God hasn't invented it, God would have to invent it. Made of coconut fibre. And it is available plenty in third world, tropical countries for use in Western and uppermiddle class Indian homes. All Debbie had to do, instead of spending all her time drinking in Kerala bars, is to find NGOs and worker cooperatives that work with the coir mat laborers rather than go through
exploitative middlemen. That way, the laborers can get fair and decent wage for their labor; we get good product; and we don't have to feel angst about the economic dilemma or exploitation. Yes, exploitation exists in that middle layer when Western commercial interests interact with low wage labor in developing countries. But if one takes time to find out, one can always find a non-profit NGO that will act as middlemen.

Posted by: ecoast at September 29, 2004 06:15 AM

Oh, one more point. Is it just me, or is it obvious to others as well that Seth was doing Debbie?

Posted by: ecoast at September 29, 2004 06:21 AM

The coir rug situation is such an easy thing for a lazy journalist to write about, and lament. I wonder what these workers' "second-best" alternative would be, if coir rugs stopped selling?

In a bleak economy, the second-best option might be a return to subsistence agriculture. That's a far more horrible life than coir rug manufacturing, and perhaps worse than most sweatshop situations. It's not as evocative a story or photograph, though, and doesn't write as good a Slate article. :(

I'm surprised at the number of commenters who take an all-or-nothing approach here. Chavez's grape boycott made sense perhaps because it put consumers and farmers on the same side against the middlemen, at a time when government oversight was clearly failing. I don't think consumers and coir rug manufacturers would agree to a boycott here.

Also, I bet Mr. DeLong would be fine with fair trade options. They are not the "opposite" of just buying the third world products at your local Wal-Mart. It's just a matter of paying a premium in exchange for better production methods and/or more pay for the actual producers. I think both are good; one is better.

Posted by: Drew at September 29, 2004 06:54 AM

Great discussion. To pose a question: how much injustice should people stomach? I mean: there is some level of profit/wage split that seems inherently unfair; for instance slavery, 100%/0%.
If the makers of the mats got a penny on the dollar,
in perpetuity, would that seem fair? What if it started at 1%, but went up a smidge every year? Or only every decade?

I think that "rational economic interest" takes a backseat to inherent 'fairness instinct' at some point. People will strike on a plant that they know will cost them their jobs if they are pushed far enough. And that seems noble to me.
It's part of a dance, though: people that rise up tend to suffer. And people that knuckle under may be rewarded for their loyalty, and improve their lot.

I think it is wrong of DeLong to say that encouraging rejection of the economic status quo is always wrong, because of the short-term suffering
of the workers. I agree with anne: sometimes to suffer is the only way to put pressure on the exploiter, and in the end have hope that things
can be made to improve. And I assert that for wage-slaves, there's suffering either way; and maybe pride in rebellion can in some emotional, very-hard-to-quantify-way, make up for diminished material well being.

A common myopia of economists (permit one cheap shot): they tend to overemphasize the importances of those things they can measure, and underplay that of those things they can't.

A book recommendation: World's End by TC Boyle.

Posted by: Dave at September 29, 2004 07:03 AM

I think that Brad's point holds up for this particular example. Mainly because the people in Desperately Poor Villiage probably don't particularly mind making coir mats. However, we shouldn't all rush out to buy sweatshop garments, convinced of how we are improving the lives of those who "chose" their jobs.

For instance, Brad suggests that we "Take more vacations at Big Luxury Hotel, so that it will have to hire more people from Desperately Poor Village, and so give them even better options." Now, I have no doubt that, given a Big Luxury Hotel, the opportunity to work as a bellhop instead of making coir mats is a good thing (or a Good Thing). But let's not pretend that the people of Desperately Poor Villiage "chose" to have Big Luxury Hotel enter their lives and their community.

This is not to say that we should view the development of Big Luxury Hotels or the exportation of coir mats as an evil. But we should be realistic about the capacity of those with more money and power to present the Desperately Poor Villiages of the world with economic Hobson's Choices.

Posted by: space at September 29, 2004 07:10 AM

Thank you for posting this. I was born in India but raised in the US, so I too have had the disorienting experiences that Seth Stephenson is describing. I understand feeling guilty when you are confronted with such poverty. It's just that guilt is not a good emotion on which to base practice or policy. I was struck too by role of the middle man - corruption is such a terrible problem in India. My Indian parents are very suspicious of giving money to charities in India because of all of the corruption they have seen. They prefer to do the diaspora thing: sent money back to relatives for tractors and school and the like.

Interestingly, my Indian parents make a point of trying to buy Indian things, to 'support the people.' And my mother was very upset with me once on a trip back because I did not want to take a bicycle rickshaw (I felt bad for the guy). "How is he going to eat, otherwise?" she said.

Posted by: MD at September 29, 2004 07:33 AM

Actually, Brad, I think you are missing Stephanson’s point. He is not really calling for virtual loom smashing. He is comparing us to Debbie. She does the dirty work of export-led growth and will continue to do it. This may be for her own financial gain or because she accepts your views about this being the best way forward for India or whatever, but she does it. She also sees what it means, however, and is disgusted by it. She deals with this moral dilemma by drinking too much, a fine method. Your commenters mostly deal with it by giving virtual lectures on the glories of export-led growth to Indian mat workers. Stephanson seems to deal with it by trying to convince people of the moral disgustingness of the whole mess. You point out there are more effective ways of fixing the problem then drinking or nagging, but I think in the end you will have less impact than Stephanson. The Multi-fiber agreement, agriculture subsidies and such like will never be repealed until they are seen by most people as the moral abominations that they are. Stephanson can do that. You, and above all most of your commenters, can’t.

