Lance Knobel cites Nicholas Kristof and Phil Jones on the anti-globalization of fools...
Posted by DeLong at June 25, 2002 10:56 AMTuesday, June 25, 2002: In support of sweatshops
Nicholas Kristof says the unsayable in The New York Times: "It's catastrophic for muddle-minded liberals to join in and cudgel impoverished workers for whom a sweatshop job is the first step on life's escalator." I remember the BBC report he cites which led to Nike leaving Cambodia. It did explain that the low-paid factory jobs were far preferable for Cambodian girls to the sex trade or staying in their impoverished villages. But the outcry that followed the accurate report overlooked those realities.
Phil Jones offers an intelligent reply to Kristof's argument. I agree that the first condition -- ensuring adequate health and safety standards, even in "sweatshops" -- is fundamental. I know there have been documented cases of global corporations violating these standards, but from what I've seen in the developing world, multinationals are generally better upholders of standards than local companies. I don't think this is altruism on their part. They are worried about reputational damage if they have woefully low standards.
As to the disparity between advocating openness for western manufacturers while slamming the door shut on the south's agricultural exports, I couldn't agree more. See Davos Newbies passim. On Phil's other points, there are no easy answers and he's right to say there is need for more research. What I object to in less intelligent viewpoints is the arrogance that we need to save the world's poor from exploitation by neo-colonialist corporations...
"They are worried about reputational damage if they have woefully low standards."
I would argue that the only reason they need to worry about reputational damage is because of anti-sweatshop organizations. Before it became commonplace to denounce, say, Nike, for its abuses, the companies had to fear no such damage, because no one in the US knew or cared. If the complaints and the publicity were to end, then so would the reason for maintaining decent standards. True, many companies would not revert back, but many would.
Until the day we have verifiable, enforced minimum standards, then I think we need activism to help keep the companies' relationship with their workforces from degenerating into neo-colonialism.
Posted by: kevin on June 25, 2002 02:14 PMHmmm, and what study supports the assertion that their villages were "impoverished" and, even better, that the only other possible line of work that Cambodian society (which I understand is fairly ancient) has managed to come up with is turning tricks?
Here's what kills me about the economics profession: it comes up with stuff like people are "impoverished." Why? Because "they live on less than 2 dollars a day."
Well, that's gibberish-- nobody could possibly live on $2/day. What you actually find is that a rural/antiquarian population is actually getting by on individual resources: everybody's got a few chickens and a well and they know how to get by in ways that our gun-totin' survivalists would kill to know. Everybody can sew, fish, & etc. Pretty medieval, I admit, but it works.
So maybe they have some excess and they trade it. And our geniuses take that income and divide out by the number of people and say they are "living on $2/day." No, the truth is that they are actually netting $2/day- which they usually blow because it isn't really that necessary to them.
Now, we create trade zones like the maliquadoras (don't hassle me on the spelling, I've seen it spelled at least 4 different ways) in Mexico. And people move there from these medieval places and get paid like $5/day. Our economists pat themselves so hard on their backs that I'm surprised they don't fall over.
Unfortunately, they ignore the fact that it also COSTS $5/day to live in these industrial centers, so the poor suckers have actually gone backwards.
And the air and water is polluted, civil society is frayed to non-existent. We worry about the Cambodian sex trade? At least it's voluntary, don't women in Juarez have a little problem with ending up raped and dead? Doesn't happen in a farming village where everybody knows everybody else.
Yeah, I know that people move there by their own free will. But to the young all that glitters is truly gold, and we market our lifestyle into every nook and cranny of the globe.
Look, I'm not an agrarian fantasist by any means- I just had to present the opposite side of the argument to make this point: We really have barely the slightest idea what the &*() we are doing- we don't have a complete set of tools for measuring things properly, we don't understand other cultures (and barely our own), and we seem almost to operate on pure hubris.
Just slow it down for EVERYBODY'S sake.
Posted by: EconSkeptic on June 25, 2002 03:39 PMThe maquiladoras in Mexico have no problem attracting workers--suggesting that lousy as conditions are in the maquiladoras, conditions are worse for a great many people in the Mexican countryside.
Brad DeLong
I knew you were going to say exactly that- why shouldn't you, everybody else does- but as far as I can tell that is at best pure speculation.
One report I read had a girl basically saying that she was just "bored" and came for the bright lights and Western lifestyle, in no way was her family "indigent and starving," as we like to picture them.
Maybe it's a teenager thing- how many fresh faced Minnesota girls wind up in SoCal's porn industry? Would you draw your same conclusion relating LA to the Twin Cities?
OK, that was a little over the top. But you get my drift- just because a lot of people do something it doesn't mean that it's in their best interests. Hell, 50 million people voted for Bush. I certainly do not support paternalism (in fact, I think that's exactly what I'm fighting here, the White Man's Burden) but are you sure we just aren't exploiting their innocence? We show them America, they want to make their country like ours, but then we tell them a lie about the economic model under which it came to be.
