The market has been allowed to work in Guatemala, El Salvador, Haiti, Indonesia, etc., in fact, most of the world. Most of the world is capitalist. In fact, in the third world, there are far fewer regulations on capital than there are in the U.S.
So, what you say is exactly wrong.
Actually it has to do with the value of money in different countries.
In America a dollar buys x amount of goods in the US. In third world countries a dollar buys 3 or 4 times that amount of goods. Paying someone in another country less money than a counterpart in the US is not robbing the poor person. In fact, if you would look things up, you would find that third world people want to work for US companies because they earn more money. If the people in Third World Countries made more money by farming then they wouldn’t take the jobs offered by the US companies.
I hate to say this but, Chumpsky, you are an idiot. You don’t know what you are talking about and you never provide cites for your rants.
In fact I am willing to bet that you, Chumpsky, are a trust fund kid who has never had a real job. If you had a real job you would understand that money is earned and not given.
Slee
This completely neglects what is by far the most important aspect of Third World economies, which is what is misleadingly called “globalization.” Essentially, the Third World is forcibly underdeveloped. Here is a good article by Robin Hahnel about how this is done:
The global economy: economy in crisis
For one thing, the difference in buying power of the U.S. dollar has nothing to do with why Guatemalan factory workers are willing to work for $0.19 an hour. In fact, Guatemala is an excellent example of capitalism in action. The average Guatemalan had a better diet, in terms of caloric intake, in 1650 than she does now. The poverty that exists in Central America is really quite amazing. Although this obvious fact is never pointed out, the U.S. has an overwhelming influence on Central America. Through its various economic institutions, and oftentimes by outright intervention, Washington virtually dictates policy to the governments of Central America. In turn, the compradors who run these states are rewarded with outrageous wealth, while the vast majority remain poor.
Central America is a capitalist paradise. There are no labor unions to speak of, no annoying environmental regulations, no annoying regulations on workplace safety, no annoying minimum wage laws, and basically nothing at all to impede the so-called “free” market.
So, we would expect that these countries would be bustling centers of prosperity, according to free-market theology. Yet, somehow they remain mired in soul-crushing poverty.
At least 70% of people in Central America live below the poverty line. Here are some other interesting facts about Central America:
http://www.hartford-hwp.com/archives/40/110.html
At least 40% live in extreme poverty, which means that they don’t make enough to satisfy minimal requirements for caloric intake.
Thirty percent of the population, or more than 130 million people, lack access to medical services, and 44 of every 1,000 children, or 2.4 million a year, die before their fifth birthday, mainly from preventible diseases.
In 1997, 10 percent of children in Latin America showed signs of malnutrition, and the per inhabitant daily caloric intake was only 2,500 calories. Although the region is considered to have one of the highest potentials for food production, it imports 31 million tonnes of grains a year.
These are not poor countries. They are very rich countries with a lot of poor people living in them. There is vast amount of wealth in these countries, that is concentrated in a very few hands, and also exported to the imperialist nations like the U.S.
It’s free rein – like a rider who lets a horse go where it wants.
The same thing that prevents them now.
-It’s not alway desireable to make one big company that sells everything.
-If one or even a few companies ran everything and only paid a dollar and hour, who do you think would buy their products?
Yeah Chumpsky…It’s America’s fault that Central America is poor. Have you ever even been to South America?
Honestly, I already have plenty of fires to put out. I figured that when a man begins his argument with lies, the rest of it will be lies as well.
Besides, everyone else is doing a fine job debunking him. 
They might oppose libertarianism on philosophical grounds but, unlike him, they at least know what they are opposing.
Its not always desireable to have one big goverment that controls everything, but that somehow happens too. That is why we have laws to try to stop that from happening. Libertarianism would just let the goverment call itself a corporation.
People would buy that companies products, and siimply be in a huge amount of debt their whole lives. Its a pretty common practice.
sleestak
[Moderator Hat ON]
sleestak, do NOT call your fellow posters idiots in this forum.
[Moderator Hat OFF]
Because 19 cents buys a Hell of a lot more in Guatemala. At the same time 19 cents buys nothing in Denmark. People in Guatemala make an average wage of less than 19 cents because most of the labor is unskilled labor and thus there is plenty of it. Denmark workers are usually skilled, because of years of education and experience. Skilled labor, because it is scarce, costs more.
