At CANYAP – Canadian Youth About Politics – the writer Anna argues in favour of sweatshops (or, at least, she argues against those arguing against sweatshops). Here’s a sample:
The countries with the highest rate of sweatshops and low-wage labor usage, South and East Asia, have experienced the most significant declines in the percent of the population living in extreme poverty. Meanwhile, Sub-Saharan Africa, where an extensive amount of government regulations exist against the creation of sweatshops (mostly at the U.N’s decree, mind you) has seen a steady increase.
And, indeed, sweatshops have been good for just about every economy they have been introduced to.
I tend to agree with Anna. I would like to get people out of sweatshops, but only by fostering better options, not by taking this option away. If you come to me with a plan to achieve that, I’ll jump on the anti-sweatshop bandwagon.
(Full disclosure: I tend to contribute to CANYAP, even though I am far from being a youth.)
*Yes, this is an attempt to fool you into thinking this is a Mindless Diversions post.
Heh. Meanwhile, Sub-Saharan Africa, where an extensive amount of government regulations exist against the creation of sweatshops (mostly at the U.N’s decree, mind you) has seen a steady increase.
And, indeed, sweatshops have been good for just about every economy they have been introduced to.
West Africa, especially Nigeria, is full to brimming with commerce. And sweatshops. Special economic zones in Lagos are full of Chinese factories. Granted, Africa doesn’t export much of what it produces, mostly because it has readier markets close to home, but to say there are no sweatshops in West Africa is nonsense.
Raising the question of whether a “sweatshop phase” is necessary to the development of an industrialized economy.
Let’s attempt to narrow the definition of Sweatshop to piecework operations. Depends on how the finances are organised.
Lots of sewing piecework is sent into Central America. I could show you two different sewing machine operations in Guatemala: unless you knew how the workers were paid, you couldn’t tell the difference.
Anyone with a sewing machine can make money. Sorta like having a cargo truck. Middlemen in the USA set up a contract to sew flats* cut in the USA on behalf of groups of workers in Central America. Often, the middleman is from the same town as the workers, some enterprising kid who got a student visa and learned enough English.
But they’re in competition with American middlemen who aren’t so inclined to favour the local workers. But the American middlemen face an obstacle: they need to buy the sewing machines and recruit local workers, which usually requires a local labour recruiter and that means bribes and paperwork and local lawyers.
Sweatshops aren’t abusive per se. The locus of abuse is the middlemen.
* pieces of fabric cut from patterns.
That makes sense.
Which might also raise the question of what are the necessary elements to get from the sweatshop phase to a better stage of development? And, is there anything that we* can do about it?**
*We can mean personally, collectively, as a government, as a multi-national coalition, etc. Maybe it’s ‘stop buying their stuff/buy more of their stuff’ or maybe it’s ‘create a multi-lateral trade deal’.
**I’m not on the side of doing something about it just to DO SOMETHING. Standard unexpected consequences caveats apply.
Trade frameworks such as NAFTA and the various follow-ons to Caribbean Basin Initiative serve the purpose well enough. Once these frameworks are established, they take on a life of their own, the structural steel around which we can build out the rest, if that makes any sense.
There’s no telling what sort of demand may arise. Say what you want to about Paul Krugman’s positions on macroeconomics but his stuff on trade theory seems incontrovertible. Don’t sweat the details, they’ll work themselves out if the frameworks are in place.
Well… looking at it historically if you have a stable government that can maintain a certain baseline of law and order economic development proceeds at a certain moderate pace.
If you have a government that not only maintains order but is responsive to the public (democracies of various sorts do this) you tend to get somewhat faster economic development. They also do infrastructure better (better placed, more useful) which speeds up development.
Also if your government can get their trade barriers down that definitely first speeds up the development of sweatshops and then in turn speeds up development of sweatshop alternatives.
I mean if you look at Africa a lot of what seems to hang them up business wise is terrible government, chaos, disease and war.
At turns, I wonder if democracy is the answer. Let me rephrase that… economic development emerges in the context of stability. An enlightened despotism can build up the framework upon which the niceties of democracy can be hung. Look at how we went about reconstructing Japan after WW2. Or, consider how Singapore has slowly grown more democratic under the steely despotism of Lee Kuan Yew.
Democracy is a flower which grows on the bush of good government. But the flower isn’t the first thing we see as the plant grows. Democracy is fragile: a nation can lapse back into despotism or other -isms when things go wrong: arguably, fascism and totalitarian communism couldn’t have arisen if the economies of those countries were working well.
When the USSR came apart at the seams, Russia et al. rushed into political reforms and screwed up economic reforms. China went down the road to capitalism and screwed up political reforms. Now Russia’s lapsing into a Strong Man State, encumbered by a growing criminal class and China’s having to wrestle with the demands of a generation of a well-heeled middle class. Seems to me China made the better bet.
Now I won’t attempt to generalise any farther but it does seem the early stages of industrialisation benefit from strong government, not necessarily a democratic government.
I concur BlaiseP to a degree. We’ve seen, especially in Asia, Democracy flower almost exactly how you describe. South Korea, Taiwan and Singapore were all essentially strong armed into orderly capitalism and then flourished into democracy. Japan, in the context of armed American occupation, did much the same. So yeah absolutely I’d say stability is the most important and in a nations short to shortish medium term an enlightened strong man or kleptocracy can provide that.
What we’ve seen in the Middle East and in China, though, is that Democracy provides a necessary popular feedback that is missing in the medium to long term for nations. The despots accumulate a layer of yes-men and toadies that insulate them from the public. Even well meaning despots end up misspending fortunes on bad infrastructure and dubiously useful building projects, they also tend to ignore environmental concerns. Mortality also rears it head: even a genius benevolent dictator will eventually shuffle off this mortal coil.
My own inexpert opinion is that Democracy offers both information feedback loops and orderly methods of government transition that insure better governance and stability in the medium to long term. But I’m inclined to agree that it may well be an imperfect midwife of stable countries in the immediate term.
Would Egypt be better served by an enlightened despot right now or their current democratic muddle? You know infinitely better than I.
Jeebus, with Egypt, it’s been under a Strong Man System for so long, they probably need a break from it. It’s like a broken arm that’s been in a cast too long: the bones have set but now it simply must be cut off and the patient has to go to Physical Therapy. Painful but necessary. And it stinks like hell, cutting off a cast that’s been on too long. Egypt needs to evolve a political system, with parties and a justice system and a working legislature. It will take time.
Egypt doesn’t need or want another Pharaoh. Mursi tried that schtick for a while and everyone hated it.
BlaiseP, the trouble is that for every enlightened dictator, there are dozens of looting thugs. And that’s a low end estimate.
Dude. Awesome. I admit to having a “No Politics” comment at the ready.
My biggest problem with the anti-sweatshop argument is how many people line up and for how long to get one of the sweatshop jobs. Of all of the problems, the problem of the sweatshop seems secondary to the problem of people desperate to work in one.
I think a weakness in the linked article is that it doesn’t properly account for how the anti-sweatshop movement is trying to alleviate the problem of people desperate for sweatshop work.
I think part of that stems from the fact that it is really easy to say that sweatshops are bad, and no one should have to work in one. Such an argument becomes the popular argument, and ignores any nuance. And, of course, such arguments are often paired with calls for boycotts, but I don’t know that boycotts alone will be of much help to the sweatshop workers.
Abusive sweatshops are a symptom of a much larger problem: bad government.
My father used to have a joke: An Asian dictator is sitting on the porch of his mountainside villa, enjoying cigars and the company of his cronies. “See that highway out there in the valley? Below, a six lane expressway, full of cars and trucks went as far as the eye could see. At the offramps, shiny office buildings, the parking lots full. Stores and tidy apartment blocks were springing up. “I stole 30% of the budget for that project.”
In an African regime, another dictator was enjoying a wee drop and some fine cigars with his cronies? “See that highway out there?” A dirt road, with a few miserable donkeys and camels on it wound through the valley. “I stole 100% of the budget.”
Any well-run country can attract investment capital. Abundant worker supply meets piecework demand. As long as things are run on the up-and-up and there’s infrastructure to support it, light industry will always spring up.
P.S. I have a comment hung in moderation…
Is it the comment up above? Consider it saved!
I’m not anti-sweatshop, per se, but let’s not pretend that sweatshops are something other than what they are. That’s where I start to get annoyed. It’s obviously exploitation. Is it exploitation that’s better than starvation? Duh! If exploitation weren’t better than the alternative, no one would ever be exploited.
… and boom! goes the dynamite.
That’s exactly how I see it, as well. I do think there’s something to the argument (or suggestion) Burt mentioned above that sweatshops are a necessary pass-through phase. But that doesn’t change any of the basic facts about sweatshops.
It seems to me a large part of “exploitation apologetics” derives from the fact that most sweatshops are the result of Western (capitalistic, “free-market”, Democracy-based, etc) firms moving to those locations.
Okay, then what was the cause of sweatshops in our own history? We didn’t have some highly developed neighbor nation that was exploiting out cheap labor costs.
Heck, I don’t even have a problem with people deploring sweatshops. It’s when they follow it up with “and that’s why we should do things governmentally that will eliminate sweatshops from that economy” that I start scratching my head. Working in a sweatshop is bad, agreed, but if we close them down and send all their employees off to starve, work in prostitution and sort toxic garbage is that better?
Yes, exactly. To solve the sweatshop problem is to solve the 2nd most important problem.
To solve the sweatshop problem by eliminating sweatshops is to solve the 2nd most important problem without addressing the 1st.
And it seems that the 1st wasn’t on the radar (defined as “generating anywhere near the number of people holding signs and chanting stuff about what they want and when they want it”) until the sweatshop was brought up and the 1st isn’t on the radar after the sweatshop is removed from the picture.
North, I don’t think anything I said is inconsistent with what you said. Is it?
Actually, maybe we do disagree. You wrote:
Okay, then what was the cause of sweatshops in our own history? We didn’t have some highly developed neighbor nation that was exploiting out cheap labor costs.
We didn’t have any rich foreign nations looking to set up shop here (well, we did, in fact) but it seems to me what we did have was a regime of powerful people who, instead of outsourcing their capital centers to cheaper regions with cheaper labor, deliberately “exploited” immigrant labor – and facilitated immigration to those ends – to keep their labor costs down.
I mean, that’s pretty uncontroversial, isn’t it? That’s what gave rise to unions and the anarchist movement and a bunch of other stuff, yes?
JB,
Obviously, I agree with you, but I think this particular thread is approaching a bit of a circular argument.
Stillwater has a good point, here. The sweatshop dynamic, as it pertains to the U.S. as the “oppressing” nation, hasn’t changed all that much. It’s just that now the corporate class is offshoring their sweatshops, rather than exploiting a lower domestic socio-economic class.
Jobs 21st Century Americans won’t do!
Well, my solution is to push for multiple sweatshops to open at the same time. Make Nike compete with Adidas and make Nike and Adidas compete with Puma.
I, Jaybird, could not work in a sweatshop. I am not that dextrous, I am not that strong, I don’t have that much endurance. The idea that I’d make only fifteen cents (or whatever) per fifty dollar item that I make for my employer seems like a *HUGE* discrepancy. It feels like I should be able to make enough money to buy a pair of the shoes I’m making. Hell, it feels like I should feel ashamed that there is a line around the block to work in my factory rather than pleased at all of the money I’m going to make… and, indeed, by selling unnecessary luxury items to people who would also not take these jobs that I’m only paying fifteen cents per fifty dollar t-shirt for.
It *FEELS* like exploitation. To look at it and dispassionately say “everyone in this relationship is benefitting, you benefit by buying a fifty dollar t-shirt that you obviously want more than the fifty dollars, the factory owner benefits by getting your fifty dollars (minus overhead, of course), and the workers benefit from the wages given them. Everyone (EVERYONE) is coming out ahead in this relationship.”
And I don’t know how that feeling could best be addressed.
I suppose we could argue that the exploitation happened across classes, sure.