Posted by: AlanB. at September 29, 2004 08:17 AM

Corrupt practices of middle organizations can be a harsh problem in more than a few countries in giving aid. We need to be wary of how aid is dispensed, nonetheless middle organizations are essential and we can have considerable confidence in World Bank affiliated organizations and other recognized international aid organizations. Encouraging and smoothing direct remittance from relatives abroad can also be quite productive.

Posted by: anne at September 29, 2004 08:36 AM

Brad, face it, you're what AA would call an enabler. You're just as to blame.

Posted by: jerry at September 29, 2004 08:52 AM

There will be a time when producer cooperatives are formed among mat makers, and a larger portion of profits on mats will come to be captured by the producers. There is much movement in this direction in the India I know.

Posted by: lise at September 29, 2004 09:00 AM

Professor De Long's reasoning is obviously sound and valid. I'll just add one more option to enhanche Stevenson's reincarnation prospects: buying 'fair trade' products, i.e. buying from companies that guarantee a better deal for third-world producers. Are there any obvious downsides to this that I can't see?

Posted by: enzo rossi at September 29, 2004 10:43 AM

Professor De Long's reasoning is obviously sound and valid. I'll just add one more option to enhance Stevenson's reincarnation prospects: buying 'fair trade' products, i.e. buying from companies that guarantee a better deal for third-world producers. Are there any obvious downsides to this that I can't see?

Posted by: enzo rossi at September 29, 2004 10:43 AM

BRAD,

I guess my question is:

Can someone who freely accepts a job at a mutually agreed-upon wage ever be considered to be "exploited"?

Posted by: Dean at September 29, 2004 10:45 AM

Professor De Long's reasoning is obviously sound and valid. I'll just add one more option to enhance Stevenson's reincarnation prospects: buying 'fair trade' products, i.e. buying from companies that guarantee a better deal for third-world producers. Are there any obvious downsides to this that I can't see?

I take it that, given that it is reasonable to expect fair trade products to be more expensive than 'unfair' ones, buying them in practice amounts to giving to charity (an option already covered by De Long), but this is perhaps a more direct way of tackling the issue of low wages in the third world.

Posted by: enzo rossi at September 29, 2004 10:46 AM

BRAD,

I guess my question is:

Can someone who freely accepts a job at a mutually agreed-upon wage ever be considered to be "exploited"?

Posted by: Dean at September 29, 2004 10:47 AM

Brad (if I may), that may be the best thing you've ever written. Bravo.

Posted by: First-time-poster at September 29, 2004 10:53 AM

"it is extremely rare in historical perspective for the government to be anything other than a committee for managing (and advancing) the affairs of the local landlord class and the local bourgeoisie."

Isn't this the precise thought that defines the stereotype -- the "Berkeley radical" -- that terrorizes the rest of the country?


Posted by: joe at September 29, 2004 11:06 AM

Enzo Rossi

Agreed! Fair trade items make all the sense. This is much the same as producers cooperatives forming to gain bargaining ability.

Posted by: anne at September 29, 2004 11:10 AM

Can someone who freely accepts a job at a mutually agreed-upon wage ever be considered to be "exploited"?

Yes, if the working conditions are sufficiently brutal, just like a person who sells their sexuality or organs freely for a mutually agreed-upon wage can be considered to be exploited. I would also state that in any polity which does not allow collective bargaining, low-skill laborers are always on the losing end of market power and therefore exploitable.

But that's mostly not what seems to be happening here -- I'd need to do more research, but it looks like we've got a pretty straightforward monopsony/cottage industry combination, and Prof. DeLong's approach seems best. But AlanB's point is important -- we all have the responsibility to figure out what our place in the moral scheme of the world is, not just to find something we don't like and drink a lot to ignore it.

Posted by: Kimmitt at September 29, 2004 11:53 AM

Information asymmetries may add to the problem of bargaining. Middlemen may be extracting rents this way.

The spread of e-choupals in India, where local suppliers (of agriculture, spices) look at world market prices (in addition to info on weather and scientific experise), pool together and either bargain harder with middleman can help to raise wages. Kerala is after all one of the last bastions of Communist Party of India (Marxist) hegemony.

Posted by: Robin at September 29, 2004 12:38 PM

"Can someone who freely accepts a job at a mutually agreed-upon wage ever be considered to be 'exploited'?"

Do they have full knowledge of the likely consequences (health risks etc) of the job before making the decision to take it? If not, exploitation.

Another question (to which I do not know the answer) - humans being biological beings are not rational. If the would-be employer exploits this irrationality - by structuring conditions such that the mythical rational human would _not_ take the job, but the optimistic irrational one would - is _that_ exploitation?

And what about taking into account the discount rate? (Andrew Tobias: "to a man one sandwich away from starvation, his discount rate is infinite" or words to that effect) - is it exploitation for the employer to take advantage of this?

