Buying products made in developing nations - good or bad?

Great Debates
1

I’ve heard all the horror stories about kids being chained to sewing machines for fifteen hours in developing nations, so I generally try to avoid buying products not made in the U.S. But the flipside is that what sounds like terrible pay to us wealthy Westerners can be a decent wage to many of these workers. This is the part of the whole pro/con WTO thing that gets me. I just don’t know which side is right.

The other day I was at JC Penney’s and found these really cute pajama pants. I very nearly bought them, til I noticed that they were made in Cambodia. I have a particular interest in Cambodia, and it seemed unlikely to me that the people who made these pants were being treated adequately, and I don’t want to support the manufacturer. So I put the pants back on the rack. But of course, perhaps my money would be used to pay the Cambodian workers, who would then be able to buy an extra kilo of rice for their kids. I’m not sure which argument is correct.

So tell me, should I have bought the pants, or was I right to put them back?

2

I believe that one of the main things essential for a nation to move from developing status to developed status is for it to export manufactured goods, rather than raw materials. As such, even exploitative industry can be seen as helping in the long run.

Of course, you really don’t want to support the exploitation. I’d go for a rule of thumb of trying to join organized boycotts of particular manufacturers to try to convince them to take the lead in being more fair to third-world employees, rather than just not buying goods from the third-world.

3

I don’t think that human rights issues should be a part of any purchase, because they’re so hard to trace. Sure, my khaki shorts may have been made in the USA, but where did the cotton in them come from? What were the working conditions there? You can see where I’m going, and the more complex the thing you’re buying the less you know about the people that made it. Anyways, money=stability. If these plants make money, people in those countries make money (not necessary the workers, but anytime American dollars go to another country the poor will ultimately benefit). Plus, by having economic ties, you avoid war. Example: In World War I we had something like 1000 times more money invested in the Allies than we did in the Central Powers. If we have money vested somewhere, war is averted. Think of it as your contribution to world peace.

4

But isn’t that just what the corporations want you to think?

(I don’t know if you can tell, but I’ve heard a lot of information on one side, not so much on the other.)

5

>> But isn’t that just what the corporations want you to think?

The argument is either right or wrong. If it is right you should not accept it because “the corporations” want you to believe it? What kind of an argument is that?

I suggest we should deal with arguments on their own merits and leave prejudice aside.

6

gorewonfla wrote:

Then Kyla wrote:

Then sailor wrote:

Of course you’re right, sailor, we need to make and examine arguments, not just assertions. But it seems to me that the assertion most in need of a supporting argument here is the one made by gorewonfla that “anytime American dollars go to another country the poor will ultimately benefit.” GIVE ME A BREAK, PLEASE! You don’t have to be some dyed-in-the-wool anti-American to realise the fallacy of such a naive notion. From gorewonfla’s name i get the impression he is a Democrat (i may be wrong), but what he presents is the most simplistic Reaganite trickle-down economic theory, unsupported by even a shred of evidence.

Ask the poor of Honduras, Guatemala, and El Salvador if they benefitted during the past century from being kicked off their productive native lands to make way for US agribusiness, such as banana growers, for whom they were then often forced to work by corrupt and violent dictatorships.

Ask the poor workers in the maquiladoras along the southern side of the Rio Grande whether, even though they get paid, they are happy in jobs that threaten them with violence for unionising, that pose grave health risks due to unsanitary working conditions (birth deformities in this region are well above the Mexican average), and which expect long hours of work for no pay.

Ask the poor of the former Soviet Union and parts of Eastern Europe if they have benefitted from American investment over the past ten years or so, when homelessness and poverty in these regions is now orders of magnitude higher than it ever was under the awful Communists. (that use of the word ‘awful’ was not ironic - i have no time for the old Communist regimes either, but we still should be willing to face up to the fact that the ‘free market’ and American investment has been far from beneficial to the Russian poor).

Ask the poor of Chile whether the huge increase in US investment after the 1973 coup made up for the torture, dissappearances and murders committed by the US-backed Pinochet regime (and no, the backing was not just by the CIA and US government; strongly involved in the post-coup economy of Chile were the US mining giant ‘Anaconda’ and ‘Chicago-school free market’ economists).

And the spread of US investment overseas has also hurt American manufacturing workers, whose job security is now constantly threatened and whose pay has declined relative to the cost of living since the mod-1970s.

For some reading on such issues in these and other countries, see:

Jules Benjamin, The United States and the Origins of the Cuban Revolution (1990).

Noam Chomsky, Power and Prospects: Reflections on Human Nature and the Social Order(1996). See also these articles: 1. 2. 3. 4.

Michael Chossudovsky, The Globalization of Poverty (1997).

James Dunkerley, Power in the Isthmus: A Political History of Modern Central America(1988).