And no we’re not exactly disagreeing. It’s just that once one starts getting into the exploitation language the immoral language often can sneak in and next thing one knows one’s talking about getting rid of this deplorable practice and damn the consequences.
It’s just that once one starts getting into the exploitation language the immoral language often can sneak in and next thing one knows one’s talking about getting rid of this deplorable practice and damn the consequences.
Yes. And this ties into Jaybird’s UNICEF report below. Child labor is appalling; child prostitution is worse. And we still don’t know how to ensure that neither happens, at least not in the short term. But the problem of moral outrage is that it can blind us to the reality of incentives, causing us to not recognize when we are only responding to a particular response to incentives, rather than to the problematic incentive itself.
causing us to not recognize when we are only responding to a particular response to incentives, rather than to the problematic incentive itself.
Could you elaborate on that a bit? I can’t quite figure out the dynamic you’re trying to highlight.
My question is, why can’t we be worried about both? Why can’t we say, “OK, sweat shops exploit poverty and the poor, but getting rid of sweatshops, and nothing more, doesn’t get rid of poverty and it doesn’t help the poor become not poor,” and then start thinking of ways in which we can make the poor not poor, at the same time we think of ways to put pressure on corporations to shave some of their profits in order to make sweatshops less sweatshoppy? Or, working within the market (’cause I know ya’ll love that sh**), buy stuff from companies that do shave a bit off their profits in order to pay their workers a bit more, and maybe include some fire extinguishers and plenty of exits in their overseas factories?
And at the same time, why don’t we ask why conditions in certain parts of the world are such that so many people are willing to be exploited, because it’s better than the alternative? Why don’t we ask how the system creates such conditions? Why don’t we think of alternatives?
I know, I know, ya’ll are asking such questions, as conscientious and educated folks. But is the average Nike buyer? Are politicians? Does it weigh on the minds of voters who think foreign aid makes up 30% of our budget?
Also.
I know, I know, ya’ll are asking such questions, as conscientious and educated folks. But is the average Nike buyer? Are politicians? Does it weigh on the minds of voters who think foreign aid makes up 30% of our budget?
If it did, do you really think their response would be well-informed enough to be useful? I prefer people to be apathetic about things they don’t understand (unless their lack of apathy drives them to learn about that thing, in which case good for them).
Stillwater,
I thought as I wrote that that line probably wasn’t clear. For a completely different, and for the League, easier example, think of prohibition. We targeted how people got their drink, but it failed because we couldn’t actually eliminate their incentive to drink. We just drove their respons to that incentive from above ground to underground.
In the case of the poor in developing countries, the overriding incentive is to try to get your family fed. If we find one means so unpleasant that we decide to do away with it we obviously don’t do away with the incentive to find some way to feed your family. So we eliminate one response to that incentive and behavior simply shifts to another response. So if we eliminate the best available response because its not satisfactory, we simply push people to the next best response, which is necessarily even less satisfactory. So unless we have created a better alternative, we should hesitate to act, and if we have created better alternatives, we may not need to act any further.
Good on you, Jaybird, for observing To look at it and dispassionately say “everyone in this relationship is benefitting, you benefit by buying a fifty dollar t-shirt that you obviously want more than the fifty dollars, the factory owner benefits by getting your fifty dollars (minus overhead, of course), and the workers benefit from the wages given them.
And then you kinda get lost in the weeds, saying:
Everyone (EVERYONE) is coming out ahead in this relationship.”
Now upstream, I pointed out how everyone could come out ahead in this relationship: if the middleman can work on behalf of the workers in his village back home, the workers are getting a better cut of the profits because the middleman is one of theirs. There’s plenty of money to go around, oh maybe not a lot in US terms, but larger fractions of the profits get down to the people who do the work. In this scheme, as you say EVERYONE benefits.
If, however, the middleman pays his workers a shit rate for their work and periodically takes one of the pretty girls into the stockroom and threatens her with her job if she doesn’t put out and bribes the local government and is a corrupting influence, it’s still the same fifty dollar t-shirt on your back. These things do happen, you know. ONE person benefits from this scheme and MANY are harmed. We see Force ‘n Fraud and Coercion in this scheme and I should hope the Libertarians would see them in the mix here.
James K, it’s not their theory of poverty that I’m worried about. It’s actions in their own lives that I’m interested in.
Chris,
Of course you can be worried about both. The question is whether your worry is directed toward productive solutions or whether it focuses on solutions that produce moral satisfaction for the worrier. E.g., there is real uncertainty about the benefits of fair trade coffee. It might provide some revenue benefits to the coffe producers in the exchanges (although most of the price premium appears to go to the intermediary traders and retailers), but the price can only be kept high by limiting the amount of coffe receiving the fair trade label, which means the fair trade associations have to be fairly exclusive and not allow all coffee farmers to join. Who’s best equipped to organize a fair trade coffee association or work their way into them? Probably not the poorest and least educated, on average. So it’s quite likely that when we socially concerned westerners buy fair trade coffee we’re further helping out the relative haves, rather than those who are struggling the most.
But the premium does buy us moral satisfaction, and we fool ourselves badly if we don’t think that’s a market good.
James, there is a large and ever-growing literature on potential solutions (there is also a large literature on the positiveness of sweatshops; overall message: they’re not very good for people, even though they give them jobs, and relatively large increases and wages and working conditions will probably do more good than bad). But sweatshops aren’t going to go away because the vast majority of consumers don’t care. Sweatshops are our fault. I suppose that’s my main point.
I have trouble with the standard of “not good.” Ths is a function of my economics background, where the question is always “compared to what”? This is where one of my philosopher friends and I always have our conversations stagnate–he has an absolute standard for “good” and I have a relative standard. A sweatshop is gooder than child prostitution, picking through a garbage dump, or starving. A sweatshop is not as good as a job in the local government bureaucracy or in a factory in America.
That’s one point, and we may be irreconcilable on that point.
But another point is that I don’t think consumers caring means a whole lot. I don’t think caring consumers could solve the problem as a consequence of their caring. Do they boycott? That doesn’t necessarily help the employees. Do they only buy from certified non-sweatshops (and let’s assume no certification fraud)? That means they buy less (because they’re spending more), which means fewer jobs, which means the cost of some people having better wages is others having no wages. By buying one certified non-sweatshop UK (hope I got that right) sweatshirt instead of two sweatshop shirts, you actually might be forcing someone back to picking at the dump or selling their daughter for food.
I’m not cavalier or sanguine about that. It just sucks that our efforts to do good for others could be doing harm to others. It sucks that the world is that way, but that’s the inevitable consequence of the fundamental economic reality of scarcity–the reality that we can’t have everything, so there are always, inevitably trade offs. Consumers are limited in what good they can do even if they are all aware, do all care,and do try to make conscientious choices.
What ultimately ends sweatshops is growing wealth. As a country gets fully industrialized–mobilizes all it’s labor, shifting it from low productivity subsistence agriculture to production–it puts upward pressure on the price of labor, wages. And as people move a little beyond subsistence level wages, they begin to demand improvements in working conditions, and if they can’t get the factory owners to make the changes they’ll demand government action. But it takes increased wealth first–there’s a hierarchy of needs there (I don’t know if it maps to Maslow or not).
Efforts to increase the rate of that improvement are difficult but not impossible,but they’re not consumer driven. Education for kids, both boys and girls, sanitation, and birth control for women mean infinitely more than a caring consumer, not because there’s anything at all wrong with caring, but because the ability to translate caring into effective help is constrained by that basic economic problem of scarcity, which is a fundamental characteristic of the human condition (in fact it is a fundamental constraint on all life, period).
But we can glean some hope from the fact that the process does seem to be speeding up. Taiwan and S. Korea did it much more quickly than Britain or the U.S. S. Korea went from subsistence agriculture to having a higher proportion of their population holding PhDs than any country in the world in half a century–2-3 generations. I have a friend in the shipping industry who has told me that low cost manufacturing in China is “played out.” Firms can’t get as low coat labor in the PRC as they once could, so they’re shifting to Myanmar, Vietnam, etc. and that doesn’t mean China then is suddenly abandoned as producers seek lower cost countries; it grew enough in wealth and industrial capacity for their growth to be self-sustaining. Their population has developed enough wealth that internal demand helps keep it going.
That’s not an argument against being concerned about sweatshops (and others in this thread have correctly noted some of the specific issues of concern, such as cronyism with local officials to overlook violations of what workplace laws a country does have, sexual exploitation, and so on), but it is an argument that the bigger picture should make us fairly optimistic. As the world continues to develop, the sweatshop era gets shorter on a local level and approaches its end on a global level.
One tension that I cannot help but notice is the difference between social safety nets.
Remember the arguments we’ve had over whether we, as a society, are obliged to provide high speed internet and laptops? The argument in service to doing that was something to the effect of: “we, as a society, have created a new baseline of what is required to be a fully functioning member. You can’t do job searches, for example, without email anymore.”
The argument, as I understand it, is that the social safety net is not, as I am inclined to believe, a hard baseline that exists throughout time and culture but a relational one that bases itself on everyone else around it.
Yet when it comes to sweatshops, the argument that “this makes everyone with a sweatshop job so much better than the people who don’t have sweatshop jobs in their community!” doesn’t even appear on the radar. What ought to be provided to people is no longer based on everyone else around them.
E.g., there is real uncertainty about the benefits of fair trade coffee. It might provide some revenue benefits to the coffe producers in the exchanges (although most of the price premium appears to go to the intermediary traders and retailers), but the price can only be kept high by limiting the amount of coffe receiving the fair trade label, which means the fair trade associations have to be fairly exclusive and not allow all coffee farmers to join.
Not exactly. Fair Trade Coffee really does unkink market distortions. Coffee is like wine: there’s a smallish fraction of it which commands a high price, most of it is good to acceptable, it sells well enough — and some of it is crap. As with wine, the good stuff comes from good land, volcanic soil, just the right amount of rain and sunlight, temperature and suchlike. Land can be improved to support the good stuff model, which is more ecologically sound, but there’s only so much good land and most of that land comes in smallish parcels. To say Fair Market coffee is some barrier to entry is exactly backward: the old finca model has embraced Fair Market and can’t compete on the basis of crap coffee grown in open fields. Lots of Fair Market coffee is actually grown in people’s yards.
The Fair Market crowd have exposed the actual market price of good coffee. In the old days, the big buyers would come in and only pay a premium over the NYMEX C contract, which included both arabica and robusta. Good sound Libertarian thinking, expose actual market prices and everyone benefits. The middlemen are now subject to actual market conditions, thanks to Fair Trade. The profits do flow down to the grower these days, as they do in the wine markets.
Fair Market Coffee has led to better coffee for everyone. The good beans, arabica, can only be grown in shade but require more hand labour. The cheap stuff, robusta, can be grown in open fields. Since Fair Market Coffee has unkinked market distortions, the growers now choose the Fair Market route, not because they’re simpering do-gooders but because their coffee has a better profit margin. It’s actually more profitable to run a Fair Market operation than some cut-rate screw-the-worker scheme.
Who’s best equipped to organize a fair trade coffee association or work their way into them? Probably not the poorest and least educated, on average.
Don’t condescend to the poor. They’re just poor. They’re not stupid. They are perfectly capable of operating in their own best interests. It’s easy enough to sort them out from the abusive finca cafetaleros. Thought you guys were all about Voluntary Associations. But let one form, this is how you react?
James, what’s the mechanism by which sweatshops ultimately end? We’ll always want cheap jeans. Cheap will always mean low production costs (compared to other jeans or the same jeans earlier) relative to incomes (everywhere). It’s not that it can’t be true, I’m just quite sure what you mean. People everywhere will be wealthy enough to get bids that we’ll be able to tell ourselves are defined out of what we would define as a sweatshop? Mechanization? World population plateauing? What’s the macro, long-term process you have in mind, apart from a series country-specific movements (which obviously moves you in the direction, but doesn’t guarantee any final end)?
Teeny correction, that’s the NYMEX KC contract. C is crude oil.