Likewise, to a man whose house looks to be in the path of a hurricane, the value of plywood is (nearly) infinite - but we call the supplier's behavior "price gouging" and disapprove.


Posted by: Anna at September 29, 2004 12:55 PM

Kimmitt wrote, " 'Can someone who freely accepts a job at a mutually agreed-upon wage ever be considered to be "exploited"?'

"Yes, if the working conditions are sufficiently brutal, just like a person who sells their sexuality or organs freely for a mutually agreed-upon wage can be considered to be exploited."

Better to use Georgist-style analysis.

The capitalist *isn't* exploiting the worker, because the worker doesn't have to work for him.

*However*, the worker *must* pay the landlord---she has to sleep somewhere, and she has to work somewhere. And she needs access to raw materials to work with (or perhaps soil on which to grow her own food, if she's a subsistence farmer).

Yet land (and raw materials), the creation of no man, is not available to her unless she pays a tribute to a landowner.

Pitiful that no one on this comment page appears to know of George's (correct) critique, and are instead lost in a debate as to whether the poor are exploited by capitalists, when as George and others made clear, they're exploited by landowners.

Posted by: liberal at September 29, 2004 01:52 PM

Dave says: "I think it is wrong of DeLong to say that encouraging rejection of the economic status quo is always wrong, because of the short-term suffering
of the workers. I agree with anne: sometimes to suffer is the only way to put pressure on the exploiter, and in the end have hope that things
can be made to improve."

While principlely, there is nothing wrong with the statement above, this always gets under my skin. From the perspective of someone who is from a third world country, there is enormous arrogance in this statement. Who gives you the right to decide that we (the people who are currently working in the low wage exporting industries that are much better than alternatives) are the people who should suffer for the "long-term" good of some other people? No body, no body! lives in a first world country has any right to tell working people in a third world country that they should sacrifice just so you can "hope" that things may improve. If you truly care, you don't just do something because your intention is good. You look at the consequences of your actions and think things through, as the profess does.

By the way, in regard of the fair-trade, I am all for holding US companies that are doing business in third world countries to a decent ethic standard. But please leave the wage issue out of your discussion -- the Nike wage in China was already high enough a couple of years ago to attract school teachers from poor areas to their factories. Pushing companies paying wages well above local market levels has unintended consequences -- like depriving local kids of their teachers.

Posted by: pat at September 29, 2004 02:03 PM

Since economists seem inclined to measure everything by price, why do you inherently object to paying for a feeling of moral virtue? It's what I do every time I give back money to a cashier who has mistakenly given me too much change.

When I am aware that goods have been produced in unjust, exploitative conditions, I am willing to pay for the luxury of not using them.

I know that adherents of neoliberalism therefore consider me a very bad person, who needs to read, digest, and inwardly savor the revealed truth of rational man.

Posted by: nihil obstet at September 29, 2004 02:25 PM

pat wrote, "Pushing companies paying wages well above local market levels has unintended consequences -- like depriving local kids of their teachers."

That's true.

But the broader point is the one made by Henry George: a lot of the wage increase will get eaten up by *landlords*, because the total supply of land is fixed (inelastic).

So the focus really shouldn't be on capitalists and wages, but on land and rents.

Posted by: liberal at September 29, 2004 03:11 PM

nihil obstet wrote, "Since economists seem inclined to measure everything by price, why do you inherently object to paying for a feeling of moral virtue? It's what I do every time I give back money to a cashier who has mistakenly given me too much change."

Because economists are utilitarians.

Suppose your not purchasing the coir mat really does hurt the third world worker. Then you get a warm fuzzy feeling, but the worker suffers.

On the other hand, if you give the cashier back her change, the *net* utility represented by the money hasn't gone down. The store's went up, yours went down by the same amount, you get to feel warm and fuzzy, and the system as a whole benefits slightly due to your actions, which help establish trust (which is of economic value).

Posted by: liberal at September 29, 2004 03:15 PM

"But that's mostly not what seems to be happening here -- I'd need to do more research, but it looks like we've got a pretty straightforward monopsony/cottage industry combination"

Actually there seems to have been a collapse in prices due to industrialization. The UN FAO's 2002 report sounds not all that different from the price collapses in woven goods in the UK, back in the bad old days. Indian Marxist economist Thomas Isaac even did his PhD thesis (not seen) on it back in 1982, and later wrote a book on it.

So how come I've done the research, and all the experts posting here haven't?

FAO report:
http://www.fao.org/DOCREP/005/Y3612E/y3612e00.htm
See chapter four, in particular.

Thomas Isaac's web site--search for "coir": http://www.ces.fe.uc.pt/emancipa/cv/gen/isaac.html
Thesis title was *Class struggle and structural change in coir mat and mattings industry in Kerala 1950-1980*; he did several articles and has written a book as well.

Book: *Modernisation and employment: the coir industry in Kerala.* With R. A. Van Stuijvenberg and K. N. Nair. Indo-Dutch Studies on Development Alternatives 10. New Delhi: Sage Publications, 1992.

Posted by: Randolph Fritz at September 29, 2004 03:22 PM

So third world peasants should be grateful for their opportunity to scratch a living making products we can make a massive profit on? And those that question the morality of it are tarred and feathered as thieves preying on the worlds poor! Gee I didn’t know you could be a philanthropist simply by paying Indian kids to stitch you a cricket ball for twenty cents a day.

