Friday, January 16, 2009

The Politics of Sweatshops

Greg Mankiw's blog links to an op-ed by Nicholas Kristof in the New York Times defending sweatshops.

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.

“I’d love to get a job in a factory,” said Pim Srey Rath, a 19-year-old woman scavenging for plastic. “At least that work is in the shade. Here is where it’s hot.”

Another woman, Vath Sam Oeun, hopes her 10-year-old boy, scavenging beside her, grows up to get a factory job, partly because she has seen other children run over by garbage trucks. Her boy has never been to a doctor or a dentist, and last bathed when he was 2, so a sweatshop job by comparison would be far more pleasant and less dangerous.

I’m glad that many Americans are repulsed by the idea of importing products made by barely paid, barely legal workers in dangerous factories. Yet sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty. At a time of tremendous economic distress and protectionist pressures, there’s a special danger that tighter labor standards will be used as an excuse to curb trade.

I agree with Kristof that sweatshop jobs are a solution to poverty, not a problem. I disagree that Obama and the Democrats mean well in opposing them.

There seems to be a strong consensus among economists that sweatshops help the third world. I've seen Kristof's case made before by highly-respected liberal economists, such as Jeffrey Sachs and Paul Krugman. (For more on sweatshops from Krugman and Sachs, see here and here. Great arguments have also been made at LewRockwell, the Library of Economics and Liberty, and the Mises Institute.)

I find it hard to believe that our Democratic policy makers are unfamiliar with the names Paul Krugman and Jeffrey Sachs (or Nicholas Kristof, for that matter). So either they are familiar with their arguments, and choose to ignore them and instead lie in order to get votes, or they haven't even consulted the experts, and conduct policy with extreme recklessness. I personally believe the first option is more likely. Most Americans listen to racist idiots like Lou Dobbs over true experts, and it's much easier for politicians to pander to their incorrect notions rather than speak the truth and risk losing votes.

Ask yourself this: Why are American unions, such as the AFL-CIO, so vociferously against sweatshops? They don't have any dues-paying members in the third world; why do they care so much about their welfare? The truth is (and the AFL-CIO knows it) that increased labor restrictions in developing countries means fewer jobs there. The cost of doing business in these countries will increase, and more dated, inefficient manufacturing jobs will stay in the U.S. Unions claim to care about making sure workers in the third world aren't exploited. Really, they want to steal their jobs--no matter how much more people in the third world may need them--and make you pay more for goods at the same time. Liberals claim the free market is immoral, but this is 100% selfish, deceptive evil. And Obama and the Democrats play right into it.


Joseph Mises said...

I'd make the argument that we are upper-case Liberals.

They are socialist masquerading behind lower-case "liberalism".

zbigniew cheezinski said...

Lou Dobbs' wife is Mexican. The man is not a racist, despite what La Raza is telling you.

I dislike that he's a populist though. He didn't come out and support Ron Paul, but instead kept clamoring for a leftist who would protect the welfare state from foreign looters.

I totally think you misunderstand Dobbs. He objects to managed trade, not free-trade. NAFTA was a bunk agreement and is part of the reason we have a flood of "refugees" (if you'd call them that) from south of the border.

second-tier said...

Haha...marrying a Mexican disqualifies a person from being racist? Jesse Helms should have thought of that.

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