I don’t think the poor are stupid. I think they are often too busy working hard to survive to have time to organize, while obviously intelligent enough they often lack the training, and when there has been massive migration from rural to urban areas they often lack the foundational social relations and structures. The poor aren’t dumb, and they aren’t helpless, but they face roadblocks that the less poor, the already socially connected, do not. The advantage tilts toward those who are already–relatively–the haves.
We can compare with the interest group system in the U.S. In 1960 E.E. Schattschneider wrote about “the scope and bias of the pressure system,” and noted how it was heavily tilted toward the upper class. Since then it has become more broad-based, as knowledge about method and technique has filtered beyond the upper class, and as it has become an object of political entrepreneurship (finding a latent interest group and making a career out of organizing it). But still today there is an upward socio-economic bias in the system, with the least well-organized and politically effective groups being the poor and dispossessed.
James, “not good” in an economic sense. Increasing wages likely (the research is still ongoing) creates better economic conditions for the people involved, even if some lose their sweatshop jobs as a result. I know Roger thinks this is logically impossible, as he was simply unable to understand anything but a straightforward employment-unemployment dynamic with increases in wages, but it’s likely true (again, the research is still ongoing, but this is the general sense that social scientists get).
I don’t think the poor are stupid. I think they are often too busy working hard to survive to have time to organize, while obviously intelligent enough they often lack the training, and when there has been massive migration from rural to urban areas they often lack the foundational social relations and structures.
No man is too poor to learn how to count money or sell his own crop. Lacking the time to organise, heh, heh. That’s a joke in very poor taste. We’re talking, in the case of Guatemala, about a country which for 36 years waged open warfare on workers trying to organise themselves and systematically murdered the advocates of the poor.
As I said before, for all their fine talk about Voluntarism and Freedom of Association, let a Voluntary Organisation form and the Libertarians will be the first to attack it.
Chris, “not good in an economic sense” is an extraordinary claim requiring extraordinary evidence.
Is this economics literature, or is it coming from other disciplines?
James, economics and other disciplines. The basic findings, as far as I can tell, are that in developing nations, large increases in the lowest wages does produce some unemployment, and some companies move, but the added money that’s poured back into the economy makes up for this. We’re talking sweatshop levels here, so a 100% increase in wages only results in a rise in prices of a few percent.
Jay,
re: “relational to the people around them” standards…
1) some things are not relational. Clean Water. Not dying of preventable disease.
2) some things are: it doesn’t (I don’t think, haven’t tried with gobs of people) kill a factory worker to use a pit toilet.
Blaise, I just saw this and I do want to respond to it.
Lacking the time to organise, heh, heh. That’s a joke in very poor taste. We’re talking, in the case of Guatemala, about a country which for 36 years waged open warfare on workers trying to organise themselves and systematically murdered the advocates of the poor.
This is perfectly in line with my point, which included the issue of who is likely to have effective contacts in government. The government was happy to murder workers at the bottom of the socio-economic scale. But if it was a few large landowners, say, who decided to organize themselves into a produce cartel, no government thugs are going to come shoot them and burn their fields.
Just one more, and particularly nasty, barrier to the poor effectively coordinating their activities that doesn’t apply to the well off.
Michael, I think it means an end to cheap jeans. We know that in each country as labor gets fully mobilized sweatshops disappear (except for a few underground operations using slave labor), so we can expect the same thing to happen globally in the long run. Just as you can’t get quality inexpensive American produced textiles anymore, you won’t be able to get quality inexpensive textiles, period, unless we can further automate the process (BP seems to suggest that’s still difficult–I’ll take his word for it, since I can’t pretend to know).
In short, sweatshops end because everywhere wealth will have advanced to the point where everyone can demand better jobs, or at least better wages and working conditions, either through bargaining or through political demands. That will be the true end of the industrial revolution, which, after all, is just a particular moment in time in human history. It had a starting point, it will have an ending point.
That time will come more quickly, perhaps, if global population ultimately declines, as I think it will (both outcomes, in fact, being a consequenc of growing wealth). Labor pools will tighten, pushing up wages and continuing the pressure to automate everything we can figure out how to automate.
Doesn’t work that way. The jeans will still need to be sewn. There’s a certain fraction of markup in the contracts for those jeans, put a total dollar value on it, M. If it takes 1 middleman and 200 workers to accept and fulfil that contract, it’s still M dollars, whether it’s done by an abusive sweatshop or some feel-good hand-holding cuddlesome cooperative or not. Levis is only going to pay M dollars. They don’t care what happens down the contracting food chain.
If the middleman takes half the profits and each worker gets a fraction, or if the middleman takes one tenth of the profits and pays the workers more, it’s still M dollars. The retail price of jeans hasn’t been affected in the slightest. What makes you think differently?
It still feels like you’re assuming that degree of wealth increase everywhere into existence. We don’t really know what’s going to happen with population, nor the completely universal spread of wealth. And people will always want the cheap stuff. There will be an incentive to find cheap methods of production. It seems to me that this could either happen or not happen – how is there a guarantee? And what’s the timescale?
A couple other questions:
1.) Isn’t this all somewhat arbitrary? We’re just drawing a line and calling everything below it “sweatshops.” What kind of actual changes are we talking about here? Won’t the change we’re talking about be incredibly protractedly gradual? Won’t things in the even more remote developing world from the ones you mention (China) look substantially like the currently developing world do in the far future – 100+ years on? There are still millions, and millions, and, millions, of subsistence-level farmers who would take these jobs in a flash even in the country that you say has changed profoundly (again, China). China’s only played out while there are still Laoses to harvest. But there will still be those harder-to reach Chinese that will still lower jeans prices once the easy-to-reach conditions among the Laotions have gone up? The money to be made from reaching them and having conditions at profit-maximizing levels will still be there just as oil companies go back to deeper reserves when prices go up. Jeans prices may rise, but we’ll always want them low(est). And people are a renewable resource. At some time scale, all change will be fundamental. Are we talking about a timescale that makes your vision, I don’t know, relevant when considering the overall system that exists in the present?
2.) And then, this might be a simple answer for you, but is why is political action a process that you see as okay for improving conditions and wages sometime down the line, but not now? A minimum wage will always decrease firms’ interest in setting up operations in a place at the margins, and right now it’s not clear that if standards were set, they’d all just be up and out of there. Is there some critical point where it switches?
@Michael: curiously, people don’t always want the cheap stuff. There’s a reason Levis cost more than store brand jeans and Nike footwear. Nor is it true the market always seeks the cheapest means of production: that’s only true for an item at the tail end of its market cycle, once it’s become a commodity. The driver is margin.
We’ve got hundreds of years of data on how capitalism has made nations and individuals wealthy. If a given society reaches a rough equilibrium where the many are paid even a reasonable fraction of the profits created by capitalism, the society shoots up like a rocket. Rich and poor alike benefit from these rises. Often the rich benefit more than the poor moving up into the middle class.
It’s like turning up the knob on a good amplifier, the amplitude of all the frequencies goes up. But route that same waveform through a bandpass filter, you can attenuate or amplify certain frequencies, depending on how each filter is set. It’s a sovereign rule of thumb: if the very rich comprise the only group which benefits, it’s only paper profits. The rich invest, they don’t spend. For capitalism to work, lots of people have to spend money. The key, then, is to make sure lots of people have money to spend. It doesn’t matter how rich the wealthy become if more people get more money to spend.
Laos is a screwed up country, incredibly corrupt and backward. Vietnam isn’t so corrupt and the people are better educated. Therefore, we see Intel building high tech chip fabs in Vietnam. Political action is important, but the best advertisement a nation can make to attract capital is to demonstrate political stability and educated workers. Minimum wages are a red herring, all that means is that workers get so much per hour. Nobody’s going to spend ten million dollars on a factory halfway across the world if they can’t project sufficient value-add per worker enough to justify that build out. All it says is “our workers are worth at least this much money: if you can’t justify paying them that much, go elsewhere, we’re not interested in factories where our workers get screwed. It’s just too much trouble for us and we can’t collect taxes on people who aren’t earning money.”
I’m accepting your argument, as I understand it, that jeans have to be sown by a human, that it can’t be fully automated to replace seamstresses and, uhm, seamsters?
As industrialization begins wages are especially low because there’s a labor surplus of massive proportions. Workers are flooding into the cities and competing for jobs, which pushes wages down. As industrialization continues and labor gets fully mobilized there’s less of a surplus, and labor diesn’t have to settle for wages as low as it once did.
If wages don’t increase in the jeans factory the owner has a harder time finding enough labor. I.e, once labor is fully mobilized wages must rise. As better opportunities become available, the jeans shop has to also become a better opportunity to retain its labor force.
Somebody had to cover that increased cost. I think we’ll agree it’s not going to be the shop owner, and it’s not likely to be Levi’s. So it gets passedon to the consumer. Consumers don’t want to pay it, either, so of course Levi’s looks for a lower cost supplier, or the factory owner looks for a location with lower cost labor. But in the future when labor mobilization is complete in a global level, there is no lower cost place.
Consumers will have to pay the higher price, because all textile makers will face the same absence of lower cost places, so all textile prices will rise. Consumers won’t be able to force producers into price competition below a certain price because the producers won’t be able to make profit below a certin point–their lowest possible price will be the one that just barely covers their costs.
At that point, if we’re going to continue to have as low-cost textiles as we currently enjoy, it can only be because producers have figured out how to offset higher labor prices with sufficient cost reductions elsewhere. Maybe some engineer figures out a process for producing synthetics that slashes materials costs (or maybe materials costs are already low enough that there’s no room for enough savings to offset increased labor costs? I simply don’t knw those specific details ans won’t make ant pretense of it). Ths is where I’m an automation optimist–as labor costs increase it becomes increasingly worth the investment into research to try to automate the process. My gut assumption is that someday we’ll figure out how to automate it because it will become an economic necessity fr businesses, and that way we’ll continue to have lower cost textiles. But I have no idea about what the particular challenges are to automation–and they must be fairly substantial if we haven’t gotten there yet–so I’m not claiming it will be easy or soon. We still have at least a few generations before labor is fully mobilized globally.
That’s right, James. Sewing hasn’t proven a good application for automation. The making of cloth, yes, we mastered that at the beginning of the Industrial Revolution. Sewing, no.
As industrialisation begins, wages are high. The first crew of factory workers need specialised skills because the process hasn’t yet gotten stable. Market cycles, when they begin, produce excellent wages. We call them “chauffeurs” because rich people would hire “chauffeurs”, literally, stokers off the steam locomotive engines, with sufficient mechanical experience to keep the cars running. Once the automobiles were reliable enough, the rich people began to drive their own. That took time.
I’ve already established that worker wages can rise without any impact on the retail price. It’s a question of how the profits are divvied up. If the middleman gets rich, well, he gobbled up the lion’s share of the profits and the workers didn’t. That’s not capitalism. If markets were working in that situation, the middlemen would be squeezed along with the workers and he’s not. The middleman doesn’t have anything invested in the factories, he’s just a well-connected broker, an economic parasite, a corrupter of governments, in short — an un-capitalist. He could cut a more equitable deal with the workers. That completely escapes you. If the middleman’s cut were taken out and the workers were still getting shit wages and the savings were passed along to the consumer, well, then you’d have a point. Why should Levis pay more money to anyone? That’s not the point. The question is, why do we have to tolerate the corrupt parasite in the middle? He’s screwing things up for everyone.
My point is this: even in the lowest-end commodity market, there’s still markup. Capitalism still works. But on whose behalf does capitalism work? And don’t let’s say the worker could go somewhere else, he could only go to another situation which was just as abusive. They’d all be abusive because the few have the power to abuse the many, armed with the power of money and the state both.
@MD, I might not be able to participate much longer today, FYI.
It still feels like you’re assuming that degree of wealth increase everywhere into existence.
That has been the dynamic, and there’s nothing I’ve seen to suggest it will be different. To assume that the same dynamic will continue to produce the same results, barring some catastrophically disruptive event (say, an inability to produce sufficient energy), is the parsimonious assumption.