Sure boycotting third world products isn’t a solution, but the usual "Bjorn Lomborg" type acts of philanthropy cited by the author as a way of getting the poor off subsistence living never happen. Here we have the usual free market scenario where false opportunity is dangled like a carrot in front of starving people.

Lets deconstruct DeLong’s “solutions”.

"Praise coir doormats extravagantly, to boost demand in America for them. With higher demand, Mr. Shady Middleman will have to go further, work harder, and pay more. More families will have the option of making a livelihood by weaving coir doormats--and those families that take up that option are pretty likely to be made better off as a result."

If a villager can only make three mats a week, upping the demand is unlikely to solve their financial situation, especially as with the more volume, the buyers will demand a lower price.

"Agitate for the expiration-on-time of the Multi Fiber Agreement, which restricts textile exports from the Third World to the United States--and so virtually smashes more looms in a minute than Seth Stevenson on his bike could smash in a year."

The US trade lobby is unlikely to be swayed by pleas for a fair go, and they back up their position with millions in political donations.

"Figure out a way to generate alternatives to Mr. Shady Middleman. If there were two or three such bidding for Debbie's business, each would be a lot less shady--and each would pay the mat-makers more. The fact that Mr. Shady Middleman has his local monopoly is a sign that this is going to be hard. Either Mr. Shady Middleman himself is barely getting by, and nobody else with the organizational skills to successfully do his job wants it; or bad things happen to competitors at the hands either of the local police or the local notables. Kerala is the province of India in which the local government does the best job of protecting the poor against the rich, but it is extremely rare in historical perspective for the government to be anything other than a committee for managing (and advancing) the affairs of the local landlord class and the local bourgeoisie."

This is not a solution it’s rambling comment. If you’re going to interfere with Mr Shady middleman, then you might as well interfere with the US middlemen and then you’ve just blown all this nefarious logic out the window. Note how the problem always lies within India.

"Take more vacations at Big Luxury Hotel, so that it will have to hire more people from Desperately Poor Village, and so give them even better options."

Sounds too simplistic to me. Is there viable entertainment value in Kerela to warrant such an increase in excursions? And if there is, how many more guests are required to make a difference?

"Band together with the other guests at Big Luxury Hotel, collect a pool of $10,000 or so, and give it to a committee of senior women in Desperately Poor Village to lend out in small amounts to those in the village who need capital for projects."

Yeah, and pigs might fly. Aside from the unlikelihood of this occurring, what are the projects - making trinkets for the hordes of tourists flocking to the big hotel?

"Buy the villagers some goats (or whatever other piece of agricultural capital seems useful)."

Great, lets wreak environmental havoc with 4 legged desert making machines. DeLong is a total dufus. If the main industry is coconut product then this is a coastal environment and coconuts ARE the agricultural capital. You won’t be growing crops there or raising meat on pasture.

"Give money to the Kerala Ministry of Education (which is a reasonably clean and uncorrupt institution)."

DeLong flits from market solutions that will not work to acts of personal philanthropy, ie chuck guilt money at an institution in the hope they can find a way to circumvent an impossible situation. Why won't he look at the system which is the real culprit?

"Agitate for the United States to increase its foreign aid budget."

Agitate, agitate – what is this - a washing machine? Clearly there are no viable solutions at the Indian end, not while people being paid a pittance for their product are stuck in a subsistence loop.

DeLong, ask yourself why you're avoiding facing the greed of the American companies, which are squeezing maximum profit out of a manifestly unfair global system, aided and abetted by the US government. Continuing to pay people a pittance and justifying with this "logic" is the cruellest joke of free market capitalism. It blames the victims of circumstance for their own misfortune and absolves those fortunate enough to be born in the first world from confronting the inbuilt unfairness of the system

If you really want to do something to help the poor villagers I suggest you boycott the rip off American companies and buy from groups like community aid abroad, which funnel the middleman profits back to the poor.


Posted by: jake at September 29, 2004 03:22 PM

Rhetoric is a bit overboard. I fail to see how deciding not to buy a product amounts to theft or vandalism.

Indeed, if we rephrase it and push everyone to buy locally wherever possible, in acknowledgement of vastly underpriced petroleum that props up global shipping and transportation, I don't see the harm (I see benefit).

When we trade primarily locally, we have a better chance to get a handle on the conditions of the labor that produces our purchases. We know that labor laws are likely being followed, since we have strict laws regulating that, and there is overall more transparency.

In buying rugs from India, one generally can have no idea who is making the product, how old they are, whether they have freely chosen this labor, whether they are being paid a reasonable wage for such labor, and so on.

I blame noone, with this information deficit, from making the microeconomic decision to forego buying foreign products in favor of local products or products from nations with a suitable and customary level of transparency, workplace safety, and human rights protections.

The middleman, after all, sounds like a pimp, or, perhaps a better example, a supermarket. And perhaps we ought boycott our local supermarkets too.

Posted by: Jimm at September 29, 2004 04:26 PM

Rhetoric is a bit overboard. I fail to see how deciding not to buy a product amounts to theft or vandalism.

What other crimes of omission do we commit, daily, by such a logic?