It isn’t that hard. Guatemala is using the low wage jobs as a building point. Over time, better and better jobs will arise, because more people will be making 19 cents, instead of the normal 10 cents. This will lead to more money in education (through taxes), which will lead to more skilled labor, which will lead to higher wages being paid to those skilled laborers.
It’s also what happened in South Korea, which started (in 1950s) as the 19 cent an hour sweatshop country and is now a modern wealthy capitalist state. Because they stayed with the market and let it advance them.
No. Unskilled laborers also make tons more in Denmark than they do in Guatemala or any of the other capitalist paradises like El Salvador, Indonesia, Honduras, etc.
That is the theology. That is how it is supposed to work. The only problem is that there is no example of it ever actually working that way.
The South Korean government intervened massively in the economy, setting up very protectionist policies, instituting strict regulations on capital flow, and so on, the exact opposite of a “free” market. In fact, at one time South Korea used to have the death penalty for capital flight.
Because they are worth more, Chumpsky. Even unskilled laborers are more valuable, because they are in a country that has good roads, ports, factories, and a stable government that encourages people to expend capital in them.
That’s really the only reason. If the overall cost of producing a widget in Denmark, including $10/hr for workers, is less than the cost of producing the widget in Guatemala even though the workers are only worth .19, then the people in Denmark will make $10/hr.
Or ask yourself this: If cheap Guatemalan labor is so beneficial to capitalists, how come ALL industry doesn’t move there? Why isn’t Guatemala awash in factories?
The reason is because Guatemala has many competitive disadvantages that countries like Denmark, Canada, or the U.S. don’t have. And that is partly why people get paid so little there.
Good point. I have a friend a GM who described how they had to set up their own telecom facilities across the border in Mexico because the infrastructure is so poor. Not to mention that first world education tends to be better–literate employees, even unskilled ones, will probably tend to be more productive.
Something to note: I really don’t hear much about companies who open facilities in LDCs forcing people to work there. The reason they work there is because their other options are so shitty. Instead of blocking what is in reality their best options, and in effect doing them real harm, we should encourage further development. Unionize? You bet–though I’m w/ fmr. Michigan gov. Romney in that unions should be subject to anti-trust laws. We should use our mistakes of the past to help the people of LDCs leap-frog them, instead of forcing them to stay living in poverty.
Allowing people the freedom to run our businesses as we please seems consistent with allowing us the freedom to say what we please, think what we please, pray as we please, associate as we please, publish what we please and vote as we please.
No doubt some business regulation is needed, but our basic concept of freedom means to me that we should strive to keep regulation to the minimum. A lot of people must disagree with my POV, because there are IIRC several million pages of government laws and regulations in force.
Sleestak said: “In third world countries a dollar buys 3 or 4 times that amount of goods. Paying someone in another country less money than a counterpart in the US is not robbing the poor person.”
And went on to say:
“Chumpsky, you are an idiot. You don’t know what you are talking about and you never provide cites for your rants.”
Well, I’ll tell you what, slee. If not knowing what you’re talking about means you’re an idiot, maybe you’d better take a look in the mirror.
I have been living and working in Latin America for twenty three years now, and I can tell you, with all the cites you want, that most everything you need to live in anything except abject poverty costs a lot more than in the USA. A few things are cheaper, like tropical fruit for example, and public transportation, but even basics like beans and tortillas cost at least as much. Meat is sometimes a little cheaper, but poor people never eat meat. Medical care is a lot cheaper, outside of the fancy hospitals that serve the rich, because doctors get paid less than 10% of what an American MD gets, (one of my neighbors is a traumatoligist, and his wife a nurse, and they get by on less than $US1000 a month) but most of the really poor people I know have never seen a doctor or a dentist in their lives. Gasoline in Mexico goes for $US2.25 a gallon. Tools, books, used cars, car parts, refrigerators, clothing, you name it, all cost between 25% and 200% more than you pay. I went up to visit family in Wichita, Ks. at Thanksgiving, and looked around at available housing out of curiosity, and was somewhat amazed to see that rents in general were lower than here in Oaxaca (which is the second poorest state in Mexico.) Land in places like Guatemala is basically unavailable, since the rich own it all and don’t like to sell, but the lot behind my house is for sale: 30 x 40 meters, on a rutted dirt road, with no services at all, bare clay and rock with not a tree in sight except the ones I planted ten years ago, a two year wait for a phone line (but a beautiful view). Price: $US120,000.