And people will always want the cheap stuff. There will be an incentive to find cheap methods of production. It seems to me that this could either happen or not happen – how is there a guarantee? And what’s the timescale?
Of course. We always want to pay less if we can, even when we’re buying higher quality (that’s why we love sales). The only exception is Veblen goods.. So, yes, there will always be an incentive to find cheap methods of production. If labor costs throughlowr wages no longer offer a source of cost savings, it must come from somewhere else, with automation being the normal method. But if we can’t figure out how to automate something, and can’t find any other source of savings, then consumers may not be able to get those lower costs they want. History provides reason to be optimistic about that, but no, there’s no guarantee.. The same is true for the time frame–the general history of technological development provides reason to be generally optimistic about the time frame, but it doesn’t tell us much about any particular case. To say something sensible about the time frame for any particular industry, you’d have to know the details about that industry’s particular challenges and the current state of any applicable technology. We can assume that the time frame will vary across industries.
A couple other questions:
1.) Isn’t this all somewhat arbitrary? We’re just drawing a line and calling everything below it “sweatshops.” What kind of actual changes are we talking about here? Won’t the change we’re talking about be incredibly protractedly gradual? Won’t things in the even more remote developing world from the ones you mention (China) look substantially like the currently developing world do in the far future – 100+ years on? There are still millions, and millions, and, millions, of subsistence-level farmers who would take these jobs in a flash even in the country that you say has changed profoundly (again, China). China’s only played out while there are still Laoses to harvest. But there will still be those harder-to reach Chinese that will still lower jeans prices once the easy-to-reach conditions among the Laotions have gone up? The money to be made from reaching them and having conditions at profit-maximizing levels will still be there just as oil companies go back to deeper reserves when prices go up. Jeans prices may rise, but we’ll always want them low(est). And people are a renewable resource. At some time scale, all change will be fundamental. Are we talking about a timescale that makes your vision, I don’t know, relevant when considering the overall system that exists in the present?
2.) And then, this might be a simple answer for you, but is why is political action a process that you see as okay for improving conditions and wages sometime down the line, but not now? A minimum wage will always decrease firms’ interest in setting up operations in a place at the margins, and right now it’s not clear that if standards were set, they’d all just be up and out of there. Is there some critical point where it switches?
An iPad is hardly a Veblen Good. A gold-plated iPad, yes. But most of what we buy is based on perceived quality, not price. Even in electronics, where the bottom falls out of these markets with every new iteration of technology, half the homes in America have recorded media lying in closets, the playback technology long since obsolete and discarded.
Those clothes you give to Salvation Army? Most of them are never sold to people in your town. They are sold by weight, are loaded up in huge shipping containers and are sold in Africa on the mitumba markets. You can pick up a used Savile Row suit, 95% off. It’s wonderful to behold, kids walking down the street wearing sports jerseys from American teams. We’re clothing Africa with our discards.
Automation can only go so far. It’s not the answer, really. Human beings will always handle the exceptions and there will only be more of them to handle. I don’t know what to call the demand created by a Disposable Society, where it seems our chief goal in life is to fill our trash cans but it sure ain’t Veblen driving it.
James – no worries; me either.
Just a couple points on what you’ve said. First, this isn’t really a demand-side problem – meaning demand for the products. The demand will always be there – if not jeans, it will be something. The issue is the supply – of labor in these conditions at these wages. So it follows we’re not talking about particular industries, since all different industries demand this kind of labor – and will continue to until it’s gone. The issue is just, how much of this resource is there going to be. And I just submit we don’t know. I don’t think it’s clear that existing trends point toward an eventual end to this kind of scenario – on any timescale I care about anyway. I do accept that it creates improvement in particular places over relatively short timescales. That’s fine, though it doesn’t make anyone a hero (unless they’re voluntarily paying significantly above the wage that just keeps a child from opting for this activity rather than prostitution). It’s just not clear to me that we con comfort ourselves with the thought that this whole thing eventually leads to everyone being rich enough to be able to turn down offers of this kind of work at these kinds of wages. It’s a related rates problem where we don’t know the rates. This could be reality in the world until other things kill off humans it seems to me. Could.
Dammit, left the comment half done.
A couple other questions:
1.) Isn’t this all somewhat arbitrary? We’re just drawing a line and calling everything below it “sweatshops.”
Wait, shouldn’t I be making that point? Yeah, we are. It’s a social construction, and the definition will change as our standards change. In 1870 exterior pit toilets at a factory wouldn’t have shocked anyone’s conscience. Today it does. This relates to my arguments about how we define what means to be middle class. This is an intellectual problem for critics of sweatshops, rather than those who defend their existence.
But of course the fact that it’s an ever-evolving social construction doesn’t mean it’s an invalid concept. I mean, my inclination is to bash all continually evolving social constructs because they’re a damned pain-in-the-ass for efforts to do good social science research, but in my more fair moments I recognize that the social construction is a response to something that is really there, and that bothers people for legitimate reasons.
And then, this might be a simple answer for you, but is why is political action a process that you see as okay for improving conditions and wages sometime down the line, but not now?
I don’t communicate well. I’m not talking about whether political action is legitimate or not. I’m talking about if and when I will happen. Let’s go back to the old discussions about whether laborers have a meaningful choice, and take that most extreme case of take whatever job is offered, at whatever wages and conditions are offered, or starve. The laborer takes the job, is grateful to have it, and is so afraid to lose it that he doesn’t rock the boat by making any demands.
At some point the laborer (or the next generation of them), are just well enough off that just having the job isn’t sufficient, or other jobs are now more available, and they’ll demand better working conditions. The owner does or does not improve conditions. If the owner does, sufficiently to satisfy the workers, they will not engage in political action. If the owner does not, the laborers will turn to gov’t asking it to mandate improved conditions. Whether they are justified or not (of course, says the staunch liberal, from the very beginning ; of course not says the über libertarian, never ever) isn’t relevant. What’s relevant is that they will do it, eventually, but not at the very beginning. (Of course if factories respond effectively to their demands, there’s no reason to go to government. But as far as I can tell in all industrializing countries a sufficient number of owners have failed to respond satisfactorily, so that the not-strictly-necessary (as a matter of logic) step of asking gov’t to mandate is a predictable inevitablilty.)
Blaise, I don’t think we’re actually in much disagreement here, just emphasizing different aspects of the dynamics.
Do you know what it is that makes automating sewing so difficult? I believe you, because I think otherwise we’d already be doing it throughout much of the industry, but I know too little about working with textiles to understand why. (But I find it interesting enough to want to know.) My best out-of-my-ass guess would be that it has to do with the difficulty of working with such a non-rigid material, so that it’s hard to turn it as needed without having it fold and bunch?
@MD,
, this isn’t really a demand-side problem
Right. And I didn’t intend to imply it was. If I seemed to, that’s my bad.
I don’t think it’s clear that existing trends point toward an eventual end to this kind of scenario – on any timescale I care about anyway.
And I doubt so on Chris’s timescale, either, or that of lots of other folks. Yeah, even if several generations from now all sweatshops are gone, the folks today and tomorrow will still suffer through them. I have an easier time with the long time scale than other people. I don’t know why. Probably just a personality trait. I have a biologist friend who worries that if we wipe out human life it will be billions of years before high level intelligence evolves again, and there may not be enough time before the sun burns out. I find myself unable to worry about whether it would take a hundred million or 4 billion years. So sometimes I struggle a bit to remember that other people view these time frames much differently than I do, and that a shorter time frame perspective does logically result in a heightened concern for the question of when something will occur.
doesn’t make anyone a hero
I really hope I didn’t give the impression I was suggesting that. I’m with Adam Smith here; the good that results isn’t the businessman’s purpose or intention, he doesn’t meet others’s needs through benevolence but through self-interest, and if we let them collude instead of forcing them to compete, they’ll try to screw us all over.
There’s precious little room for heroes in my world view. The person who rushes into a burning house to save kids, that kind of thing. But certainly not in markets, and as much as I love and admire the entrepreneurial spirit, folks who call entrepreneurs heros need a good beating with the stick of knowledge.
@James: the sewing machine has grown up, oh yes. Cutting flats is now done by laser. But the need for a human operator hasn’t gone away. It sorta helps if you’ve sewn a bit to understand what’s going on. Most of the problems with an industrial robot resolve to lighting and placement of the piece. There’s no way to automate that process in sewing, too many variables in joining pieces of cloth when the contract calls for a thousand in Size 5, you don’t have the luxury of doing a custom jig and isn’t worth the cost of robot setup. You just use a better sewing machine, which for example can automate sewing a buttonhole: most high end sewing machines can do that routinely.
Now a Savile Row suit or bespoke fashions or even some prêt–à–porter fashions will have the buttonholes done by hand and an experienced eye can tell the difference. And you’ll pay for that difference. There are corners you can cut. Most of the markup in fashion is at retail, usually around 60% or so. So even at 40% cost, there’s plenty of room to pay the person who runs the sewing machine a substantial fraction. Cheap as stuff is at Walmart, they’re routinely whacking you for a 50% markup, at least.
Thanks, BP. I thought I remembered you mentioning in the past that you’d done a fair amount of sewing. Me–I made a shirt once. Nearly thirty years ago. And I know a few little thing I heard from my mom, who was a good seamstress. And one or two things I heard on Project Runway. So, obviously a very limited knowledge base on my end.
If I follow you correctly (and I may not), it sounds like part of the problem is a massive calculation problem in the placing of pieces? It brings to min the development of the stealth fighter, which is all flat triangular shapes because they don’t have the computing power to calculate radar cross sections for curved surfaces. But in developing the stealth bomber they could make use curves because supercomputers had made the calculations technologically possible.
But maybe that’s wildly off base from what you were talking about.
Good responses, James. Just to clarify that seemingly out-of-nowhere quip – that was in response to a certain attitude Roger had to the question, and that I hear echoed in claims that sweatshops are the answer and the like (though to be sure those aren’t the same claims), that the folks who engage in the profit-seeking activites are to morally commended; that they’re just geting the most unfair rap you could think of by being accused of exploiting these gorrible underlying conditions that *people* find themselves in. Which, I want to make clear, I did not think you were saying. That was a residual gripe. I’ve been at peace with all this since college on “it is what it is” terms. But it is what it is and that’s all that it is. And whether or not saying so leads to other positions, one thing that it *clearly* is, is profit-seeking exploitation. I don’t feel I owe the capitalists who undertake these ventures any moral plaudits for the results that occur in these countries. First, I don;t accept the thesis that on balance everything is better over there. I have no freaking clue whether it is. But even if it is, these are profit-seeking decisions that are being made, and for e to recognize humanitarianism, these activities would have to have humanitarianism as their motive. These companies are doing what they’re doing: exploiting people’s poverty for profit.
@James, here’s the problem in a nutshell. Automation only works when you can get a sufficiently large number of pieces through to amortise the automation costs. A sweatshop contract looks like 100,000 pieces in seventeen sizes. There are eighteen flats in a dress shirt. The numbers just don’t add up to justify a fully automated process and certainly not an automated assembly line.
Will you finally get around to answering my core contention, that paying the line worker more and getting the abusive middleman out of the process just might make sense?
…Though on timescales, I would want to say that that’s just the point. I don’t know if we’re thinking about this on different timescales. It could be that we think it would happen at around the same time (though again, I question not just timescales but inevitability), and regard that timeframe differently (or not differently)… or it could be that we think that if this were to happen, it would happen on a drastically different timescale. So I’ll throw a number out there. I believe it to be unlikely that the situation I believe you to be describing (though again, this gets to fundamental change – what are we talking about, since we agree that “sweatshop is just arbitrary) will obtain in less than five hundred years (but also quite possibly never before extinction). I find that (those) probabilities to make this possibility functionally essentially irrelevant to current moral considerations of this economic order. (Though since I regard it as basically immutable in the short term too, this is academic. But then, this is academic in my mind. So that’s okay.) So that gives you an idea where I’m at. If you don’t get back to responding to that, no worries.