Posted by: Jimm at September 29, 2004 04:28 PM

What happens then?


What happens then is there is still a demand for coir doormats, so they get made somewhere other than the third world, at higher prices -- but this creates upward pressure on labor prices in the developed world, causing manufacturing firms to seek to alleviate the problem by lobbying for either looser restrictions on labor mobility via looser immigration laws or lower costs through less workplace regulation. But since everyone in the developed world was convinced not to buy coir doormats from the Third World in order to improve labor conditions in Third World, they'll also be just as easily convinced to not vote for politicians in their own country who want to reduce labor standards, so the politicians instead will be forced by political pressure to loosen immigration standards, making migration from the Third World to the First easier, and giving more of the Third World coir doormat makers jobs in the First World, with First World working conditions and labor protections.

More realistically, at the first sign of substantial market pressure, the coir doormat manufacturers will take small steps to improve working conditions and big steps to sell them to the first world public, at which point the boycott will end, having marginally improved the working conditions of the third world laborers.

Posted by: cmdicely at September 29, 2004 04:54 PM

Brad appeals to our desire to see ourselves as fair and generous, and evokes a fairly generous response.

However, his post is historically illiterate. There are actually people who study the changes that occur in local economies as they are integrated into the global economy, and these studies have been going on for some time. For example, in the 15th century the Portugese discovered spice colonies tuned to the international trade. These colonies traded spices specially bred to improve their most piquant characteristics. The colonies the Portugese discovered had already been in existence for some time.

Normally the lay reader would leave such studies to 'professionals' like DeLong, but he has obviously failed at this task. However, a reasonably accessible discussion is that concerning enclosures and the growth of England's pre-industrial and worldtrader status. Since the early 60s much solid work has cleared away the underbrush of earlier false starts and developed a much clearer view of the landscape.

(No, Brad, I am not a disciple of the English Marxist historian who publshed in the 20s and am not pushing his views. In fact, I can't even remember his name.)

And frankly, dear reader, you're on your own. A comments section is hardly the place for a teach-in on agronomial development, and Brad obviously is not reading the relevent texts and boiling their findings into pithy and understandable posts.

A word, the wise, will be sufficient....

Posted by: serial catowner at September 29, 2004 05:01 PM

DO NOT click on the hi-lited text. Apparently my pop-up infestation is much worse than I imagined, and I must quarantine myself until I have solved it. Sorry for any inconvenience this may have caused.

Posted by: serial catowner at September 29, 2004 05:06 PM

Jake:

"deconstruct" != "reason" apparently.

1. Increasing demand for doormats will not increase a villager's capacity to make them one iota, so it won't cause the buyers to demand lower prices. Quite the reverse. Supply constant: demand up, so value-of-labor up, all the way down the chain. (See point # 3, also.)

2. The moral question is not "what should the US trade lobby do", it's "what should we do". Your point (which I agree with) is exactly Brad's. Changing the US trade lobby's minds will a) reduce your price for fibre in general, and b) will increase demand for imports (from our villages).

3. The US market is highly competitive: the US middle-person earns his/her money by doing work that no one else is prepared or able to do for lower margins. The Indian middle-man is free of competition, because of weak state enforcement of relevant trade (and criminal) laws. Using micro-capital to encourage the creation of more middle-men (not less), and increasing the penetration of media into our village (so they can check to see who else will buy their mats) will increase both the amount and the proportion of cash finding its way down the chain. (Boycotting mats will cut income immediately.)

4. Simplistic or not, would holidays in Kerela have the effect? (and note that Kerela here is a metaphor.)

5. See that little "or whatever other piece of agricultural capital" bit? OK. Instead of a goat, how 'bout a tractor? (Oops! Environmental destruction there too! See # 4.)

6. BECAUSE THE UNINTENDED CONSEQUENCES OF RADICAL CHANGE IN A SYSTEM HAVE, OVER AND FREAKIN' OVER AGAIN, PROVED WORSE THAN THE FLAWS IN THE ORIGINAL SYSTEM! (cough, hack) So, let's try giving people a ladder, rather than a rocket.

7. Again, the question is about our moral actions, and about how we might improve (or not) the lot of these villages. Would more foreign aid improve the lot of these villages more or less than boycotting coit mats and putting them out of work?

I'm old enough to have been witness to twenty-years of foreign aid / revolutionary agitation and its comprehensive failure to change anything, except for the worse. And in a few places, here and there, alternative paths were taken, and were successful. India and China are improving their lot--not perfectly, but according to most gross measures of human utility--precisely because they have embraced this model.

Now, it ain't immediately perfect, and it doesn't mean that Reason Magazine style capitalism is the way to go. But if you look at it, the suggest is that buying the bloody mats is the lesser of the two evils.

And finally, let's say every one of your policy recommendations (and I'm supposing here, cos' you cite none) would be "a good idea". How would they be advanced by boycotting mats? Can't you work towards your solutions *in addition to* supporting the trade in mats? How does a boycott actively help?

Posted by: Paul G. Brown at September 29, 2004 05:12 PM

Paul,

1: I'd already noted that the villagers can't make mats any faster, so for greater mat supply more villagers or outsiders will be required. The best case scenario for these mat makers is the price per mat stays the same, because there is no way the price is going to go up. American companies buying in greater volume will demand lower prices as does anyone who buys in bulk, therefore the middle man may take a cut in perecentage, but that's not going to help the mat makers who may well be required to take a cut from him.

