While the posters on this thread seem to overwhelmingly think free trade benefits the poorer countries, the posters on this board are not perhaps the best source of information about this. While their logic appears sound, I certainly would rather hear from the poor people that suddenly have jobs thanks to free trade, rather than us relatively rich people that merely theorize that their lives must improve. Judging from the stories one hears about the workers in the factories along the Mexican-US border, these theories may not hold up in practice.
Actually, a little bit of logic can show why free trade makes sweatshops inevitable. Basically, sweatshops are very cost-efficient, much more efficient than manufacturing in humane working conditions. Therefore, those countries that permit sweatshops conditions will be able to sell their goods at a lower price, and therefore get more business and make more profit. The more profit, the more sweatshops will be opened. So you see the more sweatshop-like the conditions, the more manufacturing will go on, meaning that free trade makes sweatshops inevitable. The only way this could not happen if there was a global shortage of workers, meaning that workers would get to exercise choice in where they worked, and conditions would improve. Unfortunately, it doesn’t look like there will be a global shortage of workers anytime soon.
Well, those who have a good education in economics and practical work experience in the developing world should be, ah yes?
That would be me.
A word of context, I live and work in the Arab world and Africa, for a large multinational. I speak several varieties of Arabic, French, etc. I consider myself to be something of an expert on doing business in the 3rd world, and not as a distant, reluctant expat but as someone who genuinly likes and esteems the people and indeed local culture. I am not a simplistic free trader as I hope my opponents recognize. Unfettered markets are not a good idea, and even free trade must be balanced by practical adjustment concerns, capacity of the local economy to adjust in the near term (no free market culture can be a real problem), etc.
Anectdotes do not economics nor analysis make.
First, one has to ask oneself what real choices are available. A difficult as it may be, if the choice is between a shitty job and starvation, a shitty job is better. Choices indeed can be quite that stark. Hand waving doesn’t make problems go away.
Second, one must ask how general the problems actually are. Often the worst cases are presented as general cases when in fact that it is not so.
Third, one must ask to what extent the information is fiable. I’ve seen quite a lot of bullshit in my day (especially by “activists” writing about my field of activity).
Fourth, one has to ask what REAL and VIABLE alternatives one has to present. Recalling programs, work rules etc all have costs to be balanced against real benefits. As it stands, demographics make it absolutely necessary for developing countries to grow as rapidly as possible in order to aviod ABSOLUTE impoverishment, not just relative impoverishment. That means producing more and more efficiently. The best way to achieve this is through free trade.
For those of you pining for the “old ways” and blaming this on “sweatshops” or what not forcing people to change? you need to get a clue.
The productive capacity of the old ways cannot support present populations. To propose that somehow picturesque premodern ways are somehow being perverted against folks will and if “they” were left alone all would be fine is an exercise in the most bankrupt and ignorant romanticism I can possibly imagine. Traditional farming methods do not support enough people qt present growth rates, nor do traditional manufactures etc. Efficiency is too low.
There is a rather stark choice in this context, either adopt new, more productive methods of production, enduring the pains of transition or you fucking starve, or live on handouts or at best grow absolutely poorer year by year as the economy grows by X rate and the dependent mouths by 2X.
I’m not happy about this observation. I am saddened by the loss of certain cultural habits, of old ways, I am the farthest thing from a western cultural triumphalist. But the cold hard facts on the ground require change. Nostalgia for a romanticized past is no excuse for condemning future generations to misery.
No, a little bit more education in economics might show some folks their analysis is too simplistic.
Assertion.
First it is necessary to define precisely sweatshop. A lot of people play fast and loose with this.
Reality, data is much more complex. Many sectors of activity, even in the 3rd world, pay what is known in the literature as efficiency wages (translating here folks, I’ve forgotten the English). That is a wage above what might be expected to be the market minimium in order to retain qualified personnel.
As I recall from past readings on the local market (I speak of North Africa), most industrial activities (even informal) were found to pay wages above what one the estimated market wage was. Retention of workers etc. Only those activities where qualifications were essentially unimportant (such as the most basic textile prod here, to my recollection) seemed to be an exception. Of course there are individual factories which are shittier than others.
Very briefly your argument by assertion fails on the data. You can look up online with as simple lit search some data of efficiency wages.
Very nicely mechanistic. But unsupported by the data.
Heck, yeah – in fact, a lot of smaller U.S. businesses have been known to use sweatshop labor inside the U.S.. They staff their factories with illegal immigrant workers, usually from Mexico, which allows them to get away with paying sub-minimum-wage salaries; if a worker complains to the Dept. of Labor, (s)he’ll just get deported back to Mexico.
Now, keep in mind that even a sub-U.S.-minimum-wage salary of $3 per hour is still higher than the Mexican minimum wage, and is considerably higher than the tiny wages Mexico allows its “maquiladora” factories to pay their workers. So, the illegal immigrants are better off because they make more than they would in Mexico, and the sweatshop owners are better off because they can get away with paying less than the U.S. minimum wage. Both parties benefit.
Therefore: Illegal immigrants are good for the economy!
Pregnancy is much more likely to cause an actual drop in productivity than, say, occasional off-hours drug use. Good thing we don’t have any tests like that here in the US!
Well, yeah. There is no infrastructure to move. I don’t know for a fact, but I’d hazard a guess and say it was very unlikely that Nike owns a clothing or shoe factory in the third world. Nike would just contract it out.
Thanks for your interesting insight, Collounsbury.