The New and Improved Sweatshop is the future, folks. It’s inevitable. All over Germany, you can find little high-tech machine shops doing small runs of high value items. Look at the market for on-demand printing, small-batch this ‘n that, customisation, aftermarket items. The list goes on and on.
The old factory model is in trouble. It can’t adapt fast enough. When Henry Ford built his Model A plant, he over-engineered it. Yes, he could make Model A cars in record time but he couldn’t retool fast enough to deal with Chevrolet, which built its factory using a more adaptable model. Look at auto and truck manufacturing today, trucks were always more amenable to custom packages, but we’re offered all sorts of options today. Place your order, get your essentially one-off car in a few weeks.
Nobody wants what’s “in stock”. They want choices. Perversely, as much as we want it Right Away, we also want our own choice of toppings. This Choice of Toppings trend will only accelerate. Soon, we’ll see hyper-generalists, capable of taking someone’s 3-D model and cranking it out in a few minutes. Those 3-D printers are only the beginning, folks, but the same trend will appear as increasing numbers of people are willing to trade the security of an 8-to-5 job for the profitability of fulfilling small-lot orders and calling the FedEx truck. Nobody wants to keep large inventories around. They’ll be able to run small, highly profitable businesses because they’re directly connected to the consumer community. They’ll be able to farm out large orders in the happy event of more orders than they can handle.
It’s a custom future, people. It’s already upon us. Why should anyone be oppressed by a few middleman parasites? There’s certainly enough demand in the world to justify everyone living a moderately prosperous life. The trick will be to put the hand of the maker into the hand of the buyer. It’s just that simple.
Will you finally get around to answering my core contention, that paying the line worker more and getting the abusive middleman out of the process just might make sense?
I’m trying to avoid getting into things that might lead to big arguments, so maybe I was being over cautious about what I avoided dealing with. But here goes.
First, I’m quite sure you’re right that the middleman position in this industry is one that’s ripe for abuse, and so I wouldn’t be surprised if it attracted a disproportionate number of abusive types. In no way am I going to suggest that this abuse isn’t a problem I that t shouldn’t be eliminated. I’m in board with you there.
The question is whether middlemen should be eliminated in general, even perfectly decent ones, to produce greater economic efficiencies (gains from which can then be apportioned to labor), my response is that it depends on the industry and without sufficient understanding of a specific industry, I can’t really say. That sounds weak and dodging, I know, but let me explain.
People tend to see middlemen as unnecessary stages in a market promise, someone who has to be paid with money that could otherwise be split among the other parties, leaving them better off. Let me stipulate that this is sometimes true. But undoubtedly it is not always true. I had a friend in the shipping industry, who was trying to explain to some students what he did. In a nutshell he matched up cargoes that needed to find a ship with shis that needed to find a cargo (I like to say he was a matchmaker). The students were having a hard time grasping what advantage supplied, and one pointedly noted that my friend was a middleman, which was true. My response was that my friend’s economic role was that he lowered transaction costs. Ship owners and producers of the various cargoes would not have been able to split up his salary between themselves because they would have spent that much and more in the search costs of trying to find each other without a middleman’s help.
We use middlemen all the time because what we pay them is actually a savings. People use dating services to reduce their mate search costs. Homebuyers and sellers use real estate agents (although there are real problems with those particular middlemen).
In the particular case of developing world sweatshop? I don’t know enough to offer an opinion I could intelligently defend. You say they do the hiring and arrange contracts with American firms, so at least superficially it sounds to me like they’re providing value. Somebody has to do that and get paid for it. But maybe there’s a better way, and I just don’t know the industry well enough–because I really don’t know it well; it’s not an industry I’ve looked at very closely–to see it.
On this one, I’d be very interested in Plinko’s thoughts, because as he notes this is his industry. I’d like to pop a bag of popcorn, sit back, and listen to you guys discuss it so I can learn more about it.
Look at auto and truck manufacturing today, trucks were always more amenable to custom packages, but we’re offered all sorts of options today. Place your order, get your essentially one-off car in a few weeks.
This is why I’m so intrigued with what you’re telling me about the difficulty of automation in textiles. It boggles my mind that we can cost-effectively produce one-off cars–and books–but we can’t do it with textiles. Clothes–superficially–seem so simple. But obviously they must not be.
Maybe I’m just weird, but these types of things fascinate me. A whole lot more than whether Obama or Boehne will win the next round of budgey battles.
@MD,
<em I believe it to be unlikely that the situation I believe you to be describing…will obtain in less than five hundred years (but also quite possibly never before extinction
Here’s hoping extinction is a long way off, but asteroids ans super volcanoes….
Anyway, my assessment of the rate at which industrialization is happening globally, as well as the increased speed at which it happens nowadays compared to the 19th century, makes me think 500 years is unjustifiably pessimistic. As a rough guess, I’d put it a 150 years at the outside, and likely less.
The only two factors–other than asteroids and super volcanoes–that give me any pause in that assessment are the availability of energy (and I think we’ll solve that) and bad governments ( a real wild card, but the overall picture on that is one of a general trend toward improvement, although not at what I would be comfortable arguing is a satisfactory rate).
Okay. And then, 150 years or less until *what*?
Until it’s impossible to hire labor at wages and in working conditions that today would generally be classified as indicative of a sweatshop. Whether that’s because nobody would take such a job or because all governments mandate better wages and conditions doesn’t matter, because either of those is a consequence of rising wealth.
All right, good. (Though now we have to figure out what that means, and again, whether we care about that threshold. But we ain’t doin’ that this afternoon if I have anything to say about it.) We’ll see if you’re right. (No, we won’t…;-))
@James, these abusive middlemen are using non-market forces to grift. If they were legit brokers, putting one hand in another, hey, that’s worth good money. We call them salesmen and they’re kinda magical people and they’re essential in the larger scheme of things and they earn every penny, as your shipping broker did.
But bribing officials and crushing down ordinary people and perverting markets, no. Nobody can defend that sort of thing. It’s surprisingly common to find abuses in software contracting. Middlemen holding passports, packing these kids into shabby apartments eight guys in two bedrooms, kickbacks galore. I’ve rescued a few of them from really H1-B situations.
Automation only subsumes into a market where every single item is exactly the same. With clothing, it just isn’t the same. Too many discrete seams, too many judgement calls to make. Maybe at some point in the future we’ll be able to automate the living hell out of this sort of thing, I’ve got a scheme in mind, taking one of those TSA scanners, putting someone in it and producing a set of patterns from the results.
Here’s a problem only half of us get: a woman’s breasts are unique. They’re also of slightly different sizes and they change over time. A good bra is expensive and a bad bra is an implement of torture. Wouldn’t it be great if a woman could step into a scanner and have six custom bras whipped up for her? Of all the articles of clothing, the bra has the most engineering applied to it but women are still walking around wearing ill-fitting underwear. It’s just stupid. Instead of obsessing about how to automate the manufacture of such things, worry instead about fitting. That’s where the money is.
Blaise, those non-market behaviors are specifically what I was not defending, just to be very clear. The question, for me, is whether there is a set of market behaviors that have to be done, and that can be done more efficiently than middlemen. If so, then middlemen are necessary. But not those particular middlemen, and the need to have someone fulfill some necessary set of market behaviors absolutely does not justify any of those non-market behaviors. You’ll get no argument from me on that.
I’m trying to wade through things here to interject where I can – one thing that caught my eye is the idea of further automation in apparel manufacturing.
I think the key idea there is handling fabric is hard to get a machine to do. It’s really, really hard. Cut up an old t-shirt into two equally sized strips and lay them directly on top of each other.
Now, use both index fingers and thumbs to pinch one corner. Hold one pinch steady and gently pull the other pinch down the side of those strips. That’s the base motion for a single sewing assembly operation. A typical t-shirt has 9 of those operations at minimum and maybe as many as 20 or so for certain types. Each of those operations has to be adjusted by eye and feel for every variance in the size of those panels, plus that every singe size of those shirts are going to be a different length. About half of them will require the panel(s) to be fed into a guide called a folder to ensure the edges go into the presser foot in exactly the right configuration.
Now, imagine designing and building a machine that can pick up panels of fabric out of a pile sense that level of touch to the elasticity of the fabric and handle it delicately enough as well as adjust to all the variables listed above, and be programmable to hundreds of slight to great variations of each operation. And, you have to re-program it every few days as the products change
Now imagine that that machine has to operate at an amortized cost of about $0.50 per shirt (for labor replacement alone, I can go through all the details of what your clothes cost if anyone cares to hear it).
On the other hand, there are a few hundred million people in abject poverty that could learn to do this same thing pretty well in a few weeks. And for them, getting that $0.50 would multiply their incomes by four to ten times over what they have now.
Now you might have an idea why apparel assembly has so resisted automation. I think BP mentioned it earlier, we’ve very well automated the easy parts that can be given over to machines and robots – the knitting/weaving, dyeing and, one of the earliest of all, the back and forth movement of the threaded needle through panels of fabric.
What’s left is mainly the handling of the panels, but they would be a daunting challenge to any roboticist.
It’s good to get your perspective, Plinko.
My initial reaction to the article is: “smarmy 20 year old wanting to dismiss the efforts of others and feel good about buying products made with sweatshop labor.”
I’m trying to be charitable, I am, but sometimes this level of smarminess on the “people just wanna hate corporations” type really pisses me off.
It misses the point, too that most of the development apparatus and efforts have gone from simply shutting down sweatshops to moving toward voluntary certification programs that work to create more sustainable and equitable labor practices in third world states. There’s a substantial body of literature and a significant amount of capital being mobilized in efforts to raise standards used in sweatshops and make consumers aware of conditions to make certified products more profitable. Specifically it’s an effort to CREATE CONSUMER AWARENESS and create demand for products using fair labor practices.
http://podcasts.ox.ac.uk/standards-sweatshops-voluntary-labour-standards-programs-global-supply-chains-audio Is a decent primer on how the global supply chain requires certain types of third party voluntary verification processes.
It’s something I’m tossing around right now on the subject of a frontpage post.
Every such effort to shut down abusive labour practices from the outside has resulted in Potemkin Villages. Voluntary certification doesn’t work in these situations. I’ve seen such efforts. The certification becomes another item on the checklist including bribing the local officials: often the abusive sweatshop is against local laws. Ending the abusive sweatshop is a seldom a matter of creating standards but a simple matter of enforcement in the context of local corruption and malfeasance.
Often the most abusive practices involve enforced kickbacks and back up the money food chain. It goes on right under the noses of well-meaning corporations such as Apple Computer. It’s obscured by layers of middlemen who will look in your face and lie to you all the day long. That’s part of their value-add: dealing with the do-gooders.
I have said the locus of abuse is the middleman. The very worst of the middlemen are local citizens, beyond the reach of prosecution, often capable of having the snooper’s visa revoked. I’ve seen that, too.
Yeah what BP said. But so long as we’re talking about knowledge spreading, non-coersive (good heavens, I’m sounding like Roger) certifications, marketing etc I’d opine you’re on the side of the angels.
Force, fraud and coercion remain valid terms. For that matter, exploitation does, too. Years of personal experience and common-sense follow-the-money analysis have revealed the nexus of this problem to be the abusive middleman. We know several things about him:
1. He is seldom if ever a foreigner. The outsiders are dependent upon him. He usually calls himself a labour recruiter but he is not. He a local fixer who controls contract fulfilment and administers the money. He does not work directly for the corporations such as Sears or JCPenney or WalMart or any of the usual suspects implicated in these terrible incidents which come to light every so often.
2. He controls hiring and firing of the “sweater”, the line supervisor who does the actual abusing.
3. He is protected, or has protected himself, by bribes and connections to local power structures. Through these connections, he can not only thwart any well-meant efforts to expose what goes on in the sweatshops, he can attack the investigators. Case in point, when NYTimes exposed nepotism in China’s ruling elite, it was subjected to an extended cyber attack.
4. He is a corrupting influence and is often directly related to persons in power where nepotism is not against local laws. In China, these persons are called Young Princes and they amass fortunes.