2. My point was the unlikehood of changing the trade lobby's mind. What shits me about free market afficonados is this glib expectation that things set in stone are changable when history shows just how entrenched these power bases are. In effect a load of theory is no use to the poor, its just an excuse for the rich to justify the inequity.

3. I was not suggesting boycotting mats - but dealing with ngo's that set up infrastructure to buy from the poor direct. While there are certainly issues like corruption in the third world that don't help the situation, it is also another excuse used by free market afficionados to shift the moral blame.

4. Let's not blow our trumpets too loudly shall we? It's the extent of the help I'm talking about. It seems to me that there aren't many cases where western tourism dramatically improves the lot of the ordinary poor. Such arguments are naieve or specious generilastions that ignore the fact that the chain of exploitation is a long one and there are plenty of Indian entrepeneurs lining up to do so.

5. Your politcal bent is leaking out here at the edges. My point is that coconuts grow in sandy coastal regions, not much else does. Tractors will be of little use here too, regardless of environmental considerations.

6.Funny how preserving the status quo is the preserve of those who benefit most of all from it.

7. Foreign "aid" usually comes with strings attached anyway. Real aid in the form of not giving with one hand and taking away with the other is a rarity, so you can't write it off without that caveat. Let's not forget that most third world countries were exploited through centuries of colonialsim. And what was once done at the point of a gun is now down a modem. Meaningful aid which leads to self determination is always boycotted by the US, witness their latest kybosh of the UN iniative on the Tobin tax.

India and China are shitty examples. Rampant pollution and corruption, the only reason they work economically is because they have vast pools of peasant labour that we can all exploit. Hardly an economic miracle.

If you'd read my blog carefully you would note that I wasn't advocating boycotting mats - merely pointing out that paying third world people a pittance isn't something to be proud of, and noting that the free market system never delivers on its promises to elevate such people through trade because its a mass of lies and contradictions.

Posted by: jake at September 29, 2004 05:56 PM

Jake:

Paying third world primary producers a pittance is a crying shame. No argument. But Brad's whole point is that *not* paying them anything (Seth's conclusion) is a greater shame.

Are you agreeing with Brad (and disagreeing with Seth)?

Should I, as a moral act, buy the bloody mats, or not?


Posted by: Paul G. Brown at September 29, 2004 07:29 PM

So you want to make it a black and white buy/don't buy issue.

Before you decide on buying/not buying as a moral act, consider the following:

It's all very well to say paying someone a pittance is better than giving them nothing, but whose to say we aren't contributing to their poverty trap? Maybe if we stopped buying the mats they'd reassess their situation and change their lives. A similar situatiion can be seen in countries who've ditched traditonal subsistence agriculture for "high value" cash crops. Rather than getting ahead, all they're doing is failing to pay off their ever increasing national debt while getting castrated by a corporate F1 hybrids and chemicals they can't get elsewhere, while we suck up their ridiculously cheap product.

If you don't aspire to western consumerist lifestyle maybe you don't need so much.

You can reduce DeLong's argument to buy don't buy, Paul, but clearly he has an agenda. You can tell by the fact his empathy is tokenistic; his "based in reality" solutions are the onus of the third world, while his pie in the sky ones like agitating and throwing lots of cash are ours, and thus consigned to the day dream bin. Result - nothing changes and we shrug off responsibility.

DeLongs' priveleging of the status quo is so intractable that I find his "do nothing" approach more morally repungnant than Seth's, even if in the short term his would do harm.

So I'd say both Seth's and Delong's prescriptions are as bad as eachothers. Buy the bloody mat from an ngo as mentioned.

Posted by: jake at September 29, 2004 08:24 PM

"But Brad's whole point is that *not* paying them anything (Seth's conclusion) is a greater shame."

Restated, isn't this "either you buy the mat and get those rug makers their four cents or you don't and they're four cents out." Cause if it is, it's circling around the point: there are other things you can do. For example: buy the rug from a Fair Trade organization (like with that Rugmark logo). You get the rug, the rug maker gets a decent profit, and the exploiter finds that the market for those unfair trade rugs is drying up and they can choose between a slice of a shrinking pie or join the Rugmark program and get a slice of a bigger pie. But all that can't start if you just buy the rug from the exploiter.

There already are alternatives to Shady Middleman here and they didn't get off the ground without consumer demand and consumer education and (effectively) boycotting the non-fair trade versions of those products. Expand the boycott to more consumers.

Posted by: ArC at September 29, 2004 08:27 PM

Jake:

The specific question is a black-and-white question: is it a greater or a lesser evil to buy the mats, or boycott buying the mats? I mean, the bloody mat is a bloody metaphor. More broadly, is it a greater evil to support a policy of free and fair trade, or to advocate for a boycott of even free and fair trade because we are so rich, and they are so poor? Moral questions have that unequivocal quality. That's why they're moral, as opposed to empirical questions, or logical questions.

To buy or not to buy these particular mats can be an enormously complex question (See: Hamlet) but the moral dilemna boils down to a choice between alternatives. And in wrestling with the details of a specific situation--Seth and the bloody mats--you gain insight into a whole range of other questions.