Jim Handy, Gift of the Devil: A History of Guatemala (1984).

Stephen Schlesinger and Stephen and Kinzer, Bitter Fruit: The Untold Story of the American Coup in Guatemala (1982).

U.S. Congress, House Committee on Government Operations. Employment, Housing, and Aviation Subcommittee Maquiladora detention : Mexican treatment of trade unionists, One Hundred Third Congress, first session, September 29, 1993.

Juan Gabriel Valdés, Pinochet’s economists : the Chicago school in Chile (1995).

Finally, it’s not enough to argue that what goes on in these countries is none of our business, that they have their own laws and that we should respect them. First of all, the US has never been shy about poking its nose in elsewhere when America was likely to benefit. And secondly, US corporations pressure both the US government and the government of other countries to adopt policies which are favourable to American investment and often detrimental to the local working populations.

7

So your alternative to a person in a poor country having a badly paying job is to leave him with no job. Sorry, I don’t get it.

8

Let me chime in on a few levels here.

Since China began to open up in the late 1970’s, it has made great strides in improving the economic level of citizens, quality of life has improved for hundreds of millions, personal freedom has improved, the government has become more open domestically and internationally, etc. Now before you jump on me for being a Beijing apologist, I will grant that China started from a low base level and has far to go. That said, Chinese gains can be largely attributed to opening the economy and foreign direct investment.

China currently has a floating migrant population of between 100-200 million people. This is the population that works in the factories that make “Made in China” export goods, construction, and all sorts of service industries that allow the China export machine to function. This migrant population is unparalled in the history of China and the world. Never before has the impoverished Chinese countryside seen such an inflow of capital. This is the real “trickle down” effect of all these migrant workers leaving places with only subsistance farming, and going somewhere to make a living wage and begin personal capital accumulation. This is also transforming the political landscape of the countryside as some peasants can now afford to hire justice. Granted, there are also downsides to the migrant population and it does create new social ills. These people were previously (we are talking into the 1980’s) essentially serfs stuck in the impoverished countryside with very few rights and rarely allowed to travel.

I have dealt with a multitude of trading companies and factories running the gauntlet from state owned enterprises, military enterprises to 100% foreign owned and operated businesses. There has certainly been a trend over the past 15 years to reach and maintain minimum standards for workers powering the export market. In the past few years, I have seen a trend that foreign trading companies that export over a billion dollars a year worth of goods create compliance positions to ensure that their contract factories meet the standards of the purchasing companies in the US. Some of the US movements for ethical treatment of workers does actually pay off. Certainly, factories are much more aware of it now that even 5 years ago, and they take steps toward compliance.

Some will make the arguement that trade elevating the standard of living helps prop up an abusive government. That may in fact be true, but as I alluded to earlier this same government is also improving. The pace and level may not be one you agree with, but it is improving. Secondly, would you instead prefer 1.4 billion impoverished people revolt against that government and descend into pure anarchy that would make the Balkans look like a picnic? Sure, there might be a peaceful overthrow of the government and the entire country stays together and keeps their nukes safely stockpiled. Chinese history doesn’t have a good record of a peaceful transition.

Creating jobs is a good thing.

9

sailor wrote:

I’m sorry, i don’t get it either. Nowhere in my post did i say that. All i was doing was disputing the previously-made claim that whenever American money goes to a country, the poor will always benefit, and pointing out some examples to support my case. China Guy contends that the opening of China has benefitted many Chinese; it seems to me that he is a little overoptimistic, but i don’t know enough about recent Chinese history to dispute or confirm his claim yet.

All i ask is that you look at what i actually say, instead of ascribing to me arguments that i never actually make. I happen to believe that, with the right motivations and under appropriate legislation in the foreign countries, American investment could produce considerable benefits, but the fact is that it hasn’t always happened.

10

mhendo, the legislation and enforcement by the third world counties is important. INHO at least as important is the consumers. Consumers have to be willing to pay the price for third world workers to make a “living” wage.

In making rational retail purchasing decisions, there has to be enough people voting with their dollars that say the lowest price is not the most important factor. Unless purchasers in the US demand to pay more for the same goods, and that translates into wealth accumulation for the laborer making those goods, then one might as well put a bumper sticker on your car for all the good it will do. The fact of the matter is that most buyers in the US make purchasing decisions based largely on the lowest price.

The opening of China has benefited the Chinese immensely. Perhaps with a different government, there would have been greater progress but that is of course impossible to judge. I would also point out that I am highlighting general trends. China has 1.3 or 1.4 billion people, is in a transition from a centrally planned economy to a market driven economy, is extremely dualistic, and therefore any one with an agenda can find a “real” example to support their position. Myself included.

Kyla, good luck in trying to buy 100% US originated and manufactured goods.