Again, you very well could be right (about things being better in Hell on the Rio than the village life), but WE DON'T KNOW because nobody seems to be doing any thoughtful research on the subject. Everything is thru an economist's perspective, and it's a very narrow perspective.
If they want to make shoes, CD players, &etc. for us that's great. But this is what I want to see: one or two shifts a week the shoe factory DOESN'T sew on the swoosh, the CD factory DOESN'T glue on the Emerson label, and then on their day off the CD people go buy those shoes and the shoemakers get new electronic equipment.
This is how the Pacific Rim economies grew- to the point that Japan now seems oversaturated with gadgets and gizmos and may now need to find a way beyond Consumer Capitalism.
But for the new guys, with the "Western Consensus" in place I don't see how that will happen. The Pacific Rim system of import/export control is just not allowed. You pay people the minimum that gets them to show up, and if they want any extra spending cash you just move to the next 3rd World country. Aren't some Mexican jobs moving to China?
When I squint at it is starts to seem like the WVA coal towns, where people had jobs that apparently paid good, hard cash, but the system was rigged so that they never really got ahead. WVA is *still* one of our bottom feeder states, and I wonder if it isn't a hangover from Big Coal's exploitation.
Posted by: EconSkeptic on June 26, 2002 06:56 AMWhat is your point, exactly? Do you think people living in the "pretty medieval" way you describe are actually better off than they would be if they lived in an industrial society? I wonder why you don't move there yourself, to experience the joys and personal rewards that lie in getting "by in ways that our gun-totin' survivalists would kill to know".
In Argentina, plagued by an economic depression which dates from 1998, people are lately returning to small subsistence crops. Public schools try to lure kids not just by offering a cup of milk (which was customary a few years ago), but increasingly by teaching them how to grow their own vegetables. Do you honestly think that low-income parents who switch from making a living out of an actual job to growing lettuce in whatever piece of land they find are actually better off? Well, they certainly don't.
And about the fact that "they usually blow [the $2 a day they make] because it isn't really that necessary to them". What exactly is "necessary"? Of course, you could argue that anything beyond that which keeps you alive is unnecessary. But beyond that subsistence level, comparisons CAN be made. Living in a country plagued by disease is living, but it's worse than living in a country where you can expect to be 70. Learning to read can greatly enhance your quality of life, and so can a better education. Things as diverse as the structural quality of buildings and widespread access to culture are also valuable. Communication with the rest of the world... the list is endless. And it is not accomplished by people staying in their dwelllings and living at subsistence levels - or so it seems, judged by the pride Americans and Europeans have in their lifestyles, and the willingness people in poor countries have to emulate them.
And please, don't get me started in the patronizing attitude implicit in your assertion that they "blow" their money. Who are you (or anybody else) to tell people how they should be spending the product of their work? Thet, obviating the fact that you probably do not know the consumption patterns of people "in the villages".
Surely, the market value of traded goods and services is not the only measure of well-being. But it's much more accurate than valuing the "moral content" of those activities - particularly when the one judging that content is far from living by those standards.
Posted by: Maria Eugenia on June 26, 2002 08:15 AMI was going to post what Maria said, but didn't have to. Since people are making these economic decisions voluntarily -- and since the alternatives are pretty miserable -- we can conclude that sweatshops are better than subsistence farming (which as the name implies does little more than keep body and soul together).
More reading: In praise of cheap labor by Paul Krugman
Point-Counterpoint: Nigeria, from the Onion. (Sample: "Nigerians don't need money for stereos or CDs: They make their own music! Along with a huge variety of drums, traditional instruments include many kinds of flutes, xylophones, and wooden clappers. Music permeates all aspects of life there, including public assemblies, festivals, weddings, funerals, and storytelling sessions." vs. "If I could get just a little money, I could try to leave. But I must save my money for food. There is no good food to buy in the streets. There are no doctors. I am still young. I don't want to get sick and starve. I don't want to be killed by the police. Please, God, save me." And yes, I know the Onion is exaggerating for comedic effect.)
Posted by: Paul on June 26, 2002 01:07 PMIt generally annoys me that people who have no clue about the "sweatshops" are the ones who are the most outspoken about them. My wife owns a small business that makes toys and gift items that are manufactured in China. She personally visits all of the factories that she uses and meets the owners and the workers. Here's the people she meets:
The owners: even in communist china, there are many factories that are owned not by the government or multi-national corporations, but by chinese entrepreneurs. They contract work out to foreigners looking for low wage manufacturing. Surprisingly, Tawainese own a lot of factories in China.
The workers: young people, often girls, who have come from farm communities to make what is to them an enormous amount of cash. They generally work 80 to 90 hours a week, with time off only for a couple of weeks during the chinese new year. The factories are clean and bright, and dorms are provided for the workers. There's generally no plumbing for anyone (even the visiting americans), but that's life in most of China. The workers don't plan on working 80 hours a week for life. They usually come for 1 to 4 years, save their money, and go back home to their families. It really isn't much different than young people in America working 80 hours a week as doctor-interns, lawyers in big law firms or even as unpaid grad students. It's something you choose to do to get ahead -- the financial payoffs are different, but in relative terms they are similar.