ArC: Sure, there are a million things you might do. Each of these questions has its own moral dimensions. I buy fair trade coffee specifically (Trader Joe's Cafe Pajero), prefer fair trade goods when they are available, and buy second-hand clothes for my kids, because all of these are lesser of two evils. I also give time and money to (often imperfect) organizations because that's a lesser evil than not giving.

Posted by: Paul G. Brown at September 29, 2004 09:39 PM

My experience of 10000 Villages is that the prices (for the things I want) aren't higher than in standard stores; the extra cost is that the selection is smaller, so I have to go in more often to run across the same number of right color/size/type things.

Since shopping is widely considered entertainment, this might be a benefit, not a cost. I am the canny hunter, etc etc.

The clothing is often better made than any but very expensive Western clothing; I have a couple of Indian vests with every seam perfectly bound or lined - there's no selvage visible anywhere; and they're only cotton, they don't "need" this. It's proving far more durable than overlock seam finishes.

Posted by: clew at September 29, 2004 11:04 PM

It's surprising to me how many people still believe that *saving* the poor from being *exploited* is our mission as civilised people. I thought this should have died not long after "White Man's Burden".

Who among you has been anointed with the ability to calculate all available information, and thus, can judge the circumstances better than the laborer himself? Let these people decide for themselves - and *help* your own friends and family, or {gasp}, maybe someone who actually asks for help.

Removing the best available option will do no good for the laborer - regardless of who takes the most profit.

Posted by: Dean at September 30, 2004 01:33 AM

ArC: sure, buying the mat from a "fair trade" organization is better than just buying the mat. But the goodness comes from the buying the "fair trade" mat as opposed from not buying the normal mat. So if when considering the purchase of a mat in Cost Plus or Pier One or whatever, if you're not actually going to go to the effort of tracking down a "fair trade" mat for whatever reason (cost, effort, laziness, you'll get a polypropylene one from the hardware store instead), it's better for the Indian worker to get the one that's sitting in front of you.

Posted by: Jake McGuire at September 30, 2004 10:25 AM

Question to everyone who is now boycotting those coir mats: Do you think Cuba is better off because the US boycotts it? If so, you should boycott (or buy?) Europe, because Europe doesn't boycott Cuba. And how about Iraq from 1991 to 2003, was Iraq better off because of the UN sanctions? Or did those sanctions kill Iraqi children?

Posted by: BW at September 30, 2004 01:45 PM

Okay, there are a lot of issues in this post that make a lot of sense,

1. The fact that people are making mats without being coerced to do so by anything but self interest shows that these people are not being "exploited" by their own standards.

2. Depending on what kind of a market you have, price or quantity will set the other. If, as implied earlier, the quantity of these mats is fixed and demand is greater than supply, the prices will rise even for those people buying in bulk (bulk shopping only works to decrease the cost relative to others, and often is unavailable in quantity based markets). This is Brad's argument, that the middlemen will be forced to pay higher prices because more rugs will be demanded. This is just basic economics, a no brainer.

3. The comment that by giving mat makers jobs we are essentially screwing the people who are poorer by taking away their potential jobs. This implies that, if I am unemployed, I will be hurt by anybody who gets a job, even if its at McDonalds as a fry boy (or whatever their called). This is a counterintuitive argument. By raising the per capita income of a population (which is the result of giving previously unemployed people job when all else remains constant) you get more disposable income and get more consumer spending. This only goes to make everybody better off, by expanding the economic stragnth of the nation.

4. The key part of this post is that by reducing the demand for rugs creates a decrease in the price of those rugs, and thus a decrease in what these "exploited workers" are payed, which doesn't make them any less exploited, just makes them gain less of a benefit from it or pushes them into another job, which previously was less desirable. Either way you look at it you have decreased the per capita income of the nation (assuming all else remains constant).

That is why it is bad to assume that by boycotting those who have workers who labor of their own free will, we will be making the people better off. That argument doesn't have any logical foundation.

Posted by: publius1980 at October 1, 2004 12:22 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 12:53 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 12:57 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:02 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:07 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:18 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:23 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:27 PM

Whenever I buy a lovely doormat so dearly crafted in such straits, I smile warmly in thought of the person who made it for me, and hope that their sack of coppers is fattening at a rapid rate so that they can board a conveyance suitable to their station and come to America and wash my car.

Yes. That would be satisfactory.

Posted by: Billy Beck at October 1, 2004 01:31 PM

Good god. I'm horrified to see that whole long batch of comment-bits standing there over my name. It's quite mortifying. I mean it when I apologize for that to Mr. Delong, and everyone else, who shouldn't have to look at that. I would have had that happen if I'd known what it was doing.

Posted by: Billy Beck at October 1, 2004 06:35 PM

Belated applause to Jake for a beautifully executed avoidance of Paul G. Brown's sixth point: we must at all costs avoid considering the historical results of attempts to instantly catapult developing economies into industrialization, for anyone who stops to consider those results is obviously a revanchist, self-interested defender of the status quo! Bravo! What is to be done, indeed?

Snark aside, the discussion here counts as one of the best things I've ever seen at Brad's site. Thanks to everyone (even Jake).