We would all condemn slavery in present times, though slavery and human trafficking goes on all around us and is simply another facet of the same problem. There’s always a local middleman involved. No longer do the slavers have to ambush villagers and sell them at slave markets, world economic disparity and the promise of good jobs on offer is a sufficient lure to trap the unwary and desperate into these abusive schemes. But there are parallels between the slavery of old and today’s abuses: the slaves which came to America weren’t captured by the captains and crew of those ships. They were first sold in slave markets run by local chiefs, who merely acted as middlemen for the actual slavers out in the bush.
Nob, do you have an opinion on Tom Harkin’s Child Labor Deterrence Act?
UNICEF has an interesting report on what happened after it was passed. (Do a search on “not anticipated“.)
If I were to adopt the tone of your initial reaction (quoted here: “smarmy 20 year old wanting to dismiss the efforts of others and feel good about buying products made with sweatshop labor”), what phrasing would work best, do you think, given what actually happened in response to the consumer awareness you created?
Thanks for the link, Jonathan.
Interesting debates going on around here — Very encouraged on my end. I’ll make my own comments, but please forgive the rambling… It is almost 1 a.m here, and I am just exhausted.
Sweatshop labor does not exist in a vacuum — Nor do sweatshop-laden economies stagnate frequently. As BlaiseP mentioned above, sweatshops do indeed seem to be the early stages of industrialization, and we can clearly see examples in the bounty of developed, or developing, nations that have heavily utilized sweatshops as a primary form of employment in the past. Asian countries are frequently cited, but we often forget that once long ago, most of Europe was field of murky factories that, if they existed today, would be considered sweatshops. Consistently, the utilization of any kind of low-to-non-regulated labor has always stimulated economies on the long term.
To all the folks to commented — As I mentioned in my article, the key to getting rid of sweatshops is to encourage their production and multiplication. As countries become more well off, the sweatshops begin to die a natural death. In the meantime, any sweatshops that do exist seem to be contributing to a rudimentary form of industrialization.
Industrialization is the process of rapid wealth creation. As I noted in my article, people who work in sweatshops generally make more than the minimum wage of their nation, if not substantially higher.. This results in an economic demographic shift that changes the entire dynamics of the country or community. I really enjoyed reading about that sweatshop in Honduras that was producing Kathy Griffith’s line, because that was a perfect example of how extremely lucrative a sweatshop can be for their employees. .. And how have those people been benefited by having their work cut off partially or entirely in the name of ‘human rights’?
I always quote Thomas Sowell in saying that there are no solutions, only trade offs. In the case of sweatshops, we have to think that there is no immediate solution for the conditions of poverty that already exist in the countries those workers live in [conditions that were decidedly not caused by sweatshops, mind you]… But is there a trade off that adequately represents a benefit outweighing a loss? I’d think so. And I would say that sweatshops are indeed the benefit in that they offer the worker a *better* quality of life than he or she would have without it.
Starvation is not better than working in a sweatshop. Working on farms and in the fields under extreme elemental exposure for a fraction of the salary is not better than working in a sweatshop. Turning to crime or prostitution for lack of a legitimate way to earn a living is not better than working in a sweatshop.
Are conditions ideal? No. Of course not. But reality has no room for idealism. We can instead be thankful sweatshops exist to create an extremely broad range of benefits for people across the spectrum of existence.
One fellow in the comments spoke about “creating a demand for products made through fair labor practices”.. My goodness! First of all, Nob, you can’t invent a demand for anything. The demand exists, or it doesn’t. Further, demand is more than just wanting the product — It’s putting a desired value on it. I’m sure everyone would like a well-made pair of jeans, for example, but very few people are willing to pay $150-200 for those jeans when they could just as easily pay $20-40 for something comparable. Just as well, even fewer people are actually *able* to pay the prices ‘fair-labor’ products would demand. And before you delude yourself into thinking that fair labor products would not cost more, you are absolutely incorrect.
With the concept of ‘fair labor’ comes the implication of regulations — A production cost increase. With regulations come the implications of raised wages in exchange for no more an escalation in workload — A production cost increase. With regulations come the implication of a nicer work area — A production cost increase. With regulations come the implication of an enforcing body to ensure that the regulations are being adhered to — Another production cost increase… And on, and on, and on, and on.
But another big issue I have with the concept of ‘fair labor’ is the fact that the term ‘fair’ is someone else’s concept of what fair is. I’m sure to most of those sweatshop employees, it’s not fair to take away their jobs just because there is someone in Canada who dislikes the idea of where they work, and thinks that they are not being treated *fairly*. I’m sure to the consumers of sweatshop produced goods, it is not fair that the value of their dollar has suddenly been significantly reduced due to an increase in the price of goods as a result of the massive cost reconciliation on the part of the heavily regulated ‘fair-labor’ industry.
To me, it’s not fair that one side of this argument includes moral crusades based on an arbitrary definition of fairness in which a solution to unfairness is creating an artificial demand for fairness through the regulatory hijacking of things those moral crusaders consider unfair, without the input of the people who will be the assumed beneficiaries of the fairness policies because, most likely, the moral crusader refuses to acknowledge that those sweatshop workers will have a very different idea of fairness then they do and probably wouldn’t have seen the initial work situation as unfair in the first place.*BREATH* What a run on sentence that was.
I’m not smarmy, Nob. But I think it takes a real smarmy person to refer to someone they disagree with as smarmy.
[Just a thought — If one wanted to promote low-cost production in a country that already has extensive civil and worker’s rights, one might want to make it their business to encourage the abolishment of the minimum wage laws in developed nations. Oops — Did I just say that? Shame on me. ]
Actually, you can create demand. Steve Jobs was famous for creating things nobody even knew they wanted until they’d seen it.
Repealing minimum wage laws makes no sense. Sweatshops, as you say, are moneymakers. There’s no particularly good reason why the middleman should make the lion’s share of the money and the workers should be treated so shabbily.
Thomas Sowell once said People who think that they are being “exploited” should ask themselves whether they would be missed if they left, or whether people would say: “Good riddance”? . It’s a false dichotomy: everyone who works is exploited, often quite happily. The question is, would anyone but the abusive middleman care if the workers (who are not paid wages but are paid by the piece ) get a better fraction of the profits and a sanitary bathroom and aren’t coerced into granting sexual favours by their abusers? How did European get out of the sweatshop model? They formed unions, as they had formed guilds in previous centuries. Life improved radically and societies actually improved in every way. Sowell misses all this.
Who wants to promote low-cost production? It’s a stupid model all round. It’s not even good capitalism: capitalism strives for high-value, high-margin propositions. I won’t say “shame on you”, clearly you don’t know how capitalism works. Capitalism enriches lots of people. It’s the salvation of the poor, the underpinning of democracy. Show me an abusive sweatshop, I will show you an abusive government.
Steve Jobs created things that people happened to want. He did not create the people to want them. Products are released all the time that no one wants — Cafes open all the time that no one wants to go to. You, like Nob, seem to like to think that simply by making the product available, you will create a demand for it, and that is very far from being the case. Fair Labor products already exist, but they hardly make up anything even remotely close to even a small market share. No one wants them, because no one wants to pay the price they are asking.
Nob was essentially suggesting to create a forced demand by limiting the market availability of non-fair labor products… Milton would weep.
Capitalism is indeed about making profit, but more profits come with a higher market share, and a higher market share come with either making your brand and quality exceptionally well known so that you can charge a premium, or offering a comparable alternative to the prime-priced products by reducing your price dramatically. In order to reduce prices, you must reduce the production costs. The fact of the matter is, fair labor, for all of it’s wonderful sunshine-and-lolipops theory, yields extremely high production costs that the business must then pass on to the consumer in order to make any profit at all.
Sweatshops generally exist in countries with corrupt governments because corrupt governments are not hardly as concerned with making several hundred pages of red tape for businesses to open and operate under. The Governments do not run the sweatshops, nor do they have much involvement with them other than letting them exist in the first place.
It makes me wonder about the Unions in the industrial revolution… They obviously had much less power than Unions do today, and they were appealing to Governments and Monarchs that actually cared in one way or another. Unions have long since ceased to serve any legitimate function in modern, developed societies,but I would think that those countries will have their own revolutions if and when they need them. Most of the Asian tigers didn’t, and still don’t, to an extent, have any kind of collective employment rights regulations or regulators like unions. South Korea and Singapore never enjoyed a laborer upheaval that resulted in Unionization or better working conditions, and yet somehow they have worked through sweatshop reliance and have formed extremely strong economies. That goes for just about every former-third world Asian country.
As for your comments about the middle-man, all I can ask you to do is consider your own words. Tell me, BlaiseP, how we are going to ensure the middle-man is not abusive or corrupt? If you can come up with a solution that will not increase production costs, I’d happily hop on board and promote it. Just as well, you must consider that sweatshops do not breed those abusive middle men, human nature does.
You can say I know nothing about capitalism all you want, BlaiseP.. But writing me off with such smug comments only brings one word to mind, and I think that word is… Smarrrmmmyy.
Anna, a couple of things here. I think it’s pretty well understood that in the right situations, suppliers can create demand. Creating demand doesn’t mean creating people, it means somehow fostering a need or desire in those people that wasn’t there before.
I don’t know what exactly constitutes “fair labour” products, but I don’t think it’s correct to say that these products have little market share. Last time I checked, Starbucks sold exclusively Fair Trade coffee. I assume this counts as a fair labour product, and I think we can all agree that they have a pretty good market share.
Now, Anna, we know how people are created. We also know how they are persuaded to buy things. The tactics are remarkably similar. It’s called advertising.
Do not put words in my mouth, Anna. Those who try this stunt come to regret it and you clearly aren’t up to it. You clearly don’t understand capitalism: the creation of demand is called marketing and sales. The production mechanism is in a different part of the cubicle farm, over in order fulfilment. Sweatshops arise as a consequence of already-created demand. They run on a contract basis. Now here is how such a mechanism actually works.
The fashion shows in Paris and New York are closely watched by people called Buyers. They see a fabric they like, they see a colour trend forming. Within a few minutes, images are sent from the show to large fashion retailers and a cascade of events leads to fabric artists creating new patterns for already-existing looms. A few master tailors create a prototype. This prototype is unsewn and patterns are created from it. The fabric arrives, the master tailors make revisions, work out thread choices and sewing techniques, instructions are composed, and contracts are let. All this is happening, literally within days of a big show.
A good deal of this can be automated but sewing itself has resisted automation. The sweatshops are full of highly skilled workers, often owning their own sewing machines. They’ve worked dozens of such contracts, so many of this size, so many of that, so many in this fabric, this isn’t creating demand. Let me tell you how this actually works.
Do you think you’re so very clever, that your purchasing choices are all that hard to predict? The people who let those contracts have the statistics on their markets, the size of the shirt on your back this very minute, every article of clothing you’re wearing, was the result of predictive marketing. You’re a sheep, so are we all. We only think we’re buying what we want. Human beings are so goddamn predictable and with every purchase you make, your needs and desires are matched to you with ever-greater precision. Not only is demand created, it’s so heavily manipulated these guys know when you buy your groceries and it affects their product restock times. Great for you and me, these retailers know what we want. They want to make us happy and give us what we think we want. But don’t kid yourself, Anna, they’re creating demand.
These retailers don’t have time to mess around, they’ve already composed the patterns and they’ve probably start cutting flats. Those poor saps running the cutesie coffee shop might not have the marketing details on you but those retailers, they do.
These “sweatshop” contracts are highly competitive but the retailers need hundreds, often thousands of sewing machines to start up immediately.
You know nothing about sweatshops. If you did, you wouldn’t say things like “the Governments don’t run the sweatshops.” In Guatemala, no foreigner can own more than 49% of a business, I know, I’ve run two down there. Red tape there is, and plenty of it. It’s all quite easily cut through with bribes and kickbacks. Just try getting something through customs in a third world country. Then come back to me and bravely tell me about whose nations have hundreds of pages of red tape. That’s what trade agreements and frameworks do, they eliminate red tape.