At night the dorms crackle like a college campus with young people talking, flirting, etc. Anyone who doesn't like it can just goes back home, and a lot do. Very few choose to make a life out of it.
Its certainly not something I'm ashamed to make money based upon. Globalization has been a really cool experience for me. We've gotten to understand China in a way that you just couldn't as a tourist, and we now have some good friends on the other side of the world.
Posted by: pj on June 26, 2002 06:27 PMIf "sweatshop protestors" are really so concerned about rich Americans exploiting the poor abroad, why don't they protest something meaningful?
Like, maybe, US protectionist subsidies that make selected Americans rich by paying for overproduction that impoverishes whole sectors of foreign subsistence economies? (Rather than just the anecdotal sweatshop that gives a few workers a chance to improve their lot.)
For instance, from page one of yesterday's WSJ:
"Mody Sangare hitched his one-blade plow to two lanky oxen and began turning over the dirt of his fields. Walking barefoot behind the plow, the 22-year-old farmer would spend the next 14 days tilling and planting 15 acres of cotton.
"And for what, he wonders? The price being offered to Mali's cotton farmers this year is 10% lower than last year's -- a pitiful sum itself, given that world cotton prices had fallen to the most unprofitable level in three decades. After the last harvest, once the farming costs were paid, the Sangare family was left with less than $2,000 for the year to support two dozen family members and relatives....
"On the same June day that the rain came to Korokoro, cotton seedlings half a world away in the U.S. pushed up through the thick black soil of Perthshire Farms, a 10,000-acre cotton plantation in the Mississippi Delta. Kenneth B. Hood, the eldest of four brothers who run the farm, climbed into the air-conditioned cab of a $125,000 Case tractor and prepared to give the seedlings a dousing of fertilizer.
"The enormous tractor, one of 12 on the farm, is equipped with digital displays, four-wheel drive and an air-cushioned seat....'There are lots of reasons to be optimistic,' says Mr. Hood, who this year is chairman of the powerful industry trade group...."
"The biggest reason for Mr. Hood's upbeat outlook is also the biggest reason for Mr. Sangare's despair: subsidies. American farmers get them in abundance. Malian tillers don't...."
[S]ubsidies to U.S. farmers ... depress global prices of some vital cash crops that developing countries count on. In Mali, the U.S. spends $40 million a year on education, health and other programs. That investment is blunted by sagging prices for cotton, Mali's main cash crop. The state cotton company predicts a deficit of about $30 million this season. As a result, the very people who are supposed to be soothed by the anti-poverty offensive are becoming more alienated and angry..."
Protesting the likes of that would be a heck of a lot more significant than protesting about Gap jeans.
Belatedly -
There are plenty of protests against policies that hurt small farmers in poor countries. The Progressive Populist is mostly written for small farmers in the USA, but it repeatedly objects to policies that damage farmers elsewhere:
In 1999, fewer than 30 of the richer, developed nations contributed more than $280 billion in direct farm subsidies to help their own farmers. ...
Since 1991, I have had the privilege of serving as a volunteer or technical assistant on agricultural developmental assistance assignments to Estonia, Poland, Czech Republic, Hungary, Bulgaria, Croatia, Albania and Kazakhstan. These new, independent democracies, which were formerly under Communist rule, have welcomed joint-venture capital from the West to rejuvenate their ailing businesses and industries. Far too often, leaders in these poorer nations been taken in by the "free-traders" and opened their borders to food and grain imports that have decimated their own farm economies.(here)
or
But the bill has a lot more to do with large growers and producers and with Bush's interest in boosting the fortunes of Republicans from the farm states in the Midwest and orchard owners in Florida. Opponents -- including some environmental groups, conservative Republicans and some Democrats -- say the bill amounts to a raid of the treasury, while foreign trade representatives are up in arms over what they are calling an unfair trade advantage.(here)
Protestors of the WTO are also probable customers of, say, Ten Thousand Villages, a nonprofit chain devoted to fair trade.
These may not be economically sophisticated approaches, but they are trying to find non-subsidy or market routes to the advantage of the really poor.
pj's wife's company could probably sell specifically to WTO protestors, if it could show them how good the factory conditions are. The Lowell mills used the same technique to everybody's benefit, for a while. I sure don't buy that all sweatshops are so much an improvement on home conditions that their workers don't need outside watchdogs, though, because if they were there freely they probably wouldn't need to be locked in. (Also, if farming is worse than locked-in sweatshop jobs partly because of rich-country farm protectionism, the rich countries as a whole are damaging the sweatshop workers twice.)
I would guess that protests linked to brand-names are televised, or remembered, or even made more often because they can piggyback on the ad investments that make the brand names memorable. There were plenty of small-print protestors in Seattle in 1999, but the sign with fourteen points on exactly what would have to change to make trade with Burma OK probably didn't make prime-time news.