One question for the assembled masses: to my mind, there are a few standing examples, in the 20th/21st century, of a post-colonial agricultural/early-industrial society jumping directly and successfully into the post-industrial/information economy and bringing the majority of their citizens up to rough health/income parity (if not better) with Western Europe and the US: Singapore comes to mind immediately. We don't hear a lot about the "Singapore Model" in the states these days, largely (I suspect) due to justifiable discomfort with their political autocracy. But surely there are some lessons there which can be applied to places like Kerala..?

Posted by: Doctor Memory at October 2, 2004 03:32 PM

I just want to say that I think neither one will be reborn to Boddhisatva status, assuming that is something good. To be reborn as a Neoliberal Economist, well I'm not sure where that would be, but it might not be desirable.

I'm not opposed to home crafts industries. I think that is preferable to working in a factory setting that is uniform and doesn't allow for any creativity on the part of the worker. But there must be better ways of doing it than this. Isn't there any direct marketing model that has been tried with this type of industry, one where the workers receive a much higher proportion of the sale? Maybe that is what the NGO's do. It seems that with computers and direct marketing methods you could even do custom orders of the mats instead of just making them to specs, and charge more.

If this is the best that neoliberal economics has to offer in the area of free trade- a few cents of benefit to a third world worker for $20+ of our money, it's no wonder that people are disillusioned. That seems like a very poor rate of return on my investment, and I am very sorry if any of my tax dollars have gone to schools to support this type of thinking. We may not be able to afford this type of economics for very much longer.

Posted by: wood turtle at October 2, 2004 04:56 PM

In taking exception to Stevenson's myopic piece on India, I am also quite convinced that he would try hard to like any other country without the minimal effort required in understanding what makes a country tick. Case in point is his misanthropic views of other tourists. Having said that, I admire his gumption for opening his mouth to voice his albeit misplaced views in a world of politically correct travel writers and their readers. My beef with his rhetoric is that while he has nothing but pure disdain for the common tourist, he himself never rose above their ilk to reveal another dimension to the country that thrives amidst its chaos. Furthermore, he harbors a thinly-veiled disgust towards those visitors on a spiritual quest. Stevenson's world is limited to his immediate perception; everything beyond his comprehension cannot be of any worth. His other gaffe is his failure to recognize the parallels between the inner cities of his figured-out and structured backyard. Besides over-the-counter Ativan, his takeaways are as shallow as his faculties of observation.

Posted by: sorebrek at October 3, 2004 02:05 AM

"1. The fact that people are making mats without being coerced to do so by anything but self interest shows that these people are not being "exploited" by their own standards."

But coir mat workers are paid very little - less than agricultural workers, even. Their employment is drawn from the "most disempowered social groups". And with all that, it's work maybe six months out of the year.

http://krpcds.org/publication/Ramohan.html

I'm still not convinced that this isn't a "it's the only game in town" effect, rather than that they're really not being exploited.

Posted by: ArC at October 3, 2004 12:50 PM

Mr Stevenson is a mass of shallow thinking encased in a good writing style.

His writing style appears "honest" on the surface. Perhaps some of it *is* honest. That does nothing to the fact that his thinking style is, well, worthless.

Here we have a travel writer whose sole motive for traveling is to be able to say "I went there", and not to experience anything. In fact,
the less experience the better. If he could earn bragging rights, he would do all travelling with a remote on the travel channel.

Mr. Stevenson concludes with some forced "I liked it" stuff, using of all things a simile about spinach! Which makes it clear he never ever tried a single Indian spinach dish, otherwise he would have lost the spinach cliche. (Actually, turns out he was stuffing on chicken wings and beer beyond some small experimentation.)

Talk about not being able to let go of preconceptions.

It is hardly surprising that Mr. Stevenson thinks not buying choir mats would raise the standard of living for choir mat weavers. This is entirely in accordance with Mr. Stevenson's ability to cogitate.

Posted by: jd at October 5, 2004 05:08 AM

I don't understand economists any more when they talk about free trade and the global economy. In this country we have a minimum wage and labor standards and it's okay. In fact, we never became a post-industrial power until there where labor rights and living wages. Even guys like Henry Ford knew workers had to make enough to buy what they were producing and that you couldn't have mass production without mass consumption. You have to have the synergy of supply and demand to have an industrial / post-industrial economy. I thought this was the Amercian Way (before supply-side economics). So many third world countries never really advance because they never generate enough demand to develop a self-sustaining internal economy. They are frozen in some kind of 19th century sweatshop parallel exsistence. They completly rely on foreign demand (from us rich countries), which is eroded with every job that is marked down to a subsistence wage. All those Indonesians who make expensive Western shoes and go barefoot because their whole economy is misdirected. These countries must out-produce the United States and European countries of the mid-20th century but they have never raised their standard of living to anything that close to middle class (as we used to describe it). The whole idea of comparative advantage scares me any more. There is this whole over-supply of human beings on the planet and this country cannot complete with economies where people are considered fortunate to make coir mats for a few cents a week. What does it say about the aspirations we have for the third world and our own future existence? Well at least we won't starve.

Posted by: ljp at October 6, 2004 01:27 PM

I've finally managed to put together the follow up material I promised. I've posted it in the follow up thread about Seth Stevenson that Brad DeLong put up a few days after this one.

Posted by: P.M.Lawrence at October 6, 2004 10:26 PM