I have already explained how to eliminate the abusive middleman. You clearly didn’t grasp the obvious: the local people operate their own middleman. They get a better cut of the profits. I’ve been hectored by more informed Free Trade types than you, Anna. Your opinions are uninformed by facts.
I hardly think Star Trek counts as advertising for Apple, Blaise.
Yet another of your Gnomic Utterances, Kim. Do expand upon that thought.
TNG’s graphics designers got scooped up by Jobs, and they basically reused/tweaked designs from Star Trek. The fact that Apple’s stuff looks futuristic, is because Star Trek conditioned us to think of it as futuristic.
Not to say that you aren’t right in the main, you just happened to pick a poor example 😉
If you bought jeans more than one every ten years, you’d know how the fashion industry works. I said nothing about Star Trek or Apple, either one. I said Steve Jobs created markets for things people didn’t know they wanted. Apple’s chief designer is Jonathan Ive, who as far as I know hasn’t sewed a buttonhole in his life.
Star Trek prefigured a great many things, I suppose. The tablet metaphor goes back a lot farther than Star Trek: for crissakes, the Greeks had wax tablets for temporary storage.
It’s a long way from Thierry Mugler’s seamstresses feverishly sewing a model into some futuristic dress to a Mayan woman working a high end Bernina sewing machine in Quetzaltenango. The seamstress is working with a needle and thread for over 100 dollars an hour. That Mayan woman is sewing tricot at a foot per second with a space-age machine for less than 50 cents per hour.
I said Steve Jobs created markets for things people didn’t know they wanted.
This. And obviously not just through advertising, but through creating things that never existed before. I’ve been on my IPad for hours today (sick, not shirking, I swear), but four years ago nobody wanted an IPad because there was no such thing to want. And as I understand it, the first tablet was introduced about a decade ago but failed because they couldn’t persuade people to want it.
“Nob was essentially suggesting to create a forced demand by limiting the market availability of non-fair labor products… Milton would weep.”
As he should.
Sweatshops existed in the United States. Arguably they still do but I would argue that most factories were sweatshops from the earliest Mills at Lowell until the Triangle Fire at least. I would argue that sweatshops did not really disappear from the United States until WWII. There were plenty of incidents of factory owners smashing down on labor in the Great Depression through the use of hired thugs.
It was not rapid profiliation that ended sweatshops in the United States (an argument very convenient for libertarians as LWA pointed elsewhere on Ordinary Gentlemen).
Unfair labor practices and abuses ended through democratic and union action. It ended through strikes and the public being outraged by incidents like this:
http://en.wikipedia.org/wiki/Ludlow_Massacre
http://en.wikipedia.org/wiki/Battle_of_the_Overpass
http://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire
I find it too convenient that many libertarians argue that child labor ended in Europe and North America simply because the market made it inefficient. That fits too easily into your world view. My view is that the market became more efficient when people and legislatures demanded an end to child labor. Necessity is the mother of invention and by taking away a cheap and easily exploited sector of labor, the market was required to be more efficient. It is not the other way around.
Slavery certainly didn’t end with the coming of the horse collar, though it was made less efficient by it.
Actually, slavery became much more profitable with the advent of the Industrial Revolution. The cotton gin and the sugar mill created wonderful opportunities for slavery. While cotton was cleaned by hand, it was pointless to expand production very much. Sugar was so profitable it was worth working a slave to death, even if a strong slave cost as much as two horses.
And the Industrial Revolution created all manner of interesting jobs for little children, down coal mines and getting their fingers sliced off in power looms. Blake didn’t call them Dark Satanic Mills for nothing, yanno.
Kim,
BlaiseP’s right, the Cotton Gin helped extend slavery in the south for decades.
Moral crusades can also have a lasting impact on labor practices.
The holy-rollers of the British Empire starting with Wilberforce were largely responsible for making the Transatlantic Slave Trade a thing of the past, even though it cost the British public a substantial amount of money both in terms of public expenditures (Slavery Interdiction was not cheap) and in far higher sugar prices.
Oh and I suppose the poor Africans suffered from not being taken to the west to be converted and clothed in plantations and were instead left in heathenish rot on the African continent.
If you bought clothing once every ten years, you’d be surprised how easy it is to afford the $150 pair of jeans.
First. Demand isn’t some mystical force that drives a market springing out of the celestial aether. It’s the result of aggregated preferences, which are shaped by everything from marketing to social status. Context, as you say above is, is everything. Demand is context driven and the context is shaped by human action, usually by people selling products.
Second, third party certification regimes and private governance structures for everything from sustainability to fair trade practices is rather more significant than you imply. The growth of third party certification and verification systems, along with supply chain verification is one of the more interesting elements of global governance research because it exists in a market-embedded system and relies on private parties rather than government regulation.
Dismissing it all as “moral crusader”ism and suggesting that it’s simply cost inefficient is wrong, and the people who work in these fields spend substantial time getting local community feedback on what works out as the best method to create growth practices that benefit these communities most in the long run. This stuff works. And even the giant multinationals are paying attention to it.
Supply-chain verification is the next big thing in private governance.
Well said Anna.
Note: My great-grandparents almost certainly worked on sweatshops in New York when they came here through Ellis Island.
Part of my liberal heritage and the liberal heritage in the United States is fighting for improved and decent working conditions. We were forged in the heart of a sweatshop disaster:
http://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire
This tragedy was a turning point of American liberal and labor history and brought up the abuses of the sweatshop system.
I believe in decent working conditions and this includes proper hours, safety equipment, non-harassment, non-discrimination, etc.
These beliefs make it very hard for me to support sweatshops even if economists make clever arguments about why they are mutually beneficial for all. I realize that our globalized economy means that many products I use are made abroad and possibly in sweatshops like the MacBook Pro that I am typing this response on. The issue is tricky but I don’t think clever economic-libertarian arguments outweigh ethical concerns for decent labor conditions. And I’ve never quite believed in the Freedom of Contract/Lochner Era arguments. Just because you can’t quantify ethical concerns on a graph, does not mean that they don’t exist.
Right, but, holding you entirely blameless for either decision, do you even know which way the ethical concern you have for the makers of your MacBook should make you lean on whether you should have bought it (at te price you did) – or what other kinds of things you think it suggests you should consider doing (like dropping everything and spending a year or two attempting to do labor organizing in China, perhaps), even if it’s not so strong that you’re actually expect to do it? In other words, what’s the proposition being made here that you’re even arguing against?
I do question the idea that sweatshops are somehow “the answer.” I understand that. I don’t know how anyone thinks they know that. I don’t know how anyone thinks they know just what the choices people face that force them to take a job in a sweatshop, or even ho voluntary those choices really are. That all seem like some really on-the-ground-level sh*t to me, which a lot of people are assuming for the sake of their arguments. It’s really not at all clear to me what actually is going on in the places where these things get made. If that’s all you mean by “ethical concerns,” – that you don’t know what the facts of these situations actually are, then I’m with you. But I also don’t know that it’s not all as voluntary as the, (sorry folks, but) Dr.-Pangloss (and that’s not saying you’re saying it’s great, but just that it’s all as good as it can be right now, or would be if we could institute universal freedom and voluntarism) viewpoint has it. So if “ethical concerns” means that you have to be against these institutions in some fundamental way, I don’t know how to agree. I mean, what are we saying about them. To me, it all seems like it depends on facts about these places that I just flat-out don’t know.
Here’s the first “what you should do”: “gather information”
I’ve heard tales that corporations deliberately impoverish people in the third world so they won’t have to pay them as much.
A corporation is expected to hire the most competent, most desperate person. They are not expected to make people more desperate in order to bid down their salary.
I wholeheartedly agree about that first step, Kim.
Sweatshops aren’t just places where wages are low. They’re also places where workers have no power, and can be abused mentally, emotionally, and physically, and places where worker safety is of no importance, so they wind up maimed or killed. It’s true that they seem to be an inevitable first step on the road to industrialization. That fact should make us ashamed of the sorry, selfish thing that is the human race.
Nob? Are you around? Were sweatshops ever a real factor in the industrialization of Japan, in particular?
I ask because I think we make many fallacies in the west, by assuming that everyone develops exactly the way we did.
Kimsie,
Here’s a contemporary report
It’s what one would predict, both from the general trend of industrializing countries and from the general position of the serf/laboring classes in the Edo period. Peons weren’t exactly highly valued. (Although interestingly I read that Meiji Japan ended slavery in the regions it conquered, aside from its own military enslavement of subjugated people for military production and, ehr, recreation purposes.)
I’ve been way too busy with work this week to formulate a some comments, but I do have a lot to say, given that this subject is essentially my career.
In brief, I think though I agree with much of Anna’s reasoning, there’s a lot of the how she get’s there that I find troublesome. I’ll want to quibble just because I sincerely believe that actually realizing the significant gains that we believe should flow to workers in these factories are heavily dependent on proper recognition of the forces at play and directed effort to alter those dynamics. Consumer awareness and action is necessary, but far from sufficient.
Blaise has said a lot of the most important stuff already – namely that bad local government (and in a direct bad actor/crony capitalism way) is a major root cause, but I think I can shed some more light when I can sit down and write them out for a bit.
Blaise — You are getting aggressive and testy. Means I am doing my job well. 😉 You can say I am uninformed all you want, but you are the one who keeps making the same dead argument over and over. .. It makes me wonder if that t-shirt you are wearing in your avatar is fair-trade. Somehow, I doubt it.
I made all the arguments I had to make in my OP on CanYAP. But I must say that I dislike that the arguments have gone so far away from the point I had initially wanted to tackle — And that was the constant, uninformed dismissal of sweatshops as being a legitimate way to achieve economic growth and personal benefit in third world nations.
The one perspective I am taking that no one else appears to be considering is that sweatshops exist in this world. Poverty also exists in this world. And impoverished people generally have no better options then to work in sweatshops — Why? *Because they are impoverished*. As I mentioned many posts ago, sweatshop labor does not exist in a vacuum. Constantly growing economies make expansion and competition possible within that nation, and new factories with better pay and better conditions will slowly murder the old factories as they try to lure employees [we saw this with Apple in China]. This kind of competition, of course, is only possible with the fewest regulations and as little Government involvement possible, and it doesn’t look like Blaise much likes that.
Inefficiency kills itself in the free market. Demand created by consumers and demand created by employees much meet each other in most ends of the spectrum, and the market adjusts naturally for that. Arguments made against sweatshops are never made on the basis of economics, but rather on the basis of morality. .. But I can’t think of a single scenario that includes ending sweatshop labor and having as wide a variety of benefits to as wide a variety of people.
In this thread, I have seen a new strain of argument prop up, and that is one that includes reference to unions and democratic action as having been the end to factory labor in the developed world… And to the people making these comments, I would like to make a point.
To me, I find that the most significant difference that fostered labor revolution in developed nations was the concepts of rights. In the western world, everyone was guaranteed certain protections and liberties, and when they were not being given to factory workers, those workers had the legitimate basis for a small revolution — Attempting to reclaim what they should have already had. We, as a developed nation, are looking at countries with sweatshops and not considering that those countries don’t have, and have never had, any such thing as human rights — Never mind workers rights!
Those countries will never have a revolution, they will never have a strike, nor will they ever have a walk-out. Why? Because no one is expecting to be treated any better — And while that might sound callous to us, it’s the absolute truth. China, South Korea, India, Hong Kong, Taiwan, Singapore — All of the sweatshop heavyweights have officially began to transition from a factory-ridden disaster area into economic stability and strength with ever-increasing better working conditions, and never even having had a labor dispute.
I would say that the industrial revolution of the Asian Tigers is just about over, actually, considering that these countries will be hosting the largest proportion of people in the middle class in world history by 2020. Generally the emergence of a middle class signifies the end of one economic period, and the beginning of a new one.
And sweatshops did that, by the way… Not just carried the Tigers into economic stability, but created the middle class by making everything cheaply available en mass to the general public.