What it amounts to is that working people can’t afford anything, so they do without. Can’t afford to rent a decent hoime, so they live in cardboard shacks. Can’t afford meat, eggs, milk, so they survive on tortillas and a few beans. Can’t afford dentistry, so they wait untill their teeth and rotted enough that a curandero in the marketplace can pull them out with a rusty pair of pliers. Can’t afford medicine, so if their children get sick, well, they usually die. (Funerals are cheap, especially for kids, since all the neighbors will kick in a few centavos even if it means going without food for a day.)
ISiddiqui said: “Guatemala is using the low wage jobs as a building point. Over time, better and better jobs will arise, because more people will be making 19 cents, instead of the normal 10 cents. This will lead to more money in education (through taxes), which will lead to more skilled labor, which will lead to higher wages being paid to those skilled laborers.”
This is the usual myth propogated by gringos who don’t know what they’re talking about. (See sleesatak’s comment to Chumpsky above.) It doesn’t work that way. Chumpsky was right on target when he said “That is the theology. That is how it is supposed to work. The only problem is that there is no example of it ever actually working that way.” For the past twenty years the income of workers all over Latin America has been declining, malnutrition and child mortality has been increasing, the infrastructure has been decaying, and the rich have been getting a LOT richer. (See Chumpsky’s cite a few posts above for some figures; from my experience I would suggest that the author of the paper is understating things.)
js africanus said “Something to note: I really don’t hear much about companies who open facilities in LDCs forcing people to work there. The reason they work there is because their other options are so shitty.” And he, like Chumpsky, is right on target. The reasons that their other options are so shitty are many, but mostly are because the wealthy own everything and like things just fine the way they are. Subsistance farming isn’t really all that bad, compared to living in a slum like Nezahualcoyotl and commuting two hours each way on a fume-belching bus jammed to three times its capacity to a twelve hour a day job carrying bricks for a wage that won’t feed your family, but the rich own all the good land so even subsistance farming is beyond the reach of most of the poor. But then js af goes on to say “we should encourage further development. Unionize? You bet” Try to organize a union in Guatemala, El Salvador, Honduras, etc. and the ruling class will send in what Libertarians like to refer to as “Private Security Agencies”. Down here they’re better known as death squads.
More later.
No, not true. Even workers that do virtually identical jobs in both countries have vast disparities in wages.
Let me get this straight:
A Guatemalan making, say, T-shirts is only worth $0.19, but in Denmark, a worker doing the exact same thing is worth $10 an hour?
It is.
In fact, the Third World in general is “awash in factories.” You may have noticed how much stuff is made in the Third World. Just take a look at all of the stuff you own. Look at the tag on the shirt you are wearing right now, or your shoes, or the plates you eat off of, or a thousand different things you use every day. (Even a lot of the stuff that says “Made in USA” is actually made elsewhere, they just sew a button or something on when it gets here to qualify as “Made in USA.”) Many, if not most of these things, are made in Third World countries.
It’s not Guatemala that has competitive disadvantages. In fact, Guatemala is a very rich country. It just has a lot of poor people living in it. The reason they are poor is that there are no popular organizations where people can organize and press for their rights. The U.S. trained and supplied security forces pretty much killed everybody who tried to organize.
The difference is that in Denmark workers are much more highly organized than they are in Guatemala.
Yup. It’s a world of shit. What do you recommend?
Darn it! I swore that I wasn’t going to swear in any posts, and I did it twice in this thread. See what you all have done to me.
Well, if your options are to either work in a Maquiladora or starve, this is not much different from being forced to work there.
And, their options are so shitty by deliberate public policy choice. The great powers ensure that the Third World remains miserable. Writers in The New Republic, for example, would write about returning Nicaragua to the “Central American mode”–a mode of misery and poverty. If a country steps out of line, and tries to provide better options for its citizens, like the Sandinistas did, they are destroyed.
I can’t speak for Mapache, but one thing we could do would be to press the U.S. government to stop forcing the Third World to be poor.
That’s sort of a non-answer. What specific policies need to be undertaken?