I think it’s really quite easy to sit here and judge situations on behalf of mascots for moral crusades — But I don’t think any of us will ever really understand unless we were one of those people working in the sweatshop. I don’t think many anti-sweatshop advocates like using that kind of imagery because, generally, if we were poor and starving and our only options were prostitution, death, or working in a sweatshop — We’d pick the sweatshop any day.
But that again makes me stress the point that sweatshops and personal and economic situations do not exist in a vacuum. I can not possibly say this enough. If any of you took a look at the graph I had on my original article, you’d see that. The countries that experienced stagnation are, in fact, the ones with the most restrictions on sweatshop work availability by limiting the amount of sweatshops, or the size, etc…
Blah blah blah, yadda yadda yadda, sweatshops are good, Starbucks coffee still sucks and not even their attempt at a blonde roast worked, and everyone is happy.
All I can end with is the absolute desperate hope that every one of you has a closet and cupboard chalk full of fair trade nonsense.*
[* Which is another point I forgot to discuss, and that is how the elimination of unregulated labor would not just hurt the people working in the factories, but also the poor who rely on the low prices of the goods that are available only through sweatshop labor.
To NewDealer. Yes, the market did become more efficient — Just not in the country child labor was abolished in. The elimination of unregulated cheap labor in the developed world only resulted in factory displacements elsewhere.]
Oh, Anna. You poor lost soul. I am saying you’re uninformed. I’m making a rather live argument, that the Sweatshop could make the workers reasonably well-off, provided it was organised for the benefit of the workers and not just the middlemen.
I read your argument on CanYAP. You have never once been inside a sewing workshop, that much is beyond any doubt. If you had, you would be making very different noises. You are at liberty to stop making stupid noises any time now: I’m only here to inform you, to be the clue to the clueless. Anyone can be ignorant. It’s an easily-cured condition. Slather the ointment of soothing fact upon those carbuncles and soon those lumps will subside.
Factories are bunk. They’re old hat. History hath shewn to the n-th degree workers ought to organise and make their lives better and that shall never happen while we have asshats in charge of this world. I have, furthermore, explained how demand is created, by putting some money in the hands of many hands. Poverty is always the result of some kink in the markets.
Now some people around here have said I do not appreciate the wisdom of the Libertarians. This is not true. I have changed my mind since I got here: their much preaching has impacted me in ways I had not foreseen. I have concluded the chief impediment to free markets is government regulation, as they have often said. But many of these regulations are engineered to benefit the few and not the many.
The Libertarians breathe out hatred at government interference, but on whose behalf doth government interfere? It is the few and not the many. If government is corrupt, who hath corrupted it and to what end? Even when government creates programs to benefit the many, those programs tend to enrich the few and not the many. In point of fact, the many seem to exist for the sole purpose of enriching a few middlemen. If the poor remain mired in poverty, well, they do so to justify the further enrichment of middlemen and Poverty Pimps and many another disgusting intermediary.
You know absolutely nothing about the struggle for human rights. Don’t even come around here to insult my intelligence with such a claim. China’s prisons are full of labour organisers. Bright Indian kids come to me to escape their H1-B pimps who are taking half their salaries and cramming them four to a bedroom into slum apartments in Louisville KY. The Young Princeling sweatshop heavyweights drive around Guangzhou in luxury cars because they’re some general’s sons. The Chinese Army, the PRC, owns an entire class of stock and that economy is coming off the rails: it’s an engine without any oil in the crankcase. In Russia, they don’t even obey the speed limits: they get blue mars lights from the state security mechanisms and blaze through Moscow highways, beyond the reach of law.
I might not know what’s in your cupboard or which brand of coffee you put in your pot in the morning. I can make a pretty good guess about what’s in your closet, though. You paid far too much for it and a good bit of it went into bribing some government official.
Blaise — I think you are the most self-congratulatory person I have ever met. And that’s saying a lot considering I spend quite a bit of time on the Internet.
Look up ‘anointed’, I’m confident you’ll find a picture of yourself (decked out in your decidedly non-fair trade garb, mind).
I doth thinketh this conversation can endeth here.
(PS: I don’t need to go into a sweatshop to make my noise about it, the people who work in sweatshops are making the exact same noise as I. Interestingly enough, no noise about conspiracy-theory-esque middlemen.)
(PPS: Insult your intelligence? I didn’t know you had any to insult in the first place.)
I suppose you missed the last global strike?
Hey all,
I know things are getting a little heated here (and heated is ok), but we’re starting to just throw around insults and that’s not really in the spirit of the site.
Let’s attack ideas, but not each other.
Starting with full disclosure – apparel sourcing is my career. I work for a fairly large and well known company with a fairly high level of responsibility. I’ve been to dozens of apparel factories all over Asia. I think about this stuff a lot.
Let that color my words as you will. Also, I might do a bit of arguing by assertion – I’ll try to minimize that.
Firstly, the thing I have trouble getting past is the use of ‘sweatshop’ as interchangeable with all indsutrial employment in the developing world. Nick Kristof was the first encounter I had with the argument that the global poor need more sweatshops, not less. It seemed provocative at the time, coming as it did from him to someone, like me, who was not far out of college and who considered himself a firm member of the Left.
So, I get it as a sort of transgressive assertion, but in a world where there remains real slavery and real forced labor, as well as varying degrees of poverty ranging from desperate to struggling, lumping the economic circumstances of everyone into ‘sweatshop labor’ obscures too much and prevents us from interrogating the differences between the opportunities and experiences of workers enough to understand what forces hold them back and how to get on a path out of poverty.
Now, to bow to Blaise, I have to say, he’s accurately diagnosed significant portions of the problems in global labor markets – particularly the crony capitalism that dominates most developing nations.
Where I struggle with the discussion is the assertion that most ‘sweatshops’ are run on behalf of US brands and companies by middlemen
Within the apparel industry, and I know many others, this isn’t true. They sell their products to the brands you know as well as many you do not. They’re capital firms – they buy matierals, pay workers to make them into goods and sell them to customers. Nearly all of them sell to a dozen or more different companies.
I call this out as an important point because a lot of the discussion around sweatshops revolves around why US brands don’t pay their workers more. The ‘middleman’ excuse is sort of skewed. Companies like my employer don’t directly or indirectly employ anyone in factories. The question of why we don’t pay more assumes we can pay workers at all. We buy finished goods, so paying them extra is most likely going to go straight to the pockets of the owners, no different than Blaise’s examples of the despots and the highways.
What does work is pressure to conform to rules. There are contracts specifying adherence to codes of conduct and local laws, audits of payroll records and interviews with workers. They do work, to an extent. The tough part is, it’s hard to trust them fully, and they’re a poor substitute for real compliance with legal/cultural requirements because the owners have every financial incentive to try and avoid/undermine/bamboozle the process.
Where my issue with both the anti-sweatshop and the ‘moar sweatshops’ crowds lies in the reliance on the third-party audit route as the only viable way for conditions to be improved. Let me tell you, public pressure does work, even if most of the loudest voices have blinkered understandings of the actual circumstances for most of the workers they claim to fight for.
The reason there aren’t better laws is exactly the crony capitalism at play. But, I would posit that what would be better for workers would be better regulation of safety moreseo than wages (see: Tarzeen). Wages will take care of themselves as the workforce develops more likely than not.
All that to say, what I suggest would be most effective is to put public pressure on the companies to support legal and enforcement reforms in the nations their factories exist, politcally and monetarily. Spending hundreds of thousands of dollars per company annually on an individual basis for 3rd party audits is an improvement over nothing, but they’re limited in efficacy compared to the same resources and efforts devoted to improving the general governance would have significantly more upside.
By “middlemen” I kind of got the impression BP may have just meant, or meant to include in many instances, just managers. Bosses. Could be wrong about that.
I sorta simplified things. Plinko really does know this subject better. Look,the Plinkos of this world are tired of the nasty blowback from horror stories. They’re not doing these audits entirely out of the goodness of their hearts, you know. They dread another Kathy Lee Gifford scandal.
In response, these outfits now run Potemkin Villages. Management brings in coaches, teaching employees how to lie. Records are routinely falsified. They have little fire drill sorta exercises so when the inspectors do come round, the children and pregnant women know to run to the roof.
The deceit and bafflegap is mind-boggling in both scope and magnitude. Are those inspectors going to have the resources to find the stash of passports and visas in the company safe where they’ve been stashed? Not on your life.
Dexter Roberts and Aaron Bernstein have done yeomen’s work over the years, detailing how these inspectors never seem to catch any of these outfits doing anything nefarious. These third-party inspectors serve as little more than plausible deniability for these retailers. Why are they doing business in nations with abysmal human rights records, where labour organisers and journalists are in prison and bribery is considered a cost of doing business? Why don’t these retailers hire those workers themselves and run the workshops under their own auspices? Why aren’t their boards of directors held accountable?
In answer to all these questions, we are told Companies like my employer don’t directly or indirectly employ anyone in factories. The question of why we don’t pay more assumes we can pay workers at all. Well, why not? The answer is as obvious as the nose on your face: US firms aren’t allowed to be majority stakeholders in Chinese or Guatemalan corporations– add a hundred other vile despotism to that list, both large and small. And the US retail outfits, for all their concern about compliance, are perfectly willing to go along with this arrangement.
Crony capitalism starts with Crony.
Right on.
There’s this little squib outlining what really goes on with “compliance monitoring”.
I left out the very important point above. The middleman is me, not the factory owners. Not accounting for that leads you down some odd paths. I don’t take issue much with BP’s perspective on who the actors are beyond that. I do take a completely different view of the future of the industry, but if we knew exactly the best oath, we’d already have taken it.
I see I missed a lot of back and forth yesterday afternoon, I’ll try to come up with something useful and write more later.
Best path. No more commenting from a touchscreen.
It seems fair to note you occupy the role of buyer operating with established firms, thereby cutting out the middlemen, a natural evolution of the problem domain. I have seen other models where buyers are not as scrupulous. Walmart comes to mind immediately. They had considered acquiring Li & Fung, a biggish middleman operation but decided to go to direct sourcing instead.
Whether the abusive practices arise from push-down from unscrupulous middlemen acting as independent agents and brokers — or whether it’s a fixer within an established corporation, it doesn’t change the equation much, though I’ll stipulate (and learn) from anything you have to say about the mechanics of how this works in the real world.
I contend, and you seem to agree, when it comes to African and Asian Dictators, it’s the cronies around him who are the best and most significant part of that joke. These Dictator Types don’t get rich on their own: they need a cadre of corrupt officials around themselves. Follow the money and you’ll always find bribes and kickbacks, flowing from what little trade does arise in these wretched countries.
I mean not just me, but my employer is, in the rag trade, a middleman. Consumers want to buy clothes. Factories make them. My company is the classic matchmaker, getting involved to match them up – we plan and forecast for trends and tell them what to make.
If the factories ever figure out how to sell directly to US consumers, my life will change dramatically. On occasion I think on how to be prepared for the transition, as it will surely happen before my career ends.
The factory owners – the golden princes you talk about, IMHO, are more rentiers than matchmakers for the majority of the trade. Yes, you’ve got it that companies such as mine couldn’t operate factories if they wanted to, the cronies need to get their share and the workings of governments of nearly all developing nations devote considerable resources to ensuring they keep their share.
That said, companies like my employer used to manufacturers, the exodus from this hemisphere left them with a choice to own their production and die or outsource and live. But don’t pity them, management of these companies have grown to love being freed of the constraints of manufacturing, preferring to dictate hard terms and telling factories to take it or leave it. I am not sure many would take up ownership again if it became possible once more. Of course, the Foreign Corrupt Practices Act means it’s all but impossible for American companies to operate soundly in a lot of places in the world.
Interesting you should mention Li&Fung and Wal-Mart, as I’ve had to deal with both for most of my career. Wal-Mart is an odd duck, extremely scrupulous but in accordance with a weird ethic that only they truly understand. They’ve been experimenting with using LF for a while, and I can’t imagine a worse marriage. The two companies seem culturally utterly at odds to me, but perhaps there’s something there that I cannot see.